    [Senate Hearing 107-355]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 107-355, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2002

    =======================================================================

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1416

    AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR MILITARY ACTIVITIES
       OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR
    DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL
      STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   ----------

                       MARCH 21, JULY 11, AUGUST 2, 2001

             Printed for the use of the Committee on Armed Services
    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                 2002--Part 3  READINESS AND MANAGEMENT SUPPORT

                                                     S. Hrg. 107-355, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2002

    =======================================================================

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1416

    AUTHORIZING APPROPRIATIONS FOR FISCAL YEAR 2002 FOR MILITARY ACTIVITIES
       OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND FOR
    DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE PERSONNEL
      STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR OTHER
                                    PURPOSES

                                   __________

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   __________

                       MARCH 21, JULY 11, AUGUST 2, 2001

             Printed for the use of the Committee on Armed Services

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                          COMMITTEE ON ARMED SERVICES

                        JOHN WARNER, Virginia, Chairman

    STROM THURMOND, South Carolina       CARL LEVIN, Michigan
    JOHN McCAIN, Arizona                 EDWARD M. KENNEDY, Massachusetts
    BOB SMITH, New Hampshire             ROBERT C. BYRD, West Virginia
    JAMES M. INHOFE, Oklahoma            JOSEPH I. LIEBERMAN, Connecticut
    RICK SANTORUM, Pennsylvania          MAX CLELAND, Georgia
    PAT ROBERTS, Kansas                  MARY L. LANDRIEU, Louisiana
    WAYNE ALLARD, Colorado               JACK REED, Rhode Island
    TIM HUTCHINSON, Arkansas             DANIEL K. AKAKA, Hawaii
    JEFF SESSIONS, Alabama               BILL NELSON, Florida
    SUSAN COLLINS, Maine                 E. BENJAMIN NELSON, Nebraska
    JIM BUNNING, Kentucky                JEAN CARNAHAN, Missouri
                                         MARK DAYTON, Minnesota

                          Les Brownlee, Staff Director

                David S. Lyles, Staff Director for the Minority

                         CARL LEVIN, Michigan, Chairman

    EDWARD M. KENNEDY, Massachusetts     JOHN WARNER, Virginia
    ROBERT C. BYRD, West Virginia        STROM THURMOND, South Carolina
    JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
    MAX CLELAND, Georgia                 BOB SMITH, New Hampshire
    MARY L. LANDRIEU, Louisiana          JAMES M. INHOFE, Oklahoma
    JACK REED, Rhode Island              RICK SANTORUM, Pennsylvania
    DANIEL K. AKAKA, Hawaii              PAT ROBERTS, Kansas
    BILL NELSON, Florida                 WAYNE ALLARD, Colorado
    E. BENJAMIN NELSON, Nebraska         TIM HUTCHINSON, Arkansas
    JEAN CARNAHAN, Missouri              JEFF SESSIONS, Alabama
    MARK DAYTON, Minnesota               SUSAN COLLINS, Maine
    JEFF BINGAMAN, New Mexico            JIM BUNNING, Kentucky

                         David S. Lyles, Staff Director

                    Les Brownlee, Republican Staff Director

                                     ______

                Subcommittee on Readiness and Management Support

                      JAMES M. INHOFE, Oklahoma, Chairman

    STROM THURMOND, South Carolina       DANIEL K. AKAKA, Hawaii
    JOHN McCAIN, Arizona                 ROBERT C. BYRD, West Virginia
    RICK SANTORUM, Pennsylvania          MAX CLELAND, Georgia
    PAT ROBERTS, Kansas                  MARY L. LANDRIEU, Louisiana
    JIM BUNNING, Kentucky                E. BENJAMIN NELSON, Nebraska
                                         MARK DAYTON, Minnesota

                       DANIEL K. AKAKA, Hawaii, Chairman

    ROBERT C. BYRD, West Virginia        JAMES M. INHOFE, Oklahoma
    MAX CLELAND, Georgia                 STROM THURMOND, South Carolina
    MARY L. LANDRIEU, Louisiana          JOHN McCAIN, Arizona
    E. BENJAMIN NELSON, Nebraska         RICK SANTORUM, Pennsylvania
    MARK DAYTON, Minnesota               PAT ROBERTS, Kansas
    JEFF BINGAHAM, New Mexico            JIM BUNNING, Kentucky

                                      (ii)

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                             Installation Readiness
                                 march 21, 2001

                                                                       Page

    Wright, Col. Gary W., U.S. Army, Director of Public Works, Fort
      Sill, Oklahoma.................................................     4
    Webster, CSM Dennis E., U.S. Army, III Corps and Fort Hood, Texas     6
    Johnson, Capt. Steven W., U.S. Navy, Commanding Officer of the
      Navy Public Works Center, Norfolk, Virginia....................     9
    Licursi, CMC Kevin H., U.S. Navy, Navy Region Southwest, San
      Diego, California..............................................    13
    Yolitz, Lt. Col. Brian, U.S. Air Force, Commander, 20th Civil
      Engineer Squadron, Shaw Air Force Base, South Carolina.........    17
    Poliansky, CM SGT. Walter, U.S. Air Force, Superintendent of the
      89th Support Group, Andrews Air Force Base, Maryland...........    22
    Phillips, Col. Thomas S., U.S. Marine Corps, Assistant Chief of
      Staff of Facilities, Marine Corps Base, Camp Lejeune, North
      Carolina.......................................................    25
    Lott, Sgt. Maj. Ira, U.S. Marine Corps, Assistant Chief of Staff
      of Facilities, Marine Corps Air Station, Miramar, California...    27
    Smith, Col. David C., Army National Guard, Chief of the Army
      National Guard Division for Installation, Army National Guard
      Bureau, Washington, DC.........................................    40
    LoFaso, Capt. Joseph M., U.S. Navy, Deputy Chief of Staff for
      Shore Installation Management, Commander, Naval Reserve Forces,
      New Orleans, Louisiana.........................................    42
    Dunkelberger, Col. James W., U.S. Army Reserve, U.S. Army Reserve
      Engineer, Office of the Chief of Army Reserve, Headquarters,
      Washington, DC.................................................    45
    Stritzinger, Col. Janice M., Air National Guard, Civil Engineer
      for the Air National Guard, Andrews Air Force Base, Maryland...    49
    Culpepper, Hilton F., Assistant Civil Engineer, Headquarters, Air
      Force Reserve Command, Robins Air Force Base, Georgia..........    56
    Boles, Col. Kenneth L., United States Marine Corps Reserve,
      Assistant Chief of Staff for Facilities, Marine Forces Reserve,
      New Orleans, Louisiana.........................................    58

                   Readiness of United States Military Forces
                                 july 11, 2001

    Keane, Gen. John M., USA, Vice Chief of Staff, United States Army    79
    Fallon, Adm. William J., USN, Vice Chief of Naval Operations.....    86
    Handy, Gen. John W., USAF, Vice Chief of Staff, United States Air
      Force..........................................................    94
    Williams, Gen. Michael J., USMC, Assistant Commandant of the
      United States Marine Corps.....................................    96

       Installation Programs, Military Construction Programs, and Family
                                Housing Programs
                                 august 2, 2001

    DuBois, Raymond F., Jr., Deputy Under Secretary of Defense,
      Installations and Environment..................................   144
    Johnson, Rear Adm. Michael R., USN, Commander, Naval Facilities
      Engineering Command............................................   154
    Robbins, Maj. Gen. Earnest O., II, USAF, Civil Engineer, United
      States Air Force...............................................   162
    Van Antwerp, Maj. Gen. Robert L., Jr., USA, Assistant Chief of
      Staff for Installation Management..............................   173
    McKissock, Lt. Gen. Gary S., USMC, Deputy Commandant for
      Installations and Logistics....................................   188

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2002

                                  ----------

                           WEDNESDAY, MARCH 21, 2001

                               U.S. Senate,
                      Subcommittee on Readiness
                                and Management Support,
                                   Committee on Armed Services,
                                                        Washington, DC.

                             INSTALLATION READINESS

        The subcommittee met, pursuant to notice, at 9:30 a.m. in
    room SD-232A, Russell Senate Office Building, Senator James M.
    Inhofe (chairman of the subcommittee) presiding.
        Committee members present: Senators Inhofe, Cleland, Akaka,
    and E. Benjamin Nelson.
        Professional staff members present: George W. Lauffer and
    Cord A. Sterling.
        Minority staff member present: Michael J. McCord,
    professional staff member.
        Staff assistants present: Kristi M. Freddo, Jennifer L.
    Naccari, and Michele A. Traficante.
        Committee members' assistants present: Ryan Carey,
    assistant to Senator Smith; George M. Bernier III, assistant to
    Senator Santorum; Erik Raven, assistant to Senator Byrd;
    Davelyn Noelani Kalipi, assistant to Senator Akaka; and Eric
    Pierce, assistant to Senator Ben Nelson.

         OPENING STATEMENT OF SENATOR JAMES M. INHOFE, CHAIRMAN

        Senator Inhofe. The subcommittee will come to order.
        First of all, I know it is a large number of people we are
    dealing with here today and for that reason we will have to
    keep opening statements very short. I will do the same.
        Yesterday in this room, Senator Akaka, the ranking member,
    and I held a hearing on encroachment, and I will bet you that
    the 18 or 16 of you today could do just about as good a job as
    they did yesterday, because we have serious problems with
    encroachment. It is just part of the crisis that we are facing
    right now in our military.
        The subcommittee meets this morning to receive testimony on
    the status of our active and Reserve military facilities.
    Although our witnesses represent only eight military
    installations, I am confident that their experiences are
    typical throughout the military services. It is my goal that at
    the completion of the hearing, the subcommittee members will
    have a better appreciation of the conditions, both good and
    bad, that our military personnel and families face on a daily
    basis.
        Since assuming the chairmanship of this subcommittee 4
    years ago, I have stressed the importance of our facilities to
    the readiness and the quality of life of our Armed Forces. I do
    applaud President Bush for his commitment to improving the
    living conditions of our military personnel. However, this
    commitment is only a first step because quality of life not
    only implies barracks and family housing, but also includes the
    working environment.
        During visits to military facilities, I have seen the
    deplorable conditions in which our soldiers, sailors, airmen,
    and marines, both in the active and the Reserve components,
    must work to repair and maintain sophisticated equipment
    required to keep the United States Armed Forces the best in the
    world. For example, at Fort Sill, we are maintaining today's
    artillery systems in motor pools that were designed and built
    for the World War II towed artillery.
        We have trainee barracks in which sewer backups are the
    routine and pre-World War II buildings that are on the verge of
    collapse. I was at Fort Bragg during a rainstorm and saw our
    troops actually covering up some of their equipment to keep it
    dry within the barracks.
        At Camp Lejeune, the roof on the facility that houses a
    small arms simulator was leaking, which interrupted training
    and threatened the sophisticated simulators. At Miramar, the
    outdated hangars were crowded and did not have the appropriate
    equipment to maintain the marines' helicopters.
        These are conditions that the private sector would never
    tolerate and there is no reason that the military should
    tolerate them either.
        During prior subcommittee hearings, high-ranking military
    and civilian Department of Defense officials have testified
    regarding funding shortfalls in the military construction and
    real property maintenance (RPM) accounts. Their testimony
    focused on the budget deliberation and the tradeoffs required
    to meet the modernization goals of the Department. They rarely
    touched on the impact these tradeoffs have had on the
    individual service members and their readiness at the
    installations.
        Today we will hear from individuals who carry out the
    budget decisions of the Department of Defense and Congress. We
    will also hear from senior NCOs whose personnel must live and
    work in the facilities that have been neglected due to the
    continual underfunding of our military construction and RPM
    accounts.
        I would like to extend a warm welcome to all of our
    witnesses. I want to point out that the witnesses were selected
    from a pool identified by the military services. Senator Akaka
    and I have made the final selection based on their experience
    and their type of installation and geographical region. Each of
    them has a wealth of experience in their field and all have
    long and distinguished careers.
        To ensure we gain the maximum benefit from this hearing, I
    would like to keep this informal. As I said in this room
    yesterday, just relax and have a good time. We really want to
    find out from those who are living in these conditions just how
    bad they are or how good they are.
        Senator Akaka.

                  STATEMENT OF SENATOR DANIEL K. AKAKA

        Senator Akaka. Thank you very much, Mr. Chairman. I want
    you to know it is a pleasure to join you again this morning,
    and good morning to all of you here. I want to welcome you from
    both the active duty and the Reserve component panels to our
    hearing this morning. We appreciate your service to your
    country and we look forward to hearing from you.
        You have the responsibility of keeping our military
    installations around the Nation running. I look forward to
    hearing this morning about the good as well as the bad at your
    duty stations.
        I know from visiting the bases and installations in my
    State of Hawaii that there are never enough resources to allow
    us to bring the quality of our workplaces, housing, and
    barracks up to the level we want for our military and our
    families. Although we want to, it would be difficult for all
    the members of this subcommittee to get away from our duties to
    visit all the installations represented here today. I thank
    Chairman Inhofe for doing the next best thing, which is
    bringing all of you here to talk to us.
        I look forward to an informative hearing and hearing
    directly from you about the problems that you face.
        Thank you very much, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Akaka.
        I have personally visited every installation represented
    here today. I have found during the last 10 years when we have
    had the drawdowns and the problems, the funding problems, the
    shortfalls and the RPM problems, I get more accurate
    information when I am out in the field than I do when we listen
    to the chiefs come in here and testify. That is the reason that
    we are going to your level.
        Many of you have never testified before one of these
    committees. So what we want to do is just get the truth as it
    is out there, to save us going to some 16 installations to get
    that.
        Now I will introduce the first panel of witnesses: Col.
    Gary Wright from my State of Oklahoma, Fort Sill; Command Sgt.
    Maj. Dennis Webster, Fort Hood; Capt. Steven Johnson, Norfolk;
    Command MC Kevin Licursi, San Diego; Lt. Col. Brian Yolitz,
    Shaw Air Force Base; CM Sgt. Walter Poliansky--and I understand
    that you have your wife here today, is that correct?
        Sergeant Poliansky. That is correct, and my children.
        Senator Inhofe. Would she stand up please. It is nice to
    have you here.
        Colonel Thomas Phillips from the Marine Corps base at Camp
    Lejeune; and Sgt. Maj. Ira Lott from Miramar. It is nice to
    have all of you here and, because I am from Oklahoma, we are
    going to start with Colonel Wright from Fort Sill.
        I would like to ask you to keep your comments really brief.
    We have a lot of people and we have two panels. So we want to
    get through this and we want to make sure--and many of the
    members will be coming in and out and those who are not here
    will have questions that they will submit in writing for the
    record and then we will leave that record open so that you can
    respond.
        Colonel Wright.

    STATEMENT OF COL. GARY W. WRIGHT, U.S. ARMY, DIRECTOR OF PUBLIC
                       WORKS, FORT SILL, OKLAHOMA

        Colonel Wright. Good morning, Mr. Chairman.
        As always, it was great seeing not only you, but as well
    Senator Warner, at Fort Sill the week before last.
        Senator Inhofe. Yes. Just to let the rest of you know what
    happened, Senator John Warner came with me to Oklahoma. We
    actually went to four facilities. He was able to see some
    things. There is no substitute for being there on the ground
    and seeing what is going on. You did a great job, Colonel
    Wright.
        Colonel Wright. Thank you, sir.
        Senator Akaka and other members of the subcommittee: First,
    I would like to thank each of you for allowing me to
    participate in today's hearing. I am Colonel Gary Wright, the
    Director of Public Works at Fort Sill, Oklahoma. Fort Sill is
    the home of the field artillery for both the United States Army
    and the Marine Corps.
        We currently have over 2,200 buildings totaling 14 million
    square feet, with 94,000 acres and just over 400 miles of
    roads, that support 14,000 service members and 19,000 family
    members. Our mission is to develop, train, equip, mobilize, and
    deploy the field artillery force. During fiscal year 2000, our
    training command graduated 25,508 Army and Marine field
    artillery officers, noncommissioned officers, soldiers, initial
    training soldiers, and marines.
        We also have the III Armored Corps artillery, which is the
    largest and most diverse artillery organization in the free
    world. Its four brigades, totaling 5,000 soldiers, are prepared
    to deploy to any theater of operations to provide fire support
    to the III Armored Corps.
        Sir, the good news is that Fort Sill leads the Army in
    constructing and remodeling single soldier quarters to meet the
    new one plus one standards, with over 2,200 spaces completed
    and construction under way for the remaining 880 units. In
    addition, a new strategic mobility rail project is under
    construction to facilitate the power projection deployments.
        However, 9 of the 13 battalion tactical equipment shops, as
    you mentioned, are close to 50 years old, with no projects to
    correct this situation.
        Fort Sill's 1,415 Army family housing units are well-
    maintained, are in a C-2 status that supports the majority of
    the assigned missions. Moreover, we consistently maintain
    occupancy rates in excess of 98 percent. However, the age of
    our quarters range from 40 to 130 years old and privatization
    is not scheduled for at least 10 years.
        The most pressing challenge is that, after 14 years of
    declining Army budgets, Fort Sill's infrastructure and facility
    readiness is now rated at C-3. That impairs the mission
    performance. Leaky roofs, inoperable and insufficient heating
    and air conditioning systems, broken and leaking plumbing,
    failing roadways, structural failures, and inadequate range
    facilities are common throughout Fort Sill.
        Ten years ago, Fort Sill had a budget of $178 million to
    support training and operate and maintain the installation. The
    public works directorate had nearly 500 personnel. Today Fort
    Sill has one additional FORSCOM corps artillery brigade. It has
    the same mission, supporting the same training load. But it is
    funded at a reduced rate of approximately $100 million.
        Senator Inhofe. I might add that going down in that 10-year
    period from $178 million to $100 million, those were dollars
    that were the real dollars at that time. So it is considerably
    less than half of what it was 10 years ago.
        Colonel Wright. Absolutely, sir.
        Senator Inhofe. Also, Colonel Wright, I am going to ask
    each one of you to try to keep your statement to about 3
    minutes, and then your entire statement will be inserted in the
    record.
        Colonel Wright. Yes, sir. About another 30 seconds here.
        Importantly, the installation is only able to fund 24
    percent of its $43 million annual facility sustainment
    requirement. The directorate of public works now has only 232
    employees to maintain the same infrastructure. As a result,
    Fort Sill, like many other installations, has stopped doing
    preventive maintenance and only does facility breakdown and
    emergency repairs.
        This not only leads to poor readiness and ineffective
    training, but it also leads to more rapid system failures,
    which cost more to repair in the long run. This reduced funding
    has resulted in a backlog of over $214 million in facility
    maintenance at Fort Sill.
        In summary, unless significant resources are added to the
    Army's overall budget for sustainment, restoration, and
    modernization, Fort Sill will continue to be forced to
    drastically underfund the maintenance of its installation
    infrastructure and to sacrifice to fund training and readiness
    mission requirements.
        Again, I would like to thank you for allowing me to testify
    today. I thank each of you for what you do each and every day
    for the Army and its sister services.
        [The prepared statement of Colonel Wright follows:]

                 Prepared Statement by Col. Gary W. Wright, USA

        I am Colonel Gary Wright, the Director of Public Works at Ft. Sill,
    Oklahoma.
        Ft. Sill is the home of the field artillery for both the United
    States Army and Marine Corps. We currently have over 2,200 buildings
    totaling 14 million square feet with 94,000 acres and over 400 miles of
    roads to support 14,000 service members and 19,000 family members. Our
    mission is to develop, train, equip, mobilize, and deploy the field
    artillery force. During fiscal year 2000 our training command graduated
    25,508 Army and Marine field artillery officers, non-commissioned
    officers, and initial entry training soldiers and marines. We also have
    the III Armored Corps Artillery, which is the largest and most diverse
    artillery organization in the free world. Its four brigades totaling
    5,000 soldiers are prepared to deploy to any theater of operations and
    provide fire support for the III Armored Corps.
        The good news is that Ft. Sill leads the Army in constructing and
    remodeling single soldiers quarters to meet the new 1+1 standards, with
    over 2,200 spaces completed and construction under way for the
    remaining 880 units. In addition, a new Army strategic mobility rail
    project is under construction to facilitate power projection
    deployments. However, nine of thirteen battalion tactical equipment
    shops are close to 50 years old with no projects to correct this
    situation in the Army Future Years Defense Plan (FYDP). In fact, Ft.
    Sill has only two military construction projects in the FYDP, far below
    what is required to renew aging infrastructure.
        Ft. Sill's 1,415 Army family housing units are well-maintained at a
    C-2 status (supports majority of assigned missions). Moreover, we
    consistently maintain occupancy rates in excess of 98 percent. However,
    the age of our quarters range from 40 to 130 years and privatization is
    not scheduled for at least 10 years.
        Our most pressing challenge is that after 14 years of declining
    Army budgets, Ft. Sill's infrastructure and facility readiness is now
    rated at C-3 (impairs mission performance). Leaky roofs, inoperable and
    insufficient heating and air conditioning systems, broken and leaking
    plumbing, failing roadways, structural failures, and inadequate range
    facilities are common throughout Ft. Sill.
        Ten years ago Ft. Sill had a budget of $178 million to support
    training, and operate and maintain the installation. The Public Works
    Directorate had nearly 500 personnel. Today, Ft. Sill has one
    additional FORSCOM Corps Artillery Brigade, the same mission,
    supporting the same training load, but is funded at a reduced rate of
    approximately $100 million in fiscal year 2001. More importantly, the
    installation is only able to fund 24 percent of its $43 million annual
    facility sustainment requirement. The DPW now has only 232 employees to
    maintain the same infrastructure. As a result, Ft. Sill, like many
    other installations, has stopped doing preventative maintenance and
    only does facility breakdown and emergency repairs. This not only leads
    to poor readiness and ineffective training, but it also leads to more
    rapid system failures which cost more to repair in the long run. This
    reduced funding has resulted in a backlog of over $214 million in
    facility maintenance at Ft. Sill.
        In summary, unless significant resources are added to the Army's
    overall budget for Real Property Maintenance the Army will continue to
    be forced to drastically underfund the maintenance of its installations
    infrastructure as a sacrifice to fund training and readiness mission
    requirements.

        Senator Inhofe. Thank you, Colonel.
        Sergeant Webster.

     STATEMENT OF CSM DENNIS E. WEBSTER, U.S. ARMY, III CORPS AND
                            FORT HOOD, TEXAS

        Sergeant Webster. Good morning, sir. I am CSgt. Maj. Dennis
    Webster. I am from III Corps and Fort Hood, Texas.
        Thank you for the opportunity to speak to you this morning.
    The opportunity to speak to you this morning is very important
    to me. Your understanding and support of our installations and
    our soldiers and civilians is vital to the Army's mission and
    overall operational readiness.
        III Corps is the most powerful armored corps in the world.
    75,500 soldiers, 24,000 combat vehicles and aircraft, 37
    percent of the U.S. active component ground combat power. It
    includes forces at four major installations: Fort Hood, Fort
    Carson, Fort Bliss, and Fort Sill, also with oversight of
    training at Fort Riley, Kansas.
        During these opening remarks I will focus on Fort Hood, but
    in general the same conditions exist at all our installations.
    Fort Hood is considered the power projection platform for the
    Army. We are the knockout blow when the world needs us. We have
    to be prepared to respond to any threat anywhere in the world
    when called upon.
        Unfortunately, it is becoming more and more difficult,
    because of demands placed on the infrastructure that supports
    our units, our soldiers, our civilians, and our families. The
    Army over the years has attempted to juggle wellbeing needs and
    initiatives while trying to maintain readiness. As it should
    be, the priority has been on our ability to fight and win our
    Nation's wars, but the price has been a shortfall in the
    maintenance of our installation infrastructure.
        Fort Hood is a maintenance challenge. It is the equivalent
    of four Pentagons' worth of buildings. This includes 99
    barracks, 56 motor pools, nearly 6,000 sets of family quarters,
    more than 400 miles of water lines, 280 miles of waste water
    lines, 260 miles of gas lines, 900 miles of paved roads, 1,700
    acres of paved parking lots. Fort Hood is big.
        We have over 340 square miles on the installation. We are
    home to over 42,000 soldiers and support over 166,000 family
    members and retirees.
        At Fort Hood we have a comprehensive RPM, or real property
    maintenance, program that includes repairs, preventive
    maintenance, and life cycle replacement of components. Under
    the Army's installation status report, or ISR, facilities are
    assessed against Army condition standards for each type of
    facility. Red facilities are described as dysfunctional and in
    overall poor condition. Of the 44 barracks renovated on Fort
    Hood during the fiscal years 1990 to 1995, 25 of those or 67
    percent are now rated amber or red in the ISR.
        The fiscal year 2001 requirement for real property
    maintenance and repair at Fort Hood is estimated at $204
    million to bring facilities to standard. The current funding
    level of $16.4 million basically limits efforts to priority one
    repair. Priority one repairs include health protection, safety,
    security, or the prevention of property damage. Examples would
    include gas leaks, sewage backups, heat and air conditioning
    problems, and water failures.
        On a positive note, our construction program for new
    facilities represents improved conditions for our soldiers. But
    they also represent more space, more components, and more
    technically complex systems to maintain. New barracks now have
    individual sleeping rooms, multiple bathrooms, and individual
    heating and cooling systems, compared to the old sleeping bays,
    gang latrines, and centralized systems.
        Despite the many new facilities, the average building on
    Fort Hood is nearly 30 years old. Funding levels have never
    allowed for a comprehensive approach that included adequate and
    systematic preventive maintenance and components replacement.
        Steady progress has been made over the years and this
    encourages soldiers, particularly ones who have returned to
    Fort Hood from other tours. But since RPM focus has to be of
    necessity on priority one items, those items that soldiers see
    on a daily basis end up on the backlog. Let me give you a few
    examples----
        Senator Inhofe. I will tell you what, Sergeant Webster. Try
    to wrap it up if you could, because we have a lot of witnesses
    here.
        Sergeant Webster. Very well, sir.
        When we look at where soldiers work, several items are
    readily apparent. The average life expectancy of roofs on Fort
    Hood is 15 years. The lack of funds drives the decision to
    patch rather than replace. At the average cost of $59,000 per
    roof, Fort Hood should be spending nearly $9 million per year
    on roof replacements on our 2,272 non-housing buildings.
    Maintenance shop bay doors and lights are inoperable. Over 160
    bay doors currently need repair or replacement. 1,300 bay
    lights are inoperable. Of 194 hangar doors at two airfields,
    inspection revealed 104 need repair immediately. Thank you.
        [The prepared statement of Sergeant Webster follows:]

            Prepared Statement by CSgt. Maj. Dennis E. Webster, USA

        Good morning, I am CSgt. Maj. Dennis Webster. I am the Command
    Sergeant Major for the U.S. Army III Corps and Ft. Hood, Texas. Thank
    you all for the opportunity to speak to you this morning.
        This opportunity to speak to you this morning is very important to
    me--your understanding and support of our installations and our
    soldiers and civilians are vital to the Army's mission and overall
    operational readiness.
        III Corps is the most powerful Armored Corps in the world--75,500
    soldiers--24,000 combat vehicles and aircraft--37 percent of all U.S.
    active component ground combat power. It includes forces at four major
    installations: Fort Hood, Fort Carson, Fort Bliss, and Fort Sill, also
    with oversight at Fort Riley. During these opening remarks, I will
    focus on issues at Fort Hood, but in general, the same problems exist
    at all our installations.
        Fort Hood is considered the power projection platform of the Army--
    the knockout blow when the world needs us. We must be prepared to
    respond to any threat, anywhere in the world, when called upon.
    Unfortunately, this is becoming more and more difficult because of the
    demands placed on the infrastructure that supports our units, our
    soldiers, our civilians, and our families.
        The Army, over the years, has attempted to juggle well-being needs
    and initiatives while trying to maintain readiness. As it should be,
    the priority has been our ability to fight and win our country's wars,
    but the price has been a shortfall in the maintenance of our
    installation infrastructure. Fort Hood is a maintenance challenge! It
    has the equivalent of four Pentagons' worth of buildings. This includes
    99 barracks, 56 motor pools, and nearly 6,000 sets of family quarters,
    more than 400 miles of water lines, 280 miles of waste water lines, 260
    miles of gas lines, 900 miles of paved roads, 1,700 acres of paved
    parking. Fort Hood is BIG! We have over 340 square miles on the
    installation. We are the home to over 42,000 soldiers and supporting
    over 166,000 family members and retirees.
        At Fort Hood, we have a comprehensive RPM program that includes
    repairs, preventive maintenance, and the life cycle replacement of
    components. Under the Army's Installation Status Report (ISR),
    facilities are assessed against DA condition standards for each type of
    facility. ``Red'' facilities are described as dysfunctional and in
    overall poor condition. Of the 44 barracks renovated on Fort Hood
    during fiscal year 1990-1995, 25 (67 percent) are now rated Amber or
    Red in the ISR.
        The fiscal year 2001 requirement for real property maintenance and
    repair at Fort Hood is estimated at $204 million to bring facilities to
    standard. The current funding level of $16.4 million basically limits
    efforts to Priority 1 repairs. Priority 1 repairs include health
    protection, safety, security, or the prevention of property damage.
    Examples include gas leaks, sewage backups, heat, air-conditioning, and
    power failures.
        On a positive note, our construction program for new facilities
    represents improved conditions for our soldiers, but they also
    represent more space, more components, and more technically complex
    systems to maintain. New barracks now have individual sleeping rooms,
    multiple bathrooms, and individual heating and cooling systems compared
    to the old sleeping bays, gang latrines, and centralized systems.
    Despite the many new facilities, the average building on Fort Hood is
    nearly 30 years old. Funding levels have never allowed for a
    comprehensive approach that included adequate and systematic preventive
    maintenance and component replacements.
        Steady progress has been made over the years, and this encourages
    soldiers, particularly ones who have returned to Fort Hood after other
    tours. But since the RPM focus has to be, of necessity, on Priority 1
    items, those items that soldiers see on a daily basis end up on the
    backlog. Let me give you a few examples.
        When we look at where soldiers work, several items are readily
    apparent. The average life expectancy for roofs on Fort Hood is 15
    years. Lack of funds drives the decision to ``patch'' rather than
    replace. At the average cost of $59,000 per roof, Fort Hood should be
    spending nearly $9 million per year on roof replacements for the 2,272
    non-housing buildings. The problem compounds with each year facilities
    are not fully maintained. Maintenance shop bay doors and bay lights are
    prime examples of the impact of deferred maintenance on the
    installation's ability to perform its mission. Over 160 bay doors
    currently need repair or replacement. More than 1,300 bay lights are
    inoperable. A recent inspection of 194 hangar doors at the two
    airfields revealed that 104 need repair immediately. When we look at
    where soldiers live, there are different, but no less important issues.
    For example, over 5,000 locks in barracks need repair or replacement
    today. Excessive wear without replacement means the same key opens
    multiple doors and soldiers' safety and security are compromised.
        When we take an even larger view of things that the average soldier
    doesn't consider until there is a failure somewhere, other issues
    become apparent. A large portion of our water lines, waste water lines,
    and gas lines is part of the original distribution systems for Fort
    Hood and is more than 50 years old. With a 40 to 50-year life
    expectancy, these systems are deteriorated and failing frequently. Fort
    Hood repaired four water line breaks for 10-16'' water lines in just 1
    week this year. Annual replacement investment exceeds $5 million for
    these items alone.
        I'm sure you are all aware of the current state of our family
    housing. There are initiatives in all the services to address these
    shortfalls. We at Fort Hood have our Residential Communities Initiative
    (RCI) to address our family housing shortfall and maintenance. We have
    begun to think ``outside of the box'' to address problems we are facing
    and RCI is an excellent example; however, many times when we think
    ``outside of the box'' we need additional approvals to execute, and in
    this I would ask your help.
        The facilities at Fort Hood play a key role in the military
    readiness equation. The continued choice to patch roof leaks rather
    than replace roofs jeopardizes facilities and costly computer
    equipment, furniture, and carpeting--we end up being ``penny wise,
    pound foolish.'' Soldiers lose confidence in their leaders because of
    perceived indifference or inability to take care of their needs. Our
    soldiers, civilians, and their families are negatively impacted in the
    places they work, live, and play.
        In conclusion, I am extremely proud of our soldiers and civilians;
    I am proud to represent them. I thank you on behalf of all III Corps
    soldiers, civilians, and family members for your past support and look
    forward to the opportunity to discuss and solve together the challenges
    that lie ahead.

        Senator Inhofe. We have been joined by Senator Ben Nelson
    from Nebraska. Did you have an opening statement to make,
    Senator?
        Senator Ben Nelson. No, thank you.
        Senator Inhofe. Alright.
        Captain Johnson.

      STATEMENT OF CAPT. STEVEN W. JOHNSON, U.S. NAVY, COMMANDING
       OFFICER OF THE NAVY PUBLIC WORKS CENTER, NORFOLK, VIRGINIA

        Captain Johnson. Good morning, Mr. Chairman and members of
    the subcommittee. I am Captain Steve Johnson, the Regional
    Engineer for the Commander, Navy Region Mid-Atlantic, and
    Commanding Officer of Navy Public Works Center Norfolk. I thank
    you for the opportunity to discuss the condition of our
    facilities and family housing.
        As the Mid-Atlantic Regional Engineer, I have
    responsibilities for Navy facilities in Virginia's Hampton
    Roads area, in Philadelphia and Mechanicsburg, Pennsylvania,
    and for Naval Air Station Keplovik, Iceland. In the Hampton
    Roads area there are six major shore installations: Naval
    Station Norfolk, Naval Support Activity Norfolk, Norfolk Naval
    Shipyard, Naval Amphibious Base Little Creek, Naval Air Station
    Oceana, and Naval Weapons Station Yorktown. These six major
    shore installations comprise 56 square miles of real estate and
    6,600 facilities valued at $9.2 billion, and they support
    82,000 active duty military personnel, 107 ships, and 38
    aircraft squadrons.
        In addition to submitting my written testimony, I provide
    the subcommittee with a handout containing pictures depicting
    some of the good and some of the bad in the Hampton Roads area.
        I thank the subcommittee for the support it has given us in
    the past. It has allowed us to do many good things for our
    sailors. However, there is much to be done. There are seven
    groups of facilities in my written statement: waterfront,
    aviation, bachelor housing, family housing, training,
    utilities, and other. Only the family housing category is rated
    C-2, capable of meeting its mission most of the time.
        Senator Inhofe. What are the rest of them rated?
        Captain Johnson. They are rated C-3, sir, marginally
    capable of meeting their mission.
        Our facilities provide poor quality service for our
    sailors, which creates a message mismatch. Quality of service
    is advocated, but not funded.
        Mr. Chairman, this concludes my oral statement. I welcome
    any questions that you or the other members of the subcommittee
    may have.
        [The prepared statement of Captain Johnson follows:]

               Prepared Statement by Capt. Steven W. Johnson, USN

        Mr. Chairman, members of the subcommittee, I am Capt. Steve
    Johnson, Regional Engineer for the Commander, Navy Region, Mid-Atlantic
    and Commanding Officer of the Navy Public Works Center, Norfolk. I
    would like to thank you for the opportunity to discuss the condition of
    our facilities and base housing. As the Mid-Atlantic Regional Engineer,
    I have responsibilities for Navy facilities in the Virginia Hampton
    Roads area, at Philadelphia and Mechanicsburg in Pennsylvania, and for
    the Naval Air Station in Keflavik, Iceland. In the Hampton Roads area
    alone there are six major shore installations: Naval Station Norfolk,
    Naval Support Activity Norfolk, Norfolk Naval Shipyard, Naval
    Amphibious Base Little Creek, Naval Air Station Oceana, and Naval
    Weapons Station Yorktown. These six major shore installations comprise
    56 square miles of real estate, 6,600 facilities valued at $9.6
    billion, and support 82,000 active duty military, 107 ships and 38
    aircraft squadrons.
        As the Mid-Atlantic Regional Engineer, I follow the Navy's facility
    investment priorities of waterfront, airfield, training, bachelor
    quarters, and utilities, whether I am recommending military
    construction (MILCON) projects, or determining what local OM&N projects
    to fund across the Mid-Atlantic Region. In addition to the Navy's
    investment priorities, I also consider mission accomplishment, economic
    efficiencies, and quality of service in establishing our local facility
    funding priorities. Based on available resources, urgent needs are
    being met with difficulty in the Region and I would judge our overall
    facility condition as marginally acceptable.

                             WATERFRONT FACILITIES

        The condition of our waterfront facilities, as reported by our Base
    Readiness Report (BASEREP), is C-3. We estimate the maintenance backlog
    to be $88 million. Of our 85 piers and wharves, 50 were constructed
    before 1950. These piers are structurally inadequate to enable cranes
    to service ships from the piers, are too low to properly handle
    amphibious landing ships, are too narrow and have inadequate space
    between piers. Electrical power is insufficient to meet ships needs and
    will become even more critical as new classes of ships such as the
    LPD17 come on line. Safety and maintenance are also concerns because
    the steam lines are exposed to the tides below the pier decks and the
    shore power cables lie on the pier deck. We also spend $2 million per
    year replacing timber fenders. New double deck pier designs will
    address all of these issues. Our waterfront re-capitalization plan
    includes replacement of one pier per year for the next 20 years and
    will be capable of supporting future classes of ships.

                              AVIATION FACILITIES

        The condition of our aviation facilities, as reported by our
    BASEREP, is C-3. We estimate the aviation facility maintenance backlog
    to be $90 million. For example, the Naval Station Norfolk Chambers
    Field hangars are deteriorated WWII-era facilities, have high
    maintenance and energy costs, and cannot effectively support modern
    aircraft squadrons' missions. Working conditions in the spaces are poor
    and have gotten press coverage as a cause for pilot attrition. They are
    65 percent oversized--and therefore are more expensive to maintain than
    they should be. The present hangar layout is inefficient and requires
    aircraft and vehicles to taxi excessively between hangars. The Chambers
    Field runways and taxiways also require refurbishment and upgrade to
    address modern aircraft loading requirements. These deficiencies are
    being addressed through an airfield re-capitalization and modernization
    plan that has been supported, to date, by Congress. The total re-
    capitalization plan will take 9 years, cost $160 million, of which $46
    million is for pavement and $114 million for hangars, and demolishes 42
    facilities.
        Improvements to some facilities have been made. For example, at
    Naval Station Norfolk two modern hangars were constructed in 1994 that
    are sized for modern aircraft, are energy and maintenance efficient,
    and provide the right environment for productive aircraft maintenance
    and day-to-day squadron operations.
        Nevertheless, there remain aviation facility deficiencies that
    adversely affect day-to-day operations. An example is 50-year-old
    Hangar 200 at Naval Air Station Oceana which has been highlighted in
    the media as a Navy facility in poor condition. The hangar door surface
    coating has completely failed and the door is covered with rust. The
    antiquated gas heat system is expensive to maintain and fails
    frequently. Some sections of the piping system have burst. The hangar
    doors routinely fail presenting a safety hazard and resulting in
    significant energy loss when they are stuck in the open position.
    Aircraft maintenance production suffers as a result of having to
    manually open the doors and as well as the exposure of sailors to the
    elements.

                                BACHELOR HOUSING

        The condition of our bachelor housing facilities, as reported by
    our BASEREP, is C-3. We estimate the bachelor housing and galley
    facility maintenance backlog to be $67 million. Although we have
    completed more than $96 million in renovation and MILCON projects over
    the past 3 years, in order to upgrade all remaining barracks to 1+1
    standards, there are still 10 barracks which need to be converted at an
    estimated cost of $79 million.
        The recently completed $7.9 million Carter Hall renovation at Naval
    Station Norfolk is an outstanding example of 1+1 bachelor quarters
    standard. This is a first class, showcase quality facility and was
    first utilized by sailors from the U.S.S. Cole. On the other hand,
    bachelor housing that has not been renovated to 1+1 standards is
    generally or poor material condition. For example, Groshong Hall at
    Naval Station Norfolk was built in 1973. It has central head facilities
    and the majority of its sailors are three to a room. The sinks in the
    heads are separating from the walls, the showers leak to the floors
    below and there is water damage to walls and floors.

                                 FAMILY HOUSING

        The condition of our family housing facilities, as reported by our
    BASEREP, is C2. We estimate the family housing maintenance backlog to
    be $55 million. About 93 percent of Navy families in the Hampton Roads
    region live in private sector housing. Although private sector housing
    is plentiful, expenditures for suitable housing often exceed junior
    enlisted pay grade housing allowances. The region manages 4,092
    enlisted and officer homes, of which 69 percent have been renovated
    within the past 7 years. Two neighborhoods, totaling 678 homes, are
    newly constructed or currently under construction. About 500 homes
    require renovation and there is a requirement deficit of more than 800
    homes. The requirement for affordable housing, particularly for junior
    enlisted families, is being addressed through a pilot program with the
    Virginia Housing Development Authority (VHDA). VHDA will construct 80
    housing units on government land that will be leased to junior enlisted
    families under a Navy privatization initiative. Additional
    privatization initiatives are being considered for the Hampton Roads
    Area.

                              TRAINING FACILITIES

        The condition of our training facilities, as reported by our
    BASEREP, is C-3. We estimate the training facility maintenance backlog
    to be $42 million. In total more than 3 million square feet are
    designated for training use in more than 200 facilities. Nearly one
    third of this space is categorized as substandard or inadequate. A
    typical training facility is Building 3504 at Little Creek which houses
    the Expeditionary Warfare Training Group Atlantic. 22,000 students per
    year train in the facility. Classes have been postponed because of
    heating, ventilation, and air conditioning (HVAC) failures. The power
    supply is antiquated and inadequate to support the electrical load of
    the training equipment. Another example is Building SP-381 at Naval
    Station Norfolk. Its 35-year-old roof has deteriorated beyond
    economical repair and leaks during rainstorms. The walls are soiled and
    discolored from age and high usage. The suspended ceiling is water
    stained and damaged. Classroom training is frequently interrupted
    during rainstorms. The 16-year-old HVAC system is in need of
    replacement.

                                   UTILITIES

        The condition of our utility infrastructure, as reported in our
    BASEREP is C-3. We estimate the utility maintenance backlog to be $122
    million for the region. As an example of the impact of these utility
    deficiencies, nuclear and non-nuclear ships at Norfolk Naval Shipyard
    have experienced numerous faults and outages as they are served by
    underground electrical cables that are over 60 years old. Mobile
    electrical transformers have had to be placed at Pier 23 at Naval
    Station Norfolk to temporarily alleviate reliability problems with
    shore power. Two nuclear submarines at this pier recently lost shore
    power because of problems with these mobile units. The substandard
    condition of 40-year-old waterlines at NAVSTA Norfolk have resulted in
    low water pressure and low water quality to bachelor quarters and
    family housing occupants. The facilities at the Atlantic Fleet
    Headquarters and NATO compounds must rely on individual emergency
    generators in part because of the reliability of the 40 year old
    substation and switchgear that serves these compounds.

                                OTHER FACILITIES

        The condition of our remaining facilities is generally C-3. We
    estimate the remaining facility maintenance backlog for the Hampton
    Roads shore facilities to be about $343 million. Programming decisions
    based on Navy priorities enable us to maintain and plan the re-
    capitalization of our waterfront, airfields, bachelor and family
    housing, training facilities, and utilities. We need to stay this
    course and continue these investments. However, these decisions leave
    few resources for other facility requirements such as administrative
    buildings, personnel support facilities, logistical facilities, and
    roads. The consequence is many of these facilities are in poor
    condition and adversely affect the quality of service for our sailors
    and civilian employees. Examples are provided in the handout and
    include:

             At NSA Norfolk, the Commander Naval Surface Forces
            Atlantic staff of 108, who are managing the manning, training,
            ship maintenance, and funding for the Atlantic Fleet, are
            housed in a wood frame building constructed in 1942 that has a
            $5 million maintenance backlog. Work conditions are very poor.
            The windows and walls leak, there are frequent HVAC failures,
            the electrical system has deteriorated, there are structural
            problems, and steam leaks in crawl spaces.
             There are dozens of 40- to 60-year-old wood frame
            buildings throughout the region. Nine have recently either been
            condemned or restrictions have been placed on them because of
            structural failures or inadequacies. At Naval Support Activity
            (NSA) Norfolk, the Atlantic Fleet Communications Department had
            to be relocated on an emergency basis when their primary
            building had a wood truss frame failure and was subsequently
            condemned as structurally unsafe.
             While many facilities at Naval Station Norfolk have
            similar problems, the Commander Naval Air Force Atlantic
            command building roof and walls leak so badly that plastic
            tarps are used to cover mechanical systems. Buckets catch water
            and there is water damage throughout the interior.
             Building 31 at Norfolk Naval Shipyard (NNSY) in
            Portsmouth, used by shipyard engineers, is an historic
            structure built in 1866. Typical of more than 30 buildings in
            the ``old yard'' area of the base, this admin facility has been
            fixed and fixed again, pending funding of a $3.4 million
            renovation project. One half of the timber roof recently
            collapsed, causing us to move our 150 people overnight. The
            result is an unplanned repair expenditure of $250,000 and
            significant production time and cost impacts to several
            submarine and ship overhaul projects.
             The Regional Child Development Center (CDC) supporting
            NNSY and the Naval Medical Center in Portsmouth is undersized,
            with a capacity of 57 for a 372-child requirement. Qualified,
            local private childcare is virtually non-existent. The building
            is the only one in the region with a C-4 rating: it has no
            sprinkler system, inadequate toilet facilities, and a chronic
            mold infestation that caused a complete CDC shutdown for 30
            days last September. Elimination of this health concern would
            require complete replacement of interior architectural and
            mechanical systems. The best economic solution is MILCON (P-
            333) that has been unprogrammed for 15 years. P-333 ($6.4
            million) would save over 300 sailors an average of $128 per
            month in childcare costs.
             At the Little Creek Naval Amphibious Base there are
            many temporary wood-frame constructed in 1943 with most
            building systems failing.
             A fourth of all Naval Station Norfolk roads are
            classified as poor or worse. At the waterfront more than a
            thousand sailors park their cars in dirt parking lots.
             Pre-commissioning units consisting of groups of 60
            sailors needed a facility to work from and were given a
            building on the demolition list as it was the best facility
            available. They fixed the building to make it habitable through
            self-help. Six months later it was discovered that termites had
            caused structural damage to the building and we had to evacuate
            them to another building earmarked for demolition. We're still
            awaiting funding to renovate a facility for pre-commissioning
            units.

        There are also many success stories where new operational or
    personnel support facilities have come on line and represent the high
    standard we are proud of and want to attain across our facility
    inventory. Examples include:

             A new $13.3 million air terminal has just been
            finished at Naval Station Norfolk. This facility has
            dramatically enhanced the quality of service for sailors and
            airmen. This terminal is one of the busiest terminals in the
            Air Mobility Command system and we now have a first class
            facility that handles more than 10,500 passengers per month and
            eliminates previous problems of aircraft, cargo, and passenger
            overcrowding.
             The new $4.8 million gymnasium at Naval Air Station
            Oceana is a modern, top quality sports facility.
             The Youth Center at New Gosport in Portsmouth
            renovated an undersized existing youth center facility and
            connected a refurbished warehouse to make it a modern, top
            quality facility.

        One of the most effective means to reduce costs is to reduce our
    maintenance footprint. Accordingly, the Navy and Mid-Atlantic Region
    has been emphasizing demolition as part of our RPM program for several
    years. Since 1998, including plans for this year, we will have
    demolished 259 buildings and have removed 874,000 square feet and $19
    million of maintenance backlog from the inventory. Many more structures
    could be demolished, but other facilities first need to be renovated
    and occupants moved in order to make the worst structures available for
    demolition.
        The Mid-Atlantic Region is also stretching available funds by
    pursuing energy conservation initiatives using third party financing
    such as installing energy efficient lighting or air conditioning
    systems. Working with local utility companies we jointly develop
    projects where the savings pay for the project construction and
    financing, and when the loan is paid off the Navy accrues all future
    savings.
        In summary, the condition of facilities in the Hampton Roads area
    is mixed. There are new modern facilities such as barracks, hangars,
    and piers, and there is a long-term plan in place to re-capitalize our
    waterfront and airfields. However, more funds will be needed across the
    board to reduce the overall maintenance backlog, to improve the quality
    of service for our sailors, and to achieve balanced facility
    excellence.
        I'm happy to answer any questions you may have.

        Senator Inhofe. Thank you very much, Captain Johnson.
    Chief.

       STATEMENT OF CMC KEVIN H. LICURSI, U.S. NAVY, NAVY REGION
                    SOUTHWEST, SAN DIEGO, CALIFORNIA

        Chief Licursi. Good morning, Senator Inhofe and
    distinguished subcommittee members.
        As the CNO-directed Master Chief for Navy Region Southwest
    in San Diego, California, I am honored this morning to appear
    before you and speak about the condition of Navy facilities in
    family and bachelor housing on behalf of the sailors and
    families of Navy Region Southwest.
        I would especially like to thank the subcommittee members
    for your past efforts and continued commitment to improve
    quality of life for our sailors and their families. Our sailors
    sincerely appreciate all you and our Navy leadership has done
    on their behalf. The committee's efforts have resulted in
    providing our sailors much improved Navy morale, welfare, and
    recreation programs. I am convinced that these types of
    activities are providing the sailors healthier lifestyles by
    offering alternatives to alcohol and other activities that
    negatively impact personnel readiness.
        There has been a considerable investment into family
    housing, but there is still much work left to do when Navy
    family housing falls either below our standards or where the
    community cannot capably support our sailors in the private
    sector. Regrettably, while there has been considerable progress
    made towards enhancing the quality of life facilities in Navy
    Region Southwest, workplace quality of life continues to suffer
    due to the continuing deterioration of shore infrastructure.
        Leaking roofs, plumbing leaks, ventilation and air
    conditioning systems, when provided, do not work. Our buildings
    are antiquated, with an average age of 50 years. We create a
    message alignment problem when we put 15-year-old furniture
    back into the newly renovated facilities that we are doing.
        Bachelor quarters infrastructure also affects sailors'
    quality of life. In the barracks, the lack of routine
    maintenance and restoration due to funding constraints, the
    buildup of condensation and mildew from antiquated air
    conditioning systems, the age, the outdated basic designs, and
    the lack of ability to house all the sailors desiring to room
    in the bachelor housing, all contribute to poor quality of
    life.
        Little or no funding is applied to these barracks other
    than emergency trouble calls, due to other more pressing
    financial needs. Our sailors are living with furniture that is
    well beyond its life expectancy, due to the lack of available
    funding for furniture.
        Your Navy today is manned by young men and women who are
    the best educated and trained sailors we have ever had. Their
    commitment to accomplish their mission has never been stronger.
    In my 23 years of naval experience, I have never seen your
    sailors fail to answer the call when faced with the challenges
    and dangers that exist in our world today. They deserve quality
    family housing that meets today's standards. They deserve
    quality bachelor housing and they deserve a healthy, safe work
    environment of sound material condition and equipped with
    furniture that is functional.
        Senators, we tell the parents of our sailors that we will
    take care of their sons and daughters in return for the service
    they provide our country. Your continued support in these vital
    areas is imperative for us to be able to meet that commitment.
        I want to thank you for letting me appear before this
    distinguished panel and I hope that my testimony will help you
    to decide to continue to support the shore infrastructure
    repair and construction relief we so badly need. I thank you
    and I look forward to answering any questions that you may
    have.
        [The prepared statement of Chief Licursi follows:]

                Prepared Statement by CMC Kevin H. Licursi, USN

        Good morning Senator Inhofe and distinguished subcommittee members.
    As the CNO Directed Master Chief for Commander, Navy Region Southwest
    (NRSW), I am honored this morning to appear before you and speak about
    the condition of Navy facilities and family housing on behalf of the
    over 300,000 sailors, civilian employees, and family members that live
    and work in Navy Region Southwest. I would especially like to thank the
    subcommittee members for your past efforts and continued commitment to
    improve quality of life for our sailors and their families. Our sailors
    sincerely appreciate all you and our Navy leadership has done on our
    behalf.
        Many of the improvements in sailors' quality of life over the past
    years have been a direct result of your partnership with Navy
    leadership. In recent years, military construction (MILCON) and non-
    appropriated fund construction (NAFCON) projects throughout Navy Region
    Southwest such as family housing, bachelor housing, child development
    centers, youth centers, recreational and medical facilities to name a
    few, have either been completed or they are in work. Additionally, with
    your support, we have received appropriated funds to remodel old
    bachelor housing to improve our sailors' standard of living.
        The committee's efforts have also resulted in providing our sailors
    much-improved Navy morale, welfare, and recreation programs. All the
    Navy bases in my region either now have or are slated to have Single
    Sailor Recreation Centers that offer high adventure outdoor activities,
    access to technology in the form of internet computers, leisure
    programs such as libraries, games and movie theaters, and personal life
    skills education. After traveling throughout Navy Region Southwest and
    talking to thousands of sailors, I am convinced that these types of
    activities are providing sailors healthier lifestyles by offering
    alternatives to alcohol and other activities that negatively effect
    personnel readiness. The recreation centers are conveniently located
    where the single sailor population lives and works. These recreation
    centers would have never been realized without the necessary
    appropriated funding which you were instrumental in obtaining for the
    Navy to construct, repair, and outfit the buildings, and provide the
    programs that are being used by great numbers of sailors today.
        Due to the past support of Congress, there has been a considerable
    investment into family housing in Navy Region Southwest. But there is
    still much work left to do where our Navy family housing either falls
    below our standards or where the community is not capable of supporting
    our sailors with private assets.
        The Navy's three-pronged approach to solving our housing needs is
    crucial to the recruitment and retention of our highly trained sailors.
    First, the goal to increase the Basic Allowance for Housing in order to
    eliminate out of pocket expenses is the key to enabling our sailors to
    afford the available housing in the private community. Second, where it
    is feasible, we are leveraging available resources through the use of
    the Public/Private Venture (PPV) authority that Congress extended
    through December 31, 2004. Third, we ask you to continue to support
    housing MILCON so that we can finish the job of improving the quality
    of living available to our sailors and their families.
        In San Diego there is a current vacancy rate of less than 1
    percent, and a projected shortfall of over 5,000 homes for our Navy and
    Marine Corps families. The cost of deregulated utilities has grown
    exponentially. The average waiting time for Navy housing is 18 to 36
    months for enlisted and officer personnel respectively. To combat this
    untenable situation, we are about to award our first PPV contract in
    Navy Region Southwest. We are excited about this program. You can
    understand this excitement when you realize that for the price of one
    MILCON house through PPV, we can house 13 sailors and their families at
    a higher quality of living.
        Our sailors and I personally thank you for recently pulling forward
    the replacement of 100 more houses into this year's program. As a
    result, NAS Lemoore is about 75 percent through the multi-phased
    replacement of 1,547 quality homes. With the increase in expected
    families, it is imperative to keep this project on track.
        Regrettably, while I have mentioned some of the progress that has
    been made toward enhancing the QOL facilities in Navy Region Southwest,
    workplace quality of life continues to suffer due to the continuing
    deterioration of shore infrastructure.
        Operational aircraft hangars I have toured at our bases are old and
    in poor condition. Leaking roofs, plumbing leaks, ventilation, and air
    conditioning systems (when provided) don't work. The average age of
    buildings within Navy Region Southwest is 50 years. We recently had to
    evacuate the aircraft from Hangar 340 at Naval Air Station North Island
    due to deterioration of the building in the ceiling structure. Pieces
    of concrete that form the structure have fallen and are posing
    personnel and equipment hazards. This has greatly affected the quality
    of workspace and morale of the sailors assigned to the Helicopter
    Squadrons housed at that hangar. They are required to work in temporary
    enclosures that have been purchased to provide shelter while working on
    the aircraft along with temporary lighting. Neither of these conditions
    is acceptable by Navy leadership and myself.
        At Naval Air Facility El Centro, modern tactical aircraft won't fit
    into the vintage 1940 hangars. As a result, the sailors who maintain
    the aircraft are exposed to outside temperatures in excess of 115
    degrees Fahrenheit. This makes it difficult to conduct maintenance,
    because the skin of the aircraft is too hot to touch.
        Bachelor quarters' infrastructure also has a negative effect on
    sailors' quality of life. In the barracks, the lack of routine
    maintenance and restorations due to funding constraints; the build-up
    of condensation and mildew from antiquated a/c systems; the age;
    outdated basic designs; and the lack of availability to house all
    sailors desiring a room in bachelor housing all contribute to poor QOL.
        While residing in existing barracks, our sailors are living with
    furniture that is well beyond it's life expectancy, due to lack of
    available funding for furniture. The Navy's goal is to replace the
    furniture every 7 years. We are currently replacing furniture about
    once every 10 or more years. As a benchmark, industry replaces
    furniture every 5 years on average. In addition to these living
    conditions, our sailors are often required to perform janitorial duties
    in spite of the Navy's inter-deployment training cycles (IDTC)
    initiative, which in essence eliminates duties not directly related to
    the sailors rate, especially while in port. This has further affected
    the ability to provide adequate quality of life services in our
    barracks as we continue to fight for scarce funding.
        On a more positive note, the Navy has been able to move sailors
    ashore in some locations. The Chief of Naval Operations, ADM Clark's
    goal is for sailors to live ashore when in homeport. We are working in
    the Navy Region Southwest towards this goal, but we will need MILCON in
    order to make significant advances. The pay-off has been improved
    retention in those locations where shipboard sailors are living ashore.
        Sailors expect to live in less than optimal conditions aboard ship
    because space is limited, but they are not satisfied living in those
    conditions ashore. Current funding is not sufficient to provide
    suitable quarters ashore, because many of our older facilities have not
    been replaced or renovated. I also want to emphasize that our Navy
    leadership recognizes this is unacceptable and not how we want sailors
    to live. However, until MILCON or repair and maintenance funding to
    renovate other existing barracks becomes available and the projects are
    completed, the only other option sailors have to find suitable housing
    is to move into the local community. My sailors would be the ones
    suffering financially, because of out-of-pocket expenses necessary to
    reside in private sector housing. Basic Allowance for Housing (BAH) for
    single sailors does not begin to cover the minimum costs associated
    with living on the local economy.
        Our Navy leadership is aware of the requirements for shore
    installation funding and the services it provides to the warfighter. I
    believe the lack of fully articulating the full shore infrastructure
    requirement and then underfunding that requirement severely affects our
    sailors. Historically Other Base Operating Support (OBOS) requirements
    have been under-funded in order to meet the ever changing and often-
    unplanned operational fleet requirements brought on by different
    operational contingencies. Must fund bills such as labor, utilities,
    and BOS contracts reduce the dollars available for any discretionary
    spending. Because of budget cuts and unplanned events during execution
    year, some OBOS requirements become unfunded; one example is service
    craft maintenance. Offsets are paid by the Real Property Maintenance
    (RPM) account, which defers critical maintenance further. This has
    accelerated the decline in our regional facilities and has caused
    critical maintenance backlogs to be unmanageable. Our Navy leadership
    has been and is being forced to make short-sited and unwanted decisions
    to cut Special Project funding and other Quality of Service (QOS)
    improvements to meet current readiness requirements. Bottom line, every
    dollar taken out of RPM is a direct support dollar taken away from our
    sailors.
        The effect of the condition of facilities in Navy Region Southwest
    is not limited to just the deckplate sailors, but it also frustrates
    their leadership. The price of readiness and mission accomplishment is
    being shifted to the backs of our sailors because of workarounds
    brought on by our failing infrastructures. I am concerned that our
    sailors have become so accustomed to the current poor condition of our
    infrastructure that they have no expectation it will improve.
        Your Navy today is manned by young men and women who are the best
    educated and trained sailors we have ever had. Their commitment to
    accomplish the mission has never been stronger. In my 23 years of naval
    experience, I have never seen your sailors fail to answer the call when
    faced with the challenges and dangers that exist in our world today.
    They deserve quality family housing that meets today's standards, has
    reasonable amenities, and affords sailors the security of knowing their
    family is safe and taken care of while they are deployed. Our single
    sailors deserve quality bachelor housing with reasonable amenities that
    are maintained, have ample living area, allows for privacy, and is
    centrally located to support facilities. They deserve a healthy and
    safe work place that is of sound material condition and equipped with
    furniture that is functional. They deserve to be equipped with the
    proper resources, tools, and spare parts to accomplish the job, and
    equipped with working environmental controls that provide reliable heat
    and air conditioning. Additionally, it is imperative that sailors have
    adequate MWR recreational and fitness/gym facilities that support the
    population of our bases and enhance both mission and personal
    readiness.
        Our sailors' lives are all about service, service to their country.
    In return for that service and sacrifice, we as an organization are
    obligated to provide them a quality of service that is equal to their
    sacrifice. Quality of life and quality of work are the components of
    quality of service that we owe each and every sailor. With your help,
    we have made vast improvements in the QOL portion of the equation. With
    your continued support, we will be able to attack the problems we have
    with QOW and working conditions.
        Senators, we tell the parents of our sailors that we will take care
    of their sons and daughters in return for the service they provide our
    country. Your continued support in these vital areas is imperative for
    us to be able to meet that commitment. I want to thank you for letting
    me appear before this distinguished panel and I hope that my testimony
    will help you to decide to support the shore infrastructure repair and
    construction relief we so badly need in the Navy. I thank you and look
    forward to answering any questions you may have.

        Senator Inhofe. Thank you, Chief.
        Colonel Yolitz.

    STATEMENT OF LT. COL. BRIAN YOLITZ, U.S. AIR FORCE, COMMANDER,
       20TH CIVIL ENGINEER SQUADRON, SHAW AIR FORCE BASE, SOUTH
                                CAROLINA

        Colonel Yolitz. Good morning, Mr. Chairman, members of the
    subcommittee. I am Lt. Col. Brian Yolitz and I represent Shaw
    Air Force Base, where I command the 20th Civil Engineer
    Squadron. I have submitted my assessment of the condition of
    our facilities, infrastructure, and family housing and the
    impacts they are having on our mission in the written statement
    you have before you. It is indeed a privilege and honor to
    discuss these with you today.
        During my time as a commander and as I prepared for today's
    hearing, a steady theme concerning the maintenance and repair
    funding levels of our base facilities and infrastructure has
    become apparent. In a word, frustration--a growing frustration
    that is eroding our morale, our retention, and our readiness.
    The field is frustrated. My engineers and craftsmen are
    frustrated. Because of funding levels, we tell them to do a
    band-aid fix or ignore maintenance that is required, knowing
    well that they will be back, maybe not back tomorrow, maybe not
    next week, but back nonetheless, to redo their work or to do
    more substantial repair, knowing well it could have been done
    and should have been done better in the first place.
        They are frustrated because of the impact this is having on
    the mission. We know we can and we must do better. The
    commanders and enlisted leaders I support at Shaw are also
    frustrated, frustrated because our facilities and
    infrastructure are simply not supporting their needs. Like
    Major Larry Gatti, Commander of the 20th Component Repair
    Squadron, who during the summer months has to continually
    juggle his airmen's duty hours and implement work rest cycles
    because the mechanical systems simply cannot keep the ambient
    temperature below 100 degrees in his F-16 engine maintenance
    shops.
        Like Master Sergeant Mike Kosover, Airfield Manager from
    the 20th Operational Support Squadron. He has watched many of
    our airfield pavement maintenance needs go deferred or
    unaddressed. Now he plays traffic cop, redirecting aircraft
    around our problem areas, adding taxiing time and wear and tear
    to our jets.
        We are asking these two airmen and many others like them to
    manage work-arounds when they should be focused on their
    specific mission, fixing and flying jets.
        Sir, from your extensive travels to our installations and
    the statements provided by the members of this panel, our
    facilities and infrastructure are in desperate need of
    attention and an infusion of resources, an infusion to regain
    and sustain the readiness edge our infrastructure complex must
    provide.
        I trust through this hearing and the ensuing discussions
    and debate it generates that this subcommittee will be able to
    provide the attention and resources needed to maintain and
    repair our facilities and infrastructure so they can properly
    support the missions assigned to us and, more importantly,
    support the terrific people who ultimately make those missions
    succeed.
        Mr. Chairman, on behalf of the men and women of the 20th
    Civil Engineer Squadron at Shaw Air Force Base, I again thank
    you for this opportunity to appear before you today. Also, sir,
    I thank you and this committee for your continued strong
    support of Air Force programs and the benefits provided to me,
    my family, and my fellow airmen here at home and deployed
    around the world. I am eager to address any questions you may
    have at this time.
        Thank you very much.
        [The prepared statement of Colonel Yolitz follows:]

               Prepared Statement by Lt. Col. Brian Yolitz, USAF

                                  INTRODUCTION

        Mr. Chairman and members of the subcommittee, good morning, I am
    Lt. Col. Brian Yolitz, Commander of the 20th Civil Engineer Squadron
    and Base Civil Engineer at Shaw Air Force Base, South Carolina. My
    squadron is made up of nearly 500 personnel officers, NCOs, airmen, and
    civilians. We are responsible for all aspects of the maintenance,
    repair, alteration, and construction of Shaw's 400-plus buildings,
    1,704 family housing units, airfield and road-way pavements, and the
    base's associated electrical, natural gas, water, and sewer utility
    systems. We also provide crash rescue and fire protection services,
    explosive ordnance disposal, as well as environmental management for
    the 16,000 acre complex which includes Poinsett Electronic Combat
    Range. I report to my wing commander on the condition of these systems
    and programs and how they are supporting his mission to fly and fight.
        I certainly appreciate the opportunity to appear before you today
    and share my views on the current state of facility conditions and how
    recent funding levels have affected me as a base civil engineer and my
    squadron's ability to support the mission needs of Shaw Air Force Base.

                                   BACKGROUND

        In the 1970s, the Air Force realized quality facilities were
    important to the men and women of the Air Force. This was an
    acknowledgment by senior leaders that providing Air Force people with
    safe, efficient, and modern places to live and work positively impacted
    the quality of life and quality of service of our people and ultimately
    improved the overall morale and readiness of our force. They recognized
    the very poor working and living conditions existing at that time had
    an overall negative impact on both.
        In the mid-1980s and early 1990s, our military construction and
    real property maintenance accounts were robust and we made great
    progress in providing quality facilities for our airmen and their
    families. Since then, investment in Air Force facilities has declined
    as a result of constrained defense budgets and competing Air Force
    requirements. We now see growth in the backlog of required work
    necessary to maintain the readiness edge we established in past years.
    Meanwhile, the expectations of our commanders, our people, and our
    families remain high, as they should. We are expected to balance
    mission readiness, modernization, and quality-of-life efforts in the
    face of aging infrastructure and declining military construction and
    real property maintenance budgets. I would like to provide you with my
    perspective on how this has affected me at work and at home.

                              SHAW AIR FORCE BASE

        Mr. Chairman and distinguished subcommittee members, Shaw Air Force
    Base is home to the 20th Fighter Wing and four squadrons of F-16
    Fighting Falcons. We are on call to provide suppression of enemy air
    defense fighters and a host of combat support at a moments notice. We
    also host the headquarters U.S. Central Command Air Forces and 9th Air
    Force.
        On the 9th and 10th of August 1990, just after Iraq invaded Kuwait,
    two fighter squadrons from Shaw responded as part of the first wave of
    U.S. aircraft to counter the Iraqi threat as part of Operation Desert
    Shield. All told, more than 4,000 people from the Fighter Wing and
    CENTAF--over two-thirds of Shaw's military population--deployed as part
    of Operations Desert Shield and Desert Storm. During Operation Allied
    Force, 36 F-16s and nearly 900 people deployed to Aviano Air Base,
    Italy, and Bandirma Air Base, Turkey, to fight the air war over Serbia.
    Over the past year, we have engaged in 20 deployments, moving more than
    2,300 people and 620 tons of equipment and supplies to locations around
    the world.
        As we speak, the 77th Fighter Squadron and more than 190 proud
    airmen are deployed in support of Operations Northern and Southern
    Watch. I have 18 airmen deployed as part of this group and back at
    Shaw, I have almost 50 airmen preparing to deploy in a force of over
    850 others from Shaw as part of AEFs 5 and 6 in which we are the Lead
    Wing.

                            AIR EXPEDITIONARY FORCE

        I'd like to add, the AEF concept of packaging units of airpower
    capability has quickly become part of our culture. While we continue to
    find areas to improve the concept with each rotation, particularly in
    the area of expeditionary combat support, the AEF concept has delivered
    on the number one promise we made to our people and that is
    predictability. Each one of my airmen knows exactly when they are
    eligible to deploy--and they plan on that, arranging educational
    opportunities and family vacations based on what AEF they are assigned
    to.

                           REAL PROPERTY MAINTENANCE

        Mr. Chairman, back at Shaw, we are all well aware of the impact
    current funding levels are having on our ability to maintain, repair,
    and, when needed, replace base facilities and infrastructure.
        Since 1996, we have seen a steady decline in real property
    maintenance by contract, or RPMC funding. In fiscal year 1996, we
    received nearly $14 million for contract projects to maintain and
    repair base facilities and utility systems. In fiscal year 2000, we
    received $7.6 million, $2.4 million of which was a plus-up to support
    the beddown of our new flight simulator equipment. This year, we have
    received only $2.9 million with little hope for any additional funding.
    This represents a reduction of nearly 80 percent--leaving many mission
    needs unaddressed.
        One example is the repair of taxiway Foxtrot on our airfield
    complex, which has been shut down for several years due to the
    deteriorated condition of the pavement. While we have work-arounds in
    place for our day-to-day fighter operations, not having this taxiway
    severely limits our ability to handle large frame aircraft like the C-
    17, C-141, or KC-10 needed for deployment operations. Depending on the
    scenario, we are required to mobilize nearly 1,700 people and over
    1,400 short tons of equipment--more than 30 C-17 equivalents in a
    matter of days. Not having the proper taxiway system impedes our
    ability to mobilize our force quickly and efficiently.
        Another example is our military working dog kennels. Our 6 military
    working dogs are indeed weapons systems. Trained for bomb and drug
    detection, they deploy throughout the United States in support of the
    Secret Service and counter drug operations along the Mexican border;
    and to meet force protection needs around the world. In fact, Iwan, a
    Belgian-Malamute bomb dog, is deployed and on duty with his handler in
    Southwest Asia, protecting Americans serving in Kuwait. The facility,
    which houses these working dogs, was built by German Prisoners of War
    in 1943. It has failed the last 4 veterinary inspections and has
    deteriorated to the point that our dogs suffer multiple ear infections
    and skin irritations which have rendered them undeployable and unable
    to meet their mission needs on several occasions.
        In general terms, our current real property maintenance funding
    levels allow us to only provide simple day-to-day maintenance and
    repair--to our most pressing needs. As a result, we are seeing a steady
    deterioration of our facilities and infrastructure. We have been forced
    to scale back preventative maintenance programs in several areas to the
    point where we respond only when a system fails and immediate action is
    required. This is evidenced by a continuous stream of emergency and
    urgent work requests for our in-house work force, particularly for roof
    and pavement repairs. Our inability to provide adequate preventative
    maintenance was also a contributing factor leading to our need to close
    taxiway Foxtrot.
        We have reached a point where we no longer accept all the work
    requests from our customers. The work order allocation system we've
    created has our group commanders identify and prioritize their Top 10
    work requirements. Our in-house craftsmen work directly off those
    lists. When they finish a job, our production controllers call the
    commander for his or her next most pressing need. There is always
    something to fill the vacant spot on the Top 10 lists. In fact, we are
    tracking over 800 orders for our main base and family housing
    maintenance work forces. In addition, our engineers have nearly 30
    projects totaling over $20 million worth of contract work on the shelf,
    awaiting funding. The estimated cost to raise our Installation
    Readiness Report rating from C-4 to a C-2 is $139 million. Chronically
    constrained funding over the last several years has lead to a ``why
    bother, if it's not an emergency, it will never get funded'' mentality
    in some. As a result, I'm not certain this figure gives us a true
    assessment of our requirements to return our facilities and
    infrastructure to a condition where they fully support the missions of
    Shaw Air Force Base.

                         MILITARY CONSTRUCTION PROGRAM

        We rely on the Military Construction Program to do the ``heavy-
    lifting'' in terms of facility and infrastructure upgrades and
    replacement. We have seen a steady downward trend in terms of funding
    and opportunities in this area as well--particularly in the area of
    current mission requirements.
        Since fiscal year 1993, we have had only two current mission MILCON
    projects sent forward to Congress as part of the President's budget for
    that year's budget cycle--in fiscal year 1994, we received a new Child
    Development Center ($2.9 million) and in fiscal year 1997, we renovated
    three dormitories ($8.5 million).
        Fortunately, we have been blessed with terrific support from
    Congress who has championed projects and accelerated their execution
    for the betterment of our troops--at Shaw, that meant a Security Forces
    building in fiscal year 1997, which helped move that unit out of a
    building built in the early 1950s and, until its recent demolition, was
    affectionately called ``The Crack House.'' This committee brought a
    dining facility forward in the fiscal year 2001 bill to replace our
    current facility built in 1958. That project is scheduled for a ground
    breaking late this summer and we are extremely grateful.
        Like RPMC funding, reduced MILCON funding forces wing leadership
    into making tough choices and leaving critical mission needs
    unaddressed. For example, we need to replace the aircraft maintenance
    units for three of our fighter squadrons. Today, the aircraft
    maintenance crews working on our F-16s are crammed into facilities
    which are undersized, poorly laid out, and inefficient in terms of
    functional use and energy consumption. We also have plans to construct
    a new contingency deployment center--a smart and efficient way to
    enhance our readiness by consolidating and streamlining our ability to
    mobilize and deploy. Unfortunately, these requirements remain unfunded
    through fiscal year 2007. The MILCON program also addresses quality-of-
    life needs for our installations. Our base library is housed in an
    undersized and deteriorated 47-year-old building. We need to replace it
    with a modern facility to support the ever-growing educational needs of
    our airmen and their families is also an unfunded requirement through
    fiscal year 2007.

                                 FAMILY HOUSING

        Funding for the day-to-day maintenance and repair of our family
    housing units has been relatively steady over the last several years.
    Unfortunately, the average housing unit at Shaw is 38 years--with 50
    percent being built in the 1950s. While we have made some upgrades to
    these units with projects in the 1970s, the houses and neighborhoods
    are still designed and built for families of the 1950s and 1960s. An
    Air Force family of today, as with any family in America, leads a
    vastly different life style. The computers, printers, and entertainment
    equipment that are the norm of the 21st century, have exceeded the
    electrical capacity of our units. The family of today has become more
    materialistic and, as a result, have more things in their household--
    they demand more room to store and display their belongings--our units
    are undersized. Finally, our houses and neighborhoods were designed for
    just over one car per family. A two-car family is the norm today and as
    a result, our streets are crowded, causing cramped and unsafe
    conditions in terms of both vehicular and pedestrian traffic. Our
    housing units only have carports and our residents don't have the
    option of a garage which is the standard for a home in the civilian
    community.
        Housing is an important issue for our people. It's a day-to-day
    quality of life issue, but it is also a retention issue. The Air Force
    recruits the member, but retains the family. When it comes time to make
    the decision to stay and reenlist, the member really only has 49
    percent of the vote--the spouse and family have 51 percent--that's the
    way it is in my family. If we, as an Air Force, cannot show the family
    that we are committed to them by providing a safe, quality place to
    live, they will elect to separate. We need to invest in upgrading or
    replacing our inadequate housing with homes and neighborhoods that
    reflect the needs and expectations of the modern, high-tech family.
    This is an important ingredient in retaining our bright, professional
    airmen.

                               SELF-HELP PROGRAM

        Like most Air Force bases, we promote our self-help program. This
    program allows our customers to take on small scale projects that we
    are unable to accomplish due to funding or manpower shortfalls. Units
    supply the labor from within their organization and through our self-
    help store, receive materials, technical guidance, and support. Self-
    help projects typically focus on enhancing quality-of-life type
    functions such as snack and break areas as well as office, supply, and
    training rooms. These projects display the tremendous leadership and
    initiative of our airman and build unit esprit-de-corps by allowing
    teams to take responsibility for their work environment.
        As the base civil engineer, I am frustrated that, because of
    manpower and funding levels, my squadron is not able to fully meet our
    customers' needs forcing them to turn to self-help to accomplish work
    we should be doing for them. Because self-help work is often done after
    duty hours and on weekends, I am also concerned that self-help, if
    unchecked, will add to the already heavy OPTEMPO and work load of our
    people--keeping them from their families and much needed time off. Make
    no mistake, the work accomplished through self-help is of good quality
    and the sense of pride when a unit completes a project is
    overwhelming--I just wish we could do more so our airmen could focus on
    the missions they're trained to do.

                                    VEHICLES

        Just as providing quality places to work directly affects a
    member's quality of service, so do the condition and quality of the
    tools we give them to accomplish their mission. My vehicle fleet is
    another area limiting our ability to properly maintain and repair the
    base. I have a vehicle fleet of 146 vehicles. It is made up of a
    combination of 50 leased vehicles--general purpose vehicles like pick-
    up trucks--and an Air Force owned ``Blue Fleet'' of 96 vehicles and
    special purpose pieces of equipment like street sweepers, loaders, back
    hoes, and graders. The leased fleet is in good shape, typically
    replaced within 6 years or 40,000 miles depending on condition, at an
    annual cost of $185,000, which includes maintenance. However, my ``Blue
    Fleet'' is aged. Today, one-half of the fleet (50 of 96) has reached or
    exceeded its life expectancy. Within 3 years, over 80 percent of the
    fleet (79 of 96) will have reached or exceed its life expectancy with
    little help on the horizon. Optimistically, I only see two replacement
    vehicles--a farm tractor, and dump truck--coming in between now and
    fiscal year 2003.
        As the age of our ``Blue Fleet'' increases, so does the cost of
    maintaining it. Our transportation squadron is funded on an average of
    $1,100 per vehicle to maintain and repair my fleet. Unfortunately, this
    total is quickly depleted as major components fail--like transmissions,
    and street sweeper broom drive motors. When the bill to repair a
    vehicle exceeds his budget, he turns to me to fund the repairs and I am
    forced to dip into my facility maintenance and repair dollars to get
    the repairs made and get the vehicle back in the hands of my craftsmen.

                                   CONCLUSION

        The conditions I've highlighted, coupled together, make operating
    and maintaining an air base very challenging. I am blessed to command
    and work with the best and brightest people I've had the privileged to
    serve with in my 18 years in the Air Force. They deserve the very best
    and all the support we can give them. Mr. Chairman, in my opinion, we
    can no longer mortgage our infrastructure without significant, long-
    term negative effects--on our people and our readiness. Make no
    mistake, we have the very best people who will make the mission
    succeed, but they need our support today to meet the mission challenges
    of tomorrow.
        There are base engineers at our 86 major Air Force installations
    across the U.S. and around the world that could articulate their own
    experiences, analysis, and opinions of how reduced real property
    funding has affected them, their units, and the missions they support.
    The accounts I have highlighted today reflect my own experiences and
    opinions. I am very grateful for the opportunity to share them with you
    today.
        Mr. Chairman, I thank you and the subcommittee for its continued
    strong support of Air Force programs and benefits provided to me, my
    family, and more importantly, my fellow airmen, here at home and
    deployed around the world. I am eager to address any questions you may
    have at this time.

        Senator Inhofe. Thank you, Colonel. I think those anecdotal
    examples are very good about the temperature in the maintenance
    shops. That is very helpful.
        Several of you have said you want to continue the treatment
    you have had. This is not what this is about. We realize the
    deficiencies that are out there. We have to improve. You are
    doing great with the hand that has been dealt you, but we want
    to deal you a better hand.
        Sergeant Poliansky.

        STATEMENT OF CM SGT. WALTER POLIANSKY, U.S. AIR FORCE,
      SUPERINTENDENT OF THE 89TH SUPPORT GROUP, ANDREWS AIR FORCE
                             BASE, MARYLAND

        Sergeant Poliansky. Good morning, Mr. Chairman, members of
    the subcommittee. I am CM Sgt. Walter Poliansky, Superintendent
    of the 89th Support Group at Andrews Air Force Base. I
    appreciate the opportunity to appear before you today and to
    share my views on the impact that reduced facility maintenance
    funding has had on our enlisted force.
        The Air Force is significantly different today than when I
    entered in 1978. Then our workplace environments, housing
    units, and dormitories were in very poor shape. This had a
    serious impact on our morale and retention in our early years
    as an all-volunteer force. In the mid-1980s and early 1990s, we
    made great strides to provide quality facilities for our people
    and their families.
        Since then, however, a decline in the budget has hindered
    our abilities to continue to move forward in these areas. This
    has adversely affected the quality of life of our enlisted
    force, their families, and ultimately retention rates. What we
    need is a larger budget to fund our facility maintenance
    programs.
        Facilities and infrastructures at Andrews Air Force Base
    are on the average 30 to 40 years old. Because of funding
    constraints, the first things cut from our construction
    projects are the overhaul and repair of our electrical,
    mechanical, and utility systems. Consequently, our facilities
    are starting to look better, but the real problem lies beneath
    the facade.
        Frequently our military workforce responds to after-duty
    hours. Airmen are called out all hours of the day and night, in
    all weather conditions, to fix problems well beyond repair with
    little to no resources. Compounding the problem, our engineers
    stationed at Andrews are also assigned to deployable
    expeditionary forces. This puts an added burden on those left
    behind to maintain the base.
        Our people are fatigued and frustrated. The long hours are
    having a negative effect on our morale. Power outages have
    become more routine because existing equipment has not had
    sufficient upgrades over the years. Our airfield pavement is 40
    years old and requires over $30 million worth of critical
    repairs to keep it fully mission capable. Many of our
    mechanical systems are now performing beyond their life
    expectancy and are beginning to fail.
        Our airmen are becoming frustrated and less efficient
    because of their workplace environment. On occasion they are
    sent home early or relocated to other facilities because of
    system failures. An increase in funding will allow us to
    replace old systems now in order to head off catastrophic
    failure later.
        It does not stop at the workplace. Many of our young men
    and women come home after a long day of work to no heat, air
    conditioning, or hot water, further impacting their morale and
    ability to perform effectively. Our enlisted force are the most
    dedicated and trained I have seen in my 22-year career. They
    deserve to have the best resources available to do the job they
    are trained and a standard of living equal to their civilian
    counterparts.
        Many of our young airmen are getting out, not because they
    do not enjoy their job, but because of the environment and
    conditions they have to work and live. One staff sergeant who
    recently separated from the Air Force after 7 years told me: I
    can no longer work for an organization that wants me to do a
    job without the right tools and materials.
        If we provide our people with quality work and home
    environment, the right tools and equipment, they will do the
    rest. We need your help.
        Mr. Chairman and members of this subcommittee, I want to
    thank you for your continued strong support of these Air Force
    programs to enhance our quality of life at Andrews Air Force
    Base and throughout our military services. I will be happy to
    address any questions.
        [The prepared statement of Sergeant Poliansky follows:]

              Prepared Statement by CM Sgt. Walter Poliansky, USAF

        Mr. Chairman and members of the subcommittee, good morning. I am CM
    Sgt. Walter Poliansky, Superintendent of the 89th Support Group, at
    Andrews Air Force Base, Maryland. As the Superintendent, I am
    responsible for advising the commander on all issues affecting health,
    morale, welfare, and quality of life for our group's 715 enlisted
    members. I appreciate the opportunity to appear before you today to
    share my views on the impact reduced facility maintenance funding has
    on the enlisted members in our Air Force.

                                    OVERVIEW

        The Air Force of today is significantly different than when I
    entered in late 1978. Then, our workplace environments, housing units,
    and dormitories were in very poor shape. This had a serious impact on
    morale and retention in our early years of an all-volunteer force.
    Senior leadership recognized this problem and took action to provide
    our people with safe, efficient, and modern places to work and live.
    These quality-of-life initiatives positively impacted readiness,
    morale, and ultimately retention. Their efforts proved fruitful in the
    mid-1980s and early 1990s. Military construction and real property
    maintenance accounts were robust, and we made great strides in
    providing quality facilities for our people. Since then, a decline in
    the defense budget, and competing requirements, have hindered our
    abilities to move forward in these areas. We now see growth in the
    backlog of required work necessary to maintain the readiness edge we
    established in past years. Meanwhile, expectations of our commanders,
    our people, and our families remain high. We are challenged to balance
    mission readiness, modernization, and quality-of-life efforts in the
    face of aging infrastructure, and declining military construction, and
    real property maintenance budgets.
        We need a larger real property maintenance budget to fully fund our
    preventative maintenance program. We need additional funding to repair
    and overhaul our rapidly aging facilities and infrastructure. Finally,
    we need the funds to purchase much needed replacements for outdated
    furnishings for our single airmen living in the dormitories.
        Deteriorating infrastructure and facilities, along with reduced
    funding in facility maintenance programs, adversely impact the quality
    of life of our enlisted force, their families, and ultimately retention
    rates. Although we have made strides, more needs to be done.
    Frequently, because of funding constraints, the first things cut from
    construction projects are the replacements and overhaul of the
    mechanical, electrical, and utility systems of our facilities.
    Consequently, our facilities are looking better, but the real problem
    lies beneath the facade.
        Our present funding only allows us to do the bare essentials, keep
    our heads above water, and sustain facility operations. We have become
    reactive instead of proactive. We do not have the dollars necessary to
    perform essential maintenance or equipment replacement. Facilities and
    infrastructure at Andrews Air Force Base are, on the average, 30- to
    40-years old. Most mechanical, electrical, and utility systems are well
    beyond their life expectancy. We do not have the money to upgrade these
    outdated systems. Additionally, off-the-shelf replacement parts are no
    longer available or manufactured.
        Because the budget is so tight, our military work force is
    frequently responding to after-hour emergencies. Airmen are called out
    all hours of the day and night, in all kinds of weather, to fix
    problems well beyond repair with little to no resources. Compounding
    the problem, 86 percent of the engineers stationed at Andrews are also
    assigned to deployable Air Expeditionary Forces. Our family's
    expectations are reasonable, despite our personnel shortages, due to
    deployments. They are understanding, yet count on the same level of
    quality service. These requirements and valued customer service put an
    added burden on those left behind to maintain the base. Increased
    funding will allow us to replace old equipment and systems now in order
    to head off catastrophic failures later. This will also reduce our
    operations tempo for our civil engineer work force, who are already
    over-tasked.
        Let me give you a few examples: In November 1999, our civil
    engineers responded to a major power outage over Thanksgiving weekend
    that knocked out power to our airfield lighting system. The source of
    the problem, 30-year-old cable that should have been replaced 10 years
    ago. IMPACT: Air Force electricians worked 12 to 14 hours a day, in
    deplorable weather conditions, for 18 days straight. An emergency
    contract had to be executed to augment our work force. Together they
    replaced over 63,000 feet of deteriorated cable. Additionally, our
    power production shop had to work around the clock to provide generator
    support until the commercial power could be restored. Because of their
    dedication, there was no impact to our Presidential support mission.
    However, our people were fatigued. The long hours had a negative effect
    on their morale and quality of life. Power outages have become more
    routine throughout the base, including the housing area, because
    existing equipment has not had sufficient upgrades to keep up with our
    increasing demands.
        Most of the pavement on our airfield is 40 years old and has
    reached the point where routine maintenance is no longer effective. We
    have identified over $30 million in backlogged, critical repairs needed
    for our runways and taxiways at Andrews. They are necessary to maintain
    our full mission capable status. Additionally, this will prevent costly
    foreign object damage to aircraft from loose pavements being ingested
    into their engines.
        Another problem is our mechanical systems throughout the base. Many
    of them are beyond their life expectancy. Last summer, the air
    conditioning system failed at our education center, housing the Office
    of Special Investigation Academy, Airman Leadership School, and off-
    duty education programs. This system was 25 years old. It had operated
    almost 5 years over its 20-year life expectancy. For the last 3 to 4
    years, our craftsmen had been nursing the system along because there
    was no money to replace the unit. They responded routinely to make
    ``band-aid'' fixes that kept the system operational. They regularly
    made recommendations to have the unit replaced. IMPACT: The quality of
    life of both the craftsmen performing the maintenance, and the students
    and staff the facility supports were severely impacted. The price of
    the new system was $80,000. An additional $14,000 was spent on renting
    a portable chiller unit for 30 days, until the new unit could be
    installed. Because of the system's catastrophic failure, funds had to
    be diverted from other priorities, impacting yet other Andrews' members
    and their quality of life. This is only one of many problems. We have
    people working in facilities that have been identified for demolition,
    because it is no longer economical to renovate. Workers are becoming
    frustrated and less efficient. On occasion, they are sent home early
    because of environmental conditions. In my opinion, our readiness
    posture is being jeopardized.
        It does not stop at the workplace. The centralized heating and air
    conditioning units at the dormitories are also deteriorating. Many of
    our young men and women come home after a long day at work to no heat,
    air conditioning, or hot water. This lowers their morale and ability to
    perform effectively.
        Dormitory furnishing is yet another problem. These items have a 5-
    year life cycle because of the high turn over rate and usage.
    Presently, because of funding limitations, we are replacing items on
    the 10-year cycle. Our young airmen deserve better than this. These
    examples are common throughout the Air Force.
        Our enlisted force is the most dedicated and trained I have seen in
    my 22-year career. They deserve to have the best resources available to
    do the job for which they are trained, and a standard of living equal
    to their civilian counterparts. Many of our first and second term
    airmen are getting out. Not because they do not enjoy their job, but
    because of the environment and conditions they have to work and live
    in. One staff sergeant, who recently separated from our Air Force after
    7 years, told me, ``I can no longer work for an organization that wants
    me to do a job without the right tools or materials.'' If we provide
    our people with a quality work environment, the right facilities,
    tools, and equipment; they will do the rest.
        It is our job to protect our men and women. Daily, we put them in
    harms way--yet we do not put our best efforts forward to take care of
    them and their families. Now is the time to invest in our most
    important and valuable asset--our people. We need your help.
        In conclusion, Mr. Chairman, and members of the subcommittee, I
    want to thank you for your continued strong support of Air Force
    programs and the benefits you have provided our airmen in terms of
    quality of life both in the workplace and at home. I will be happy to
    address any questions.

        Senator Inhofe. I know this, I personally witnessed some of
    the things that they are doing to make it look good while
    underground it is a disaster. What I am going to ask any of you
    to do for the record is to give me some specific examples out
    there on things that are being done to make it look good when
    it is covering up a disaster.
        Colonel Phillips.

       STATEMENT OF COL. THOMAS S. PHILLIPS, U.S. MARINE CORPS,
    ASSISTANT CHIEF OF STAFF OF FACILITIES, MARINE CORPS BASE, CAMP
                        LEJEUNE, NORTH CAROLINA

        Colonel Phillips. Good morning, Mr. Chairman, members of
    the subcommittee. My name is Col. Tom Phillips. I am the
    Assistant Chief of Staff of Facilities at Camp Lejeune, North
    Carolina.
        Camp Lejeune's facilities challenges are three: one,
    rapidly aging facilities. Camp Lejeune is rather unique in that
    it was built all at once in the early 1940s, so it is old,
    nearly 60 years.
        Two, its size and complexity. We have 40,000 marines and
    sailors there, plus we support at least 100,000 families and
    retired personnel as well.
        Of course, the final challenge that we face at Camp
    Lejeune, lack of funding to support these facilities. The
    availability of military construction and operation and
    maintenance funding has not kept pace with increasing
    facilities requirements. Requirements include improved quality
    of life goals, critical environmental concerns, infrastructure
    deficiencies, and major renovations for family housing units.
        An effective demolition program, our institution of
    activity-based costing procedures, and other management tools
    have helped. However, no major improvements in the overall
    condition of its facilities is likely to occur without a
    meaningful increase of military construction and operation and
    maintenance budgets.
        Sir, I have submitted a more detailed statement. I have
    also submitted to the members some interesting photos of
    infrastructure and, as you have just commented, sir, those
    photos are of infrastructure we do not typically see.
        [The prepared statement of Colonel Phillips follows:]

              Prepared Statement by Col. Thomas S. Phillips, USMC

        Mr. Chairman and members of the subcommittee: I am Colonel Tom
    Phillips, Assistant Chief of Staff, Facilities, Camp Lejeune, North
    Carolina. I appreciate this opportunity to appear before you today. I
    am particularly pleased to be able to discuss with you the very serious
    issue of the existing condition of buildings, structures, and
    infrastructure at Camp Lejeune. My intent is to provide you information
    regarding our current facilities, efforts to improve our facilities,
    and shortfalls and challenges we face in our attempts to provide our
    marines and sailors and their families with adequate facilities to
    perform their important missions.
        Camp Lejeune is the Marine Corps' largest amphibious base. Located
    in southeastern North Carolina, the base is home to 40,000 active duty
    marines and sailors and an additional 100,000 dependents and retired
    military personnel. The base encompasses 153,000 acres and provides an
    essential training environment for the Marine Corps and other services.
        Camp Lejeune's facilities problems are directly attributable to
    three factors: (1) the age of the base, (2) the size and complexity of
    the base, and (3) lack of adequate funding to repair, maintain, and
    replace aging facilities.
        Camp Lejeune was constructed in the early 1940s. Most of our
    facilities are approaching 60 years old. Because of the age of our
    facilities, we are now faced with the high cost of renovation and
    replacement of buildings and infrastructure along with the normal cost
    of maintaining the facilities. Advancements in training requirements,
    quality of life, and complexity of building systems have also increased
    the cost to maintain and operate facilities. The availability of
    funding in both the military construction (MCON) program and operation
    and maintenance (O&M) accounts has not kept pace with the increasing
    facilities requirements.
        Camp Lejeune has a plant replacement value of $3.7 billion. In
    recent years, we have averaged approximately $18 million annually in
    ``replacement'' MCON funding. Based on this current level of funding,
    we are on a 205-year cycle for replacement of facilities. We face
    tremendous challenges in meeting our stated goals of improved quality
    of life and adequate facilities for our personnel. Based on the Marine
    Corps' goal of providing 2 X 0 room configuration for all troops, Camp
    Lejeune has an existing BEQ deficiency of over 6,000 manspaces.
        Although we have replaced some shops and operational facilities in
    recent years, we still have many of our operational units working daily
    in old, inadequate facilities . . . many without heating systems and
    running water. In addition, environmental requirements, such as the
    construction of a new wastewater treatment plant and landfill, although
    desperately needed, have drawn limited construction dollars away from
    much needed billeting and operational requirements.
        On the O&M side, our budget for maintenance and repair falls short
    of the needs generated by a base of this size. We currently have a $106
    million backlog of maintenance and repair. Much of the needed work is
    in facilities that directly affect our ability to meet our military
    mission. In many areas, while we are able to maintain a good outward
    appearance on the base by performing cosmetic repairs and maintenance,
    major problems lurk below the surface . . . problems such as aging
    utility systems, infrastructure deficiencies, hidden structural
    deterioration, and aging components such as basic wiring and plumbing.
    As I mentioned earlier, many of our facilities are approaching 60 years
    old. We can no longer merely paint and perform minor maintenance to
    keep these facilities operational. Most buildings are at the age where
    they require major renovation, including rewiring, replumbing,
    replacing structural members, and removing hazardous materials such as
    asbestos and lead paint. The need and cost for performing these
    renovations has increased significantly in the last decade.
        We have over 4,000 family housing units at Camp Lejeune. The
    majority of the units were built in the 1940s and 1950s. Over 60
    percent of these units are in need of replacement or major renovation.
    Many of the units have health hazards such as lead paint, asbestos, and
    contaminated soil that must be monitored continuously. We estimate the
    cost of replacing or renovating these units at over $200 million.
    Adequate family housing is an issue that must be addressed in the very
    near future.
        We have taken significant steps in recent years to improve
    efficiency and stretch our maintenance and construction dollars. In the
    past 4 years, we have demolished 432 facilities, eliminating over one
    million square feet of inventory that required maintenance. We have
    contracted many services that we felt could be completed more
    efficiently by the private sector. We have instituted activity based
    costing procedures and other management tools to improve efficiency and
    effectiveness. We are currently completing a business process
    improvement analysis aimed at organizing our operations around
    essential processes. We continually look for opportunities to improve.
    However, at some point, the bottom line is that adequate funding must
    be provided to match the total facilities requirement.
        In conclusion, Mr. Chairman, I would again like to express my
    appreciation to the subcommittee for providing the opportunity to meet
    with you on this important topic. The condition of our facilities is an
    issue that is very dear to the Marine Corps. The benefits derived by
    the Marine Corps from better facilities, particularly in the areas of
    improved readiness and quality of life, are substantial. I sincerely
    hope that the information we provide today will help you determine how
    to best utilize our limited resources in the future. Mr. Chairman, this
    concludes my statement. I will be pleased to answer any questions you
    may have.

        Senator Inhofe. Good, Colonel. I appreciate that.
        In yesterday's hearing we examined some of the encroachment
    problems, such as the effect of protecting the habitat of the
    red cockaded woodpecker and others, on training. So we had a
    chance to go over that in some detail. Thank you very much.
        Sergeant Lott.

     STATEMENT OF SGT. MAJ. IRA LOTT, U.S. MARINE CORPS, ASSISTANT
        CHIEF OF STAFF OF FACILITIES, MARINE CORPS AIR STATION,
                          MIRAMAR, CALIFORNIA

        Sergeant Lott. Sir. Good morning, Mr. Chairman, members of
    the subcommittee. I am Sgt. Maj. Lott, Sergeant Major, Marine
    Corps Air Bases Western Area, Marine Corps Air Station,
    Miramar, California. I appreciate the opportunity to appear
    here today. I am particularly pleased that you have chosen to
    focus on the condition of the infrastructure, facilities, and
    family housing at Miramar. I would like to concentrate my
    discussion this morning on military family housing.
        As a result of BRAC legislation, we closed two of our major
    Marine Corps air stations in Orange County, California, and
    moved to a single site in San Diego. The location of Marine
    Corps Air Station Miramar is ideal because of its proximity to
    other key military facilities and training areas in the region.
    BRAC funded most of our barracks requirements and we have come
    a long way in our facilities renovation.
        The critical shortfall we are experiencing in San Diego is
    in military family housing. The move to San Diego required us
    to vacate approximately 2,800 military units that house 60
    percent of our married marines. With only 527 military family
    housing units located aboard Marine Corps Air Station Miramar,
    we entered into a regional housing alliance with the Navy to
    best support our military families. Our partnership with the
    Navy housing is highly valued, but we must do more to obtain
    affordable family housing for our marines.
        San Diego Navy housing currently maintains 9,039 military
    family housing units and Miramar Base marine families occupy
    1,148 of those units, our fair share based on population.
    Roughly 18 percent of all marine families assigned to Miramar
    reside in one of the 52 military family housing areas located
    throughout San Diego County. Some are well over 30 miles from
    base.
        The severe shortage of affordable rental units within
    reasonable commuting distance of Marine Corps Air Station
    Miramar adversely affects quality of life, morale, and is an
    indirect, albeit serious, threat to our readiness. With the
    likely loss of some of the existing units on the domestic lease
    program, our family housing situation will get worse before it
    gets better.
        Marines who are preoccupied with high housing costs and
    making ends meet divert their focus from mission
    accomplishment. Even in peacetime, much of the work our marines
    do is inherently dangerous and involves great responsibility.
    Concerns about family safety and finances can impact the
    marine's ability to concentrate on his day-to-day mission.
        Marine families who live on the local economy have seen
    their increases in housing allowances gobbled up by
    skyrocketing housing costs, energy costs, vehicle maintenance,
    and gasoline prices. Annual adjustments to housing allowance
    simply cannot keep up with the booming San Diego economy and
    housing shortages. Finding a rental unit is a real challenge in
    San Diego, where the vacancy rate is less than 1 percent.
    Junior enlisted marines with families often opt to occupy
    quarters in high crime areas because of the relative
    affordability of such neighborhoods. Those marines who choose
    safer areas find that their housing allowance is dwarfed by
    expensive rent.
        Typical rent in San Diego exceeds junior marines' housing
    allowance by anywhere from 10 to 150 percent. The Navy-Marine
    Corps team has a public-private venture working that will begin
    to address the housing shortfall by providing 588 new houses.
    But with thousands of families waiting on waiting lists for
    well over a year, we need to continue these efforts to
    accelerate the time line to produce more houses quickly.
        Mr. Chairman, we appreciate your interest and support. This
    concludes my statement. I will be pleased to answer any
    questions you may have at this time.
        [The prepared statement of Sergeant Lott follows:]

                 Prepared Statement by Sgt. Maj. Ira Lott, USMC

        Mr. Chairman and members of the subcommittee: I am Sgt. Maj. Ira
    Lott, Sergeant Major of Marine Corps Air bases Western Area, Marine
    Corps Air Station, Miramar, California. I appreciate the opportunity to
    appear before you today. I am particularly pleased that you have chosen
    to focus on the condition of the infrastructure, facilities, and family
    housing at Miramar. I would like to concentrate my discussion this
    morning on military family housing.
        As a result of BRAC legislation, we closed two of our Marine Corps
    Air Stations in Orange County, California and moved to a single site in
    San Diego. The location of MCAS Miramar is ideal because of its
    proximity to other key military facilities and training areas in the
    region. BRAC funded most of our barracks requirements and we have come
    a long way in our facilities renovation. The critical shortfall we are
    experiencing in San Diego is in military family housing. The move to
    San Diego required us to vacate approximately 2,800 military units that
    housed 60 percent of our married marines. With only 527 military family
    housing units located aboard MCAS Miramar, we entered into a regional
    housing alliance with the Navy to best support our military families.
    Our partnership with Navy housing is highly valued, but we must do more
    to obtain affordable family housing for our marines. San Diego Navy
    housing currently maintains 9,039 military family housing units and
    Miramar-based marine families occupy 1,148 of these units; our fair
    share based on population. Roughly 18 percent of all marine families
    assigned to Miramar reside in one of 52 military family housing areas
    located throughout San Diego County, some over 30 miles from the base.
    The severe shortage of affordable rental units within reasonable
    commuting distance of MCAS Miramar adversely impacts quality of life
    and morale and is an indirect, albeit serious, threat to our readiness.
    With the likely loss of some of the existing units under the domestic
    lease program, our family housing situation will get worse before it
    gets better. Marines who are preoccupied with high housing costs and
    making ends meet divert their main focus from mission accomplishment.
    Even in peacetime, much of the work our young marines do is inherently
    dangerous and involves great responsibility. Concerns about family
    safety and finances can impact the marine's ability to concentrate on
    his day-to-day mission.
        Marine families who live on the local economy have seen their
    increases in housing allowances gobbled up by skyrocketing housing
    costs, energy costs, vehicle maintenance, and gasoline prices. Annual
    adjustments to housing allowances simply can't keep up with the booming
    San Diego economy and housing shortages. Finding a rental unit is a
    real challenge in San Diego where the vacancy rate is less than 1
    percent. Junior enlisted marines with families often opt to occupy
    quarters located in high-crime areas because of the relative
    affordability of such neighborhoods. Those marines who choose safer
    areas find that their housing allowance is dwarfed by expensive rent.
    Typical rent in San Diego exceeds the junior marines' housing allowance
    by anywhere from 10 to 150 percent.
        The Navy-Marine Corps team has a public-private venture working
    that will begin to address the housing shortfall by providing 588 new
    homes, but with thousands of families waiting on waiting lists for well
    over a year, we need to continue these efforts and accelerate the
    timeline to produce more houses quicker.
        Mr. Chairman, we appreciate your interest and support. This
    concludes my statement. I will be pleased to answer any questions you
    may have.

        Senator Inhofe. Sergeant, when I was out there it was so
    bad, and I am sure you are aware, I think it should be in the
    record that some of our enlisted personnel are actually living
    across the border in Tijuana.
        Sergeant Lott. Yes, sir, that is a true fact. They still
    are, sir.
        Senator Inhofe. They still are?
        Sergeant Lott. Yes, sir.
        Senator Inhofe. Let us do 7-minute rounds here, because we
    are going to try to conclude this on the half-hour so we can
    give almost a full hour to the next group. So what I would like
    to do is just ask some questions and have each one of you
    quickly respond, just very briefly. Then the rest can be done
    in your written responses for the record, because we want
    everything you have.
        It is a very unique panel to have the range of officers and
    enlisted personnel here. But the one thing you have in common,
    you have been around for quite some time, so most of you were
    around in the days of the gang latrines, which I was, too. In
    fact, mine was back in the late 1950s. The latrine where I took
    basic training in Fort Chafee--I mean, the barracks--was
    supposed to be torn down in 1964. I went back last summer with
    a Guard unit and found it was still up and still being used. I
    even found where I carved my initials underneath it.
        So although we have very few barracks that still have open
    bays and gang latrines, many of the barracks that I have
    visited are deplorable: peeling paint, missing floor tiles, bad
    plumbing. I would like to have each one of you tell us how you
    would rate the existing barracks with those that you lived in
    and what is the direct benefit of going to a one plus one
    standard.
        We will start with Colonel Wright.
        Colonel Wright. Mr. Chairman, we are ahead of the power
    curve in one plus one. What really concerns me are the training
    barracks. Those dollars are not flowing yet. It is the things
    you do not see. You see a well-kept installation, grass cut;
    that is because we have nearly 200 borrowed military manpower
    spaces that we get from our III Corps folks on a 42-day period
    cycling. That is why the installation looks so good, not
    because we only have three guys left in grounds maintenance.
        But the barracks themselves, it is the heating and air
    conditioning system. Yes, when it rains you know it leaks. You
    need heat and air year round, particularly in Oklahoma in the
    summertime. It is the plumbing system, which you have an
    example of today, that is chronic leaks or backups, I would
    say.
        So we are getting there in the barracks themselves. The
    soldiers love them, the one plus one. They think it is the
    greatest thing we could possibly have ever done for them.
        Senator Inhofe. Very good.
        Sergeant Webster.
        Sergeant Webster. Sir, I agree with Colonel Wright in that
    the one plus one barracks standard is the way to go. Soldiers
    tell me that is exactly what they want, privacy. We still have
    four brigades worth of soldiers living with gang latrines on
    Fort Hood. We have plans to build buildings in the future, but
    they are not there yet.
        Senator Inhofe. Thank you, Sergeant. The last time I was in
    Fort Hood was during your tornado. Were you there at that time?
        Sergeant Webster. No, sir.
        Senator Inhofe. About 2 years ago.
        Sergeant Webster. In Gerald, sir?
        Senator Inhofe. Yes.
        Sergeant Webster. Yes, sir, I was down in First Cav
    Division.
        Senator Inhofe. Captain Johnson.
        Captain Johnson. Yes, sir. We are working--we are about
    halfway in our progress to get to the one plus one standard.
    The Navy feels that that is a good standard from the sailors.
    We are introducing a new initiative to bring the junior sailors
    off the ships. That will increase our need for barracks by
    about 11 barracks. This is a very expensive endeavor, but very
    important because they have the worst living standard in all of
    DOD.
        Senator Inhofe. All right. Chief Licursi.
        Chief Licursi. Yes, Senator, I concur with Captain Johnson.
    What we are seeing in Navy Region Southwest is the same thing.
    Our barracks range from the one plus one standard on the new
    barracks in Naval Air Station Fallon, Nevada, to renovating
    rooms that are at the two plus two standard. So there's a wide
    range. We would like to get some more consistency.
        We are working hard at getting to one plus one, but we need
    military construction funds to accomplish this on the time line
    that is required. We also short about 13 barracks to help
    accommodate also the need to move the sailors off the ships to
    shore.
        The sailors love the one plus one barracks. They like the
    idea of leaving the workplace, where they have a rough day, and
    going back to a room where they can sit down and relax and have
    some privacy.
        Senator Inhofe. Colonel Yolitz.
        Colonel Yolitz. Yes, sir. At Shaw Air Force Base, we have
    over 16 dorms, we have 5 that are already to the one plus one
    standard, and the other ones are at the two plus two standard.
    Across the Air Force, we were able to get rid of the gang
    latrines in fiscal year 1999, so we are very happy and pleased
    with that.
        We have a dorm master plan that has outlined deficit
    reduction and then replacement of those dinosaur dorms and the
    Air Force has this programmed out over the next several years.
        Senator Inhofe. Sergeant Poliansky.
        Sergeant Poliansky. I concur with my colleagues, on the one
    plus one. We are headed in the right direction. At Andrews we
    have 316 dormitory rooms that require complete furniture
    replacement, with a budget of over $600,000 required to replace
    and upgrade our curtains and furniture for our young airmen. We
    are headed in the right direction.
        We have two dormitories that are already converted to one
    plus one, another one under construction, and we just need your
    support on the furnishings and upgrading those other rooms.
        Senator Inhofe. Colonel Phillips.
        Colonel Phillips. Sir, the Marine Corps is going to a two
    plus zero configuration, with the permission of Congress. Even
    with that, Camp Lejeune by itself has a 6,000 man space
    deficiency as we try to transition to that.
        Senator Inhofe. Sergeant Lott.
        Sergeant Lott. Mr. Chairman, Miramar is the only Marine
    Corps base that has the one by one rooms, based on a lot of the
    BRAC moneys that we received in our move. Initially the marines
    loved the privacy, they loved being by themselves. After the
    novelty wears off, they are lonely. They sit in their rooms
    sometimes and they just wonder where their next buddy is
    because he is gone and they have nobody to talk to. That was
    some of the concerns that some of my marines have brought to my
    attention.
        Also the fact one of them brought to my attention was a
    prisoner has more space than he does.
        Senator Inhofe. Thank you, Sergeant Lott.
        The next question will be very brief. Recognizing that over
    50 percent of our personnel are now married personnel, I would
    like to have each one of you tell me the most common criticism
    of family housing in your command, unless you have already
    covered it, such as Sergeant Lott has.
        Colonel Wright. Sir, we are in pretty good shape. The
    answer is there is not enough on the installation. Only one in
    five families live on our installation. We have adequate
    housing downtown. There will be no increase. They cannot wait
    to get on post, even though Lawton is a great place to live.
        But it is the 18- to 24-month period to get on post that is
    the number one concern.
        Senator Inhofe. Sergeant Webster.
        Sergeant Webster. Sir, I would agree that the backlog of
    getting into quarters is the biggest issue, along with
    renovation and upgrade of the new quarters. At Fort Hood we are
    working with the regimental Residential Community Initiative
    (RCI) to try and increase the rate that we can repair,
    renovate, and build new housing at Fort Hood for our soldiers.
    We think that is the way to go and a very positive impact for
    our soldiers much quicker.
        Senator Inhofe. Captain Johnson.
        Captain Johnson. Sir, for those who would like a Navy
    family house in the Norfolk area, the most common complaint is
    the waiting time to get that house.
        Chief Licursi. Senator, the biggest complaint that I hear
    from our sailors is the shortfall of about 5,000 family units
    that is required to meet the needs in San Diego, and also the
    waiting time. The waiting time is anywhere from 18 to 36
    months.
        Senator Inhofe. Very good.
        Colonel Yolitz.
        Colonel Yolitz. Senator, the biggest issue at Shaw Air
    Force Base is basically the age, which drives the quality of
    the houses. The houses were built in the early 1950s for a
    family of the 1950s, not compatible with a family of the 21st
    century.
        Sergeant Poliansky. The same here. I guess it is the size
    of the homes for our senior NCOs. Living space is actually
    pretty cramped. As you move from station to station you
    accumulate items and furnishings. Your kids are growing up and
    you look at more space and a more modern environment to live
    in.
        Senator Inhofe. Thank you.
        Colonel Phillips. The homes, sir, are too small and they
    are too old.
        Senator Inhofe. My time has expired.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Looking at you and hearing you, I think of you as a choir.
    You are all singing the same song. Master Sergeant Poliansky
    told us about a sergeant who left the service. He was getting
    out; he was not getting the tools that he needed for the job.
        I have a question for you and would like brief comments on
    this. My question has to do with the facilities at your base. I
    would like to look at it in this way. Do the facilities at your
    base make the young men and women in uniform who are assigned
    there, as well as the civilians who work alongside them, feel
    that they are a part of a first class organization?
        Colonel Wright. Senator Akaka, soldiers as well as
    civilians at Fort Sill feel as though they are living and
    working in a C-1 Army, however with C-3 facilities. It is the
    heating and air conditioning, whether you are in your barracks
    or whether you are in your admin space, in your offices. They
    see the plumbing problems that we repair daily. With the
    downsizing, there is even more crunch on it, because the
    attitude is, when are we going to get around to fixing this
    stuff.
        The backlog is just beyond all means. The sooner we get
    that repaired, the sooner the morale of both the civilians and
    the soldiers themselves will improve.
        Senator Akaka. I know you have been stationed at Scofield.
    The Quadrangle is still around.
        Colonel Wright. Yes, sir, the A Quad.
        Senator Akaka. Command Sergeant.
        Sergeant Webster. Sir, Sergeant Major Webster. I would say
    the answer to your question is yes and no. Those soldiers who
    are working and living in the newer buildings do feel that they
    are in first class organizations and are being supported. Those
    who do not feel the opposite way.
        We have a situation on Fort Hood where we have haves and
    have-nots. When everybody is have-not and somebody gets
    something, people are pretty satisfied with that. But now that
    we have more haves than have-nots, it is a lot more aggravation
    and bothersome for soldiers living and working with leaks, bad
    plumbing, heating and air conditioning problems.
        Senator Akaka. Captain.
        Captain Johnson. Yes, sir. As I stated earlier, we have a
    quality of service message mismatch. Folks feel that the
    facilities they work in are not up to the standards of the rest
    of their attitude and the mission given to them. We talk about
    improving quality of service, but the funding has not been
    there to improve the vast majority of the facilities.
        Senator Akaka. Chief.
        Chief Licursi. Yes, sir, Senator Akaka. I would have to say
    that the sailors do not and the employees do not consistently
    feel that they belong to a first class organization in those
    facilities that they work in that are deteriorating.
        A primary example is Naval Air Facility El Centro. We have
    1940-vintage hangars that we are trying to repair high-stakes
    tactical aircraft in and the aircraft do not fit in the
    hangars, and it exposes our sailors that are doing the
    maintenance to the elements in the summertime in excess of 115
    degrees, which is a personnel and safety hazard and material
    hazard.
        When you work in those types of conditions, the sailors
    wonder, am I important enough. The question comes about, would
    Boeing treat their employees like this? I have to say it is not
    consistent and not everybody thinks it is a first class
    organization.
        Senator Akaka. Colonel.
        Colonel Yolitz. Senator Akaka, I agree with Sergeant Major
    Webster, yes and no to that question. We have folks who are
    privileged to be in a new facility. Our Security Forces
    Squadron is very happy to be in a new facility, recently
    constructed. But they were in a facility that we just tore
    down. They used to call it ``the crack house,'' to put a face
    on the condition that they lived in.
        There are other folks who are waiting for a facility, a
    place commensurate with our force modern, particularly our
    fighter squadron, aircraft maintenance units, where they are
    cramped in, hot, deplorable living conditions. They are the
    have-nots and they would not categorize themselves as being a
    member of a first class organization.
        Senator Akaka. Chief.
        Chief Licursi. Senator, I concur with my colleagues. Our
    people are frustrated, but they are dedicated and they try to
    do their best with the limited resources they have. If you
    provide us additional resources, we could go ahead and improve
    their job satisfaction and they could stand up a little prouder
    and a little taller.
        Senator Akaka. Colonel.
        Colonel Phillips. Sir, I currently have facilities where I
    have a communications electronics battalion working in
    facilities that have no heads with running water. I have 19
    battalion-sized armories without heating or air conditioning,
    very expensive weapons systems in those areas. Our previous
    commanding general claimed to be the biggest slumlord in the
    county. That is the kind of facilities we live in.
        So the answer, sir, is yes and no, mostly no. But when we
    through military construction provide new facilities, then it
    becomes first class.
        Senator Akaka. Sergeant Major.
        Sergeant Lott. Sir, the marines have done so much with so
    little for so long, it becomes commonplace. Like my general
    says, we just put some lipstick on that to make it work.
        Senator Akaka. Thank you.
        The question was asked about one plus one barracks and the
    answers have been that we are heading in the right direction,
    they love it, that is the way to go, it is a good standard. All
    answers were for that.
        My question is should we stick with the one plus one
    standard or consider something not quite as nice that would
    allow us to get more barracks faster? I understand that the
    Army and Air Force are moving fast on it, the Navy and Marine
    Corps are not. So are there other factors besides the one plus
    one barracks?
        Colonel Wright. Sir, I would have to remind you that Fort
    Sill is ahead of the game, but the Army itself will not build
    out this one plus one until 2008 with the current funding
    stream. Senator, we did exactly what you are talking about.
    There are 3,000-plus barracks we have at Fort Sill or soon to
    have, all but 500 of them are renovations. We have determined
    we could do it faster, just a little bit cheaper. But the other
    thing is, preserve some of our historic structures on the
    installation. So we have done that very effectively at Fort
    Sill.
        Sergeant Webster. Sir, I would encourage you not to build
    faster with less. I believe the soldiers deserve to have the
    one plus one, and if it takes just a little bit longer then we
    will have to do with that. But I think if we build less now we
    will pay for it down the line in retention of soldiers. I think
    they will look at that as a loss of faith and one more time
    that we have been given the short end of the stick, sir.
        Senator Inhofe. Let me interrupt and say, I think it is a
    very good answer. As the rest of you answer, you might say
    whether you agree with Sergeant Webster.
        Colonel Wright. Yes, sir, absolutely. It is the best thing
    we have done. The space is minimal. We may change the standard
    design just somewhat depending on the geographical area, but
    the soldiers really enjoy those. I think it is a great
    retention as well as recruiting tool to see what the current
    soldiers live in.
        Captain Johnson. Sir, the Navy supports the one plus one
    standard and feels it is very good for retention and for
    recruitment. However, we are looking at a two plus one standard
    similar to the Marine Corps, with the idea being that we can
    accommodate and improve the lifestyle for more sailors faster
    with the amount of money we are being given. The intention in
    the future is to download those two plus zero to a one plus
    zero standard, so eventually a person would have the privacy of
    his own room. However, the two plus zero is viewed as the way
    to get out of the gang heads faster and improve the quality of
    life for more people faster.
        In addition, we are introducing the concept of bringing the
    junior sailors off of the ships in home port. This increases
    the amount of barracks we need to build. So if you look at the
    amount of money we are being given, in trying to improve life
    for more people faster we need a two plus zero standard as an
    interim.
        Senator Inhofe. Yes?
        Chief Licursi. Yes, sir, Senator. I agree with Captain
    Johnson and I agree with the one plus zero standard. The Navy
    has made an expectation in the minds of the sailors that this
    is the quality of life we are going to provide for you as a
    recruitment tool and as a retention tool, and in order to do
    that we need to keep that promise and we need to ensure that we
    maintain and continue MILCON funding to make that happen.
        In San Diego, it will be right on the time line of the
    required period to make that commitment if we continue to stay
    on track with funding for our MILCON.
        Senator Inhofe. Thank you.
        Colonel Yolitz. Sergeant Major Webster is right. Do it
    right the first time.
        Sergeant Poliansky. I concur.
        Colonel Phillips. Sir, the Marine Corps has a permanent
    waiver to go to the two by zero standard. That helps to defer
    some of the cost of the one by zero standard.
        Sergeant Lott. I concur.
        Senator Akaka. Thank you so much for your responses.
        Senator Inhofe. Yes, Senator Nelson.

                STATEMENT OF SENATOR E. BENJAMIN NELSON

        Senator Ben Nelson. Thank you, Mr. Chairman. I want to
    commend you for bringing together a panel with diverse
    experiences, but similar conclusions based on their
    observations and their experiences.
        We want to see the military be a family- and personnel-
    friendly institution, each branch of it. If you were to rank
    right now on a scale of 1 to 10 how family-friendly it is or is
    not, could you give me some idea of that, 10 being the best and
    1 being the lowest?
        Colonel Wright. Sir, I am going to give a two-part answer.
    Every installation would be different because it depends on how
    often they deploy and the type of unit that is on that Army
    installation. Fort Sill, I would rank it in the two to three
    category, because we are predominantly a training base. Even
    though we have 5,000 soldiers that are ready to deploy, the
    family support network is there. They know the facilities are
    in good shape when they return.
        So it really would depend on the unit and if they may or
    may not be deploying.
        Senator Ben Nelson. It might include also the benefits,
    whether there are child care facilities available and how those
    are funded or to what extent they are in the process of being
    provided.
        Colonel Wright. Yes, sir. We are very fortunate at Fort
    Sill. Our child care center is about 5 years old. We are very
    happy with that. However, of course, it could not accommodate
    all 19,000 families, so a goodly number do go downtown. But
    those who live on the installation, as well as some bring them
    on the way to work.
        As we have more and more single parents with children, that
    is the priority right now at our child care centers, our single
    parent soldiers and then dependents of soldiers married to
    soldiers.
        Sergeant Webster. Sir, I am not sure that I can give you an
    accurate 1 to 10 rating.
        Senator Ben Nelson. Your feeling.
        Sergeant Webster. But I guess a five, going down. We have,
    like I said, a split base of great facilities versus very old
    and not good facilities. That goes along with some of our
    support elements. There is never enough child care. We have a
    lot more married military soldiers, married to each other, and
    working folks that need family care than we used to. But we do
    what we can with what we have.
        I think that there is a dedicated group of people that are
    trying to do what they can to make it a user-friendly and very
    family-friendly and soldier-friendly environment. But we need
    more resources to make that better.
        Captain Johnson. Sir, I would rank the Navy as about a
    seven in reference to a family-friendly environment. Concerns
    for the family are right at the top and they permeate just
    about every facet of the decisionmaking process: family support
    centers, housing, child care centers, medical clinics.
    Everybody is focusing on the families, because if you can
    recruit the family you can retain the member. Very important.
        Senator Ben Nelson. Thank you.
        Chief Licursi. Senator, I would say that in Navy Region
    Southwest our family support facilities in operations are
    probably a seven and going up. Our biggest shortfall is in
    child care. We are a deployable force. We are a ship work
    force. Our child care centers, one, we do not have enough of
    them to provide the child care; two, they are not open 24
    hours. Our sailors work 24 hours.
        So where I would say the improvement would have to be is in
    child care and the availability to provide that service 24
    hours a day for those that need it. We are open from early
    morning to early evening, but those sailors that work late
    night hours do not have facilities available.
        Senator Ben Nelson. They are easily forgotten when others
    are sleeping, right?
        Chief Licursi. Often, sir.
        Senator Ben Nelson. Thank you.
        Colonel.
        Colonel Yolitz. Sir, at Shaw Air Force Base I score the
    base probably at seven and rising, going higher. But each
    installation is different. At Shaw we live, we work, we deploy,
    we fight together as a team. It may not be a specific function
    of the facilities that are available, but it is a function of
    the programs.
        At Shaw we are blessed with a world class child development
    center and award-winning teen and youth programs that really
    help our young kids and that put our families and parents at
    ease a bit. I think that is probably as important as buildings
    and facilities.
        Senator Ben Nelson. No doubt.
        Sergeant.
        Sergeant Poliansky. The Air Force enlists individuals, but
    tries to retain families. I have my wife here with me today.
    Child care seems to be a major theme. At Andrews we had a roof
    collapse at one of our child development centers because of
    some oversight in construction. It is being renovated.
    Additionally, we have a new one that is being constructed.
        The family support network programs are available. Because
    almost one-third of our 3,500 enlisted members are in some sort
    of deployable billet, a lot more support is required, for those
    family members that are left behind. So I think I would rate it
    maybe about a five, but we are trying to improve those things
    because we retain families. Without family support you would
    not see people like me here today after 22 years.
        Senator Ben Nelson. I appreciate that.
        Colonel.
        Colonel Phillips. Sir, in terms of child development
    centers, which we have under construction now, and family
    services, I might be tempted to rate that as a seven. But then
    if I focus strictly on family housing, that is clearly a two.
        Senator Ben Nelson. It brings it back down?
        Colonel Phillips. Yes, sir.
        Sergeant Lott. Sir, in San Diego I would not give family
    housing that high. That is how bad our situation is. Child
    development centers, just like the colleagues here say, they
    should be open 24 hours, they need to be open 24 hours. Other
    than that, marine families, where we control, it is very high,
    sir.
        Senator Ben Nelson. With regard to not being open 24 hours,
    is that a function of lack of budget or is it a function of
    just it has not been established yet and it could be? Because I
    assume part of this could be--you do not have to add
    facilities, it is a matter of having the personnel and the
    programs in place. Do you have any thoughts about what it would
    take to make it family-friendly for 24 hours? Somebody has to
    work at night?
        Chief Licursi. Senator, I would have to say that it has to
    do with funding and the lack of qualified personnel. The Navy
    has pretty much been the benchmark now for child development
    centers, because we are not just a child care center, we are a
    child development center, and there is a lot of training that
    goes in to meet that commitment and job.
        Without the personnel to do that, we are not capable of
    doing that. So of course, the more personnel you hire, the
    higher the expense becomes, and there is a funding cost that is
    involved with it.
        Senator Ben Nelson. Thank you.
        Colonel Wright. Senator, as I answer your question--I must
    have been around the artillery for too long--I would like to
    reverse my scoring. Our facilities would be a 7 or 8 with 10
    being high. We are not 24 hours open. We do not have a lot of
    shift work. What we have done is expand the hours, because our
    drill sergeants come to work at 4:30, 5:00 in the morning and
    stay rather late. We can accommodate that, but if we had
    additional funding we certainly would consider a 24-hour
    operation.
        Senator Ben Nelson. Thank you.
        Sergeant Webster. Sir, if I could add, additionally if you
    open that facility 24 hours you are going to run into a
    maintenance problem. So you have to build more facilities. You
    may not have to build one for one, but you have to have down
    time to maintain the facility, to keep it clean, as it has to
    be for child care. So it is not just a matter of funding for
    hiring personnel.
        Senator Ben Nelson. Thank you.
        Senator Inhofe. Thank you, Senator Nelson.
        We were trying to end this panel on the half hour and we
    did not quite make it. I had one question I wanted to ask just
    the officers who are here. That is, in light of the
    skyrocketing costs of natural gas and electricity, what have
    you had to do creatively to offset that cost? Just the
    officers, very briefly.
        Colonel Wright. Sir, normally in Oklahoma gas is relatively
    cheap. We have seen up to this point this fiscal year the price
    of gas has gone up 72 percent. The rate of consumption on gas
    has gone up 24 percent. The good news is electricity is only a
    fraction of that, I think a 4 and an 8 percent in consumption,
    because we had a cold November-December.
        Where is the money coming from? The utility account is
    broke right now, the end of February. We are having to move
    funds, other SRM funds that we would normally get the remainder
    of the year, to cover that account. We project a $2 to $4
    million shortfall for the remainder of the year.
        Captain Johnson. Sir, the facilities we service are
    supported by the public works center, which is a Navy working
    capital fund activity. That means we operate as a business and
    we can actually run a deficit against the corpus. Therefore,
    this year we are doing okay with utilities costs. We are
    absorbing the loss. However, the Navy will decide whether or
    not those losses will be recovered next year or several years.
    I do not yet know the answer. But this is enabling us to absorb
    the 30 percent increase that we are absorbing.
        Senator Inhofe. Yes, Colonel.
        Colonel Yolitz. Sir, at Shaw on the east coast we have seen
    an approximately 8 to 10 percent increase in costs overall,
    based on two things, cost of energy and consumption, because of
    the colder winter we have had. But I do have colleagues in
    Texas and on the west coast that have seen prices, particularly
    for the month of December, up 200 percent. Basically, all that
    is going to end up falling short some time in the May time
    frame as far as utilities are concerned.
        Senator Inhofe. Colonel.
        Colonel Phillips. We are running a deficit of about $4
    million. Natural gas price has doubled. Electricity went up
    approximately 6 percent. It appears that headquarters Marine
    Corps will be able to cover that. If they cannot, then it comes
    out of the base operating support and/or my managing real
    property dollars.
        Senator Inhofe. We are going to the next panel. I would
    like the rest of my questions submitted for the record. One of
    them I will be interested in is to have each one of you
    identify and describe what you consider to be the most critical
    issue in your command.
        [The information referred to follows:]

        Sergeant Webster. I consider our Sustainment, Restoration, and
    Modernization (SRM) program; formerly known as Real Property
    Maintenance Program (RPM), and the Residential Community Initiative to
    be key to solving our aging infrastructure and facility problems,
    because they provide a total package. Of the two, I consider our SRM
    program to be the most critical issue in my command because it directly
    impacts the ability of our soldiers to perform their mission. At Fort
    Hood, we have a comprehensive SRM program that includes repairs,
    preventive maintenance, and the life cycle replacement of components.
    The Army's Installation Status Report (ISR) assesses facilities against
    DA condition standards or each type of facility. ``Red'' facilities are
    described as dysfunctional and in overall poor condition. We currently
    have 383 ``Red'' facilities at Fort Hood. Of the 44 barracks ISR.
        Our fiscal year 2001 SRM requirement at Fort Hood is estimated to
    be about 200 million to bring facilities to ``Green'' standard. The
    current funding level of $16.4 million basically limits efforts to
    Priority 1 repairs. Priority 1 repairs include health protection,
    safety, security, or the prevention of property damage. Examples
    include gas leaks, sewage backups, heat, air-conditioning, and power
    failures. Since the SRM focus must be, by necessity, on Priority 1
    items, those items that soldiers see on a daily basis end up on the
    backlog. Let me give you a few examples.
        When we look at where soldiers work, several items are readily
    apparent. The average life expectancy for a roof is 15 years. Lack of
    funds drives the decision to ``patch'' rather than replace. With an
    average cost of $59,000 per roof, Fort Hood should be spending nearly
    $9 million per year on roof replacements for the 2,272 non-housing
    buildings. For the past 5 years, we could afford only $800,000-$1
    million. Our backlog on roofs alone is $124 million. Maintenance shop
    bay doors and bay lights are prime examples of the impact of deferred
    maintenance on the installation's ability to perform its mission. Over
    160 bay doors currently need repair or replacement. More than 1,300 bay
    lights are inoperable. A recent inspection of 194 hangar doors at the
    two airfields revealed that 104 need repair immediately.
        When we look at where soldiers live, there are different, but
    equally important issues. For example, over 5,000 locks in barracks
    need repair or replacement today. Excessive wear without replacement
    means the same key opens multiple doors and soldiers' safety and
    security are compromised.
        When we take an even larger view of things that the average soldier
    doesn't consider until there is a catastrophic failure somewhere, other
    issues become apparent. A large portion of our water lines, waste water
    lines, and gas lines is part of the original distribution systems for
    Fort Hood and is more than 50 years old. With a 40- to 50-year life
    expectancy, these systems are deteriorated and failing frequently. Fort
    Hood repaired four water line breaks for 10-16 inch water lines in just
    1 week this year. Annual replacement investment requirements exceed $5
    million for these items alone.
        We're charged with being good stewards of the resources we are
    given. We have new facilities throughout the installation. Regardless
    of the type or age of a facility, in the long run we have to spend more
    on major repairs because all the small problems have compounded. If we
    are resourced to properly maintain them they will be around and be used
    for years to come and will, over the life of our facilities, save the
    taxpayers money.

        Senator Inhofe. Senator Akaka.
        Senator Akaka. Just if I can get a yes or no answer from
    you. The question is whether you think most military families
    want to live off base if out of pocket cost is comparable to
    living on base?
        Colonel Wright. Sir, they want to live on base almost
    across the Army, I believe, because of the security, the
    atmosphere, not just the shortened distance to work, even if
    costs are equal.
        Senator Akaka. Thank you.
        Sergeant Webster. Sir, on base.
        Captain Johnson. Sir, that largely depends on the location.
    In Hampton Roads, I think that most folks would prefer to be
    off base. There are some that want to be on base.
        Chief Licursi. Sir, in Navy Region Southwest, because of
    the cost of living, with the rising utilities, gas prices,
    natural gas prices and everything else combined with this, the
    locations of the homes and the distance people have to travel,
    the majority of the sailors would like to live in military
    housing.
        Colonel Yolitz. Again, it is location-dependent. Most folks
    that do want to live on base live on base for the sense of
    community, with shared experiences and hardships. They survive
    better as a team.
        Sergeant Poliansky. I agree. They prefer to live on base.
    Depending on where you are at, the commute to work is quite
    awesome and plays on readiness a bit.
        Colonel Phillips. Clearly, on base, sir. But 77 percent
    live off base.
        Sergeant Lott. Sir, in California, with conditions as they
    are, I concur with Master Chief Licursi on base.
        Senator Akaka. Thank you for your responses.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you. We will dismiss this panel now.
    We appreciate your time very much.
        We would ask the Reserve and Guard component panel to come
    forward. [Pause.]
        We welcome you here. You heard the format from the previous
    panel, so I would like to have you follow the same thing. We
    would like to get through your opening statements in 3 minutes.
        We will start with you, Colonel, if you would give us your
    opening statement. Thank you.

    STATEMENT OF COL. DAVID C. SMITH, ARMY NATIONAL GUARD, CHIEF OF
        THE ARMY NATIONAL GUARD DIVISION FOR INSTALLATION, ARMY
                 NATIONAL GUARD BUREAU, WASHINGTON, DC

        Colonel Smith. Yes, sir. Mr. Chairman and members of the
    subcommittee: I am Col. David Smith, Chief of Installations,
    Army National Guard, and I welcome the opportunity to appear
    before the subcommittee to speak about Army National Guard
    facilities. I am responsible for an infrastructure with a plant
    replacement value of over $23 billion. The Army National Guard
    has over 21,000 facilities, more than 81 million square feet,
    that receive Federal funds for their operations and
    maintenance. These facilities support over 350,000 members of
    the Army National Guard, over 2,000 federally reimbursed State
    employees who operate and maintain the facilities, over 3
    million man-days of use by other Department of Defense
    components, and citizens in over 2,700 communities in which the
    Army National Guard facilities are located.
        Your Guard is manned with higher quality soldiers, trained
    and equipped to a higher degree of readiness, than ever before
    in its 360-year history. Our military construction program has
    a direct impact on our training and operational capabilities.
    Currently the Army National Guard facilities do not meet unit
    or Army standards. According to the Army's installation status
    report, the Army National Guard has a facility deficit of over
    $19 billion and real property maintenance backlog of $6.8
    billion. 40 percent of the States are C-4 for facility quantity
    and 67 percent of the States are C-4 for facility quality. C-4
    means that these facilities have major deficiencies that impair
    the mission performance of our units.
        We are thankful for your generous support. The extra half
    billion dollars Congress provided in the last 3 years have
    helped the revitalization of the Army National Guard.
    Infrastructure requires constant reinvestment. Our annual
    reoccurring military construction requirements alone are in
    excess of $600 million. Annual reoccurring real property
    maintenance requirements approach $400 million.
        The Army National Guard needs about a billion dollars
    annually. Because of a lack of investment funds, the
    infrastructure of the Army National Guard is starved, as the
    installation status report indicates.
        I thank the subcommittee for their support and their
    interest in our facilities and will be happy to address any
    issues that the subcommittee might have.
        [The prepared statement of Colonel Smith follows:]

                  Prepared Statement by Col. David Smith, ARNG

        Mr. Chairman and members of this Subcommittee, I am Col. David
    Smith, Chief of Installations, Army National Guard and I welcome the
    opportunity to appear before this subcommittee to speak about Army
    National Guard facilities.
        I am responsible for an infrastructure with a plant replacement
    value of over $23 billion. The Army National Guard has over 21,000
    facilities, with more than 81 million square feet, that receive Federal
    funds for their operations and maintenance. These facilities support
    over 350,000 members of the Army National Guard, over 2,000 federally
    reimbursed State employees who operate and maintain the facilities,
    over 3 million mandays of use by other Department of Defense
    components, and citizens in the over 2,700 communities in which Army
    National Guard facilities are located.
        Today, the Army National Guard has taken on new responsibilities.
    Your Guard is now manned with higher quality soldiers, who are trained
    and equipped to a higher degree of readiness than ever before in its
    over 360 year history. Our MILCON program has a direct impact on our
    training and operational capabilities.
        We have an obligation to provide adequate, safe, and cost efficient
    facilities to support our personnel and units throughout the Nation,
    but we are struggling to do so. For example, a recent note from the
    Maine Construction and Facilities Management officer spoke of recent
    meeting of the Maine Facilities Board:

            ``We agreed that one of our prioritization criteria should be
            the impact on the drilling Guard soldier. The shame of even
            being seen in such a facility, let alone function, affects his
            or her ability to learn and maintain a military occupational
            skill. Lack of respect for an organization that can't even keep
            its infrastructure sound affects the retention of those
            soldiers trying to maintain proficiency and certainly makes
            recruiting a greater challenge than it should be.''

        Currently, Army National Guard facilities do not meet unit needs or
    Army standards. According to the Army's Installations Status Report,
    the Army National Guard has a facility deficit of $19 billion and real
    property maintenance backlog of $6.8 billion. Forty percent of the
    States are C-4, Red, for facility quantity, and 67 percent of the
    States are C-4 for facility quality. This means that they have major
    deficiencies that significantly impair the mission performance of the
    units assigned there.
        We certainly realize that we are not alone in the challenge to do
    the best we can within the DOD budget. We are part of the Army Facility
    Strategy, which, for the Army National Guard, currently emphasizes
    readiness centers, surface maintenance facilities, and classrooms.
        Furthermore, we are very thankful for your generous support. The
    half billion dollars extra Congress has provided in the last 3 years
    have certainly helped the revitalization of the Army National Guard.
    Yet as large a sum of money as this is, it is literally a drop in the
    bucket. Infrastructure requires constant reinvestment. Our annual
    recurring MILCON requirements alone are in excess of $600 million. The
    annual recurring Real Property Maintenance requirements approach $400
    million. In other words, just the Army National Guard alone needs about
    a billion dollars annually.
        We don't see ourselves as unique. Prudent facilities management is
    prudent facilities management no matter which component of the Defense
    Department we are talking about--or which agency of government at
    whatever level. Nonetheless, the Army National Guard is different,
    because the States either own our real property or operate it under a
    license from the Corps of Engineers or under a lease. The Army National
    Guard facilities program is a grant program, and the States manage it
    from the Military Department and are responsible for a far-flung
    operation, not one in a compact, concentrated area.
        Because of a lack of investment funds, the infrastructure of the
    Army National Guard is in crisis, as the Installations Status Report
    numbers indicate. To show the extent of the crisis, I would like to
    conclude with an extract from a typical note I received recently, this
    one from the Mississippi Construction and Facilities Management
    Officer:

            ``I sat in the Camp Shelby Engineers weekly staff meeting last
            week with all my department heads, roads and grounds,
            resources, mechanical, etc. and the one issue that was directed
            to me more than anything was the issue of resources, ``Did I
            see any hope of increases?'' on the horizon. . . . They are
            proud of Camp Shelby and the work they do but are tired of
            hearing that ``more with less'' rhetoric. Tightening up is one
            thing, starving the dog is another and this dog is starved. At
            this same meeting the staff reported over 1,000 outstanding
            work orders for this particular week. The mechanical/building
            supervisor had just received a boiler inspection from the state
            and laid (in addition to this previous 1,000 work orders) an
            additional 130+ work orders to boilers and hot water heaters
            alone from one simple and narrowly confined safety inspection.
            The meeting began with 1,000 outstanding work orders and when I
            left had 1,130. Just another day of crisis management at a
            large training site.''

        I thank the subcommittee for the your support for our facilities'
    progress, and I will be happy to address any issues that the
    subcommittee might have.

        Senator Inhofe. Thank you.
        Captain LoFaso.

    STATEMENT OF CAPT. JOSEPH M. LoFASO, U.S. NAVY, DEPUTY CHIEF OF
       STAFF FOR SHORE INSTALLATION MANAGEMENT, COMMANDER, NAVAL
                 RESERVE FORCES, NEW ORLEANS, LOUISIANA

        Captain LoFaso. Yes, sir. Mr. Chairman, members of the
    subcommittee, I am Capt. Joe LoFaso and I am the Deputy Chief
    of Staff for Shore Installation Management for the Commander,
    Naval Reserve Force. We are headquartered out of New Orleans,
    Louisiana. I want to thank you for giving me to opportunity to
    talk with you today about our Reserve Force infrastructure and
    discuss some of the challenges and a few successes that we have
    had.
        I want to particularly thank Congress. This year the Naval
    Reserve Force had a $12 million military construction budget. I
    feel like the poor guy here because compared to others, they
    are a much larger infrastructure. But Congress gave us an
    additional $44 million. So we almost quadrupled our military
    construction budget. That is pretty typical of the support we
    have received for many years, but this was a larger than normal
    donation, which we have gratefully received.
        I would like to discuss very generally a few areas of
    concern--sustainment, restoration, and modernization (SRM),
    formerly called real property maintenance. You have heard from
    many of the others here. We share the same concerns. We have
    military installations with permanent military members that
    support our drilling reservists throughout the United States,
    so we share the similar quality of service, quality of life,
    and operational concerns for our squadrons and personnel that
    are stationed throughout the Reserve Forces, naval air
    stations, particularly in joint Reserve bases.
        The average age of those facilities is about 42 years old,
    so that is about typical. We only have 1,200 Navy structures
    throughout the Naval Reserve Force and that is about less than
    half of what I think Fort Sill has. So you can see we are not
    real big.
        In addition to the SRM shortfalls, though, which we see at
    the same level as the active component, we also have to pay the
    other bills that help run a base, whether it is the utilities,
    the security forces, of course your child care centers. All
    those have been severely undercut over the years as a result
    of, of course, downsizings that have taken place.
        We have of course participated with various outsourcing,
    privatization, regionalization, claimant consolidation, and all
    the other buzzwords that you have probably heard from the Navy,
    in order to try to become more efficient and cost effective.
        In addition, a big part of our infrastructure, an important
    part of our infrastructure, is information technology. I think
    that is kind of an anomaly perhaps that you might be interested
    in hearing, because when you consider the widespread nature
    throughout the entire United States of the drilling reservists,
    how well we stay tuned in to those reservists and serve them,
    it is a quality of life issue as well as an operational issue
    for us to be able to get together with them, stay connected
    with them, pay them, as well as provide the orders and be able
    to stay in contact with them.
        So I think that is a part that we have been trying to work
    very diligently on for quite some time, and dealing with the
    20-year-old DOS technology out there that now needs to be
    brought up to the 21st century. That is a part of
    infrastructure that I think is very critical to us.
        Joint use facilities. I would like to talk about some
    successes. I think joint probably serves the Reserve components
    perhaps better than any other components, in my opinion. In
    many cases we try to take advantage of that, and we have
    already joint Reserve centers by the definition with the Marine
    Corps. In many of our places we are joined with the Marine
    Corps. But of course we are seeking other opportunities
    wherever they are available with the other services and already
    in fact enjoy opportunities where we share facilities with them
    already throughout the United States. More can be done there.
        Finally, I would like to talk about family housing very
    quickly. You would not think about that with the Reserves, but
    again we are enjoying a public-private venture in the New
    Orleans area. For us that is our largest housing area, so I
    just wanted to mention that. We will double our houses. Once
    again, of the $23 million the Navy is sharing in that venture,
    $17 million of that was a congressional add. Again, the sailors
    and marines of that area of course appreciate the quality of
    life increase there.
        In summary, the Navy's ability today to tap into the
    Reserve Force is the reward of the prudent investment in the
    Naval Reserve people, equipment, its IT facilities, and
    training.
        I want to thank you for allowing me the opportunity to
    speak to the subcommittee on this important issue.
        [The prepared statement of Captain LoFaso follows:]

                 Prepared Statement by Capt. Joseph LoFaso, USN

        Mr. Chairman, members of the subcommittee, I am Capt. Joe LoFaso,
    Deputy Chief of Staff for Shore Installation Management for the
    Commander, Naval Reserve Force, New Orleans, Louisiana. Thank you very
    much for giving me the opportunity today to talk to you about our Naval
    Reserve infrastructure and discuss some of the challenges and successes
    we are experiencing today force-wide. I have prepared a handout for
    distribution to you and the other members that gives you a general
    overview of the size and composition of the Reserve infrastructure. I
    do not intend to discuss that general information with you today, but
    wish to spend my short time highlighting for the subcommittee some
    specific areas that are challenging the Naval Reserve's ability to
    provide our customers and sailors with the quality-of-service workplace
    that they expect and deserve while serving our great Nation.
        The Naval Reserve, since its inception 86 years ago, has evolved
    into a battle-tested and skilled Naval Reserve Force that is the envy
    of the world. We are an integral part of today's Navy, but to continue
    providing service to the fleet we need the capability to properly
    administer and train our people, and to maintain and safely operate our
    equipment. Infrastructure is one of many vital components of that
    capability. Let me discuss very generally a few areas of concern we
    have in our attempts to maintain an aging infrastructure.

                           INFRASTRUCTURE CHALLENGES

        RPM. At the end of fiscal year 2000, the Naval Reserve owned 1,280
    structures with an average age of 42 years. The overall general
    readiness condition of our facilities is C-3. The corresponding
    Critical Backlog of Maintenance and Repair (BMAR), which has gradually
    increased over the past decade, is estimated to reach $296 million by
    the end of fiscal year 2007. The Navy has determined that an RPM
    investment of at least 2 percent of Plant Replacement Value (PRV) would
    be required to provide adequate levels of facility maintenance. Over
    the FYDP, the Naval Reserve is funded at about 1.5 percent of PRV per
    year. Without additional funding, we cannot stop the continued growth
    in our critical backlog.
        OBOS. During the past decade of downsizing, the Naval Reserve has
    fully participated in Navy's various outsourcing, privatization,
    regionalization, and claimancy consolidation initiatives designed to
    reduce the ownership costs of maintaining our Reserve infrastructure.
    We feel we have made great strides in running our installations in a
    most efficient and cost effective manner.
        Information Technology Infrastructure. The Naval Reserve, an
    organization of more than 88,000 `citizen sailors' based across the
    country and deployed worldwide, is encumbered by an IT infrastructure
    based largely on 20-year-old DOS technology and methods. These
    antiquated systems are a barrier to conducting the organization's
    necessary day-to-day business and to meet fleet support requirements.
    The Naval Reserve's IT budget has been, and is inadequate today to
    support the maintenance of current legacy systems and to modernize and
    upgrade critical manpower, personnel, and training systems. Additional
    dedicated investment in O&MN funds is needed to enable the Naval
    Reserve to jump-start its IT modernization process and to maintain
    current operations.
        Demolition. As Navy continues to reduce infrastructure and reduce
    costs, demolishing excess facilities has been emphasized as a way to
    reduce our maintenance footprint. In fiscal year 1996, Navy centralized
    demolition requirements into a separate program to more effectively
    focus O&MN resources, and in fiscal year 1999 created a separate Naval
    Reserve demolition program with initial funding of $1 million per year
    across the FYDP. We will continue to pursue this program as an
    excellent means of eliminating obsolete facilities.
        There are many success stories we could talk about over the past
    few years that have improved the overall condition of our facilities
    and enhanced morale among our sailors. I'd like to highlight two
    relatively new initiatives which are economically smart, and which also
    improve the way we do business.

                            INFRASTRUCTURE SUCCESSES

        Joint-use Facilities. We fully support the Joint-use Reserve
    facilities concept. DOD directive 1225.7 tasks the services to
    participate in a Joint Service Reserve Component Facility Board to
    ensure maximum practical joint construction in each state. The initial
    result of this effort has been the joining of the Naval Reserve and
    Marine Corps Reserve with the Army and Army National Guard in a joint
    common-use facility located in Orlando, Florida. Construction has begun
    this fiscal year with full cooperation among all participating Reserve
    components. A second joint venture is the Armed Forces Reserve Center,
    NAS JRB New Orleans with construction contract award for Phase I
    scheduled later this year.
        Family Housing. We fully support continued use of the Military
    Housing Privatization initiative. The Fiscal Year 1996 Defense
    Authorization Act established the Military Housing Privatization
    Initiative authorizing DOD to create partnerships with the private
    sector to revitalize existing family housing and/or build new military
    housing. The expectation is that Public/Private Venture (PPV) would
    enable Navy to meet housing requirements faster and at a lower cost,
    than from traditional construction of Navy-owned properties. In the New
    Orleans area, we have a very successful example of the value of PPV.
    Using the leveraging power of PPV, we are able to renovate 416 existing
    units, and construct an estimated 500 new units. The project is in the
    final stages of exclusive negotiations. We anticipate congressional
    notification and award of this project this spring. Continued use of
    this program will help us provide our sailors the quality-of-service
    they deserve.
        In summary, Mr. Chairman, Navy's ability today to tap into its
    Reserve Force is the reward of prudent investment in Naval Reserve
    people, equipment, IT, facilities, and training. However, as my active
    duty counterpart notes in his testimony, more funds will be needed to
    support the challenged Reserve programs I have just outlined so that we
    will be able to continue to provide essential day-to-day peacetime
    support to the fleet and preserve the capability to surge convincingly
    in time of war. Thank you again for allowing me the opportunity to
    speak to the subcommittee on this important issue.
        I would be happy to answer any questions you may have.

        Senator Inhofe. Thank you, Captain.
        Colonel Dunkelberger.

      STATEMENT OF COL. JAMES W. DUNKELBERGER, U.S. ARMY RESERVE,
        U.S. ARMY RESERVE ENGINEER, OFFICE OF THE CHIEF OF ARMY
                 RESERVE, HEADQUARTERS, WASHINGTON, DC

        Colonel Dunkelberger. Good morning, Mr. Chairman, Senator
    Akaka. Thank you for allowing me the opportunity to testify
    today on behalf of the thousands of men and women serving today
    in your Army Reserve, a ready, relevant, and essential part of
    the Army.
        I am Col. James Dunkelberger, the Army Reserve Engineer. My
    community sustains two of the Army's major installations and 12
    regional support commands with 45 million square feet of
    buildings. These regional commands function as virtual
    installations, with facilities in 1,300 communities across all
    50 States, most U.S. territories, and in Europe.
        My mission is to support readiness by providing and
    maintaining facilities in which Army Reserve units and soldiers
    are trained and of which they may be justifiably proud. Like
    the other services, we face the same facilities challenges, but
    in a little different setting.
        Our primary facilities, the Army Reserve centers, are
    prominent symbols of the Army on ``Main Street America.'' They
    often create the very first impression of the entire Army and
    present a permanent billboard for all Americans to see.
    Imagine, if you will, the impression that poorly maintained and
    seriously outmoded facilities leave on young men and women
    considering the military, on their mothers and fathers, on
    their neighbors in the community, and on the American taxpayer.
    Sad but true, this is the case today all across our Nation.
        These factors alone provide a compelling reason for focused
    facility support. For today's Army Reserve soldiers, the
    impacts of poor facility conditions are even more acute.
    Overcrowded, inadequate, and poorly maintained facilities
    seriously degrade our ability to train and sustain units and
    decay soldier morale and esprit de corps.
        This has grown significantly worse over time. For 8 of the
    past 10 years, we have been functioning on less than 40 percent
    of the required funding to sustain existing facilities and we
    are constructing on average only five to six new facilities per
    year, with 28 percent of the required funding. Couple these
    facts with the advancing age of the inventory, greater mission
    demand, and a shifting population; it is easy to see that we
    are in a facilities death spiral without immediate help.
        Most of our facilities are 1950s-era structures that remain
    virtually the same as when they were constructed. They are
    sorely in need of modernization or, as in most cases,
    replacement.
        Our theme is ``building pride.'' We try to do so primarily
    through major maintenance and repair projects, a new program
    called Full Facility Revitalization, similar to the Army's
    whole barracks renewal program, and to a small degree new
    military construction. We are ``building pride'' at the rate of
    six or eight centers at a time, but it is not enough. We have
    developed an overall strategy to modernize our facilities by
    2025, which is in concert with the Army's facility strategy.
    Resources are the essential but elusive key to success. Our
    soldiers, who we proclaim as twice the citizen, deserve better.
        We appreciate all your help in building Army Reserve pride.
    Thank you very much for this opportunity.
        [The prepared statement of Colonel Dunkelberger follows:]

             Prepared Statement by Col. James W. Dunkelberger, USAR

        Good morning Mr. Chairman and distinguished members of the
    subcommittee. Thank you for the opportunity to testify on behalf of
    more than 360,000 men and women serving today in your Army Reserve--a
    ready, relevant, and essential part of THE ARMY.
        I'm Col. James Dunkelberger, the Army Reserve Engineer. I represent
    the Army Reserve installation community that proudly sustains 2 of the
    Army's major installations and 12 regional support commands. These
    regional commands function as ``virtual installations'' with facilities
    in 1,300 communities across all 50 States, most U.S. territories, and
    in Europe.
        On any given day some 2,200 Army Reserve soldiers are engaged
    around the world in support of the Army or one of our warfighting
    commands. In fiscal year 2000, this amounted to about 3\1/2\ million
    man-days of support from your Army Reserve. That's equivalent to an
    active division, plus some.
        The Army Reserve brings tens of thousands of professionals from the
    civilian world to the Army with skills and abilities the Army may not
    have or cannot afford to develop. Many are leaders and experts in their
    chosen fields. To train these ``citizen soldiers,'' we utilize more
    than 45,000,000 SF of widely dispersed Reserve centers and support
    facilities worldwide. This equates to more square footage than Forts
    Hood and Sill combined, with Fort Belvoir thrown in for good measure.
    Like these posts, we experience inherently the same challenges, but in
    a little different setting.
        My mission is to support readiness by providing and maintaining
    facilities in which Army Reserve units and soldiers may train, and of
    which they may be justifiably proud. Therein lies my challenge today.
        Our primary facilities, Army Reserve centers, are prominent symbols
    of the Army on ``Main Street America.'' They often create the very
    first impressions of the entire Army and present a permanent
    ``billboard'' for all Americans to see. Imagine, if you will, the
    impression that poorly maintained and seriously outmoded facilities
    leave on young men and women considering the military; on their mothers
    and fathers; on our neighbors in the community; and on the American
    taxpayer. Sad but true, this is the case today all across our Nation.
    These factors alone provide a compelling reason for focused facilities
    support.
        For today's Army Reserve soldiers, the impacts of poor facility
    conditions are even more acute. Overcrowded, inadequate, and poorly
    maintained facilities seriously degrade our ability to train and
    sustain units and decay soldier morale and esprit de corps. This
    situation stems from a lack of adequate resources to address these
    conditions over time. For 8 of the past 10 years, we've been
    functioning on less than 40 percent of required funding to sustain
    existing facilities and we're constructing on average only 5-6 new
    facilities per year with 28 percent of required funding. Couple these
    facts with the advancing age of the inventory, greater mission demands,
    and a shifting population, it's easy to see that we are in a facilities
    death spiral without immediate help.
        Most Army Reserve facilities consist of 1950s era, red brick, flat
    roofed, tired looking structures that remain virtually the same as when
    they were constructed. They're sorely in need of modernization or, as
    in most cases, replacement.
        We have hundreds of deplorable facilities. They siphon off an
    inordinate amount of our maintenance and repair dollar. Given current
    Real Property Maintenance funding, we're unable to break free from
    sustainment let alone improve our facilities.
        The Army Reserve engineer theme is ``Building Pride.'' We try to do
    so in many ways, but primarily through major maintenance and repair
    projects, full facility revitalization, and, to a small degree, new
    military construction. With respect to our Full Facility Revitalization
    Program, if we were to receive on average of $2 million per facility,
    we could completely modernize many of our existing and enduring
    locations into state-of-the-art and space efficient facilities our
    soldiers will train in and be proud for the next 25-30 years. This is a
    cost effective and practical way to meet our mission.
        We're ``Building Pride'' at the rate of six or eight centers at a
    time, but it's not enough. We've developed an overall Pride Builder
    Strategy to modernize our Army Reserve facility inventory by 2025. It
    is in concert with the Army's Facility Strategy. We have the will to
    succeed, but resources are the essential but elusive key to success.
    Our soldiers, whom we proudly proclaim as the ``twice citizen,''
    deserve better. We appreciate your help in building Army Reserve Pride.
    Thank you very much.

        Senator Inhofe. Thank you, Colonel.
        We have been joined by Senator Cleland. Senator Cleland, we
    have already disposed of the first panel of the regular
    services. This is the Reserve and the Guard component on
    facilities problems. Is there any statement you would like to
    make prior to continuing?

                    STATEMENT OF SENATOR MAX CLELAND

        Senator Cleland. Yes, sir, Mr. Chairman, just real quickly.
    I have an opening statement I would like to enter into the
    record if there is no objection.
        Senator Inhofe. No objection, and following your statement,
    I enter into the record Senator Bunning's opening statement.
        Senator Cleland. Good to have Mr. Culpepper here from
    Warner Robins and I look forward to his testimony. I thank all
    of you for your service to our country.
        I happen to be a big advocate of boosting our defense and
    boosting our defense infrastructure. There are some 13 military
    bases in Georgia and we have a lot of needs there. I just want
    to thank the chairman for calling this hearing because it does
    focus on the need for infrastructure to support our forces in a
    manner that they deserve to be supported. So I just want to
    applaud the chairman and the ranking member for having the
    hearing. It is an honor to be here.
        Thank you, Mr. Chairman.
        [The prepared statements of Senator Cleland and Senator
    Bunning follow:]

                   Prepared Statement by Senator Max Cleland

        Thank you, Mr. Chairman, and you, Senator Akaka, for holding this
    important hearing.
        I would also like to thank our witnesses, the officers, enlisted,
    and civil engineers and managers who have come to talk to us on the
    nature of the problems that they are facing on a daily basis, around
    the country. They get to deliver the good news on a new project or
    repair that has just been completed, they also know the hundreds of
    other repairs and maintenance projects that are still awaiting
    attention. We appreciate their hard work and dedicated service.
        The problem of maintaining our military infrastructure is real and
    is not getting any better. GAO reported that DOD and the service's
    management of the backlog in real property maintenance began as far
    back as the 1950s. The current backlog of such maintenance is estimated
    at $16 billion--that's BILLION not million. And this number has grown
    from $8.9 billion in 1992 and $14.6 billion in 1998. In 2000, the
    Pentagon reported to Congress that it found 60 percent of military
    bases rated as C-3 or C-4. Neither the Department of Defense nor the
    services have a uniform system or strategy for maintaining real
    property.
        Georgia has 13 military installations representing each branch of
    the military. The missions of our bases in Georgia are strong and more
    relevant than ever. Some of these bases need attention when it comes to
    base facilities and infrastructure. For example, at Fort Gordon, the
    Consolidated Communications Facility at Fort Gordon--which houses all
    of the incoming and out going communications equipment--leaks so badly
    during rain that plastic sheets are placed strategically to divert
    water from damaging the equipment.
        Fort Stewart, Warner Robins, Fort Benning, and others are also on
    the list of installations with major infrastructure challenges. The
    problem is significant. In the face of these challenges, some say the
    answer is to close bases, but I believe that hastily closing bases and
    cutting capabilities before we understand future requirements is
    neither wise nor efficient. I think we can manage our infrastructure
    better, selectively replacing older and inefficient structures with
    newer ones, while streamlining our overseas bases--a step that is
    supported by the commanders in chief of European Command and U.S.
    Forces Korea. I believe we should take these steps, and assess the
    results of our ongoing base closure actions, before we commit to
    further cuts.
        I look forward to hearing from the witnesses and look forward to
    working with the members of this subcommittee to address this critical
    issue.
                                     ______

                   Prepared Statement by Senator Jim Bunning

        Readiness is something that this subcommittee struggles with as you
    all do. Sometimes, we on this subcommittee have felt that we have not
    always received candid answers about the state of any and all aspects
    of readiness issues.
        I've expressed my frustration before about our military's chain-of-
    command system. It is tough to get the truth and expertise that we need
    on these issues because of the chain-of-command.
        We know the President is the commander in chief. Whatever his
    policy is, you have to salute and come over here and do it. I
    understand that. But it makes it very frustrating for us because we
    need to hear your expertise. Because you are the experts and the guys
    out in the field.
        This subcommittee is trying to work with you to be helpful. If we
    don't get candid answers from you all, then we simply can't do our
    jobs. Therefore, you can't do your job the way you'd like to do it. So
    we would appreciate candor.
        I am concerned about the effect crumbling infrastructure and
    substandard housing have on morale, recruiting, and retention. This can
    lead to problems executing missions effectively and efficiently. The
    task in all this is to link these signs of hollowness together so we
    can better understand the current state of readiness.
        I hope we can bury the notion from the Defense Department over the
    last few years that excessive infrastructure spending was creating
    short falls elsewhere in the budget--especially in modernization and
    mission readiness accounts.
        It is clear that infrastructure investment has been chronically
    underfunded by the last administration, and were it not for Congress
    upping the ante, thousands of military personnel and their families
    would be living in poorer conditions and working in far worse
    conditions.
        The Defense Department and the military services cannot keep
    putting things off for another year hoping that the problem can be
    resolved on someone else's watch.
        Congress alone cannot solve the problem. We must work together. I'm
    gratified that our new president acknowledges the problem. I hope that
    more resources in fiscal year 2002 defense programs will go directly to
    meet some of the critical infrastructure shortfalls which can no longer
    be ignored. We have dug ourselves into a hole and I think it's time
    that we begin to dig out.
        Again, give us your candor now. I don't want your candor as soon as
    you retire and put on a suit. I'm always amazed how many, as soon as
    they put on a suit, say--``now let me tell you how it really is.''

        Senator Inhofe. Thank you, Senator Cleland.
        Colonel Stritzinger.

     STATEMENT OF COL. JANICE M. STRITZINGER, AIR NATIONAL GUARD,
     CIVIL ENGINEER FOR THE AIR NATIONAL GUARD, ANDREWS AIR FORCE
                             BASE, MARYLAND

        Colonel Stritzinger. Mr. Chairman and members of the
    subcommittee: Good morning and thank you for the opportunity to
    appear before you today to discuss the readiness of Air
    National Guard Forces in relation to our facilities. I am Col.
    Janice Stritzinger, the Civil Engineer for the Air National
    Guard. I lead an organization that operates $12.6 billion in
    facilities supporting Air National Guard missions and our
    108,000 Air National Guard men and women. This infrastructure
    of over 4,800 facilities is spread across 170 locations in all
    50 States, three territories, and the District of Columbia. We
    also partner with 67 civilian airports that provide us access
    to an additional $4.4 billion in airfield infrastructure at a
    fraction of what it would cost us to own and operate it
    ourselves.
        We have concerns about the degraded condition of some of
    our facilities, about the limited resources to address these
    shortfalls, and the impact this has on our readiness,
    retention, and recruiting. At the same time, we are very proud
    of our achievements in maximizing the limited funds we have
    been given.
        The Air National Guard civil engineers I lead make up 30 to
    40 percent of the Air Force contingency engineering capability.
    Last summer our units were actively involved in fighting the
    devastating fires in the west. Members of your committee
    visited our unit from Anchorage, Alaska, while they were
    deployed in Ecuador. Less glamorous, but equally important, are
    our routine training exercises performed here in the United
    States.
        Unfortunately, 18 of our Red Horse engineering troops died
    in a plane crash while returning from such a training project
    in Florida. In visiting with the family, friends, and employers
    of these dedicated citizen airmen, I was encouraged by their
    continuing commitment to the mission. As senior leaders, we owe
    these troops the best possible resources to perform their jobs.
        One of the key resources is the installations they operate
    and train from. Facilities in the Guard today run the gamut
    between deplorable and those which have won design and
    construction awards. As a direct result of your tremendous
    congressional support, nearly 50 percent of the Air National
    Guard facilities are adequate. We know that, given the right
    level of funding, we can produce right-sized, efficient,
    quality workplaces for our airmen.
        However, there are three barriers that stand in our way: an
    aging infrastructure, lack of sufficient funding, and the
    impact of new mission conversions. Recruiting and retention are
    critical to all components, including the Guard and Reserve.
    For potential recruits, the face of the Guard is our
    installation facilities. If this space is a double-wide
    trailer, old, run-down, and in a state of disrepair, it will
    not entice the type of young person we need in our service
    today.
        This aspect of the link between quality facilities and
    readiness should not be underestimated. In 1994 we began the
    beddown of the B-1 at Robins Air Force Base in Georgia by using
    temporary facilities and facilities slated for demolition. As
    of today, we still have $30 million of unfunded requirements,
    with a current projection for completion some time after fiscal
    year 2004. Ten years is too long to be in condemned facilities.
        In conclusion, Mr. Chairman, I want to thank the
    subcommittee for the opportunity to meet with you today. We do
    face some significant challenges in our attempts to support the
    Air National Guard's varied missions and readiness with
    adequate facilities.
        I have a written statement for the record that provides
    additional information on our issues of aging infrastructure,
    low projected budgets, and a large new mission beddown bill.
    Your tremendous support has been critical to our program and
    has touched virtually every person in our organization in one
    way or another. We continue to take steps that maximize the
    effectiveness of our dollars we do receive.
        Again, thank you for your support and for this opportunity
    to present my views.
        [The prepared statement of Colonel Stritzinger follows:]

             Prepared Statement by Col. Janice M. Stritzinger, ANG

        Mr. Chairman and members of the subcommittee, good morning and
    thank you for the opportunity to appear before you today to discuss the
    readiness of Air National Guard forces in relation to our facilities. I
    am Col. Janice Stritzinger, the Civil Engineer for the Air National
    Guard. I lead an organization that operates $12.6 billion in facilities
    supporting Air National Guard missions while protecting our forces and
    the environment. We develop policies and program resources to support
    nearly 108,000 Air National Guard men and women performing missions in
    support of the Air Force from over 170 locations.
        We have concerns about the degraded condition of some of our
    facilities, about the limited resources to address these shortfalls,
    and the impact this has on our readiness, retention, and recruiting. At
    the same time, we are very proud of our achievements in maximizing the
    limited funds we have been given and I would like to share these
    successes with you as well.

                                    OVERVIEW

        The Air National Guard is a constitutionally unique military
    organization with roots dating back to the very beginnings of our
    country and its militia. Our State and Federal missions are
    accomplished by 88 flying wings and 1,600 support units located at 173
    locations in all 50 States, 3 territories and the District of Columbia.
    The plant value of Air National Guard-managed real estate exceeds $12.6
    billion with over 4,800 facilities comprising in excess of 32 million
    square feet. We partner with 67 civilian airports that provide access
    to an additional $4.4 billion in airfield infrastructure at a fraction
    of what it would cost us to own and operate it ourselves.
        These facilities support a total force capability that is unrivaled
    in the world today. While comprising roughly 34 percent of the Air
    Force's mission capability, the Air National Guard specifically
    provides 100 percent of the Nation's air defense and 45 percent of the
    theater airlift mission to name a few. In addition to high visibility
    missions like last year's flight to the South Pole to rescue Dr. Gerri
    Nielsen, the Air Guard is a significant player in the Aerospace
    Expeditionary Force.
        Air National Guard civil engineers make up 30 to 40 percent of the
    Air Force contingency engineering capability performing a variety of
    missions. Last summer, our units were actively involved in fighting the
    devastating fires in the west. Members of your committee visited our
    unit from Anchorage, Alaska while they were deployed in Equador. Less
    glamorous, but equally important, are routine training exercises
    performed here in the U.S. Unfortunately, 18 of our Red Horse
    engineering troops died in a plane crash while returning from such a
    training project in Florida. In visiting with the families, friends,
    and employers of these dedicated citizen airmen, I was encouraged by
    their continuing commitment to the mission. As senior leaders, we owe
    these troops the best possible resources to perform their jobs. One of
    those key resources is the installation they operate and train from.
        Facilities in the Guard today run the gamut between deplorable and
    those which have won design and construction awards. As a direct result
    of congressional support nearly 50 percent of the Air National Guard
    facilities are adequate. We know that given the funding, we can produce
    right-sized, efficient, quality work places for our airmen. However,
    there are three barriers that stand in our way--an aging
    infrastructure, lack of sufficient funding, and the impact of new
    mission conversions.

                              AGING INFRASTRUCTURE

        The average age of an Air National Guard facility is 26 years. Our
    pavements are significantly older. Given the limited funding for real
    property maintenance, most of these facilities have had little regular
    maintenance. Imagine your house after 26 years with no new paint or
    carpet. The industry standard for replacement of facilities, otherwise
    known as the recapitalization rate, is 50 years. Our recapitalization
    rate is more than four times the industry standard. The Air National
    Guard has 1,460 facilities greater than 50 years old with a combined
    plant replacement value in excess of $2.1 billion.
        Other metrics used to describe the state of our facilities include
    the recently published installation readiness report. This report
    attempts to put a face on the relationship between facilities and unit
    readiness. It is a relatively new product and is still being refined,
    but the initial review of Air National Guard facilities is disturbing.
    It confirms our opinion that limited funding is resulting in facility
    system failures.

                            LACK OF SUFFICIENT FUNDS

        The Air National Guard currently comprises 7 percent of the total
    Air Force plant replacement value (excluding the value of
    infrastructure at civilian airfields). Given projected funding each
    flying wing can expect one MILCON project every 22 years. This is
    simply insufficient to support our current facilities and cannot begin
    to address the many new mission requirements.
        Our real property maintenance account is similarly stressed. With
    current funding allocations consisting of just one percent of the plant
    replacement value, each unit can expect to receive on average $690,000
    per year to maintain, repair, and upgrade all facilities and
    infrastructure on the installation. A typical Guard base has 325,000
    square feet of facilities and 125,000 square yards of pavement. Back to
    my example of your home, it would be difficult to maintain aged
    residential construction, much less an aircraft maintenance hangar, at
    only $1 per square foot.
        Some Air Force funding is targeted to replace ``quality of life''
    facilities like dormitories and fitness centers. This is an important
    focus, but does not translate well into the Air National Guard. Our
    traditional guardsmen work for their civilian employers during the
    week, and dedicate their weekends and free time to serving the Air
    National Guard and our Nation. For them, quality of life is a quality
    workplace to train in and operate from. This translates into readiness.
    There is no accommodation for this ``quality of life'' so portions of
    the Air Force budget exclude the Air National Guard and do not benefit
    our military members.
        At the 67 civilian airports we occupy, we occasionally participate
    in joint projects with the airport and the Federal Aviation
    Administration. These projects, referred to as military construction
    cooperative agreements, allow us to spend appropriated funds on non-
    Federal property. This program is mutually beneficial to the airport,
    the Federal Aviation Administration, the Guard and the taxpayer, as it
    ultimately saves money for all parties. The difficulty lies in
    ownership of the real estate. Air Force funding is based on owned and
    leased real estate and facilities. All Air National Guard funds spent
    on these joint airport projects come from a program, which is sized to
    support only the real estate we own or lease. As a result, every dollar
    spent on an airport is one dollar less available to fix our own failing
    infrastructure.
        The bright spot in all these dire budget issues is the great
    support we have received from Congress. Assistance from Congress has
    accounted for over 70 percent of the Air National Guard MILCON program
    in the last several years. This support has ensured that critical
    current mission requirements are being addressed. It has allowed us to
    replaced outdated, inefficient, and unsafe facilities with modern
    quality facilities at a rate of 4 to 1. This means that for each new
    facility constructed, we have demolished four old facilities that were
    draining our resources.

                              NEW MISSION BEDDOWNS

        We are currently programming and executing major new mission
    beddowns at five locations. Beddown construction is critical to
    reaching initial operational capability for the new weapon system, but
    the limited funding is making most facility projects ``late to need.''
    The beddown of our B-1 bomber unit at Robins Air Force Base, Georgia
    was started in 1994. We anticipate the final facility projects will not
    be complete until after fiscal year 2004 at best. We are using
    temporary trailers and facilities previously scheduled for demolition
    by Robins officials. Ten years to beddown a new mission is too long for
    personnel to train in borrowed and condemned facilities.
        Additionally, future new missions have the potential to overwhelm
    our program. Given the historic funding of three to four projects per
    year our entire President's budget could be strictly new mission
    projects. Repair, upgrade, and replacement of existing facilities will
    be delayed for many years.
        Recruiting and retention are critical to all components, including
    the Guard and Reserve. For potential recruits, the face of the Guard is
    our installation facilities. If this face is a double-wide trailer,
    old, run down and in a state of disrepair, it will not entice the type
    of young person we need in our service today. This aspect of the link
    between quality facilities and readiness should not be underestimated.

                      MAXIMIZING THE FUNDS IN OUR PROGRAM

        The challenge of maintaining facilities and readiness have also
    provided opportunities to excel. We have undertaken several initiatives
    within the Guard to get the most out of every dollar. We continue to
    pursue joint projects at every opportunity, have improved our execution
    strategies, and aggressively manage our funds to provide for
    reprogramming actions.

                                 JOINT PROJECTS

        The scoring process used to allocate limited Air Force MILCON funds
    does not readily support matching fiscal years on joint projects
    between components. To better achieve our joint goals, we worked with
    the Air Force Reserve to outline an extensive program of joint projects
    including dining halls, medical training facilities, troop quarters,
    and headquarters facilities. To facilitate advocacy, the Air National
    Guard was carrying the full scope for the project in our future years
    defense program. Language included in the fiscal year 2001 SASC MILCON
    report 106-292 removed our ability to report unfunded requirements and,
    consequently, our ability to show this joint project agenda. We are
    continuing to pursue the projects, but you will find pieces in each of
    our MILCON programs now.

                         IMPROVED EXECUTION STRATEGIES

        Since the large majority of our program comes through budget year
    decisions, we do not have the normal lead time for design and
    construction. We have taken steps to ensure projects are awarded in the
    first year of the appropriation so our people enjoy the benefit of
    their new facilities as quickly as possible. Our execution has improved
    dramatically in recent years.

                       AGGRESSIVE MANAGEMENT OF OUR FUNDS

        The generous support of Congress has also created a shortfall in
    planning and design funding. We have been successfully identifying
    savings in the construction program and gaining the requisite
    congressional approval to apply them to these design needs. In
    addition, we have completed a $12 million reprogramming action to buy
    out a large part of the backlog in unspecified minor construction.
    These relatively small projects are often the most beneficial to units
    executing a conversion. They can be executed more quickly than MILCON
    projects and tend to address the immediate needs of a unit. We are
    gradually increasing the baseline funding in this account, but need
    additional savings and congressional approvals to sustain this program.
    Savings that had been earmarked for this account in fiscal year 2001
    were taken to pay the congressionally mandated $100 million rescission.

                                   CONCLUSION

        In conclusion, Mr. Chairman, I want to thank the subcommittee for
    the opportunity to meet with you today. We do face some significant
    challenges in our attempts to support the Air National Guard's varied
    missions and readiness with adequate facilities. An aging
    infrastructure, low projected budgets, and large new mission beddown
    bills will continue to challenge us. Your tremendous support has been
    critical to our program and has touched virtually every person in our
    organization in one way or another. We will continue to takes steps
    that maximize the effectiveness of the dollars we do receive. Again,
    thank you for this opportunity to present my views.

        Senator Inhofe. Thank you, Colonel. I would suggest that
    when you said 50 percent of your installations are adequate,
    that means 50 percent are inadequate.
        Colonel Stritzinger. Yes, sir.
        Senator Inhofe. Mr. Culpepper, nice to have you with us.

      STATEMENT OF HILTON F. CULPEPPER, ASSISTANT CIVIL ENGINEER,
    HEADQUARTERS, AIR FORCE RESERVE COMMAND, ROBINS AIR FORCE BASE,
                                GEORGIA

        Mr. Culpepper. Mr. Chairman, members of the subcommittee,
    good morning. I am Hilton Culpepper, the Assistant Civil
    Engineer, Air Force Reserve Command. I appreciate the
    opportunity to appear before you today to discuss the impact
    that reduced military construction and sustainment,
    restoration, and modernization (SRM), formerly called real
    property maintenance (RPM) funding, has on the 74,000 men and
    women who proudly serve in the Air Force Reserve.
        The Air Force Reserve owns and operates 12 installations,
    consisting of over 10,000 acres, 1,000 buildings, and 12
    million square feet of facilities. The plant replacement value
    of these installations is $4.5 billion. From these 12
    installations and 55 other locations we operate, the men and
    women of the Air Force Reserve provide 20 percent of the total
    across the board Air Force capability at a cost of 4 percent of
    the Air Force budget.
        The Air Force Reserve military construction requirements
    are over $683 million. But at the current Air Force MILCON
    funding levels, the Air Force Reserve Command receives on
    average less than two projects per year. At this rate, our
    facilities can be replaced only every 314 years.
        SRM funding for the Air Force is based on 1 percent of
    plant replacement value (PRV). At 1 percent, the Air Force
    Reserve Command can do little more than breakdown maintenance.
    Yet we must make our facilities last 314 years.
        Over the past several years, the Air Force has stressed
    quality of life facilities. For the men and women of the Air
    Force Reserve, their quality of life facilities are where they
    train and work. When they are constantly faced with inadequate
    facilities that we cannot maintain, it eventually takes its
    toll on recruitment, retention, and mission accomplishments.
        The Air Force Reserve has benefited greatly from
    congressional interest in our people and missions across
    America. Because of this interest, we have many fine
    facilities. However, these facilities must be maintained or
    they will rapidly deteriorate. For every good facility, we have
    one that is seriously degraded.
        The average age of our facilities is 29 years and growing.
    You can paint an old building and it looks great, but it is
    still an old building.
        Mr. Chairman and subcommittee members, I ask for your
    assistance and I ask for your continued support of the MILCON
    program and SRM funding. I thank you for your continued
    interest in the men and women of the Air Force Reserve and in
    the investment that you have made in their future.
        [The prepared statement of Mr. Culpepper follows:]

                   Prepared Statement by Hilton F. Culpepper

        Mr. Chairman and members of the subcommittee, good morning, I
    appreciate the opportunity to appear before you today to discuss the
    impact that reduced military construction and real property maintenance
    funding has on the 74,000 men and women who proudly serve in the Air
    Force Reserve.
        The Air Force Reserve owns and operates 12 installations consisting
    of over 10,000 acres, 1,000 buildings, and 11 million square feet of
    facilities. The plant replacement value of these installations is $4.5
    billion. From these 12 installations and the 55 other locations we
    operate from, the men and women of the Air Force Reserve provide 20
    percent of the total, across the board, Air Force capability. In the
    past 10 years, we have engaged in full and equal partnership with the
    Air National Guard and active Air Force in responding to over 50
    contingency and real world operations. This is a five-fold increase
    over the previous 40 years.
        The Air Force Reserve military construction requirements are over
    $683 million. These requirements are merged with the priorities of the
    active Air Force and Air National Guard to produce an integrated MILCON
    program. As a whole, the Air Force MILCON funding requirements compete
    against the most serious needs of our business. The Air Force Reserve
    military construction program has consistently focused on sustaining
    what we own, bedding down new missions, upholding quality of life,
    reducing infrastructure, and continued environmental leadership. We
    have also established a lodging master plan and are working to build a
    fitness center facility improvement plan. The Air Force Reserve
    military construction program has benefited greatly from the
    congressional interest in the Air Force Reserve people and missions
    across America. Being good stewards of the taxpayer's dollars, we are
    proud to report for fiscal years 1998, 1999, and 2000, we have awarded
    100 percent of our MILCON projects in the year of appropriation. We
    believe no other component has matched that performance and this is
    indicative of our aggressive effort to provide the best facilities we
    can.
        The Air Force Reserve real property maintenance budget presents
    challenges similar to the MILCON program. We currently have over $308
    million in facility investment requirements identified. The limited
    funding forces the field to balance their aging infrastructure, force
    protection requirements, quality of life in the workplace, airfield
    systems and environmental requirements. The real property maintenance
    budget competes with all other requirements in the day-to-day
    operations of Air Force installations. Although our focus is on
    recapitalizing the physical plant, the level of funding allows us to
    only maintain or sustain critical systems such as heating and air
    conditioning systems, water lines and valves, electrical systems and
    substations, streets, and airfield lighting and pavements. This results
    in a pattern of fixing only what breaks and saving the remaining money
    for the next breakage to occur. We continue to only fund our most
    urgent needs in the real property maintenance budget. We cannot
    continue to mortgage the Air Force infrastructure without significant,
    long-term negative effects on morale, retention, and readiness. In my
    opinion, the Air Force has routinely had to trade off infrastructure
    and modernization to shore up near-term readiness causing a steady
    deterioration of our physical plant.
        In conclusion, Mr. Chairman, I want to thank the subcommittee for
    its continued strong support to the men and women of the Air Force
    Reserve and investment in their futures. I will be glad to address any
    questions at this time.

        Senator Inhofe. Thank you, Mr. Culpepper.
        Colonel Boles.

    STATEMENT OF COL. KENNETH L. BOLES, UNITED STATES MARINE CORPS
    RESERVE, ASSISTANT CHIEF OF STAFF FOR FACILITIES, MARINE FORCES
                    RESERVE, NEW ORLEANS, LOUISIANA

        Colonel Boles. Thank you, Mr. Chairman, distinguished
    members. I am Col. Ken Boles, stationed as the Assistant Chief
    of Staff for Facilities for Marine Forces Reserve, also located
    in New Orleans, Louisiana. I appreciate this opportunity to
    appear before you this morning and would like to submit my full
    statement and a package of what I call my ugly duckling book
    for the record.
        I would like to point out one typographical error that is
    contained in my package on page 3, where it starts to talk
    about the funding level for SRM. I am a little bit dismayed. I
    wish I had the $400 million plus figure that is listed there.
    Unfortunately, it is only $10 million, sir.
        Marine Forces Reserve is made up of 185 sites located
    currently in 47 States, soon to be 48, the District of
    Columbia, and the Commonwealth of Puerto Rico. These Reserve
    centers are a work place for more than 37,000 active, active
    Reserve, Marine Corps Reserve, and sailors. Over 75 percent of
    our Reserve centers are more than 30 years old and of those
    about 35 percent are over 50 years old. Across the board, the
    average age is a little bit more than 38 years.
        As you can imagine, the cost to repair each one of those or
    upgrade them for new equipment can be substantial. I have two
    programs that I use to address my requirements. One for
    replacement programs is the military construction Naval
    Reserve, or MCNR program; and the second one, the operations
    and maintenance, Marine Corps Reserve, O&MMCR program. The SRM
    program is used generally for repair.
        Our present MCNR backlog is $205 million. The average
    presidential budget for MCNR from 1993 to 2001 was $3.8
    million. Through plus-ups and assistance from Congress, that
    has actually averaged $10.7 million during that same time
    frame. However, even with that funding level of $10.7 million,
    it would take us almost 20 years to eliminate my backlog.
    Unfortunately, it also means during that 20 years I cannot add
    any new projects to that backlog.
        Our real property maintenance backlog is a little more than
    $20 million, made up of a BMAR of nearly $10 million and a
    $10.3 million minor construction backlog. Keep in mind, though,
    please, that those numbers are very fluid. As I am sure most
    panel members will also agree, that number changes, and
    unfortunately both of them go up.
        Congressional quality of life for defense funding
    enhancements that Marine Forces Reserve received in fiscal year
    1997 and 1999 were particularly helpful and gave us a
    substantial boost to reduce our SRM backlog. A couple different
    programs that we have jumped on with enthusiasm. In 1999, the
    commanding officers readiness reporting system, or CORRS, came
    on line at the direction of the Department of Defense. In
    fiscal year 2000 we finished an evaluation of the sites that we
    have full funding responsibility for.
        The first phase during that particular CORRS evaluation
    showed and identified approximately $57 million worth of repair
    and replacement requirements. More telling was the fact that
    our administrative supply and maintenance production
    facilities, the places where we actually repair and maintain
    equipment, had a shortfall of 186,000 square feet. This year's
    CORRS report phase two will evaluate the remaining sites and so
    far the preliminary data also shows that we will be increasing
    both our SRM and MCNR backlog as a result.
        Lastly, another useful program that we are huge advocates
    for and take advantage of is the Joint Service Reserve
    Component Facility Board, which meets annually in each one of
    the States throughout the United States. This board coordinates
    the efforts of each service's Reserve new construction
    initiatives and, although individual Reserve centers are
    possible as a result of that board, in more and more cases
    Marine Forces Reserve are joining our other services in joint
    facilities, all because of that single board.
        In conclusion, Mr. Chairman, I would like to say once again
    I appreciate the opportunity to be here and discuss these
    issues with yourself and your fellow subcommittee members. It
    is an important topic, one that has a direct improvement in
    readiness and quality of life if addressed adequately.
        Mr. Chairman, this concludes my comments. I would be happy
    to answer any questions you may have.
        [The prepared statement of Colonel Boles follows:]

               Prepared Statement by Col. Kenneth L. Boles, USMCR

        Mr. Chairman, distinguished members of the subcommittee: I am Col.
    Ken Boles, the Assistant Chief of Staff for Facilities for Marine
    Forces Reserve, headquartered in New Orleans, Louisiana. I appreciate
    this opportunity to come before you today to discuss the status and
    concerns that we have within Marine Forces Reserve in the areas of
    installation readiness and infrastructure. My intent today is to
    provide you the most current information and status on the Reserve
    installations that I manage on a daily basis. I also hope to impart to
    each of you the challenges we face and needs that we have within the
    Marine Corps Reserve in our attempts to provide our Marines and
    assigned sailors the very best facilities we can to accomplish their
    day-to-day missions.
        Briefly, Marine Forces Reserve is made up of 185 sites. We're
    currently located in 47 states, the District of Columbia, and the
    Commonwealth of Puerto Rico. We have full funding responsibility for 41
    of those sites. At the remaining 144 sites, we are tenants. As tenants
    we provide a representative portion of the expenses the host incurs to
    operate each center. These Reserve centers are the workplace for more
    than 5,200 active duty and active Reserve Marines and sailors as well
    as 32,702 Selected Marine Corps Reserve, SMCR Marines, better known as
    drilling reservists.
        My challenge as the Facility Manager for Marine Forces Reserve is
    how to use the limited dollars that I receive to maintain, repair,
    enlarge, and, eventually, replace our aging buildings and
    infrastructure.
        Over 75 percent of the Reserve centers we are in are more than 30
    years old, and of these, about 35 percent are over 50 years old. The
    average age across the board is 38. The cost to repair, maintain, and
    upgrade these aging facilities increases annually and can be
    substantial. Since these Reserve centers were built, construction
    techniques, methods, and materials have changed. In addition, the
    equipment that we have fielded to our units over the years has changed.
    The equipment is bigger, heavier, wider, and longer. Most require
    appropriately constructed or modified maintenance facilities as well as
    adequate electrical power and other support infrastructure upgrades to
    maintain their combat readiness. Even in our administrative spaces, the
    increased use of computers, fax and answering machines, televisions,
    VCRs, projection systems, copiers, simulators, and the like have placed
    a huge electrical demand on our facilities. Facilities that were built
    for manual typewriters and the M151 jeep, of World War II fame, are now
    inadequate for the equipment our modern Marine Corps uses. When we
    renovate a Reserve center we must address each of these shortfalls.
    Where found, we must also remove materials that were once commonly
    used, such as asbestos and lead based paint, materials, which we now
    know, have detrimental health effects. This can push up the renovation
    cost significantly as it takes specially trained and equipped personnel
    to remove and dispose of these materials. Additionally, meeting current
    building codes in our various states we reside in for electrical,
    plumbing, and other disciplines is expensive. You may see a similar
    situation when you have an accident in your car. The car you purchased
    for $20,000 from General Motors or Ford, might take $35,000 in parts
    and labor at Joe's Body Shop to make it whole again. When that happens
    in an auto accident your car is totaled and replaced. We frequently
    find this to be true when we do work up renovation estimates. We
    frequently find it cheaper to build a new Reserve center than it is to
    repair and upgrade an existing one. Unfortunately, Marine Forces
    Reserve is not funded sufficiently enough to do this. Hence we repair
    or renovate a Reserve center when it would really be better to build a
    modern, energy efficient Reserve center from the ground up.
        The tools at my disposal to address Reserve center replacement and
    repair are the Military Construction, Naval Reserve (MCNR) program and
    the Operations and Maintenance, Marine Corps Reserve (O&MMCR) program.
    Our present MCNR Backlog is $205 million. Our Real Property Maintenance
    (RPM) Backlog is $20.2 million, consisting of a $9.9 million Backlog of
    Maintenance and Repair (BMAR) and a $10.3 million Backlog of Minor
    Construction, called MCON.
        The average President's budget funding level for the MCNR program,
    Marine Corps Exclusive, for fiscal years 1993 to 2001 is $3.8 million,
    not including Planning and Design. The average appropriated funding
    level for the program during the same period is $10.7 million, again,
    not including Planning and Design. However, even at an annual funding
    level of $10.7 million, it would still take nearly 20 years to reduce
    the current backlog. It also requires making the unrealistic assumption
    that no new projects are identified during the same period.
        The funding level for RPM, including Quality of Life, Defense
    (QOL,D) enhancements, has averaged $410 million during fiscal years
    1995 through 2001. The Congressional Quality of Life, Defense funding
    provided to Marine Forces Reserve has provided a substantial boost to
    our RPM program during this period. In fact, slightly less than one-
    fourth of our RPM funding has come from this Quality of Life funding
    source. These funds are particularly beneficial because they are
    allocated specifically for RPM shortfalls. We direct our RPM funds
    toward correcting critical facility repairs that could result in self-
    aggravating facility damage, health impacts as identified by facility
    inspections, or command directed safety and mission essential projects.
    The second effort is to fund non-critical facility repairs and
    renovations or mission enhancing minor construction projects. Lastly,
    facility enhancing aesthetic repairs or minor construction projects
    will be accomplished. During this past fiscal year, five whole-center
    repairs were funded at Wyoming, PA; Lynchburg, VA; Brooklyn, NY;
    Brookpark, OH; and Pico Rivera, CA. These projects have substantially
    improved the working conditions for our marines and assigned sailors
    and improved units' abilities to accomplish their respective missions.
    At the same time, aesthetic improvements not only enhance the physical
    appearance of the center but the surrounding communities as well.
        The MCNR and RPM programs are closely related. The age and current
    condition of facilities dictate a temporary, short-term RPM fix until a
    project goes through the MCNR process for approval and funding. The
    normal process for projects that have a high command priority takes 3
    to 5 years from the time a project is identified on the MCNR list until
    it receives funding. During this period, RPM funds are used to address
    temporary, short-term fixes. These RPM projects only address health,
    safety, and self-aggravating facility issues.
        In 1999, the Department of Defense directed the implementation of
    the Commanding Officer's Readiness Reporting System (CORRS). We
    strongly support this effort because it standardizes individual service
    requirements. It has become one of the most important tools we use
    during our planning process. Combining CORRS with our property
    management procedures has enabled us to examine the numerous
    maintenance, repair, and construction projects and formulate our
    Facilities Master Plan objectives. In fiscal year 2000, we completed
    CORRS data collection on all 41 sites for which Marine Forces Reserve
    has 100 percent funding responsibility. We are currently developing
    projects from this CORRS information that will further increase our RPM
    and MCNR backlogs. This report identified $57 million worth of repairs
    and new construction. The new construction was needed to address a
    space shortage of 186,000 square feet identified throughout the 41
    sites.
        The main shortages of space were found within the equipment
    maintenance, administrative, and supply areas. For the fiscal year 2001
    CORRS data collection, our focus has been on the remaining 144 sites
    where Marine Forces Reserve occupies marine exclusive space at joint
    and tenant Reserve centers. This year's CORRS report will cost Marine
    Forces Reserve over $500,000. The tough decision this fiscal year was
    whether to spend lean RPM funds to gather the CORRS information or fund
    maintenance and repair projects. We chose to fund the remaining CORRS
    data collection effort. We anticipate the CORRS data for joint and
    tenant spaces will have similar results as last year and future
    projects will be developed and placed on the RPM and MCNR project
    lists, further increasing the backlog of both programs.
        Another useful program that we actively participate in is the Joint
    Service Reserve Component Facility Boards, which meet annually
    throughout the United States. These boards successfully coordinate the
    efforts of each service's Reserve new construction initiatives.
    Although unilateral Reserve centers are possible we are seeing more and
    more joint Reserve centers as a result of this service-wide Reserve
    coordination.
        The overall condition of Marine Corps Reserve facilities presents a
    daunting task. It will continue to demand a sustaining, combined effort
    of innovative RPM management, a pro-active exploration of and
    participation in joint facility projects, and a well targeted use of
    the MCNR program that will allow the Marine Reserves to reduce both the
    MCNR and RPM backlogs.
        In conclusion, Mr. Chairman, I would like to say once again that I
    appreciate the opportunity to meet with you and your subcommittee
    members on such an important topic. The condition of our Reserve
    centers is of paramount importance to the Marine Corps. Better
    facilities mean improved readiness and quality of life. I sincerely
    hope that the information that I have provided today will help you
    determine how best to allocate funds to improve installation and
    infrastructure readiness.
        Mr. Chairman, this concludes my statement. I will be pleased to
    answer any questions you may have.

        Senator Inhofe. Thank you, Colonel.
        Colonel Smith, when you gave your statement you alluded to
    67 percent of your facilities were rated C-4. I think each
    service has a different way of rating them. However,
    identifying these deficiencies does not really do any good
    unless something follows that in terms of correcting the
    problem.
        So I would like to ask each one of you, in your views do
    the installation status reports have a direct impact on the
    real property maintenance or military construction funding
    allocations in your components, Colonel?
        Colonel Smith. Yes, sir, they do. We tried to adhere very
    strictly to that report and we plan accordingly. The military
    construction is followed by that report. We have a ranking
    order from 1 to 1,305 projects and the Real Property
    Maintenance (RPM) which we now call sustainment, restoration,
    and modernization (SRM) is allocated according to equal use
    among the States and by need.
        Senator Inhofe. Captain LoFaso.
        Captain LoFaso. The reporting system absolutely does have
    an impact on the level of funding. So again, the expectation is
    if the facilities are C-3, for instance, you would get more
    funding than if they were C-2. That's true.
        Senator Inhofe. Colonel Dunkelberger.
        Colonel Dunkelberger. Although we are in the process, I
    have not really seen any tangible result yet to come out of the
    reports.
        Senator Inhofe. Colonel.
        Colonel Stritzinger. Sir, that is probably also true for
    the Air National Guard. It is still a new report that the Air
    Force is using for the installation and readiness report. At
    this time we feel as though it does accurately represent the
    readiness impact of our facility conditions. But as usual,
    there are more problems that need to be fixed than there are
    resources to align to those problems.
        Senator Inhofe. I am sure that is true.
        Mr. Culpepper.
        Mr. Culpepper. Yes, sir, it does impact. We use the numbers
    in our ranking on our facilities projects.
        Senator Inhofe. Colonel Boles.
        Colonel Boles. Sir, I would like to concur also that the
    CORRS system and what we are using for an equivalent type
    system does provide a readiness rating. The supply and admin
    facilities that we have in our own sites were C-4 and the
    maintenance and production facilities were C-3 this year. But I
    would also like to say that you generally create more projects
    than you have resources to address.
        Senator Inhofe. I would like to ask each one of you to
    identify your most serious facility issue. Let us start with
    you, Colonel Smith. I know there is a lot of competition for
    that title.
        Colonel Smith. Yes, sir. Our readiness centers are a
    variety of ages and they are where our soldiers work and train
    and live while they are doing their drill duty. I have recently
    toured two facilities in Utah and Oregon where the kitchens
    were inoperable. They had been condemned, not for lack of
    equipment, but because of the ability to renovate those
    facilities to bring them up to standard. This is for our
    readiness facilities and also our maintenance facilities.
        Senator Inhofe. Greatest challenge.
        Captain LoFaso. Just overall, I would say that the growing
    critical backlog of maintenance is the most serious of
    problems. There is a variety of problems, but we see it growing
    at approximately 15 to 20 percent a year and we cannot stop it.
        Senator Inhofe. Do you agree with that, Colonel.
        Colonel Dunkelberger. Yes, sir, focused SRM. It has been
    too little and too late.
        Colonel Stritzinger. Sir, in addition, I concur with the
    previous two witnesses that SRM is definitely a problem for the
    Air National Guard. It is a death spiral that we are in,
    because as soon as you get one project taken care of there is
    two to replace it.
        But we also in the Air National Guard have a problem with
    our new missions and mission conversions, trying to bring those
    on line. I currently have $200 million that are waiting for
    funding for missions that have already been announced, let
    alone the missions that are coming down the line when new
    weapons systems come on line for the Air Force with the F-22
    and the C-17.
        Mr. Culpepper. Sir, we provided you some photos of some of
    our facilities. A lot of those problems you will notice are
    what I call roof-related. We have serious problems across the
    command with our roofing situation. We are continually
    repairing buildings. They leak through and we just never seem
    to get there.
        Colonel Boles. Sir, I would like to also agree, inadequate
    SRM funds to address the growing backlog. When you generally
    have your backlog grow about $10 million a year and you
    generally average anywhere from $7 to $10 million a year from
    funding, it is virtually impossible to catch up. But at the
    same time, we are getting inadequate increases in base support
    and contract type support funding as well. Annually since 1995,
    we have experienced about a 10 percent per year increase in
    those contract costs. Of course, this year probably the largest
    one would be utilities that are hitting us.
        Senator Inhofe. Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        I would like to ask you whether you are able to build a
    long-range plan for addressing the needs of the facilities and
    be able to stick to that. Do you have the funding necessary to
    carry out a meaningful long-range plan? That is the question.
        Colonel Smith. Sir, we have built a long-range plan and we
    are attempting to stick to it. The question is are we able to
    fund those facilities at a reasonable rate, and the answer is
    no, sir. I would echo what was said earlier. Our building rate
    for replacement is about 300 years. Our RPM runs about 100
    years for facilities maintenance.
        Senator Akaka. Captain.
        Captain LoFaso. If we had a plan, we would not have the
    money to carry it out. So I am not sure that the plan would be
    useful even if it really was there. We have some plans, but of
    little use.
        Colonel Dunkelberger. Sir, the Army has what we call the
    Army facilities strategy and we are a player in that facilities
    strategy. It is over a very long period of time. Resourcing it
    will be a challenge. There are work-arounds that we will have
    to do, but we intend on working as hard as we can to do that.
        Colonel Stritzinger. Sir, the Air National Guard has a
    well-developed master plan across all the Air National Guard,
    where each unit has an active plan for not only short-range,
    but also their long-range upgrades. Given the stability of the
    Guard force, these plans are well known and we utilize them.
    All program documents, all 1391s that come forward for funding,
    always include a statement that the projects are in compliance
    with those master plans. Whether or not the resources are there
    to be able to take the projects and implement them, sir, is
    another story.
        Mr. Culpepper. Sir, we have a great plan. We send teams out
    all over the command to identify facilities projects and to
    rack and stack them in the order in which they need to be done.
    Unfortunately, the money situation is such that we do not get
    very deep into it. As I stated earlier, we do a lot of
    breakdown maintenance. You have a plan, but something breaks,
    and you have to go fix that. But we do have a plan.
        Colonel Boles. Sir, we have a facilities master plan that
    we completely review every 2 years and every other year we do
    an update to that. As my colleague said, it is a great plan,
    but rarely executed to the word.
        I would say that the MCNR portion of our master plan is
    generally more executable than our SRM-related repairs and
    upgrades to the facilities, simply because of inadequate
    funding.
        Senator Akaka. Colonel Dunkelberger, you did mention in
    your statement about your deplorable facilities and that money
    is often siphoned off of maintenance and repair. So there is a
    problem with the focus of the money. My question to all of you
    is do the people in the Guard and Reserve believe that they get
    a fair share of the available military construction dollars? I
    think I know the answer, but I want to hear it for the record.
        Colonel Dunkelberger. Sir, we support the Army facilities
    strategy. It is a good strategy, and that relates to your
    question. It will provide us with a foundation for building our
    facilities. With the Army emphasis on barracks and readiness,
    in the near years there is little for the Reserve components.
    We would certainly emphasize that we could use more.
        Captain LoFaso. Sir, I am at the headquarters, so I cannot
    say that I speak to the personal reservists. I am an active
    duty military member. But I can say that that has not always
    been true in the past, that they would have felt they were
    receiving their fair share. But I would say we have reached
    comparability now with the active component as far as the
    funding levels.
        Colonel Dunkelberger. Sir, with respect to SRM,
    sustainment, restoration, and modernization, in the Army
    Reserve, as with the Army, we use a model called AIM-HI that
    basically talks about requirements. We believe it is a pretty
    fair depiction of what is required.
        In terms of getting SRM funding, we are all kind of down in
    the barrel, if you will, throughout the Army. So in that
    regard, I feel we do. With respect to the military
    construction, however, I think that the strategy is a little
    ambitious and I do not believe we are getting quite our fair
    share.
        Colonel Stritzinger. Sir, I would have to say from the
    total force for the Air Force active duty, Guard, and Reserve
    that ultimately they do not get enough to start off with, and
    when you start fracturing that down to the Reserve components
    and the Guard on the military construction funding, our share
    of the Air Force funding is based on our percent of the plant
    replacement value, which only equates to 7 percent of the Air
    Force military construction program. Ultimately, that gives the
    Air National Guard three to four military construction projects
    a year in the President's budget, and that ultimately
    translates into each wing only receiving a project about every
    22 years.
        In addition to that, previously I had stated about the $200
    million in new mission beddown requirements that are waiting
    for funds, and with new missions taking up our three to four
    projects in the President's budget there isn't any chance of
    any current mission projects or needs to even enter into the
    President's budget.
        On the SRM side in the house, we are in a similar
    situation. Our baseline is 1 percent of our plant replacement
    value, which only gives us about $100 million per year. The
    industry standard is 2 to 4 percent of your plant replacement
    value and we are only getting 1 percent. That further breaks
    down into only about $700,000 per year per base, which is
    roughly about a dollar per square foot.
        Mr. Culpepper. Sir, when you are not getting much money,
    you obviously do not think the system is fair. However,
    probably the overall system itself is OK. The MILCON funding
    across the board has greatly decreased for everybody. When
    there was a billion dollars or so in the program, we competed
    very well. Being a small command, we could compete. But as the
    number of dollars in the overall program has gone down,
    obviously we are competing for a smaller and smaller share.
        But the system is OK.
        Colonel Boles. I would say, like our active duty brethren,
    when they hurt, we hurt. When life is good, life is good for
    the Reserves as well. As Mr. Culpepper said, we compete very
    well. A picture is worth a thousand words. When you look at the
    various pictures of the sites that we are in right now, the
    owned versus actual placement of our particular units, it is
    very fortunate that we do in fact have the interest of Congress
    to help increase our military construction budget, almost
    tripling it. The reality of the situation is that if we had
    stayed at $3.8 million you would have to wait every 2 years to
    replace one site, and that would be very difficult.
        Senator Akaka. Mr. Chairman, my time is up. Let me make a
    request here. I would like to ask each of you to provide for
    the subcommittee's records the backlog of maintenance and
    repair for your service compared to the amount you actually get
    each year to spend on repairs. Thank you.
        Senator Inhofe. You might include also in that, based on
    that, if there is no change how many years would it take you to
    get there. Is that all right?
        Senator Akaka. Please add that to the request.
        [The information referred to follows:]

        Colonel Dunkelberger. The SRM backlog for the USAR is $1.3 billion.
    We annually receive approximately $130 million. We are funded at less
    than 100 percent of what is required to merely stem the daily
    deterioration of facilities. Therefore, we can never reduce the Army
    Reserve facilities' backlog of maintenance and repair. Valuable and
    scarce operations and maintenance funds have been targeted at bringing
    our most critical training centers to C-1 at the expense of other
    facilities. In essence, we chose to target our funds to achieve the
    maximum return on investment.
        It's difficult to ignore maintenance and repair of selected
    facilities. But, to do otherwise places us in a death spiral where ALL
    facilities must become worse, before they are repaired. Our approach
    has been successful to date, due in part because of our never-ending
    search for better tools to maintain and repair our facilities. We
    leveraged the base realignment and closure to trade up many of our
    worst facilities for better facilities. We have developed our Full
    Facility Revitalization program that directly links into the Army
    Facility Strategy concept of facility modernization. We have a
    Commander's Lease Initiative that moves soldiers from our worst
    facilities to C-1 leased facilities. Each new lease has an exit
    strategy developed prior to execution of a lease. We have a very
    innovative Real Estate Exchange program. Basically, we enter into
    negotiated agreements with states, local governments, or private
    industry to leverage the value of our property to them. It allows us to
    replace poor facilities with newer facilities funded by the exchange of
    our property.
        All of these tools are integrated into a single Master Plan with a
    goal to achieve a C-1 level. I've deliberately left off the date we
    hope to achieve that goal. With current funding levels we never will.
    But without developing the plan, I would not know how much is required
    to achieve the goal. We can have all Army Reserve facilities C-1 if the
    Army Reserve is provided 100 percent of our sustaining costs--$185
    million per annum--in 60 years. Through a combination of 100 percent
    sustainment funding, military construction and full facility
    revitalization funds--$250 million per annum--the Army Reserve could
    reach C-1 in 25 years. However, our SRM funding is seriously
    inadequate. If not increased, no matter how innovative we are in our
    fund execution and planning, the backlog will consume our mission
    capable facilities as well.
        Colonel Boles. The fiscal year 2000 actual Backlog of Maintenance
    and Repair (BMAR) for Marine Forces Reserve was $7.9 million. Since
    fiscal year 1995, the annual Marine Forces Reserve BMAR has averaged
    approximately $7.2 million. It is important to note that the BMAR
    figure is fluid, and it is constantly changing as a result of on-going
    facility inspections that identify new maintenance and repair projects.
    Furthermore, as the results of the Commanding Officers Readiness
    Reporting System (CORRS) inspections at each of our 185 manned sites
    are reviewed and documented, the Marine Forces Reserve expects the BMAR
    to increase.
        The Marine Forces Reserve annual RPM funding level has averaged
    approximately $7.2 million. Since fiscal year 1995, the Marine Reserves
    yearly RPM funding level, including additional Quality of Life, Defense
    funds in fiscal year 1997 and fiscal year 1999, has ranged from a low
    of $5.7 million to a high of $15.9 million. The receipt of these QOL-D
    funds during fiscal year 1997 and fiscal year 1999 was critical in
    allowing Marine Forces Reserve to stabilize its BMAR growth. Based on
    the current funding level and BMAR assumptions, the Marine Forces
    Reserve will be severely challenged to limit near term BMAR growth.
        Based upon the current funding level, it will take approximately 9
    to 10 years to reduce the BMAR to zero.

        Colonel Dunkelberger. If I could, I would like to clarify
    what I stated before about not receiving a fair share. The Army
    for the past several years now has been working very hard on
    the whole barracks renewal program, on infrastructure
    replacement, and on the RCI and things such as that. A lot of
    military construction dollars go to that.
        To clarify what I stated, when I say not my fair share, we
    do not play in that. So it is kind of hard to get an equivalent
    percentage, if you will, if you have a large piece off the top
    for those initiatives.
        Senator Akaka. Thank you, Mr. Chairman.
        Senator Inhofe. Senator Cleland.
        Senator Cleland. Thank you very much, Mr. Chairman.
        Mr. Culpepper, the 314 years as a cycle for replacing
    facilities, was that Warner Robins or was that the Reserve
    component in the Air Force?
        Mr. Culpepper. That is across the command, sir. That is the
    Air Force Reserve component.
        Senator Cleland. That means your backlog is pretty severe,
    it seems to me.
        Mr. Culpepper. Yes, sir.
        Senator Cleland. That is a long time, 314 years. What would
    you say would be the greatest threat to readiness of the Air
    Force Reserve with this incredible backlog of unmet needs?
        Mr. Culpepper. Probably the greatest threat is our
    readiness posture and retention. People come in to work and you
    plug in your coffee pot and you blow 20 computers down the
    hall, those sort of things. Our facilities are getting old.
    They are not wired properly. Some of them, they leak on top of
    you. You look up and your drop ceiling is gone.
        They just feel like they are working in a lot of instances
    in second class facilities.
        Senator Cleland. I am glad the Air Force still has the same
    priorities I had when I was in the Army, that the coffee pot is
    more important than the computers. Now that we have our
    priorities straight, Mr. Chairman, we can move on. [Laughter.]
        What would you say would be the situation at Warner Robins
    itself, the command there?
        Mr. Culpepper. Speaking for the Reserve command at Warner
    Robins, we have two headquarters facilities there. One of the
    facilities is very nice. We just renovated it about 3 years
    ago. We are in the process of trying to renovate the other one.
    I happen to be in the renovated facility. CE looks after its
    own, sir, and it is a very nice facility. You like to come to
    work. It is bright, it is cheery. You have a little bit of
    space.
        You go to the old facility and the people that work there,
    as I once did, in that facility you get used to it. You are
    used to coming in to a dreary location and I guess you become
    acclimated. But now that you see the good versus the bad, the
    people over there, it has a depressing effect upon them.
        Of course, we are trying to get that facility renovated
    also, to match up.
        Senator Cleland. Just for the record, could you submit the
    list of unmet needs for the Air Force Reserve Command
    Headquarters component at Warner Robins? I would be interested
    in knowing that.
        Mr. Culpepper. Yes, sir.
        [The information referred to follows:]

        The final phase of the Add/Alter AFRC Headquarters Facility that
    was funded in the fiscal year 2001 MILCON program completes this
    project. We have no other MILCON requirements for our facilities at
    Robins AFB at this time.

        Senator Cleland. I want to thank all of you for
    participating today. I am on the Personnel Subcommittee. It is
    obvious that what you are dealing with here is not just bricks
    and mortar, but the quality of life and the ability to recruit
    and retain young service men and women for any mission for
    which they might be trained and ready. That is the bottom line.
    We understand the linkage there.
        Mr. Chairman, again thank you for having this hearing.
        Mr. Culpepper, thank you.
        Mr. Culpepper. Thank you, sir.
        Senator Inhofe. Senator Cleland, you mentioned the quality
    of life and retention. Retention is a huge problem right now,
    as you all know. My concern has been that if something should
    happen--I will share a story with you. At the 21st TACOM over
    in Germany that is responsible for the ground logistics in
    areas in the Balkans all the way down to the Persian Gulf,
    because of these deployments that are dramatically affecting
    you guys, they said that they are at about 100 percent capacity
    in terms of ground logistics.
        So the question I asked there--and this is between getting
    involved in Bosnia and before Kosovo--was at this level, if
    something should happen in the Persian Gulf, what would you do?
    The answer was: We would be totally dependent on Guard and
    Reserve.
        Consequently, we concentrate on the quality of life, but
    moreso I think in the services than in the Reserve and Guard
    components. The quality of life programs, such as the barracks
    and the family housing, are receiving increased attention. What
    are the quality of life issues as they relate to your
    components? What are the funding levels associated with those
    quality of life programs?
        I ask this question because you have the same problem in
    critical MOSs in the Reserve and Guard components that they do
    in the regular services. Anyone want to answer?
        Colonel Smith. Yes, sir. The quality of life issues from
    our perspective center around our armories. Our armories are
    the facilities where we train and live. They are community
    organizations that the families tend to congregate around. We
    also have a family support services that has been in existence
    now for several years and is starting to provide the support to
    those families that live, not on post, but in their own homes.
        Senator Inhofe. Captain.
        Captain LoFaso. Again, I heard somebody say it earlier. For
    many in the United States, the Reserve center is the Department
    of Defense, and when they look at that Reserve center and it is
    a second- or third-class facility what kind of impression does
    that give them of the military? So there is a retention and a
    recruitment problem right there.
        In addition, if those facilities again are not properly
    maintained and the reservist must come to those facilities and
    be trained, if you will, and receive the services that he or
    she needs and those facilities obviously cannot support that
    function, then again retention becomes an issue for the Reserve
    that comes there.
        In addition, again I mentioned IT because it is a big part
    of our infrastructure and how will we stay connected with our
    reservists, whether it is directly for order-writing, for
    payment purposes, the long distance learning--we are not always
    at the fleet concentration area. It is all technology today
    that is helping to make that more viable, cost effective,
    etcetera.
        Senator Inhofe. In addressing the retention problem, where
    do you rank facility conditions in terms of as far as what
    affects our retention problem?
        Captain LoFaso. Again, I do not have a statistic on that.
        Senator Inhofe. Any of the rest of you?
        Mr. Culpepper. I think I would rank facilities as pretty
    high on the list across the board. We do not have a lot of
    quality of life facilities in the Reserve command. We do not
    have the child care centers, barracks per se, things of that
    nature. So when money is set aside to fund those issues, we do
    not generally get to play in that.
        So like I said earlier, our quality of life facilities, we
    would like to see a little bit more money put into that area.
        Colonel Stritzinger. Yes, sir. I would have to agree with
    that statement. Definitely, for the Air National Guard quality
    of life is the quality of the workplace, and that is our
    recruiting tool. Part of the problem that we have is that when
    it has been directed down from the Chief of Staff of the Air
    Force, the Air Force budget will take $100 million off the top
    to focus towards dorms. Then that is almost a fifth of the
    program that the Air National Guard is not a player in trying
    to get those resources to take care of some of our needs. So
    there is no benefit to the Air National Guard. Not to take that
    away from our active duty counterparts, because I know it is
    very important and critical to them and it is a quality of life
    issue to have the dorms and the fitness centers and the child
    care centers.
        But the few times that the Air National Guard has been
    given quality of life funds within the budget process, it has
    been very sporadic. We received some funds back in 1997 to the
    tune of about $44 million and then again in 1999 we received
    another $10 million. But it is hard to build a program to
    address issues when you do not know when funding is coming and
    there is no consistency to the funding stream.
        On top of that, sir, if we had some less restrictive rules
    on how we executed those funds, because our quality of life is
    so different than the Air Force's.
        Senator Inhofe. Any other comments on that?
        Colonel Smith. Yes, sir, if I may. I received a comment
    from the Maine Construction Facilities Management Officer and
    his quote is that, ``The shame of being seen in these
    facilities, let alone function, affects his or her, the
    soldier's, ability to learn and maintain a military
    occupational skill. Lack of respect for an organization that
    cannot even keep its infrastructure sound affects retention of
    those soldiers trying to maintain proficiency. This makes
    recruiting a greater challenge than it should be.''
        Colonel Dunkelberger. This is an insidious thing. It
    strikes at your self-esteem. We are asked to do a lot. We are
    asked to do a lot more now, and when you have to go out there
    and work in a facility and do these things it is a struggle.
    You strike at self-esteem and strike at pride. This is tough
    stuff when you have a civilian job as well.
        Senator Inhofe. Thank you very much.
        Senator Akaka.
        Senator Akaka. Mr. Chairman, I have a last question here to
    ask. We know of the well known phrase ``pay me now or pay me
    later,'' which was applied usually to our cars. But clearly, it
    applies to maintaining our buildings as well. I would like to
    ask any of you who want to respond to this whether you are
    generally able to get money to fix things before they
    completely break, or do you let things go until they fail and
    pay a lot more to repair or replace them?
        I know we have different systems and you use systems, too.
    The question is, is our system for dealing with building
    maintenance working?
        Colonel Smith. Yes, sir, I would like to start if I may.
        Senator Akaka. Colonel Smith.
        Colonel Smith. Our system is broken. I have numerous
    examples of that, but I will share one with you. The Jersey
    City, New Jersey, armory was built in 1929. It has not aged
    gracefully. There are large barrel-type fuses and large long-
    handled throw switches that appear as though it would take two
    men to move them. The only thing missing is the electric arc
    jumping from pole to pole. A goodly number of quaint little
    fuse boxes containing six to eight porcelain and glass-encased
    15-amp fuses are sprinkled throughout the building walls. The
    steam boilers that provide heat to the cavernous facility of
    more than 146,000 square feet are more than 40 years old, but
    look like they are twice the age.
        Sir, that is not untypical of some of our facilities.
        Captain LoFaso. When you have a growing critical backlog,
    all the money that you have is to fix the things that are
    broken. We do preventive maintenance, but I am going to say
    that the majority of the money goes to fix what is already
    broken.
        Colonel Dunkelberger. Preventive maintenance is an idea,
    not a fact. That pretty much sums it up.
        Colonel Stritzinger. Sir, within the Air National Guard we
    are definitely operating our buildings and systems longer, with
    inadequate maintenance. The risk that you accept on that is the
    risk of fire, dangerous indoor air qualities, inadequate
    utility systems across the board.
        Just recently, with the airfield pavements problem that we
    had, we just damaged some aircraft engines in Atlantic City and
    we were forced to shut down operations due to the failing
    pavements that we have.
        Mr. Culpepper. More patching. I find it interesting that we
    can get a few bucks to go out and maybe patch a pothole in a
    runway and then we turn right around--because we cannot replace
    the entire slab or whatever--and break a million dollar engine.
    So it is the same thing.
        Colonel Boles. Sir, I had a great dream last night. I woke
    up in the middle of the night and I had all the money I needed
    to be proactive and plan ahead. But when I came out of the fog,
    I realized the reality is that you are in a reactive mode. You
    are correcting things that have already broke. In most cases, a
    roof leaked or an electrical panel is blown and you have to
    repair that. You cannot go and upgrade. You just are
    insufficiently funded.
        Senator Akaka. Thank you very much for your responses.
        Thank you, Mr. Chairman.
        Senator Inhofe. I think that is a good question to ask,
    Senator Akaka. I always use the example of the M-15/915 trucks
    over in Germany, that we determined we could replace each one
    for the amount we maintain them over a 3-year period. That is
    somewhat of an accounting problem. As we get into a rebuilding
    mode here, we are going to try to do a better job for you
    folks.
        I appreciate very much your coming and sharing very bluntly
    with us the reality that we are facing today. Thank you, we are
    adjourned.

        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator James M. Inhofe

        1. Senator Inhofe. Please give some specific examples on things
    that are being done to make installations look good when it is covering
    up a disaster.
        Colonel Phillips. Many buildings at Camp Lejeune are now
    approaching 60 years of age. In repairing a few of our older
    facilities, we have found numerous situations where metal and wood stud
    walls have totally deteriorated and were basically held up by plaster
    surfaces and brick veneer. The maintenance solution is to completely
    replace these walls. However, due to lack of funding, the most we can
    afford to do in a majority of these buildings is cosmetic--mostly
    patching and painting rather than fix the systemic problem. In these
    same facilities, we still have the original plumbing and mechanical
    systems. These systems need to be replaced with modern systems that
    meet current code requirements. Again, due to lack of adequate funding,
    we concentrate our efforts on keeping these systems operational through
    a patchwork approach. Another example is roofs. We are constantly
    patching leaking roofs that have exceeded their useful life. This is a
    band-aid approach because, in most cases, we cannot afford to
    completely replace the roofs.
        Sergeant Lott. One example would be the rupturing of the high-
    pressure lines within hangars 2 and 5 at MCAS Miramar. With no funds
    allocated for maintenance and repair of these systems, funds had to be
    diverted from other MRP projects to effect repairs. The heating system
    within the older style barracks, like the above-mentioned pipes were
    neglected for some time causing our marines and sailors to go without
    heat. We purchased energy saving heaters for those occupants that
    needed them.
        Colonel Dunkelberger. The Army Reserve maintains a 5-year Corporate
    Sustainment, Restoration, and Modernization Plan. In addition we have a
    line item detailed Facilities Annual Management Plan. The development
    of these plans begins with the Chief, Army Reserve's guidance that is
    distributed to the field. The field develops and documents their
    requirements. The Army Reserve Engineer staff validates those
    requirements, developing an integrated, prioritized execution plan.
        Since the Army Reserve gained control of our own facilities'
    destiny in 1992, none of our efforts were in any way focused on a
    cosmetic solution to hide potentially disastrous conditions, such as
    failing electrical or vehicle exhaust systems. Therefore, the Army
    Reserve can provide no examples of cosmetic projects being accomplished
    that hide failing facility components. The Army Reserve, in fact,
    targets its resources toward repair of failed or failing components.
        We developed our strategy in fiscal year 1996 to bring our
    facilities to a C-1 1evel even though we knew sufficient funds were not
    available to achieve the C-1 goal in any reasonable time. The strategy
    was developed to focus efforts, determine funding requirements to
    achieve C-1 standards, and breed success. We recognized that without a
    strategy no success was possible.
        The strategy began as ``Just Say No to Worst First.'' We recognized
    that the continued policy of funding the worst facilities first ensures
    that all facilities became ``worst'' before they were repaired. We also
    recognized that we could not repair all facilities.
        Therefore, we chose to target funding to our USAR Centers, the home
    of our Army Reserve soldiers. We developed corporate priorities
    approved by the Chief, Army Reserve. Our highest priority projects are
    the correction of life, safety, and health deficiencies. The lowest is
    maintenance of finished surfaces.
        The strategy now is to eliminate all non-mission capable facilities
    through an effort called ``Get the Red Out''. The Army Reserve has a
    business process that begins with identification of the current
    condition, both from the soldier (customer) and engineer community
    (landlord) perspectives. Those facilities that are C-1 have funds
    focused to maintain the C-1 level. Those facilities that are C-2 are
    targeted for repair. Those facilities that are C-3 are put though an
    analysis that determines how to best exit that ``red'' facility.
        The result of the above analysis is the Army Reserve's Corporate
    Master Plan. This Master Plan displays the current condition, the tool
    by which we will bring the facility to C-1 standard, and the cost to
    bring the facility to C-1. The Master Plan integrates all tools to
    maximize bringing facilities to C-1 standard while continuing to
    support the training and readiness of the units and soldiers assigned
    to each facility.
        The various tools currently at our disposal are:
        1. Military Construction, Army Reserve (MCAR)--We utilize MCAR to
    replace our worst and uneconomically repairable facilities.
        2. Our Operations and Maintenance, Army Reserve funds are used to
    maintain C-1 facilities at the C-1 standard and drive C-2 facilities to
    C-1. We create a Corporate Property Maintenance and Facilities Annual
    Management Plan that assures the expenditure of these funds in support
    of the strategy.
        3. We have a Commander's Lease Initiative that moves soldiers from
    our worst facilities to C-1 leased facilities. Each new lease has an
    exit strategy developed prior to execution of the lease.
        4. We've developed our Full Facility Revitalization program that
    directly links into the Army Facility Strategy concept of facility
    modernization. We have funded pilot projects to refine this program's
    business process, develop facility modernization standards, and obtain
    good cost models. Using information from the pilot projects we refine
    our Full Facility Revitalization prioritized project list.
        5. We have leveraged the Base Realignment and Closure to trade up
    many of our worst facilities for better facilities. This is often a no
    cost upgrade.
        6. We have a very innovative Real Estate Exchange program.
    Basically, we enter into negotiated agreements with states, local
    governments, or private industries that desire our facilities or
    property in exchange for new facilities situated elsewhere.
        In essence we have chosen to target our funds to achieve the
    maximum return on our investment. Let me tell you it is a hard decision
    to ignore the maintenance and repair of selected facilities. But, to do
    otherwise places us in a downward spiral where all facilities must
    become worse, before they are repaired.
        Our approach has been successful to date primarily due to our
    never-ending search for better tools to maintain and repair our
    facilities. In addition to the Commander's Lease Initiative, Real
    Estate Exchanges, and Base Realignment and Closure, we've utilized
    contracting tools, such as the Energy Savings Performance Contracts, to
    maximize the amount of maintenance and repair we can accomplish today.
        This deliberate, integrated, and prioritized implementation of the
    Army Reserve's strategy to obtain a C-1 facility inventory assures that
    only projects that improve facility conditions are accomplished. The
    various plans that implement the Corporate Master Plan are the
    management controls that assure we properly repair failed or failing
    components. The Army Reserve strategic goal to obtain a C-1 rating for
    all facilities is only limited by resources received.

        2. Senator Inhofe. How would you rate the existing barracks with
    those that you lived in and what is the direct benefit of going to a
    one plus one standard?
        Colonel Phillips. I have not lived in the Bachelor Enlisted
    Quarters (BEQ), but my experience as a commander and a facility officer
    has given me a wealth of knowledge about these buildings. Generally,
    the structural aspects of our newer barracks are good. However, our
    backlog of maintenance and repair has created barracks problems such as
    mildew, heating, ventilation, and air conditioning (HVAC) failures,
    door lock problems, rusting exterior metal wall panels, etc. From a
    design perspective, our older BEQs are considered lacking in areas such
    as sufficient laundry facilities, individual storage areas, and
    provisions for electrical and communications outlets (stereos, internet
    access, etc.).
        The Marine Corps received a waiver from the Department of the Navy
    to construct 2XO rooms vice 1+1. The 2XO room includes 180 net square
    feet of living/sleeping area and a bathroom. The Marine Corps will
    assign two junior enlisted personnel or one non-commissioned officer
    (NCO) per room. This configuration supports our tenets of unit cohesion
    and team building while also rewarding the achievements of our NCOs,
    and will allow us to more quickly eliminate inadequate barracks.
        Sergeant Lott. The barracks (squadbays) that I lived in as a troop
    offered more security in the form of the firewatch; offered more
    camaraderie in the form of being able to readily talk to your bunkmate
    or neighbor; offered a heightened sense of teamwork in the form of
    clean up details; and more importantly it offered the sense of
    belonging because this was everyone's home. These are part of the
    foundations that we marines practice and live by.
        The benefit of the one plus one barracks is to the individual, not
    the institution. They have security, yet there is no one that they can
    turn to and trust to watch their belongings. They have privacy, yet
    there is no one to turn to share an idea or seek advice. There are not
    another set of eyes to assist in the ensuring field day cleanliness is
    accomplished properly. The biggest problem that I've heard from the
    marines that live in the one by ones is that they lack camaraderie.
    Once you close your door you are alone much like an inmate.
        Whether we go back to squadbays or continue to have a minimum of
    two to a room, the bottom line is that we are entrusted with the safety
    of our marines both physically and mentally. One plus one barracks
    hamper our abilities to adequately care for our marines.

        3. Senator Inhofe. Recognizing that over 50 percent of our
    personnel are now married personnel, tell me the most common criticism
    of family housing in your command.
        Colonel Phillips. The most common criticisms of family housing are:
          a. Condition of existing housing--many units are 40-50 years old
    and in need of major renovation.
          b. Long waiting lists to get in family housing--running up to 9-
    12 months for our enlisted personnel.
          c. Military families living out in town--paying approximately 15
    percent of their housing expenses ``out of pocket.'' The added expense
    of living out in town coupled with the distance that families must
    travel to utilize medical and commissary benefits causes a strain on
    many of our families.
        Sergeant Lott. The most common criticism of family housing aboard
    MCAS Miramar, is simply the lack of it. With a less then 1 percent
    vacancy rate it's a landlord's market. Marines who are on short-term
    leases, because they are on a 18 month to 24 month waiting list for
    military housing, are paying higher rents than if they were on long-
    term leases. Additionally, the partners we had in the Domestic Leasing
    Program are opting not to renew the lease, because they can rent to
    civilians for a higher price, which will put many families at the mercy
    of the local market.
        Marines and sailors aboard MCAS Miramar are forced to make a choice
    between living close to base and paying higher rents and low mileage on
    their vehicles or moving well over 30 miles away for lower rents but
    incurring longer commutes and more wear and tear on their vehicles. In
    2000, close to 800 marines and sailors in the pay grades of E-1 to E-5
    aboard MCAS Miramar received over one half million dollars in loans for
    vehicle maintenance, household start-up fees, and/or food for their
    families.
        San Diego presently has a Public Private Venture program in the
    works. This program, and more like it, needs to be accelerated. With
    9,000 military family housing units available and close to 6,000
    already on the waiting list, our situation is desperate. With the
    arrival of another aircraft carrier and escorts, within the next few
    years, demand for family housing will increase dramatically.
                                     ______

                  Questions Submitted by Senator Rick Santorum

        4. Senator Santorum. Two weeks ago members of my staff traveled to
    the Norfolk Naval Shipyard Detachment--Naval Foundry and Propeller
    Center (NFPC), Philadelphia, Pennsylvania, to see first-hand the unique
    capabilities of this installation and its workforce. As you undoubtedly
    know, this facility is the Navy's only supplier for cost-effective
    manufacturing design, production, and repair of the most
    technologically advanced propellers. You should know that my staff was
    greatly impressed with both the operations ongoing at the NFPC and with
    the highly-skilled workforce that proudly help this Nation meet its
    national security requirements. The capabilities found at this
    installation are truly one-of-a-kind.
        You may recall that foundry and propeller work that had been
    performed on the West Coast was consolidated at the NFPC in the late
    1990s. My staff could not help but notice that some of the buildings
    the NFPC took over after this consolidation were in poor condition.
        What commitment can you give me that the Navy will give strong
    consideration to making improvements in the physical structure of the
    NFPC and that it will give top priority to the modernization (i.e.
    MILCON) needs of the installation?
        Captain Johnson. The Navy has spent $31.8 million in military
    construction funds since 1995 to improve and modernize the Naval
    Foundry and Propeller Center. Further investment in the Center will be
    addressed during the Navy's budget preparation. Additional investment
    requirements can be seen in Navy's March 29, 2001, response to Senate
    Armed Services Committee Report 106-292 that directed the Navy to
    provide to the congressional defense committees a report which analyzes
    the facility, equipment, staffing and projected funding requirements of
    the Naval Foundry and Propeller Center, Philadelphia, PA.

        5. Senator Santorum. Should a core capability such as the NFPC be
    adequately resourced to meet national security requirements? That is,
    shouldn't a one-of-a-kind asset like the NFPC be resourced accordingly?
        Captain Johnson. Yes, a core capability such as the NFPC should be
    provided with adequate resources to meet national security
    requirements. Facility upgrades will be addressed during the Navy's
    budget preparation. Most equipment will be funded through the Navy
    Working Capital Fund Capital Purchase Program, while other funding
    alternatives that can provide NFPC with the flexibility to rapidly
    procure the most efficient and technically superior equipment are still
    being explored. However, in light of competing priorities for
    resources, the President's budget represents the best balance of
    resources and requirements.

        6. Senator Santorum. I have seen anecdotal evidence that many of
    our Air National Guard installations are suffering from a backlog of
    repair needs and desperately needed improvements. In many cases, I have
    heard that water distribution systems are outdated; that power
    distribution systems are prone to failure; and that many Air National
    Guard installations have sanitary sewage systems that are broken.
        In addition, I have also heard that many Air National Guard
    installations lack appropriate hangars necessary to provide maintenance
    to key platforms. Furthermore, many installations suffer from
    inadequate space and that temporary facilities--constructed as a
    stopgap--are still in use decades later. Reports are that Air Guard
    personnel spend far too much time addressing installation shortfalls
    and work-arounds at the expense of important mission training.
        Are these reports that I am hearing consistent with your experience
    with the installation needs of the Air National Guard throughout this
    country?
        If so, what can Congress do to try to help the Air National Guard
    improve the readiness of these key installations?
        How can we work to see Air National Guard military construction
    projects funded in a more expeditious manner?
        Colonel Stritzinger. This statement is my personal opinion and does
    not represent the official position of the Department of Defense or the
    Air Force. My response draws on my experience with the Air National
    Guard (ANG) throughout the count.
        Yes. The examples you have cited such as the water quality problems
    at McEntire ANGB, SC plague many ANG locations. In the most recent
    installation readiness report (IRR) the utilities category was rated C-
    3 indicating significant deficiencies prevent some missions from being
    performed. Of the 153 ANG installations with such systems, 78 had a
    rating of C-3 or worse. It would cost nearly $100 million in
    sustainment, restoration, and modernization (previously called real
    property maintenance or RPM) and $40 million in military construction
    (MILCON) funds to correct these utilities problems across all ANG
    installations.
        The maintenance and production category of this report, which
    includes our maintenance hangars, aircraft shop spaces, and vehicle
    maintenance facilities, was rated C-4 overall. This indicates major
    deficiencies that preclude satisfactory mission accomplishment. The
    cost to correct this category alone accounts for $630 million of the
    MILCON backlog of $1.8 billion. Shortfalls in this area have led to
    workarounds that range from relatively mild (having to use tugs to push
    open hangar doors) to drastic (performing aircraft maintenance outside,
    in all weather, for lack of a facility). In some cases, temporary
    facilities are used to minimize the impact of the shortfall and keep
    the mission operational. At Robins AFB, GA the ANG unit has been in
    buildings borrowed from the active duty host's demolition list for 8
    years. Because of scarce funds, they will most likely remain in these
    condemned facilities for several more years, negatively impacting their
    mission capability, moral, retention, and recruiting.
        Though the ANG backlog numbers are very large, the situation is
    improving due to the assistance we have received from Congress in the
    last several years. In the past 5 years roughly 70 percent of our
    MILCON program has come from congressional inserts. These inserts have
    targeted critical current mission needs at our installations that fell
    below the Air Force funding line. Much of the ANG budget line is
    consumed by new mission beddown requirements and, as such, cannot
    address the refurbishment of these existing utility systems and
    buildings.
        The one issue that would allow us to more adequately illustrate our
    needs and more quickly address them is clarification of the reporting
    requirement in 10 USC 10543. This section of the code requires the
    Reserve components to provide an annual list of ``additional'' MILCON
    and equipment they would purchase if the current year's budget is not
    at least 90 percent of the average authorized amount in the preceding 2
    years. There has been confusion during recent years on the real meaning
    of ``additional'' and whether this list applied to the current budget
    year or each year covered by the FYDP. The current direction for this
    report is to only include projects already funded in the FYDP and only
    provide the list for the current budget year. A clarification which
    allowed the report to include a list of projects totalling the historic
    average annual authorization in each year of the FYDP, whether or not
    they are also included in the FYDP, would provide thc flexibility to
    report true out-year mllcon requirements.
                                     ______

                  Questions Submitted by Senator Susan Collins

        7. Senator Collins. At your respective military installations, what
    has your experience been with the Navy's regionalization, consolidation
    of base operating support functions?
        Chief Licursi and Captain Lofaso. This effort has resulted in
    focused service being provided to service members. A key improvement is
    establishing consistent baselines and expectations from base to base.
    Prior to regionalization efforts and the quality of service was not
    consistent and expectations were not being met.

        8. Senator Collins. Please include in your response the geographic
    disbursement of your respective regions.
        Chief Licursi and Captain Lofaso. The Navy has the following
    regions:
          Navy Region Northwest
          Navy Region Southwest
          Navy Region Southeast
          Navy Region Mid-Atlantic
          Navy Region Northeast
          Navy Region Hawaii
          Navy District Washington
          Navy Region South Texas
          Navy Region Korea
          Navy Region Japan
          Navy Region Marinas
          Navy Region Europe
          Navy Region Pensacola
          Navy Region Great Lakes

        9. Senator Collins. How has regionalization affected your day-to-
    day operations?
        Chief Licursi and Captain Lofaso. A single point of contact has
    been established to address concerns and issues. This contact provides
    a central source for answering questions and ensuring funding is being
    provided in an equitable manner. Overall regionalization has been a
    positive experience.

        10. Senator Collins. What types of change management strategies
    were employed at your respective installations to transition the
    consolidation of base operating functions in your respective regions?
        Chief Licursi and Captain Lofaso. Stream Line Business Case
    Analysis (SBCAs) was used at the regional level to assist in the
    transaction of consolidating Base Operating Services. The objective of
    the SBCAs is to save money and reduce requirements by restructuring
    shore installation management functions and organizations in the
    respective region. Each SBCA is based primarily on a preliminary
    analysis of manpower and organizational structures.
        SBCA teams were comprised of key representatives from the Major
    Claimant, Office of the Chief of Naval Operations (OPNAV) (N46), region
    and key subject matter experts (SMEs) identified by local area
    commanders, and contractor support personnel.
        Each team employed seven steps in their analysis process, which is
    abbreviated as follows:
        1. Validating manpower (for the specific function)
        2. Reviewing the ``installation management function'' description
        3. Developing a clear picture of each function's current concept of
    operations
        4. Considering options/alternatives to determine potential manpower
    savings based upon regionalization, consolidation, and organizational
    analyses
        5. Developing narrative descriptions, organizational charts, and
    lists that identify impediments, barriers, and enablers
        6. Considering additional options and recommendations that would
    save money
        7. Preparing the rough draft SBCA.

        11. Senator Collins. Were standard operating procedures (SOPs) or
    concept of operations (COOs) developed to track the consolidation of
    base operating support functions at your installations?
        Chief Licursi and Captain Lofaso. Yes. The SBCAs were briefed to
    the Claimant and Regional Commander that mapped out the implementation
    of consolidation. Included in this brief was an agreed upon Plan of
    Action and Milestones (POA&M) for the consolidation implementation.
    Monitoring and management of the POA&M was the responsibility of the
    Major Claimant and the Regional Commander.

        12. Senator Collins. What metrics are being used to ensure the
    consolidation of base operating support functions is reaching the
    proposed targets/goals?
        Chief Licursi and Captain Lofaso. The very nature of OBOS is that
    it is current year expenditures necessary to operate an installation.
    There are very little accumulation effects of under funding in past
    appropriations. If something is not funded, it is simply not done. For
    fiscal year 2001 OBOS is funded at a mix of C-2 and C-3 readiness
    levels and is appropriate when viewed on a whole with the total Navy
    program.

        13. Senator Collins. What has the projected and actual savings/cost
    avoidance been with regionalization in your respective regions?
        Chief Licursi and Captain Lofaso. Total cost avoidance is estimated
    to be $3 billion for fiscal year 1997-2001.

        14. Senator Collins. What has  been  some  of  the  lessons
    learned  with  the  transition?
        Chief Licursi and Captain Lofaso. The following lessons learned are
    distilled to core elements.

             Establish a focused sense of urgency
             Create a guiding coalition

                     a) Base Commanding Officers and Program Managers own
                    the plan
                     b) Establish regional planning board
                     c) Involve unions

             Develop a vision and strategy
             Empower broad-based action
             Communicate the change vision

                     a) Use every vehicle possible to constantly
                    communicate the new vision and strategies
                     b) Advise employees of proposed changes in the
                    organization

             Get rid of obstacles
             Generate short-term wins
             Consolidate gains and produce more change
             Anchor the new approaches in the culture
             Organization

                     a) Include implementation POAM
                     b) Involve HRO, IT and resource management expertise
                     c) Focus on objective: delivery of requisite BOS
                    services
                     d) Program-centric management is critical to realizing
                    regionalization efficiencies
                     e) Create business plan

        15. Senator Collins. What has been the actualized benefits of the
    process?
        Chief Licursi and Captain Lofaso. Regionalization is a form of
    consolidation. It has been shown that consolidation can improve the use
    of resources and reduce costs. Cost reductions come from scale and
    scope economies, redundancy elimination, and market leverage.

        16. Senator Collins. What has the impact been on the workforce?
        Chief Licursi and Captain Lofaso. In some instances the workforce
    was realigned to match the organizational construct for that particular
    region. This realignment involved physical and/or organizational
    relocations. During this transition period every effort was made to
    communicate with the employees the impending changes and the impact to
    their position.

        17. Senator Collins. How has regionalization affected the existing
    labor agreements already negotiated or established at your respective
    military installations?
        Chief Licursi and Captain Lofaso. Most bargaining units in the
    Department of the Navy were established many years ago at the
    installation level, e.g., all wage grade employees of a Naval Shipyard,
    all fire fighters at a Naval Air Station, etc. When employees are
    reassigned from their current activity to a new regionalized activity,
    they are no longer covered by the definition of the bargaining unit at
    their old activity.
        Modifications of existing bargaining units or establishment of new
    units must be certified by the Federal Labor Relations Authority
    (FLRA). As a result of regionalization, bargaining units have been
    established at several of the new regional activities. In some
    locations, e.g., Navy Region Northwest, new collective bargaining
    agreements have already been negotiated for the new units. In other
    areas, the bargaining unit issues are still being resolved by the Navy,
    affected labor unions, and the FLRA. Where representational matters are
    pending before the FLRA, 5 C.F.R. 2422.34 requires agencies to maintain
    existing recognitions and adhere to the terms and conditions of
    collective bargaining agreements.

        18. Senator Collins. Have any of you established memorandums of
    agreement with your respective local labor unions/organizations?
        Chief Licursi and Captain Lofaso. In some locations Memorandums of
    Agreement were signed with labor organizations representing employees
    impacted by regionalization. Such agreements generally involved a
    commitment by management at the new regionalized activity to maintain,
    to the extent feasible, the terms and conditions of employment that
    existed prior to regionalization until union representation matters
    were resolved.

        [Whereupon, at 11:33 a.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2002

                                  ----------

                            WEDNESDAY, JULY 11, 2001

                               U.S. Senate,
                      Subcommittee on Readiness
                                and Management Support,
                                   Committee on Armed Services,
                                                        Washington, DC.

                   READINESS OF UNITED STATES MILITARY FORCES

        The subcommittee met, pursuant to notice, at 9:40 a.m. in
    room SR-232A, Russell Senate Office Building, Senator Daniel K.
    Akaka (chairman of the subcommittee) presiding.
        Committee members present: Senators Akaka, E. Benjamin
    Nelson, Inhofe, and Bunning.
        Majority staff members present: Maren Leed, professional
    staff member, and Michael McCord, professional staff member.
        Minority staff member present: Cord A. Sterling,
    professional staff member.
        Staff assistants present: Gabriella Eisen, Kristi M.
    Freddo, and Michele A. Traficante.
        Committee members' assistants present: Menda S. Fife,
    assistant to Senator Kennedy; Davelyn Noelani Kalipi, assistant
    to Senator Akaka; Eric Pierce, assistant to Senator E. Benjamin
    Nelson; J. Mark Powers, assistant to Senator Inhofe; and George
    M. Bernier III, assistant to Senator Santorum.

         OPENING STATEMENT OF SENATOR DANIEL K. AKAKA, CHAIRMAN

        Senator Akaka. The meeting will come to order. Good
    morning, everyone. The Readiness and Management Support
    Subcommittee meets this morning to resume our series of
    hearings on readiness and installation issues. We had two
    excellent hearings in March. Senator Inhofe, I want to say
    this, you have personally set a high standard as chairman of
    this subcommittee in dedication to the readiness and well-being
    of our men and women in uniform and their families. I expect
    this subcommittee to maintain that tradition that was set by
    Senator Inhofe. I appreciate your providing me with a warm
    welcome to this subcommittee, Jim. I have enjoyed working with
    you and know that we will continue to work closely to ensure
    the readiness of our military.
        This morning, we will hear from the Vice Chiefs of the
    military services, who will share their views regarding the
    readiness of our force and the fiscal year 2002 budget. I want
    to welcome all four of our distinguished witnesses this
    morning. We depend on you to give us the benefit of your wisdom
    and experience on the readiness situation in our forces today.
        Because we have just received the basic information on the
    budget and details are still being delivered, we are also
    looking to you to provide an overview of what is in the amended
    budget request in the readiness account and the philosophy used
    in putting the request together. Senator Inhofe.

                  STATEMENT OF SENATOR JAMES M. INHOFE

        Senator Inhofe. Thank you, Mr. Chairman. First of all, let
    me say that I have enjoyed about 5 years of chairing this
    subcommittee, and it has been one that has been very rewarding
    and very frustrating, because we have problems. Instead of
    continuing in a state of readiness, I would say rebuilding a
    state of readiness, we have been borrowing from accounts, and
    we have very serious problems. But I have to also say, and I
    want to say publicly in this meeting, that there is no one I
    have a higher regard for than our new chairman. I will look
    forward to being his Ranking Minority member.
        It happens that Senator Akaka and I are very close friends.
    We do Bible study together, we have been together since we were
    in the roadhouse days, and he has an excellent voice. He may
    sing for you if things are not going the way we want.
    [Laughter.]
        He used to lead us all in our prayer breakfasts, and you
    will enjoy him, as we all enjoy him, as our new chairman.
        I want to welcome all of the Vice Chiefs. You have tough
    jobs out there. I can remember an experience that I have had
    with each one of you. I remember being down at Fort Bragg with
    General Keane when we were watching the drops take place, and a
    howitzer and a high-mobility multipurpose wheeled vehicle
    (HMMWV) came out and I heard kind of a gasp. The chute did not
    open, and it went down into the ground about 6 feet down there.
    Every time I see General Keane I think about that chute that
    did not open.
        I appreciate your courage that you exhibit in handling this
    tough issue that we have on training ranges. I hope we get into
    this today as to the effect of other training ranges. In fact,
    General Williams, I am sure we will get a chance to talk about
    Okinawa and some of the training range problems that we have
    there.
        So we do have real serious problems that we have been
    trying to address. We have not had the resources to address
    them--I am talking about our real property maintenance
    accounts, spare parts, encroachment issues, aging equipment--so
    I hope we can get together and really resolve these problems.
    Mr. Chairman, I will be working very closely with you to see
    that we can do that. Of course, Senator Ben Nelson and Senator
    Bunning are very committed, and I appreciate their attendance
    here today at this subcommittee hearing.
        Senator Akaka. Thank you very much, Senator Inhofe.
        I am going to ask for statements from Senator Ben Nelson
    and Senator Bunning.
        Senator Nelson.

                STATEMENT OF SENATOR E. BENJAMIN NELSON

        Senator Ben Nelson. Thank you, Mr. Chairman. I appreciate
    the opportunity to be here with the Vice Chiefs today. I will
    have some questions for you individually as we get to the
    questions, but I appreciate very much your background, and I am
    looking forward to your comments about our force readiness and
    what we can do together to make sure that we are in a state of
    readiness at every level. I am very anxious to get your
    comments about the status of readiness and what we can do to
    improve it.
        Thank you very much.
        Senator Akaka. Senator Bunning.

                    STATEMENT OF SENATOR JIM BUNNING

        Senator Bunning. Thank you, Mr. Chairman. Gentlemen, thank
    you all for appearing before us today. I would like to join
    with my colleagues in saying thanks for all of your great
    service to the United States of America.
        We have a large task ahead of us, as you all well know.
    After the previous decade of neglect, our military has serious
    resource problems in almost every category that we can look at.
    We no longer can afford to take money that was intended to be
    invested in our future military capabilities and use it to pay
    for immediate operational needs. We must fund our military at a
    level that both pays for current operations and invests in the
    future.
        Because of the previous administration's overuse and
    underfunding of our armed services, our task of repair will be
    much harder than it should be. It will be difficult, but I look
    forward to working with you to ensure that our military remains
    strong, because I have 35 grandkids and I want to make sure
    that they are secure in this country for a long time. I know
    that they will have an additional big flock of children, too,
    so I am looking forward for a strong national defense, the
    first prerequisite of the Constitution.
        Thank you for being here.
        Senator Akaka. Thank you very much, Senator.
        We are looking forward to your statements. You may wish to
    summarize them, and I want you to know that your written
    statements will be made a part of the record, and we want to
    move along as quickly as we can. Following that, there will be
    questions from members of the subcommittee.
        So at this time I would like to first call on General Keane
    for your statement.

      STATEMENT OF GEN. JOHN M. KEANE, USA, VICE CHIEF OF STAFF,
                           UNITED STATES ARMY

        General Keane. Mr. Chairman, Senator Inhofe, distinguished
    members of the subcommittee, I am very honored to be here today
    and also to be associated with my fellow Vice Chiefs.
        Let me begin by thanking the members of the subcommittee
    and the members of the staff for the support of the 2001
    authorization act in providing pay raises, health care, and
    continuing efforts to improve the well-being of Army soldiers,
    and we truly appreciate your support of Army readiness. Our
    combat formations are C-1 and C-2. On any given day, some
    121,000 soldiers are forward-stationed, and an additional
    26,000 are operationally deployed in 68 countries. Day in and
    day out, through a position of strength, and in concert with
    our sister services, we deter wars and we stand ready to
    respond when our Nation calls.
        While the United States Army is only the eighth largest
    Army in the world, we are regarded by most as the world's
    preeminent land force. This is a remarkable testimony, in my
    judgment, to the caliber and the quality of the soldiers who
    fill the ranks of this magnificent Army.
        This is not to say that we do not have challenges. Our
    basic and most pressing challenge these last years is that we
    have had a fundamental mismatch between the national military
    strategy and resources. Over the last decade, the Army program
    has not been balanced. We have paid for near-term readiness at
    the expense of installation support and procurement and
    modernization. Frankly, these accounts have been broken these
    last number of years.
        The 2002 budget amendment is a positive step in the right
    direction to begin to help balance our Army programs. Let me
    briefly address what it does and what it does not do. First and
    foremost, it does fund near-term readiness, allowing us to keep
    our combat formation C-1 and C-2.
        With respect to our installations, the 2002 budget
    amendment establishes the condition to reverse a decade-long
    trend of underfunding. Base ops has increased to 96 percent.
    RPM, or what we now call SRM (sustainment, restoration, and
    modernization), has increased to an historic high of 94
    percent. Clearly, this is a step in the right direction, but
    the problems on our installations cannot be remedied in 1
    year's budget. This effort must be sustained, and the 2002
    budget makes no provisions for the staggering $18 billion
    backlog we have in SRM.
        The budget amendment funds our transformation efforts for
    the Objective and Interim Force. We have moved out with Army
    transformation, and with your help we have established
    momentum. We are forming two interim brigades at Fort Lewis,
    Washington, with four additional brigade formations planned in
    the future. We will begin to field the Objective Force in this
    decade.
        However, our Legacy Force modernization and
    recapitalization accounts remain underfunded. 75 percent of our
    major combat systems are beyond their half life. Our operations
    and support (O&S) costs are increasing 10 percent per year, 30
    percent over the last 3 years, and our safety of flights on our
    aging aircraft are increasing. On the Apache, for example, we
    have an increase of over 200 percent on safety of flights on
    that aircraft.
        In terms of our people readiness, we have a good-news
    story. Last year was the first time since 1992 that the Army
    met its recruiting objectives for all three of its components,
    the active component, the National Guard, and the Reserve, and
    commensurate with that we were able to meet all of our quality
    objectives as well. That is truly a significant achievement
    when you consider this, that we are recruiting 185,000 people
    across all three components as a primary workforce every single
    year, and nothing in America comes close to a number like that,
    so that is a remarkable achievement.
        I am happy to report to you as we sit here today that we
    know that this year we will meet those recruiting objectives
    again. We will meet all quality objectives again for all three
    components.
        In terms of retention of our soldiers, the other
    measurement of the quality of our Army, last year we exceeded
    our objective. We met a target of 108 percent, and this year we
    will exceed our retention objective for our enlisted soldiers
    as well.
        We are challenged by retention of our officers. We had a
    spike for lieutenant colonels and colonels, and this year we
    have flattened that out, and frankly we reversed the trend, and
    it is a slight downward trend, and we had a larger spike for
    our captains' retention over the last couple of years. We have
    now flattened that out, but we do not have signs of it yet.
    Hopefully by the end of the year or the beginning of next year,
    that also will be a downward trend. We are certainly working
    very hard in that area.
        Let me just conclude by saying that maintaining an Army is
    a shared responsibility in our view among its members, both
    military and civilian, among the administration, Congress, and
    certainly the American people. On behalf of our soldiers,
    civilian workforce, our families, our retirees, and our
    veterans, we want to thank you for your continued support of
    this great institution, and I look forward to your questions.
        Thank you.
        [The prepared statement of General Keane follows:]

                 Prepared Statement by Gen. John M. Keane, USA

        Mr. Chairman and members of the subcommittee.
        Thank you for the opportunity to testify before you today on the
    current and future readiness of the United States Army.
        Our soldiers are most appreciative of the work of Congress and of
    this subcommittee to address some of our most pressing concerns.
    Soldiers, retirees, and their families sense a renewed commitment to
    their well-being through your approval of the Fiscal Year 2001 National
    Defense Authorization Act that provides for the pay raises, health care
    provisions, retention incentives, and housing improvements our Army
    family so richly deserves. The priorities set forth in the President's
    2002 amended budget for the Department of Defense will serve to further
    emphasize that the quality of life experience of those who have served,
    and those who continue to serve our Nation, is a key component of Army
    readiness. Though the Army must continue to balance priorities to
    preserve our transformation momentum while, at the same time,
    protecting near-term readiness, the message is extremely positive.
        With respect to our transformation efforts, we appreciate your
    continued support, which has enabled us to begin procurement of Interim
    Brigade Combat Team capabilities and the advancement of Objective Force
    technologies.

                  PERSUASIVE IN PEACE . . . INVINCIBLE IN WAR

        The United States Army is, without question, the preeminent Army in
    the world today and is fully prepared to meet our full-spectrum
    obligation to fight and win the Nation's wars, whenever and wherever
    the Nation calls. We also continue to execute a robust peacetime
    engagement that, day in and day out, prevents crises from becoming
    conflicts and conflicts from becoming wars, strengthens our ties with
    our military friends and allies, creates stability where instability
    reigns, bolsters our Nation's economic prosperity, and promotes
    democracy abroad and the values that underpin it.
        America today enjoys a vibrant standard of living that is the envy
    of the world, thanks in large part to the military's role in
    maintaining peace and stability. At significant personal sacrifice, the
    American soldier guarantees that way of life and, as General Shinseki
    has previously testified, has provided far more in readiness than our
    Nation has paid for.
        On any given day, the Army has nearly 125,000 soldiers forward
    stationed in over 100 countries. In fiscal year 2000, on average, we
    deployed more than 26,000 additional soldiers daily for operations and
    military exercises in 68 countries around the world--from East Timor to
    Nigeria to the Balkans (the average for fiscal year 2001, to date, is
    28,198 soldiers deployed in 62 countries). In Bosnia, the Texas Army
    National Guard's 49th Armored Division assumed the mission for the
    Multinational Division (North), the first time since World War II that
    a Reserve component division headquarters has led active component
    forces in an operational mission. In Korea, our soldiers continue a
    successful security commitment made 50 years ago. In Southwest Asia,
    our soldiers continue to support United Nations sanctions against Iraq,
    stability operations in the Persian Gulf, and peacekeeping efforts in
    the Sinai. We also continue to maintain a presence in Bosnia, Kosovo,
    Haiti, Honduras, and other challenged countries in the world to assist
    our geographic commanders-in-chief with their peacetime engagement
    strategies and the promotion of peace and stability in this uncertain
    and dangerous world.
        Today, nearly one-third of The Army's active component ``go-to-
    war'' force is forward stationed, deployed, or in the field--advancing
    our national interests, supporting theater engagement plans, and
    training for tomorrow's warfight. But, our Army is one-third smaller,
    deploys more frequently, and is more likely to conduct stability and
    support operations than its Cold War predecessor. Accelerating
    operational and deployment tempos have strained Army capabilities, and
    over-stretched resources have leveraged our warfighting readiness on
    the backs of our soldiers and their families.

                NATIONAL MILITARY STRATEGY AND RESOURCE MISMATCH

        Many years of declining budgets, coupled with downsizing in the
    1990s, and an operational tempo that has increased threefold since the
    fall of the Berlin Wall, continues to compel the Army's senior
    leadership to sacrifice far-term readiness to pay for our non-
    negotiable, near-term readiness contract with the American people. This
    mismatch between requirements and resources forces us daily to make
    some tough choices among operations, force structure, readiness, and
    modernization. In the final analysis, the Army has had no other
    recourse but to mortgage our future, in terms of modernization and
    installation support, to maintain our near-term readiness. This trend,
    though bred of necessity, must stop. The President's 2002 amended
    budget establishes the condition to reverse this trend in terms of
    installation support. However, the current shortfalls in our
    modernization and installation accounts will take years of sustained
    funding increases to correct.

                        IMPACT OF THE PROCUREMENT PAUSE

        From fiscal year 1989 to fiscal year 2000, Army buying power
    decreased by 37 percent while the pace of operations in support of the
    National Military Strategy significantly increased. This phenomenon,
    combined with the natural end of a robust procurement cycle for our
    major fighting systems and reduction in force structure, compelled us
    to substantially reduce procurement from fiscal year 1990 to fiscal
    year 1997.
        The Army is now in the midst of a skipped modernization cycle. As
    one direct consequence of this skipped cycle, we estimate that Army
    research, development, and acquisition (RDA) accounts have contributed
    over $100 billion to the Nation's growing ``peace dividend.'' We cannot
    skip another cycle. The Army plans to field the first Objective Force
    formations within this decade and complete transition to the Objective
    Force a full decade earlier than previously planned. Over the next
    decade, the Army must significantly increase its RDA account to make
    this transformation a reality.

                       RECAPITALIZATION AND MODERNIZATION

        The Legacy Force is today's Army as it is currently configured, and
    it guarantees near-term warfighting readiness to support the National
    Military Strategy. It also provides us the critical time needed to
    transform to the Objective Force. Today's Army must be prepared to
    fight and win the Nation's wars and be able to supplement the
    capabilities of the Objective Force until 2032 (target fielding date)--
    a significant challenge considering that over 75 percent of our Legacy
    Force combat systems exceed the half-life of their expected service.
    Our aging equipment is one of the reasons our operations and support
    costs have grown steadily over the past 4 years, safety of flight
    messages have increased, and why our depot maintenance system is under
    constant strain.
        To maintain our strategic hedge--unmatched combat power at an
    affordable price as the Army fully transforms to the Objective Force--
    we must rebuild and selectively upgrade our currently fielded systems.
    We define this as recapitalization. Recapitalization will return
    selected systems to like-new condition and bridge Army capabilities
    until we field the Objective Force. To this end, the 2002 budget takes
    a positive step in this direction by providing additional funding to
    depot maintenance.
        If sufficiently resourced, recapitalization is clearly a ``win-win-
    win'' proposition for the Army. First, it improves safety,
    supportability, readiness, and capabilities of our warfighting systems.
    Second, it is a cost-effective alternative to purchasing new systems.
    Last, the costs of recapitalization are partially recovered through
    operations and support cost avoidance associated with our aging
    systems.
        Since 1988, the Army terminated or restructured a staggering 182
    programs to pay for near-term readiness and Army Transformation. During
    the last year alone, we terminated or restructured programs that are
    valid requirements for today's Army, but not for the Objective Force.
    In response to the procurement pause dating back to 1990, the Army has
    chosen to shift its investment strategy from resourcing Legacy Force
    capabilities to resourcing the Objective Force. We will, however,
    continue to selectively enhance our Legacy and Interim Force systems
    that serve as a bridge to or will have a direct role in our Objective
    Force, such as the Javelin, Medium Enhanced Air Defense System, Joint
    Tactical Radio System, Crusader, and Comanche.

             INSTALLATION READINESS--A STEP IN THE RIGHT DIRECTION

        Army installations are the foundation of the force and an integral
    part of our warfighting readiness. They support soldiers and their
    families, serve as our projection platforms, and provide efficient and
    timely support to deployed formations. Unfortunately, over the last
    decade, the Army has had no other recourse than to defer the
    maintenance and revitalization of our facilities to pay for current
    readiness--clearly impairing mission performance and adversely
    affecting soldier and family well-being.
        That trend is changing course, as reflected in the proposed 2002
    budget. In fact, we are willing to assume a modicum of risk in current
    readiness to improve the conditions of our facilities by slightly
    reducing our flying hours (14.5 to 14 per crew/per month) and annual
    home station tank miles (800 to 730). Transferred savings from this
    reduction, coupled with significant increases in our facility
    Sustainment, Restoration, and Modernization (SRM), Military
    Construction (MILCON), and Base Operations (BASOPs) accounts, will
    begin to arrest the decade-long hemorrhaging of our facilities and
    provide needed new ones.
        The Department of Defense standard for complete renewal of
    facilities is every 67 years. With proposed fiscal year 2002 funding
    levels, it will take the Army approximately 90 years to fully
    revitalize our infrastructure--a better proposition than 150 years with
    current funding levels, but well above the 67-year standard. Today,
    installation commanders only receive approximately 70 cents on a dollar
    to fix those things that are broken on their installations and 90 cents
    on a dollar to operate them. The resultant effect of this funding
    shortfall is that they only have enough money to fix critical
    deficiencies that require immediate attention, such as broken sewer
    lines and water, heat, and electrical failures. They certainly do not
    have the funding to place necessary sustainment dollars into their
    facilities that were beautifully constructed some 3 years ago--
    buildings that are already showing signs of decay.
        The proposed 2002 budget will provide our commanders with 90 cents
    on a dollar to fix those things that are broken on their installations
    and 96 cents on a dollar to operate them. Clearly, these increases will
    improve the well-being of our soldiers and their families in the near
    term and, if sustained over a period of years, will move our C-3 and C-
    4 (meaning that mission performance is impaired or significantly
    impaired) installations toward C-2 and C-3. Notwithstanding, until our
    SRM accounts are fully funded to 100 percent of our requirements, our
    restoration and modernization backlog will continue to grow--a backlog
    that currently totals $17.8 billion.
        We are most appreciative of the President's approval for fiscal
    year 2001 supplemental funding and his 2002 budget submission. The
    President's support clearly demonstrates his concern for the well-being
    and readiness of the force. Steady state SRM, BASOPs, and MILCON
    funding, combined with projected savings associated with better
    business practices, privatization, and elimination of excess
    infrastructure, will provide our soldiers and their families with the
    living and working conditions the preeminent land force in the world
    deserves.

               ENCROACHMENT ON OUR RANGES . . . A GROWING CONCERN

        Training is a critical pillar of Army readiness, and it is
    incumbent upon Army leaders to ensure that our soldiers and units are
    afforded every opportunity to train as we fight--in combat-like
    conditions. These conditions can only be replicated via realistic,
    challenging, and demanding live-fire and maneuver training. Any
    reduction in this type of training will degrade our readiness and place
    our soldiers at serious risk on future battlefields or in distant lands
    conducting peacekeeping operations. Some have suggested that increased
    use of simulations can offset live weapons firing and maneuver
    training. While we have made a significant investment in simulations,
    they do not adequately address the extreme rigors and demands of
    combat. Simulation can and does complement live-fire training, but it
    is not yet viable as a full replacement.
        The amount of live-fire training that individual soldiers and units
    are required to complete is based on the common sense premise that
    certain skills are perishable and must be periodically exercised. The
    Army has established standards that identify the minimum number of
    times and specific firing events that a soldier must train to achieve a
    prescribed level of proficiency. Currently, the Army has difficulty
    meeting these minimum standards because of limited time and ranges--
    ranges that are in danger of being further scaled-back due to
    encroachment. The Army's primary encroachment concerns are urban
    sprawl, threatened and endangered species, and restrictions because of
    unexploded ordnance that impact use of munitions. The cumulative and
    aggregate effect from this list of concerns, among others, have
    recently come to the forefront for the Department of Defense and Army
    leadership as a serious threat to future training and testing of our
    Army because of restrictions and limitations imposed by them.
        The Army's primary initiative to meet the challenges of
    encroachment is the creation of a Sustainable Range Management program
    designed to integrate environmental compliance and stewardship,
    facilities management, and training management on ranges and training
    lands. We are improving the way we design, manage, and use ranges, and
    this effort will certainly help us maximize their capability,
    availability, and accessibility to meet doctrinal training
    requirements. Sustainable Range Management is the foundation for
    sustaining live-fire training and the environment on our ranges. As we
    have in the past, we will continue to improve range operations, range
    modernization, state-of-the-art land management, research on munitions
    effect and unexploded ordnance management, and public outreach.
    Although final funding levels have not yet been established, we ask
    Congress to support this important program.
        The Army's leadership recognizes that societal changes,
    demographics, and environmental issues will continue to impact the way
    we train our soldiers and units. We will continue to fulfill our role
    as a responsible environmental steward and to do our best to ensure
    that our practices do not endanger the health or well-being of any
    American. At the same time, the Army is legally and morally obligated
    to fulfill its primary role--to fight and win our Nation's wars,
    decisively. I believe there are ways to balance these competing
    requirements. Just as our Nation needs a well-trained military force,
    it also needs a healthy environment. In light of the Secretary's
    current strategic review, it would be premature to discuss specific
    proposals, but I look forward to working with other Federal agencies
    and Congress.

                                FORCE PROTECTION

        Foreign and domestic terrorist groups remain the biggest danger to
    Army installations and operations around the world. Despite the absence
    of significant terrorist activities in the United States this year,
    domestic Army installations remain at risk.
        The Army made remarkable progress in anti-terrorism (AT) readiness
    last year, and that progress continues in 2001. All Army installations
    now report having AT and weapons of mass destruction incident response
    plans. AT exercises have increased in frequency and quality throughout
    the continental United States. Major Commands and installations have
    demonstrated notable improvement in AT training and education. However,
    the last year's terrorist attack against the U.S.S. Cole provided a
    grim reminder that the threat remains active, lethal, and unpredictable
    and, despite improvements in the overall Army AT posture, there is
    still work to do. General Shinseki set a goal ``to ensure appropriate
    security measures are established, continuously reviewed, and
    sustained.'' A heightened sense of purpose, and recent initiatives in
    planning and technological improvements, aim to continue advancement
    toward meeting that obligation and achieving General Shinseki's goal.
        One issue we continue to address that impacts every unit and
    installation worldwide is access control to our installations. The Army
    Staff has been working access control to Army installations since March
    2000 and advising the senior leadership as we progress. I recently sent
    a message to the field mandating installation vehicle registration by
    July 2001 and to immediately initiate action to achieve complete
    installation access control.

                    FORGING AHEAD . . . ARMY TRANSFORMATION

        In the past 18 months, we have made great strides in pursuing the
    vision for the Army's future. Our vision fundamentally changes the way
    we intend to fight, and the 2002 budget will enable that Transformation
    effort, although not at the optimal level. To meet the challenges that
    lie ahead for us in this dangerous and uncertain world, we require a
    force that is more responsive, deployable, agile, versatile, lethal,
    survivable, and sustainable--a force that will be strategically
    responsive and dominant across the full spectrum of military
    operations. We call that force the Objective Force.
        In an effort to field the first units of the Army's Objective Force
    by the end of the decade, the Army has redirected its research,
    development, and acquisition to support Transformation. The goal is to
    use this new approach to obtain overwhelming organizational combat
    power. We are optimistic, based on Army Science Board findings, that
    technologies needed to support the Future Combat System (FCS) will
    mature to the point that the Secretary of the Army and the Chief of
    Staff will be able to make a technology readiness decision in the near
    future--a decision necessary to proceed to the system development and
    demonstration phase for the FCS. The 2002 budget funds FCS
    demonstrations of system-of-system functions and cost sharing
    technologies. Over the next 6 years, the Army will demonstrate and
    validate FCS functions and exploit high-payoff core technologies,
    including composite armor, active protection systems, multi-role direct
    and indirect fire cannons, compact kinetic energy missiles, hybrid-
    electric propulsion, human engineering, and advanced electro-optic and
    infrared sensors.
        In the meantime, the Interim Force, a transition force with
    distinct advantages in higher-end, small-scale contingencies and a
    major contributor in major theater war employment, will be more
    strategically responsive than today's heavy forces, but more lethal and
    survivable than the Army's current light forces. To this end, the Army
    is continuing to refine its doctrinal foundations for Transformation
    and the organization and operational design for the Interim Brigade
    Combat Teams (IBCT). Results of these revisions will steer our efforts
    to design the rest of the Interim Force.
        Two Interim Brigades, organized last year at Fort Lewis,
    Washington, have been using surrogate vehicles (until the Interim
    Armored Vehicle, LAV III, is fielded) and off-the-shelf technology to
    evaluate and refine this design and develop tactics, techniques, and
    procedures; thereby establishing the conditions necessary for the
    Interim Force. The IBCT's primary platform is the Interim Armored
    Vehicle (IAV)--a vehicle that will provide the Army with a major combat
    system capable of arriving anywhere in the world within 96 hours, ready
    to fight. The 2002 budget continues funding of IAVs for the second
    IBCT, providing a worldwide deployment capability in combat
    configuration within 96 hours.
        In conjunction with the IBCT initiative, we recently conducted an
    advanced warfighting experiment at Fort Polk, Louisiana, and the 4th
    Infantry Division's capstone exercise at the National Training Center.
    These exercises have demonstrated increased combat effectiveness
    through advanced technologies and improved leader development and
    warfighting concepts.

                          INSTITUTIONAL TRANSFORMATION

        While the intellectual force behind Transformation is how we are
    going to change the way we fight the Army, we are certainly cognizant
    that this change will bring about a plethora of logistic,
    organizational, doctrinal, training, and leader development challenges.
    We are pleased that the 2002 budget funds our schoolhouse training at
    100 percent. It also funds TRADOC transformation initiatives to include
    expansion of one station unit training, establishment of a land warfare
    university, basic officer leadership course enhancements, establishment
    of an accession command, and quality assurance initiatives. As we
    continue to change the way our Army fights, we must ensure that those
    who will be prosecuting the next war are prepared to do so in a
    decisive manner. Thanks to the 2002 budget, we have jumpstarted that
    learning process.

                  PEOPLE . . . THE ARMY'S MOST IMPORTANT ASSET

        In addition to the momentum the Army has attained with respect to
    Transformation, we, along with Congress and this administration, have
    not lost sight that people are our most important asset. The physical,
    material, mental, and spiritual well-being of our soldiers, families,
    and civilians are inextricably linked to our readiness. Fiscal year
    2002 increases in pay raises, housing allowances and improvements, and
    enlistment and retention bonuses are some of the proof-positive
    examples of our commitment to take care of those who are willing to
    risk it all for the defense of our Nation. Sustained congressional
    support for important well-being initiatives like these help us recruit
    and retain quality soldiers and Army families.
        As for recruiting and retention, the Army met its goal in fiscal
    year 2000, and we will meet it again in fiscal year 2001.
    Notwithstanding, we will continue to closely monitor our recruiting
    efforts because the same challenges associated with an all-volunteer
    force that existed 5 years ago, still exist today. Our ``An Army of
    One'' advertising campaign is one of the innovative approaches the Army
    is using to draw the youth of America into our ranks. Although this
    campaign has had some skeptics, the initial returns are encouraging--
    realizing that it is certainly too soon to ascertain its full impact.
    Web site visitors per day, recruiter chats, and caller volume to our
    recruiters have increased 167 percent, 92 percent, and 42 percent,
    respectively. Furthermore, we have assessed 1,600 more recruits than we
    had at this time last year.

                                    MANNING

        Beginning in fiscal year 2000, we increased the readiness in our
    active component combat divisions and cavalry regiment by fully manning
    them in the aggregate, but in doing so, we accepted some risk in the
    institutional base. Our next step is to similarly man our early
    deploying units that support our active divisions and armored cavalry
    regiment. Fully manning the active component, however, is not enough.
    As mission demands necessitate increased use of our Reserve components,
    we must bolster their full-time support requirements to better maintain
    their readiness and availability. Our ultimate goal, of course, is to
    fill the entire force to meet all of our manning requirements--thereby
    reducing operational and personnel tempo and improving both readiness
    and well-being.

                                   CONCLUSION

        For 226 years, the Army has kept its covenant with the American
    people to fight and win our Nation's wars. In all that time, we have
    never failed them and we never will. Building and maintaining an Army
    is a shared responsibility between those of us in uniform, Congress and
    the administration, and the American people. With the help of Congress
    and the administration, we will keep the Army ready to meet today's
    challenges and continue to make significant strides toward achieving
    the Vision we announced in 1999.
        Thank you, Mr. Chairman and distinguished members of the
    subcommittee for allowing me to appear before you today. The statements
    made in this testimony are contingent upon the results of Secretary
    Rumsfeld's strategic review. Please consider them in that light. I look
    forward to working with you on these important issues.

        Senator Akaka. Thank you very much, General Keane.
        Admiral Fallon.

     STATEMENT OF ADM. WILLIAM J. FALLON, USN, VICE CHIEF OF NAVAL
                               OPERATIONS

        Admiral Fallon. Mr. Chairman, Senator Inhofe, Senator
    Nelson, Senator Bunning, members of the staffs, it is an honor
    to be here and a privilege to be asked to comment.
        I would like to first of all thank you on behalf of the
    sailors and marines of our Nation for the tremendous support
    that you have given them, the confidence you have in them to do
    their jobs worldwide. Today your Navy has 317 ships in
    commission, we have 133 that are underway as we speak, about 30
    percent of those forward-deployed, 3 carrier battle groups, 3
    ARGs in the various places around the world, 2 more battle
    groups and ARGs working up to replace them in our continuing
    cycle of forward-deployed readiness.
        The Navy today continues its support of the Nation to
    maintain control of the seas, to provide sustainable combat-
    power forward-deployed, to maintain the trade that is so
    essential to underpin the economic vitality of this Nation, to
    provide for stability to attempt to dissuade those who would
    cause us trouble and problems with others, and the bottom-line
    is to be able to win in combat when required.
        Today, as you well know, we are about 40 percent smaller
    than we were a decade ago in force structure, but the level of
    commitment of our naval forces worldwide remains at essentially
    the same level as it was 10 years ago, and so with this steady
    employment program, if you would, our people stay very busy
    meeting their commitments worldwide.
        We are facing some very serious fiscal challenges, no
    surprise to you, I know. We really need this 2001 money as fast
    as we can get it to keep our people going for the rest of this
    fiscal year. The 2002 amended budget helps. It is a very
    positive step to help us address some serious readiness
    problems, and it does us some great good in the future. But I
    have to tell you that we are going to need additional help if
    we are going to get to the level of ships and aircraft in
    particular that we need to maintain just the 97 QDR levels. At
    the present build rate of ships and aircraft we are nowhere
    near what we need to sustain these levels with 317 ships in
    commission today.
        Our priorities are pretty simple. First and foremost,
    people. I have to thank you for all that you have done,
    particularly in the last year, to help that. As General Keane
    mentioned, we are also enjoying terrific turn-around in our
    ability to retain our quality people. This year alone, the
    retention figures for our junior enlisted are up over 8
    percent, and in fact for the last 2 years are up over 12
    percent across the board.
        That is a tremendous help to us, and something that was
    very necessary. We are looking to sustain that, and also we are
    seeing increases in the more senior enlisted ranks as well. We
    want to see those things continue, and we know that
    particularly in enlisted ranks the chief reason for that are
    the specifically targeted incentives that you have made
    available to our people.
        As for current readiness, we have been struggling. We have
    been able to maintain our forward-deployed forces we think in
    very good shape, but our nondeployed folks have been bearing
    the burden of keeping those forward folks in good shape, and we
    have to fix this. That is what we intend to do with the money
    in the 2002 budget.
        Recapitalization and modernization has really been the
    bill-payer to try and keep our current readiness going, and so
    we would really like to help get at this business of future
    readiness. The bottom line is, we need more ships and aircraft.
    The aircraft build rate is only about half of what we need to
    sustain our current levels, and the shipbuilding rate only
    about 40 percent of that.
        We are working day-by-day with the new administration on
    the defense panels, working the QDR to address these issues and
    to prepare ourselves for the future.
        I would like to thank you on behalf of our sailors and
    their families for all that you have done and continue to do
    for us. I appreciate your taking my written statement, Mr.
    Chairman, for the record, and I will stand by and look forward
    to your questions. Thank you very much.
        [The prepared statement of Admiral Fallon follows:]

               Prepared Statement by Adm. William J. Fallon, USN

                                  INTRODUCTION

        Mr. Chairman, members of the subcommittee, thank you for the
    opportunity to discuss the readiness of our Navy. Congress has been
    particularly helpful in addressing Navy readiness concerns and we are
    grateful for your continuing support.
        Let me begin by emphasizing that our Navy is by far the best in the
    world, an outcome of the fact that Congress recognizes that the United
    States has always been and always will be a maritime nation. But our
    margin of supremacy, while considerable, is not excessive. We need to
    continue to be the best Navy on the planet, because the challenges and
    responsibilities we face outweigh the challenges and responsibilities
    of any other nation on earth.
        This kind of supremacy requires a sustained effort. Our mastery of
    the seas, made possible by the deployed presence of a substantial U.S.
    military force, continues to ensure access to our economic, political,
    and security interests overseas. Today there are approximately 48,000
    sailors and marines deployed on carrier battle groups, amphibious ready
    groups, and independent deployers such as submarines and maritime
    patrol aircraft. These ``on station'' naval forces promote regional
    stability, deter aggression, and provide the capability for timely
    response in crises.
        If deterrence fails and crisis becomes war, naval forces provide
    significant combat power. Immediately employable naval forces,
    simultaneously controlling the seas while projecting power throughout
    the battlespace, are necessary to facilitate the entry of forces from
    outside the theater, assuring access for the joint force, and enabling
    our sister Services to deploy more rapidly. As the ground-based forces
    join naval forces already operating forward, the result has to be a
    joint force that projects offensive power sufficient to serve our
    national interests.
        The Navy provides credible combat-ready forces that can sail
    anywhere, anytime, as powerful manifestations of American sovereignty.
    We demonstrate that capability with our forward-deployed forces every
    day, in the Mediterranean Sea, the Arabian Gulf and the Western
    Pacific, always ready to directly and decisively influence events
    ashore, from the sea.
        The Chief of Naval Operations (CNO) has outlined before the Armed
    Services Committees his top five priorities, with manpower as the
    number one issue. Accordingly, we continue to make a strong commitment
    to our people, our most vital resource.
        Of particular importance to this subcommittee is the CNO's second
    priority of maintaining current readiness at high levels. Our Navy is a
    rotational force. That means we need to deploy forces that are ready
    from the first day of deployment to respond to tasking from the
    National Command Authorities. About one-third of our Fleet is deployed
    every day, and we must ensure that this deployed readiness remains
    high.
        A third priority is future readiness. Because demand for deployed
    battle groups and amphibious ready groups has not declined
    proportionately with our decline in force structure, we've seen an
    increase in our utilization rates, which has exacerbated the wear and
    tear on our ships and aircraft, requiring more maintenance. Hence,
    maintaining our future readiness requires that we initiate a
    recapitalization program that delivers the right number of
    technologically superior platforms and systems to the Fleet.
        Quality of service is a fourth priority. We need a balanced
    combination of quality of life and quality of work to underpin both
    readiness and mission accomplishment. Pay, bonuses, and other
    compensations while on active duty, when combined with retirement
    options, are essential elements of quality of life. Quality of work
    includes aspects of sailors' work environment, from the physical
    condition of the workspace, to the appropriate tools, to adequate spare
    parts inventories, to the atmosphere in the workplace.
        The other key priority is alignment, by which we attempt to ensure
    that all the elements of our organizations, systems, and processes
    deliver exactly what they are designed to produce: a combat capable
    Navy ready to sail in harm's way. Recalibrating and adjusting alignment
    within the Navy's organization will facilitate achievement of
    warfighting requirements and ensure proper focus on current and future
    readiness issues.
        In the final analysis, every one of the CNO's top five priorities
    is a readiness issue and all are related. Optimizing readiness requires
    attention to each of our top five priorities as well as managing
    second- and third-order effects, as will be explained further.
        As you know, the status of the programs discussed here, as well as
    the associated funding levels, are subject to change as a result of the
    Secretary of Defense's ongoing strategy review. In my view, proposed
    changes will have to accomplish three things:
        1. Revitalize and refurbish the force, to correct deteriorating
    material conditions and upgrade crumbling infrastructure resulting from
    chronic underfunding;
        2. Achieve national security objectives with a clear demonstration
    of ability to decisively win any conflict; and
        3. Prepare and posture the force to deal with future threats.
        As the new strategy is developed, we must balance future and
    current readiness and resist the temptation to look so far downstream
    that we overlook the shortfalls that could cause us to fail today.

             THE RELATIONSHIP BETWEEN CURRENT AND FUTURE READINESS

        I want to start out by stating that the readiness of our forward-
    deployed naval forces to meet their assigned missions is currently
    adequate. Let no potential adversary misunderstand that point. Our
    deployed forces are ready today.
        Unfortunately, while we plan that non-deployed forces will be at
    lower readiness levels than our forward forces, it is my assessment
    that non-deployed readiness has slipped to levels less than what they
    should be. This assessment is based on data that indicates
    significantly more units are reporting major deficiencies in their
    ability to execute primary missions. Figure 1 indicates the percentage
    of time Navy units reported C1 or C2 in overall readiness over the last
    two decades.

        As you can see, the gap between these deployed and non-deployed
    categories has steadily increased over the last 10 years. Many factors
    contribute to this trend, including constrained budgets, aging
    platforms, shortages of parts, munitions and trained personnel, as well
    as the ITEMPO and OPTEMPO restrictions which limit the at-sea time we
    can demand of our forces between deployments (this is one of the
    second-order effects I noted earlier).
        Figure 2 illustrates the consistent tempo of deployed operations
    with a substantially reduced force structure. Even though we have taken
    action to increase the ``duty cycle'' of certain forces such as mine
    countermeasure ships by permanently basing them overseas, our deployed
    commitments are such that we have not been able to reduce deployment
    demands commensurate with force structure declines.

        In order to keep forward deployed readiness as high as possible, we
    have sometimes found it necessary to sacrifice combat systems
    modernization and ship and aircraft procurement to fund ``must-pay''
    near term readiness bills. For example, many ships, including Austin
    and Anchorage-class amphibious ships as well as our fleet command
    ships, are reaching the end of their service lives. Such ships often
    require unprogrammed repairs, forcing us to divert funds to meet urgent
    maintenance requirements. These actions, in turn, produce a maintenance
    backlog that is very unhealthy, especially given the small size of our
    Navy today.
        To repair this maintenance backlog, it has become necessary to
    divert even more funds from our future readiness programs, resulting in
    continued underfunding of investment accounts. For example, during his
    first significant opportunity to adjust the Navy budget, the Chief of
    Naval Operations made the very painful decision to reprogram nearly
    $6.5 billion from other Navy programs to begin to address our current
    readiness shortfalls. Because of this increased emphasis on near-term
    readiness, the total request for procurement funding has decreased from
    $26.6 billion in fiscal year 2001 to $24.6 billion in fiscal year 2002.
        Another important fact is that ships reaching service mid-life,
    like the oldest of our Aegis cruisers and some of our submarines,
    require modernization to be operationally viable in future hostile
    situations. Although a ship may have a service life of over 30 years,
    technology continues to evolve at a rapid pace, with computer
    processing speed doubling about every 18 months. This fact demands that
    we make significant and sometimes wholesale upgrades of combat systems
    periodically throughout the ship's life to keep it on the cutting edge
    of warfighting technology. Hence we find the need for programs like
    Cruiser Conversion Program, Cooperative Engagement Capability, and
    Advanced Rapid Commercial-off-the-shelf Insertion Program. Yet funds
    for completing such important force protection tasks are elusive.
        Nevertheless, the 160 units (ships, aircraft squadrons, etc.)
    currently scheduled and preparing for deployment within the next year
    will be required to repair equipment and train in an environment of
    difficult budget tradeoffs. If sufficient resources are not made
    available to keep our equipment in good working order, combat readiness
    will suffer, as will opportunities for and quality of training, which
    will in turn affect morale.
        For example, fewer mechanically sound aircraft available for non-
    deployed aircrew training significantly degrades our overall aviation
    readiness posture. This effect is illustrated as squadrons in later
    stages of the inter-deployment training cycle (IDTC) with maintenance
    problems often find it necessary to draw mission-capable aircraft away
    from squadrons in earlier stages of the IDTC in order to complete their
    training. Another manifestation of readiness problems is the practice
    of our Fleet aircraft Replacement Squadrons (FRS) ``borrowing''
    aircraft from fleet squadrons in order to complete student training and
    qualifications.
        Thus a second-order effect: because those squadrons just beginning
    their IDTC must then train with fewer aircraft, they enter the later
    stages of their training cycle in a lower state of readiness than they
    should.
        A third-order effect is the requirement for even more time and more
    ready aircraft to get back on step than predecessor squadrons, which
    causes them to draw proportionately more airplanes from other squadrons
    just entering the training cycle.
        A fourth order effect might be the precipitation of a violation of
    Individual Tempo (ITEMPO) limits, due to a need to conduct more
    intensive training late in a predeployment cycle triggering increased
    costs of operations in the form of ITEMPO payments (not to mention the
    demands on our people).
        This series of events have put us in a downward spiral. Managing
    these unintended consequences and competing demands is challenging.
        Conditions like these have infected our fleet with what the CNO has
    labeled a ``psychology of deficiency,'' by which our sailors have come
    to believe that resource shortfalls are a normal condition. Left
    unchecked, this perception will adversely affect retention and the
    readiness of our force. sailors need to see that our Nation is
    committed to providing them the tools necessary to carry out the
    missions our Nation assigns to them.
        The Navy continues to face significant challenges in funding our
    operating accounts as the force ages. There will likely be other times
    in the future when new shortfalls or changed priorities make it
    necessary to tap readiness accounts to pay other obligations. These
    diversions are likely to continue as operations and maintenance
    accounts remain the Services' only large source of unobligated funds.
        As it is, we have been able to make ends meet only through the
    intervention and considerable help of Congress in providing
    supplemental funding. I would therefore like to thank you for your
    support again this year. Navy's allocation of the supplemental, when
    combined with a modest reprogramming request for readiness and
    personnel accounts, should address essential and urgent requirements to
    fulfill our estimated remaining fiscal year 2001 requirements.
        Specifically, and of note to this subcommittee, this critical
    infusion will be allocated to fund the increased costs of the Flying
    Hour Program, utilities, base operations costs, force protection
    projects, and recovery operations for the EHIME MARU.

                                     ITEMPO

        The Fiscal Year 2000 National Defense Authorization Act (NDAA)
    requires military services to track deployment of members on an
    individual basis, and to provide payments to service members who exceed
    specified days deployed. It's now becoming clear that these ITEMPO
    restrictions may have some unintended consequences.
        What we're finding is that this legislation, as enacted, presents
    the Navy with a dilemma. Many of our sailors, for example, prefer to
    remain at sea even when doing so keeps them deployed for long periods
    of time (deployed 401 or more days out of the preceding 730 days). Some
    sailors like to stay deployed in the Western Pacific where they can
    remain closer to the lands of their birth. Other sailors opt for back-
    to-back sea duty as a way to remain in the same homeport for reasons of
    family stability. Still others joined the Navy because they actually
    like going to sea. Were Navy to accede to these desires of our people,
    given current deployment requirements, very large additional costs
    would result at a time when we are trying to limit expenditures.
    Analysis of this situation is ongoing and we will make the results
    known to this subcommittee as soon as possible.

                                  ENDSTRENGTH

        The Navy has met its overall recruiting and endstrength goals in
    fiscal years 1999 and 2000, and we are on track for fiscal year 2001.
    We are currently reenlisting nearly 60 percent of eligible sailors who
    reach the end of their first enlistments, compared with 47 percent in
    1999. Two-thirds of petty officers with 6-10 percent years of service
    are reenlisting, compared with 60 percent 2 years ago. Annual attrition
    rates for first-term sailors have fallen from over 14 percent to less
    than 12 percent since 1998. Unfortunately, officer retention remains
    well below steady-state goals in every community except Naval Flight
    Officers.
        Better than anticipated manning in fiscal year 2001, the result of
    long sought after improvements in recruiting and retention, has reduced
    at-sea billet gaps and allowed our Navy to begin filling increased
    requirements in areas such as anti-terrorism/force protection, aviation
    maintenance, and environmental billets at sea. As a result, we are
    requesting authorization in fiscal year 2002 to increase our
    endstrength from 372,642 to 376,000. This additional endstrength will
    lock in gains we have made in improved at-sea manning and enhanced
    readiness.

                               MATERIAL READINESS

        Aging systems often require significantly increased maintenance.
    Older systems experience increased breakdown rates, require more
    frequent repairs, and thus consume more spare parts. The pace of
    operations and deployments, and the consequent accelerated aging of
    systems and infrastructure are outpacing our ability to maintain
    readiness levels. While we have made progress reducing material
    shortfalls over the past 3 years, equipment and supply readiness for
    non-deployed units remains a significant readiness challenge.
        Account shortfalls currently exist in the areas of ship depot
    maintenance, aviation material support, and precision-guided munitions.
    We have shifted funds from ship and aircraft procurement accounts to
    pay these bills, but this trend cannot continue indefinitely.

                             SHIP DEPOT MAINTENANCE

        Emergent costs associated with ship depot maintenance continue to
    grow as we have deferred past maintenance. Unfortunately, this has
    produced recurring shortfalls in this account. These shortfalls have
    been manifest in cancelled, de-scoped, or deferred scheduled repairs.
    This in turn has caused degradation in some mission capabilities,
    increased probability of component failure, and subsequent cost to
    replace failed components.
        In 1999, a lack of maintenance funds in the ship depot maintenance
    account was a key factor in one of our combat logistic ships failing a
    major material inspection. In analyzing the factors which contributed
    to this failure, the CNO pointed to our cultural tendency to
    underestimate the requirement, and to then underfund the underestimated
    requirement. He has therefore committed to identifying the full
    requirement for ship depot maintenance in future budgets and then
    funding to ensure success.
        Since then, the fleets have reassessed their positions, reporting
    the need for a significant growth in a number of scheduled
    availabilities, which has resulted in a larger shortfall this year than
    originally projected.
        Our fiscal year 2002 budget provides an additional $660 million for
    ship maintenance with the objective of increasing the percentage of
    requirement funded from 87 percent (fiscal year 2001) to 90 percent.

                               AVIATION READINESS

        Our aviation force now contains, on average, the oldest mix of
    type/model/series aircraft in naval history. For the first time, our
    average aircraft age exceeds the average age of our combatant ships. As
    the average age of the aviation force has increased, there has been a
    corresponding increase in the costs of operations and maintenance of
    aircraft. Specifically, the cost of Aviation Depot Level Repairables
    (AVDLRs), which is driving the cost of maintaining our aircraft, has
    risen an average of 13.8 percent per year over the period fiscal years
    1996-1999.
        In addition, the increasing demands of recent operational tempo
    also affect our ability to maintain our aircraft. For example, The F/A-
    18 has been flown well in excess of planned utilization rates. As a
    result, more than 300 aircraft will now require a service life
    extension earlier than originally planned or budgeted for. Similar
    situations apply to F-14s, EA-6Bs, P-3Cs, SH-60s, and virtually every
    other aircraft in the fleet.
        The single most influential factor in supporting near-term aviation
    readiness is the health of our Flying Hour Program, which includes
    fuel, consumable spare parts, and AVDLRs. Depot level repairables,
    which account for over half of the program's resources, have been the
    biggest challenge to the flying hour program in recent years. Despite
    our focused attempts to alleviate shortages in AVDLRs, we continue to
    experience shortfalls.
        Shortages also exist in aviation mission critical items, such as
    targeting pods and repair equipment on aircraft carriers. Again, our
    deployed air wings are receiving the aviation material support they
    need to ensure that they are mission ready, but it has come at the
    expense of non-deployed units. Without the fiscal year 2001
    supplemental, the current Flying Hour Program shortfall will result in
    Navy and Marine Corps pilots unable to fly sufficient hours to maintain
    adequate training readiness levels.
        Our fiscal year 2002 Flying Hour Program is funded to achieve the
    CNO's goal of 83 percent TACAIR/ASW Primary Mission Readiness (PMR).
    The program has been priced using the most recent fiscal year 2000 cost
    per hour experience, including higher cost for repair part pricing and
    usage. This repricing, which adds significantly to the cost per flying
    hour, is a manifestation of the Department's aging aircraft inventory
    discussed earlier.
        The most effective manner in which to address the problems facing
    naval aviation is to introduce new aircraft into the fleet as soon as
    possible. To that end, the fiscal year 2002 amended budget takes steps
    to increase the number of F-18E/F aircraft. We are currently in an age/
    cost spiral that can be corrected by addressing these modernization
    requirements.

                           PRECISION-GUIDED MUNITIONS

        The inventory levels of precision-guided munitions (PGMs) continue
    to be a concern. PGMs were originally developed and procured to allow
    for precise attacks on specific categories of targets to reduce risk
    for our aircrews. Stockpiles were then sized appropriate to the limited
    target sets for which they were designed.
        In practice, however, it has become routine to use these weapons in
    ways we didn't foresee when we developed our procurement plans. For
    example, we now use PGMs to minimize collateral damage even when less
    expensive and more plentiful weapons would be effective from a
    weaponeering point of view.
        Hence, the requirement for PGMs has grown significantly and we face
    an inventory shortfall. A second order effect is that as we have
    diverted funds to accelerate the delivery rate of PGMs, we have
    impacted our ability to fund other ordnance maintenance, resulting in
    an increased backlog of ``not ready for issue'' weapons. A third order
    effect is that we may have to compensate by limiting the fleet's
    training allowance, as well as significantly reducing funding for
    development of future weapons.
        We remain considerably short of the warfighting requirement
    associated with our current strategy. Because these weapons greatly
    reduce risk to our forces and to non-combatants, additional funds may
    be necessary in the areas of weapons development, maintenance, and
    procurement to sustain acceptable levels of both warfighting and
    training munitions required by the new strategy.

                TRAINING, ENCROACHMENT, AND LIVE FIRE EXERCISES

        Success or failure in combat and the risk that we ask our sailors
    to shoulder is a direct function of the preparation we afford them
    prior to combat. Shortfalls in manpower, equipment, and supply
    readiness directly affect training readiness among naval forces. Issues
    such as encroachment and restricted access to training ranges also
    constrain our ability to train, fight, and win and I'm sure are well
    understood by this subcommittee. Training and testing ranges are
    central to continued military readiness, yet we increasingly face
    encroachment problems.
        Experience with live ordnance and exposure to live fire conditions
    are essential to combat readiness and are prerequisites for sailors who
    may be called to engage in combat. Forgoing this experience, for
    whatever reason, is likely to result in increased casualties and
    suboptimized performance in battle.
        While a growing amount of training and testing can be accomplished
    using computer simulations and other information technology solutions,
    technology has not yet produced a mechanism which can simulate the
    complex, end-to-end series of procedures associated with the
    preparation and launching of live ordnance, then assessing the results.
    Likewise, the handling and use of live ammunition, and the danger,
    noise, shock, and visual effects associated with the impact of live
    ordnance, generates a psychological response which simulation cannot
    replicate. There is no realistic simulation for this experience. Hence,
    for the foreseeable future, we will not be able to replace all live
    training with simulation and request your continued support of ranges.

                                   CONCLUSION

        The essence of our Navy is the fleet, and the fleet remains the
    focal point of our efforts. We must maintain the fleet at the highest
    possible level of readiness and training-able to fight and win today.
    Our trademark must remain combat-ready, forward-deployed forces, manned
    by dedicated, well-trained, well-led sailors, motivated by a sense of
    mission, as committed to their Navy as their Navy is committed to them,
    operating modern, well-maintained equipment and platforms with the
    right capability, constantly patrolling the world's trouble spots. Your
    continued commitment to improving Navy life and mission accomplishment
    has made a significant difference. Our sailors and their families
    appreciate it, and the Navy is most grateful for your enduring support.

        Senator Akaka. Thank you very much, Admiral Fallon, for
    your statement.
        General Handy.

      STATEMENT OF GEN. JOHN W. HANDY, USAF, VICE CHIEF OF STAFF,
                        UNITED STATES AIR FORCE

        General Handy. Thank you very much, Mr. Chairman, Senator
    Inhofe, members of the subcommittee. Thank you all for taking
    the time to discuss the critical issues of readiness for our
    Air Force. I will tell you that we sincerely appreciate the
    tremendous support of our men and women in blue that you have
    shown over the many months and years.
        I would also add that I am cautiously optimistic about our
    readiness, the fact that it is somewhat stabilized, but I would
    quickly add that that is at significantly lower levels than in
    the mid-1990s. Your support with recruiting, retention, and
    quality of life initiatives has certainly helped us hold the
    line at today's level. However, the growing cost of operating
    our increasingly aging fleet of aircraft continues to exert
    constant pressure on our attempts at readiness. The need for
    modernization and recapitalization is compelling. I would like
    to thank my teammates here at the table for the extraordinary
    support that we have all shown to each other, and they toward
    the Air Force. Again, thanks for your strong support, and I am
    ready to answer any and all of your questions.
        [The prepared statement of General Handy follows:]

                 Prepared Statement by Gen. John W. Handy, USAF

        Mr. Chairman, members of the subcommittee, thank you for the
    opportunity to appear before you and discuss the readiness of the
    finest aerospace force in the world: America's Air Force. Over the past
    year, our men and women in blue have continued to protect our nation's
    interests across the full spectrum of engagement. From humanitarian
    assistance to contingency operations, aerospace power has provided our
    theater commanders with the capability for rapid, decisive action in
    support of our national interests. Our transformation to an
    Expeditionary Aerospace Force has been a key component of our success.
    Using this concept, we have been able to continuously assign and deploy
    Aerospace Expeditionary Forces (AEFs) around the world. Today, we have
    almost 87,000 airmen deployed or forward stationed, ensuring the
    security of the United States and our allies around the world.
        Our successes notwithstanding, we are confronted with a number of
    issues. Recruiting and retention are a recurring concern in today's
    competitive environment. Aging aircraft and infrastructure have greatly
    challenged our readiness. The changing global security environment
    demands we evaluate our future organization, concepts of operation, and
    capabilities to ensure we remain relevant now and in the future. To
    address these challenges, recapitalizing and modernizing our force
    becomes imperative. We must emphasize science and technology, improve
    our partnerships with industry, expand our capabilities in space, and
    become more efficient in all our efforts.

                                     PEOPLE

        We are the finest aerospace force in the world largely because we
    have the finest airmen in the world. Our challenge is to recruit the
    best of America's youth while retaining our highly skilled and
    experienced force. These are not easy tasks in the face of intense
    competition from the private sector.
        Your continuing support has helped us meet our recruiting goals
    without lowering our standards. Enlistment bonuses, adjusted pay
    initiatives, retirement reforms, and improvements in medical benefits
    helped us reach our fiscal year 2000 recruiting goals. They have kept
    us on track to meet our goals again this year.
        Recruiting is only part of the equation. Retention is critical to
    the health of our force as well. In fact, we have the highest retention
    goals of any service--the Air Force is the retention force. We rely on
    a cadre of dedicated, skilled airmen to keep our aircraft flying, our
    satellites operating, and all of our systems continuously ready for
    employment. The skills of these airmen are in great demand in the
    commercial world. Our people are talented, disciplined, and drug-free;
    they are wonderful citizens and workers, and companies everywhere want
    them. In short, the strong pull from the private sector in combination
    with other factors has resulted in several years of depressed
    retention, creating experience shortfalls in a variety of career fields
    across our force.
        In the face of these challenges, we are grateful for your steadfast
    support that has allowed us to extend and expand reenlistment bonuses,
    increase housing allowances, and expand Montgomery GI Bill benefits. We
    are cautiously optimistic that we have turned the corner on first-term
    enlisted retention. The rate has been at or above our 55 percent goal
    for seven consecutive months.
        We continue to work on our second-term and career reenlistment
    rates. Their decline appears to have leveled off for now--thanks in no
    small part to the assistance of the administration, Congress, and this
    committee. We still have a lot of work to do in order to restore these
    rates to the desired level that will sustain the force. In the
    meantime, the cumulative effects of shortfalls in second-term and
    career reenlistments have created gaps in experience that reduce our
    ability to perform our day-to-day mission. They also take away from our
    ability to train the new recruits who must replace our experienced
    airmen who have moved on to other endeavors. Creating an experienced
    force is the work of years--once lost, it is not quickly regained.
        We continue to face challenges with officer retention as well, for
    many of the same reasons we have struggled with enlisted retention. The
    pilot shortage is one manifestation of this effect. The aviation
    continuation pay program you supported, along with an overall reduction
    in our requirements for rated staff officers, has kept our pilot
    shortage at 1,200, even in the midst of an already aggressive airline
    hiring campaign.
        Ultimately, we believe our transformation to an Expeditionary
    Aerospace Force--with the stability of its predictable rotation
    schedules--combined with initiatives in pay and benefits, will move us
    closer to our retention goals.

                                   READINESS

        We would like to express our thanks to the administration,
    Congress, and this subcommittee for the continuing support we've
    received to help us work on our most critical readiness issues. You've
    provided increased funding to bolster our most pressing readiness
    concerns, enabling us to arrest a startling rate of decline. Your
    support of the fiscal year 2001 supplemental will help us hold the line
    and maintain our readiness, albeit at its current less-than-acceptable
    level. Most recently, the budget amendment to the President's fiscal
    year 2002 budget calls for a much-needed infusion of funds to help with
    a broad panoply of readiness-related issues. Ultimately, we need your
    continued support, especially in modernizing our aging aircraft fleet,
    in order to improve our readiness.
        Your United States Air Force is currently operating the oldest
    fleet of aircraft in its history. At present, our aircraft are 22 years
    old on average, and growing older. Our aging fleet costs more to
    operate and maintain in both effort and dollars. The destructive
    combination of depressed retention among our skilled maintainers and
    the unpredictable and more frequent breakage on older aircraft creates
    a challenging situation to stabilizing readiness. Last year we flew 97
    percent of our programmed flying hours, but due to a variety of
    factors, at 103 percent of the programmed cost. Over the past 5 years,
    we have noted an increase of nearly 50 percent in our flying hour
    costs. We are working harder and spending more just to maintain level
    flight.

               INFRASTRUCTURE AND PHYSICAL PLANT RECAPITALIZATION

        We face many challenges in maintaining our infrastructure and
    physical plant, as well. In an era of constrained resources and
    competing requirements, we have been forced to use infrastructure as a
    bill payer to help us shore up readiness. We greatly appreciate your
    construction budget adds, but even with your help we are still far
    short of the industry standard for physical plant recapitalization.
    Today, our military family homes are 37 years old on average while our
    plant facilities are 40 years old. We have a $5.6 billion backlog for
    maintaining our real property that represents documented problems, with
    documented repair costs we cannot afford to pay. We have challenges in
    sustaining, restoring, and modernizing our infrastructure that detract
    from our readiness by reducing the quality of life and quality of
    service our people and their families experience in their living and
    working facilities. These growing repair costs further contribute to
    our retention and readiness challenges.

                                 MODERNIZATION

        Our aircraft are getting older and their average age continues to
    increase. Even if we execute our planned modernization program, our
    aircraft continue to grow older. By the year 2020, their average age
    will be nearly 30 years old.
        Subject to the outcome of Secretary Rumsfeld's strategic review,
    the Air Force needs to aggressively modernize its capabilities. We have
    transformed our force organizationally with the Expeditionary Aerospace
    Force concept, but we are faced with diminishing returns as we are
    forced to work harder and spend more to operate our aging systems. We
    need to couple our ongoing aerospace, precision, and information
    initiatives with advances in continuous global surveillance, directed
    energy, and unmanned aerial vehicles. Your Air Force is committed to a
    future of innovation and ongoing transformation to assure we continue
    to provide the aerospace power that assures the safety and security of
    our national interests.

                                    SUMMARY

        Your United States Air Force is a dedicated force of professional
    men and women who protect our nation's interests through the
    exploitation of the aerospace medium. The Nation and its citizens have
    placed their trust and confidence in us and we have not--and will not--
    let them down. We are in the midst of trying times, however. We
    continue to work harder and spend more just to hold the line on our
    current level of readiness. We continue to work on recruiting and
    retaining a high-quality force in a competitive economy, while
    confronting the modernization challenges of our aging fleet and
    infrastructure.
        We are committed to working with you, the Office of the Secretary
    of Defense, and the other Services to evaluate the most appropriate
    aerospace strategy for the evolving security environment. We must pay
    special attention to the shrinking military-industrial base and
    evaluate methods for improving our current acquisition processes. To
    that end, we are actively seeking ways to improve the effectiveness and
    efficiency of our processes, including leveraging the best business
    practices found in both government and industry. Finally, the
    statements made in this testimony are contingent upon the results of
    Secretary Rumsfeld's strategic review. Please consider them in that
    light. Thank you again for your support as we continue to work together
    to bolster the readiness of America's Air Force, protecting our
    Nation's interests and ensuring ``No One Comes Close.''

        Senator Akaka. Thank you very much, General Handy.
        General Williams.

        STATEMENT OF GEN. MICHAEL J. WILLIAMS, USMC, ASSISTANT
              COMMANDANT OF THE UNITED STATES MARINE CORPS

        General Williams. Mr. Chairman, Senator Inhofe, members of
    the subcommittee, I am proud to be here today to talk to you
    about the readiness of your Corps of Marines. You have my
    written statement, and I would only add that the Marine Corps
    today remains a force in readiness. Men and women still want to
    become and remain marines. Today, there are some 30,000 marines
    deployed all around the world, and they are ready to do the
    Nation's business.
        It is true that we have purchased a great deal of that
    readiness on the backs of modernization and infrastructure, and
    it is in those two areas that we need your help. I would like
    to thank you on behalf of those marines whom I represent today
    for your interest and concern and continued support.
        Thank you, sir.
        [The prepared statement of General Williams follows:]

              Prepared Statement by Gen. Michael J. Williams, USMC

                                  INTRODUCTION

        Chairman Akaka, Senator Inhofe, and distinguished members of the
    subcommittee, it is my privilege to report on the state of readiness of
    your Marine Corps. On behalf of marines and their families, I want to
    thank the committee for its continued support. Your efforts reveal not
    only a commitment to ensuring the common defense, but also a genuine
    concern for the welfare of our marines and their families.
        Today, we are approximately 212,000 strong, with 172,600 marines in
    the Active Forces and 39,558 in the Marine Reserves. We are ready to
    execute the National Military Strategy (NMS) as the Nation's ``Force in
    Readiness.'' The Marine Corps maintains a global, expeditionary
    perspective. We focus on our role--to be the Nation's premier
    expeditionary force; prepared to respond across the spectrum of
    conflict from humanitarian missions to major theater war. Marines train
    to be first on the scene, first to help, first to quell disturbances,
    and first to fight. To us, these are enduring roles, regardless of the
    tactical, operational, or strategic clime and place. Now, more than
    ever, these enduring roles exist in an international security landscape
    that challenges us to maintain a conscious force protection posture at
    all times. Our awareness is high, our training is on target, and our
    antiterrorist and force protection efforts are robust, both at home and
    abroad.
        In addition to heightened force protection, we are revolutionizing
    our approach to operations in the 21st century. We are moving beyond
    the traditional amphibious assault operations that we have conducted
    throughout our history. Our goal now is advanced, expeditionary
    operations from land and sea to both deter and respond to crises. A
    prime example of these attributes is resident within our Marine
    Expeditionary Brigade (MEB). Nearly 10 years ago, in light of pressing
    manpower considerations, we deactivated our six standing brigade
    command elements. Last year, we reestablished three MEBs by embedding
    their staffs within our Marine Expeditionary Force (MEF) headquarters.
    These units are now actively operating. The 1st MEB recently
    participated in Native Fury, a humanitarian assistance operation in
    Kenya, and 2nd MEB completed a Maritime Prepositioning Squadron offload
    exercise, Dynamic Mix, in Greece.
        The versatility of the MEB is emblematic of the unique scalability
    of our Marine Air-Ground Task Forces (MAGTFs). In size and capability,
    these brigades are midway between our Marine Expeditionary Units (MEUs)
    and our MEFs. A MEB represents a force of about 16,000 marines. It
    includes a Reinforced Infantry Regiment, over 80 fixed wing and rotary
    wing aircraft, and sufficient sustainment for 60 days of combat. Our
    MEBs can either deploy as an amphibious forcible entry capability or be
    airlifted into a theater of operations and join up with Maritime
    Prepositioning Forces.
        Our commitment to prepare for the future is reflected in Marine
    Corps Strategy 21, which lays out the Corps' aim to enhance the
    strategic agility, operational reach, and tactical flexibility of our
    MAGTFs. Ultimately, our vision of the future and our expeditionary
    culture, along with our philosophy of maneuver warfare, come together
    in our emerging capstone concept, Expeditionary Maneuver Warfare.
    Achieving the full promise of that concept will hinge on our efforts to
    balance the competing demands of near-term readiness and investment in
    our infrastructure and equipment modernization. I should note, however,
    that the programs I will discuss and their associated funding levels
    may change as a result of the Secretary's on-going strategy review. The
    administration has determined our final fiscal year 2002 and outyear
    funding levels in conjunction with this review.

                         THE FOUR PILLARS OF READINESS

        The Marine Corps assesses readiness in terms of ``four pillars'':
    Marines and their families, legacy systems, infrastructure, and
    modernization. The first two pillars--marines and their families and
    our legacy systems--are most closely associated with near-term
    readiness; while infrastructure and equipment modernization are
    typically linked to future, or long-term readiness.
        Properly balancing our resources across these four pillars is
    essential to ensure we remain ready, relevant, and capable. The Marine
    Corps always has and will continue to fund near-term readiness first.
    Unfortunately, as the Commandant and I have stated many times,
    dramatically increased operational requirements coupled with
    constrained toplines over the last several years have forced us to fund
    near-term readiness at the expense of our future, or long-term
    readiness--investment in our infrastructure and equipment
    modernization. The fiscal year 2002 budget funds our near-term
    readiness requirements and allows us to begin to address one of our
    ``bill-payers''--our infrastructure. However, adjustments to
    modernization funding have been deferred to fiscal year 2003 and out,
    pending the results of the ongoing Quadrennial Defense Review.
        The administration provided additional funding in this budget for
    military pay and entitlements, health care benefits, flying hours,
    utilities at our bases and stations, depot maintenance, strategic lift,
    essential base operating support costs and force protection
    requirements. In addition to these near-term readiness requirements,
    the administration provided increased funding for one of our most
    underfunded areas--our infrastructure. Additional funds provided allow
    us to begin to address badly needed family housing requirements at Camp
    Pendleton, California, and bachelor enlisted quarters at various
    locations. Additionally, funding added to our military construction
    account allows us to reduce our fiscal year 2002 replacement cycle to
    between 60 and 70 years. While these increases allow us to begin to
    address one of our most critical problem areas--our infrastructure--I
    remain concerned about sustaining that level of investment and
    accelerating the pace of equipment modernization. Following is my
    assessment of each Marine Corps pillar of readiness.

                           MARINES AND THEIR FAMILIES

        Marines and their families--our foremost pillar of readiness--are
    grateful for the committee's and the administration's work to support
    our programs, improve health care, and provide increased compensation
    for their service. We have met our recruiting goals for 6 years, and
    are successful because of your help and the hard work of our dedicated
    recruiting force. Our recruiters make the crucial difference in today's
    increasingly challenging recruiting environment--a population marked by
    a low propensity to enlist in military service, a competitive economy,
    increasing college enrollment, and generational differences. With your
    continued help and the devotion of our recruiters, we will continue to
    attract quality young men and women to fill our ranks.
        Retention is on track, thanks in part to the pay raises and
    incentives previously authorized by this committee. To date we have
    reenlisted 97.3 percent of our First Term Alignment Program goal for
    this fiscal year. More junior officers are electing to remain beyond
    their initial obligation, and we are achieving our enlisted retention
    goals. We continue to closely monitor retention issues and concerns,
    particularly in some of the harder to retain technical Military
    Occupational Specialties (MOSs) such as, intelligence, data
    communications, and air command and control technicians. While overall
    officer retention remains stable, we continue to experience higher than
    average attrition in some skill areas among mid-grade officers, to
    include administration, command and control, intelligence, combat
    engineers and public affairs; and we remain guardedly optimistic about
    our stabilized fixed wing aviation attrition. Enlisted career force
    requirements present our greatest retention challenges, particularly
    our mid-grade noncommissioned officers. The Selective Reenlistment
    Bonus (SRB) program has been our single most powerful tool to influence
    enlisted retention behavior and meet MOS retention challenges. The
    increases the administration provided in this budget for the SRB
    Program and the targeted pay raise initiative will go a long way toward
    assisting in meeting our recruiting and retention goals and helping
    take care of our marines and their families.
        While our marines and their families have benefited from recent
    increases in pay and allowances, the increasing costs of the basics,
    such as rent, utilities and fuel, require continued annual increases in
    pay and basic allowance for housing to ensure our marines maintain an
    acceptable quality of life. Further, we need to provide and maintain
    those essential support systems that benefit and protect marines and
    their families; especially accessible, responsive health care. We are
    extremely thankful to Congress, Mr. Chairman, for the recent enactment
    of much-needed improvements to the TRICARE system for our Active Duty
    personnel and for our retired veterans. We are thankful to the
    administration for providing increased funding for improvements in this
    area. We expect these improvements to make a significant difference in
    retention and morale.
        Another issue affecting the first pillar of readiness is the
    Quadrennial Defense Review (QDR). Although the last QDR led to tangible
    improvements, it also resulted in a reduction in our end-strength that
    essentially removed the warfighting ``shock absorber'' of the Marine
    Corps. As a result, there remains little flexibility in meeting the
    personnel demands inherent in a robust operational tempo. In order to
    improve our near-term readiness, we have made significant internal
    adjustments over the past 2 years. Through reduction in attrition of
    our first-term marines, internal management efficiencies, outsourcing,
    and privatization, we will eventually return approximately 4,000
    marines to the operating forces. We are also utilizing numerous better
    business practices to make our operations both efficient and effective
    and we now have the largest Activity-Based Costing/Management program
    in the Department of Defense.
        The readiness impacts of the personnel tempo legislation contained
    in the Fiscal Year 2001 National Defense Authorization Act run counter
    to the Corps' rotationally deployed, expeditionary ethos as well as our
    limited budget. Marines are deployers by nature; men and women join the
    Marine Corps to see the world and we don't disappoint them. Our
    successful recruiting and retention efforts bear testament to the
    viability of our service culture. Our forward-deployed crisis response
    forces and security forces, the units we need most ready to engage the
    threats to our national security, are the ones this legislation will
    have the greatest negative impact upon. Although the personnel tempo
    legislation may be appropriate for the other services, its present
    construct does not comport with the Corps' culture and missions and is
    likely in the long run to have a profoundly deleterious effect on our
    cohesion and on our ability to conduct operations and training.

                               OUR LEGACY SYSTEMS

        Our second pillar, legacy systems, is key to near-term readiness.
    This pillar represents the equipment, aircraft, and weapons systems
    currently in the inventory of our MAGTFs. Although the ground equipment
    readiness rates of our operating forces and prepositioned assets remain
    relatively high, most of the primary equipment and weapons systems in
    our command element, ground combat element, and combat service support
    element have reached or exceeded their programmed service lives. As the
    Commandant and I have previously testified, we are facing block
    obsolescence in our major legacy systems. The cost to maintain these
    systems, in terms of both dollars and man-hours, continues to climb. We
    have taken maximum advantage of Service Life Extension Programs, which
    marginally improve our legacy systems, but these programs cannot
    fulfill our modernization needs. Our reliance on aging equipment
    negatively impacts our capabilities. The countless hours of maintenance
    required to keep these systems operating safely, directly impacts the
    quality of life of our marines and allows less time for their training.
    We can no longer afford to delay the modernization of our force.
        The situation is the same in our aviation combat element. Many of
    our aircraft are approaching block obsolescence. In fact, the majority
    of our primary rotary-wing airframes are over 25 years old. The
    majority of our key aviation equipment is older than the marines who
    use it. Our KC-130Fs are 19 years past planned retirement. When our
    first KC-130F rolled off the assembly line, President Kennedy was
    beginning his first year as the Commander in Chief, thus underscoring
    the importance of the KC-130J. Our CH-46Es and CH-53Ds are more than 30
    years old, and the average age of our CH-53Es is 12 years. Some of our
    younger pilots are flying the exact same aircraft that their fathers
    flew.
        Continued aviation modernization is a critical path that should be
    accelerated at every opportunity. Currently, we are seeing an
    associated decrease in the reliability and maintainability of aircraft
    components. Recent studies demonstrate that demands for aviation spares
    are increasing as our aviation fleet ages. The challenges associated
    with unanticipated parts failures on older aircraft, diminishing
    manufacturing sources, and long delays in delivery of these parts all
    place demands on readiness. While recent increases provided by the
    administration for Program Related Engineering and Program Related
    Logistics (PRE/PRL) are extremely helpful, only modernization programs
    will ultimately relieve the strain being placed on these older
    airframes.
        In addition to ground and aviation equipment concerns, today's
    Navy-Marine Corps team relies on amphibious ships that are reaching the
    end of their service lives. Our amphibious lift requirement is well-
    defined. We require ships to meet forward presence requirements while
    maintaining the flexibility to surge additional forces for the
    uncertain crises of the future. Although our amphibious lift
    requirement is for sufficient ships to lift 3 MEB Assault Echelon (AE)
    equivalents, fiscal constraints have resulted in plans which limit the
    programmed amphibious force to 2.5 MEB AE equivalents, a total of 36
    ships (or 12 Amphibious Ready Groups). This requirement is presently
    sustained with a combination of active and Reserve Navy ships and
    inactive ships maintained in the Amphibious Lift Enhancement Plan
    (ALEP). Our 2.5 MEB (AE) lift requirement can be achieved by active
    Navy amphibious ships upon the delivery of the twelfth LPD-17 class
    amphibious ship. Currently, the Navy is planning a future amphibious
    force of 12 big deck ships (a mix of aging LHAs and newer LHDs), 12
    newer LSD 41/49s and, with your continued support, the 12 LPD-17 San
    Antonio Class ships. We remain concerned about schedule slippage in the
    LPD-17 program.
        Another critical component of our strategic lift capability is the
    Maritime Prepositioning Force (MPF), which provides the Unified
    Commanders thousands of C-17 sortie equivalents of combat equipment and
    sustainment already forward located in their areas of responsibility.
    However, the MPF ship leases will expire in fiscal year 2009 and fiscal
    year 2011 and we will need National Defense Sealift resources to
    replace these cost-effective and proven strategic assets with MPF
    Future ships. Because the U.S. has never been able to rely exclusively
    on forward basing or overseas access as means of positioning forces,
    and with base access increasingly problematic, Naval forces must
    continue to provide robust assured access with forward presence and the
    projection of power and influence from the sea. Our future operational
    concepts envision use of the sea as maneuver space and as a sanctuary
    to base long range, precision Naval fires, force assembly, maintenance,
    and resupply base in future operations. MPF Future will be a key
    enabler of the sea-based logistics operations necessary to support
    expeditionary maneuver warfare, providing support for forces already
    forward-deployed or deploying in amphibious ships as well as rapid
    response with tailorable and scalable stocks for crises.

                                 INFRASTRUCTURE

        Our third readiness pillar, infrastructure, is so significant to
    our overall readiness that the Commandant of the Marine Corps refers to
    it as the Fifth Element of the MAGTF. Our bases and stations are the
    platforms from which we project expeditionary power by deploying and
    sustaining MAGTFs. They are the platforms for developing, training, and
    maintaining our marines, and they serve as the centerpiece for our
    quality of life programs.
        We have a long-range plan that will guide the strategy for our
    infrastructure through the year 2020. Our intent is to have an
    infrastructure that minimizes redundancy, maximizes efficiency, is
    cost-effective, environmentally sound, and capable of supporting the
    weapons systems and operational concepts we are developing. Along with
    equipment modernization, however, infrastructure (Military
    Construction, Maintenance of Real Property, and Family Housing) has
    long been a bill-payer for near-term readiness.
        Thirty-five percent of our infrastructure is over 50 years old. Our
    supporting infrastructure--water and sewage systems, bridges, and
    roads--is antiquated and decaying. They constitute a ``quiet crisis''
    looming across our bases and stations. The increases provided in this
    budget allow us to begin to address this problem but I remain
    concerned. Prior to the administration's increases, our military
    construction replacement cycle exceeded 100 years; the industry
    standard is approximately 50 years. While this budget allows us to
    attain an over 60 year cycle of military construction replacement in
    fiscal year 2002, the average recapitalization rate rises to nearly 100
    years across the Future Years Defense Plan (FYDP).
        We have made no significant progress in the maintenance and repair
    of our existing infrastructure. While we had slowed the growth of
    backlog of maintenance and repair (BMAR) at our bases and stations to
    approximately $650 million this fiscal year, it rises to $687 million
    in fiscal year 2002 and averages approximately $660 million across the
    remainder of the FYDP--far exceeding the goal of $106 million by fiscal
    year 2010.
        Approximately half of our family housing units are inadequate, and
    we have a deficit of almost 9,000 homes in fiscal year 2001. Our goal
    is to eliminate inadequate family housing units by fiscal year 2010.
    This budget allows us to revitalize our current inventory and to
    accelerate the elimination of substandard housing; however, it does
    little to address our family housing deficit. As currently planned,
    assuming Basic Allowance for Housing is increased to reach zero percent
    out of pocket by fiscal year 2005, we will reduce our family housing
    deficit by approximately 20 percent by fiscal year 2006.
        Another challenge we face is protecting our bases and stations
    against the many forms of encroachment that threaten to curtail our
    operations. Urban growth and development near our installations
    inevitably require coordination and compromise with many elements of
    the civilian sector on issues such as land, sea, and air usage,
    environmental stewardship, and frequency spectrum management.
    Accordingly, we work diligently to remain good neighbors and to
    accommodate the demands of adjoining communities without degrading
    training and the mission effectiveness of our bases and stations.
    However, encroachment issues already dominate the agenda in some areas,
    and we anticipate that these issues will multiply in the years ahead.
    Encroachment is simply the manifestation of the competition for
    precious limited resources. We must recognize that some of the
    interests involved are mutually exclusive. A decision to build a
    civilian access road on one of our bases, or to protect a species, may
    close or preclude a training range; a decision to share airspace may
    restrict operations; a decision to share a frequency may preclude the
    use of a technology. Because of their potential impacts, some of these
    decisions should be made at the National level. We need your support to
    ensure that the debate on encroachment is informed, and the impacts
    carefully considered and controlled.

                                 MODERNIZATION

        Finally, I would like to address our fourth pillar--modernization.
    Equipment modernization, like infrastructure, has long been a ``bill-
    payer'' for near-term readiness. For most of the last decade, Marine
    Corps ground and aviation equipment funding was below the ``steady
    state'' requirement level. Unfortunately, this trend continues. While
    the fiscal year 2002 budget does not include increases for equipment
    modernization pending results of the ongoing QDR, fiscal year 2002
    ground equipment modernization is currently funded below our ``steady
    state'' requirement level. Based on today's National Military Strategy,
    we have identified the direction we need to go and the equipment we
    need to meet tomorrow's challenges and maintain the ``expeditionary
    force in readiness'' our Nation requires. We are optimistic that the
    fiscal year 2003 budget will allow for acceleration of the pace of
    equipment modernization.
        The replacement of the 17,000-vehicle fleet of HMMWVs with the
    HMMWVA2 and the replacement of the 5-ton medium truck family with the
    Medium Tactical Vehicle Replacement (MTVR) are crucial steps in our
    effort to modernize our ground mobility. The planned replacements for
    these two aging families of vehicles will begin to lower maintenance
    costs and associated readiness challenges. Acquisition of other major
    replacement systems such as the Advanced Amphibious Assault Vehicle
    (AAAV), the High Mobility Artillery Rocket System (HIMARS), and the
    lightweight 155mm howitzer are also part of the solution. Lethality and
    the ability to maneuver our forces remain cornerstone requirements for
    the ground combat element.
        We also have a viable, balanced plan to field new and improved
    aviation platforms: Joint Strike Fighter, KC-130J, AH-1Z/UH-1Y, and the
    MV-22. The V-22 program is being restructured based upon
    recommendations from the Secretary of Defense-chartered Blue Ribbon
    Panel. The Panel recommended that the Department of Defense proceed
    with the program but temporarily reduce production to a minimum
    sustaining level to provide funds for a Developmental Maturity Phase
    that may take from one to 2 years. We are hopeful that needed changes
    and improvements to the program will be funded at the most economical
    rate of production in the fiscal year 2003 budget.
        Just as with our ground equipment, the pace at which we field
    aviation platforms is a critical issue. Our success in keeping Marine
    Corps aircraft safe and operational is the result of a sustained and
    intense maintenance effort. Since 1995, our direct maintenance man-
    hours per hour of flight increased by 16 percent and our
    ``cannibalization'' rate increased by 24 percent. During the same time
    period, our full mission capable rate, though still within acceptable
    parameters, decreased by almost 17 percent across the force. These
    statistics represent data for all Marine Corps aircraft and are
    indicative of our aging fleet.
        The burden of maintaining readiness at acceptable levels has been
    increasingly borne on the backs of our marines. Readiness sustainment
    programs such as Program Related Engineering (PRE), which identifies
    necessary component improvements before incidents occur, have been
    underfunded for so many years that we have had to rely primarily on
    vigilance in maintenance from our marines to ensure safety of aircraft.
    Fortunately, this budget includes increases for this critical program.
    The longer we defer the acquisition of new weapons systems, the more
    critical it becomes to fund programs needed to maintain and reduce
    associated risks of aging legacy systems.
        Despite the many challenges that confront us, the Marine Corps,
    drawing upon its 226 years of expeditionary tradition, is primed for
    the future. We constantly evolve our warfighting capability through the
    development of new tactics, doctrine, and equipment. With your help and
    that of the administration, we are on a modernization track that, in
    2008, will result in the initial convergence of a number of major
    programs. If realized, this will profoundly modernize the Corps and
    dramatically enhance our strategic agility, operational reach, and
    tactical flexibility. Our commitment to innovation and experimentation
    will ensure we are ready on every occasion the Nation calls.

                                    SUMMARY

        With the continued support of Congress and the administration, we
    will maintain the high level of readiness that the American people
    expect from their Corps of Marines. Thank you for the opportunity to
    present testimony on this important issue.

        Senator Akaka. Thank you very much. Now we will begin with
    the questions. I just want the subcommittee to know that we
    will have rounds of 8 minutes, and we will begin with my
    questions followed by Senator Inhofe, Senator Nelson, and
    Senator Bunning.
        General Keane, the Army's budget request reduces the level
    of tank training miles and helicopter flying hours below the
    traditional goals of 800 miles per year and 14.5 hours per
    month. What is the rationale behind the Army's decision to
    reduce its training levels, and what impact would this
    reduction have on readiness?
        General Keane. Thank you, Senator. First of all, we do not
    believe it will change the C-1, C-2 status of our combat
    fighting formations. We think it is a prudent operational risk
    that we can take. We reduced a $5.6 billion account by $300
    million, and frankly we did that to transfer money into our
    installation support account, into SRM, to do something to
    break the hemorrhage that we have had for a number of years.
        Part of the 2002 plus-up that we received also assisted us
    with SRM but, quite frankly, not enough, and we cannot continue
    to ignore the reality that our infrastructure on those
    facilities are decaying at a greater rate than we have a
    capacity to repair them. What we have been doing is giving our
    commanders 70 cents on the dollar to fix what is broken on
    those installations, and it is just unsatisfactory.
        We think we have taken a prudent operational risk. We do
    not think it will have significant impact on our readiness. We
    are going to do a midyear review in January with all of our
    major commanders to see what the situation is. If it appears
    that we are going to have a readiness impact, then we would
    readdress it financially at that time.
        Senator Akaka. To all of you, I would like to ask you
    whether the fiscal year 2002 budget request fully funds the
    current readiness requirements of your service.
        Admiral Fallon. Senator, we believe the 2002 budget makes
    great strides in helping us, and the objective, as I understand
    it, of that amended budget is to put us in a position that we
    do not have to come back and request a supplemental next year.
    We believe that this budget puts us in a favorable position in
    that regard. There are, in fact, still things that we need,
    particularly in the future readiness business, that are not
    going to be met by the top line in the 2002 budget.
        Senator Akaka. General Handy.
        General Handy. Certainly we are pleased in the Air Force
    with the 2002 budget as amended by the administration, but I
    would have to tell you all that it leaves us far short of all
    the requirements to stop a decline in readiness levels. We
    think we have stabilized, but we need to turn that trend in the
    upward direction. This budget makes a good attempt at that, but
    it still leaves us about $9 billion short of Air Force
    requirements.
        Senator Akaka. General Williams.
        General Williams. Sir, I would echo those comments, that
    the 2002 budget makes a substantial contribution, especially in
    the area of infrastructure, current readiness, and depot-level
    maintenance. To the extent that modernization is a readiness
    issue, and we believe in the Marine Corps that it has become a
    readiness issue, that budget continues to fall short of helping
    us to catch up with our deferred modernization over the past
    decade.
        Senator Akaka. General Keane.
        General Keane. Sir, as I said in my opening statement, it
    is a step in the right direction, but we still have chronic
    problems, frankly. Our future readiness account remains broken.
    Recapitalization of our aging fleet is not what it should be.
    We have moved money around internally in the Army to help
    ourselves as best we can, but we still have significant claims
    there. As I mentioned, 75 percent of our ground and air combat
    systems are beyond their half-life.
        What we have discovered, when you do the analysis of this
    and look at it, when a piece of equipment gets beyond its half-
    life, the operational and support costs for each year
    thereafter exponentially increase because of the rapid aging of
    that equipment. What it does is just drives up your operational
    support costs, and it robs you of capital that you can use for
    other programs, and that is the kind of spiral we are in right
    now in the United States Army.
        This budget does not do much to help us with that chronic
    problem that we have. We have unfinanced requirements in total
    of $9.5 billion after the budget is amended by the
    administration.
        Senator Akaka. The next question is to all of you again,
    what is your assessment of the readiness of the forces in your
    service based on the performance of the soldiers, sailors,
    airmen, and marines, both in the real world operations and in
    training exercises?
        General Keane. In terms of the performance of Army soldiers
    in real-world operations, testimony to their performance, as
    measured by their commanders, I think is extraordinary. Many of
    you have taken the time to visit them, and you see them on
    those operational deployments day in and day out.
        The people making decisions on the streets of Bosnia and
    Kosovo, when to pull the trigger, when not to pull the trigger,
    is done by young soldiers, and young sergeants. Colonels and
    generals are not involved in that activity, and what is on
    display is the values of the American people, and our national
    policy is being executed by our youngsters in the United States
    Army. We are all very proud of them, as to the measure and
    quality of their performance, and frankly their level of
    contentment is extraordinarily high as a result of that.
        Our highest retention rates are among our deployed
    soldiers, and I think for obvious reasons. There is a sense of
    self-worth, the sense that you are doing something important
    for your country, and you are doing it with some of the best
    people America has, side-by-side with them, so they get a lot
    from that. As a result of that, the cohesion that they have in
    those units is testimony to their retention rates.
        Now, training, as well, we have been able to maintain the
    rigor of our training program at our combat training centers at
    Fort Irwin and Fort Polk, and also in Germany, as well as our
    home station training. Those accounts have been funded, and we
    are very satisfied with the performance of our commanders. Our
    commanders assess themselves C-1 and C-2 based on the
    performance of their training, and they do that on a monthly
    basis, so we let them make those judgments about the quality of
    their training, and our own assessments that senior leaders
    make is very satisfactory.
        Admiral Fallon. Senator, I would have to jump on what
    General Keane just said. I will tell you that we believe that
    our forward forces are in very good shape. They have performed
    admirably when called upon the last couple of years. Even,
    particularly this time of year, sailors that are forward-
    deployed to the Gulf in a very demanding environmental
    situation are just doing a bang-up job. The indicators that we
    have, the ways that we track this through our readiness
    systems, also support the fact that they are in really good
    shape forward-deployed.
        I will tell you a couple of statistics. My previous
    assignment was down as the Second Fleet Commander. I was tasked
    to provide these trained and ready forces to go overseas, and
    just in the area of manning, which I think is the most
    important factor in any of our readiness equations, we were not
    able, back 3, 4 years ago to deploy forces at more than the low
    90 percent of their required manpower across the board in most
    of our ship and aviation units.
        The last couple of battle groups that left from both the
    east and the west coasts have gone out with percentages in the
    upper 90s, basically almost a full complement of all the people
    that they really need to do the job fully deployed, and that is
    a tremendous boon to our forces.
        As General Keane indicated, also, our forward-deployed
    readiness is very high, and higher than I can remember in quite
    a long time. But I have to tell you that, conversely, the down
    side of that is that probably those units that are lagging,
    particularly in retention, most often are support units that
    are being used to provide the resources to maintain the high
    readiness of our forward forces. So, for example, our
    replacement and training aviation squadrons' retention rates
    are not nearly as good as we would like to have them.
        I will also give you one other statistic. Although we have
    been able to keep the forward-deployed folks consistently at C-
    1, C-2 readiness levels, we have noticed over the past decade a
    steady decline in the nondeployed readiness. In fact, we are
    about 10 percentage points, a full 10 percent lower in
    nondeployed readiness than we were a decade ago, and that is
    the thing that we feel has just to get turned around, so the
    additional money that is available this year will basically
    keep us going, next year a substantial input to keep the
    resources in the forward forces so that we do not have to go
    back, hopefully, and dig so deep into the bathtub of our
    nondeployed forces.
        Senator Akaka. Thank you.
        General Handy.
        General Handy. Senator, there are two sides to that story.
    The one that you addressed predominantly is the people issue,
    and one of the things that I would report to you is, on those
    opportunities where we have an opportunity to get out of
    Washington and visit units, there is nothing that creates more
    enthusiasm or pride in our hearts, my heart, to be very
    personal about it, than the magnificent airmen we have out
    there that perform flawlessly day in and day out. They honor
    America with their service, and they are exquisite in the
    performance of their duties. That is the good news story.
        The down side of that is of all the equipment they operate,
    of the infrastructure they have to occupy, right down to, in a
    good number of cases, military family housing, are not
    adequate. Specifically with regards to readiness, of our combat
    units that report C-1 or C-2, the top two readiness categories,
    the Air Force today has only reported 69 percent capability.
    That is a very sad state of affairs, quite different from the
    early 1990s.
        Senator Akaka. General Williams.
        General Williams. Sir, the Marine Corps is the youngest of
    the forces. Seventy-five percent of marines are less than 25
    years old, and two-thirds of the Marine Corps is always on its
    first enlistment. They join the Marine Corps to be a part of
    something bigger than themselves, and to operate and travel and
    see the world, and we do not disappoint them. We keep them
    busy. They are, I think, extremely well-led by the junior
    officers, who are the troop leaders of the Marine Corps. I
    think their performance is superb, the best possible
    advertisement for the Marine Corps is a young PFC or lance
    corporal.
        We worry about their taking care of their families when
    they are gone, and the adequacy of their family housing, and
    the adequacy of our bases to take care of them; but, their
    readiness to do what the Nation needs them to do I do not think
    has ever been higher, nor has their quality.
        Senator Akaka. Thank you, General. I would like to call on
    Senator Inhofe at this time.
        Senator Inhofe. Thank you, Mr. Chairman. One thing about
    this subcommittee, the lines of jurisdiction are not really
    well-defined, because while you might consider retention issues
    as being personnel issues, or optempo issues, those are
    readiness issues, the same with modernization.
        Yesterday--some of you may have watched the rerun of our
    hearing, where we had all of the Chiefs and all of the
    Secretaries before us. I tried to get the point across that
    more than anything else--because we in this room are all aware
    of it, but the general public is not aware of it--that we do
    not have the best of everything any more, and that becomes a
    readiness issue.
        General Keane, yesterday I used a chart, looking at the
    Paladin, which was developed back in the early 1960s, and at
    that time I think we outgunned almost everybody. However, since
    that time we have equipment that is being used which was built
    by the Brits, the Russians, the South Africans, and Germany.
        All of them, whether you are talking about range or rate of
    fire, are better than what we have right now. I use that to get
    your reaction and to see what you think is the best solution
    for this very serious deficiency and obviously the Crusader is
    what I am addressing here.
        General Keane. Yes, sir. Thank you. It is certainly true we
    have been outgunned in artillery for a number of years. We are
    operating the Paladin system on a 1960s chassis, and it is a
    carrier for 10-plus years of technology that has aged on that
    system.
        We get into a debate on whether we should bring Crusader
    into the United States Army or not. I think it is absolutely
    outrageous to think that we would permit our young Army
    soldiers to be outgunned by adversary artillery on a
    battlefield today.
        We would not think of doing something like that with a
    strike aircraft going against an enemy aircraft, and we would
    not want that to be in the United States Air Force. We would
    not think of that happening with a submarine going against
    another submarine, and we would not want that to happen to our
    Navy. We would not think of it happening with a tank. We have
    arguably the best tank in the world.
        But the thing that kills on the battlefield soldiers more
    than anything else is enemy artillery, and we have to be able
    to reach out and kill it. We will kill it with joint fires, to
    be sure, but we have to be able to kill it with close precision
    fires. We have to do it at range, and we have to have the
    mobility to do it, and we have to have the lethality to do it,
    and Crusader is the answer to that. It gets some bad publicity
    because of its weight.
        General Shinseki saw that, and has taken 15 tons off of
    that vehicle. We can put two Paladins on a C-17. We can put two
    Crusaders on a C-17. We think we have satisfactorily addressed
    the weight and deployability issue of the equipment.
        Senator Inhofe. I appreciate that very direct answer,
    because I think it is a crisis, too. I think the argument they
    use is, you cannot do it with a C-130, but we need to address
    this. It is the performance that we are after. I appreciate
    your response very much.
        I might disagree with you a little bit in that some of the
    other services are feeling this, too. General Handy, yesterday
    we talked at our meeting about our air-to-air capabilities and
    how we are not able to compete. Even today, the SU-27 in terms
    of range and detectability range is better than our best air-
    to-air, which is the F-15, and air-to-ground, the F-16 I think
    is inferior in many ways to the SU-30.
        Now, those are on the market right now to our adversaries
    out there. In fact, China has purchased some 240 -27s and -30s,
    we think. We do not know the exact figure.
        So you know, we have not modernized that much either, and I
    would like to have your comments on this, first of all, if you
    agree with it, and second, the best solution that we might have
    out there.
        General Handy. Certainly. I appreciate the question,
    Senator, and I would have to approach it this way, that I am
    absolutely amazed that anyone would engage in a debate on the
    value of the F-22 for air superiority in today's world.
    Factually, when we put our pilots in their today's aircraft, 9
    out of every 10 engagements, our pilots in their aircraft win
    against our pilots in our aircraft.
        The F-22, on the other hand, is absolutely proving itself
    day in and day out in tests. It is meeting or exceeding every
    one of the key performance parameters that we have stated for
    the weapon system. It will guarantee for the foreseeable future
    the capability of airmen around the world to dominate the
    skies, and to debate that issue makes no sense at all to me.
        Could I also address similar comments with the Joint Strike
    Fighter and its capabilities in the air-to-ground role? The
    high-low mix of the F-22 for air superiority, and the Joint
    Strike Fighter for its ground attack capabilities, presents a
    force structure of the future that no one can deny, and the F-
    22 is especially noteworthy in its test performance to date.
    That is about as direct as I think I can answer your question.
        Senator Inhofe. That is very direct. I would just add that
    it is almost keeping up, though. You have the Typhoon, the
    Raphael, the Eurofighter, and all this next generation
    appearing. I look at the F-22 and the Joint Strike Fighter as,
    yes, getting us back into a position of superiority, but at
    least holding our own, because it is not a static world out
    there.
        Let me ask you, Admiral Fallon, you talked about your
    retention improving in several areas. Specifically, on your
    pilots, because we dipped down below 20 percent here about a
    year ago, signing up for another complete tour, where are we
    right now with our pilots?
        Admiral Fallon. Thanks, Senator. It is a continuing
    challenge. We are doing better, and we have done better the
    last 2 years than in the previous several years, but it is one
    that requires constant attention, and it is a complex issue. My
    opinion, for example, is that the thing that I think has had
    the most direct impact on our significantly enhanced enlisted
    retention are the targeted, particularly financial incentives
    that have been put in place for these folks.
        I think for the pilot retention, a little bit more of a
    complex issue, and I think it directly ties to each of these
    readiness items we have been talking about. In my view, the
    three principal determinants in readiness are the people, the
    equipment, and the training. Our people have watched over the
    past several years that we have consistently shorted several
    aspects, each of these aspects in its own way.
        I think reality today is that the manpower side is being
    addressed very well. People know there is a commitment by not
    only the uniformed leadership, but the civilian leadership, and
    certainly by the Hill and the administration, to do whatever it
    takes to make sure that our people are adequately taken care of
    in the best manner possible. I think that is really good.
        On the equipment side of the house, though, they have
    watched consistently as we have deferred these modernization
    things. You just got into a discussion on aircraft, and I think
    it is pertinent to look at, for example, we are just
    introducing the F-18E/F to the fleet, looking forward to the
    first deployment later this year.
        That aircraft is a tremendous improvement over its
    predecessor, and we cannot wait to get it, but we have also
    deferred, or minimally invested in, several quality
    improvements to that air frame that would really put it in fine
    stead with some of these competitive aircraft. We just have not
    been able to fund those things at the appropriate level because
    we have tried to balance all these resources.
        The third piece is the training piece. Without adequate
    training resources, without the ranges and the ability to train
    the way we really fight, having the best equipment in the
    world, and even the best people, will put us at a disadvantage
    at the opening of a conflict, because we would really like to
    be able to have people go out and, as soon as they are
    required, to be able to fight the way they need to to win.
        Our people are real smart. They understand this. They know
    what kind of tradeoffs have been made, and they would like to
    see a strong commitment in all of these areas as a good
    indication of this is the kind of outfit they want to stay in
    and they could support.
        Senator Inhofe. My time has expired, but we will have other
    rounds, I suppose. I have a lot more things to get at. I just
    would like to have this, if you can get the most current
    figures, so we can track where it is in terms of retention of
    pilots, it would be helpful to us.
        Admiral Fallon. Absolutely.
        [The information referred to follows:]

        Aggregate aviator retention rates (both pilot and NFO) through the
    end of the third quarter fiscal year 2001 are 38.1 percent. Although
    this is a 2.44 percent decrease from the previous year, it is still 7.1
    percent above the all-time low of 31 percent experienced in fiscal year
    1999.
        Pilot retention rates through the end of the third quarter fiscal
    year 2001 are 32.97 percent. Although a 6.36 percent decrease from
    fiscal year 2000, it is still almost 5 percent higher than 28 percent
    retention of fiscal year 1999.

        Senator Akaka. Thank you. I call on Senator Nelson for his
    questions.
        Senator Ben Nelson. Thank you, Mr. Chairman.
        With respect to the retention of pilots and the
    availability of staffing for military aircraft, I would like to
    ask General Handy a question.
        I was recently contacted by the 55th Air Wing at Offutt Air
    Force Base. They asked for some assistance to address these
    critical staffing needs that are necessitated because senior
    pilots leave the service for work in the private sector,
    usually flying commercial aircraft. As a way to aid the Air
    Force, of course, the Nebraska Air National Guard has been
    seeking the start-up program of funding to maintain a presence
    at Offutt for the purpose of supplanting, supplementing, and
    filling in some of the void that has been created by departing,
    transitioning senior pilots.
        I have endorsed this proposal, which is referred to as the
    future total force initiative, and I wondered if you had any
    thoughts about that particular program, or similar programs
    where we could use existing personnel in other military
    endeavors to try to support and supplement what we might be
    experiencing both in the short-term, but also maybe in the
    long-term as well.
        General Handy. Thank you, sir. I would just assure you that
    the idea of future total force, which is the bumper sticker
    that the Air Force has used to describe our plans, strategy for
    the future, and our continuing rather extraordinarily good
    relationship between active, our Air National Guard, and Air
    Force Reserve Command components, we believe they are totally
    integrated in everything that we do today.
        But the future total force concept is one that looks for
    all the ideas where we could engage Guard or Reserve components
    more aggressively in day-to-day operations and in long-term
    mission areas, and we will continue to flesh out ideas, as you
    suggested.
        I would just like to add, we are 1,100 pilots short today.
    Now, we predict that we will be about 1,200 pilots short in the
    2002 time frame, and the airlines are hiring about 5,000 pilots
    a year from now as far as we can see into the future, and so
    any effort, as you have suggested, that we can work together
    with you to enhance and stop that bleeding, then we will be
    there and ready to engage.
        Senator Ben Nelson. Any others that might like to respond
    to similar kinds of programs that you are entertaining right
    now to try to supplement support, any of the inadequacies, or
    lack of staffing that you may have in your branch?
        General Williams. Sir, I would just tell you from my
    service point of view we have made some fairly substantial
    improvements in pilot retention. We have been okay, about 60
    percent of our pilots are rotary wing pilots. We have not had a
    big problem with rotary wing pilots. We have had a problem with
    fixed wing pilots, mostly for the obvious reason of airline
    hiring.
        We have come down about 50 percent in our resignations from
    2 years ago; but, when we look at the percentage of fixed wing
    pilots who are accepting the bonus this year and committing
    themselves for a long period, we see that number is starting
    down, so I am not so sure that our good news is not temporary.
        We do use our Reserves. Our Marine Corps Reserves fly with
    us mostly for optempo relief, and we find that we do not have a
    problem manning our Reserve organization, because pilots who
    get out like to maintain their affinity with the Marine Corps,
    so in the Reserves we are in pretty good shape for pilots; but
    we may be on the verge of struggling again with fixed wing
    pilot retention.
        Senator Ben Nelson. Admiral Fallon.
        Admiral Fallon. Senator, I think we are pretty much in the
    same boat as the Navy. We are very open to any ideas that might
    help us to work on retention. I firmly believe, though, that
    our people are looking for signs of long-term commitment, to
    not just patchwork our way through year-to-year, but to see
    that we are going to be moving in a steady direction for a
    consistent period of time, and I think that will help
    tremendously.
        We are seeing the rates increase, but again our take rate
    on the bonus this year is not quite as high as we would like to
    see it, so we are making improvements, but I think people are
    looking to see some more signals in the air.
        Senator Ben Nelson. General Keane.
        General Keane. Senator, we do not have a pilot retention
    problem in the Army, but nonetheless we are challenged by
    staffing in our aviation organizations, and our TRADOC
    Commander General Abrams has an initiative which General
    Shinseki is considering to increase the staffing in our
    aviation battalion headquarters to get our pilots more stick
    time and to reduce the stress that they are experiencing by
    trying to do both and also be staff officers.
        This came to light when we deployed our forces to Albania
    with Task Force Hawk, and we put a spotlight on it and realized
    that we had to do something to arrest that problem.
        Thank you, sir.
        Senator Ben Nelson. Thank you.
        Senator Akaka. Senator Bunning.
        Senator Bunning. Thank you, Mr. Chairman.
        General Keane, yesterday the Secretary of the Army and
    General Shinseki came before the committee. In the Secretary's
    prepared statement, he mentioned that as a result of the
    increased use of the Reserve component to meet mission
    requirements, the Army needs to improve the number of full-time
    support personnel supporting the Reserves. Will increasing the
    number of full-time support to the Reserve component improve
    their readiness?
        General Keane. Yes, it would, sir. By having full-time
    people there day in and day out to help plan and organize the
    training that is taking place as opposed to attempting to do
    that on a part-time basis will help stabilize those units
    better than what they currently are. It also helps to prepare
    them for the deployments that are taking place by having more
    full-time men in support helping to prepare those organizations
    for deployments before we actually mobilize the part-timers for
    full-time deployment, so that is an attempt on our part to
    relieve some of the pressure in those organizations.
        Senator Bunning. It sounds like robbing Peter to take care
    of Paul, though. In other words, what do you do then with the
    Reserve? When you utilize the Reserve, you are moving that
    Reserve unit out because they are better-trained and better-
    prepared because of the use of the full-time officer that went
    in to help.
        General Keane. Yes, sir, what the full-timers help you do
    is make adequate preparation for that deployment. When the
    actual deployment occurs, obviously everybody there is then in
    a full-time status. It helps you make that transition from a
    part-time status to a full-time status better, and we have
    learned that through experience, through the years.
        Senator Bunning. You mentioned in prior testimony today
    that you are about $9.5 billion short. Is that on an annual
    basis?
        General Keane. Yes, sir. Well, of course, we do not know
    what the future budget requirements will be, but it is pretty
    close on an annual basis.
        Senator Bunning. I was going to say, how can you tell,
    because unless you are involved, and I assume you are, in the
    shakedown, the thing that the Department of Defense is doing,
    how do you know your future requirements, and where it is going
    to come down as far as dollars for the Army, dollars for the
    Navy, and down the line.
        General Keane. No, we do not. What I was talking about is
    the $9.5 billion shortfall are unfinanced requirements we have
    for the 2002 budget that has been presented to you.
        Senator Bunning. Just the 2002 budget.
        General Keane. The 2002 budget, and right now we are in a
    strategic review, and also the quadrennial review, sponsored by
    the Secretary of Defense, and we are in the middle of that
    process right now.
        We intend to finish that hopefully by the end of this
    month, and out of that will come fiscal guidance to the
    services, and will enable us then to begin to build what we
    refer to as the 2003-2007 POM which will produce the 2003
    budget, and then we will have certainly a better understanding
    as to what funding we will have for 2003, and any shortfalls,
    if any, that we may have as a result of that. We will have a
    pretty good handle on that, I would imagine, by the end of the
    summer, early fall, as to where we stand.
        Senator Bunning. You realize if it had not been for
    Congress that you would be a lot shorter than you are now in
    fulfilling the presidential requests in the past 10 years. If
    we would have filled 100 percent of the requests from the
    services, you would be much deeper in the hole than you are
    right now.
        General Keane. Yes, sir.
        Senator Bunning. We plussed up most of those budgets, and
    we cannot in my personal opinion plus-up the 2002 and 2003,
    2004 fast enough to make up for the shortfalls that we have had
    over the last 10 years, so I assume that is why the Department
    of Defense is going through this study to find out how they are
    going to fight wars, what the future of fighting wars is going
    to be, and what the best way to get there is, and how we can
    fund them properly.
        I would like to talk to the Admiral for just a second.
    There are 317 ships. We hear 240. We hear that is where the
    Navy is headed, 240, if the present trend continues. How many
    more dollars does that mean that we are going to have to put
    into the Navy's budget to get you--we cannot do it with three
    ships a year, is what I am trying to tell you.
        Admiral Fallon. Senator, if I could make a couple of
    comments, one, going back to the question that was asked
    earlier about 2002, we have another $12 billion in requirements
    that we could identify to fully resource not only our current
    readiness but to make the investments in recapitalization that
    we would need to maintain that 317-ship level.
        To put it in round numbers, over what is programmed right
    now at 2002 levels, we will need about $10 billion a year in
    money to get us up to rebuild, out of this hole. For example,
    you used the number 240. You could pick a number and pick a
    year, and depending on several factors it could be as low as--I
    know the CNO has used the number 180 at one time. Well, if you
    project far enough into the future at the current build rate,
    you will get down to those levels and eventually maybe even
    lower.
        So the key point is, we are not going to do it at the
    current build rate of less than six a year. We are going to
    have to get it up. We think it is going to be about a $10-
    billion a year investment over what is in there now.
        There are a couple of factors here. One is a major effort
    being made to address the near-term readiness things so that we
    do not have to continue to rob in the future to fund those
    accounts, and that is really headed in the right direction. Use
    that as the launching pad. Now we have to really look at the
    future and make an investment.
        Senator Bunning. I assume that the Secretary of Defense
    task force on modernization and how we are going to do that
    will come up with a number that we have to fund to that level
    if we are going to get back to where we were.
        Admiral Fallon. Yes, sir. That is our expectation as well.
        Senator Bunning. General Williams, you mentioned
    modernization in the Marine Corps. How short is the Marine
    Corps as far as dollars are concerned?
        General Williams. When we looked at that, we came up with a
    number that includes some of Admiral Fallon's equipment,
    because, of course, the Navy buys our aircraft, and it would be
    around $1.4 billion.
        Senator Bunning. $1.4 billion?
        General Williams. Yes, sir.
        Senator Bunning. Well, if my math is anywhere close to
    being correct, that is about $32 billion on an annual basis
    just to get back to maintaining and modernization that we need
    to have done under the present force structure.
        If I may ask one more question, Mr. Chairman, because I
    asked all the Chiefs yesterday--on BRAC. I am a questioner of
    BRAC, and everybody at the table yesterday was for BRAC. The
    reason I am a questioner of BRAC is, I have not seen any
    dollars. Nobody has ever come to me and shown me what has
    happened with the saved money.
        If you would assist your Chiefs to come up with a schedule
    of savings that have occurred since BRAC I and BRAC II, it
    would really assist those of us who do not believe that BRAC
    III is necessary.
        Now, I know the rationale for it. I know a lot of places
    around this country would be very unhappy with a BRAC III, but
    if there are substantial savings--the number mentioned
    yesterday was $4.5 billion. I would like to see it, I would
    like to feel it, and I would like to be convinced that a BRAC
    III is necessary, so I just leave that with you.
        Thank you, Mr. Chairman.
        Senator Akaka. Thank you very much. For your information,
    we have another round to go through if you have other
    questions.
        My next question is to Admiral Fallon, and this has to do
    with ship overhauls, which has been a huge part of the Navy.
    There has been a lot of concern in recent years about both the
    funding level and the management of Navy ship maintenance
    programs. You acknowledged this problem in your statement.
    Despite frequent supplementals and increases to the budget, we
    still hear of scheduled maintenance availabilities for ships
    being canceled.
        What is the Navy doing to increase the stability and
    predictability of ship overhauls so that our ships can get the
    maintenance they need, and also so that work promised to public
    or private shipyards will actually be made available?
        Admiral Fallon. Senator, I will start with a confession,
    that we have institutionally for some number of years now, and
    it is probably longer than we might like to admit, we have
    consistently managed to understate the true requirement for the
    repair and maintenance of our forces, and it has been going on
    for so long that it has become endemic in the institution.
        The CNO, having a tremendous amount of fleet experience, is
    determined to correct this way of doing business. We have been
    working for the last year, specifically, that he has been here,
    and almost the year that I have been up here, to get our people
    to correctly identify what needs to be done. This is not just
    some criminal activity, or something that people did because
    they had evil intentions. It was people recognizing what they
    perceived to be the reality of funding levels, and making
    rationalizations to basically diminish the appetite for
    fulfilling the requirement to keep ships up.
        In other words, lots of times--for example, during a ship
    overhaul, work will be identified after the fact that happens
    to be over the budget that was submitted for that particular
    vessel, and people are then faced with a decision. You go ahead
    and do the work now that has been identified, or just say,
    well, can the ship survive without that being done? If the
    answer was yes, more often than not the work was deferred.
        There are other times when it would have been most
    efficient and most effective for the long-term to get a certain
    work package completed when the ship goes in, it is opened up
    and accessible, but those decisions were consistently made to
    not do it because of the desire to have some of those resources
    apportioned to other vessels, and so we have gotten into this
    business. We have to fix it. We are determined to fix it, and
    we are working with the fleets right now to do everything we
    can to positively identify those requirements and to get it
    funded.
        This is not going to happen overnight, as you well know. We
    have ships that are in their thirties, for age, and decisions
    are going to be made as to how many resources to put into those
    versus going to the newer ships, but we are determined to work
    on this and to do our best, and the amount of money that has
    been identified as a requirement substantially increased over
    the last year, and we are seeing already in the 2002 budget a
    significant increase in money that is dedicated in this area,
    so we aim to fix the problem.
        Senator Akaka. There has been and is concern on readiness
    reports, and this is for all of you to comment on, especially
    the accuracy of readiness reports. Do you believe that our
    readiness reports give you and other top leaders in the
    Pentagon an accurate feel for the readiness and capability of
    our forces? General Keane.
        General Keane. Yes, Mr. Chairman, in the Army we have the
    capability to not only receive readiness reports from our
    division and corps commanders, but actually down to the
    battalion level themselves, and we are very encouraged by the
    directness and frankness of those reports.
        Battalion commanders lay out very clearly what their
    challenges are, so we think that those reports are accurate,
    and based on our own anecdotal evidence of visiting the field
    and staying in contact with them, what we are able to observe
    ourselves with our own eyes, and using our own judgment, and
    what we are reading in the reports themselves I think are an
    accurate assessment of where we stand.
        I know there is always some concern about that, and it
    deals with whatever pressure the people feel, the youngsters
    feel out there to make their organization look good, so to
    speak, but in my judgment, having spent most of my life there,
    doing that, and supervising these battalion commanders, and
    knowing truly what is taking place, I know they are telling it
    like it is, and we have plenty of evidence to substantiate
    that, sir.
        Senator Akaka. Admiral Fallon.
        Admiral Fallon. Mr. Chairman, I also have high confidence
    that our people are doing it right. There is a difference in
    these bands, C-1 and C-2, for example, that we can see. We have
    seen that within C-2, for example, that we have for several
    years a lower trend in reporting. They still made the cut, if
    you would, for C-2, which we consider minimum deployable
    status, but it was definitely lower than it had been before,
    and our people were telling us that, and they would give us the
    specific anecdotals, and data.
        As I mentioned before, our nondeployed readiness in the
    Navy and Marine Corps is unique, I think, in that regard, that
    historically, we would allow our nondeployed people to go to
    lower levels. The reality is that they are going to much lower
    levels than they had been before, and that is a consistent
    trend over the past decade, and our people have been reporting
    and that data has been obvious, and that is what we would like
    to correct. We would like to bring those lower levels up so
    that we do not have to have it degrade to the level that they
    experienced in the last couple of years.
        Senator Akaka. General Handy.
        General Handy. Senator, the short answer is, I have
    absolute confidence in the accuracy and significance of
    readiness reporting, and I can say that because it is not just
    the readiness report C-1 or C-2 that we measure. You add to
    that the metrics, other very detailed metrics of mission-
    capable rates, launch rates, supply support rates. All of that
    is also an indicator of readiness effectiveness, as well as the
    Commanders in Chiefs out there, the war-fighters direct
    feedback on the readiness of units that report for action.
        All of that combined leads to a level of confidence in the
    overall readiness reporting system, so we feel very confident
    for all of those reasons that we are getting the right feedback
    from our people.
        Senator Akaka. General Williams.
        General Williams. Yes, sir, we do have confidence in it,
    and our junior commanders do not see reporting low readiness as
    something that is a mark against their record; but, rather,
    when that happens, that is the way that we shine light on their
    problems and get them additional resources. So we do not put
    the pressure on to jack up readiness rates. In fact, I have
    great confidence that the commanders are telling us the truth.
        Senator Akaka. Thank you. We will call on Senator Inhofe
    for his second round of questions.
        Senator Inhofe. Thank you, Mr. Chairman. In your first
    round, you asked the question about the sufficiency of the
    budget. I think, General Handy, you are the one that used a
    figure. You said $9 billion. Was that just referring to the Air
    Force, when you were talking about some of the deficiencies
    that are there from the budget?
        General Handy. Yes, sir. If you take the current, as
    amended administration's 2002 column against the Air Force
    requirements for 2002, and I would quickly add does not fix
    everything, does not totally modernize, does not fix readiness,
    so those are some fairly significant loopholes but if you take
    that against our reasonable requirements for the 2002 budget,
    $9.1 billion is the----
        Senator Inhofe. Okay. That is significant, and I think it
    is important for us to know from each of the services. Last
    fall we had the Joint Chiefs appear before the committee, and
    we asked the same question. They said the deficiencies were
    between $48 and $58 billion.
        Now, because of the upgrade, or the improvement that is
    coming out of the White House, that is still about $30 billion,
    but I would like to have this broken down between services. You
    may not have it now, but anything that you can share with us
    for the record would be fine, or anything you have right now
    would be helpful.
        General Keane. Yes, Senator. The Army's shortfall, or
    unfinanced requirement against the 2002 budget is $9.5 billion,
    and the largest amounts of that shortfall, as I mentioned, our
    recapitalization program is underfunded. That is $556 million.
    Our force modernization is underfunded. That is almost $2
    billion.
        I mentioned the fact that the Army has a staggering $18
    billion backlog in repair and maintenance that is being driven
    by chronic underfunding through the last decade-plus. Our
    capacity to execute that backlog in this current year would be
    $2.7 billion, so those are the three major areas of the $9.5
    billion. They give you the sense of what some of the items are.
    There is a long list of these items, obviously.
        Senator Inhofe. Good.
        Admiral Fallon, do you have anything more specific?
        Admiral Fallon. Yes, sir, Senator, I do. The number for the
    Navy is $12.4 billion, and the majority of that, like the Army,
    is in modernization programs and infrastructure, aging
    infrastructure.
        Senator Inhofe. General Williams.
        General Williams. Yes, sir. It was about $1.4 billion.
        Senator Inhofe. You are still using retreads, too?
        General Williams. Yes, sir, and that also includes some
    double counting, probably, because it also includes some
    aircraft modernization issues that perhaps the Navy is counting
    as well.
        Senator Inhofe. Okay. General Keane, in your opening
    statement you talked about, in a very positive way, the 94
    percent as far as real property maintenance (RPM) accounts are
    concerned. I think it is important for us to understand and not
    be fooled here that these are things that should have been done
    yesterday.
        I can remember, after I was down there with you at Fort
    Bragg, and you were replaced by General Kernan, I think it was.
        I was down there later in a rainstorm in the barracks and
    they were covering up the equipment with their own bodies to
    keep it protected. Those are things that should be done, and I
    think we have to get ourselves in a position where the RPM
    accounts are taken care of immediately.
        General Keane. I said it positively because it was a step
    in the right direction for us to move from a funding level of
    about 70 percent of SRM, which is what we have done throughout
    most of this decade, to 94 percent, so that is a big step for
    us.
        Senator Inhofe. Yes.
        General Keane. We were able to do that as a result of the
    budget amendment to some degree, and also moving some of our
    optempo dollars in that direction, because we just cannot
    continue to go the way we have been going.
        Senator Inhofe. Those accounts have been the recipients of
    a lot of other accounts. From ammunition--I am sure each one of
    you could tell your own stories about the SRM deficiencies out
    there. I just want to make sure that the record accurately
    reflects that this is still a crisis.
        General Keane. It very much is. We are not at 100 percent,
    and it is just 1 year that we have begun to put close to the
    amount of money that is needed, and we are going to have to
    continue that as we move along. As I mentioned before, we have
    to do something about the backlog that is out there as well.
        Senator Inhofe. Let me get into another area. I did not
    mean that critically at all. I just want to make sure the
    record accurately reflects the crisis that we are experiencing
    in that area.
        In my opening statement, General Williams, I told you I was
    going to talk to you about the problems on some of our ranges,
    specifically Okinawa. I would like to have all of you think
    about this. I compliment, of course, Admiral Fallon for the
    work that he has done in trying to help us with the crisis that
    we have in Vieques. It is my intent that we will have that back
    as a live range. I think we owe that to the people that we are
    sending into the Persian Gulf to get adequate training from
    east coast deployments.
        But one of the things that is not talked about very much
    is, if they would be successful in being able to take away from
    us a range that we own for our use, just by protesting, and by
    breaking the law, what is the effect it would have in other
    areas. What comes to my mind is, we went around looking for
    possible alternatives. Cape Wrath was one in Northern Scotland
    and Capo Teulada in Southern Sardinia.
        In each of those areas there were articles in the paper,
    because that was right when the Vieques training range issue
    started, saying that, if they are not going to allow using live
    ordnance on land that they own, why should we allow them to do
    it here. So it does have a domino effect, and we are now
    reaching a crisis point in having adequate ranges in all
    services.
        Why don't we just start with General Williams, and anyone
    else who has some examples. I would like to get them in the
    record. If not, we can get it in the record at a later time.
        General Williams.
        General Williams. Sir, you mentioned Okinawa and, of
    course, we have not fired artillery on Okinawa for sometime. We
    normally deploy our artillery batteries up to Camp Fuji in
    mainland Japan, and we fire there.
        Up until now, we have had very good relations with the
    Japanese Government on Camp Fuji. I do not know, quite frankly,
    what Vieques will do as far as energizing the Japanese
    Government, or that portion of the Japanese Government that
    would like to shut us down to do so more vigorously.
        Now, the other place that I can think of that is a
    potential problem, where we do a lot of training, is in Korea,
    and, although that is more Jack Keane's area than mine, marines
    go to Korea frequently. We do a lot of live fire training
    there, and that would be another concern where a sovereign
    nation is allowing us to use live fire on their territory.
        General Handy. Senator, it is a tremendous concern to the
    Air Force. We could talk about the ranges overseas, but I could
    bring it right to home. Some of our most prized ranges and
    training areas are right here in the continental United States,
    and almost on any given day the Air Force is defending itself
    in court for lawsuits to preclude the use of either the air
    space above, or the actual range itself, and so we are very
    concerned about the potential debate, or dialogue that might go
    from here, so you have strong support.
        Senator Inhofe. I was not meaning to imply just abroad, but
    at home, too. I am very sensitive to this with Fort Sill, one
    of the largest live ranges in the United States, being in my
    State of Oklahoma.
        General Handy. Yes, sir.
        Senator Inhofe. But I am sure that you are constantly
    having problems with the use of Eglin, and the use of Pine
    Castle and other areas that are local here, so I just want to
    find out what types of problems, and how this could aggravate
    those problems.
        General Handy. Yes, sir. We are concerned that they might
    be drawing a direct linkage between the issues, and it might in
    some way weaken our ability to use these ranges that are
    absolutely, unequivocally critical to Air Force readiness, and
    so we really need to draw the line if at all possible.
        Senator Inhofe. We have to use words like that, because we
    are talking about American lives being properly trained.
        General Handy. Yes, sir.
        Senator Inhofe. Admiral Fallon.
        Admiral Fallon. Yes, sir, Senator. What bothers me about
    this big picture is that I do not think we have a range
    anywhere in the States or overseas which is not feeling the
    pressure from some group with some cause or some desire to
    effectively limit our ability to use those ranges and, as you
    pointed out so clearly, the most critical point is the live
    fire, and if we do not get that we put our people at risk.
        So it seems to me that the whole business of encroachment,
    whether it is for environmental reasons or policy reasons, or
    whatever, we need a comprehensive approach to it, and I think
    that is one area in which the Senate and the House could both
    help us, because it seems the tactic of those who object to our
    use of these facilities for training is to take them on one at
    a time, and a generalized argument they use, is they claim
    there is another place.
        We hear that refrain constantly. There has to be another
    place, just do not do it here, and as we look around, those
    other places are all the same in terms of the kind of pressure
    that we are feeling, so we could use the collective approach
    this in recognizing that there is essential training that is
    required, and that it is going to necessitate having space, air
    space, land space, sea space, and the ability to use it to do
    the types of activities within those ranges in which our people
    can learn and grow the confidence to actually do their business
    if they have to do it in a combat situation.
        Senator Inhofe. Yes, I am glad you mentioned live ranges,
    too. I can remember my own personal experience when I was in
    the U.S. Army. There is quite a difference crawling under the
    fire when it was inert than when it was live. I can remember
    going out on some of the ships that were using live fire. Just
    the handling of the ordnance, if it is inert, you handle it
    differently, and so it is critical, and I think we need to talk
    about that.
        Also, as I said yesterday in the hearing, you cannot take
    an accident report and positively identify what caused it. The
    tragedy that took place in Kuwait on March 12 was one that was
    very real, and three places in the accident report it said they
    had been looking for places to use live ranges in preparing
    these people for that deployment, and they were unable to do
    it, and that was right after we went to inert on Vieques.
        General Keane, did you have anything to add?
        General Keane. Yes, Senator, I certainly do. The United
    States Army certainly is concerned, as are the other services,
    of the implications of Vieques. First of all, on live fire
    exercises, we feel it is absolutely essential that the Army
    conducts combined arms live fire exercises and also integrate
    it with our sister services at times when we can do that.
        If we are not doing live fire exercises, there is a direct
    correlation to lost lives. It is that simple, and if you are
    not doing that, then what you are doing is putting the burden
    on the backs of our soldiers to put them into combat situations
    without having replicated those combat situations in training
    as best as you possibly can, and despite all the fancy
    simulation that we have, and it saves us money to do
    simulation, we have not backed away from the fact that we must
    do very realistic live fire training, combined arms, for our
    soldiers and our units.
        The problem we face comes in four categories, and we refer
    to it as encroachment on our installations. The first is urban
    growth. We have seven installations that are affected by urban
    growth.
        The second one is noise concerns, and we have 11
    installations that are being encroached by noise concerns and
    the surrounding community concerns. Fort Sill would be one of
    them.
        The third deals with threatened and endangered species and
    habitat. We have 153 federally-listed species on 94
    installations in the United States Army, and 12 installations
    have their lands listed as critical habitat, and we are
    managing all of that, and that ties up a significant amount of
    lawyers and a significant amount of biologists and others to do
    that.
        Quite frankly, these endangered species are surviving on
    military installations. I am absolutely convinced they love
    soldiers. [Laughter.]
        Because the surrounding communities are encroaching on them
    as a result of their own urban and suburban growth and killing
    the endangered species, they are thriving on military
    installations. There is obviously a price to be paid to protect
    them, and there are implications on the opportunities to train
    on these installations.
        The fourth category we have with encroachment deals with
    our concern and the American people's concern to preserve safe
    drinking water, and the lead propellants that could possibly
    get into that water as a result of our live fire exercises that
    are conducted in impact areas.
        So urban growth, noise concerns, threatened and endangered
    species, and our concern to protect safe drinking water, are
    the four areas where the United States Army is working full-
    time dealing with this encroachment issue.
        Senator Inhofe. You actually got into my next question. Mr.
    Chairman, if I might take a few minutes--my time has expired
    some time ago, but I would add one question on encroachment,
    and maybe the spectrum issue also. All these things that you
    have talked about, General Keane, is what I would like to hear
    responses from the rest of you about because encroachment is a
    problem.
        Regarding endangered species, whether it is Camp Lejeune or
    Fort Bragg, we are doing such a good job, we are exacerbating
    the problem. Our problem is much greater now because of the job
    that we are doing. In other words, protecting this habitat is
    increasing the size of the species, so we have more habitat we
    have to protect. There has to be an end to this thing, other
    than just open season.
        I would like to talk about the encroachment problems, as
    General Keane has, in some of these other areas, too. Also
    another area that I want to get into--back when the Republicans
    were in the majority I chaired two subcommittees, this one and
    also the Clean Air Subcommittee of the Senate Environment and
    Public Works Committee. We were trying to look at this to say,
    is there something we should do legislatively to exempt
    military installations from some of these very tight
    restrictions that they have, or at least let the public know
    the cost of these.
        So as you are responding to this, General Williams and the
    rest of you, you might also at some point come up with the cost
    of all of this encroachment. It would be very helpful to us to
    help you.
        General Williams. Yes, sir. First, we have had some small
    success working with the environmental groups, especially in
    Camp Pendleton, to bring them on the base and show them how we
    are trying to take care of the species there, and to educate
    them a bit that the alternative to the Marine Corps at Camp
    Pendleton is not a national park; it is a housing development,
    and if we go, they are going to pave Camp Pendleton and we will
    not have to worry about the endangered species. So by having
    those kind of dialogues, we have made some progress.
        We believe there is probably some legislative remedy for
    some of this in recognizing military training and live fire as
    a specific Federal use of land that would allow us to continue
    to operate in certain areas without the constant round of
    lawsuits.
        I do not have, sir, a dollar figure for what it costs us;
    but, I know the largest growth area in the Marine Corps law
    community right now is environmental law, and we spend a
    substantial portion of money and time and energy in defending
    ourselves in courts on both coasts. I can try to get you some
    actual numbers, sir, to give you some costs, but I do not have
    them with me.
        [The information referred to follows:]

        In an attempt to answer the question with the most accurate and
    current cost data available, I would like to reference our response to
    a similar question addressed for the Senate Environment and Public
    Works Committee concerning environmental costs. ``In fiscal year 2002,
    the Marine Corps has budgeted $117 million in Operation and
    Maintenance, Marine Corps (O&MMC) funding and anticipates spending $3
    million from reimbursable accounts (e.g., agricultural outlease,
    forestry) to implement our Environmental Compliance, Conservation, and
    Pollution Prevention programs. In fiscal year 2002, a total of 378
    O&MMC-funded and 73 Reimbursable-funded full-time equivalent staff
    support these programs.''

        Senator Inhofe. Sure.
        General Handy. Sir, I would not want to change a thing that
    has already been said, but Jack Keane and I have a lot in
    common. As a captain, my training was curtailed because of the
    red cockaded woodpecker. I have been friends with that
    woodpecker ever since, and I say that somewhat tongue-in-cheek,
    but it undeniably restricts the training that we are able to do
    between the 82nd Airborne Division and Air Force C-130 and C-
    141 and C-17 units, all because of protecting the species. Now,
    that is a little bit of the negative side.
        The other side, of course, is the amount of money that we
    all spend to partner with environmentalists. While it is a
    negative it is certainly a positive, that on the good side of
    our Defense Department all of us have done an extraordinary job
    of working with the environmental community to mitigate some of
    these problems, but to the extent that it impinges upon our
    ability to ensure readiness, we do need some help to see if we
    cannot draw the line, and we would be more than happy to
    provide you with the best numbers that we could give you with
    the cost to the Air Force as a Department.
        [The information referred to follows:]

        General Handy did not respond in time for printing. When received,
    answer will be retained in committee files.

        Senator Inhofe. That would be very helpful, General Handy.
        Admiral Fallon. Senator, I will have to take the request
    for a specific numbers and get back to you, but I can just say
    amen to what has been said here in terms of the amount of
    effort that has been required in very recent years to attempt
    to come to grips with the realities of dealing with the
    encroachment issues throughout the world as far as the naval
    forces.
        [The information referred to follows:]

        I don't have a list of the additional costs we have accrued over
    time resulting from statutory requirements to comply with environmental
    laws and regulations. I can, however, provide several examples of the
    measures we have had to employ in order to ensure training
    effectiveness is balanced with environmental protection. I can discuss
    the cost of these measures both in terms of dollars and in terms of
    their impact on the effectiveness of our training and on the fidelity
    with which they allow us to deploy our weapons systems.
        Prior to and during pre-deployment battle group exercises, the Navy
    implements ``precautionary measures.'' This is done to ensure that we
    can obtain a favorable biological opinion from the Fish and Wildlife
    Service and National Oceanic and Atmospheric Administration Fisheries
    regarding our proposed training actions prior to their initiation as
    required by the Endangered Species Act. A favorable opinion results
    from formal consultation between the Navy and these agencies after the
    Navy identifies that its action ``may'' affect endangered species, and
    the Navy and the agencies agree on the ``mitigation'' measures needed
    to minimize or eliminate any negative effects related to our proposed
    actions. We believe that use of the ``precautionary approach'' results
    in overly cautious mitigation measures, and by extension more costly
    and less realistic training evolutions. Examples of precautionary
    measures we are required to take at Vieques and their impact are
    outlined below:

             Discontinued the use of illumination rounds after
            11:00 p.m. with a 60-minute maximum total time of illumination
            per night. This is required to protect nesting sea turtles that
            can be affected by artificial light. This reduces the amount of
            night fire training Navy can conduct.
             We have certified biologists perform aerial
            surveillance of the range and surrounding waters prior to
            training exercises to ensure no marine mammals would be injured
            or harassed in the unlikely event that inert ordnance lands in
            water. Each survey costs $300,000.
             We immediately suspend training exercises if a sea
            turtle is observed either on the range or within 1,000 yards of
            shore or if a marine mammal is sighted within 1,000 yards of
            shore. This can, and has, interrupted the flow and fidelity of
            our training, extended its duration, and adds substantial fuel
            and other costs due to the requirement to reinitiate and
            complete the exercise impacted.

        The second example I want to discuss is our use of San Clemente
    Island. In addition to being our only surface fire support range on the
    west coast, San Clemente Island is also home to the endangered San
    Clemente Island Loggerhead Shrike. The ``endangered'' status of the
    Shrike mandates that we take a number of actions to protect it that are
    similar to the ``precautionary'' actions discussed previously. Some
    examples of these actions and their impacts are:

             In order to protect the Shrike from exercise initiated
            fires during the 9 to 10 month fire season and to comply with
            the Endangered Species Act, we have decreased one of two live-
            fire impact areas by 90 percent and another by 67 percent, and
            we have a contract in place to provide helicopter based fire
            fighting capabilities at a cost of $180,000 per year. These
            mitigation actions have substantially reduced targeting
            options, and are responsible for a concomitant reduction in
            training fidelity due to the lack of target diversity.
             To further reduce the fire threat, Navy has virtually
            eliminated the use of illumination rounds during training
            exercises. During each gunfire exercise, ships are restricted
            to the use of a single illumination round for zero altitude
            rather than the designed aerial burst needed for the intended
            illumination role of the munition. Also, during the 9 to 10
            month fire season, Navy conducts no night naval gunfire support
            training. Night training, a critical element of naval gunfire
            support, is adversely impacted by these mitigation actions.
             During the Shrike breeding season the entire shore
            bombardment area is closed 4 days a week to permit biologists
            to observe the Shrike.
             Ironically, our highly successful Shrike conservation
            program threatens to further reduce our ability to conduct
            effective training at San Clemente Island. Operated at a cost
            of $2.5 million annually, this program has been highly
            effective. The Shrike population has grown from 13 to 120 birds
            in the wild, and we now have 67 birds in a captive breeding
            population. This successful stewardship of the Loggerhead
            Shrike has had a direct impact on training. As the Shrike
            population has recovered, on-island nesting areas have expanded
            into the only two live-fire impact areas further threatening
            our ability to train.

        The last example I will share with you relates to the impact of the
    Marine Mammal Protection Act and the Endangered Species Act on our
    planned deployment of new weapons systems. Complying with these laws
    has proven to be an extremely expensive, time-consuming, and readiness-
    threatening process. For example, the $350 million Surveillance Towed
    Array Sensor System Low Frequency Active (SURTASS-LFA) Sonar, a system
    that we believe to be critical to our ability to ensure the future
    security of our Nation, remains on the shelf. Although Navy has funded
    and completed a 2-year, $10 million research project, and an
    Environmental Impact Statement that demonstrates the environmental
    compliance of the system, its future deployment is still uncertain.
    Navy is awaiting a letter of authorization from National Oceanic and
    Atmospheric Administration Fisheries, and expects litigation to be
    brought under these laws to prevent deployment of this readiness-
    essential system.

        Admiral Fallon. I will give you one quick look at the
    reality today. One would hope, expect that when we give our
    operational commanders the task of laying out exercises to
    prepare their forces for their combat roles and missions, that
    they would set to work and lay out their exercises first and
    foremost with achieving their objective in mind.
        Reality today is that they have to consider a wide range of
    current existing restrictions, and end up laying out the
    exercises with many compromises already in effect before they
    even begin to fire the first weapon or get the first ship or
    airplane underway, and this approach to doing business I feel
    is detrimental to the readiness mindset that we need to have
    instilled in our people, and if we continue down this road, I
    believe we are going to have difficulties in the future.
        For example, in the environmental world, the way things
    work today with the endangered species, for example, is that
    there will be a consultation between the Navy, for example, and
    the regulatory agencies, and there will be a negotiation to
    reach an agreement on, for example--the takes is the term that
    is used--the number of, say, marine mammals that might be
    harmed or injured in a particular exercise, and this is a
    specific number. If that number is exceeded, and that number
    may be one, as it was in a recent exercise down near Vieques,
    if that number is exceeded, the expectation is that the
    exercise is going to be terminated.
        This way of doing business is basically not sustainable if
    we are going to maintain the readiness that we need to
    maintain, so we could use some assistance, and this is one that
    the Senate and the House could help us with, I think, in better
    defining the terminology so that we do not end up being in
    constant court battles in trying to interpret what the laws,
    regulations mean in regard to these takes.
        Thank you, sir.
        General Keane. Senator, I would just add that 10 to 15
    years ago we were polluters of the environment, and we have
    learned an awful lot, and educated our commanders on how to
    protect the environment, and in our judgment I think anybody
    looking at us objectively would conclude that we are good
    stewards of the environment.
        That said, I do believe we are on a collision course here,
    though. As I outlined to you, the number of installations that
    we have in the United States Army that are being threatened, in
    the United States primarily, and obviously some overseas in
    Korea and in Germany, the reality is that I think at some point
    we will need some legitimate relief in terms of legislation to
    help us protect the domain we call a training base, so that we
    can use the instruments of war in peacetime to be ready for
    war, despite the noise it makes, and despite some of the
    challenge it does to the ground and the environment that
    surrounds it.
        Notwithstanding that, then our readiness will be degraded,
    and the result of that is obvious to all of us from our years
    of experience and judgment. That translates into the loss of
    lives, and potentially to the loss of a conflict, and that is
    just not acceptable. I think we are on a collision course.
        Senator Inhofe. Well, you are right. I think we need to
    accumulate some of our good examples as to the type of steward
    you have been. There is no better example, really, than
    Vieques. You go to Vieques, and you see what they have done in
    putting the walkways out there, and it is a pristine area,
    preserved wildlife, conservation. I have often wondered what
    that would look like today if we had not been there, and you
    are right, the alternative is not a park, but it is going to be
    urban sprawl, and I think we need to paint that picture.
        Mr. Chairman, I have gone over my time.
        Senator Akaka. Thank you. We may have another round if you
    have more questions.
        Let me ask about operation and maintenance (O&M) accounts
    for fiscal year 2002, and the growing question of whether we
    can afford what is coming up, excluding the health care
    account, and the budget request for operation and maintenance
    account for fiscal year 2002 grows by approximately 9 percent,
    or $8.8 billion above the fiscal year 2001 level.
        I understand that an increase of this size helps fix many
    problems or concerns in the readiness area, but I would ask
    each of you if you believe we can afford an O&M budget this
    large in the future while still addressing our other needs,
    such as modernization.
        General Williams, you got it right on this issue on page 3
    of your statement, so let me begin with you. Do we have the
    right balance, or are we giving up too much in other areas to
    maintain readiness? I would like to hear from each of you.
        General Williams.
        General Williams. Yes, sir. At this point we are saddled
    with a modernization rate that we see as our problem. As long
    as we keep the older equipment, we see an inflation in
    operations and maintenance repair cost and spares every year
    that for aviation repairs, for example, goes up about 14
    percent a year. The longer it takes us to replace those aging
    aircraft, the longer we are going to have to put up with that
    very steep inflation rate in spares and depot-level reparables.
        The same thing at a lower dollar level takes place in
    ground equipment. We have the right answer, we think, for the
    replacement equipment for the Marine Corps. The problem is the
    rate at which we are having to buy it. For example, it is
    taking 5, 6, or 7 years to replace old trucks. Well, that means
    for 5 years we are going to carry that old equipment, we are
    going to spend too much money repairing it. So I think the
    answer to that balance is to try to speed the rate of
    modernization in order to flush the old equipment out of the
    inventory earlier.
        Senator Akaka. General Handy.
        General Handy. Sir, I would approach it similarly. Over the
    years, the Air Force has tried to produce budgets that balance
    readiness, modernization, people, and infrastructure. Under
    extraordinary budget constraints, the one area that has really
    suffered has been that infrastructure piece of it, and so we
    have very directly had to borrow from infrastructure to pay
    readiness and modernization.
        At the same breath, we have not been able to entirely solve
    those problems as we have discussed repeatedly this morning,
    and so as you look into the future, we have to right now go
    back and pay a lot of that deficit in the infrastructure
    accounts. That is certainly part of the O&M.
        The other are the issues that General Williams addressed.
    That is the flying hour program. We have this year fully funded
    in the 2002 budget as amended our full estimate of the flying
    hour requirements for 2002, to include the inflation of
    increased cost of spares, increased cost of fuel.
        There are many other metrics that go into that increased
    O&M. The most tragic, of course, I believe is our aging weapons
    systems. If you look at the average fleet age of our aircraft
    today, 22 years, growing, in spite of the C-17 or the F-22, or
    eventually the JSF, to almost 30 years, 20 years from now,
    those older weapons systems require more and more dollars to
    maintain, and so it is not surprising that if you look at our
    budgets you would see, for those reasons, a significant
    increase in O&M dollars required.
        Senator Akaka. Admiral Fallon.
        Admiral Fallon. Sir, I do not believe we have a single
    acquisition program today in the Navy that is being run at its
    most efficient procurement rate, and that is pretty telling, to
    be in that situation.
        I go back to my earlier comment about tradeoffs being made
    inside the institution, I think for a lot of well-intentioned
    reasons, but the reality is we have just been shifting the pea
    under the pod for a long time. We are only going to get well if
    we fully resource the current readiness, so we are not short-
    sheeting the folks with the equipment that we have to maintain
    today, and then making a step increase in investment to
    modernize.
        I believe we will see some payoff. We are starting to see
    some already, and I think we will see more in the near-term as
    we adequately resource what we have, but clearly we are going
    to have to accelerate the buy rates, and there is no other way
    to arrest the increasing age issue with either ships or
    aircraft unless we can substantially ramp up the number.
        Six ships a year just does not cut it, and whatever the
    glide slope we are coming down to--Senator Bunning said 240, it
    is certainly a lot less than 317 as you go out year by year,
    and the aircraft buy rate is about half what it really needs to
    be to sustain what we have. It just has to be changed, so it is
    going to require a step increase to make it happen.
        General Keane. Mr. Chairman, the O&M side of the budget for
    the Army in 2002 has been plussed-up close to $3 billion over
    the 2001 budget, and we have done that to move money primarily
    into our infrastructure accounts, and that is relieving some
    pressure, as I stated before.
        What is still significantly unfunded, and you put your
    finger on it, is our procurement and modernization. In that
    program, to give you a sense of the scale of our problem, when
    we go back to 1988 as a benchmark year, to the present, and we
    look at that account, the United States Army has killed or
    terminated or deferred an incredible 182 systems over the
    course of 12, 13 years. 103 of those have been terminated or
    killed. The others have been deferred or delayed, all of which
    adds to the cost of that program eventually, over time.
        That account, from the Army's perspective, is completely
    unsatisfactory, and we do not have the resources to generate
    the capital investment in that account that it needs to have,
    and as my associates have said to you, this is the future
    readiness of our service that we are dealing with, and to a
    degree we mortgage our future to take the resources that we do
    have to pay for the near-term readiness of our service.
        That is the Army decision, and that is the decision we have
    made throughout this decade with declining budgets, and with
    under-resourced budgets, and that is the decision we are making
    in the 2002 budget as well, because we are under-resourced
    again.
        Senator Akaka. General Shinseki's testimony yesterday
    described the Army's current readiness standards as, ``a Cold
    War legacy that reflects neither the complexity of today's
    strategic and operational environments nor other important
    factors.'' He further stated that the Army was reexamining the
    methods used to measure readiness, and my question is on
    improving readiness reports.
        One example of this is that earlier this year the Third
    Infantry Division was accomplishing the mission it was sent to
    the Balkans to do, but was reporting lower readiness, because
    it was not able to meet its timelines under the two major
    theater war guidelines. This occurred despite the fact that the
    Army was not expecting the Third Infantry Division to meet
    those guidelines as long as it was engaged in the Balkans.
        General Keane, when do you think the Army will have a new
    readiness measurement system? In addition to the issue General
    Shinseki raised of addressing the more complex reality we now
    face, what steps need to be taken to ensure that our methods of
    measuring readiness improve our ability to not only predict the
    future readiness of our forces, but also allow for an
    assessment of readiness in the past as well as readiness for
    current operations?
        General Keane. Yes, Mr. Chairman, you are absolutely right,
    the Third Infantry Division reported a lower C-rating status as
    a result of its deployment to the Balkans. The C-rating status
    was being measured against its wartime requirements and, as you
    know, that particular division is missioned against two of our
    major theater war requirements, so the division commander was
    doing what the system asked him to do. Those brigades
    essentially were not available, and would not be proficient at
    their wartime requirements due to peace enforcement operations
    that he was executing.
        As a result of that, the Army initiated a study to take a
    look at this. Now, what has happened is that the Defense
    Department is also looking at this issue, so our efforts will
    be rolled into what the Defense Department is doing as a whole,
    and I am really not certain when that effort will be completed.
        I know the Army had intended to finish its work in the fall
    of this coming year, so I would have to get back to you and
    find out when the Defense Department is going to finish that.
    Dr. David Chu is in charge of that effort. He is the Under
    Secretary of Defense for Personnel and Readiness, and I will
    have to ask him and get back to you, sir.
        [The information referred to follows:]

                        New Readiness Measurement System

        The Office of the Secretary of Defense (OSD) and the Joint Staff
    will meet with Service representatives after Labor Day to discuss
    future DOD readiness objectives. By January 2002, Dr. Chu, in
    collaboration with the Services and the Joint Staff, will recommend
    guidelines and procedures for a comprehensive readiness reporting
    system that evaluates readiness on the basis of the missions assigned
    to the forces. The new system should leverage information technology to
    capture readiness for current missions, provide for the establishment
    of readiness goals and metric analysis, and allow accurate and timely
    reporting. The Army intends to provide OSD with an update on its
    Strategic Readiness System (SRS) progress in September 2001.
        The Army is currently revising readiness reporting procedures to
    move toward a more objective, timely, and accurate reporting system.
    Modifications to the Army Regulation 220-1 (Unit Status Reporting) and
    the development of the SRS will enable us to meet this goal. The SRS is
    a three-phased, multi-year project that started in September 2000. The
    current timeline reflects this system being implemented by the end of
    fiscal year 2002.
        The SRS will provide the senior Army leadership with an overarching
    reporting system to facilitate the early detection of critical
    resourcing issues while measuring readiness of both the operating and
    generating forces through the use of specific performance measures.
    This is a readiness management decision support tool that is accurate,
    scaleable, objective, flexible, and timely in its measurement of the
    Army's ability to support the National Military Strategy and Title X.
    The Transformation readiness reporting system will enable senior Army
    leadership to influence strategic readiness across the Army and
    measures the entire force, including operating forces, institutions,
    installations, and power projection platforms.
        This holistic readiness system will fundamentally change the
    readiness reporting culture. In order to truly manage readiness, the
    system must be predictive. Through the use of leading indicators,
    readiness projections will be assessed to predict readiness outcomes.
    This will enable the senior leadership to make resourcing decisions in
    the out-years to proactively and positively effect enterprise
    readiness. SRS will integrate existing programs by leveraging and
    enhancing the information available through the current readiness
    reporting system while operating within the current information
    security and management environment. In addition to developing the SRS,
    modifications to metrics and policy are being made to Army Regulation
    220-1. Requiring warfighting units to assess unit readiness against the
    wartime mission for which the unit was organized and designed, and
    against the peacetime operational deployment, will enable commanders to
    make a more accurate readiness assessment.

        Senator Akaka. Let me pass to Senator Inhofe.
        Senator Inhofe. I know that we are about out of time, Mr.
    Chairman. Let me make one comment, getting back to the
    encroachment problem that we have.
        I think most of you are probably aware, with all the
    environmental impact statements that are required, Congressman
    Curt Weldon, with whom I was elected in 1986, and I, are going
    to approach something that would require a national security
    impact statement when we are asking for an environmental impact
    statement, just to try to get this out on the table so people
    will know and be aware.
        Sometimes it is difficult, with prejudiced media that we
    have, to get them to really report the cost of these things and
    the effect it has on our ability to protect our young men and
    women in uniform.
        One real short question for General Handy. Yesterday, I
    asked a question about, in the President's budget, that had
    some kind of assumed savings of $140 million in outsourcing
    some of the depot maintenance and apparently there is some kind
    of analysis to support this statement. Do you have that
    analysis?
        General Handy. Sir, the short answer is no, that the facts
    are that we in the Air Force note that no depot budget directly
    has been decremented, and so we are trying to work with OSD to
    determine exactly what they are talking about.
        What I would assure you, with all the years that you and I
    have talked about depot issues, the Air Force remains
    aggressively in support of our current depot system, and we
    would like to work with you to continue to identify exactly
    what OSD has in mind. We will work with your staff.
        Senator Inhofe. I appreciate that, and you have been very
    helpful. I am not asking in a critical way at all. I am just
    very much concerned about it, and you have probably heard
    yesterday, I was pursuing this as to what point are we going to
    have the F-22 in to the depots.
        If we are talking about core, you know that that is core,
    and we have to have that capability. I think people lose sight
    of the fact that there was a national security justification
    for a 50-50 or a 60-40 for a core capability in a depot to
    start with, and until something better comes along, we have to
    keep that in mind.
        I am not saying that just because one of the three air
    logistics centers (ALCs) is in my State. I would feel the same
    way--in fact, I was at your Army depot at Corpus the other day,
    expressing my concern there.
        One last thing, if I could, to get it in the record. We
    touched on this spectrum issue. As you know, there is a band of
    frequencies that they are trying to take from DOD, and it is a
    tough thing for Senator Akaka and myself, because there is
    going to be a lot of pressure, and we have been defenders of
    this spectrum for DOD. I would like to know from each of your
    services, if we lost that band of frequencies, what types of
    effect it could have on you folks.
        General Keane. In terms of the Army, Senator, it would be
    pretty significant, because we are talking about our primary
    tactical radio relay system, our mobile equipment, high
    capacity line-of-sight radio, numerous point-to-point microwave
    systems, and our new Land Warrior radios that we are bringing
    into the force.
        Senator Inhofe. Everything you are mentioning now is in
    that band--well, it is the 1755 to 1850.
        General Keane. 1755 to 1855 mhz. Everything that I just
    mentioned to you is in that band, and that has significant
    impact on the Army's Title 10 responsibilities, obviously, so
    it is a serious situation as far as we are concerned.
        Senator Inhofe. Thank you.
        Admiral Fallon. Senator, it is particularly serious for the
    Navy, because we do not have the option of using terrestrial
    lines, land lines.
        Everything, all of our communications with the fleet have
    to go through the air, and so we view this continued
    impingement on the spectrum with significant alarm, because it
    just narrows the options. We do not want to find ourselves in a
    position where we have to just use a certain frequency range,
    or a part of the spectrum. We think we need the redundancy of
    being able to go through different areas, and we could use some
    help on this.
        Senator Inhofe. There are a lot satellites on that band.
        General Handy.
        General Handy. Yes, sir. For the benefit of the record, I
    would make a couple of comments, but I would also like to offer
    that we provide you and anyone else the very specific by
    system, by frequency band in the spectrum that is affected by
    this initiative. I think we ought to clearly get that on the
    table.
        But from a joint force perspective, from a joint warfighter
    perspective, the impacts in the negative are monumental if we
    allow these initiatives to go forward with no consideration for
    the DOD piece of it. Within the Air Force, it affects space
    operations, it affects air operations, and it affects
    significantly ground-to-ground operations, and we will provide
    you the detail.
        Senator Inhofe. Which we would like to have from all of you
    for the record, because this issue is going to come up.
        General Williams.
        General Williams. Yes, sir. We will provide you details.
        The only comment that I would add is that we like to talk a
    lot about quality of life. The best quality of life is a live
    marine, and every time we introduce another artificiality in
    training, or every time we do not allow our men and women to
    use the equipment that we bought for them to the fullest extent
    that they can in training, we degrade the training, and so we
    are very concerned that this will be yet another artificiality
    in our training.
        Admiral Fallon. Senator, if I could do one re-attack, this
    is another example of a certain segment of the population with
    an interest in a narrow area that impinges on the overall
    business of our operations and training that taken in and of
    itself does not appear to be a big deal, but the cumulative
    effect of all of these encroachments is really becoming a
    burden, and the end result is, it puts our people at risk.
        [The Army information referred to follows:]

        In terms of the Army, vacating 1755 to 1850 megahertz (MHz) without
    comparable replacement spectrum, cost reimbursement, and sufficient
    time to relocate would have a significant detrimental impact on the
    ability of U.S. military forces to achieve and maintain warfighting
    readiness.
        Loss of the band would impact the Army's Mobile Subscriber
    Equipment (MSE) and its components, including the high capacity line-
    of-sight radio. MSE is the digital backbone that provides command and
    control capabilities to the warfighter. It also serves as the transport
    mechanism for intelligence imagery  data, logistics data, medical
    information, and morale and welfare support.
        Loss of the band would also impact other communications
    capabilities such as point-to-point microwave systems, Land Warrior
    radios, and combat identification radios. Land Warrior radio is a close
    combat communications system for infantrymen, combat medics, combat
    engineers, forward observers, and scouts. Voice, data, and imagery are
    transmitted using the Land Warrior radio. Combat identification radios
    provide forward combat forces with the ability to identify friendly
    forces for prevention of fratricide.
        Point-to-point microwave systems also require access to the band
    for backbone communications at military test and training ranges. The
    Army Corps of Engineers also relies on point-to-point microwave systems
    to transmit data to control locks, dams, and electrical power
    generation along U.S. waterways.

        [The Navy information referred to follows:]

        The potential consequences of the loss of this band of frequencies,
    as the Deputy Secretary of Defense stated in his February 13, 2001
    letter to Secretary Evans is: ``Our Nation's Armed Forces would be at a
    substantial strategic and tactical disadvantage in combat and the
    execution of military operations could be jeopardized if the Department
    lost its use of the band [1755-1850 MHz].''
        Specific operational impacts to the Navy and USMC from decreased
    access to this essential force multiplier (radio frequency spectrum)
    include: additional littoral operational and training frequency
    limitations, reduction or elimination of tactical aircrew training for
    our Naval aviators, premature satellite loss impacting our ability to
    accomplish our mission, system redesign and schedule delays (which
    translate directly into lost dollars), and elimination of key testing,
    which in turn, results in systems being fielded with uncertain
    capabilities.
        For example, the Air Force and Navy aircrew combat training system,
    which provides realistic training with engagement assessment and
    feedback, is in this frequency band and would be lost if the spectrum
    were lost. This aircrew training system is one of the main reasons
    American pilots are the best-trained combat pilots in the world.
        Navy operations in the littoral areas of the United States and its
    possessions are already restricted due to frequency limitations arising
    from various other users of the spectrum like commercial TV and
    cellular phone operators. These frequency limitations impact our
    ability to conduct littoral warfare training, increase our fuel/
    training costs for sea transit times, and decrease our radar and
    tactical data link operator proficiency thereby contributing to an
    overall reduction in fleet readiness. Further spectrum encroachment
    expected from OBRA-93 and BBA-97 (247 MHz in total) will only
    exacerbate these current operational impacts due our current frequency
    limitations. Any further loss of access to the spectrum, to include the
    1755-1850 MHz band, without comparable alternate spectrum, adequate and
    timely compensation, and the flexibility to transition the myriad of
    incumbent users somewhere else (which has yet to be identified) will
    severely impact fleet operations, readiness training, and our ability
    to transform into a leaner, more agile, and more effective force to
    meet the security challenges of the future. Fundamental to this
    transformation is the network-centric concept of operations which is
    already being implemented. RF spectrum is virtually the only way to
    connect mobile ground forces, ships, aircraft, and satellites.

        [The Air Force information referred to follows:]

        General Handy did not respond in time for printing. When received,
    answer will be retained in committee files.

        [The Marine Corps information referred to follows:]

        The 1755-1850 MHz band primarily supports the Marine Corps' AN/MRC-
    142 HMMWV-mounted radio system. The way the Marine Air-Ground Team
    fights today, the AN/MRC-142 is a cornerstone of our tactical, command
    and control (C\2\) capability.
        The AN/MRC-142 is our primary, expeditionary, wideband (576 kbps),
    line-of-sight (LOS) system, supporting every battlefield function. For
    example, it links the Wing Tactical Air Control Center to remote
    airfields; it provides the path for relay of the real time, ground
    combat picture, collated at the Infantry Regiment-level, to the
    Division Command Post; and it ties the Commander, Amphibious Task Force
    afloat to the Commander, Landing Force Ashore, as marines assault
    inland.
        Designed to be compatible with the Navy's Digital Wideband
    Transmission System, it is a proven component of an integrated,
    expeditionary, joint backbone architecture and is accounted for in
    force lists supporting standing war plans. Trained marines can activate
    an AN/MRC-142 link in just 40 minutes; simultaneous activations enable
    the rapid installation of robust, task force, voice and data networks
    in even the harshest, remote environments.
        Marine elements employ 418 systems, each with two radio-
    transmitters, and 68 additional systems reside in War Reserves. To
    employ this capability, 877 marines are school-trained operators.
    Additionally, scores of officers and senior enlisted marines are
    trained in the systems engineering, embarkation, and maintenance
    management of the AN/MRC-142.
        Estimates to replace the materiel associated with the AN/MRC-142
    capability approach $300 million. However, the need to maintain
    warfighting readiness--should a replacement system be required--will be
    a challenge. This does not include the substantial costs associated
    with research and development, training, embarkation, engineering,
    system sustainment, testing, and operation plan impacts across the
    United States Marine Corps prior to fielding a substitute system.
        Other electronic systems that would be effected by the loss of this
    spectrum that impact the Marine Corps include: satellite control links
    that effect our use of Global Positioning System and communication
    platforms, Air Combat Training Systems and Joint Tactical Combat
    Training Systems, Base/Range infrastructure such as microwave towers
    and security videos, and Remote-Control ordinance neutralization system
    links (robots).

        Senator Inhofe. Thank you. Mr. Chairman, I have other
    questions for the record, but I know we have gone past our time
    here.
        Let me just mention to you, I appreciate so much all four
    of you being very straightforward. It makes our job a lot
    easier here to know what the real problems are. We know that we
    can depend on you, and I personally appreciate it very much.
        Senator Akaka. I have further questions, too. I will submit
    them for the record also.
        I would like to make some remarks about encroachment and
    some of the problems that we are facing. I think you are all
    aware of the problems we are having in Hawaii in Makua, but I
    praise the General there that is working on that problem with
    the community. He has done, I feel, an excellent job.
        As a matter of fact, I made the remark that he has done so
    well that what he has done can be used as a model when we face
    these kinds of problems. He has worked so well with the
    community, the community has taken it to heart.
        I understand that by today, I think there might be a ruling
    made by the court which may extend the impact statement for a
    few months, but we will hear from the judge today, but I felt
    that the success thus far at Makua has been the dialogue that
    has gone on between the military and the community. I felt that
    General Dubik has brought about a feeling of trust between the
    community and the military, which was tough to do, but he has
    done real well, and I hope that this can continue.
        I thought I would mention this, because I felt that the
    military has done a good job out there. We will be hearing from
    the court today.
        So with that, I want to say thank you again for being so
    candid, and the clarity that you bring to the questions that we
    have will certainly help the subcommittee make the kinds of
    judgments they will have to make on the budget and other
    matters.
        Again, I want to thank all of you for coming, and thank my
    friend, Senator Inhofe, for his part in the subcommittee's
    work. As I said, I want to repeat that I will certainly try to
    keep the standards that you have set for this subcommittee.
        Are there any further questions, or any comments from the
    witnesses? Otherwise, the subcommittee stands adjourned.
        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator Daniel K. Akaka

                        SPECIAL PAYMENT FOR HIGH OPTEMPO

        1. Senator Akaka. In your testimony, Admiral Fallon, you expressed
    concern that the Individual TEMPO legislation contained in section 574
    of the Fiscal Year 2001 Defense Authorization Bill that requires you to
    pay a $100 per diem to service members who are deployed above a certain
    number of days does not adequately accommodate personnel management
    practices in the sea services.
        Admiral Fallon and General Williams, please give me an estimate of
    how much you will have to pay your sailors and marines to comply with
    this legislation in fiscal year 2002, and how much of this requirement
    is reflected in the budget request? Is the Department of the Navy
    recommending that Congress alter or repeal this legislation?
        Admiral Fallon. Navy is actively tracking deployment of sailors on
    an individual basis as prescribed. To date, approximately 2 million
    transactions have posted to Navy's corporate ITEMPO database,
    translating to over 700,000 ITEMPO events. Concurrently, Navy has been
    engaged in an ongoing examination of potential ITEMPO monetary costs,
    as well as global presence and readiness issues that have become the
    unintended consequences of managing schedules (operational and
    maintenance) and high OPTEMPO communities (such as the Seabees) in
    light of ITEMPO. Moreover, we have identified the adverse impact ITEMPO
    can have on individual sailors as we try to manage their distribution
    to preclude ITEMPO ``busts.'' While Navy is complying with the intent
    of the legislation, its ramifications are becoming increasingly
    evident.
        Navy is actively refining projected cost and forecasting models,
    but this is very challenging since estimates based on the tempo of
    platforms do not directly or readily translate to estimates of the
    tempo of individuals. The fundamental expeditionary and forward-
    deployed nature of the service and the fact that Navy has collected
    only 9 months of actual ITEMPO data magnify the scope of the challenge.
    However, even with these limitations, preliminary estimates indicate
    that Navy's average annual cost for high deployment per diem allowance
    could be as high as $160 million. This has been included in CNO's list
    of unfunded requirements for FY02. It should be noted that this cost
    estimate is derived solely on operational considerations. Out of
    homeport maintenance availabilities and the impact of accumulated
    ITEMPO days when not assigned to a deployable unit will result in an
    additional cost. Accordingly, we believe it prudent to suspend
    implementation of the $100/day pay provision, to permit more time to
    collect additional data and conduct detailed analyses. In so doing, the
    full spectrum of consequences could be better understood and measures
    taken to mitigate them.
        General Williams. The Marine Corps understands the intent of the
    PERSTEMPO legislation, is fully complying by actively tracking and
    managing the PERSTEMPO of our marines, and will report to Congress as
    required. However, we have several concerns: The high-deployment per
    diem payment equates to ``paying premiums'' for doing what we do as
    normal operations and deployments in support of the Nation. PERSTEMPO
    requirements put our commanders on the horns of a dilemma by causing
    them to make decisions they wouldn't ordinarily make: Use scarce
    operations and maintenance funds to pay per diem; break the continuity
    and cohesion of units to avoid putting some marines over the 400-day
    threshold, or; reduce the amount of necessary pre-deployment training
    so that individuals will not break the 400-day threshold during the
    deployment.
        We ask that Congress recognize that the PERSTEMPO legislation is a
    new requirement and the full impact is not known at this time. We need
    time to fully assess the impact and possible unintended adverse
    consequences and implement any necessary corrective actions. The Marine
    Corps does not at this time have an accurate assessment of the costs or
    impact of this legislation. We are currently analyzing the impacts and
    costs and will make those results known to this subcommittee as soon as
    possible.
        In the meantime, the Marine Corps recommends delaying the
    requirement to begin paying the high-deployment per diem payments, for
    those exceeding the 400 day threshold, until 1 October 2003. This delay
    will allow the Services the time to use the tools we have devised to
    manage PERSTEMPO before we are required to start the payments. Using
    our tools we will be able to reduce PERSTEMPO to the least possible
    amount and have time to budget for the PERSTEMPO per diem that we must
    pay.

                                    PER DIEM

        2. Senator Akaka. General Handy and General Keane, in Admiral
    Fallon's testimony he expressed concern that the Individual TEMPO
    legislation contained in section 574 of the Fiscal Year 2001 Defense
    Authorization Bill that requires you to pay a $100 per diem to service
    members who are deployed above a certain number of days does not
    adequately accommodate personnel management practices in the sea
    services.
        What are your views on this legislation? Does the fiscal year 2002
    budget include any funds for payment for this per diem to Army or Air
    Force personnel?
        General Handy. The Air Force shares the concerns that motivated
    this legislation. Extensive deployments have a profound effect on
    morale and the quality of life of our service members. Because of this
    concern, we began collecting and tracking individual TEMPO in 1996.
    Furthermore, as a management tool, the Chief of Staff of the Air Force
    established a desired maximum of 120 days away from home per 12-month
    period for all Air Force members. This desired maximum of 120 days is
    well below the thresholds of 181 and 220 days established by the Fiscal
    Years 2000 and 2001 National Defense Authorization Acts. Effective 1
    October 2000 we began tracking TEMPO based on thresholds that were
    established and require General Officer oversight/approval. The lowest
    ranking General Officer in the member's chain of command must approve
    any member who is projected to be deployed 182 days or more out of the
    preceding 365 days. MAJCOM Commanders or the Vice Chief of Staff of the
    Air Force must approve any member who is projected to exceed 220 days
    deployed out of the past 365 days. Finally, members will receive $100
    per day for each day deployed over 400 days (401 or more days) out of
    the preceding 730 days. This, in turn, will help minimize the number of
    members who may become eligible to receive the $100/day ``per diem'' as
    a result of burdensome TEMPO.
        We have appropriately included high deployment per diem in our
    fiscal year 2002 Military Personnel budget submission.
        General Keane. We view the legislation as an opportunity to review,
    evaluate, and provide to Congress specific information on the impact
    that operational requirements have on soldiers. However, the level of
    detail involved in PERSTEMPO tracking requires an increased workload
    and is an administrative burden at the unit level. The Army has
    developed and implemented a web-based application program for managing
    PERSTEMPO in the field Army. The current fund designation for payment
    to soldiers who become eligible for the high-deployment per diem is
    Military Personnel Army. Congress did not provide additional
    appropriations for this program, and funding is not currently
    programmed for the possible payment to soldiers beginning in fiscal
    year 2002.

                          GROWTH IN FLYING HOUR COSTS

        3. Senator Akaka. General Handy and Admiral Fallon, for the past
    several years both the Navy and the Air Force have requested additional
    funds because they have been surprised by the growth in the cost of
    their flying hours. I know that both the Navy and the Air Force budgets
    for fiscal year 2002 contain significant increases in funding for
    flying hours. Are you confident that this year's budget fully funds
    your program so that you will not need to seek additional funding? What
    steps are you taking to control this cost growth?
        General Handy. The fact that this budget amendment was submitted in
    June, almost 5 months past our normal request, gives us better
    confirmation of the trends we are forecasting. We believe we have taken
    prudent consideration into building our fiscal year 2002 flying hour
    funding request. We believe it compensates for the emerging cost growth
    we have experienced in fiscal year 2001 while also considering the
    impact of aging aircraft.
        As components that were designed to last the life of the weapon
    system fail and as vendors capable of repairing and/or reverse
    engineering ancient systems vanish, an aggressive recapitalization
    program is the only long-term answer to controlling costs of aging
    weapon systems. However, in the short-term, we must keep current
    systems viable through modifications. Most modifications, whether
    designed to improve capabilities or increase reliability, help us
    sustain these systems.
        Admiral Fallon. The fiscal year 2002 budget is sufficiently funded
    to support the hours required to achieve 83 percent primary mission
    readiness. The Navy is taking a three-pronged approach to control some
    of the demand growth per flight hour as our fleet ages.

             We have specific programs targeted to reduce the usage
            of some of the parts that fail most often; e.g., logistics
            engineering change proposals and affordable readiness
            initiatives.
             We have modified planning, programming, and budgeting
            processes to address increased growth rates in demand, so that
            we will not have large shortfalls in the execution year. We
            will adjust this figure as our reliability initiatives begin to
            take effect.
             Continue to support the modernization and procurement
            programs such as the F/A-18E/F and JSF that will reduce the
            average age of our force and our expected future operating and
            support costs.

                  READINESS PROBLEMS VS. CAPABILITY SHORTFALLS

        4. Senator Akaka. General Keane, Admiral Fallon, General Handy, and
    General Williams, DOD's readiness reports speak of the risk of our
    ability to carry out two nearly simultaneous major operations as being
    low, moderate, or high. The ``risk'' is not necessarily caused by
    shortfalls in the training and readiness of our people. It can be
    attributed to needed capabilities which are insufficient or completely
    nonexistent.
        I ask each of you, without getting into any classified details:
        First, what exactly do we mean by risk?
        Second, how much of that risk and how much of your concern is in
    the training and readiness area and how much is on assets or
    capabilities we don't have enough of, such as airlift or chemical-
    biological defenses? Where should we be focusing our efforts if we have
    additional funding?
        General Keane. In broad terms, the Army views risk as an assessment
    of the probability of operational mission failure and the cost relative
    to objectives. Most directly, this involves accomplishing commander in
    chief operational missions. However, there are associated implications
    and risks beyond this level of activity. Risk is associated with every
    aspect of military operations--from military engagement to warfighting.
        Both the Quadrennial Defense Review (QDR) 2001 legislation and the
    Joint Strategy Review 2001 address risk in three broad categories:
    political risk, strategic risk, and military risk.
        Political risk is the likelihood of the Nation incurring
    significant and potentially irreversible damage to its ability to
    maintain worldwide influence. Political risk impacts American global
    influence, and must be considered within the political/diplomatic,
    economic, military, and information instruments of power.
        Strategic risk for the military instrument of power is the
    likelihood of damaging the broadest capabilities of the U.S. Armed
    Forces, jeopardizing the legitimacy of the national military strategy,
    and prohibiting accomplishment of national military objectives.
    Strategic risk affects U.S. global military capability. Military risk
    is the likelihood of mission failure or prohibitive cost at the
    operational level in the execution of the missions described by the
    national military strategy.
        Military risk impacts mission accomplishment at the operational
    level. In practice, military failure translates into strategic and
    political failure. However, political and strategic failure do not
    always equate to military failure. While assessment of political risk
    is beyond the domain of the Army, it is usually considered in terms of
    U.S. influence, access, and credibility.
        Risk assessment is not an exact science. There are many variables,
    and many of its characteristics are simply not quantifiable. It is a
    process that by necessity must be both objective and subjective. Risk
    assessments must be linked to the strategic environment and discrete
    real-world threats, as well as the costs, consequences, and
    implications for the Nation and its Armed Forces for both action and
    inaction. Uncertainty, strategic surprise, and adaptive, determined
    adversaries all matter. Best military judgment also matters--as present
    risks are being borne and managed by senior leaders daily.
        The Department of Defense terms of reference for the QDR calls for
    balance among force, resource, and modernization requirements measured
    against four dimensions of risk. Force management risk addresses
    management of people and equipment, including OPTEMPO. Operational risk
    considers mission success at acceptable cost across a range of
    contingencies. Future challenges risk entails the ability of U.S.
    forces to transform. Efficiency risk addresses resource consumption, to
    include infrastructure and business practices.
        There is no single formula to help answer your second question. We
    must be as concerned with training and readiness as we are with the
    availability of key assets and capabilities. If the best-trained
    soldiers are not properly equipped to fight, they are as vulnerable as
    those fully equipped but not properly trained. As nations around the
    globe integrate key technological capabilities into their national
    security structures, the challenge to U.S. technological advantage
    increases. In the end, the American advantage is our culture, economy,
    and military superiority in training and leader development that
    ensures success in our national strategic aims.
        Assessments of military risk in operational plans must address
    forward-stationed and deployable units and the status of numerous other
    critical enablers, such as assured access, availability of strategic
    lift, chemical-biological defenses, mobilization and power projection
    capabilities, and command, control, communications, and computers/
    intelligence, surveillance, and reconnaissance (C\4\/ISR) capacity.
    These enablers and capabilities are extremely important for joint force
    effectiveness and merit continued high priority for Office of the
    Secretary of Defense, Joint, and Service funding.
        There will always be tough decisions in the allocation of
    additional funding. For example, currently, additional resources would
    allow us to accelerate recapitalization of our counterattack corps,
    restore necessary OPTEMPO funding, and begin stabilization of our
    infrastructure. Yet we cannot let our next generation of leaders and
    soldiers down by failing to prepare for the threats we envision in the
    mid- and long-term. We cannot break our non-negotiable contract with
    the American people to win the Nation's wars. The Army's vision--
    People, Readiness and Transformation--sets a clear and balanced set of
    priorities where we must invest. DOD faces the same challenge of
    balancing near- and far-term requirements.
        Admiral Fallon. In a dual major theater war (MTW) scenario, risks
    are assessed to be moderate to high due to precision munition
    shortfalls, insufficient aviation spare parts, and limited bandwidth
    available for our forces to communicate and fight at an optimum level
    in both MTWs.
        For the Navy risk is due in part to the readiness degradation
    observed among our non-deployed forces. The significance of declining
    readiness among non-deployed forces is that these units constitute
    critical follow-on forces. The lower the readiness of non-deployed
    forces becomes, the greater the risk to being able to respond with
    combat-ready follow-on forces.
        We intend to continue efforts to bring all CVBGs up to required
    readiness. If the Battle Groups could be equipped with the munitions,
    spares, and communications capabilities necessary to raise their
    readiness to the C-2 level, for both theaters, I believe low to
    moderate risk levels would exist.
        General Handy. Regarding the first question, risk, as used in this
    context (i.e., Quarterly Readiness Reports to Congress, Joint Monthly
    Readiness Reviews, (JMRR) etc.) is defined as the likelihood of failing
    to accomplish theater objectives within planned timelines. Risk does
    not mean that U.S. forces would not prevail, but rather that slower
    than planned force build-up and delays in counter-offensive operations
    increase the potential for higher casualties to U.S. forces in the
    interim and during the fight.
        On the second question, part one, all deficiencies degrade the
    ability to execute National Military Strategy (NMS); however, some
    drive more risk than others. To ensure senior leadership focuses on the
    most critical readiness issues, JMRR deficiencies are categorized as
    either Category 1 (most critical warfighting risk drivers) or Category
    2 (important deficiency that contributes lesser levels of risk to the
    NMS). Additionally, these deficiencies are further categorized as
    either (1) a capability deficiency or (2) as a readiness deficiency. A
    capability deficiency is defined as a lack of resources to meet
    established mission requirement--deficiency concerns resources that do
    not exist within DOD (i.e., total airlift required exceed total airlift
    available). A readiness deficiency is defined as a readiness
    degradation: (1) because of the condition of an existing DOD resource;
    or (2) due to the inability of an existing capability to fully perform
    its function (i.e., training deficiencies, broken C-141s).
        Currently, approximately 50 percent of Category 1 deficiencies
    identified with the Air Force are ``capability related'' deficiencies.
    As stated earlier, all deficiencies degrade the ability of the force to
    execute NMS, hence, we are concerned about all deficiencies.
        Reference question two, part two, additional funding would be used
    to support both current and future readiness issues. We must ensure our
    retention and recruiting efforts provide the people we need to regrow
    our skilled technicians and operators we've lost in the past 3 to 5
    years. Also, we must provide these people with the right equipment,
    training, and spare parts to increase weapon system availability.
    Finally, we must address aging equipment and infrastructure. Without
    substantial recapitalization efforts, keeping the existing fleet
    mission ready will drive higher maintenance/spare cost, challenge us to
    sustain current readiness levels, and put long-term readiness at risk.
    Because our current readiness is the result of several years of
    sustained underfunding, poor retention, TEMPO, and aging systems, it
    will require several years of substantial and sustained investment to
    recover readiness.
        General Williams. The risk report you speak of comes from the
    readiness assessments made on the warfighting scenarios from the Joint
    Monthly Readiness Reviews (JMRRs). In this context, risk is defined as
    the likelihood of failing to accomplish theater objectives within
    planned timelines. It does not mean that U.S. forces would not prevail.
    Rather, risk means that slower than planned force build-up and delays
    in counter-offensive operations increase the potential for higher
    casualties to U.S. forces in the interim and during the fight.
        The Marine Corps' training and readiness are good, but not without
    concerns. Our readiness is high, because modernization and
    infrastructure have been the billpayers for current readiness over the
    past decade. The readiness of our legacy equipment is increasingly
    being borne on the backs of our marines. The pace of equipment
    modernization continues to be of great concern.

                           NAVY END STRENGTH INCREASE

        5. Senator Akaka. Admiral Fallon, the Navy requested an increase of
    almost 3,400 sailors in fiscal year 2002. Can you elaborate on the
    rationale behind this request and why you are asking for an increase
    while deliberations about force structure in Quadrennial Defense Review
    are still ongoing?
        Admiral Fallon. In line with CNO's top priorities of manpower,
    current readiness, and future readiness, Navy plans to meet growing
    manpower requirements, reduce the size of the Sea/Shore Gap, while
    allowing for greater flexibility in shaping the force through a long-
    term investment in people.
        Due to the success of our fiscal year 2001 end strength strategy,
    Navy plans to end fiscal year 2001 and begin fiscal year 2002 at close
    to our fiscal year 2002 end-strength requirement for 376,000 sailors.
    Our commitment to additional end strength in fiscal year 2002 meets
    requirements for anti-terrorism force protection, as well as additional
    readiness and operational demands for ships and squadrons. Second, we
    have significantly reduced our billet gap (difference between
    authorized enlisted billets and actual enlisted personnel onboard). In
    fiscal year 1999, the enlisted gap averaged 18,431 (13,833 at-sea and
    4,598 ashore). As a result of personnel initiatives to improve manning
    and readiness, we have reduced the total gap in billets by more than 26
    percent from fiscal year 1999 to today. We have made even greater
    progress in the at-sea gap, reducing it by almost 67 percent from
    fiscal year 1999 levels. Executing end-strength to the full 1 percent
    statutory authority has helped us balance the gap by increasing
    productive workyears across the fiscal year spectrum--thus diminishing
    the effects of a cyclical end-strength bathtub that has historically
    presented an inherent readiness challenge in our manning profile. This
    will allow us to continue improving readiness and manning into fiscal
    year 2002.
        Finally, in a steady-state force environment, we face significant
    force de-aging in coming years. If constrained to execute to current
    end-strength levels, our current retention gains would force us to
    sacrifice a steady-state level of accessions which would sustain us for
    20-30 years. Our strategy is based on maximizing retention gains to
    sustain an experienced career force and minimize de-aging, while
    building adequately for the future.

                           SERVICE RETENTION PROBLEMS

        6. Senator Akaka. General Keane, Admiral Fallon, General Handy, and
    General Williams, as I understand it, many of the services are
    struggling with meeting retention goals for mid-career enlisted
    personnel. Is this because of a systemic problem across the services,
    or do the causes differ? Have you developed or are you developing,
    either jointly or independently, an integrated approach to address this
    problem? What are the short- and long-term readiness impacts of
    continued shortfalls?
        General Keane. The Army exceeded its fiscal year 2000 mid-career
    reenlistment objective and is well on course to exceed the fiscal year
    2001 objective.
        The Army has worked with the other services to address pay, well-
    being, and benefit issues through Congress. We have also taken steps to
    alleviate the impact of a fast-paced military lifestyle on our soldiers
    and their families. Improved child-care facilities and installation
    activities, as well as targeted reenlistment bonuses and improved
    compensation have all played a major role in our success. In the short-
    term, our readiness posture is generally healthy. Like our sister
    services, we have some specialties that we are concerned about, but in
    the aggregate, our force is in good shape. If we maintain current
    recruiting and retention rates, there will be no adverse long-term
    readiness problems. Our recruiting and retention programs have served
    us well in maintaining personnel readiness.
        Admiral Fallon. Navy has developed long-range reenlistment goals
    that reflect our vision to mold the force profile into a desired shape
    which would support and sustain a 75.5 percent Top 6 Pay Grade Enlisted
    Program Authorization (EPA) requirement. The 75.5 percent Top 6 EPA
    requirement reflects Navy's anticipated manpower needs based on future
    technology and weapons platforms. Navy's long-range reenlistment goals
    are listed in the following table along with the reenlistment rates for
    the last 3 fiscal years.

                                            NAVY ENLISTED REENLISTMENT RATES
    ----------------------------------------------------------------------------------------------------------------
                                                                   Zone A  (<6     Zone B  (6+ to    Zone C  (10+ to
                        FYTD (October-June)                          years)           10 years)         14 years)
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1999..........................................             45.8%             60.5%             82.8%
    Fiscal year 2000..........................................             50.3%             62.5%             83.2%
    Fiscal year 2001..........................................             59.4%             67.7%             84.4%
    Long-range Goals..........................................               57%               69%               89%
    ----------------------------------------------------------------------------------------------------------------

        While still somewhat shy of our long-range goal, the reenlistment
    rates for our mid-career (Zone B) sailors has shown steady improvement
    over the levels for the same time period in the previous 2 years. To
    combat any aggregate personnel shortfalls and as a long-term solution,
    we have concentrated on our Zone A or initial term enlistees. If we
    don't keep our sailors the first time, we never have the opportunity to
    keep them again. Our efforts have resulted in a large improvement in
    Zone A reenlistment rates, which represents a significant step in the
    right direction as more of these sailors are opting to stay Navy for a
    second tour. To counter our specific skills shortfalls, we have a very
    robust Selective Reenlistment Bonus (SRB) program that has helped us
    keep individuals with high demand skills within our lifelines in the
    near-term.
        Ultimately, as we continue to build on our retention successes of
    the last 2 years, it is our desire for increased numbers of mid-career
    sailors to reenlist in the Navy for third (and subsequent) tours.
        General Handy. Service specific retention goals are developed to
    support vastly different force structures, yet the challenges we face
    are similar. Within the Air Force, retaining the right number and mix
    of people has become increasingly more difficult. Our expeditionary
    mission and complex weapon systems require an experienced force, and we
    depend on our ability to attract, train, and retain high quality,
    motivated people to maintain our readiness for rapid global deployment.
    While patriotism is the number one reason our people, both officer and
    enlisted, stay in the Air Force, the constant ``push'' and ``pull''
    factors that influence career decisions put our human resources at
    risk.
        During a decade of sustained economic growth, record low
    unemployment, increasing opportunity and financial assistance for
    higher education, and a declining propensity to join the military, we
    have realized a decline in our enlisted experience levels. We expect
    the ``pull'' on our skilled enlisted members to leave the Air Force to
    persist. Businesses place a premium on our members' skills and
    training. In fact, exit surveys indicate the availability of civilian
    jobs is the number one reason our people leave the Air Force. In
    addition to the ``pull'' from the civilian sector, manning shortfalls,
    increased working hours, and TEMPO continue to ``push'' our people out
    of the Air Force.
        Our strategy to address these challenges is based on the premise
    that if we take care of people and their families, many of them will
    stay with us despite the ``push'' of increased TEMPO and ``pull'' from
    the private sector. To combat the ``push'' from within, the Air Force
    implemented structural and cultural changes via Expeditionary Aerospace
    Force concept to enhance responsive force packaging, as well as to
    provide our force more stability and predictability in deployment and
    home station scheduling. We must continue to address the ``pull'' from
    the strong economy by focusing on our core Quality of Life priorities:
    upgrade neglected workplace environments, provide safe and affordable
    housing, adequately compensate our people, enhance community and family
    programs, provide improved educational opportunities, provide quality
    health care, and reduce out-of-pocket expenses for housing, travel, and
    medical expenses. In addition, we are addressing adequate manpower as
    one of our core quality of life priorities. In doing so, we are
    combating TEMPO by balancing resources and requirements. Quality of
    life initiatives are critical to our future. They affect the welfare of
    our men and women and are critical factors to our overall readiness.
        Retention is only one of a number of interrelated factors impacting
    personnel readiness. These factors include home station mission
    demands, availability of training, unit manning, and retention. The Air
    Force's Status of Resources and Training System (SORTS), particularly
    the personnel and training assessment areas, cumulatively reflect the
    impacts of these factors. The prolonged impact of lower than desired
    enlisted retention, particularly the retention of our skilled second-
    term personnel, has been a concern. This loss of experienced personnel
    coupled with an influx of new personnel has created a skills level
    imbalance. This imbalance has placed an even greater burden on those
    who remain in the Air Force than ever before. Experienced personnel
    serve not only as the trainers for these new members, but they are also
    the expertise we call upon to carry out the Air Force mission at home
    and abroad.
        General Williams. The Marine Corps has seen a trend in lower
    continuation rates among its mid-career enlisted personnel. This trend
    has caused our First Term Alignment Plan (FTAP) to steadily increase
    over the last several years.
        We are currently developing a Subsequent Term Alignment Plan (STAP)
    model to clearly identify a reenlistment ``target/goal'' in the mid-
    career enlisted force. We are also in the process of determining how to
    spread our limited Selective Reenlistment Bonus (SRB) resources to
    better support our mid-career force.
        If we continue to see a decline in our mid-career continuation
    rates, we will take remedial action by placing a higher FTAP
    requirement, seeking to reenlist more of our first-term population. The
    drawback of such action is the drop in the experience level we get from
    our career force.

                       NAVY DEPARTMENT BUDGET PRIORITIES

        7. Senator Akaka. Admiral Fallon and General Williams, this budget
    amendment clearly focuses on the personnel and operation and
    maintenance accounts. Within the Department of the Navy, the active
    duty Navy's personnel and O&M accounts would get a 12 increase over the
    current year's level, while the active duty Marine Corps budget goes up
    by 6 percent and the Navy and Marine Corps Reserve budgets would go up
    by just 3 percent.
        What is the rationale for this disparity? Is it your view that
    active duty budgets were underfunded but that the Reserve components
    were not?
        Admiral Fallon. As you are aware, budgetary levels from year-to-
    year vary with departmental requirements, inflation, authorized end-
    strength and congressional action (plus-ups, rescissions, and
    direction). This budget balances short-term needs (manpower and
    readiness) with long-term requirements (infrastructure and
    modernization) in both active and Reserve programs. The budget is
    currently structured with a total force (Active and Reserve) philosophy
    to meet known readiness-related requirements and avoid reliance on a
    supplemental appropriation during execution. When considering
    differences between the Active and Reserve Forces, the most obvious
    factor is the sheer size of the Active vs. Reserve components.
    Additionally, there are significant force structure and manpower
    differences underlying the levels of  O&M and MILPERS funding required
    to meet CNO goals for readiness programs.
        The Department's fiscal year 2002 amended budget has taken positive
    steps to help us take care of today's most pressing readiness problems.
    The total force approach used in determining requirements and funding
    levels ensures adequate resources across active and Reserve, Navy and
    Marine Corps readiness accounts.
        General Williams. The Marine Corps balances resources across four
    pillars upon which our readiness is built--marines and their families,
    current readiness/legacy systems, modernization, and infrastructure--
    with a focus toward near-term readiness accounts. While military
    personnel and operation and maintenance accounts are primarily near-
    term readiness accounts, there are shortfalls in these areas for both
    our Active and Reserve Forces that do not affect our near-term
    readiness. I would like to address our military personnel and operation
    and maintenance accounts separately.
        The fiscal year 2002 Marine Corps active duty military personnel
    account, MPMC, increased 8 percent over the fiscal year 2001 level,
    primarily due to pay raises, increases in Bachelor Allowance for
    Housing (BAH) rates for buying down out-of-pocket expenses, and
    increases in retention bonuses. Our Reserve personnel account, RPMC,
    increased 3 percent over the fiscal year 2001 level due to pay raises
    and increases in BAH. While the fiscal year 2002 budget funds our top
    priority personnel requirements, there are areas in both our active and
    Reserve personnel accounts where we could use additional funding (e.g.,
    additional bonuses, operational tempo relief (Active Duty Special Work
    (ADSW)), and new camouflage utility uniforms).
        The fiscal year 2002 operation and maintenance account for our
    active component, O&MMC, increased by 2 percent over fiscal year 2001,
    and our O&M account for our Reserve component, O&MMCR, decreased by 3
    percent, ($4 million). While these statistics may lead one to believe
    there is a slight inequity between O&M funding for our active and
    Reserve accounts, the primary reason for the reduction in our O&MMCR
    account is congressional increases provided in fiscal year 2001 that
    were not carried forward into fiscal year 2002 for items such as
    initial issue, and a decrease in our Defense Finance and Accounting
    Service (DFAS) bill. The O&M account for our active forces also
    reflects a decrease for fiscal year 2001 congressional plus-ups which
    were not carried forward into fiscal year 2002, as well as a reduction
    in funding for maintenance of real property; however, these decreases
    were offset by increases for utilities, other base operating support,
    and a functional transfer of funds from our procurement account to
    O&MMC for the Navy Marine Corps Intranet (NMCI).
        As is the case with our military personnel accounts, while the
    fiscal year 2002 budget funds our top priority operation and
    maintenance requirements, there are programs in both our Active and
    Reserve Forces where we could use additional funding in fiscal year
    2002 (e.g., maintenance of real property, initial issue, base operating
    support, depot maintenance, and operating forces support). These
    shortfalls do not affect our near-term readiness.

                           RESERVE COMPONENT FUNDING

        8. Senator Akaka. General Keane, Admiral Fallon, General Handy, and
    General Williams, it is my understanding that the percentage of funding
    the active components devote to their respective Reserve components
    varies from service to service. Are you providing adequate resources
    for your Reserve components to perform their missions?
        General Keane. The Army has made great strides over the last few
    budget cycles to address the funding shortfalls in the Reserve
    components. The Reserve components have received significant increases
    in some of our O&M accounts that bring the Active and Reserve
    components close to parity in programs such as OPTEMPO and recruiting
    advertising. The Army continues a full partnership with the Reserve
    components in the defense of our Nation.
        Admiral Fallon. As the committee is well aware, the Chief of Naval
    Operations continues to place heavy reliance on the contributions of
    his Naval Reserve, as reflected in our fiscal year 2002 amended budget
    submit. The programming guidelines for the Reserve's operational
    readiness accounts, identical to the active Navy, have ensured that
    there is adequate resourcing for the Naval Reserve to perform its
    mission in FY02. Like the active component, the Naval Reserve will
    benefit from significant increases in Flying Hour Program ($33
    million), Base Operations Support ($13 million), and Depot Maintenance
    ($22 million) funding if the submit is approved.
        In addition to sharing the budget's increases with the Active
    component, however, the Reserves also share in its shortfalls. In a 6
    July 2001 letter sent to Representative Skelton of the House Armed
    Services Committee, the CNO presented a list of requirements that are
    not funded in the fiscal year 2002 amended budget submit totaling $12.4
    billion. Included in this total is a $10 million shortfall in the
    Reserve Personnel Navy appropriation (RPN), a $48 million shortfall in
    Operations and Maintenance, Navy Reserve (O&MNR), and a $44 million
    shortfall in Military Construction, Navy Reserve (MCNR). If funding
    were made available to all the programs as specified in the letter, the
    Navy would be able to maintain all force readiness programs throughout
    the year.
        General Handy. The Air Force tries to provide adequate funding to
    support Reserve component requirements. In the Air Force, we cannot
    perform our missions without their important contributions. The Reserve
    components are no longer a force in Reserve but are full partners in
    the total force. From a resource perspective, the Air Force ensures
    that the personnel accounts and flying hour programs permit the Reserve
    components to attract and retain quality people. Funding levels for
    aircraft depot maintenance are approximately the same as the active Air
    Force. In addition, their facilities compete for funding using the same
    criteria as applied to active Air Force facilities. Unfortunately, we
    have not been able to identify significant additional funding for
    modernization and equipment upgrades but make incremental progress in
    areas important to the integration of the Reserve components into the
    total force.
        General Williams. The Marine Corps Reserve is represented fully in
    the Marine Corps resourcing process and receives an equitable share of
    available funding. As part of our total force policy, Marine Corps
    equipment procurement is accomplished through our single acquisition
    objective process, wherein all requirements, to include sustainability
    requirements for both the Active and Reserve component, are considered
    and resourced. This single acquisition strategy ensures the Reserve
    component receives the same equipment as the active component. In
    summary, the Marine Corps Reserve is provided adequate resources,
    within a balanced Marine Corps Total Force Program, to accomplish its
    mission.

                                FORCE PROTECTION

        9. Senator Akaka. General Keane, Admiral Fallon, General Handy, and
    General Williams, some of you have mentioned efforts to improve force
    protection. Will you review what you consider to be your most important
    initiatives in the fiscal year 2002 budget request to address force
    protection concerns? What steps are you taking to ensure that force
    protection needs are met, while we maintain readiness and our
    engagement with other nations? Do the Reserve components have specific
    roles to play in force protection and antiterrorism missions?
        General Keane. The Army has taken several initiatives to enhance
    force protection (FP). The primary initiative requiring funding is
    controlled access to Army installations 24 hours a day, 7 days a week,
    and mandatory vehicle registration. The Army is also implementing the
    recommendations and initiatives from the Cole Commission Report, as
    well as initiatives resulting from antiterrorism (AT) vulnerability and
    physical security assessments of all Army installations conducted from
    1997 to 2001.
        General Shinseki directed an Army-wide assessment of the Army's
    antiterrorism/force protection (AT/FP) posture, inspecting all Major
    Commands (MACOMs) and installations required to have an AT plan. An FP
    assessment and training program will be implemented in fiscal year 2002
    based on lessons learned from this review.
        Our antiterrorism policy is being rewritten, and the final draft of
    a new antiterrorism regulation is being staffed. An installation
    commander's guide for antiterrorism and force protection was published
    in March 2000. In-transit tracking of threat assessments to units
    moving through high-risk areas was instituted in April 2001. AT/FP
    training has been elevated to the equivalent of primary mission area,
    and AT training will be integrated into unit collective and individual
    training. AT scenarios will be included in all combat training center
    and battle command training program rotations, as well as mission
    rehearsals and pre-deployment training. AT training has been enhanced
    and consolidated and a new AT officer course will begin in August 2001.
    Antiterrorism operational assessment teams are being established by all
    MACOMs to test the security procedures of installations. An AT
    reporting system is being finalized as part of the annual installation
    status report to show installation shortfalls to better understand how
    to improve installation AT readiness. Army-wide standards are being
    implemented for explosive detector dog teams.
        The Army Reserve and National Guard have the same responsibilities
    and fall under the same programs as the active component. A March 2001
    draft Army Homeland Security Strategic Planning Guidance outlines the
    Army's responsibility in conducting domestic support operations as part
    of the DOD's commitment to defend the United States.
        Admiral Fallon. We have included a variety of new initiatives in
    the fiscal year 2002 budget request. The Navy has increased and
    accelerated the procurement of harbor patrol boats for our
    installations, which are essential for the monitoring of our waterside
    perimeter. Additionally, we have designated funds for waterborne
    barrier systems and waterside security systems. These are designed to
    establish the necessary standoff to protect our vital assets and
    further increase the monitoring of our perimeter. There are also
    significant funds designated for personnel. We are increasing the
    number of Master at Arms billets throughout the fleets to further
    develop the Navy's professional security force. Equally important, NCIS
    is adding additional special agents, analysts, and security specialists
    for overseas and domestic support of our ships and aircraft.
        The Navy continues to work closely with the Department of State  to
    ensure our force protection needs are met while retaining our essential
    role of engagement with foreign countries. Secretary Powell issued a
    cable calling upon all country teams to work with the Navy in
    establishing desired security support from our host nations. Host
    nation cooperation continues to be a challenge. However, with the
    strong support of State Department we are working through these issues.
        Reserve components are a vital piece in our force protection
    activities. The Navy has Naval Reserve Force protection and law
    enforcement teams augmenting CINC security forces worldwide. Additional
    Reserve personnel are augmenting base security forces and are assigned
    to support security teams during special events. Naval coastal warfare
    units and Coast Guard port security units, both manned by reservists,
    provide security for harbors in CENTCOM. Additionally, the Navy
    incorporates Reserve support for the completion of Port Integrated
    Vulnerability Assessments (PIVA) worldwide. Finally, numerous Master at
    Arms reservists have returned to active duty to support the growing
    demand for security personnel.
        General Handy. In December 2000 we completed our first 3-year cycle
    of conducting higher-headquarters integrated vulnerability assessments
    at all 99 of our major active and Reserve installations. In addition,
    although not required until federalization, we have already assessed 19
    of the 72 Air National Guard bases. Our most important force protection
    initiatives in the fiscal year 2002 budget request are to fix the
    equipment and training shortfalls identified in those vulnerability
    assessments which place the most people and resources at risk. The
    assessments identified shortfalls in personal protective equipment,
    alarms and sensors, thermal imagers, moveable barriers, and other
    equipment items.
        We are putting organizational and fiscal emphasis on force
    protection to ensure our needs are met while maintaining readiness and
    engagement with other nations. The majority of the $89 million added in
    our fiscal year 2002 force protection request is for equipment
    upgrades. We are making force protection an enabler of all mission
    areas. For example, we're improving defensive countermeasures for
    aircraft and more aggressively using ISR at the tactical and strategic
    levels for force protection. Finally, we're making greater use of
    robotics for explosive disposal and purchasing better sensors and
    upgraded small arms to improve our force protection posture.
        The Reserve components have become fully integrated into our total
    force. They provide personnel in support of Aerospace Expeditionary
    Forces and also provide day-to-day protection for their home stations.
    They face the same force protection challenges and risks as their
    active counterparts.
        General Williams. Our most important force protection initiative is
    effective first responder capability to a weapon of mass destruction
    (WMD) event. First responders are law enforcement, firefighter,
    emergency medical, selected facilities, and command personnel. Our
    fiscal year 2002 budget request includes funding for communications
    equipment suites to allow Marine Corps first responders to communicate
    with their civilian counterparts. Mutual aid and support with the
    civilian community is essential if we are to respond effectively to a
    WMD event. It also includes funding for mass notification systems.
    These systems provide instantaneous notification of installation
    personnel in the event of a change in the force protection condition,
    or any base-wide emergency.
        Training is an essential part of our Anti-Terrorism/Force
    Protection (AT/FP) program. We have sought additional funding to
    conduct AT/FP training and exercises. We recently completed a bio-
    terrorism table-top exercise at Camp Pendleton that reinforces the
    requirement that this be a community-wide response, and that our
    installations are part of the larger community. We intend to pursue
    additional exercises of this nature to ensure well-established lines of
    communication with our Federal, state, and local counterparts.
        In ensuring that our future force protection needs are met, we
    remain convinced that the best force protection measure is, and will
    continue to be, a well-trained marine. We will continue to devote the
    resources necessary to train our marines and commanders to recognize
    the threat and be prepared to protect themselves and others from
    terrorist events. An example of our engagement with other nations in
    this regard is the recent deployment of our Chemical and Biological
    Incident Response Force (CBIRF) to the Middle East where they trained
    with their counterparts in Bahrain and Jordan.
        The Marine Corps Reserve provides marine emergency preparedness
    liaison officers to support the ten FEMA regions and the two
    continental U.S. armies. They coordinate Marine Corps support to the
    lead Federal agencies in the event of a disaster or a large-scale
    emergency.

                             ARMY DEPOT MAINTENANCE

        10. Senator Akaka. General Keane, what percentage of Army
    requirements for depot maintenance of ground combat equipment and
    aviation equipment would the fiscal year 2002 budget amendment fund?
        General Keane. Ground depot maintenance is funded to 75 percent of
    requirements in fiscal year 2002, and aircraft depot maintenance is
    funded to 51 percent of requirements in fiscal year 2002.
                                     ______

                  Questions Submitted by Senator Rick Santorum

                                  FASTER SHIPS

        11. Senator Santorum. Admiral Fallon, the June 21, 2001 edition of
    the Wall Street Journal reported that the Department of Defense is
    reassessing the strategy of waging two major conflicts simultaneously
    because of its focus on current rather than future threats.
    Specifically, the article discussed the use of new technologies such as
    faster ships to address future threats in light of the increased
    intelligence capabilities of potential enemy states.
        As you may be aware, the FastShip project of Philadelphia involves
    the use of Maritime Administration Title XI loan guarantees to finance
    the construction of four 38-knot, U.S.-flag, roll-on/roll-off,
    commercial cargo ships, with the research and development costs for
    this project already being borne by the private sector. Each of these
    ships is capable of transporting 300 helicopters to the Persian Gulf in
    less than 11 days and of carrying 10,000 tons of military cargo over
    about 5,000 nautical miles at a speed of 36 knots without refueling.
        In your opinion, would the availability of such a fast sealift
    vessel be consistent with DOD's new emphasis?
        Admiral Fallon. We recognize that aspects of some military service
    missions may be enhanced by the use of high-speed sealift. No joint
    OSD/JCS mobility studies have been conducted that specify a requirement
    for such ships in inter-theater service.

        12. Senator Santorum. Admiral Fallon, would you support increased
    funding for the Title XI loan guarantee program to allow for the
    construction of such militarily useful vessels?
        Admiral Fallon. The administration does not support increased
    funding for the Title XI program. FastShip can compete for funds
    remaining in the program.

        [Whereupon, at 11:31 a.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2002

                                  ----------

                            THURSDAY, AUGUST 2, 2001

                               U.S. Senate,
                      Subcommittee on Readiness
                                and Management Support,
                                   Committee on Armed Services,
                                                        Washington, DC.

       INSTALLATION PROGRAMS, MILITARY CONSTRUCTION PROGRAMS, AND FAMILY
                                HOUSING PROGRAMS

        The subcommittee met, pursuant to notice, at 2:30 p.m. in
    room SR-232A, Russell Senate Office Building, Senator Daniel K.
    Akaka (chairman of the subcommittee) presiding.
        Committee members present: Senators Akaka, Levin, and
    Inhofe.
        Committee staff members present: David S. Lyles, staff
    director.
        Majority staff members present: Maren Leed, professional
    staff member; Peter K. Levine, general counsel; and Michael
    McCord, professional staff member.
        Minority staff members present: George W. Lauffer,
    professional staff member; Ann M. Mittermeyer, minority
    counsel; and Cord A. Sterling, professional staff member.
        Staff assistants present: Gabriella Eisen, Jennifer L.
    Naccari, and Daniel K. Goldsmith.
        Committee members' assistants present: Christina Evans,
    assistant to Senator Byrd; Davelyn Noelani Kalipi, assistant to
    Senator Akaka; Brady King, assistant to Senator Dayton; John A.
    Bonsell, assistant to Senator Inhofe; George M. Bernier III,
    assistant to Senator Santorum; Robert Alan McCurry, assistant
    to Senator Roberts; and Derek Maurer, assistant to Senator
    Bunning.

         OPENING STATEMENT OF SENATOR DANIEL K. AKAKA, CHAIRMAN

        Senator Akaka. The subcommittee will come to order. I want
    to say good afternoon to all of you and especially to the
    witnesses, welcome. The Readiness and Management Support
    Subcommittee meets today to review the amended budget request
    for fiscal year 2002 for military construction, family housing
    and other installation programs of the Department of Defense.
    We had originally planned to have this hearing 3 weeks ago, but
    we had to postpone it. I am pleased that we were able to
    reschedule this hearing and thank the witnesses for their
    cooperation in this effort.
        This afternoon we will hear from Mr. Ray DuBois, the Deputy
    Under Secretary of Defense for Installations and Environment,
    and from senior military representatives from each service:
    Maj. Gen. Robert Van Antwerp, the Assistant Chief of Staff of
    the Army for Installation Management; Rear Adm. Michael
    Johnson, Commander of the Naval Facilities Engineering Command;
    Maj. Gen. Earnest Robbins, The Civil Engineer of the Air Force;
    and Lt. Gen. Gary McKissock, the Deputy Commandant of the
    Marine Corps for Installations and Logistics.
        We are still receiving and reviewing the details of the
    fiscal year 2002 budget request. Today we will ask our
    witnesses to provide an overview of their budget requests for
    military construction and family housing programs, and what
    philosophies and priorities you used in putting the request
    together.
        This year's budget makes a substantial investment in the
    Department's facilities, an area that has been too low on the
    funding priority lists of the Department for too long now.
    Despite an increase in emphasis on quality of life in recent
    years, we still have a long way to go to get all our facilities
    up to the level our men and women in uniform deserve. This
    year's budget request for installation programs is a step in
    the right direction. Both the Department of Defense and
    Congress need to make sure we make a sustained effort to
    address these issues in the coming years, because a one-time
    increase is not enough to solve this problem.
        I want to take a moment before we turn to our witnesses to
    recognize the contributions of Paul Johnson, the senior career
    civilian responsible for installation and military construction
    issues in the Department of the Army, who is retiring this week
    after over 50 years of Federal military and civilian service.
    Eighteen of those years were spent in his current position as
    Deputy Assistant Secretary of the Army for Installations and
    Housing. This is a remarkable record of public service. Many of
    us have worked with Paul Johnson over the years to resolve
    difficult issues in our States. On behalf of the subcommittee I
    want to congratulate him on a job well done. I am sure General
    Van Antwerp would agree that his retirement leaves big shoes to
    fill in the Army's management of its facilities.
        So, I would like to say thank you very much Paul Johnson
    for your service. Will you rise to be recognized if you are
    here, Paul?
        General Van Antwerp. Sir, he is not here, but I will pass
    those kind words on to him.
        Senator Akaka. Please do that.
        General Van Antwerp. We had a wonderful farewell for him
    yesterday.
        Senator Akaka. Tell him I asked him to rise.
        General Van Antwerp. I will tell him, thank you sir. I will
    make him stand on your behalf.
        Senator Akaka. Thank you so much. Finally, I would like to
    apologize in advance to our witnesses for my temporary absence
    during this hearing. I must attend a hearing and markup in
    another committee this afternoon and I will return as soon as I
    am able. In the meantime, Senator Inhofe is here, though he has
    to leave as well.

                  STATEMENT OF SENATOR JAMES M. INHOFE

        Senator Inhofe. We have a serious problem, Mr. Chairman. So
    that everyone understands, the reason we have several
    Republicans missing is that Mr. Bunning, Mr. Smith and I are
    meeting with the President at 3 o'clock. It is of a nature that
    we really have to be there. So, I apologize. I am going to
    waive my statement, but I would like to enter it for the
    record. There are a couple of things that I wanted to get to,
    but I am going to have to leave, so I do not know how you want
    to do this Mr. Chairman.
        Senator Akaka. Yes, I thank you for doing what you are
    doing. We will enter your statement in the record. My reason
    for leaving, I want to tell you, I must introduce someone in
    another committee. However, I will be right back after that. It
    should take me just about 5 minutes. I will now call upon our
    witnesses and would ask each of you, as we usually do, to try
    to summarize your statements in 5 minutes. Without objection
    your entire printed statements will be included in the record
    of this hearing.

                 Prepared Statement by Senator James M. Inhofe

        Mr. Chairman, I want to join you in welcoming our witnesses.
    Although the military construction and sustainment, restoration, and
    modernization (SRM)-RPM to the old timers--accounts are funded at the
    highest levels since I began my service in the Senate, the challenges
    of carrying out the program have not diminished. Each of our service
    representatives has a long history of working with this subcommittee
    and I have the highest regard for their abilities to get the job done.
    Mr. DuBois, congratulations on your appointment as the Deputy Under
    Secretary of Defense for Installations and Environment. I expect we
    will be seeing a great deal of you and I hope you will not hesitate to
    contact the subcommittee for consultation on the many issues that you
    will need to resolve in the coming months.
        As I indicated, this is a robust military construction and family
    housing funding request. The $10 billion request represents a $1.2
    billion increase over the fiscal year 2001 enacted level and is a
    strong indicator of the administration's commitment to improving the
    living and working conditions of our military personnel and their
    families. I especially want to recognize Secretary Rumsfeld for his
    emphasis on working conditions. I have always contended that the
    conditions of the facilities where our sailors, soldiers, airmen, and
    marines work is not only a readiness, but also a quality of life issue.
    The working conditions of our people have as much of an influence on
    retention as do the barracks and family housing. This budget request
    reflects that philosophy in that the request for maintenance and
    production facilities is almost twice the amount requested last year.
    Although on the grand scheme this is a good military construction
    (MILCON) program, I am concerned that it will create expectations the
    administration will not be able to fulfill in the out years as the
    bills for equipment modernization and the transformation become due.
        Mr. Chairman, finally, I believe this subcommittee had a critical
    role in bringing a focus on the Department's lack of direction on
    facility replacement. Over the past several years, the subcommittee has
    held hearings on real property management and the Department's
    underfunding of both the military construction and RPM accounts. The
    hearings identified a lack of standard and directions of facility
    management. This year's budget sets the goal for facility replacement
    at 67 years. This standard, although not achieved in this budget, will
    reduce the replacement cycle for our facilities from more than 200
    years, and, in the long-term perspective reduce the operating cost of
    our facilities.
        Mr. Chairman, this is a good MILCON budget for the people and the
    Nation. Our task is to ensure that the standards set by this request
    are carried out in future budgets.

        Senator Akaka. I would like to begin with Mr. DuBois, who
    serves as principal advisor to the Secretary of Defense on
    issues affecting military installations, including military
    construction, family housing, base closure, and environmental
    issues. This is your first appearance before this subcommittee
    and we welcome you and look forward to working with you in the
    future.
        Mr. DuBois.

    STATEMENT OF RAYMOND F. DuBOIS, JR., DEPUTY UNDER SECRETARY OF
                 DEFENSE, INSTALLATIONS AND ENVIRONMENT

        Mr. DuBois. Thank you, Mr. Chairman. In order to try and
    telescope our opening statements the distinguished gentlemen on
    my right and left have agreed to dispense with theirs and I
    will make just a few opening remarks. The Secretary of Defense
    has testified that his strategic review and ultimately the
    Quadrennial Defense Review (QDR) will place a high priority on
    the adequacy of installations. The importance of installations
    is reflected in the budget, which includes a substantial
    increase in resources for installations and facilities.
        Four key recommendations included in that budget submission
    are that installations must be adequately funded, number one.
    Number two, facilities must be sustained. Number three, the
    facilities must be modernized. Number four, the facilities must
    be restored.
        A fifth point, however, needs to be mentioned. A few
    minutes ago Under Secretary of Defense Pete Aldridge made the
    announcement at the Pentagon that the Department of Defense
    would be forwarding to Congress prior to the recess, proposed
    legislative language pertaining to an efficient facilities
    initiative. I am sure there will be some questions around that,
    but just let me say that Secretary Rumsfeld and the entire
    department believe that this infrastructure realignment and
    reduction is a necessary ingredient to husbanding, if you will,
    the resources that you appropriate for us.
        Facilities sustainment, restoration and modernization
    investments will, as a practical matter should we be authorized
    to enter into this process, not be stretched so far. In that
    light, the Secretary also signed yesterday a memorandum, a
    directive if you will, to the CINCs to develop an overseas
    strategic basing plan, which is due to the Secretary 6 months
    subsequent to the completion of the QDR.
        Finally, Mr. Chairman, to ensure that our facilities
    deficiencies are eliminated in the long run we continue to
    refine the long-range facilities strategic plan. In addition,
    your comments about, ``Would this be a one-time fix,'' if you
    will, ``to the problems that we have with respect to
    installations and facilities?'' Our answer is that we are going
    to work very hard to enter into the Future Years Defense
    Program (FYDP) with the involvement of the three military
    departments and appropriate levels of spending that will
    continue to bring down our recapitalization rate, as we did
    this year from 192 years to slightly over 100 years. Our
    objective, as you probably know, is 67 years.
        In conclusion, Mr. Chairman, thank you again very much for
    the opportunity to appear, and my colleagues and I will try to
    answer your questions to the best of our ability.
        [The prepared statement of Mr. DuBois follows:]

                  Prepared Statement by Raymond F. DuBois, Jr.

                                  INTRODUCTION

        Mr. Chairman and distinguished members of this subcommittee, thank
    you for the opportunity to discuss the Department of Defense's fiscal
    year 2002 programs for military installations and facilities. Our
    military installations and facilities are integral components of
    military readiness. I look forward to working with you to ensure that
    they continue to support America's military superiority and the men and
    women who live and work at our installations.
        I will address our infrastructure and our plan for its improvement,
    our military construction and family housing request, our operations
    and maintenance request, proposed legislation, the installations'
    vision for the future and our action plan.

                      RENEWING THE INSTALLATIONS FRAMEWORK

        For years we allowed our installations and facilities to
    deteriorate due to competing budget priorities and indeterminate
    requirements. Last year's Installations Readiness Report showed 69
    percent of the Department's facilities are rated C-3 (have serious
    deficiencies) or C-4 (do not support mission requirements). Much of our
    infrastructure--the seen and the unseen--is old and in various stages
    of decline. Our average facilities age across the Department is 41
    years. Without adequate sustainment and recapitalization, facility
    performance degenerates, operational readiness and mission support
    suffer, service life is lost, and total costs rise.
        This administration is committed to restoring our installations and
    facilities to perform as designed. Secretary Rumsfeld has stated that
    the fiscal year 2002 budget balances ``preparation for the future with
    current needs--through robust funding to improve morale, boost
    readiness, transform defense capabilities and upgrade aging
    facilities.'' We are breaking the current cycle of ``pay me now or pay
    me much more later,'' and our fiscal year 2002 budget initiates an
    aggressive program to renew our facilities.
        For fiscal year 2002, we are requesting a total of $10 billion for
    military construction, family housing and base realignments and
    closures, an increase of $2 billion over the previously submitted
    fiscal year 2002 budget request. The amended fiscal year 2002 request
    represents the down payment on a long-range plan to streamline and
    improve the performance of our facilities and housing. Key to achieving
    the long-range goal will be successful implementation of the
    Department's Efficient Facilities Initiative (EFI), designed to realign
    and reduce base infrastructure by approximately 25 percent, and
    ultimately, save several billion dollars annually. We must also fully
    sustain our facilities and halt, actually, reverse the unacceptable
    aging of the Department's facilities by accelerating our
    recapitalization rates. Finally, we must restore the readiness of
    inadequate facilities, modernize facilities to meet future challenges,
    and dispose of, or demolish, obsolete facilities.

                               SUMMARY OF REQUEST
              [Estimated President's Budget as amended--$ Billions]
    ------------------------------------------------------------------------
                                                                Fiscal Year
                           Facilities                          2002 Request
    ------------------------------------------------------------------------
    Real Property Services (O&M)............................            4.0
    Sustainment (O&M).......................................            5.3
    Restoration and Modernization (O&M/MilCon)..............            4.1
    New Footprint (MilCon)..................................            2.0
    ------------------------------------------------------------------------

        Two principles guide our effort to improve and maintain our
    infrastructure: first, the quality of our infrastructure directly
    impacts readiness; and second, it is more cost effective in the long-
    term to ensure facilities perform as they are designed than it is to
    allow them to deteriorate and replace them when they are not useable.
    By investing money now and sustaining that investment over time, we
    will restore and sustain readiness, stabilize and reduce the average
    age of our physical plant, reduce operations costs, and maximize our
    return on investment. We plan a comprehensive review of our
    infrastructure needs through 2020 during the ongoing Quadrennial
    Defense Review.
        Secretary Rumsfeld has made it quite clear that he intends to
    significantly change the business practices of the Department. Not that
    terminology causes change, but it certainly sends a rhetorical signal
    that the Secretary is serious about not just transforming our force
    structure but also our infrastructure by virtue of military
    requirements and necessity. We use outcome-oriented terms that
    emphasize performance--sustainment, restoration, and modernization
    (SRM)--rather than the misleading legacy term ``real property
    maintenance'' (RPM) that represents just one activity of many. Our
    Facilities Sustainment Program funds the required and scheduled
    maintenance and repairs for the inventory using operations and
    maintenance funds. Sustainment preserves the inventory and allows it to
    reach its expected service life. Our Facilities Restoration and
    Modernization Program repairs or replaces damaged or obsolete
    facilities and implements new or higher standards where necessary. The
    restoration and modernization terminology recognizes the contribution
    of both military construction and operations and maintenance
    appropriations to recapitalizing our facilities and housing.

                MILITARY CONSTRUCTION AND FAMILY HOUSING REQUEST

        The fiscal year 2002 amended budget request for the military
    construction and family housing program is robust. Over $2 billion was
    recently added to the military construction request, targeted toward
    replacing or renovating what we currently own. This investment takes
    the Department from a recapitalization rate of 192 years to a rate of
    101 years in fiscal year 2002--much closer to the Department's goal of
    a 67-year replacement cycle. Most importantly, this funding should aid
    the Department in moving toward restoring its facilities to at least a
    C-2 readiness condition.
        Our fiscal year 2002 request for military construction is $5.9
    billion, of which $5.2 billion is for regular military construction--an
    increase of 46 percent over last year's request, $163 million is for
    NATO security investment, and $524 million is for implementing
    previously legislated base realignments and closures.
        We are requesting $1.1 billion for family housing construction and
    $3.0 billion for operating and maintaining our almost 300,000 family
    housing units. This budget request reflects the Department's initiative
    to restore and modernize its existing facilities and also reflects
    President Bush's initiative to improve housing for our service members
    and their families. On February 12, 2001, in a speech to the troops at
    Fort Stewart, Georgia, President Bush stated that ``we owe you and your
    families a decent quality of life. We owe you the training and
    equipment you need to do your jobs. . . . You and your families are the
    foundation of America's military readiness.'' Secretary Rumsfeld added
    $400 million to the program to make this a reality, increasing the
    family housing construction program by over one third. A substantial
    portion of this increase will be utilized to increase our housing
    privatization efforts, which allow us to leverage our appropriated
    funds and improve the quality of our housing more rapidly.

                             COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
                                       [President's Budget as amended--$ millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year                     Fiscal Year
                                                                         2001 \1\       Fiscal Year        2002
                                                                       Appropriation    2001 Final     Appropriation
                                                                          Request      Appropriation      Request
    ----------------------------------------------------------------------------------------------------------------
    Military Construction...........................................         3,189.1         4,215.3           5,210
    NATO Security Investment Program................................             190             172           162.6
    Base Realignment and Closure IV.................................         1,174.4         1,024.4           532.2
    Family Housing Construction.....................................             748           904.1         1,114.4
    Family Housing Operations & Debt................................         2,732.1         2,701.1           2,940
    Homeowners Assistance...........................................  ..............  ..............            10.1
                                                                     -----------------------------------------------
        Total.......................................................         8,033.6         9,016.9         9969.3
    ----------------------------------------------------------------------------------------------------------------
    \1\ Does not include FY01 supplemental request. Does not include general provision (sec. 125 and 132)
      reductions.

        Contingency Funding: Military construction projects typically
    include contingency funds to address problems that arise due to changes
    in missions changes or design, unanticipated site conditions, or other
    unexpected circumstances. The Department's fiscal year 2002 budget
    request includes a 5 percent contingency for all of the services and
    defense agencies.
        NATO Security Investment Program: The NATO Security Investment
    Program (NSIP) provides for the acquisition of common use systems and
    equipment; construction, upgrade and restoration of operational
    facilities; and other related program and projects in support of NATO.
    The request for the NATO Security Investment Program (NSIP) is $163
    million in fiscal year 2002. The Department anticipates recoupments of
    approximately $11 million, and together with unliquidated balances of
    $25.4 million from prior years, the NSIP program will total $199.4
    million.
        Completion of Prior Base Realignment and Closure (BRAC) Rounds: The
    fiscal year 2002 budget requests $524 million in BRAC appropriations to
    complete prior rounds, which is less than half of our fiscal year 2001
    request. Over 86 percent is for environmental cleanup and the balance
    will support operations and maintenance costs. We currently estimate
    that the four previous BRAC rounds will save approximately $15 billion
    through fiscal year 2001 and generate an estimated $6 billion in annual
    recurring savings thereafter.
        Overseas Construction: The fiscal year 2002 budget for military
    construction at overseas bases is $720 million for regular
    construction. Over $350 million is directed toward projects that
    support quality of life issues such as child development centers,
    family housing, enlisted barracks, school facilities and medical/dental
    facility upgrades. The remaining projects are operational or support
    facilities.

                       OPERATIONS AND MAINTENANCE REQUEST

        We are requesting $10.3 billion to fund installations' operations
    and maintenance costs in fiscal year 2002. Of this total, $4.0 billion
    will provide real property services (RPS) support and $6.3 billion will
    provide for facilities sustainment, restoration, and modernization
    (SRM) and the demolition of unneeded facilities. RPS is a must-pay
    cost, and it funds contracts such as grounds maintenance, painting and
    elevator and crane maintenance. Sustainment funds pay for the day-to-
    day maintenance and repair costs. Restoration and modernization funds
    major repairs and upgrades to damaged or obsolete facilities and
    infrastructure.
        The demolition program has been a success story for the Department.
    In May 1998, we set a goal to eliminate 80 million square feet of
    obsolete facilities by 2003. Over the past 3 years, the Department
    demolished and disposed of over 44.9 million square feet of excess and
    obsolete facilities and other structures, such as fuel tanks and engine
    test pads, and the program is 5.5 million square feet ahead of our
    goal. The program has been expanded to include several defense agencies
    and will continue past its current planned completion in 2003.

                         POSSIBLE ENABLING LEGISLATION

        During this past year, we have actively solicited ideas from the
    services, our public employees, private industry, and local communities
    to improve the operation and management of our installations. Based
    upon this feedback, we have submitted several legislative proposals for
    your consideration, and we are also examining other innovative ideas:
    Legislative Proposals
             Amend Section 2805 of Title 10 United States Code to
            increase the minor construction threshold from $500,000 to
            $750,000 and from $1,000,000 to $1,500,000 for projects
            involving life safety issues. The current threshold limits the
            Department's ability to complete projects in areas with high
            costs of construction. Without this relief, there may be a 2 or
            3 year delay in completing smaller, unforeseen construction
            projects if the Department of Defense components must submit
            such projects for military construction appropriations.
             Amend the 1990 and 1988 base closure statutes to
            revise the guidelines for leasebacks. The proposed legislation
            seeks authority for Federal tenants to obtain facility services
            and common area maintenance directly from the local
            redevelopment authority (LRA) or the LRA's assignee as part of
            the leaseback arrangement rather than procure such services
            competitively in compliance with Federal procurement laws and
            regulations. The proposed legislation also expands the
            availability of the leaseback authority to property on bases
            approved for closure through the 1988 base closure statute.
             Amend Section 2853(d) of Title 10 United States Code
            to exclude environmental hazard remediation from the 25 percent
            allowable cost increases on construction projects. This
            provision would not change in any way our environmental
            responsibilities. It would give us flexibility to use existing
            funds to respond to requirements while moving ahead with
            construction. Experience has shown that unforeseen
            environmental cleanup costs alone can account for more than 25
            percent of cost increases, a problem that becomes unmanageable
            if construction costs are also higher than anticipated. With
            the current situation, some military construction projects must
            be stopped prior to completion so as not to exceed the current
            25 percent cap. Excluding unforeseen environmental hazard
            remediation from the cap provides greater flexibility and
            enables the Department to more expeditiously execute contracts
            and respond to the unforeseen environmental conditions.
             Amend Section 276a of Title 40, United States Code to
            increase the thresholds for application of the Davis-Bacon Act
            from $2,000 to $1,000,000. This threshold has remained
            unchanged for over 35 years. Increasing the threshold reduces
            costs, provides greater flexibility in purchasing commercial
            items, simplifies acquisition procedures and competition
            requirements, and enables the Federal Government to conduct
            business in a more commercial manner. The Department could
            achieve savings of $190 million in fiscal year 2002 alone if
            this threshold is increased.
    Ideas Undergoing Departmental Consideration
             The Efficient Facilities Initiative is an effort by
            the Department to achieve an approximately 25 percent reduction
            in base infrastructure. This initiative is key to allowing the
            Department to more efficiently support force structure,
            increase operational readiness, and facilitate new ways of
            doing business.
             The Department is considering the possibility of
            extending the authorities contained in the Brooks Air Force
            Base Development Demonstration Project (Section 136 of the
            Military Construction Appropriations Act, 2001, Public Law 106-
            246) to all military installations. This effort would permit
            the Military Departments to explore ways of supporting their
            missions and people more effectively and at less cost while
            maintaining operational readiness.

             We are considering the amendment of Section 2801
            (Alternative Authority for Construction and Improvement of
            Military Housing), Chapter 169 of Title 10, United States Code,
            to provide permanent authority to the Military Housing
            Privatization Initiative (current program authority expires in
            December 2004). We are also examining the MHPI to determine any
            lessons learned and recommend any legislative changes to
            improve the process.

                             INSTALLATIONS' VISION

        To ensure that our facility deficiencies are eliminated in the long
    run, the Department is articulating a long-term Facilities Strategic
    Plan with a time horizon consistent with the military operations that
    installations support. The Facilities Strategic Plan is the foundation
    for long-term initiatives directly linked to our mission, our vision
    for installations, our goals, and the needs of our customers. Our
    installations' vision recognizes that America's security depends on
    installations and facilities that are available when and where needed
    with the capabilities necessary to support current and future military
    requirements. The Facilities Strategic Plan is based on four goals:
    right size and place, right quality, right resources, and right tools
    and metrics. Accomplishing these four goals will enable us to create
    the installations required to support a 21st century military.
        Right Sizing and Locating Our Installations and Facilities: We must
    shape and size our infrastructure on the basis of military necessity.
    Our first goal is to improve the balance between the installations and
    facilities inventory on hand and the inventory required by today's and
    tomorrow's military forces and missions. This also includes preserving
    access to and integrity of the Department's operational test and
    training ranges from encroachment issues. Right sizing through the
    Efficient Facilities Initiative also allows the Department to align
    operational forces with the installations best suited to their 21st
    century missions. Our Facilities Strategic Plan assumes that 25 percent
    of the current inventory will become excess to future needs and can be
    disposed through additional base realignments and closures.
        The Department has been successful in reducing infrastructure
    through previous base closures and realignments. By the end of fiscal
    year 2001, the Department will complete implementation of the base
    realignment and closure recommendations, to include the closure of 97
    and realignment of 55 major installations. We are looking at ways to
    enhance the initiative to privatize our utility infrastructure and are
    revisiting program guidance and goals to incorporate lessons learned
    and input from industry.
        Providing the Right Quality Installations and Facilities: Our
    second goal is to provide facilities that possess the qualities needed
    to support military operations, training, maintenance, housing and
    community support, which in turn, enable readiness. ``Right quality''
    means facilities capable of meeting warfighting missions and enhancing
    quality of life for our service members and their families. As General
    Shelton, Chairman of the Joint Chiefs of Staff, said during a speech at
    the Defense Orientation Conference Association Annual Meeting on
    October 4, 2000 ``. . . we must not continue to ignore the aging
    infrastructure at our posts, bases and stations that has such a
    dramatic impact on our service members' quality of life.''
        The Department has accelerated the restoration of degraded
    facilities by requesting $4 billion for fiscal year 2002 for facilities
    restoration and modernization. Many facilities with current readiness
    ratings of C-3 or C-4 will be improved to C-2 readiness condition as a
    result.
        Providing the Right Resources: Our third goal is to allocate the
    right resources to achieve the right size and quality of our
    installations and facilities. Sustainment requirements are computed
    using the Facilities Sustainment Model, which determines sustainment
    costs based on commercial benchmarks and the planned inventory.
    Recapitalization requirements are computed using a standard design life
    on average for all facilities of 67 years. New footprint construction
    is determined based on service and defense agency requirements to meet
    new missions or to satisfy long-standing deficiencies.
        Using the Right Tools and Metrics: Our fourth goal is to develop
    analytical tools and metrics to allow us to more accurately develop our
    requirements and assess our level of improvement. We are implementing
    management tools and performance measures to enable us to assess the
    current and future condition of our physical plant and directly link
    them to our Installations' Readiness Report.
        Over the past year, the Department has made major strides in
    improving our management tools and metrics. We developed a standard
    Department-wide terminology for facility classification, which has been
    institutionalized across the Department. The Facilities Assessment
    Database (FAD), which incorporates the services' real property
    databases, has expanded to include personnel data, weapon system
    inventory and costs of real property maintenance activities and base
    support, where available. In addition, the FAD has transitioned into
    the source database for other Department-wide databases and management
    tools, including the Facilities Sustainment Model. Another effort
    involves improving the Base Information System databases and
    integrating them among the services so more accurate tools are
    available to guide and monitor management decisions.
        The Facilities Sustainment Model was used by the services to
    determine sustainment requirements for their fiscal year 2002 budget
    submissions, and the Facility Aging Model enables us to assess the
    impact of planned facility actions on the useful life of the
    facilities' inventory. In its second year, the Installations' Readiness
    Report has effectively characterized the effect our installations and
    facilities have on military readiness.
        We are also developing a tool to capture recapitalization
    requirements and predict restoration and modernization requirements. In
    a companion effort to the Facilities Sustainment Model, the Department
    restructured its program elements to reflect the new focus of
    sustainment, restoration and modernization.

                              FRAMEWORK FOR ACTION

        America's security, today and in the future, depends on
    installations and facilities that support operational readiness and
    changing force structures and missions. The fiscal year 2002 budget
    request demonstrates our dedication to that mandate. We have taken a
    four-pronged approach to achieve our vision: right size and place,
    right quality, right resources, and right tools and metrics for our
    installations and facilities. We developed the Defense Facilities
    Strategic Plan to provide the framework for accomplishing these goals
    and enable us to provide ready and capable facilities for our
    warfighters.
        We will continue to transform our installations and facilities into
    those required for the 21st century, both through increased resources
    and through better use of existing resources. We will capitalize on the
    strengths of the private sector through housing and utilities
    privatization and competitive sourcing initiatives. We will also
    develop a plan for managing unused and underutilized property and
    facilities and actively explore opportunities for outleasing.
        We look forward to continued collaboration with Congress and
    welcome your ideas for identifying additional opportunities to provide
    the right quality and quantity of installations in the most cost-
    effective manner.

                                   CONCLUSION

        This concludes my prepared testimony. In closing, Mr. Chairman, I
    sincerely thank you for giving me this opportunity to describe our new
    focus on installations and facility programs and for your very strong
    support for a robust military construction program.

        Senator Inhofe. Mr. DuBois, I appreciate this. Again, I
    apologize on behalf of the members of this subcommittee for the
    sparse attendance. I know the reason on this side. One thing I
    did want to get to, because it was a surprise for all of us,
    were some of the quotes that you have made. You have been
    quoted--I assume accurately quoted--as saying, ``Some
    operations could be transferred out of the southeast where an
    increase in civilian aircraft and suburban sprawl has become a
    hindrance, and that some 150 military operations in the
    Norfolk, Virginia area probably would be eliminated.''
        This is a bad thing to have coming out. In fact, in a way,
    if this were organized in a decision that you were announcing,
    I think there could be some benefit to it, because I have
    always said that there ought to be some way to stop this
    municipal purgatory that comes with a BRAC round. I understand
    that there is language coming to our committee, but it is not
    here yet.
        What I had requested was that you take categories--if our
    infrastructure is not a problem in some areas. I will just give
    you a couple of examples. If you were to use basic pilot
    training, or any of these areas where we have already gone
    through and squeezed quite a bit through infrastructure: air
    logistics centers, we had five, now we are down to three. If
    anything could be taken off the table, then that would
    dramatically reduce the hysteria out there and make life a lot
    easier for everyone who is not here today who should be.
        Now first of all, let me ask you if you want to comment on
    the statements that you made and then we will have some more to
    talk about in terms of the language that is going to be used.
        Mr. DuBois. Yes sir. I am going to begin by saying, in
    answer to many of the comments made to me subsequent to those
    statements, some of which were taken out of context, that there
    is no list. There is no pre-conceived notion around which
    region of the country or which categories of installations
    would be a focus of realignment.
        Senator Inhofe. Would not be?
        Mr. DuBois. Would not be.
        Senator Inhofe. Would be or would not be?
        Mr. DuBois. There is not a list that would address any
    category or any region for that matter. As you know, we have
    not begun, and nor will we until authorized by Congress, the
    comprehensive, integrated analysis necessary to come to any
    kind of conclusions and recommendations that would inform an
    effective, mission-oriented base realignment and closure
    package.
        The second district of Virginia I know. I have lived there.
    My father had a cruiser out of Newport News. In no way was I
    meaning to address, as I said, a locality. I think one must, as
    you have pointed out correctly, look at things like basic or
    initial pilot training and where it might best take place not
    for the weapons systems that are in the inventory today, but
    for the weapons systems that may be in the inventory tomorrow,
    which have larger performance envelopes and environmental and
    noise attributes different than the aircraft in our inventory
    today.
        On the issue of categorization, I have looked at many of
    the installations and facilities in the Department of Defense
    in the United States and worldwide, and there are very few that
    remain, as opposed to 25 years ago when I served in the Defense
    Department, single use or single activity installations. I
    think to try to take a category off the table or even part off
    the table, flies in the face of many of the multi-use
    installations that we have today. That would make it extremely
    difficult to do an appropriate, integrated, cross-service cut
    at what installations and facilities meet our mission
    requirements as dictated by our QDR process.
        That, in the final analysis, sir, is I think what the
    Secretary is reaching for here; a process with integrity which
    addresses what infrastructure is necessary to support the
    mission, the national security requirements. That, of course,
    includes, as you and I have discussed: force structure, which
    means end-strength; weapons systems in today's inventory;
    weapons systems that we can project reasonably, at least
    performance-wise to be in inventory 10 or 20 years from now.
        Senator Inhofe. The information that we have heard is that
    you had some language ready and were prepared to send it. You
    mentioned the mission--is it your opinion that we know enough,
    or you know, because we certainly do not, what our strategy,
    our mission will be? I have always said that you do not want to
    consider changing the infrastructure until you know what our
    mission is going to be so you know what is going to be needed.
    Do you know that at this point?
        Mr. DuBois. The Secretary of Defense would agree with you
    wholeheartedly insofar as any analysis, any guiding principles
    for that analysis must be driven by the national military
    strategy. That in turn drives a force structure. The
    infrastructure must map to the force structure requirements.
        Now, many questions have arisen around timing. I would only
    submit that past history has indicated to both Congress and the
    executive branch that in order to effectively address the
    installation and the infrastructure capacity, and to be able to
    present to Congress--in this case in the summer of 2003--it
    must be authorized in the 2002 defense authorization act.
    Because the totality of what we are facing, in conjunction with
    working with Congress and the communities, is an analysis that
    as a practical matter is going to take us 15 months to do.
    Then, as our language has indicated, and as was the case in
    previous BRACs, a commission needs to assess the
    recommendations of the Secretary, which would happen in the
    spring of 2003, and certify that the Secretary's
    recommendations followed the law, followed the stated criteria
    as published, and gives every opportunity through the
    commission process for the communities involved to testify and
    to express their views.
        So that in the summer of 2003, on or about the Fourth of
    July recess, the President would submit to Congress for their
    determination a full package. It is the timing that has always
    been a frustration to both Congress and the executive branch. I
    think together, at least in 1990, it was agreed that this kind
    of approach, given the fact that it took 18 months to 2 years
    to complete, was the appropriate approach.
        Senator Inhofe. I came to Congress, I was in the House at
    that time in 1987, which was the year that Dick Armey passed
    what I thought was a very good approach to this, to try to take
    politics out. For the first three rounds it worked fairly well.
    The last round, it did not. I believe I can accurately say that
    the first time it was really politicized was in the last round.
        Now, it is my understanding that you are coming up with all
    new language that will not be the same as our current draft
    language that is there. So you are starting maybe with other
    criteria, with different ways of forming commissions, maybe
    with a different number of people on the commission, and all
    these things. Why would you want to make all those changes if
    there was only the one problem, as far as I know, that in the
    fourth round it was politicized? Is it to try to prevent that
    from happening again?
        Mr. DuBois. I think one of the principal objectives of some
    of the new language, and let me interject here that the overall
    architecture of what we are proposing is very similar to the
    architecture of past BRAC rounds. In fact, it is in
    architecture and in timing, very similar to the current bill in
    front of you that Senator Levin and Senator McCain have co-
    sponsored. There are some differences. The differences are
    principally differences wherein we thought, given our
    conversations with Members of Congress and their staff, would
    lessen the--and let us face facts--the internal politics of the
    Pentagon and the external politics in this process.
        There are aspects of it that we have included that we think
    expand upon some of the themes that have come out of the last
    four rounds, that you and your colleagues have said to us,
    ``Are you going to address this?'' So the language, mostly
    hortatory, we think does expand and enhance the approach, but
    does not change the basic architecture and the discipline
    involved in a so-called BRAC commission process.
        Senator Inhofe. Mr. DuBois and the rest of the
    distinguished panel, I do apologize. I am going to have to put
    this hearing in recess because I have 10 minutes to get to the
    White House. It is a meeting I really cannot miss. I apologize
    for that. We are in recess at this time.
        Mr. DuBois. Thank you.
        [Recess]
        Senator Akaka. The subcommittee will come to order. Mr.
    DuBois, again, I am delighted you are here. I believe Under
    Secretary of Defense Aldridge just held a press conference.
        Mr. DuBois. Yes, Mr. Chairman.
        Senator Akaka. He did call me the other day, and this press
    conference was to announce the base closure proposal being
    released by the Department of Defense. Has this proposal now
    been cleared by the Office of Management and Budget? When will
    the department submit its Efficient Facilities Initiative
    proposal to Congress?
        Mr. DuBois. Mr. Chairman, the final, formal OMB clearance
    has not been signed yet. However, it is the intention of the
    Secretary to transmit to Congress, prior to your August recess,
    the proposed legislative language of the Efficient Facilities
    Initiative.
        Senator Akaka. Do you know whether any decisions have been
    made within the Department of Defense as to which bases should
    be closed if another round of base closures is authorized?
        Mr. DuBois. I can say categorically, Mr. Chairman, that
    there is no list, nor is there a list of categories that would
    necessarily attract more attention than others.
        Senator Akaka. Mr. DuBois, some Members of Congress have
    advocated excluding some bases from review in a future base
    closure round. Does the Department's legislation propose to
    exclude any bases from the Department or the commission's
    reviews--will there be any such proposal?
        Mr. DuBois. Mr. Chairman, we have taken under serious
    consideration, from several members of the Senate and the
    House, such an exclusion list or so-called pre-selection list.
    We have concluded, for essentially two reasons, that it would
    be an inappropriate and inadvisable course of action. Number
    one, the analysis that we would undertake, as a practical
    matter, must address all facilities and installations in toto.
    Many of those installations and facilities are no longer single
    use, but rather are multi-use, and in some cases multi-service
    installations. That makes it difficult to say that a single use
    installation over here, the operations may be better moved
    somewhere else.
        But I must confess, that the issue that became most
    compelling to me was that were there such a pre-selection list
    or exclusion list published at some point during this 12 to 15
    month analytic process, that it would put enormous pressure on
    Members of Congress, on members of the executive branch, from
    the point of view that some member had an exclusion and some
    member did not. I would fear, quite frankly, that the pressures
    would become excruciating between the colleagues here in
    Congress, not to mention the kinds of pressures that would be
    brought upon the Secretary of Defense and even the President. I
    think in that regard, we concluded that this was not an
    advisable course of action.
        Senator Akaka. Does the Secretary of Defense believe we
    should follow the traditional approach of putting everything on
    the table and judge every base on its merits?
        Mr. DuBois. The Secretary subscribes to the philosophy that
    the infrastructure that we have now has excess capacity. One
    must remember that does not mean that some set percentage of
    all facilities are excess. That means in the aggregate there is
    excess capacity. Unfortunately, and this is what makes this a
    very complex, difficult task, that excess capacity exists in a
    number of different installations. But, it does not necessarily
    force one to the conclusion that an installation becomes
    therefore excess.
        The second part of your question, sir, was?
        Senator Akaka. Will they put everything on the table based
    on its merits?
        Mr. DuBois. Exactly. The merit, and this is where your
    colleague, Senator Inhofe, implied that there are changes in
    the legislative language. The principle measure of merit, to
    use your term which I think is a very good one, should be: does
    our infrastructure match the central missions and the
    operational requirements of our military? Primarily, the
    criteria about cost savings are secondary to that. It is in
    essence the military necessity that ought to drive our
    selection criteria and our analysis. That is why one must
    begin, it seems to me, with all of our facilities of whatever
    nature and wherever they might be, on the table.
        As I mentioned earlier today to a group of folks, I
    searched for an analogy. While this may not be accurate, it did
    come to my mind as I watched my young children put together one
    of those 1,000 piece puzzles. What we are looking at is we have
    a 1,000 piece puzzle today. We need to reduce those pieces to
    800, but the pieces still must fit together in a coherent
    manner. That is not an easy task and that is why you must start
    with all 1,000 pieces.
        Senator Akaka. If Congress were to attempt to exclude some
    bases from the review process, how could we rationally devise a
    list of such bases for inclusion in authorizing language this
    year before you have completed your Quadrennial Defense Review?
        Mr. DuBois. I, of course, would hesitate to step on the
    prerogatives of Congress, but I think as I have stated, I
    believe it is unwise to take that course of action. As I have
    suggested, not just because of the analytic discipline that
    looking at all of this creates for those of us who have to go
    through this arduous process, but also for the idea that it
    avoids the injection of--I know of no other term but pure
    politics--into the process. I believe that it would be an error
    should Congress ask us to do so prematurely.
        Senator Akaka. Let me begin with questions for Admiral
    Johnson. Secretary England believes the Navy can find a
    replacement for Vieques by 2003. He has stated that he is not
    looking for an exact replica of Vieques. If, as a result of the
    November referendum the Navy ends up leaving Vieques, do you
    anticipate that creating or expanding a replacement training
    range would require an environmental impact statement?

      STATEMENT OF REAR ADM. MICHAEL R. JOHNSON, USN, COMMANDER,
                  NAVAL FACILITIES ENGINEERING COMMAND

        Admiral Johnson. Mr. Chairman, that process has just gotten
    underway at the Center for Naval Analyses and others are
    involved. I think, as they work through that process, the
    environmental impact statement requirements under the National
    Environmental Policy Act and other statutory requirements will
    be an integral part of that analysis, as they look at the
    alternatives that might be out there as a potential replacement
    for Vieques.
        Senator Akaka. When we think of looking for another range
    we, of course, think of the possible costs. Can you give us a
    ballpark figure on the costs, including military construction
    dollars, of acquiring and setting up a new training range?
    Also, how long do you believe it is likely to take to get a new
    training range up and running to replace Vieques?
        Admiral Johnson. Mr. Chairman, due to where we are in the
    process, I have no earthly idea to even guess at a range on
    either one of those. I will just have to wait, and we will work
    through the process, and we will see where we end up. But, it
    is much, much too early to even guess.
        [The prepared statement of Admiral Johnson follows:]

              Prepared Statement by Rear Adm. Michael Johnson, USN

                                  INTRODUCTION

        Mr. Chairman and distinguished members of the subcommittee, thank
    you for the opportunity to discuss the Navy's military construction,
    family housing, and base realignment and closure programs. I am Rear
    Adm. Michael Johnson, Commander, Naval Facilities Engineering Command.
        The Navy's amended fiscal year 2002 military construction budget
    request inaugurates a strong commitment by the Navy and the
    administration to upgrade our aging infrastructure. It increases
    funding to meet current needs and begins a long-range plan to
    streamline, restructure, and upgrade the Navy's facilities.

                             PROGRAMMATIC APPROACH

        Adm. Vern Clark, Chief of Naval Operations, has clearly articulated
    his top five priorities for the Navy: manpower, current readiness,
    future readiness, quality of service (quality of life and work), and
    alignment. These priorities provide our ``road map'' for handling our
    daily operations in support of the fleet and play a significant role in
    shaping the Navy's strategies for future investment in facilities and
    infrastructure.
        The military construction program directly supports the CNO's top
    five priorities through a set of programmatic categories that we use to
    evaluate infrastructure investments. These categories are: restoration
    and modernization (primarily waterfront and airfields); environmental
    compliance; deficit reduction (primarily bachelor quarters and QOL);
    new mission; and family housing. By using these programmatic categories
    as our guide, the Navy's military construction program is properly
    aligned with fleet requirements.

                             FACILITIES INVESTMENT

        The Navy owns more than 160,000 facilities valued in excess of $125
    billion. Our infrastructure includes operational, training,
    maintenance, administration, housing, research, development, testing,
    and evaluation (RDT&E), supply, and medical facilities, as well as
    utility systems. The Navy's infrastructure is old, and its age and
    condition are negatively impacting readiness. Forty-three percent of
    our infrastructure was constructed before 1950. The average age of Navy
    facilities is 45 years. The Navy reported 67 percent of its facility
    categories in a C-3 or C-4 condition in the fiscal year 2000
    Installation Readiness Report (IRR) submitted to Congress by the
    Secretary of Defense in February 2001. A C-3 condition code is used to
    identify facilities that marginally meet mission demands with major
    difficulty. A C-4 condition code identifies facilities that do not meet
    the vital demands of the mission category. Our desired state is C-2
    (meets mission demands with some minor deficiencies that have a limited
    impact on mission capability) or C-1 (meets mission demands with minor
    deficiencies that have a negligible impact on mission capability).
        The Secretary of Defense is committed to a Facility Strategic Plan
    that will streamline, restructure, and upgrade our facilities. One of
    the goals of this plan is to reduce the age of the Department of
    Defense's facilities by reducing the Navy's historic average
    recapitalization rate of over 160 years to 67 years.
        The Navy has adopted a new investment strategy for our facilities
    that is founded on the Facility Sustainment Model (FSM). The FSM
    provides a life cycle based approach to computing our sustainment
    requirement by multiplying facility quantities (most often square feet)
    from our inventory times unit cost factors (most often dollars per
    square foot) from industry. Sustainment is defined as the annual
    maintenance and scheduled repairs required to maintain an inventory of
    facilities in their current condition without incurring additional
    deterioration. The portion of facility investment that goes beyond
    sustainment to improve facility conditions is called restoration and
    modernization, and includes both operations & maintenance (O&M) funded
    repair projects and military construction projects. The ``SRM''
    (sustainment, restoration, and modernization) program replaces what was
    previously known as the ``real property maintenance'' (RPM) program. By
    linking SRM and military construction together in a complete facility
    investment strategy, the Navy can prepare a more comprehensive and
    credible analysis of these requirements. The Navy will use this
    methodology for developing the fiscal year 2003 military construction
    program.

              SUSTAINMENT, RESTORATION, AND MODERNIZATION FUNDING

        In fiscal year 2002, our SRM investment is projected to be $1.36B,
    or 2.1 percent of plant value. While this is a 10 percent increase over
    our fiscal year 2001 funding, it is still short of accepted industry
    standards. Several independent industry studies have recommended an
    acceptable range for SRM funding of 2-4 percent of current plant value,
    with the private sector funding at closer to 3.5 percent. The Navy has
    averaged only 1.6 percent over the past 10 years, and is clearly well
    below industry standards. As a result, the Navy faces a significant
    $2.6 billion backlog of critical deficiencies. The critical backlog
    represents those deficiencies that result in significant negative
    impact to environmental, safety, quality of life, or mission related
    requirements. Of our total SRM funding, $1.09 billion or 80 percent is
    required for sustainment, leaving insufficient restoration and
    modernization funds to significantly reduce the critical backlog and
    improve installation readiness ratings.

                          MILITARY CONSTRUCTION BUDGET

        The Navy's military construction budget includes these
    appropriations: military construction, Navy (MCON); military
    construction, Naval Reserve (MCNR); family housing, Navy (FHN); and
    base realignment and closure (BRAC). The Navy's fiscal year 2002
    military construction program totals $1.83 billion, approximately 2
    percent of the entire Department of the Navy fiscal year 2002 budget.
        The overall Navy military construction request for fiscal year 2002
    is lower than the fiscal year 2001 enacted amount due primarily to
    decreases in base realignment and closure (BRAC) and family housing.
    However, the budget request for military construction, Navy (MCON),
    military construction, Navy Reserve (MCNR), and family housing
    operations and maintenance are 19 percent, 133 percent, and 3 percent
    respectively, greater than the fiscal year 2001 requested amounts. The
    following table outlines the Navy's fiscal year 2002 military
    construction budget request compared to the fiscal year 2001 budget
    request and enacted amounts (not including the recent supplemental
    bill):

                                  FISCAL YEAR 2002 MILITARY CONSTRUCTION BUDGET REQUEST
    ----------------------------------------------------------------------------------------------------------------
                                                                                                     Percent Growth
                          Account                         Fiscal Year   Fiscal Year   Fiscal Year    Request Fiscal
                                                         2001 Request  2001 Enacted  2002 Request   Year  2002-2001
    ----------------------------------------------------------------------------------------------------------------
    MCON...............................................       $607.0M       $733.1M       $724.1M                 19
    MCNR...............................................         $9.5M        $43.3M        $22.1M                133
    Family Housing Construction........................       $294.8M       $339.9M       $195.0M                -34
    Family Housing Ops & Maint.........................       $736.6M       $733.9M       $759.0M                  3
    BRAC...............................................       $447.0M       $467.2M       $131.5M                -71
                                                        ------------------------------------------------------------
        Total..........................................     $2,094.9B     $2,317.4B     $1,831.7B                -13
    ----------------------------------------------------------------------------------------------------------------

        Our BRAC request for fiscal year 2002 is of some concern. I will
    discuss this in more detail later.

                          PROGRAM GOALS AND OBJECTIVES

        Utilizing CNO's top five priorities and corresponding programmatic
    categories as our ``programming benchmark,'' the fiscal year 2002
    military construction budget was developed based on the following
    guidance:

             Maintain and modernize essential existing
            infrastructure while reducing excesses
             Meet all legislative, regulatory, or agreement-based
            compliance requirements
             Improve readiness
             Improve quality of service for members and families

        The fiscal year 2002 budget request continues to support the Navy's
    specific philosophy of improving living conditions for members and
    families. Fifty-five percent of the fiscal year 2002 budget request
    (excluding BRAC) will fund quality of life projects. The current budget
    will significantly reduce inadequate family housing and reduce the
    housing deficit in high cost areas by 2009 through a combination of
    construction, improvements, and public/private ventures (PPV). Central
    heads in the Navy's bachelor quarters will be eliminated by fiscal year
    2008. We are constructing and renovating bachelor quarters to comply
    with the 1+1 room configuration for permanent party personnel. The
    budget also includes four bachelor quarters to begin addressing
    berthing required for the 25,000 sailors who now live aboard ship while
    in homeport. Specific highlights for the various military construction
    appropriations are described below.

                  MILITARY CONSTRUCTION, NAVY & NAVAL RESERVE

        Our military construction, Navy and Naval Reserve programs continue
    our approach of budgeting for those projects that meet the highest
    priority of readiness and quality of service needs of the fleet and
    Reserves. The Navy convenes a Shore Installations Programming Board
    (SIPB) each year to evaluate and prioritize military construction
    projects with other installation investments. Projects are selected
    based on a number of different criteria, including fleet priorities and
    the most critical readiness, quality of service, and compliance needs.
        The Navy's fiscal year 2002 military construction program
    (including Reserves) is $746.2 million, 21 percent greater than the
    fiscal year 2001 budget request. The Navy is making significant
    investments to improve existing infrastructure by earmarking 74 percent
    of the fiscal year 2002 program for restoration and modernization
    projects. Approximately 23 percent of the program is dedicated to
    deficit reduction projects and 3 percent to projects supporting new
    mission. The majority of projects supporting deficit reduction and new
    mission are for bachelor quarters.
    Phase Funded Projects
        The Navy continues to utilize phase funding for projects with a
    cost greater than $50 million. Full authorization is requested for each
    project in the first year and the appropriation in annual increments,
    generally over 2 to 3 years. Phase funding is generally used for pier
    projects because they are very expensive and require a lengthy
    construction period.
        In the fiscal year 2002 program, we are requesting the final
    increment of funding for pier replacements at Naval Station, San Diego,
    California and Naval Shipyard, Puget Sound, Bremerton, Washington.
    Additionally, we are requesting funding to complete the CINCPAC
    Headquarters building at Camp HM Smith, Hawaii. The budget also
    includes a request for full authorization and the first increment of
    funding for a pier replacement at Naval Station, Norfolk, Virginia.
    Operational and Training Facilities
        Our construction program funds 18 operational facilities (including
    phase funded projects) totaling $189 million. Examples include:

             Pier replacement at Naval Station, Norfolk, Virginia:
            This $61.5 million project replaces pier 3 that was originally
            constructed as a supply pier. The new pier will provide the
            capability to berth all classes of ships (except aircraft
            carriers) that are currently homeported or planned to be
            homeported at NAVSTA Norfolk.
             Pier replacement at Naval Station, San Diego,
            California: This $53.2 million project replaces piers 10 and 11
            that have deteriorated beyond economical repair. The new pier
            will support large deck amphibious assault ships and surface
            combatants that are currently homeported or planned to be
            homeported at NAVSTA San Diego.

        There are also three training projects totaling $19 million.
    Examples include:

             Surface Warfare Officers School Applied Instruction
            Building at Naval Station, Newport, Rhode Island: This $15.3
            million project provides a properly sized and configured
            training facility to meet current and future student
            population.
             Reserve Center addition at Naval Reserve Center,
            Duluth, Minnesota: This $3 million project provides an addition
            and renovates existing space to adequately support training and
            administration of assigned Naval Reserve units.
    Maintenance Facilities
        There are 16 maintenance projects totaling $122 million. Examples
    include:

             Aircraft maintenance hangar at Naval Air Station,
            Brunswick, Maine: This $41.7 million project constructs a new
            six bay hangar to replace inadequate and structurally unsound
            facilities.
             Drydock Support Facility at Naval Shipyard, Pearl
            Harbor, Hawaii: This $7.9 million project constructs permanent
            waterfront facilities for shipyard personnel working on ships
            undergoing major maintenance at the forward section of drydock
            2.
    Utilities
        There are eight projects in the program totaling $77 million to
    support utilities improvements. Examples include:

             Waterfront electrical upgrades at Naval Station,
            Norfolk, Virginia: This $15.6 million project upgrades the
            capacity of the electrical distribution system to support
            ships' electrical demand requirements.
             Sewer force main at Public Works Center, Pearl Harbor,
            Hawaii: This $16.9 million project provides a new sewer main to
            replace an aging force main from Pearl Harbor Naval Shipyard to
            the Navy's water treatment facility.
    Quality of Life
        There are important quality of life projects included in our fiscal
    year 2002 budget. The single largest effort is for the construction and
    modernization of bachelor quarters (BQs). Today, we have 75,000 single
    sailors assigned to shore duty and 16,000 recruits in training at NTC
    Great Lakes. Our responsibility is to provide quality shelter for these
    sailors in the most cost effective manner possible, considering
    facilities on base or in the community. To provide a greater degree of
    privacy for single military members, the Department of Defense adopted
    a 1+1 construction standard in 1995 for permanent party personnel. This
    configuration consists of two individual living and sleeping rooms with
    closets, and a shared bath and service area. The 1+1 standard does not
    apply to recruits, students, and transients. Since 1995, the Navy has
    constructed 41 projects to support 12,900 sailors.
        The Navy has 14 BQ projects to support 4,722 sailors in the fiscal
    year 2002 budget totaling $303 million:

             Two recruit barracks at NTC Great Lakes housing 2,112
            recruits
             Two barracks modernization projects for permanent
            party enlisted personnel providing 444 bed spaces at Naval
            Activities Guam, and Naval Station Norfolk, Virginia.
             Two replacement barracks projects for permanent party
            enlisted personnel providing 300 bed spaces at Naval Air
            Facility Washington, DC, and Naval Construction Battalion
            Center Gulfport, Mississippi.
             Two new barracks projects for permanent party enlisted
            personnel providing 256 bed spaces at Headquarters Command
            Larissa, Greece and Naval Air Station Lemoore, California.
             Two barracks for transient students providing 410 bed
            spaces at Naval Air Station Brunswick, Maine and Naval Air
            Facility El Centro, California.
             Four new barracks providing 1,200 bed spaces for
            shipboard sailors at Naval Station Mayport, Florida, Naval
            Station San Diego, California and Naval Station Pearl Harbor,
            Hawaii. Two of these four barracks also support permanent party
            enlisted personnel at Pearl Harbor.

                          NAVY HOMEPORT ASHORE PROGRAM

        In addition to our ongoing program to improve the living conditions
    for our shore station sailors, the Navy is addressing one of its most
    pressing challenges: the 25,000 E-1 through E-4 enlisted unaccompanied
    sailors who now live aboard ship while in homeport. Studies and surveys
    have shown that these young sailors have the worst accommodations in
    the Department of Defense. When deployed, these sailors have no choice
    but to sleep in bunk beds in open spaces with dozens of their
    shipmates, and little more than a small locker to store their personal
    belongings. When the ship returns to homeport, these sailors must
    continue to live aboard ship. In contrast, unaccompanied E-1 through E-
    4s assigned to aviation squadrons or submarines live aboard ship when
    deployed, but merit BQ spaces when the ship is in homeport. A 1999 Navy
    Quality of Life Domain Study concluded that shipboard life and
    standards of living are major dissatisfiers for target retention
    groups.
        The Chief of Naval Operations has committed to developing a
    Homeport Ashore program that will provide these sailors accommodations,
    either in a BQ or in the community, when their assigned ship is in
    homeport. We have a pilot project underway at Naval Base Pearl Harbor,
    Hawaii, where a unique combination of recent fleet reductions, a large
    initial inventory of BQ spaces, and a desire of more senior enlisted to
    live in the community, has made BQ spaces available. About 1,500
    shipboard E-1 through E-4 sailors are afforded the opportunity to
    ``move ashore'' into BQ spaces when their ships return from
    deployments. Initial results are extremely positive. While the Navy is
    focused on retaining sailors at all levels, the efforts at Naval Base
    Pearl Harbor have contributed to increases in first term sailor
    retention of 7.7 percent above the Pacific Fleet (PACFLT) average and
    an overall increase in retention of 2.3 percent above the PACFLT
    average.
        The Navy remains committed to providing BQs that meet the 1+1
    construction standards. While I am pleased to announce the broad
    commitment, there are key aspects that must still be resolved. Specific
    procedures associated with the housing of the shipboard sailors, the
    rate at which we will construct to meet our needs, individual stations'
    ability to support the construction effort while continuing operations,
    and the mix of construction for shore sailors or shipboard sailors must
    be evaluated and weighed carefully.

                                 FAMILY HOUSING

        Our family housing program continues our commitment to eliminate
    inadequate family housing and reduce the housing deficit in high cost
    areas by fiscal year 2010 through a combination of construction,
    improvements, and public/private ventures (PPV). In fact, the updated
    Family Housing Master Plan that we will be submitting to Congress will
    show that the Navy will eliminate inadequate housing in 2009 due in
    part to an acceleration of PPV projects.
        The Navy's fiscal year 2002 family housing construction program is
    $232 million, 32 percent less than the fiscal year 2001 enacted amount,
    due in part to our focus on PPVs. However, we are still constructing,
    replacing, and improving family housing in our inventory. Major
    projects in our fiscal year 2002 program include the following:

             Construction of 160 homes at Naval Station,
            Pascagoula, Mississippi for $23.4 million;
             Replacement of 70 homes in Hawaii for $16.8 million;
             Replacement of 10 homes at Naval Air Station,
            Sigonella, Italy for $2.4 million; and
             Improving 1,290 homes at various locations for $123
            million.

        We are continuing to have success with our PPV efforts. Since the
    implementation of ``differential lease payments,'' bringing military
    member's out-of-pocket expenses to zero, the percentage of military
    occupants at the Everett and south Texas locations continues to grow.
        The second phases of both Kingsville and Everett PPV's were
    executed in November and December 2000, respectively. Phase I of a San
    Diego privatization effort for 3,248 homes is scheduled to begin this
    summer. Later this year, we anticipate executing PPV agreements at New
    Orleans and south Texas, totaling more than 1,500 homes. The fiscal
    year 2002 budget includes a follow-on phase of a privatization effort
    in San Diego that will help alleviate the housing shortage in one of
    the Navy's highest cost of living areas. Additionally, we are about to
    enter negotiations with the Virginia Housing Development Authority on a
    Hampton Roads, Virginia project and have notified the congressional
    committees of our intent to issue a solicitation for a regional
    Pennsylvania project.
        The Navy's fiscal year 2002 family housing, operations and
    maintenance program is $759 million, 3 percent greater than the fiscal
    year 2001 enacted amount. This increase is due primarily to increasing
    utility costs. These funds are essential to maintain our existing
    inventory by funding operations, utilities, maintenance, and leasing
    costs.

                          BASE REALIGNMENT AND CLOSURE

        While I want to highlight our accomplishments in this program, I
    also want to put these past successes in context of the future. Our
    base closure account, due to several factors, is becoming a limiting
    factor on property conveyance.
    Realignment and Closure Status
        We are implementing four rounds of base realignment and closure
    (BRAC), 1988 under Public Law 100-526 and 1991, 1993, and 1995 under
    Public Law 101-510. As a result of these decisions, we are executing a
    total of 178 actions consisting of 46 major closures, 89 minor
    closures, and 43 realignments.
        We will complete closure and realignment of all bases by July 2001,
    except two moves from leased space to Government owned space. One
    remaining activity is the Naval Management Systems Support Office
    (NAVMASSO) Chesapeake, VA. The primary actions were completed in
    October 1997 when NAVMASSO was disestablished and re-established as the
    Space and Naval Warfare Systems (SPAWAR) Center Chesapeake, an Echelon
    III command under SPAWAR. Relocation of this activity has been deferred
    until January 2002 due to construction delays of the joint use facility
    NAVMASSO will be occupying. The other remaining BRAC action will move
    the Assistant Secretary of the Navy (Research, Development, and
    Acquisition) and Chief of Naval Operations, Environmental Readiness
    Directorate offices from leased space in Crystal City into the Pentagon
    in April 2003.

                             BRAC COSTS AND SAVINGS

        We have closed or realigned bases to make the Navy's shore
    infrastructure more proportional to its force structure and to provide
    resources to recapitalize our weapons systems and platforms. We are
    reaping the financial rewards of our investments; through fiscal year
    2000, we had spent approximately $10 billion on all four BRAC rounds to
    construct new or adapt existing facilities, move personnel, equipment,
    ships and aircraft to their new homeports, and clean up contamination.
    By the end of fiscal year 2001, the Navy will achieve a net savings of
    $5.8 billion. Beginning in fiscal year 2002, we will save an additional
    $2.5 billion annually. These net savings estimates have been validated
    by several independent sources.
    Environmental Cleanup
        Our main focus is now on finishing environmental cleanup and
    completing property disposal. This is no easy task. We have already
    spent more than $1 billion through fiscal year 2000 on environmental
    work at our BRAC bases.
        Each base has established a BRAC cleanup team composed of
    remediation managers from the Navy, the state, and the Environmental
    Protection Agency to review, prioritize, and expedite the necessary
    cleanup consistent with reuse plans. We recognize the dynamics of reuse
    and stand prepared to phase our cleanup plans as required to support
    community redevelopment needs.
        We're making good progress in cleanup of contaminated property. The
    Navy identified about 900 contaminated sites at 51 BRAC installations.
    A contaminated site crosses the ``cleanup finish line'' when it
    achieves Remedy-in-Place/Response Complete (RIP/RC) and the
    environmental regulator subsequently concurs. As of the end of fiscal
    year 2000, we had achieved RIP/RC status at 64 percent of the
    contamination sites. By the end of fiscal year 2001, we expect to have
    completed cleanup at 79 percent of all BRAC sites.
    Property Reuse
        The National Environmental Policy Act (NEPA) of 1969 requires that
    we consider the potential environmental impacts of disposal and reuse
    of base closure property before we convey property. We evaluate issues
    involving historic preservation, air quality, noise, traffic, natural
    habitat, and endangered species. The NEPA process concludes with the
    issuance of a Record of Decision (ROD). The Navy has three disposal
    RODs remaining to be issued for the former Naval Station Treasure
    Island, Fuel Depot at Point Molate, and Naval Air Station South
    Weymouth.
        All Local Redevelopment Authorities (LRA) have developed their
    reuse plans. We strive to support immediate reuse opportunities through
    interim leases and leases in furtherance of conveyance. This immediate
    reuse effort enables communities to move in and transform the property
    from vacant buildings to an interim use while we pursue final transfer.
    Section 334 Early Transfer
        Section 334 of the fiscal year 1997 Defense Authorization Act
    established a framework for the Department of Defense (DOD) to initiate
    an early transfer of contaminated property to the community. This
    authority allows DOD to defer the Comprehensive Environmental Response,
    Compensation, and Liability Act (CERCLA) requirement that all
    remediation actions have been taken before the date of property
    transfer. We had previously completed two such transfers: the former
    Fleet Industrial and Supply Center Oakland, CA was conveyed to the Port
    of Oakland in June 1999, and the former Naval Air Station Memphis, TN
    was conveyed to the Municipality of Millington in December 1999. Since
    last year's budget submission, we have completed four additional early
    transfers.

             The former Fleet Industrial and Supply Center Alameda
            Annex, CA was conveyed to the City of Alameda in July 2000.
             A portion (51 acres) of the former Naval Training
            Center San Diego, CA was conveyed to the San Diego Unified Port
            District in February 2001 to be used for airport operations.
             The former Naval Air Station, Guam, consisting of
            approximately 1,800 acres, was transferred to the Guam Aviation
            Authority in September 2000.
             The fourth early transfer consisted of several parcels
            of property, approximately 1,500 acres, located on Guam. This
            property was transferred to the local government in April 2001.
    Property Disposal
        The Navy must dispose of approximately 580 parcels of land covering
    161,000 acres at 88 BRAC bases. Each BRAC base has a disposal strategy
    tailored for that base that incorporates LRA reuse plans with
    environmental cleanup timetables, NEPA documentation, conveyance plans
    and schedules.
        To date, the Navy has conveyed over 65,000 acres through economic
    development conveyances, negotiated sales, public sales, or public
    benefit transfer.
        After a base closes, disposal of the base closure property presents
    the most complex challenge. Section 2821 of the National Defense
    Authorization Act for fiscal year 2000 (Public Law 106-65), amended the
    Department of Defense's Economic Development Conveyance (EDC) authority
    to give us the authority to transfer property to local redevelopment
    authorities exchanging consideration for job creation opportunities.
    Section 2821 also provides authority to modify previously approved EDC
    agreements if a change in economic circumstances necessitates such a
    modification. Although LRAs have applied for ``no cost'' EDCs of our
    remaining bases, this will only expedite disposal of base closure
    property to a certain extent. LRAs must still satisfy regulatory
    criteria to acquire property by way of an EDC. The key to disposal of
    BRAC property is environmental remediation of the property.
    BRAC Fiscal Year 2002 Budget
        The BRAC account has been buffeted by budget reductions from the
    Department of Defense to Congress in the last few years, primarily due
    to the expectations that prior year unexpended balances could be used
    to fund current requirements. The Naval Audit Service has been
    reviewing task order documents across all commands with BRAC prior year
    unexpended funds, and will conclude their analysis in a few months.
        I regret to report that because of competing budget needs, we were
    unable to fully fund our BRAC funding requirement in the fiscal year
    2002 budget. I cannot predict if we will be able to substantially
    reduce, through negotiations with regulators, the amount of work
    specified in state and Federal cleanup agreements.
        We have other initiatives underway to make our infrastructure more
    effective and cost efficient. Two of those efforts, privatization of
    utilities and demolition, are described below.

                           PRIVATIZATION OF UTILITIES

        Defense Reform Initiative Directive 49 directed all of the military
    services to privatize all their natural gas, water, wastewater, and
    electrical systems, except where uneconomical or where the systems are
    required for unique security reasons. This is expected to reduce costs
    while providing quality utility service. The Navy has 735 systems
    valued at $16.8 billion available for privatization.
        We are moving forward and making good progress in issuing all
    requests for proposals for these systems by September 30, 2001. The
    goal is to award all contracts by September 30, 2003.

                                   DEMOLITION

        The demolition program eliminates aging and unneeded facilities and
    their associated operating and maintenance costs. Defense Reform
    Initiative Directive 36 directed the Navy to dispose of 9.9 million
    square feet by the end of fiscal year 2002.
        The centralized demolition program has been a huge success for the
    Navy. We are currently on track to meet this goal by the end of fiscal
    year 2001. However, we are not stopping at the directive's goal. We are
    continuing to demolish facilities either through the centralized
    program or as a result of military construction projects. The fiscal
    year 2002 plan is to demolish 2 million square feet utilizing the
    centralized demolition program.

                                   CONCLUSION

        As Admiral Clark has stated on many occasions, the fleet is the
    essence of the Navy and must remain the focal point of our efforts.
    Quality facilities and infrastructure are key elements in maintaining
    high fleet readiness, now and in the future. There is no ``quick fix''
    to correct our infrastructure deficiencies. The fiscal year 2002
    military construction program is a positive step in a multi-year
    program to: (1) bring our facilities and infrastructure to a level that
    meets fleet readiness and (2) sustain that level of readiness.
    Continued support by both Congress and the administration over the
    long-term is vital to improve the condition of our facilities.
        This concludes my statement. I thank you for the support that this
    subcommittee and staff has given to the Navy and ask for your continued
    support and assistance in enabling the Navy to achieve its vision of
    facilities and infrastructure which support fleet readiness both now
    and in the future. I am prepared to respond to your questions.

        Senator Akaka. Mr. DuBois, according to their press
    release, the House Armed Services Committee will include
    legislation in their bill that would cancel the referendum to
    be held in Vieques in November, and direct the Navy and Marine
    Corps to continue training at Vieques until the Chief of Naval
    Operations and the Commandant certify that a new training range
    is available. What is the Department's position on this House
    proposal?
        Mr. DuBois. Mr. Chairman, I was unaware of that. I knew the
    general provisions of the proposal. I was unaware of the
    specific ones that you just mentioned. But, I think it would be
    best for me to defer to the Secretary of the Navy on those
    questions and I will certainly convey them to him when I see
    him later on today.
        Senator Akaka. General Robbins, our staff recently received
    a report from the Air Force Association that they found Air
    Force facilities in the Pacific theater to be in considerably
    worse shape than elsewhere in the Air Force. In particular,
    they cited the conditions of our F-16 base in Kunsan, Korea as
    the worst in the Air Force, and stated that they ``border on
    deplorable.'' For example, they found missile maintenance
    facilities without electricity where our personnel perform
    their duties using flashlights. In general, these problems
    appear to be the result of insufficient funding for real
    property maintenance, or SRM as it is now being called. How
    would you assess the status of Air Force facilities in the
    Pacific theater, especially in Korea? What steps are being
    taken to address the problems you will identify?

       STATEMENT OF MAJ. GEN. EARNEST O. ROBBINS II, USAF, CIVIL
                   ENGINEER, UNITED STATES AIR FORCE

        General Robbins. Mr. Chairman, I am not familiar with the
    report that you mentioned, but I am aware of the installation
    readiness report that the Air Force generated and submitted to
    OSD regarding all major commands in the Air Force. I cannot
    verify or vouch that the conditions across the Pacific Air
    Forces is worse than across other major commands. But, I will
    acknowledge that in Korea some of our worst problems exist.
        It is a reflection not just of the O&M funding, but also of
    underfunding in the MILCON account in previous years. Osan and
    Kunsan do have serious problems. I am aware of the shelter
    problem you mentioned. I know that Pacific Air Forces (PACAF)
    is endeavoring to repair those through the O&M account.
        In Osan, we have tremendous problems with housing our
    enlisted personnel, and so you will see projects in this year's
    budget submission to construct dormitories for our enlisted
    folks. Likewise in 2003, we hope to submit a project that will
    begin to move our military families on base at Osan. Right now
    they live, basically, in the community. So, within PACAF
    certainly the worst conditions exist at those two Korean bases.
    The Air Force is aware of them and through prioritization we
    are trying to address those.
        [The prepared statement of General Robbins follows:]

          Prepared Statement by Maj. Gen. Earnest O. Robbins II, USAF

                                  INTRODUCTION

        Mr. Chairman and members of the subcommittee, I appreciate the
    opportunity to appear before you and present the Department of the Air
    Force fiscal year 2002 military construction program. Today, I will
    share with the subcommittee our investment strategies for facilities,
    housing, utility systems, and environmental programs.

                                    OVERVIEW

        Our total force MILCON and military family housing programs play a
    vital role supporting Air Force operational needs, workplace
    productivity and quality of life. Adm. David Jeremiah, USN (Ret.)
    acknowledged this fact in the recent Special Department of Defense
    Report on Morale and Quality of Life. Two of the top four issues,
    improving the workplace environment and providing better housing, rely
    on the success of our MILCON and military family housing programs.
        For several years reduced funding for our facilities has led to a
    steady deterioration in Air Force infrastructure. The good news is that
    our fiscal year 2002 total force MILCON budget request is double what
    it was last year and stands at over $1.2 billion. With this fiscal year
    2002 budget and the investment levels projected through the Future
    Years Defense Plan, we will reduce our recapitalization rate from its
    present 250-plus years to about a 190-year recapitalization rate, still
    far below our desired rate of recapitalization, but this is clearly a
    step in the right direction.
        However, even with additional MILCON funding in fiscal year 2002,
    the Air Force infrastructure challenges remain the same. We must
    continue to balance funding among the priorities of people, readiness,
    modernization, and infrastructure. Increases in the overall defense
    budget this year will help meet the most pressing Air Force needs.
    However, previous underfunding of military construction and operation
    and maintenance required us to develop ``work-arounds,'' which impacted
    the Air Force's combat capability, operational efficiency, and quality
    of workplace environment. Although we continue to operate and support
    the world's premier aerospace force, we cannot correct overnight the
    negative impact reduced funding has had on our infrastructure.
        For fiscal year 2002, we are requesting a program of $2.7 billion
    for our total force MILCON and military family housing. This request is
    comprised of $1.1 billion for traditional active MILCON, $1.4 billion
    for military family housing, $149.1 million for Air National Guard
    traditional MILCON, $53.7 million for Air Force Reserve traditional
    MILCON. These Air Force programs were developed using a facility
    investment strategy with the following objectives:

             Accommodate new missions
             Invest in quality of life improvements
             Continue environmental leadership
             Sustain, restore and modernize our infrastructure
             Optimize use of public and private resources, and
             Continue our demolition programs

        Mr. Chairman, the Air Force clearly could not maintain the quality
    of our facilities and the advantages they provide without the strong
    support we have always received from this committee and for that we are
    most grateful. With this background, I would like to discuss our
    military construction budget request for fiscal year 2002.

                            ACCOMMODATE NEW MISSIONS

        New weapons systems will provide the rapid, precise, global
    capability that enable our combat commanders to respond quickly to
    conflicts in support of national security objectives. Our fiscal year
    2002 new mission MILCON program consists of 32 projects, totaling $283
    million. These new missions include important initiatives to improve
    Air Force operational capabilities. However, they and the
    infrastructure to support them should be considered in light of ongoing
    Quadrennial Defense Review (QDR) activities in the Department.
        These projects support a number of weapon system beddowns; two
    worthy of mention are the F-22 fighter and the C-17 airlifter. The F-22
    Raptor is the Air Force's next generation air superiority fighter. The
    location for the F-22 flight-training program is Tyndall Air Force
    Base, Florida with Langley Air Force Base, Virginia serving as the
    first operational base. The fiscal year 2002 MILCON includes two F-22
    projects at Tyndall totaling $15 million and three F-22 projects at
    Langley totaling $39 million.
        The C-17 Globemaster III aircraft is replacing our fleet of C-141
    Starlifters. The C-17 provides rapid global mobility by combining the
    C-141 air speed and long-range transport capabilities, the C-5
    capability to carry outsized cargo, and the C-130 capability to land
    directly on short, forward-located airstrips. To support this program,
    our request includes a $5 million facility at McChord Air Force Base,
    Washington, two Air National Guard projects for $22.2 million at
    Jackson International Airport, Mississippi, and five projects for $36.5
    million at McGuire AFB, New Jersey.
        Other new mission requirements in fiscal year 2002 include the C-
    130J at Little Rock Air Force Base, Arkansas; the Space Based Infrared
    Radar System (SBIRS) at Schriever Air Force Base, Colorado; and a
    Telescopic/Atmosphere Compensation Lab at Kirtland Air Force Base, New
    Mexico.

                           INVEST IN QUALITY OF LIFE

        The Air Force is committed to taking care of our people and their
    families. Quality of life initiatives acknowledge the sacrifices our
    airmen make in support of the Nation and are pivotal to recruiting and
    retaining our best. When our members deploy, they want to know that
    their families are stable, safe and secure. Their welfare is a critical
    factor to our overall combat readiness, and our family housing program,
    dormitory program, and other quality of life initiatives reflect our
    commitment to provide them the facilities they deserve. I would also
    like to thank the President for his support and additional funding to
    improve the quality of life for Air Force personnel and their families.
        Our Air Force Family Housing Master Plan provides the road map for
    our housing MILCON, O&M, and privatization efforts to meet the
    Department of Defense goal to provide safe, affordable and adequate
    housing for our members by 2010.
        The $518 million fiscal year 2002 MFH replacement and improvement
    program will replace more than 700 worn-out units at 8 separate
    locations, improve more than 2,100 units at 15 locations, and supports
    privatization of more than 10,000 units at 12 locations. I'll discuss
    our housing privatization program in more detail in a few minutes. Our
    fiscal year 2002 housing operation and maintenance program totals $869
    million.
        Just as we are committed to provide adequate housing for families,
    we have an ambitious program to house our single junior enlisted
    personnel. The Air Force Dormitory Master Plan is a comprehensive,
    requirements-based plan, which identifies projected unaccompanied
    enlisted housing requirements and prioritizes MILCON projects. The plan
    includes a three-phased dormitory investment strategy. The three phases
    are: (1) Fund the replacement or conversion of all permanent party
    central latrine dormitories; (2) construct new facilities to eliminate
    the deficit of dormitory rooms; and (3) convert or replace existing
    dormitories at the end of their useful life using the Department of
    Defense 1+1 room standard. Phase 1 is complete, and we are now
    concentrating on the final two phases of the investment strategy. Our
    total requirement is 75,200 Air Force dormitory rooms. We currently
    have a deficit of 11,400 rooms and the existing inventory includes
    5,300 inadequate rooms. The remaining cost to execute the Air Force
    Dormitory Master Plan and achieve the fiscal year 2009 Air Force goal
    to buy out our deficit and replace our worst existing dormitories is
    just over $1 billion.
        The fiscal year 2002 dormitory program consists of 13 enlisted
    dormitory projects, with 8 projects at 7 CONUS installations, and 5
    projects overseas, for a total of $157 million. On behalf of all the
    airmen affected by this important quality of life initiative, I want to
    thank the committee. We could never have made it this far without your
    tremendous support of our dormitory modernization program.
        Other traditional quality of life investments include community
    facilities such as fitness centers and child development centers, vital
    in our efforts to attract and retain high quality people and their
    families. A strong sense of community is an important element of the
    Air Force way of life, and these facilities are important to that sense
    of community as well as to the physical and psychological well being of
    our airmen. The fiscal year 2002 MILCON program includes fitness
    centers at F.E. Warren AFB, Wyoming, Laughlin AFB, Texas, Kunsan AB,
    Korea, Mildenhall AB, United Kingdom, and Buckley AFB, Colorado.
        Overseas quality of life continues to be a priority to us. Even
    though the majority of our Air Force personnel are assigned in the
    United States, 21 percent of our forces are serving overseas. The Air
    Force overseas base structure has stabilized after years of closures
    and force structure realignments. Now, old and progressively
    deteriorating infrastructure at these bases requires increased
    investment. Our fiscal year 2002 MILCON program for our European and
    Pacific installations totals $273 million totaling 27 projects. The
    program consists of a variety of quality of life and infrastructure
    projects in Korea, the United Kingdom, Germany, Italy, and Turkey as
    well as critical facilities on Guam, Wake Island, and Greenland. We ask
    for your support of these operational and quality of life projects.
        Rounding out the MILCON fiscal year 2002 request are the planning
    and design and unspecified minor construction requirements. Our request
    for fiscal year 2002 planning and design is $87 million. These funds
    are required to accomplish the design for current mission projects
    added as a result of the amended budget for the fiscal year 2002
    program, complete design of the fiscal year 2003 construction program,
    and to start design of our fiscal year 2004 projects. We have requested
    $21 million in fiscal year 2002 for our total force unspecified minor
    construction program, which is our primary means of funding small,
    unforeseen projects that cannot wait for normal MILCON.

                       CONTINUE ENVIRONMENTAL LEADERSHIP

        The Air Force continues to enhance mission capability and sustain
    the public trust through prudent environmental stewardship. We are
    meeting our environmental cleanup commitments and planning guidance for
    policy goals through effective outreach and partnering with Federal and
    state regulators and team building with stakeholders and communities.
    Meeting our legal obligations remains a primary objective of the Air
    Force Environmental Quality Program. Our record of environmental
    stewardship illustrates our environmental ethic, both here in the
    United States and overseas. In addition to ensuring our operations
    comply with all environmental regulations and laws, we are dedicated to
    enhancing our already open relationships with both the regulatory
    community and the neighborhoods around our installations. We continue
    to seek partnerships with local regulatory and commercial sector
    counterparts to share ideas and create an atmosphere of better
    understanding and trust. By focusing on our principles of enhancing
    operational readiness, being a good neighbor, and leveraging our
    resources, we remain a leader in environmental compliance, cleanup, and
    pollution prevention. We have reduced our open enforcement actions from
    263 in fiscal year 1992 to just 10 at the end of fiscal year 2000.
        Our environmental compliance MILCON program in fiscal year 2002
    includes three projects totaling $10.2 million in support of the Clean
    Water Act. Our program includes restoring the environment, and
    constructing or modifying two fire-training facilities to meet
    environmental requirements. These fire-training facilities are located
    at Robins AFB, Georgia and Andrews AFB, Maryland. In addition, we are
    upgrading the wastewater system at Eareckson AS, Alaska. All of these
    projects satisfy DOD Class-1 requirements, which either refer to
    conditions or facilities currently out of compliance with environmental
    laws or regulations, including those subject to a compliance agreement,
    or refer to projects and activities which, if not corrected, will
    result in an out of compliance situation in the current program year.

               SUSTAIN, RESTORE, AND MODERNIZE OUR INFRASTRUCTURE

        To sustain, restore, and modernize what we own we need to achieve a
    balance between our military construction and operation and maintenance
    programs. Military construction allows us to restore and recapitalize
    our antiquated facilities while operation and maintenance (O&M) funding
    allows us to perform needed sustainment, restoration and modernization
    throughout the life cycle of a facility. Since the early nineties,
    constrained defense budgets resulted in reduced MILCON funding. For a
    few years adequate O&M funding partially offset this MILCON decline.
    However, since fiscal year 1997, competing priorities have forced the
    Air Force to cut sharply into both MILCON and O&M funding. Our effort
    to sustain and operate what we own is further strained by minimally
    funded O&M, which forces us to defer much-needed sustainment and
    restoration requirements. Currently, our sustainment, restoration and
    modernization (SRM) share of the Air Force O&M funding is only at $1.6
    billion. This is short of the $1.7 billion sustainment level, which is
    the minimum funding required to provide only the day-to-day maintenance
    and life cycle repairs necessary during the planned life of a facility.
    There is no funding for any restoration and modernization work, to fix
    things such as deteriorated water lines or failed airfield pavements.
    Our O&M funded restoration and modernization backlog now exceeds $5.6
    billion. We appreciate Congressional support in this area which has
    recently been successful in improving many of those facilities where we
    eat, sleep, play, and pray--fixing numerous dining halls, dormitories,
    fitness centers, and chapels. Without that congressional support, those
    facility enhancements could not have occurred.

                  OPTIMIZE USE OF PUBLIC AND PRIVATE RESOURCES

        In order for the Air Force to accelerate the rate at which we
    revitalize our inadequate housing inventory, we have taken a measured
    approach to housing privatization. We started with a few select
    projects, looking for some successes and ``lessons learned'' to guide
    our follow-on initiatives. Since awarding our first housing
    privatization project, at Lackland AFB, Texas in August 1998, 321 of
    the 420 housing units are now constructed and occupied by military
    families. The remaining 99 units are scheduled for completion this
    November. We have awarded three more projects that will result in 670
    privatized housing units at Robins AFB, Georgia, 402 units at Dyess
    AFB, Texas and 828 units at Elmendorf AFB, Alaska. We are working with
    the City of San Angelo on an unsolicited proposal to privatize 298
    housing units at Goodfellow AFB, Texas. Kirtland AFB, New Mexico, is in
    the middle of its housing privatization solicitation process, which
    potentially will privatize 1,164 housing units. Additionally, we have
    two more projects that will be out for solicitation shortly at Wright-
    Patterson AFB, Ohio and Patrick AFB, Florida. Our fiscal year 2002
    program includes 12 privatization projects for over 10,000 units at a
    cost of $135 million vice $868 million had we relied on traditional
    housing MILCON. This year's privatization projects are at Beale (1,444
    units), Nellis (1,313), Andrews (115), McGuire (1,882), Lackland (564),
    Altus (978), Hickam (1,356), Hurlburt (330), Buckley (201), Langley
    (1,268), Elmendorf (624), and Barksdale (432). We're realizing, on
    average, a five to one leverage on our MILCON investment for housing
    privatization and we see this kind of favorable ratio holding steady or
    perhaps even increasing on other projects in the out-years.
        Our housing privatization initiatives are making great strides in
    the right direction. We firmly believe that through housing
    privatization we can provide improved housing to more airmen in less
    time than using the standard military construction process.
        We continue to aggressively pursue privatization of utility systems
    at Air Force installations. Our goal is to privatize utility systems
    where it makes economic sense and does not unduly impact national
    security. The Air Force has identified 434 of our 645 systems as
    potential privatization candidates. We have released requests for
    proposals for 178 systems and have completed the process on 75 systems.
    The Air Force is working diligently towards the goal established by the
    Department of Defense to privatize eligible utility systems by 2003.

                          CONTINUE DEMOLITION PROGRAMS

        In an effort to reduce infrastructure, the Air Force plans to
    demolish or dispose of, non-housing building space that is no longer
    economical to sustain or restore. From fiscal year 1996 through fiscal
    year 2000, we demolished 14 million square feet of non-housing building
    space. This is equivalent to demolishing six Air Force bases equal to
    the combined square footage of Whiteman, Goodfellow, Moody, Brooks,
    Vance, and Pope Air Force Bases. Air Force demolition efforts continue
    to be a success story enabling us to reduce the strain on our
    infrastructure funding by getting rid of facilities we don't need. We
    support OSD's request for authority to conduct additional rounds of
    base closures, which would allow us to realign our forces for better
    efficiency and accelerate the disposal of unneeded infrastructure and
    facilities.
        In conclusion, Mr. Chairman, I thank the committee for its strong
    support of Air Force military construction and family housing. With
    your help, we will ensure we meet the most urgent needs of commanders
    in the field while providing quality facilities for the men and women
    who serve in, and are the backbone of, the most respected aerospace
    force in the world. I will be happy to address any questions.

        Mr. DuBois. Mr. Chairman, if I might add to that, I was
    recently in Korea with a Congressional delegation from the
    House of Representatives. I did visit Osan and many of the
    other installations there. I have testified on more than one
    occasion about the deteriorating infrastructure in Korea, both
    with the Army and the Air Force.
        It is not just the infrastructure that we see, it is the
    infrastructure that we do not see that is also of grave concern
    to the Secretary of Defense. Working with the Secretary of the
    Air Force and the committees on the Hill, we hope that there is
    $2 billion more in our military construction budget request,
    more than our 2001 request. While it is a down payment, and one
    must recognize that we, as I mentioned before, are going to
    work to keep it in the FYDP so that this ``sustains'' this
    approach to fixing the problem.
        Senator Akaka. I will suspend and yield at this time to the
    chairman of the full committee, Senator Levin.

                    STATEMENT OF SENATOR CARL LEVIN

        Senator Levin. Thank you Senator Akaka and thank you for
    convening this hearing today. These are really important
    subjects that you are covering. I want to talk to our panel
    mainly about base closures, savings that will hopefully be
    derived if we have another round or two of base closures, how
    the proposal of the administration to select the commission in
    any new base closing round is different from what existed
    previously, and if so why they are proposing changes. I will
    have questions in that vein.
        So, first Mr. DuBois, let me ask you about the General
    Accounting Office's report this month that concluded that
    although no method or system has been established to track
    savings on a routine basis, in their words, ``audits of BRAC
    financial records have shown that BRAC has enabled DOD to save
    billions of dollars.'' Do you agree with that conclusion?
        Mr. DuBois. I think that the headline that we saw in this
    morning's news, and I will address that and I believe it
    addresses your question Mr. Chairman, that categorized the
    savings as imprecise, in an ironic kind of way is correct, on
    the one hand. On the other hand the title of the GAO report
    that you referred to is, ``DOD's Updated Net Savings Estimate
    Remains Substantial.'' As you have indicated, I believe that
    while these cost and savings estimates have fluctuated over
    time, and this also comes from their brief introduction, the
    GAO's own analysis of the data showed, and I quote, ``that the
    net savings increase through fiscal year 2001 was due primarily
    to an overall reduction of about $723 million in reported costs
    and an increase of about $610 million in expected savings
    resulting from the closure actions.''
        Now to my way of thinking, for the GAO to use numbers with
    that kind of precision belies the headline. I also am gratified
    by seeing the GAO say, ``In addition to our audits,'' GAO's
    audits, ``reviews by the CBO, by the Department of Defense IG,
    by the Army Audit Agency, have affirmed that net savings are
    substantial after initial investment costs are recouped.''
        Senator Levin. You agree with that conclusion?
        Mr. DuBois. Yes I do, sir.
        Senator Levin. Relative to the base closure proposal that
    the Department has sent to us, or is sending to us today or
    perhaps tomorrow, you had an outline presented to us of that
    proposal. Under this proposal the number of people who are
    consulted is expanded to include chairmen and ranking members
    of the defense committees in the House and the Senate, in
    addition to the leadership.
        Mr. DuBois. Correct.
        Senator Levin. All of those folks may consult with the
    President about all of the nominees, as I understand your
    proposal, rather than the way in which it has existed thus far,
    where the leadership in both the House and the Senate is
    consulted on either two for the majority leader or one for the
    minority leader. That, in effect, was considered to mean that
    they would make the selection subject to the President
    approving that selection; because it was narrower. Under the
    previous procedure you spread out appointment power among more
    people. All the appointees were not appointed by the President.
        We had four people, along with the President making
    appointments under the existing law. But now, what you are
    proposing is to have more people consult and one person make
    all the appointments--that seems to me to be the inevitable
    outcome of what you are proposing. I would like to know what
    the reason for that change is? It seems to me you are going to
    have a lot less credibility in any process where that much
    power is in the hands of any person, even the President.
        Mr. DuBois. It was our conclusion, after many discussions
    with staffers and members here on the Hill, that one of the
    perceived--perhaps not real, but perceived--difficulties faced
    by commissioners individually and commissions as a whole in the
    past, was that the specification of a commissioner having been
    the Majority Leader's appointment or the Speaker's appointment,
    added a layering of political pressure on that individual
    commissioner that could otherwise have been avoided. You point
    out correctly that in previous legislation only the leadership
    of both Houses was consulted. Yes, while they could specify,
    they were, according to legislation, the only members
    consulted.
        Secretary Rumsfeld felt quite strongly that the chairman
    and ranking member of the defense committees needed to play a
    very strong role in the selection of the members of this
    commission. Therefore, we deleted the specification language
    and expanded the consultation language to include yourself, for
    instance.
        Senator Levin. I think the appearance is that we have a
    stronger role. The reality is that we have a weaker role,
    because instead of our leaders appointing people, that is
    stripped away. The consultation is not an appointment, so we
    have less power. I would much rather have the Majority Leader
    in the Senate appoint two people. I personally as chairman
    would have, I think, a greater role in the selection process
    with the Majority Leader picking two people, than I will have
    in consulting on nine people. But we asked for your reason,
    that is the reason that you give.
        Let me just ask you one other question. You say that there
    was a perception that, based on who the commissioner was
    appointed by, that created a certain political perception. Was
    that known? Was the information regarding who those
    appointments were recommended by made public?
        Mr. DuBois. My understanding was that it was clearly
    understood where----
        Senator Levin. Publicly, not just by the person appointed?
        Mr. DuBois. Yes sir, not just by the cognoscenti.
        Senator Levin. All right. Perhaps the more significant
    change that you are proposing is that you would allow a
    secretary to take off the list that the commission comes up
    with any facility or any base that is proposed for closing or
    for realignment that was added by the commission, that was not
    on the original list of the secretary. You have inserted a
    major political factor.
        Now you have the Secretary who is in a position of deciding
    whether or not a facility which has been added by the
    commission will be on that final list presented to Congress.
    That re-politicizes the whole thing. Instead of the commission
    making that decision and the Secretary saying yea or nay to the
    whole list, or the President saying yea or nay to the whole
    list, and instead of Congress saying yea or nay to the whole
    list, now you are in a situation where if the commission adds
    half a dozen actions that were not on the original proposal you
    could have the chairman of a committee or a powerful Member of
    Congress or somebody that is going to cast a key vote for the
    President saying, ``You know, there is a commission there that
    just added a facility on my base that was not on that original
    list. I have to tell you Mr. President, unless the Secretary of
    Defense eliminates that, you can forget my vote for judge so-
    and-so, or my vote for such-and-such.''
        What you are now re-inserting into this process is exactly
    what we were trying to avoid--which is a political factor where
    you can pick and choose, rather than have up or down on the
    whole list. I would like to know what your thinking is behind
    that?
        Mr. DuBois. Yes sir, and the issues that you raise are
    quite frankly issues that still haunt us, if you will. We came
    at this from the point of view of trying to de-conflict, to use
    a military term that I learned the other day, the notion that
    who in the final analysis will Congress turn to and ultimately
    abide by or subscribe to in terms of military judgment? One of
    the criticisms, complaints, concerns expressed to us over the
    past couple of months on this process was that the Joint Chiefs
    of Staff, the senior military officers, did not have enough
    involvement in this process in the past, either as individuals
    or as a collective body, number one.
        Number two, we believe that----
        Senator Levin. Now that, of course, could be corrected by
    the creation of that original list, right?
        Mr. DuBois. Right.
        Senator Levin. That is not what I am talking about.
        Mr. DuBois. But the other issue was, in the final analysis
    what organization, what body of individuals, which individual
    should have the ultimate say in terms of whether or not the
    infrastructure plan as presented by the Secretary of Defense,
    mapped to the force structure and defense strategy of the
    country? What is central to our mission? We believed, in the
    Pentagon--in the Defense Department, that the Secretary of
    Defense and the service chiefs should have that final say.
        Senator Levin. Not Congress, or the President?
        Mr. DuBois. No, Congress in terms of the totality of the
    package, the President in terms of the totality of the package.
    But while the commission could subtract--that if the commission
    suggests to the Secretary that for reasons that they
    articulated he should revisit an issue that they believed was
    either wrongly added or wrongly not included, the Secretary
    must take it under advisement and testify to what he believes
    is the right answer. It was a balance between where the
    military judgment should ultimately lie. Having said that,
    Senator, I would defer to the committee and to your judgment if
    you believe that is a situation wherein the previous construct
    was better.
        Senator Levin. We may have misread your proposal, but I do
    not think so because I do not think it is a matter of
    revisiting. I think it is a matter of deciding whether or not
    an item added by the commission will be left on that list for
    the final vote.
        Mr. DuBois. The Secretary could change his mind at the
    request of the commission, but if he chose not to change his
    mind and stuck to his original recommendations, then yes sir,
    his and the service chief's decision would essentially trump
    the commission on additions to the list.
        Senator Levin. You are repoliticizing it. It is not just
    revisiting. Let us be accurate here. It is deciding.
        Mr. DuBois. Sir, it puts an enormous pressure on the
    Secretary of Defense.
        Senator Levin. Well, the pressure on the Secretary of
    Defense should not be from political sources. If an item is
    added to the list by that commission the pressure then comes
    from people who do not want that added on the list. Then the
    Secretary can pick and choose which of the add-ons he is going
    to leave on that list.
        It is one thing to re-visit and make a recommendation back
    to the commission. But once you have that final decision of
    whether an add-on is left there or not, you have then put that
    power right back into political hands instead of the
    commission's hands. We are trying to separate, to the extent it
    is humanly possible, this decision from politics. In fact, it
    was an allegation that this process became politicized a few
    years back which has made it impossible for us to re-authorize
    a BRAC round. But we have your thinking on it and even though I
    disagree with it we appreciate your testimony relative to it.
        My final question, if I could ask one more Mr. Chairman?
        Senator Akaka. Go right ahead.
        Senator Levin. I do not know what your schedule is here,
    but you made a statement to the press the other day, Mr.
    DuBois, which really creates problems for us in terms of trying
    to have a credible process without pre-judgment. You are quoted
    as saying in USA Today that, ``Bases in the fast growing
    southeast, where encroachment from civilian aircraft and
    suburban sprawl is a growing problem could see some operations
    transferred. Some pilot training which can be hampered by heavy
    civilian air traffic could be moved to the northern plains
    states. Training areas near urban sprawl are not as valuable
    today as they were 20 years ago. Some of the 150 military
    operations in the Norfolk, Virginia area might be whittled
    down. Will they all stay in the Norfolk area? Probably not.''
        [A full copy of the article follows:]

        You have just set back our efforts, if those are accurate
    quotes. What we are trying to do is tell people there is no
    pre-judgment. We are going to have a commission that is going
    to do this. It is not going to be Mr. DuBois or anyone else. It
    is going to be a commission making this assessment and this is
    the kind of problem which has increased the fear factor. By the
    way, we all appreciate it. I mean every one of us have states
    with facilities in it which have an element of fear that a
    facility or facilities might be closed and realigned. So, what
    were you thinking of when you did this?
        Mr. DuBois. Thank you. There is no list. There is no
    category. There is no geography. There is no locality that has
    any designation one way or the other. I regret having specified
    a certain area.
        The conversation that I was having with the reporter was
    focused on the encroachment problem, a problem I did not face
    when Secretary Rumsfeld and I were in the Pentagon 25 years
    ago. I was addressing a national issue. I regret that I
    specified any particular locality. I should have kept it in the
    abstract. I will submit to you sir, my regret.
        However, I think encroachment is an issue that the
    gentlemen on my right and left would also testify to as being a
    serious issue, and one that includes spectrum competition. It
    includes urban encroachment. It includes endangered species. It
    includes other issues that did not exist necessarily in the
    same intensity or in combination as they perhaps existed 25
    years ago.
        But I did want to make it very clear, notwithstanding my
    remarks, some of which were taken out of context, that it was
    in no way meant to imply that there was any preconceived
    notion. As a practical matter, the Secretary of Defense and I
    have discussed this. The notion that there would be some list,
    exclusion or otherwise, is antithetical to his philosophy that
    the analysis proper cannot take place until the National
    strategy, through the QDR process and a force structure, is
    determined.
        Senator Levin. Well, I think it is not only ill-advised to
    make any reference to any specific location, but unless you are
    going to list every factor which would be taken into
    consideration by the Department in making a recommendation to
    the commission, to single out some factors like encroachment,
    those factors could be overcome by other factors.
        Mr. DuBois. That is quite correct, sir. It was just a
    factor that is becoming a much larger issue and concern of all
    the four services than it ever has been before. That was the
    context of the discussion.
        Senator Levin. Mr. Chairman, thank you. Thank you all.
        Senator Akaka. Thank you very much, Senator Levin. I will
    return to questions to General Van Antwerp. The Army recently
    announced the location for the next four Interim Brigade Combat
    Teams (IBCTs), and one of these will be the Second Brigade of
    the 25th Infantry Division at Schofield Barracks in Hawaii. I
    have been hearing about it, and I want all of you to know that
    I support the Army's transformation efforts.
        It is important that the Army provides the funding needed
    to make both the interim brigades and its larger transformation
    goals successful. The first step in providing this funding is
    to identify what support is needed and when. The question is,
    has the Army determined what funding will be required for the
    four interim brigades in terms of military construction and
    land acquisition and equipment purchases? What would be the
    time period for such funding?

        STATEMENT OF MAJ. GEN. ROBERT L. VAN ANTWERP, JR., USA,
          ASSISTANT CHIEF OF STAFF FOR INSTALLATION MANAGEMENT

        General Van Antwerp. Thank you, Mr. Chairman. We, too, are
    proud that this Interim Brigade Combat Team (IBCT) is going
    into Hawaii. I think it meets very well with our strategy, what
    we are trying to accomplish and our focus on that region. We
    have, in this year's budget, $56 million for Fort Lewis only,
    for five projects.
        So the first year that we will begin to fund for the
    additional four IBCTs starts in 2003. We have identified, via a
    template that we built based on our experience at Fort Lewis an
    estimate of our requirements. We have overlaid that template
    over each of the four sites to determine what is needed
    facilities-wise to support the equipment and the people going
    in. This ranges everywhere from barracks space to housing to
    child care centers to libraries to the motor pools, etcetera.
        We do have a rough estimate right now but we are still
    waiting for the actual project documentation to come in. The
    commands are getting that to us, the 1391s. We estimate that it
    will be in the neighborhood of about $500 million over the
    FYDP. We have about $300 million that we earmarked, knowing
    that we were going to need it for transformation, but it was
    not site specific.
        So we think probably our programming shortfall, which we
    will deal with within the Army, is about $200 million. The
    price tag is roughly $500 million for the entire package. We
    will know as we get clarity of the specific projects as they
    come in from the commands.
        Senator Akaka. I wish you well.
        General Van Antwerp. Thank you, sir.
        [The prepared statement of Major General Van Antwerp
    follows:]

        Prepared Statement by Maj. Gen. Robert L. Van Antwerp, Jr., USA

        Mr. Chairman and members of the subcommittee, it is a pleasure to
    appear before you to discuss the Army's Active and Reserve components'
    military construction requests for fiscal year 2002. These requests
    include important initiatives to improve the infrastructure of
    America's Army. Any dollar amounts beyond fiscal year 2002 discussed
    herein are, of course, dependent upon the results of the Secretary of
    Defense's Strategic Review, and should be considered in that light.
        This budget provides a substantial increase in construction and
    family housing resources essential to support the Army's role in our
    national military strategy. It supports the Army's vision and
    transformation strategy. Our budget includes the increased funding
    necessary to improve our installations: infrastructure in keeping with
    our leadership's commitment to having world class installations.
        The program presented herein requests fiscal year 2002
    appropriations and authorizations of appropriations of $1,760,541,000
    for military construction, Army (MCA); $1,400,533,000 for Army family
    housing (AFH--in two separate accounts); $267,389,000 for military
    construction, Army National Guard (MCNG); $111,404,000 for military
    construction, Army Reserve (MCAR) and $10,119,000 for the Homeowners
    Assistance Fund, Defense.
        The Army is and must remain the most respected Army in the world.
    Our commitment to meeting the challenges requires a comprehensive
    transformation of the Army and the Army's installations.
        Army transformation represents a move to forge a more strategically
    responsive, yet dominant, force for the 21st century. The new force
    will be more mobile and sustainable, and able to respond to the full
    spectrum of operations. Transformation also includes a rigorous
    training program, full integration of the Active and Reserve
    components, comprehensive initiatives to protect the force, and
    provides first class installations from which to project our forces. A
    fully-funded transformation will keep the Army capable and ready until
    it has achieved an objective force that is more responsive, deployable,
    versatile, agile, lethal, survivable, and sustainable. We are working
    closely with the Transformation Task Force to ensure installation needs
    are identified and addressed.
        The Army must sustain a force of high quality, well-trained people;
    acquire and maintain the right mix of weapons and equipment; and
    maintain effective infrastructure and power projection platforms to
    generate the capabilities necessary to meet our missions. Taking care
    of soldiers and families is a readiness issue and will ensure that a
    trained and qualified soldier and civilian force will be in place to
    support the objective force and the transformed Army.
        As the Army transforms, we must ensure that Army installations are
    transformed to meet the needs of the force. Army installations and
    Reserve component facilities must fully support our warfighting needs,
    while providing soldiers and their families with a quality of life that
    equals that of their peers in civilian communities.

                              FACILITIES STRATEGY

        The Army's facilities strategy is the centerpiece of our efforts to
    fix the deplorable current state of Army facilities. It addresses our
    long-term need to sustain and modernize Army-funded facilities in both
    Active and Reserve components by framing our requirements for
    sustainment, restoration and modernization (SRM) and military
    construction (MILCON) funding. Sustainment, restoration, and
    modernization (SRM) has replaced the term, ``real property
    maintenance'' (RPM). SRM includes funds for annual maintenance and
    scheduled repair--sustainment; and military construction funding to
    repair or replace facilities damaged due to failures attributable to
    inadequate sustainment or emergencies or to implement new or higher
    standards--restoration and modernization.
        The first pillar of the strategy requires us to halt further
    deterioration of our facilities. Our programmed sustainment funding,
    which comes from the SRM accounts has greatly improved. This level of
    funding may be sufficient to prevent further deterioration of Army
    facilities. We are funded at 94 percent of our requirements in fiscal
    year 2002. Our current C-3 conditions are a result of years of
    underfunding and migration of funds from the SRM accounts. We must have
    sufficient SRM resources to sustain our facilities and prevent
    facilities from deteriorating further, or we put our MILCON investments
    at risk.
        The second pillar of the strategy is to tackle the enormous backlog
    that has grown over numerous years of underfunding. Since we can't
    afford a quick fix to the $17.8 billion SRM backlog, and a significant
    deficit for construction of Army-funded facilities, we will focus
    centrally managed resources toward a critical set of facility types.
    This modernization requirement will primarily require MILCON funding
    supplemented by SRM project funding. Our goal is to raise Army
    facilities from current C-3 ratings to C-2 in the long-term by bringing
    our focused set of facilities to C-1 in 10-year increments. Our first
    10-year increment includes ARNG Readiness Centers, Army Reserve
    Centers, fitness facilities, basic training barracks, general
    instruction facilities, and tactical vehicle maintenance shops and
    supporting hardstands at a cost of approximately $10 billion. There are
    a number of MILCON projects in the fiscal year 2002 budget that support
    this first increment.
        We have based the Army facility strategy on commanders' ratings of
    our facilities in our Installation Status Report. The facilities we
    have chosen to modernize under this centrally managed program are
    critical to the Army's mission and to our soldiers. It is essential
    that both the sustainment (SRM) and the modernization (MILCON and SRM)
    pieces are funded as a single, integrated program. Only then will we be
    able to improve the health of Army real property and its ability to
    successfully support our worldwide missions and our soldiers.
        In addition to implementing our facilities strategy, we continue to
    eliminate excess facilities throughout the entire Army. During fiscal
    years 1988-2003, our facilities reduction program, along with the base
    realignment and closure process, will result in disposal of over 200
    million square feet in the United States. We continue our policy of
    demolishing at least one square foot for every square foot constructed.
    By 2003, with our overseas reductions included, the Army will have
    disposed of over 400 million square feet from its fiscal year 1990 peak
    of 1,157,700,000 square feet.
        Additionally, we are pursuing innovative ways to modernize our
    infrastructure and reduce the cost of our facilities. One example is
    installation utilities systems. Our goal is to privatize all utility
    systems in CONUS by 2003, where it is economically feasible, except
    those needed for unique security reasons. We are expanding the
    privatization of military family housing, in an effort to provide
    quality residential communities for soldiers and their families.
        Executive Order 13123, ``Greening The Government Through Efficient
    Energy Management,'' sets higher goals for reducing energy consumption.
    As of June 30, 2001, the Army had awarded 74 task orders on Energy
    Savings Performance Contracts (ESPCs), with a total private sector
    investment of $328 million and an anticipated annual energy savings in
    excess of two million MBtu's (the equivalent to 16 million gallons of
    oil). We are also pursuing opportunities to purchase electrical power
    generated from renewable sources such as wind, solar and geothermal. We
    have installed hundreds of solar lighting systems that use no energy in
    our facilities.
        Next, I will discuss our budget.

                       MILITARY CONSTRUCTION, ARMY (MCA)

        The MCA program focuses on six major categories of projects:
    mission facilities, operations facilities, transformation, well being,
    installation support, and chemical demilitarization. I will explain
    each area in turn.

                               MISSION FACILITIES

        In fiscal year 2002, there are 36 mission facility projects to
    ensure the Army is deployable, trained, and ready to respond to meet
    its national security mission. The projects continue the Army's
    Strategic Mobility Program (ASMP) to ensure deployment within specified
    timelines, provide enhanced training via live fire ranges and
    simulators, and maintain equipment readiness by ensuring Army vehicles
    are repaired and operational.
        Army Strategic Mobility Program: The 15 mobility projects in our
    budget facilitate movement of personnel and equipment from CONUS bases
    for both the Active and Reserve components to meet Army and Defense
    timelines for mobilization operations. They are part of an important
    program to upgrade our strategic mobility infrastructure, enabling the
    Army to maintain the best possible power projection platforms. We are
    requesting $128.75 million. The fiscal year 2002 projects will complete
    93 percent of the Strategic Mobility Program. Although the Strategic
    Mobility Program is scheduled for completion in fiscal year 2003, it is
    anticipated that there may be a follow-on phase as a result of changes
    in force structure and stationing.
        These include 11 projects totaling $94.9 million to improve our
    rail and air deployment capability by expanding an aircraft hardstand
    at Fort Campbell, extending a runway at Fort Benning, and providing air
    and rail passenger and materiel staging complexes at Fort Benning, Fort
    Campbell, Fort Sill, Fort Lewis and Sunny Point Military Ocean
    Terminal. To improve our port capability, we are upgrading a pier to
    support the mission of the 7th Transportation Group at Fort Eustis. Two
    projects at Sunny Point Military Ocean Terminal will improve the
    outloading of ammunition by constructing a canopy over the storage
    area, widening the road and constructing truck pads for safe transport
    and outloading of cargo and ammunition. An assembly building is
    programmed to support deployment at Fort Wainwright.
        Training: To improve soldier training, we are requesting phase II
    to complete the Digital Multi-purpose Training Range at Fort Hood. This
    project was fully authorized by Congress in fiscal year 2001. Our
    request includes a Record Fire Range and Night Fire Range at Fort
    Leonard Wood and a Modified Record Fire Range at Fort Riley. These
    ranges will provide our soldiers with M16 rifle qualification and
    training and also will provide for the integration of the Next
    Generation Targetry System for single and multiple targets. General
    Instruction Buildings are included in our program for Camp Jackson,
    Korea and Fort Sam Houston. These buildings will enable the Army to
    provide much needed classrooms for training of our soldiers. We are
    also requesting phase II of the Battle Simulation Center at Fort Drum
    that was also authorized in fiscal year 2001. A Comanche simulator
    training facility at Fort Rucker to train pilots on the Army's new
    helicopter is also requested. An Airborne Training Facility at Fort Lee
    will support training for our Enlisted Parachute Rigger and Aerial
    Delivery and Material Officers courses.
        Readiness: We are requesting 9 projects that will provide vehicle
    maintenance facilities and tactical equipment shops to ensure unit
    equipment readiness: Baumholder, Mannheim, Fort Stewart, Fort Drum,
    Camp Casey, Fort Bragg, Fort Gordon, and two projects at Fort Hood: a
    vehicle maintenance facility, and a tactical equipment shop. The
    request also includes two projects at Anniston Army Depot: a project to
    improve the safety conditions in the main combat vehicle disassembly
    and rebuild facility and a repair and demilitarization of combat armor.
    An Ammunition Surveillance Facility at Aberdeen Proving Ground is
    requested to maintain control and accountability of foreign munitions.

                             OPERATIONS FACILITIES

        The fiscal year 2002 budget request includes command and control
    facilities, laboratories, operations facilities, and a physical
    development center which began construction in fiscal year 1999.
        Two Command and Control Facilities are in the request for Pohakuloa
    Training Area, Hawaii, and phase 2 of the Command and Control Facility
    at Fort Hood, where we are completing a project that began in fiscal
    year 2001. Three laboratory projects include a Criminal Investigation
    Forensic Laboratory at Fort Gillem, which will provide forensic support
    and expert testimony in judicial cases for all DOD investigative
    agencies; a Chemistry Laboratory at Edgewood (Aberdeen Proving Ground--
    APG) for life cycle chemical agent research, development, and
    evaluation; and a Climatic Test Facility at APG to provide controlled
    temperature and humidity test environment for critical weapons testing.
        We are requesting a Military Entrance Processing Facility at Fort
    Lee for processing applicants from 77 counties in the State of Virginia
    and reducing the high cost of leased facilities. This project has a
    payback period of less than 3 years.
        Field Operations Facilities at Fort Drum and Fort Eustis will
    provide criminal investigative support for the Army. The budget request
    also includes a Shipping Operations Building at Pearl Harbor; a
    Readiness and Operations Facility at Fort Polk; an Explosive Ordinance
    Detachment Operations Building at Fort Gillem; an Operations Facility
    at the Humphreys Engineer Center for the Information Security Command;
    and a Parachute Team General Purpose Building at Fort Bragg. This
    request also includes phase 3 for the United States Military Academy
    Cadet Physical Development Center, which was fully authorized in fiscal
    year 1999.

                                 TRANSFORMATION

        Our budget contains five projects at Fort Lewis that support the
    deployment, training and equipment maintenance of the new transformed
    force. These projects include two maintenance facilities for new
    vehicles, an expanded ammunition supply storage facility to support
    training and deployment of the increased force, a combat vehicle trail
    and a pallet handling facility to support the logistic deployment of
    equipment and supplies. As new transformation installations are
    identified, we will continue to identify and validate additional
    requirements associated with transformation and will include these
    projects in future budgets.

                              WELL BEING PROJECTS

        The well being of our soldiers, their families and civilians has a
    significant impact on readiness. Therefore, 40 percent of our MCA
    budget is dedicated to providing these types of facilities. Although
    our first priority is to get soldiers out of gang-latrine type
    barracks, we are also requesting two basic combat trainee barracks,
    child development centers, physical fitness training centers, a dining
    facility, two education centers, a soldier service center, and a
    chapel. These projects will improve not only the well being of our
    soldiers and families, but also the readiness of the Army. We are
    requesting appropriations and authorization of appropriations of $701.2
    million for well being projects this year.
        Barracks Modernization Program: Modernization of barracks for
    enlisted permanent party soldiers continues to be the Army's number one
    facilities priority for military construction. It provides single
    soldiers with a quality living environment that approximates conditions
    off the installation, or enjoyed by our married soldiers. New or
    renovated barracks provide increased personal privacy and larger rooms,
    closets, new furnishings, adequate parking, and landscaping. In
    addition, administrative offices are separated from the barracks. With
    the approval of our budget, as requested, 73 percent of our barracks
    requirement will be funded at the new standard for our permanent party
    soldiers. Our plan is to invest an additional $4.2 billion in MCA and
    host nation funds between fiscal years 2003 and 2008, supplemented by
    $0.6 billion in sustainment, restoration, and modernization (SRM) to
    fix barracks worldwide to meet our goal of providing improved living
    conditions for all of our single soldiers by fiscal year 2008. While we
    are making considerable progress at installations in the United States,
    we will request increased funding for Germany and Korea in future
    budgets to compensate for these areas being funded at lower levels than
    the CONUS installations. A large portion of the remaining modernization
    effort, 44 percent, is in these overseas areas.
        In fiscal year 2002, we are planning 20 barracks projects. This
    includes 6 projects in Europe and 3 projects in Korea. Our budget
    completes the Schofield barracks and Fort Bragg barracks complexes that
    were authorized in fiscal year 2000 and incrementally funded in fiscal
    year 2000 and fiscal year 2001. Fort Bragg's large soldier population
    and poor barracks conditions require sustained high investment through
    fiscal year 2008 to provide quality housing. We are continuing with the
    second phase of two additional barracks complexes at Fort Bragg that
    were authorized in fiscal year 2001. At Fort Richardson, Fort Lewis,
    and Fort Carson, we are requesting authorization for all phases of the
    barracks complex which extends over several fiscal years; however, we
    are only requesting the funding needed for the fiscal year 2002 phase.
    Our plan is to award each complex, subject to subsequent
    appropriations, as a single contract to gain cost efficiencies,
    expedite construction, and provide uniformity in building systems.
        Basic Combat Training Complexes: We have included phase 2 to
    complete the basic combat training complex at Fort Leonard Wood that
    was authorized and begun in fiscal year 2001. This project provides a
    modern, initial entry basic training complex that includes separate and
    secure housing to support gender-integrated training, and provides for
    the administrative and training functions that are organic to the
    mission of the basic training battalion. We also are requesting full
    authorization for a basic combat training complex at Fort Jackson.
    However, we are only requesting the funding necessary to execute the
    first phase in fiscal year 2002.
        Community Facilities: Our budget request includes three new child
    development centers to replace failing or inadequate facilities in
    Wiesbaden, Fort Riley, and Fort Meade. To improve soldier physical
    fitness and community wellness, our budget includes physical fitness
    training centers at Camp Carroll, Bamberg, Wiesbaden, and Fort McNair.
    A new dining facility to provide for the soldiers at Redstone Arsenal,
    two education centers at Fort Polk and Fort Stewart, and a Soldier
    Service Center also at Fort Stewart are included in our request. With
    this budget request we will implement the Chapel of the Year Program
    with a chapel at Fort Belvoir to improve the quality and availability
    of religious facilities for the well being of our soldiers and their
    families.

                         INSTALLATION SUPPORT PROGRAMS

        This category of construction projects provides vital support to
    installations and helps improve their readiness capabilities. We have
    requested nine projects with an appropriations and authorization of
    appropriations request of $79.3 million.
        Projects in the budget request include a Cold Storage Warehouse at
    Kwajalein Atoll; an Effluent Reuse System at Fort Huachuca; a Power
    Plant Cooling Tower at Fort Wainwright; a Sanitary Sewer System at Camp
    Hovey; Electrical Distribution System at Camp Carroll; an Electrical
    Substation at Fort Campbell; a Hazardous Materials Storage Facility at
    Fort Drum; an Information Systems Facility at Fort Gordon; and a Fire
    Station at Sunny Point Military Ocean Terminal.

        A classified project is also included in our budget request.

                          AMMUNITION DEMILITARIZATION

        The Ammunition Demilitarization (Chemical Demilitarization) Program
    is designed to destroy the U.S. inventory of lethal chemical agents,
    munitions, and related (non-stockpiled) materiel. It also provides for
    emergency response capabilities, while avoiding future risks and costs
    associated with the continued storage of chemical warfare materiel.
        The Office of the Secretary of Defense devolved the Chemical
    Demilitarization Program to the Department of the Army in fiscal year
    1999. Although Congress has consistently authorized and appropriated
    funding for the Chemical Demilitarization Construction Program to the
    Department of Defense, the overall responsibility for the program
    remains with the Army and we have included it in this year's Army
    budget.
        We are requesting appropriations and authorization of
    appropriations for $172.5 million in the Army's fiscal year 2002 budget
    to continue the chemical demilitarization projects previously
    authorized. Table 1 summarizes our request:

                           TABLE 1.--FISCAL YEAR 2002
    ------------------------------------------------------------------------
               Installation                    Type               Amount
    ------------------------------------------------------------------------
    Aberdeen Proving Ground, MD......  Ammun Demil               $66,500,000
                                        Facility, Ph III.
    Blue Grass Army Depot, KY........  Ammun Demil                 3,000,000
                                        Facility, Ph II.
    Newport Army Depot, IN...........  Ammun Demil                66,000,000
                                        Facility, Ph IV.
    Pine Bluff Army Depot, AR........  Ammun Demil                26,000,000
                                        Facility, Ph VI.
    Pueblo Army Depot, CO............  Ammun Demil                11,000,000
                                        Facility, Ph III.
                                                            ----------------
        Total........................  ....................     $172,500,000
    ------------------------------------------------------------------------

        The destruction of the U.S. stockpile of chemical weapons by the
    2007 deadline in the Chemical Weapons Convention is a major priority of
    the Army, DOD and the administration. The MILCON funding for the
    chemical weapons destruction facilities is essential to achieving that
    goal.

                              PLANNING AND DESIGN

        The fiscal year 2002 MCA budget includes $134.098 million for
    planning and design. The fiscal year 2002 request is a function of the
    construction programs for three fiscal years: 2002, 2003, and 2004. The
    requested amount will be used to design-build a portion of the fiscal
    year 2002 program, complete design in fiscal year 2003, and initiate
    design of fiscal year 2004 projects.
        Host nation support (HNS) planning and design (P&D): The Army, as
    executive agent, provides HNS P&D for oversight of host nation funded
    design and construction projects. The U.S. Army Corps of Engineers
    oversees the design and construction to ensure the facilities meet our
    requirements and standards. Lack of oversight may result in an increase
    in design errors and construction deficiencies that will require United
    States dollars to rectify. Maintaining the funding level for this
    mission results in a payback where $1 of United States funding gains
    $60 worth of host nation construction. The fiscal year 2002 budget
    request for $23.1 million will provide oversight for approximately $850
    million of construction in Japan, $50 million in Korea, and $50 million
    in Europe.

                            BUDGET REQUEST ANALYSIS

        Summary: The fiscal year 2002 MCA budget includes a request for
    appropriations and authorization of appropriations of $1,760,541,000.
        Authorization Request: Request for authorization is $1,558,673,000.
    The authorization request is adjusted for those projects previously
    authorized in prior fiscal years. These projects include the chemical
    demilitarization projects, phase 3 of the West Point Cadet Physical
    Development Center, phase 2 of the Fort Hood Digital Multi-purpose
    Training Range, phase 2 of the Fort Drum Battle Simulation Center,
    phase 2 of the Basic Training Complex at Fort Leonard Wood, and the
    phases of the Whole Barracks Renewal Complexes at Fort Bragg and
    Schofield barracks. Additionally, it is modified to provide full
    authorization of $375 million for the barracks complex at Fort Carson,
    Fort Lewis, Fort Richardson, and Fort Jackson. Only $144 million in
    appropriations is required for the first phase of these projects. Table
    2 displays the projects which are phased over several fiscal years.

        The fiscal year 2002 request for appropriations and authorization
    for fiscal year 2002, by investment focus, is shown in table 3:

        Table 4 shows the fiscal year 2002 distribution of the
    appropriations request among the Army's major commands:

                            TABLE 4.--COMMAND SUMMARY
                 [Military Construction, Army--Fiscal Year 2002]
    ------------------------------------------------------------------------
                                                  Appropriations  Percent of
                       Command                         $000          total
    ------------------------------------------------------------------------
    INSIDE THE UNITED STATES:
      Army Materiel Command.....................        248,850         14.1
      Army Test and Evaluation Command..........          9,000          0.5
      Criminal Investigations Command...........         32,900          1.9
      Forces Command............................        630,600         35.8
      Information Security Command..............         36,300          2.1
      Medical Command...........................          2,250          0.1
      Military District of Washington...........         22,350          1.3
      Military Entrance Processing Command......          6,400          0.4
      Military Traffic Management Command.......         11,400          0.6
      Training & Doctrine Command...............        129,850          7.4
      United States Army Recruiting Command.....          7,700          0.4
      United States Army, Pacific...............        162,100          9.2
      Unites States Military Academy............        $37,900          2.2
      Classified Project........................         $4,000          0.2
                                                 ---------------------------
        SUB-TOTAL...............................      1,341,600         76.2
                                                 ===========================
    OUTSIDE THE UNITED STATES:
      Eight, United States Army.................        109,443          6.2
      Space and Missile Defense Command.........         11,000          0.6
      United States Army, Europe................        123,300          7.0
                                                 ---------------------------
        SUB-TOTAL...............................        243,743         13.8
                                                 ===========================
        TOTAL MAJOR CONSTRUCTION................      1,585,343         90.0
                                                 ===========================
    WORLDWIDE:
      Planning and Design.......................        157,198          8.9
      Minor Construction........................         18,000          1.0
                                                 ---------------------------
        SUB-TOTAL...............................        175,198         10.0
                                                 ===========================
        TOTAL APPROPRIATIONS REQUESTED..........      1,760,541        100.0
    ------------------------------------------------------------------------

                              ARMY FAMILY HOUSING

        The family housing program provides a major incentive that is
    necessary for recruiting and retaining dedicated individuals to serve
    in the Army. Adequate and affordable housing continues to be a major
    concern to soldiers when asked about their quality of life. We have
    waiting lists at nearly all of our major posts and out-of-pocket
    expenses for soldiers living off post are approximately 15 percent of
    the total cost of their housing. The Army supports the initiative to
    increase the basic allowance for housing (BAH) to eliminate the out-of-
    pocket costs being paid by service members for off-post housing in the
    United States. Maintaining and sustaining safe, attractive, and
    convenient housing for our soldiers and families is one of our
    continuing challenges. This budget represents an increase in the family
    housing program for additional family housing construction and expanded
    privatization. This increase will assist us in providing improved
    housing quicker and to more of our military families. Our current plan
    ensures we meet the Secretary of Defense's goal of 2010 to provide
    adequate housing to all military families. I would like to thank the
    President for his support and extra funding to improve quality of
    housing for Army personnel and their families.
        Privatization is an essential element in solving our acute family
    housing problem. The Army's privatization program, Residential
    Communities Initiative (RCI), utilizes the authorities granted by
    Congress in 1996 and extended to December 31, 2004, and includes the
    initial pilot privatization projects at Fort Carson, Colorado; Fort
    Hood, Texas; Fort Lewis, Washington; and Fort Meade, Maryland, plus 24
    additional privatization sites.
        We are especially pleased with the progress being made with our
    first privatization project at Fort Carson. The first new homes were
    occupied by Army families in November 2000. A total of 840 new units
    are being built and the rest (1,823) are being fully renovated. This
    project will provide our soldiers a quantum leap in quantity and
    dramatic improvement in the quality of our on-post housing in a short
    period of time.
        For the remaining Government-owned units in the United States and
    overseas, the Army has programmed sufficient MILCON and major
    maintenance and repair funds to eliminate all inadequate units in
    Europe, Korea and the United States by 2010.
        Our fiscal year 2002 request for appropriations and authorization
    of appropriations request is $1,400,533,000. Table 5 summarizes each of
    the categories of the Army Family Housing Program.

                                              TABLE 5.--ARMY FAMILY HOUSING
                                                   [Fiscal Year 2002]
    ----------------------------------------------------------------------------------------------------------------
                                                                         Authorization of         Appropriations
                                                                          appropriations     -----------------------
                            Facility category                        ------------------------
                                                                         ($000)      Percent     ($000)      Percent
    ----------------------------------------------------------------------------------------------------------------
    New Construction................................................        59,200         4        59,200         4
    Post Acquisition Const..........................................       220,750        16       220,750        16
    Planning and Design.............................................        11,592         1        11,592         1
    Operations......................................................       178,520        13       178,520        13
    Utilities.......................................................       258,790        18       258,790        18
    Maintenance.....................................................       446,806        32       446,806        32
    Leasing.........................................................       196,956        14       196,956        14
    Privatization...................................................        27,918         2        27,918         2
    Debt............................................................             1        <1             1        <1
                                                                     --------------          --------------
        Total.......................................................     1,400,533  ........     1,400,533  ........
    ----------------------------------------------------------------------------------------------------------------

                          FAMILY HOUSING CONSTRUCTION

        The total fiscal year 2002 request for construction is
    $291,542,000. It continues the Whole Neighborhood Revitalization (WNR)
    Initiative approved by Congress in fiscal year 1992 and supported
    consistently since that time. This successful approach addresses the
    entire living environment of the military family. The projects are
    based on life-cycle economic analyses and support the Department of
    Defense's 2010 goal by providing units that meet current construction
    and adequacy standards.
        New Construction: The fiscal year 2002 new construction program
    provides WNR projects that replace 220 units at four locations.
    Replacement construction provides adequate facilities where there is a
    continuing requirement for the housing and it is not economical to
    renovate. Some existing housing, 278 units, will be demolished, in
    order to reduce the housing density. New construction projects are
    requested at Camp Humphreys, Korea, for 54 units, where adequate off-
    post family housing is not available and no on-post family housing
    exists. These units serve command sponsored personnel living in
    substandard, off-post quarters and those personnel who are
    unaccompanied due to a lack of adequate family housing on or off-post.
    All of these projects are supported by housing surveys which show that
    adequate and affordable units are not available in the local community.
        Post Acquisition Construction (Renovation): The Post Acquisition
    Construction Program is an integral part of our housing revitalization
    program. In fiscal year 2002, we are requesting funds for improvements
    to 14,404 existing units at 10 locations in the United States,
    including privatization at seven installations: six locations in
    Europe, and one site in Korea. Included within the scope of these
    projects are efforts to improve supporting infrastructure, energy
    conservation and elimination of environmental hazards.

                   FAMILY HOUSING OPERATIONS AND MAINTENANCE

        The operations, utilities, maintenance, and leasing programs
    comprise the majority of the fiscal year 2002 request. The requested
    amount of $1,108,991,000 for fiscal year 2002 is approximately 79
    percent of the total family housing budget. This budget provides for
    the Army's annual expenditures for operations, municipal-type services,
    furnishings, maintenance and repair, utilities, leased family housing,
    and funds supporting the Military Housing Privatization Initiative.
    With current funding, housing units can be kept habitable and open;
    however, their condition will continue to deteriorate.

                             FAMILY HOUSING LEASING

        The leasing program provides another way of adequately housing our
    military families. We are requesting $196,956,000 in fiscal year 2002
    to fund existing section 2835 project requirements, temporary domestic
    leases in the United States, and approximately 8,700 units overseas.

               MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

        The military construction request, $267,389,000 for the Army
    National Guard, focuses on readiness centers, maintenance support
    shops, and training facilities. These projects are mission focused and
    are centered on the well being of our soldiers.

                               MISSION FACILITIES

        Fiscal year 2002 contains 26 mission facility projects.
        Readiness Centers: In support of the Army facility strategy, the
    Army National Guard is requesting $56,228,000 million for 11 projects.
    Our fiscal year 2002 budget request is for readiness centers in Iowa,
    Idaho, Mississippi, New Hampshire, Ohio, Tennessee, Alabama and two 60
    year old readiness centers in Louisiana. Also, in support of Army
    National Guard Division Redesign Study (ADRS), we are requesting
    funding for the addition/alteration to readiness centers in California
    and Montana. The California project is particularly significant,
    because it eliminates smaller facilities on land desperately needed by
    the local community in the Los Angeles Basin.
        Maintenance Support Shops: There are 10 maintenance shops planned
    as part of our revitalization plan: a unit training equipment site in
    Alabama, a maneuver and training equipment site in California and New
    York, a combined support maintenance shop in South Dakota and Michigan
    (phase II), and four organizational maintenance shops located in
    Massachusetts, Maryland, Tennessee, and Wisconsin. The majority of
    these facilities were built in the 1950s. Also, as part of the ADRS
    initiative, we have included one organization maintenance shop for
    addition/alteration in Kansas for this fiscal year. Sites in
    California, Indiana, Kansas, Michigan, Montana, and Nebraska were
    selected to begin the conversion process, which started this year.
    These projects are essential for the units to successfully maintain the
    additional heavy equipment they will receive during ADRS phase I. A
    total of $85,080,000 million is being requested for these Army National
    Guard maintenance support shops.
        Training Facilities: The Army National Guard is requesting
    $90,264,000 for five training facilities: Army aviation facilities in
    Arizona, Maine, New Hampshire, Texas, and phase II of the military
    education facility in Mississippi. Two illustrations of this need are
    in Texas and New Hampshire. Since Austin, Texas, closed the airport the
    Aviation facility in Texas is spread between seven temporary
    facilities. New road construction by the city at our New Hampshire
    aviation facility will cut off all access to the runway.

                            BUDGET REQUEST ANALYSIS

        Summary: The MCNG budget request includes a request for
    appropriations and authorization of appropriations of $267,389,000 for
    fiscal year 2002. The fiscal year 2002 request for appropriations and
    authorization for fiscal year 2002, by investment focus, is shown in
    table 6:

                 TABLE 6.--INVESTMENT FOCUS ARMY NATIONAL GUARD
                        [Appropriations Fiscal Year 2002]
    ------------------------------------------------------------------------
                                     Authorization  Appropriations   Percent
                Category                 ($000)         ($000)      approp'n
    ------------------------------------------------------------------------
    Major Construction.............        236,924        236,924         89
    Unspecified Minor Construction.          4,671          4,671          2
    Planning and Design............         25,794         25,794          9
                                    ----------------------------------------
        Total......................        267,389        267,389        100
    ------------------------------------------------------------------------

        Table 7 shows fiscal year 2002 distribution of the appropriations
    request among the 54 States and territories supporting the Army
    National Guard:

                                                TABLE 7.--PROJECT SUMMARY
                              [Military Construction Army National Guard--Fiscal Year 2002]
    ----------------------------------------------------------------------------------------------------------------
                                                                                          Appropriations  Percent of
                        Location                                 Project title                ($000)         total
    ----------------------------------------------------------------------------------------------------------------
    Huntsville, AL..................................  Unit Training Equip Site..........           7,498           3
    Mobile, AL......................................  Readiness Center add/alt..........           5,333           2
    Marana, AZ......................................  Aviation Maintenance Hanger.......          14,358           5
    Fort Irwin, CA..................................  Maneuver & Training Equip Site....          21,953           8
    Lancaster, CA...................................  Readiness Center (ADRS)...........           4,530           2
    Gowen Field, ID.................................  Readiness Center PHI..............           8,117           3
    Estherville, IA.................................  Readiness Center..................           2,713           1
    Fort Riley, KS..................................  Organ Maint Shop (ADRS) add/alt...             645  ..........
    Carville, LA....................................  Readiness Center..................           5,677           2
    Camp Beauregard,................................  LA Readiness Center...............           5,392           2
    Bangor, ME......................................  Army Aviation Support Fac. PHI....          11,618           4
    Framingham, MA..................................  Organizational Maintenance Shop...           8,347           3
    Salisbury, MD...................................  Organizational Maint Shop add/alt.           2,314           1
    Lansing, MI.....................................  Combined Support Maint Shop PHII..           5,809           2
    Gulfport, MS....................................  Readiness Center..................           9,145           4
    Camp Shelby, MS.................................  Mil Education Center PHII.........          11,444           4
    Kalispell, MT...................................  Readiness Center add/alt (ADRS)...             822  ..........
    Concord, NH.....................................  Army Aviation Support Facility....          27,185          10
    Concord, NH.....................................  Readiness Center..................           1,868           1
    Fort Drum, NY...................................  Maneuver Area Trng & Equip Shop...          17,000           6
    Cincinnati, OH..................................  Readiness Center..................           9,780           4
    Mitchell, SD....................................  Combined Support Maint Shop.......          14,228           5
    Alcoa, TN.......................................  Readiness Center..................           8,203           3
    Henderson, TN...................................  Organizational Maint Shop.........           2,012           1
    Austin, TX......................................  Army Aviation Support Facility....          25,659          10
    Oshkosh, WI.....................................  Organizational Maintenance Shop...           5,274           2
    Various.........................................  Planning and Design...............          25,794          10
    Various.........................................  Unspecified Minor Construction....           4,671           2
                                                                                         ---------------------------
         Total appropriation and authorization of appropriations requested..............         267,389         100
    ----------------------------------------------------------------------------------------------------------------

                   MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)

        The MCAR program focuses on mission facilities projects. In fiscal
    year 2002, there are nine Army Reserve projects to assist the USAR with
    its mission requirement of providing trained and ready forces to
    support the missions of the United States Army. The USAR's program
    continues to emphasize readiness, quality of life, modernization, and
    installation and base support.

                               MISSION FACILITIES

        Fiscal year 2002 contains eight mission facilities projects and one
    land acquisition project.
        United States Army Reserve Centers: Our fiscal year 2002 USAR
    budget request is for the construction of five U.S. Army Reserve
    Centers in Arizona, Kentucky, Washington, New Hampshire, and American
    Samoa, and one Armed Forces Reserve Center in Colorado. The Reserve
    Centers in American Samoa, New Hampshire, and Kentucky are to replace
    severely overcrowded facilities that were constructed in the 1950s. The
    Army Reserve Center in Tafuna, American Samoa, also represents the sole
    presence of the Department of Defense on the island. The current
    center's utilization rate is 293 percent. This facility will also serve
    as a command and control facility for the local authorities, as well as
    a safe haven for the local populace. The project in Washington also
    includes an Aviation Support Facility needed to maintain the Army
    Reserves' new aviation assets assigned to Fort Lewis. The projects in
    Arizona and Colorado are to improve facilities transferred to the USAR
    as a result of the 1995 base realignment and closure (BRAC). These
    facilities are overcrowded and in need of renovation and new
    construction. A land acquisition project is required in Cleveland, Ohio
    to support future construction of an Army Reserve Center.
        Maintenance Facilities: There are six Organizational Maintenance
    Shops (OMS) included as part of our construction plan. The OMS in
    American Samoa is required for use by a vehicle repair platoon and an
    engineer detachment, and the OMS in Arizona will support the routine
    maintenance requirements for the units assigned to that Reserve Center.
    Currently, there is no maintenance facility at the Reserve Center in
    Mesa, Arizona. The OMS in New Hampshire and Washington are part of the
    replacement plan for out-dated facilities. The OMS in Texas will
    replace an existing 1958 facility. Also included is an Aviation Support
    Facility at Fort Lewis, Washington. These new maintenance facilities
    will improve the equipment readiness of the units assigned and provide
    a modernized workplace for the mechanics to train.
        Barracks Renovation: There is a project to renovate the Officer
    Education School barracks at Fort Dix, New Jersey. The current barracks
    were constructed in 1970 and do not currently meet the requirements for
    training soldiers. The renovation of these barracks will provide the
    students an environment that is both safe and conducive to learning.
        The fiscal year 2002 request is for appropriations and
    authorization of appropriations of $111,404 million for military
    construction, Army Reserve, as shown on table 8:

                            TABLE 8.--COMMAND SUMMARY
             [Military Construction Army Reserve--fiscal year 2002]
    ------------------------------------------------------------------------
                                              Appropriations    Percent of
                    Location                      ($000)           total
    ------------------------------------------------------------------------
    Arizona, Mesa (USARC/OMS)...............          10,900             9.8
    American Samoa, Tafuna (USARC/OMS)......          19,703            17.7
    Colorado, Fort Carson (USARC)...........           9,394             8.4
    Kentucky, Fort Knox (USARC).............          14,846            13.3
    New Hampshire (USARC/OMS)...............           9,122             8.2
    New Jersey, Fort Dix (OES Barracks                12,000            11.0
     Upgrade)...............................
    Ohio, Cleveland (Land Acquisition)......           1,200             1.1
    Texas, Texarkana (OMS)..................           1,862             1.7
    Washington, Fort Lewis (USARC/OMS/ASF)..          21,978            19.7
                                             -------------------------------
        TOTAL MAJOR CONSTRUCTION............         101,005            90.7
                                             ===============================
    WORLDWIDE:
      Planning and Design...................           8,024             7.2
      Minor Construction....................           2,375             2.1
                                             -------------------------------
        SUBTOTAL............................          10,399             9.3
                                             ===============================
        TOTAL AUTHORIZATION OF                       111,404           100.0
         APPROPRIATIONS REQUESTED...........
    ------------------------------------------------------------------------

                      HOMEOWNERS ASSISTANCE FUND, DEFENSE

        The Army is the executive agent for the Homeowners Assistance
    Program. This program provides assistance to homeowners by reducing
    their losses incident to the disposal of their homes when the military
    installations at or near where they are serving or employed are ordered
    to be closed or the scope of operations reduced. The fiscal year 2002
    request is for $10.119 million in appropriations, along with a
    companion request for authorization and authorization of appropriations
    for the same amount. Fiscal year 2002 will be funded with
    appropriations, carryover, and anticipated authority to transfer monies
    from the BRAC account to the Homeowners Assistance Fund.
        The request will provide assistance to personnel at approximately
    14 locations that have been impacted with either a base closure or a
    realignment of personnel resulting in adverse economic effects on local
    communities. The Homeowners Assistance Program is funded not only from
    the resources being requested in this budget, but is also dependent, in
    large part, on the revenue earned during the fiscal year from the sale
    of properties.

               SUSTAINMENT, RESTORATION, AND MODERNIZATION (SRM)

        In addition to military construction and family housing, the third
    area in the facilities arena is the SRM program. SRM is the primary
    account in base support funding area responsible to maintain the
    infrastructure to achieve a successful readiness posture for the Army's
    fighting force. Installations and Reserve component facilities are the
    platforms of America's Army and must be properly maintained to be ready
    to support current Army missions and any future deployments.
        SRM consists of two major functional areas: (1) facilities
    sustainment of real property and (2) restoration and modernization.
    Facilities sustainment provides resources for maintenance and repair
    activities necessary to keep an inventory of facilities in good working
    order. It also includes major repairs or replacement of facility
    components, usually accomplished by contract, that are expected to
    occur periodically throughout the life cycle of facilities. Restoration
    and modernization provides resources for improving facilities.
    Restoration includes repair and replacement work to restore facilities
    damaged by inadequate sustainment, excessive age, natural disaster,
    fire, accident or other causes. Modernization includes alteration of
    facilities solely to implement new or higher standards, including
    regulatory changes, to accommodate new functions, or to replace
    building components that typically last more than 50 years, such as
    foundations and structural members.
        Within the SRM program, there are two areas to highlight: (1) our
    Barracks Upgrade Program (BUP) and (2) the long range utilities
    strategy. At the completion of the fiscal year 2002 program, as
    requested, we will have funded adequate housing to meet or approximate
    the DOD 1+1 barracks standard for 73 percent of our soldiers. The
    fiscal year 2003-2008 Military Construction Program will provide
    barracks for another 20 percent of eligible soldiers. We will use SRM
    resources to renovate barracks to an approximate DOD 1+1 standard for
    the remaining 7 percent of barracks residents. The Army is grateful for
    congressional support for well being programs. We allocated $86 million
    of appropriated quality of life enhancements, Defense (QOLE,D) funds to
    bring more of our permanent party barracks in the United States, Europe
    and Korea to an approximate 1+1 standard and to renovate Advance
    Individual Training (AIT) and reception barracks in the United States.
    The Army is committing an average of about $120 million per year in SRM
    to continue the efforts to upgrade housing for our single soldiers.
    This substantial funding keeps our barracks program on track to build
    new or renovate all barracks to an approximate 1+1 or equivalent
    standard worldwide by 2008.
        The second area to highlight within the SRM program is our long
    range utilities strategy to provide reliable and efficient utility
    services at our installations. Privatization or outsourcing of
    utilities is the first part of our strategy. All Army-owned electrical,
    natural gas, water, and wastewater systems are being evaluated to
    determine the feasibility of privatization. When privatization appears
    economical, we use competitive contracting procedures as much as
    possible. We continue to successfully privatize utility systems on Army
    installations. Recent successes include privatization of the electrical
    distribution system at Fort Knox, the gas system at Fort Sill, the
    water system at Fort Lee, and the waste water system at Presidio of
    Monterey. Of the 320 Army systems available for privatization since
    1998, 19 have been privatized, 28 have been exempted, and the remaining
    are in various stages of privatization. The second part of the strategy
    is the Utilities Modernization Program. We are upgrading utility
    systems that are not viable candidates to be privatized, such as
    central heating plants and distribution systems. We have executed
    approximately $177 million in utility modernization projects in fiscal
    years 1998 through 2000 and in future years we plan to accomplish $94
    million in additional projects. Together, privatizing and modernizing
    utility systems will provide reliable and safe systems.
        We are making progress in upgrading barracks and improving utility
    services, and funding for the basic maintenance and repair of Army
    facilities has improved to 94 percent of the OMA, OMNG, and OMAR
    requirement in fiscal year 2002. However, we still need to strive
    toward fully funding sustainment to keep facilities from getting worse
    and to protect the large infrastructure investment requested in this
    budget. The Installation Status Report shows Army facilities are rated
    C-3 (not fully mission capable) due to years of underfunding. At the
    end of fiscal year 2000, 26 percent of the Army's facilities were
    ``red''--unsatisfactory; 44 percent were ``amber''--marginal; and only
    30 percent were ``green''--good. The Army National Guard rated 40
    percent red, 54 percent amber and 6 percent green and the Army Reserve
    rated 45 percent red, 27 percent amber, and 28 percent green.

                      BASE REALIGNMENT AND CLOSURE (BRAC)

        Our facilities strategy strives to meet the needs of today's
    soldiers while also focusing on the changes required to support the
    Army of the 21st century. For BRAC in fiscal year 2002, we are
    requesting appropriations and authorization of appropriations of $164.3
    million. This budget represents the Army's first budget required to
    continue environmental restoration and property management of those
    facilities not yet disposed from the first four rounds of BRAC. In
    fiscal year 2000, the Army saved $911 million and will save $944
    million annually upon completion of these first four rounds of BRAC.
    Although these savings are substantial, we need to achieve even more,
    and bring our infrastructure assets in line with projected needs. We
    must reduce the total cost required to support our facilities and
    manage and maintain our real property inventory. BRAC has significant
    investment costs, but the results bring to the Army modern and
    efficient facilities at the remaining installations. The resulting
    savings are critical to modernization, sustainment, and infrastructure
    improvements.
        The Army is now in the final year of the 13-year process to
    implement the first four rounds (112 closures and 27 realignments). We
    are accelerating all BRAC actions to obtain savings and return assets
    to the private sector as quickly as available resources will allow.
    However, BRAC savings do not come immediately because of the up-front
    costs for implementation and the time it takes to close and dispose of
    property. Environmental costs are significant and are being funded up-
    front to facilitate economic revitalization. The remaining challenges
    that lie ahead are implementing the final round, BRAC 95, ahead of
    schedule; cleaning up contaminated property, disposing of property at
    closed bases; and assisting communities with reuse.
        The fiscal year 2002 budget includes the resources required to
    continue environmental cleanup of BRAC properties. These efforts will
    make 14,321 acres of property available for reuse in fiscal year 2002
    and complete restoration activities at 12 additional locations. This
    budget includes the resources required to support projected reuse in
    the near term and to continue with current projects to protect human
    health and the environment.
        Base Realignment and Closure--Overseas: Although the extensive
    overseas closures do not receive the same level of public attention as
    those in the United States, they represent the fundamental shift from a
    forward-deployed force to one relying upon overseas presence and power
    projection. Without the need for a commission, we are reducing the
    number of installations by 70 percent, roughly equal to the troop
    reductions of 70 percent. In Korea, the number of installations is
    dropping 20 percent. The total number of Army overseas sites announced
    for closure or partial closure is 677. Additional announcements will
    occur until the base structure matches the force identified to meet
    U.S. commitments.
        Base Realignment and Closure Program Status: The Army has completed
    all realignments and closure actions from the BRAC 88, BRAC 91, BRAC
    93, and BRAC 95 rounds. The Army continues with the difficult
    challenges of environmental cleanup and disposal actions to make the
    property available to local communities for economic redevelopment.
    Introduction of economic development conveyances and interim leasing
    has resulted in increased property reuse and jobs creation.
    Negotiations and required environmental restoration continue at the
    closed and realigned installations, and additional conveyances will
    occur in the near future.
        The Army has completed environmental actions at 1,414 of a total of
    1,973 environmental cleanup sites through fiscal year 2000.
    Environmental restoration efforts were complete at 77 installations
    through fiscal year 2000, out of a total of 116 installations. The Army
    remains focused on supporting environmental cleanup actions required to
    support property reuse and will continue to fund environmental cleanup
    actions that are required in support of property transfer and reuse of
    the remaining approximate 255,000 acres.
        Summary: The BRAC process has proven to be the only viable method
    to identify and dispose of excess facilities. The closing and
    realigning of bases saves money that otherwise would go to unneeded
    overhead and frees up valuable assets for productive reuse. These
    savings permit us to invest properly in the forces and bases we keep to
    ensure their continued effectiveness. We request your support by
    providing the necessary BRAC funding to continue environmental
    restoration and property management in fiscal year 2002.
        We remain committed to promoting economic redevelopment at our BRAC
    installations. We are supporting early reuse of properties through no
    cost economic development conveyances as well as the early transfer of
    properties along with cooperative agreements to accelerate the
    completion of remaining environmental remediation. The Army is also
    making use of interim leasing options made possible by Congress and
    awarding guaranteed fixed price remediation contracts to complete
    environmental cleanup to make properties available earlier. Real
    property assets are being conveyed to local communities, permitting
    them to quickly enter into business arrangements with the private
    sector. Local communities, with the Army's support and encouragement,
    are working to develop business opportunities that result in jobs and
    tax revenues. The successful conversion of former Army installations to
    productive use in the private sector benefits the Army and ultimately
    the local community.
        As noted, we have had much success in base closures, eliminating
    excess infrastructure that drained needed funds from other programs.
    Unfortunately, this has not been sufficient. For this reason, the Army
    supports additional authority to reduce infrastructure.

                            FISCAL YEAR 2002 SUMMARY

        Mr. Chairman, our fiscal year 2002 budget is a greatly improved
    program that permits us to execute our construction programs; provides
    for the military construction required to improve our readiness
    posture; and provides for family housing leasing, operation and
    maintenance of the non-privatized inventory, and to initiate
    privatization at four additional installations. This request is part of
    the total Army budget request that is strategically balanced to support
    both the readiness of the force and the well being of our personnel.
    Our long-term strategy can only be accomplished through sustained
    balanced funding, divestiture of excess capacity, and improvements in
    management. We will continue to streamline, consolidate, and establish
    community partnerships that generate resources for infrastructure
    improvements and continuance of services.
        The fiscal year 2002 request for the active Army is for
    appropriations and authorization of appropriations of $3,161,074,000
    for military construction, Army and Army family housing.
        The request for appropriations and authorization of appropriations
    is $267,389,000 for military construction, Army National Guard and
    $111,404,000 million for the military construction, Army Reserve.
        For the Homeowners Assistance Fund, Defense, the request is for
    $10,119,000 appropriations and authorization of appropriations.
        Thank you for your continued support for Army facilities funding.

        Senator Akaka. It is my understanding that the Army has
    considered housing privatization to be unworkable, or at least
    unlikely to work in Hawaii due to our unique land ownership
    situation. Recently, however, we were informed that a housing
    project at Schofield barracks is not in the Army's future years
    defense program because the Army plans to pursue housing
    privatization instead of traditional military construction.
    What are the Army's plans for housing and privatization in
    Hawaii?
        Before you answer that, I would like to also ask Admiral
    Johnson, General McKissock and General Robbins to give me their
    thoughts on that.
        General Van Antwerp. Sir, I will start first. Frankly,
    right now we are exploring the land ownership details of
    whether or not it is feasible and practical to do privatization
    in Hawaii. We basically are targeting both right now. We are
    targeting both traditional Army family housing construction and
    also housing privatization. We will probably develop a clear
    plan in the next year or so. In either case, both of those
    projects are farther out in the Army facility housing master
    plan. We do have every intention of bringing the housing in
    Hawaii up to adequate standards by 2010, and if we can
    accelerate that we will do that. But we will do it one way or
    the other sir.

         STATEMENT OF LT. GEN. GARY S. McKISSOCK, USMC, DEPUTY
               COMMANDANT FOR INSTALLATIONS AND LOGISTICS

        General McKissock. Mr. Chairman, the Marine Corps plan for
    public-private venture is--Corps-wide we expect to have between
    90 and 95 percent of our housing assets in public-private
    venture by 2008. In 2008 we expect to be completed in Kaneohe
    Bay with public-private venture housing for our marines.
        [The prepared statement of Lieutenant General McKissock
    follows:]

             Prepared Statement by Lt. Gen. Gary S. McKissock, USMC

        Mr. Chairman and members of the subcommittee: I am Lt. Gen. Gary S.
    McKissock, Deputy Commandant, Installations and Logistics,
    Headquarters, U.S. Marine Corps. I appreciate this opportunity to
    appear before you today. During my comments today, I will discuss the
    status of many programs. For fiscal year 2002, the President's budget
    includes funding to cover our most pressing priorities.
        In earlier testimony this year, the Assistant Commandant of the
    Marine Corps spoke of our bases as undergoing a ``quiet crisis''. He
    could not have been more accurate. For years now, the Marine Corps
    promise to the American people to be the force most ready when our
    Nation is least ready has had to be balanced against the legitimate
    quality of life needs of marines and their families. When faced with
    resources to support either readiness or quality of life requirements,
    but not both, readiness will always receive the higher priority.
        Ingrained in every marine leader is the knowledge that the ability
    to fight and win, to return home alive to one's family, is the foremost
    quality of life concern.
        Our installation commanders are extraordinarily committed to doing
    the best they can for the marines, sailors, family members, and
    civilian marines in their charge. I've talked to marines doing
    extraordinary work in maintenance spaces that were cold, wet, drafty
    and completely unsuitable. I've visited the spouses and children of
    these marines in family housing that should have been demolished 20
    years ago but remain standing because we have no other choice. Seldom
    do I hear a complaint. It is not in their nature to complain. However,
    it is my responsibility to see that our facility shortfalls are
    corrected.
        Though we have strategic plans and goals in place for our facility
    sustainment, restoration, and modernization, Active and Reserve
    military construction (military construction and military construction,
    Naval Reserve) and family housing programs, most programs are
    inadequately resourced. Without sustained funding levels, it will take
    us decades to resolve the quiet crisis.
        I am grateful to report that in fiscal year 2002 the administration
    has increased our Active and Reserve military construction request by
    113 percent over our 2001 request and 66 percent over the amount you
    provided in 2001. In 2002 we will also have almost $350 million to
    devote to replacement, modernization, and improvements to our
    installation infrastructure. This is an unprecedented funding level and
    we are postured to put this long needed funding increase to good use.
    Our hope is to maintain this funding level and accomplish a reversal of
    our ``quiet crisis''.
        The family housing program proposal of $268 million, along with our
    privatization efforts, will be adequate to operate and maintain our
    existing inventory. Our sustainment, restoration, and modernization
    proposal of almost $420 million, in conjunction with our out-year plan
    for this funding, will eventually address previously deferred
    maintenance and repair projects.
        The Marine Corps takes the long-term planning process for military
    construction very seriously. Given limited funding, we are forced to
    work smartly to squeeze the most from every dollar. Our planning
    methodology helps us choose the most equitable and balanced set of
    critically needed projects. However, quite often our decisions are more
    like the surgeon at a mass casualty event who must perform triage to
    determine which victims are most likely to survive.
        Because every infrastructure decision has long-term consequences,
    the Marine Corps recognized it needed a tool to improve its decision
    making process in allocating scarce resources. Since the Marine Corps
    last testified before this committee, we published Installations 2020
    (I 2020). This document was developed with the active involvement of
    our Installation Commanders, environmental and business interests, and
    operating force commanders. The purpose of I 2020 is to determine and
    validate Marine Corps infrastructure requirements 20 years from now and
    assist us in making sound programmatic decisions that will benefit
    future marines and ensure that we were good stewards of the resources
    allocated to us by Congress. This document is complete and has been
    signed by the Commandant.
        Every 2 years, the Marine Corps builds a new facilities future
    years defense plan based on an exhaustive review of facilities and
    infrastructure requirements. The Marine Corps also updates its program
    throughout the budget execution cycle based upon new guidance, audit
    results, requirements validation, military-political issues, new
    mission information, Marine component and Installation Commander's
    priorities, risk assessments, vulnerability, and facility-type sponsor
    priorities. By the time the Marine Corps' infrastructure and facilities
    plan reaches Congress, the chosen projects have been meticulously
    scrubbed and rigorously justified.
        Our planning is especially critical since many of our buildings
    already are, or are fast becoming, historic structures. Thirty-five
    percent of our infrastructure (not including our family housing) is
    over 50 years old. Those with historic significance or unique
    architectural features may become eligible for listing on the National
    Register. We do not believe that many will end up listed on the
    National Register of Historic Places. Of the remaining buildings, we
    are developing plans to demolish many of them, including about 4,000
    family housing dwellings. We'll replace them with new construction
    through a variety of means, including public/private ventures.
        Most of our bases were built during and after World War II. Our
    facilities, utilities and subsurface infrastructure are more than half
    a century old. Last year in Camp Pendleton, a broken waste pipe spilled
    3 million gallons of sewage into the Santa Margarita River. The cost to
    replace the treatment systems alone is over $179 million. The average
    Marine Corps construction program in the 1990's was $122 million. In
    other words, the entire annual military construction budget of the
    Marine Corps is not adequate to fix the infrastructure problems on just
    one of our bases. Many bases in the Marine Corps are in similar
    condition. Our challenge is to plan for a better future, and then
    actually implement that plan.
        Only a sustained financial commitment and well-managed programs
    over the next 5 to 10 years will allow the Marine Corps to regain
    control over management of its degrading infrastructure.
        I would like to address the perception some may have that the
    Marine Corps got itself into this predicament because it invested in
    combat readiness instead of bricks and mortar. That is absolutely true.
    Our first priority will always be the combat readiness of our forces.
    How could we honestly have chosen to construct new buildings when the
    Marine Corps' inventory of amphibious assault vehicles, HMMWVs, heavy
    trucks, weapons, and other equipment--the equipment that gets us to war
    and back--are well beyond their service life and require an
    extraordinary amount of money to maintain? How could we build new
    facilities when many of our helicopters are over 30 years old and our
    KC-130s now average 39 years old, all with barely enough spare parts to
    keep them flying? The Marine Corps has been spending a large sum of
    money to keep these aging systems operational when what we really
    needed to do is modernize them quickly.
        Our first quality of life promise to marines is that we will never
    fail to give them the training, leadership and equipment that will
    allow their safe return home from combat. The Marine Corps has had to
    make some very tough choices on how to allocate its total obligation
    authority. Thus, for understandable reasons, short-changing facilities
    and infrastructure for combat readiness has been the lesser of two
    evils. We have sustained our combat readiness at the expense of other
    programs beneficial to our marines and their families because we've had
    no other option. These have been painful decisions because, ultimately,
    combat readiness is more than just a trained, well-equipped marine. A
    deployed marine in harm's way will do anything asked but should not
    have to wonder whether the family left behind is adequately cared for
    while he or she is doing the Nation's bidding.
        The Marine Corps realizes that we cannot continue to postpone the
    maintenance of our facilities and infrastructure as we have in the
    past. It costs too much to bandage decaying buildings. We cannot
    continue to use our facility sustainment, restoration, and
    modernization money to fund what is in essence a facilities ``Service
    Life Extension Program''--without the benefits of modernization or full
    renovation--while our deferred maintenance and repair projects languish
    for lack of funding. We must use allocated funds to maintain facilities
    throughout their normal useful life span (about 50 years) rather than
    continuing to pour funds into deteriorated facilities that should be
    demolished, but can't be, because we lack the funds to replace them.
    Finally, we need to continue to have military construction programs
    that illustrate to marines across the country that all of us inside the
    Beltway are dedicated to providing them with respectable places to work
    and live.
        The Marine Corps is proud of its reputation for making do with
    less. Our ``can-do, make-do'' credo has always served us well, but it
    has also produced a systemic problem for our infrastructure. ``Make
    do'' facilities continue to support our ``can-do'' philosophy. We have
    marines working successfully, in inadequate facilities. I can't sit
    here and tell you we will fail because facilities are inadequate.
    Marines will do what they have to in order to meet the mission. We will
    continue to make our retention goal because the Corps is so much more
    than bricks and mortar. At the same time, we have to ask ourselves if
    we are doing the right thing by the young men and women who make the
    sacrifices necessary to wear the eagle, globe and anchor. The Marine
    Corps needs a prolonged commitment to facilities and infrastructure. As
    the Deputy Commandant for Installations and Logistics, I am committed
    to providing marines with facilities that will support effective
    training, maintenance, operations, and quality of life. The Marine
    Corps' strategic goals and disciplined planning process have us on the
    right path toward achieving recapitalization of our infrastructure
    while realizing noticeable improvements in quality of life and working
    facilities.
        Now, I would like to give you more detailed information about the
    plans and goals in each of the Marine Corps' four major funding areas
    where recapitalization and modernization initiatives in infrastructure
    and facilities are programmed: facility sustainment, restoration, and
    modernization, military construction, military construction, Naval
    Reserves, and family housing.

              FACILITY SUSTAINMENT, RESTORATION, AND MODERNIZATION

        The Marine Corps' Facility Sustainment, Restoration, and
    Modernization Program (formerly known as Maintenance of Real Property
    [MRP]) has struggled with some particularly onerous problems in the
    past few years resulting in significant numbers of deferred maintenance
    and repair projects. Because our decaying infrastructure has not been
    replaced at a manageable rate, the Marine Corps uses facility
    sustainment funds to bind together old, inadequate buildings rather
    than to maintain newer structures throughout their useful service life.
    The Marine Corps has responded to these challenges by developing plans
    to improve the condition of facilities, to demolish inadequate
    facilities, and to develop a stronger program.
        In order to slow the deterioration of our infrastructure and to
    improve the condition of our facilities, the Marine Corps has budgeted
    at a level that will reduce the level of deferred maintenance and
    repair by 2007. This level of funding will allow us to continue our
    efforts to have all barracks in good state of repair by the end of
    2004. However, this plan will only work if we stay committed to
    improving our infrastructure. Traditionally, facility sustainment,
    restoration, and modernization funds are executed at a level less than
    that planned in the out-years as these accounts are raided to support
    Marine Corps readiness needs in other areas.
        Our goal is to reduce our level of deferred maintenance and repair
    to attain the historical Congressional target for backlog of
    maintenance and repair (BMAR) of $106 million by fiscal year 2010. This
    goal was established in the early 1990's when it became clear that our
    deferred maintenance was growing rapidly and we needed a long-term
    funding profile as a baseline to evaluate our funding decisions. We
    have made an important down payment on this goal in fiscal year 2002,
    allowing for some reduction in deferred maintenance to approximately
    $650 million this fiscal year. However, this still exceeds the goal of
    $106 million by fiscal year 2010.
        We've made significant improvements in the manner that we manage
    facility sustainment, restoration, and modernization. Our Commanding
    Officers Readiness Reporting System was developed to make a clear
    connection between facility condition and mission impact. Our January
    2001 report identified 13 of 30 facilities categories rated as C-3 or
    C-4. A rating of C-3 and C-4 indicated that up to 40 percent or more of
    the facilities in a category are in a condition that it has a
    significant impact on the mission. The main areas where facility
    conditions degrade mission capability are utilities, community and
    housing, and supply and administrative buildings. This system is still
    maturing, and for the Marine Corps, the underlying data is in the
    process of being fully developed. As we update our records we are
    finding that our facilities are often worse than we suspected. In the
    next 2 years we plan to finalize our underlying data. At this time,
    however, funding decisions should not be based solely on our C ratings
    because they tend to understate our requirements.
        The Marine Corps has implemented a comprehensive demolition program
    to remove excess and inadequate infrastructure and eliminate the
    associated maintenance costs. The Department of Defense directed the
    Marine Corps to demolish 2.1 million square feet of facilities between
    1998 and 2000. We exceeded this goal by demolishing 2.2 million square
    feet in that time frame. We are continuing to eliminate additional
    excess facilities from the inventory. Consequently, the Marine Corps
    has little excess inventory remaining. Our demolition program
    represents slightly more than 2 percent of our plant; therefore, cost
    avoidance will be modest. Unless we can begin building new facilities,
    we will be forced to keep the structures we have regardless of their
    condition.
        Finally, the fiscal year 2002 program and associated out-years
    reflects funding levels that should help us to eventually address
    previously deferred maintenance and repair projects. Congress provided
    a generous increase in fiscal year 2001, targeted at quality of life,
    and we hope to continue this trend. The fiscal year 2002 sustainment,
    restoration, and modernization request is $418 million and includes
    repairs, not only to barracks and mess halls, but also to keep steam
    plants operational, to repair and maintain runways, to keep sewer lines
    functioning, and to repair roads, among other things. These
    infrastructure issues in many cases have more global impact on quality
    of life than specific building projects and we know they cannot be
    ignored. Despite our fiscal year 2002 investment in facility
    sustainment, restoration, and modernization, deferred maintenance and
    repair will continue to accumulate. However, the future year defense
    plan, at current funding levels, will eventually reduce our deferred
    maintenance and repair.

                             MILITARY CONSTRUCTION

        Military construction is the Marine Corps' primary funding source
    for infrastructure recapitalization and modernization. In preparing our
    military construction program, we try to address the most critical
    facilities and infrastructure deficiencies in the Marine Corps. Since
    the Marine Corps cannot economically address every facilities
    requirement with military construction, we carefully weigh our decision
    to construct a replacement facility against the impact of deferring the
    project or satisfying the requirement through other alternatives (such
    as renovation, leasing, or joint use facilities). When we do choose to
    defer new construction, we have come to expect that, in the short-term
    at least, marines will manage to find a way to accomplish the mission
    to acceptable standards. Restoration and modernization funds will
    clearly be used less efficiently when the goal is only to keep these
    buildings minimally operational. In the long-term, continued deferral
    of more than $3 billion in military construction projects has a
    profound effect on readiness and retention. In 2002 we are proposing an
    unprecedented level of funding for military construction--$339 million.
    While this budget allows us to attain an over 60-year cycle of military
    construction replacement in fiscal year 2002, the average
    recapitalization rate rises to nearly 100 years across the FYDP.
        We have achieved several successes this year by breaking away from
    the old design-bid-build methods we used for generations and instead
    using more design build techniques where appropriate, much like private
    industry. We are finding that the time required from project inception
    to completion has been reduced. More importantly, these projects tend
    to come in under budget and without the cost overruns we were plagued
    with in the past. Most importantly, the quality of work is better.
    Installations, teaming with NAVFAC and competent, responsible
    construction companies, are building facilities that are functional,
    solid, maintainable, and aesthetically pleasing.
        Through our military construction program, we continue to meet
    Department of Defense guidance to demolish unnecessary, inadequate
    facilities. Between 1998 and 2001, we demolished over 1 million square
    feet of facilities through military construction, and we plan at least
    another 200,000 square feet of demolition in fiscal year 2002. We will
    continue to aggressively pursue demolition until all inadequate
    structures on our bases and stations are eliminated though this is
    difficult without sufficient funding to replace structures that have
    been eliminated.
        The Marine Corps' anti-terrorism efforts comply with DOD direction
    to identify facilities force protection features. The addition of these
    features (which include fencing, building hardening, perimeter/area
    lighting, blast mitigation barriers, berms, and landscaping) has
    increased our fiscal year 2002 project costs. We will continue to
    search for ways to limit these expenditures through innovative design
    and placement of structures. However, some of our bases have limited
    space for offsets from traffic and parking--increased costs are
    unavoidable. We really have no choice but to implement these
    requirements. No leader of marines would willingly endanger the lives
    of the marines and sailors on our bases. Preventing one tragedy is
    worth the expense of all sound physical security measures.
        The military construction projects we have requested this year are
    not luxury or ``nice-to-have'' facilities. On the contrary, these
    projects replace buildings and structures that are literally falling
    apart, unsafe, overcrowded, or technologically obsolete.
        We will address environmental and quality of life concerns at Camp
    Pendleton with an initial $11 million investment in the drinking water
    system that will begin to eliminate the ``brown water'' currently being
    delivered to family housing and operational facilities.
        Our planned investment in maintenance facilities in fiscal year
    2002 totals $42 million. At Camp Pendleton we plan to replace
    relocatable facilities, tents used for storage, and aging inadequate
    wooden structures for the 1st Force Recon Company and Recon Battalion.
    At Camp Lejeune we will provide an Engineering Equipment Maintenance
    Shop that will be large enough to allow maintenance on the all-terrain
    container handlers, earth scrapers, and other large construction
    equipment critical to the Engineer Support Battalion's mission. With
    these projects, we will give some marines indoor work areas that
    actually have heat, running water, electrical power, restrooms, and
    enough space to accomplish their mission.
        Investments in quality of life total $146 million for bachelor
    enlisted quarters and $37 million in other community support
    investments. Improvements include a new enlisted dining facility at
    MAGTFTC Twenty-nine Palms, a Child Development Center at MCAS Beaufort
    and a Physical Fitness Center at Camp Pendleton. These new facilities
    will make things a bit more tolerable for marines and their families,
    who sacrifice so much already, by providing more of them decent quality
    of life resources and childcare.
        Additionally, we seek to build training facilities that will allow
    marines to ready themselves for combat in this high-tech age. A new
    Academic Instruction Facility in Camp Johnson at Camp Lejeune will
    replace the 1940's vintage, converted squad-bay classroom spaces, with
    a modern consolidated facility. At MAGTFTC Twenty-nine Palms we will
    provide modern replacement facilities for the Marine Corps computer
    school.
        With these facilities, the quality of life and quality of service
    for our marines and their families will be substantially improved as
    will their readiness to deploy to accomplish their mission. Without
    them, quality of work, quality of life, and readiness for many marines
    will continue to be seriously degraded.

                      MILITARY CONSTRUCTION, NAVAL RESERVE

        Maintaining Marine Corps Reserve facilities is a daunting task
    since the Marine Forces Reserve is comprised of over 39,000 Selected
    Marine Corps Reserve personnel and Active Reserve personnel stationed
    at 185 sites, dispersed throughout 47 States. The challenge for the
    military construction, Naval Reserve (MCNR) program for exclusive
    Marine Corps construction is how to best target limited funding to
    address $205 million in deferred construction projects. Over 75 percent
    of the Reserve centers our marines train in are more than 30 years of
    age, and of these, 35 percent are more than 50 years old. Despite the
    challenges, we have made progress and improved the quality of our
    effort to support Reserve facilities.
        The Marine Corps has continued to make significant strides in
    aligning Reserve facilities policies and procedures with those of the
    Active Forces by establishing an ongoing, sustained review and update
    of the Marine Forces Reserve Installation Master Plan, by publishing
    comprehensive and timely facilities planning and programming guidance,
    and most significantly, by programming thoroughly developed Reserve
    projects that compete well within the Marine Corps budget process.
        Before 1997, Marine Reserve sites had no effective centralized
    control mechanism in place to evaluate facilities and infrastructure
    conditions. Headquarters staffs in New Orleans and in Washington DC
    provided oversight, but facilities support was often reactive without
    proper resource prioritization.
        Since Marine Forces Reserve first published its Installations
    Master Plan in 1997, it has continued to evolve, providing a facilities
    road map for future actions. The plan includes measures of
    effectiveness for the application of resources and key planning factors
    that influence project execution. It incorporates tools such as the
    Commanding Officer's Readiness Reporting System that provides the data
    necessary to better target those sites with the most urgent
    requirements. It also includes aggressive use of the State Joint
    Service Reserve Component Facilities Boards that successfully
    coordinates the efforts of each service's Reserve construction
    initiatives to maximize the potential for joint facility projects. With
    centralized information such as the number and types of sites,
    environmental guidance, impact of project lead times, and availability
    of funding, the plan has been instrumental in the preparation of solid
    and supportable MCNR programs since 1998.
        Finally, as stated earlier, Marine Forces Reserve has begun to
    effectively compete in the Marine Corps budget process. The Marine
    Corps programs MCNR projects under the same rigorous planning and
    programming schedule as its active side military construction, and the
    results are telling. From 1993 to 1997, the funding for MCNR averaged
    $1.2 million annually. The average annual funding level for the marine
    portion of the Department of the Navy program for the years 1998 to
    2001 is $7.1 million. In fiscal year 2002, the Marine Corps has been
    able to continue the 1998 to 2001 trend by proposing an $11.12 million
    program that will provide new Reserve training centers and vehicle
    maintenance facilities for Reserve units in Lafayette, LA, Great Lakes,
    IL, and Syracuse, NY. Though the Marine Corps is faced with the
    familiar challenge of prioritizing limited resources against a growing
    list of deserving requirements, our commitment to Reserve facilities
    remains steadfast.

                          BACHELOR AND FAMILY HOUSING

        Bachelor and family housing funding is integral to maintaining
    marine morale and quality of life, and is a large element of our
    modernization and recapitalization requirement. The Marine Corps is
    committed to improving quality of life for all its marines and, in
    turn, increasing productivity within and satisfaction with the Corps.
    Quality living conditions must continue to be emphasized to obtain,
    retain, and sustain the Nation's ``force in readiness.'' We cannot
    continue to house our marines and their families in inadequate
    quarters.
    Bachelor Housing
        There are approximately 172,600 marines on active duty today and
    about 50 percent of those are young, single, junior enlisted personnel.
    Providing appropriate and comfortable living spaces that positively
    impact the morale and development of these young men and women is
    extremely important to the Marine Corps.
        The Marine Corps primarily houses junior enlisted personnel in pay
    grades of E-1 through E-5 in our barracks. Our goal is to provide
    barracks configured in the 2x0 standard. The 2x0 standard means two
    marines share a room with a private bath. Although the Department of
    Defense standard for barracks construction provides the opportunity for
    1+1 construction, which means private rooms with a shared bath, we
    consciously made the choice in 1998 to have two marines share a room.
    While we would ultimately like to provide noncommissioned officers in
    pay grades E-4 and E-5 with private rooms, we believe our most junior
    personnel in pay grades E-1 through E-3 should share a room with
    another marine. We strongly believe this approach provides the right
    balance between privacy desired by marines and the Marine Corps' desire
    to provide companionship, camaraderie and unit cohesion. This balance
    provides the atmosphere we believe is right to train and develop
    marines.
        The Marine Corps maintains over 93,000 bachelor enlisted housing
    spaces worldwide. Of that number, approximately 7,800 still do not meet
    Department of Defense adequacy standards. This is significantly less
    than the roughly 16,000 inadequate spaces we reported in 1996. With the
    help of Congress, we have been able to exceed our barracks
    construction-funding goal of $50 million per year for the past several
    years. Our average investment between 1998 and 2001 was $74 million per
    year. One hundred percent of that funding has supported enlisted
    personnel. In fiscal year 2002 we improve on our average with a
    proposed program of $146 million to construct 2,400 spaces for our
    enlisted bachelors at MCB Hawaii, MCB Camp Lejeune, MCB Camp Pendleton,
    MCB Quantico, MAGTFTC Twenty-nine Palms and the Marine Corps Support
    Activity at Kansas City, Missouri. We are not investing in military
    construction for bachelor officers' quarters until we can satisfy the
    needs of the troops. While we still have much to do to eliminate all
    inadequate barracks, marines can already see signs of progress and know
    we are working to provide them with quality housing.
    Family Housing
        Marine Corps families are an important component of readiness.
    Family housing is a critical quality of life issue because it impacts
    both retention and readiness. The Marine Corps has over 74,000 active
    duty families. These families frequently relocate, disrupting school
    for children and employment for spouses. Providing adequate, safe,
    quality housing options for families is critical to the morale and
    readiness of the Marine Corps. At any given time, over 30,000 marines
    are deployed or stationed away from their families. These separations
    often last for 6 or more months. Marines worried about the safety of
    their family members, their ability to pay bills including basic food
    and shelter costs, or whether their children are getting a quality
    education, will have a far more difficult time focusing on their jobs
    and mission than marines whose families are adequately housed and cared
    for. Our fiscal year 2002 request is for $268 million. Our priority for
    this funding request is to adequately operate and maintain our existing
    inventory.
        Sixty-four percent of Marine Corps families live off-post in the
    community. Thirty-six percent live in housing provided by the Marine
    Corps or another service.
        We have approximately 25,000 owned, leased or public-private
    venture family housing units worldwide. Much of the inventory we own is
    in poor condition and needs major renovation or replacement. 13,830 of
    our housing units are inadequate with the majority of the units
    requiring significant revitalization or replacement. Our 2001 master
    plan will show an increase in our inadequate units based on recent PPV
    feasibility studies.
        The good news with Marine Corps family housing inventory is that we
    have made significant strides to improve our inventory over the last
    several years. With your support, we have spent an average of $86
    million per year fixing existing inventory with over 92 percent of that
    funding addressing enlisted personnel requirements.
        Currently, 452 units of family housing are eligible for, or listed
    on, the National Register of Historic Places. We believe we have a
    responsibility and moral obligation to preserve and retain some of our
    historic homes, as they are treasures to the Corps and the Nation. We
    also believe that some of these buildings will have to be demolished,
    as they cannot be rehabilitated to meet today's requirements. In
    earlier testimony to the House Appropriations Committee on Historic
    Properties, we outlined our program to consult with the appropriate
    State Historic Preservation Office and with the Presidents Advisory
    Council on Historic Preservation. Our goal is to retain only what is
    truly historic.
        We are extremely enthusiastic about the opportunities available to
    improve our housing through use of the 1996 Military Housing
    Privatization authorities. We awarded our first PPV using these
    authorities on 10 November 2000. The project at MCB Camp Pendleton,
    which is already being managed by our private sector partner, will
    ultimately renovate 200 homes, replace 312 units and build 200 new
    homes. We broke ground on the project on 4 December 2000 and the first
    of the new homes should be available late in October. Not only will we
    provide excellent quality homes with adequate storage and garages, this
    project will also provide a community recreation center, ball fields,
    and tot lots. In other words, we will create a ``neighborhood'' for
    marines and sailors at Camp Pendleton. This project is the first of
    several PPV initiatives we have underway. We are extremely pleased with
    the caliber of proposals we are seeing, the quality of the homes we
    will get and the level of customer service that will be received by the
    families who will live in these homes over the next 50 years. Our
    second project involves exchanging excess units at MCLB Albany GA and
    using their value to replace badly deteriorated housing at MCB Camp
    Lejeune. This project is in the final stages of negotiation with the
    developer. We are working to reach a final business agreement soon.
        Our third project is at a Reserve site in Stewart, NY. There, we
    will turn over excess housing and improve housing we need to retain to
    support military families in the region. That project has been
    advertised and negotiations should be finalized by July 2002.
        A fourth project is proposed for MCAS Beaufort and MCRD Parris
    Island, SC. Our goal is to improve or replace the existing inventory
    and build some badly needed new housing. Congress has been notified of
    our intent to solicit proposals. We are also partnering with the U.S.
    Navy at Belle Chase, Louisiana and in southern California in support of
    Navy PPV initiatives that will significantly benefit marines and
    sailors at both locations.
        Taken together, the Marine Corps PPV projects will improve or
    replace a total of 2,288 homes, build a minimum of 340 new homes, and
    will dispose of 548 inadequate units. Ultimately these projects will
    make a huge difference to our Marine Corps families.
        These are truly good news stories. However, PPV only works where
    private investors can make a profit. At some installations, low BAH
    rates and or facilities condition mean that a business case cannot be
    made for PPV today and traditional military construction is the only
    option. While privatization will not make good business sense at every
    location within the Marine Corps, it will ultimately help us address
    most of our housing requirement. We will be reviewing opportunities for
    additional privatization in the near future. We appreciate your support
    in extending the PPV authorities to permit us to take advantage of
    these critical and extremely beneficial tools.
        In conclusion, Mr. Chairman, I would like to thank the committee
    for its strong support of the Marine Corps infrastructure program and
    the benefits this has provided and will continue to provide to the
    Marine Corps in terms of improved readiness and quality of life.
    Congressional support in the past reflects your deep appreciation for
    the relationship among facilities, warfighting capability, and quality
    of life. There is no question that replacement and modernization of
    inadequate facilities can improve mission capability, productivity,
    readiness, and sustainability. We do this all in interest of our
    highest quality of life concern: Bringing marines home safely from the
    battlefield.
        Mr. Chairman, this concludes my statement. I will be pleased to
    answer any questions you may have.

        Senator Akaka. Admiral Johnson.
        Admiral Johnson. The Navy has done a couple of things with
    the marines. Just recently, on the 31st of July, we signed a
    public-private venture phase one in San Diego, which covers
    both marines and Navy. We have another one working in the New
    Orleans area for both Marines and Navy. The Navy has some
    public-private venture analyses going on in Hawaii and we think
    there are opportunities there. As we move forward, if we had
    the ability we would offer that to the marines as well to
    perhaps accelerate their project. But we are looking very
    aggressively at public-private ventures in Hawaii.
        Senator Akaka. General Robbins.
        General Robbins. Yes, Mr. Chairman, as you are aware we
    have a family housing privatization project for Hickam.
    Industry Day was supposed to have been held last month, I
    believe. The goal is to notify Congress of the solicitation
    next month, and ultimately to award a project next summer. This
    will involve a total of 1,356 of the housing units there at
    Hickam, which is the majority of housing. There are still some
    that we see that will require traditional MILCON to renovate in
    the FYDP.
        Senator Akaka. Mr. DuBois, what is the Department of
    Defense's plan for the use of the fiscal year 2001 military
    construction funds for National Missile Defense construction?
    What would remain available if $9 million is used for site
    preparation at Fort Greely? It is my understanding that the
    construction of the X-band radar facility at Shemya, Alaska,
    the project for which the funds were originally intended, has
    slipped until 2005 or 2006.
        Mr. DuBois. Mr. Chairman, my understanding is that the
    request made by the administration for those MILCON dollars, to
    address the issues at Fort Greely, are in keeping with the
    original intent of the appropriation. I testified before
    Senator Feinstein with Under Secretary Dov Zakheim on Tuesday.
    He gave a much more articulate answer than I could. However,
    suffice it to say that there are no plans at the moment for the
    so-called remainder. We will probably be looking for a
    reprogramming of some kind. But I will take that question for
    the record if you would permit me sir, and give you a more
    complete answer.

                      Fiscal Year 2001 NMD Milcon Funding
        In fiscal year 2001, Congress appropriated $85.095 million for NMD
    Initial Deployment Facilities. Of those funds, $9 million was used for
    Ft. Greely site preparation, and earlier this year Congress approved
    reprogramming $20.85 million of the remaining to MILCON planning and
    design (P&D). (An additional $0.215 million was rescinded by Congress.)
    BMDO plans to request that the remaining $55.03 million be similarly
    reprogrammed to MILCON P&D.
        The $55 million reprogramming request would be used to begin
    development of the proposed test bed. More specifically, the following
    would be funded:

                            [In millions of dollars]
    9.6.......................................  Ft. Greely Ground-Based
                                                 Interceptor (GBI) Alternate
                                                 Booster Vehicle (ABV) Block
                                                 2006 Facilities
    7.841.....................................  Battle Management Command,
                                                 Control, & Communications
                                                 (BMC\3\) Integrated Data
                                                 Terminal (IDT) Block 2006
                                                 Facilities
    1.225.....................................  BMC\3\ NMD Communications
                                                 Network (NCN) Block 2006
                                                 Facilities
    2.675.....................................  Battle Management Command &
                                                 Control (BMC\2\) Nodes
                                                 Block 2006 Facilities
    5.916.....................................  Ft. Greely Non-Tactical
                                                 Block 2006 Facilities
    2.6.......................................  Upgrade Early Warning Radar
                                                 (EWR) Block 2006 Facilities
    4.04......................................  Upgrade Program-Wide Force
                                                 Protection
    16.053....................................  Evolving Design Requirements
    5.08......................................  BMDO P&D Requirements

    NOTE: Response above accurate as of hearing date. However, the
    reprogramming request was subsequently denied.

        Senator Akaka. Fine, thank you. Mr. DuBois, I want to
    switch to energy efficiency. On May 7, President Bush stated
    that, ``We are running out of energy in America,'' and
    announced that he was directing all Federal agencies to review
    their energy policy and reduce energy consumption. Deputy
    Secretary Wolfowitz stated that the Department of Defense is
    investing significant amounts of money to improve the energy
    efficiency of its operations. He pointed out that these
    conservation measures will not only conserve energy, but also
    save money for the Department.
        Executive Order 13123, signed by President Clinton in June,
    1999, established a goal for Federal agencies to reduce the
    average energy consumption of their facilities by 30 percent by
    2005 and 35 percent by 2010, relative to a 1985 baseline. The
    question is, are you on track to meet these goals and do you
    believe that these goals are achievable?
        Mr. DuBois. Yes, Mr. Chairman. One of the first projects
    that Secretary Rumsfeld assigned to me in my first 4 months in
    the building was how would the Department of Defense, and this
    is an example, I think, of the larger issue that you are
    addressing--what efforts would we take to reduce our energy
    consumption in the western power grid, specifically focused on
    the issues facing the State of California. By working with the
    services, we came up with a plan that while it did require a 3
    year invest cycle of some $50 million, was going to yield
    upwards of the equivalent of a 220 megawatt plant, were it to
    have been built in California. What we were hoping to achieve,
    and I have some statistics here that I think will be of
    interest to you, was a 10 percent reduction in energy
    consumption this summer vice last summer.
        Now, of course, it is August. I have not seen all the
    utility bills yet for June, July and August. But, I did ask for
    a May 2000-May 2001 year-over-year analysis, because that is
    the most recent statistic that I have. Overall, the Army, Navy
    and the Air Force have achieved together about a 6 percent
    reduction.
        Now that is less than the 10 percent that I want to
    achieve, that we want to achieve. I would defer also to the
    gentlemen on my left and right to speak specifically to their
    service writ large, not just to California. But from the
    statistics that I have seen, we are on track.
        But it is not just conservation that we must address. As we
    are addressing in the western power grid plan, we must also
    address how we would make minimal capital investments to
    maximize a reduction in energy consumption, as well as
    operational requirements that could reduce that consumption,
    but not impact operational readiness. There is a third area
    that we are pursuing, and it is the area of new technology.
        When I left the Pentagon in 1977 I went to graduate school
    to study energy economics. After graduate studies I went to
    work focusing on how to reduce energy input per unit of output:
    simple economic equation. Whether it was in a factory or in a
    white collar environment, many of the disciplines that I
    learned then are still with us today. But the one thing that
    has changed dramatically is the incorporation of new technology
    to include information technology on how we can reduce energy
    consumption. I am proud to say that all four services have also
    embraced that approach. But I would defer to any one of my
    colleagues if they would like to address their specific energy
    consumption issues.
        General Van Antwerp. I will just make a brief statement for
    the Army. We we are well below the glide-path. We are actually
    ahead of our targets for achieving the 35 percent savings. As
    Mr. DuBois said, we are focusing on the western region to
    provide some relief there. We also are looking at renewable
    energy sources: windmills, solar panels and those things,
    wherever we are able to do it, and have some pilot programs in
    that regard.
        General Robbins. The Air Force would mirror that. I will
    tell you that our data shows that in June we reduced our peak
    load at California installations by around 17 percent below
    what it was last year. Of course, shaving peak loads is the
    first target for us to look at for this summers' situation out
    there. We are also investing in some higher-tech, if you will,
    portable generators that we can have in place if the need
    arises in the future to allow us to further intercede and
    reduce peak loading at our installations in California.
        Senator Akaka. General McKissock.
        General McKissock. Mr. Chairman, we are on track. You may
    recall when the President was on the west coast recently he
    stopped by Camp Pendleton and talked about the significant
    reduction in peak load that they had achieved. We are very
    proud of what we are doing out there.
        I would like to provide for the record a base-by-base
    rundown on how we are doing, because we have had some rather
    substantial savings at some of our bases, such as at Parris
    Island, South Carolina and Beaufort; because we brought in some
    folks who helped us. Frankly, it is not a core competency of
    the Marine Corps, but we are learning very quickly and I would
    like to provide some of the lessons we have learned and our
    progress to this point.
        [The information follows:]

        The Marine Corps has maintained a comprehensive Energy Conservation
    Program for many years in order to increase the efficiency of energy
    use in its facilities throughout the world. Since 1985, the Marine
    Corps increased the energy efficiency of its buildings and facilities
    by 17.2 percent. This accomplishment resulted from implementing energy
    use improvements such as building envelope and utility distribution
    upgrades, lighting retrofits, installation of efficient boilers, motors
    and building energy management control systems, and increasing the
    efficiency of air conditioning. At Twenty-nine Palms in California and
    at Parris Island in South Carolina, leading edge technology tapping the
    power of computers to instantly analyze the operation of base-wide
    boiler plants and thermal distribution systems is resulting in
    continuous fuel and cost savings. The Marine Corps also took advantage
    of technology improvements to install solar and other renewable energy
    projects, especially to improve the energy efficiency of housing.
        The Marine Corps used multiple sources of funding to finance energy
    improvements including Government funding such as the Energy
    Conservation Investment Program and operation and maintenance funding.
    Recently, the private sector has become an important funding source
    through mechanisms such as Energy Savings Performance Contracts and
    Utility Energy Savings Contracting Programs.
        Marine Corps installation energy managers teamed with Department of
    Energy experts, Department of Navy technical personnel and industry to
    continually identify energy improvement opportunities, take advantage
    of new technology, implement more efficient energy use processes and to
    educate and train installation populations in methods to use energy
    more efficiently.
        A summary that shows the percent reduction in the energy use rate
    for each Marine Corps installation follows.

                     MARINE CORPS ENERGY EFFICIENCY SUMMARY
        [Efficiency numbers based on 1st Quarter fiscal year 2001 Defense
                  Utility Energy Reporting System (DUERS) Data]
    ------------------------------------------------------------------------
                                                             Percent energy
                                                                use rate
                         Installation                        reduction since
                                                                  1985
    ------------------------------------------------------------------------
    Camp Elmore...........................................          (65.36)
    MCLB Barstow..........................................          (41.85)
    MCB Quantico..........................................          (26.52)
    MCAS Cherry Point.....................................          (24.22)
    MARFORRES.............................................          (23.27)
    MCRD/ERR Parris Island ...............................          (20.84)
    MCB Camp Butler.......................................          (19.94)
    MAGTFTC Twenty-nine Palms.............................          (18.81)
    MCB Camp Pendleton....................................          (16.91)
    MCB Camp Lejeune......................................          (16.84)
    MCAS Yuma.............................................          (14.99)
    1st MarCorDist, Garden City...........................          (13.87)
    MCLB Albany...........................................          (13.04)
    MCRD/WRR San Diego....................................          (11.92)
    MCAS Miramar..........................................           (4.40)
    MCAS Beaufort.........................................           (1.70)
    MCAS Iwakuni..........................................             7.15
    MCB Hawaii............................................            13.44
    HQBN Henderson Hall...................................            20.24
    MarBks 8th & I Street.................................            51.53
    ------------------------------------------------------------------------

        Senator Akaka. Thank you. Admiral Johnson.
        Admiral Johnson. Mr. Chairman, I will just echo my
    colleagues, but make the remark for all of us, I believe, that
    if you look at 1985 to present, I think the Department of
    Defense really is a poster child for the country to look at and
    perhaps emulate in a number of areas on what we have done for
    energy conservation. We, as well, are ahead of the overall
    curve. I think maybe family housing may have already reached
    the 35 percent goal now.
        As we look at things: design, how we design new facilities;
    energy efficient appliances; the Energy Star program; green
    design; there are a number of things that are being
    incorporated into the designs of new facilities and the
    renovation of old facilities. We also just had an industry
    forum at Naval Air Station Fallon, Nevada on opening up,
    perhaps, a new geothermal field, in Fallon. We are looking at
    the potential of expanding our existing geothermal field at
    China Lake. Wind, on San Clemente Island; photovoltaics; fuel
    cell technology; and I think I speak for all of us, we are
    looking at those areas.
        Again, I would say that we are not given sufficient credit
    for a very, very aggressive and an active program over really
    the last 16 years. Southern California, the Navy and Marine
    Corps have actually locked in some longer term contracts for
    the next 20 months to 4 years that really has introduced new
    power into the State of California, as well as given us a
    longer term and a little more stability in the load in the San
    Diego Gas and Electric territory and the Southern California
    Edison territory.
        Senator Akaka. Well thank you for mentioning that and I
    hope too, with you, that through this hearing you will receive
    more acknowledgement in these savings. Mr. DuBois, I want to
    move to base closure cleanup requirements. I am told that the
    Department's proposed budget fails to fully fund existing
    obligations for the cleanup of closed facilities. In
    particular, there is a shortfall of $92 million for the ``must
    fund'' BRAC cleanup obligations in the Navy, and a shortfall of
    $55 million in the Air Force. If the Department does not find a
    way to make up this money, I understand that it will be in
    violation of existing legal requirements and agreements with
    Federal and state regulators at a number of sites, including
    several sites in California and one at NAS Barbers Point in
    Hawaii. Would you agree that meeting our legal obligations and
    living up to our agreements to clean up closed facilities is
    particularly important at a time when the Department is seeking
    authority to close additional bases?
        Mr. DuBois. Yes, Mr. Chairman. This issue, in the Navy for
    instance, that you raise, the so-called $92 million ``must
    fund'' shortfall, was brought to our attention several weeks
    ago. I can assure you it is the express intent of the Secretary
    of Defense to see to it that the Navy, in this regard, meets
    its obligations. Additional funds will be found.
        I am informed by the acting Assistant Secretary of the
    Navy, Mr. Holaday, that working with my staff and the Navy
    Comptroller, that there will be appropriate funding to meet
    those imminent threats--and this is why we are calling it
    ``must fund''--to health and the environment. Number one, meet
    those regulatory requirements that you spoke to, very
    important. Meet our commitments to the communities, and to the
    ongoing monitoring activities. The Navy and OSD will identify
    the means to pay for the shortfall.
        There are going to be a combination of solutions. We are
    going to look for unexpended BRAC funds that might be used to
    help pay the bill. We are going to consider moving some
    expenses from BRAC O&M to regular O&M, to free up funds needed
    to cover the shortfall. The original $92 million figure is, as
    I have been told, in point of fact somewhat less on further
    investigation. But I will defer to the admiral if he wants to
    say anything further.
        Admiral Johnson. No sir, I think you have categorized the
    work we have been doing between the Navy and OSD staff. The
    numbers in this business do tend to go up or down as you go
    through discovery and work agreements. We are working hard to
    improve on the $92 million figure and all the aspects of it.
        Senator Akaka. Well I am glad to hear, Mr. DuBois, that
    efforts are being made to address this funding gap.
        Mr. DuBois. If I might add sir, the Barbers Point issue, I
    believe, has been resolved between the parties internally to
    the building. We will get you a more definitive answer, but
    that is what I was told.
        Senator Akaka. The reason for asking this question is I
    hope we can sort out the funding problems and prevent any
    shortfall and avoid this kind of funding gap in the future. Let
    me move to housing and barracks. I would like to ask each of
    the four service witnesses, will your service meet the DOD
    goals of improving or replacing substandard unaccompanied
    housing by 2008 and family housing by 2010?
        General Robbins. Yes sir, I will take it first. The Air
    Force is on track for the dormitory, the enlisted portion of
    the housing goal. We have laid out a plan for a family housing
    master plan, that will allow us to meet the 2010 goal. However,
    we are not certain how the funding line is going to play out to
    do that. But, we have developed a strategy, if the funds are
    there, that would allow us to do that, and it is a combination
    of privatization and traditional MILCON necessary to achieve
    that goal.
        General Van Antwerp. Sir, the Army is on track to meet both
    the barracks in 2008 and the Army family housing in 2010. When
    we get finished, if the 2002 budget comes as we have submitted
    it, we will be through 73 percent of our barracks at that time.
    It is really moving along nicely and is a great reward to our
    soldiers.
        General McKissock. Yes sir, we are also on track. In
    addition to that we will not only be on track on the family
    housing, but we hope to be substantially, as I mentioned
    before, into the public-private venture mode. One note, the
    Marine Corps still has a waiver on two-by-two as opposed to
    one-by-one BEQs. We will be on track, but it will be two-by-two
    rather than one-by-one.
        Admiral Johnson. Mr. Chairman, the Navy is also on track.
    We are slightly ahead, I think, in both bachelor and family
    housing. The new Secretary of the Navy, Secretary England, is
    looking very hard, because this is such an important issue for
    both our single members and our families, at the ability to
    perhaps accelerate those dates.
        Mr. DuBois. Perhaps, Mr. Chairman, if I might conclude on
    behalf of the Secretary of Defense, he has spoken with and had
    several discussions with each of the new service secretaries on
    this issue. I have on his behalf reviewed each of the master
    plans of the three military departments. While I have some
    questions, each of them have put forth a plan to achieve the
    2010 goal for family housing. There are, as you can well
    imagine, some variables involved, not the least of which, of
    course, is a permanent authorization for housing privatization
    which we need, and some uncertainties about forward funding.
    But the Secretary of Defense is committed to forwarding those
    military family housing master plans to Congress, and we are
    making certain that they, in point of fact, will meet the 2010
    goal. We also, I might add if you would permit me sir, are
    trying to determine ways to accelerate that, which we are going
    to address as the year goes forward.
        Admiral Johnson. Mr. Chairman, if I might just add one
    piece that we are currently working on, and that is our moving
    sailors ashore from shipboard when they are in home port. That
    is a piece of this whole package. We have a family housing
    master plan that is going along well. The bachelor housing
    master plan for permanent party ashore is going well. But the
    factor of moving sailors ashore from ships, we are trying to
    blend into that mix. We hope to do that as close to the same
    timeline as we can. We are still working on that package.
        Senator Akaka. Mr. DuBois, over the past 6 years the
    administration and Congress have made a substantial commitment
    to improving quality of life by modernizing our housing for
    both single and married service members. What is the new
    administration's view on the programs you have inherited, such
    as housing privatization, moving to a one-plus-one barracks
    standard that provides greater privacy, and increasing the
    basic allowance for housing to cover 100 percent of average
    costs for those who live in off-base housing?
        Mr. DuBois. Mr. Chairman, the Bush administration endorses
    and embraces the increase in basic allowance for housing. It
    endorses, with the exception, of course, the one-plus-one--the
    Marines as General McKissock indicated, the two-plus-two for
    them, that is fine. Military housing privatization, I watched
    it from the private sector. I watched its difficult beginnings,
    if you will. I have seen where it moved a little bit too fast,
    and maybe moved a little bit too slow.
        Now, as luck will have it, I am sitting on the other side
    of the table. Some of the difficulties that I suspected,
    looking from the outside in, do exist. One of the things that I
    did find, and found gratifying, is that each of the four
    services have embraced this approach for one very simple
    reason:
        It is the quality of life of our troops that is paramount
    to people sitting at this table, to improve through family
    housing and barracks, the leverage factor available to the
    Department of Defense and to the military departments, through
    military housing privatization. It leverages anywhere from 3 to
    13 or more the MILCON dollars, the precious MILCON dollars,
    that you appropriate for us. To the extent, as I indicated, we
    can improve upon that leverage it will accelerate from 2010
    perhaps earlier. That is our goal. So we do absolutely endorse
    military housing privatization.
        Senator Akaka. I thank you very much for your responses. As
    was indicated, we have a huge responsibility, both Congress and
    the military and the Pentagon and the President, in doing what
    is right for our troops and our military. I am sure I do not
    have to ask the question of whether Secretary Rumsfeld will
    support what you have said and intends to continue these
    programs, because we need to, and I am sure he would agree.
        Mr. DuBois. Thank you, Mr. Chairman, he does.
        Senator Akaka. We will keep the record open for any
    questions or any statements that may be made for this hearing.
    Again, I want to sincerely thank all of you for being here and
    providing your testimony and responding to our questions. Thank
    you very much.
        Mr. DuBois. Thank you, Mr. Chairman.
        Senator Akaka. The subcommittee is adjourned.
        [Questions for the record with answers supplied follow:]

                 Questions Submitted by Senator James M. Inhofe

                           RECAPITALIZATION RATE GOAL

        1. Senator Inhofe. Mr. DuBois, one of Secretary Rumsfeld's more
    significant goals is to fund facility replacement on a 67-year
    standard, rather than the almost 200-year cycle that was the result of
    prior years' underfunding. Although this is still short of the industry
    standard of 57 years, it will significantly increase the readiness of
    our military installations, however, it will also be at a significant
    cost.
        What is the basis for the 67-year recapitalization rate goal?
        Mr. DuBois. The basis is an engineering estimate of the expected
    service life for each type of facility in the DOD inventory--for
    example 25 years for guard towers, 50 years for operational buildings,
    75 years for piers, and 100 years for sewer systems. When weighted by
    the value of related facilities in the inventory, these service life
    estimates average about 67 years for the DOD as whole. We researched
    external sources for similar estimates--including the Bureau of
    Economic Analysis and commercial sources such as Marshall and Swift--
    and we think the 67-year standard is a reasonable, though conservative,
    target. These estimates assume we will provide regular sustainment
    throughout the life cycle for all our facilities. Where facilities are
    not in good shape today--which means their expected service lives have
    been reduced--we also need to make additional restoration investments
    to get them back on the 67-year cycle. Finally, these life cycles can
    sometimes be extended--such as we have done with the Pentagon
    building--with appropriate modernization investments to counter
    obsolescence.

        2. Senator Inhofe. Mr. DuBois, will the current budget request
    support the 67-year replacement standard? If not, what are the funding
    requirements or other initiatives that will allow you to reach the
    standard?
        Mr. DuBois. As Secretary Rumsfeld has testified about the fiscal
    year 2002 budget: ``It will start an improvement but leave us short of
    our goals.'' The budget cuts the facilities recapitalization rate by
    approximately half, from nearly 200 years to about 100 years, but it is
    short in all three elements needed to implement a full-up 67-year
    recapitalization cycle: sustainment, modernization, and restoration.
    Sustainment--most important, since without it the 67-year standard is
    not valid--is short about $800 million; modernization--the regular
    replacement or upgrading of existing facilities to counter
    obsolescence--is short about $2.9 billion; and the restoration has a
    backlog of approximately $60 billion. These must be addressed over a
    number of years and will be considered as we develop the President's
    fiscal year 2003 budget. All of this assumes we can eliminate about 20
    percent of our current facilities infrastructure by an efficient
    facilities initiative or by demolition or other forms of disposal.

        3. Senator Inhofe. Mr. DuBois, what role will base closure have in
    achieving the 67-year replacement standard?
        Mr. DuBois. It would have two roles. First, if we can close and
    dispose of existing facilities--and take them off the inventory books--
    we will move closer to the 67-year standard because we can devote more
    resources to enduring facilities. For example, if we closed and
    disposed (and did not rebuild) 20 percent of existing facilities, we
    could move from a 100-year recapitalization cycle to approximately an
    80-year cycle. Second, if we close a location but consolidate its
    functions at a new location, any recapitalized facilities at the
    receiving location will contribute to lowering the overall
    recapitalization rate.

                      SAVINGS FROM CHANGES IN DAVIS-BACON

        4. Senator Inhofe. Mr. DuBois, the Davis-Bacon Act (1937) requires
    the payment of prevailing wage rates (which are determined by the U.S.
    Department of Labor) to all laborers and mechanics on Federal
    construction projects in excess of $2,000. Construction includes
    alteration and/or repair, including painting and decorating, of public
    buildings or public works. The Department is requesting legislation to
    raise the size of the construction project to $1.0 million and assumes
    $190 million in savings as a result of the change.
        What assumptions are you making in regard to size of the savings
    from the changes in Davis-Bacon and where are you crediting the
    savings?
        Mr. DuBois. Studies, including a GAO review, estimated a savings
    range from 3.7 percent to 5 percent. The Department historically
    averages about $3 billion per year in construction projects between
    $2,000 and $1,000,000. Therefore, we believe the Department could save
    from $111 to $150 million by increasing the Davis-Bacon threshold. Most
    of these projects are funded with O&M appropriations for facility
    restoration. We would apply savings to other priority facility
    restoration construction. Very few affected projects are funded with
    military construction appropriations.

        5. Senator Inhofe. Mr. DuBois, what are the plans for restoring the
    assumed savings, if your proposal on Davis-Bacon fails?
        Mr. DuBois. If our proposal fails, we will be unable to restore and
    modernize as many facilities. Further, we will be unable to conduct
    business like successful commercial entities, we will continue to be
    shackled with oversight and reporting requirements unique to the
    Federal Government, and we won't be able to increase competition by
    greater involvement of small businesses.

                        STRATEGY FOR ENCROACHMENT ISSUES

        6. Senator Inhofe. Mr. DuBois, the Senior Readiness Oversight
    Council identified a series of encroachment issues that adversely
    impact military readiness: endangered species and critical habitats;
    unexploded ordnance and other constituents; maritime sustainability,
    airspace use; air quality, airborne noise; and urban growth. Based on
    the testimony provided by the services at the Readiness Subcommittee
    hearing on March 20, 2001, it appears that the time is ripe for the
    development and implementation of a comprehensive strategy that
    addresses both the individual and the cumulative effects of these
    issues.
        What specific actions have you taken to facilitate the development
    and implementation of a comprehensive strategy intended to address
    readiness concerns related to these encroachment issues?
        Mr. DuBois. The Office of the Secretary of Defense (OSD) and the
    services are working together closely to help ensure sustainable ranges
    for future test and training. Last year, the services brought the
    encroachment issue to the Senior Readiness Oversight Council (SROC).
    The Deputy Secretary of Defense chairs the SROC which includes the
    Under Secretaries of Defense, the Vice Chairman of the Joint Chiefs,
    and the Service Secretaries and Chiefs. SROC is responsible for DOD
    readiness oversight, and advises the Secretary of Defense on readiness
    status and issues.
        On June 20, 2000, the SROC discussed encroachment issues and
    constraints that affect testing and training; determined they pose a
    clear concern for military readiness; and directed a comprehensive
    analysis and action plans to address the concerns. The Defense Test and
    Training Steering Group, an existing DOD group, responsible for test
    and training range issues, has responsibility for this action. This
    steering group brings key DOD managers and range operators together to
    solve joint problems and ensure common solutions to test and training
    issues.
        On November 27, 2000, the Steering Group reported its findings and
    recommendations to the SROC. In response, the SROC reaffirmed
    encroachment is a serious readiness issue requiring a comprehensive and
    coordinated DOD response. The SROC endorsed all the group's
    recommendations, now being actively pursued by DOD under the overall
    auspices of the Sustainable Ranges Initiative. Several of these actions
    are highlighted here.
        Sustainable Range Action Plans: DOD has developed initial Issue
    Action Plans on nine important encroachment areas: endangered species
    and critical habitat; UXO and munitions; spectrum encroachment;
    maritime sustainability; national airspace redesign; air quality;
    airborne noise; urban growth; and outreach. These plans are to be
    delivered to the SROC in October 2001, and have recently been provided
    in draft form to the House Armed Services Committee, the Senate Armed
    Services Committee, and the House Government Reform Oversight Committee
    for their review. These plans provide an essential starting point for
    the Department's efforts to address encroachment systematically on our
    test and training ranges. For each encroachment area, lead points of
    contact have been identified and an existing organization or group
    within DOD has been directed to implement the roadmap and ensure
    encroachment and range sustainment becomes an integral part of their
    area of responsibility.
        Policy Development. Although OSD does not own or manage test and
    training ranges, it is our responsibility to provide policy and
    guidance to ensure test and training lands are operated and maintained
    effectively. To that end, OSD, in close cooperation with the services,
    is developing a DOD Directive on the ``Management of Sustainable Ranges
    and Operating Areas.'' This directive will provide the guidance to
    ensure our range operators take a comprehensive approach to dealing
    with encroachment through integrated planning, management, and outreach
    efforts.
        Unified DOD Noise Program. Noise is a long-standing and chronic
    concern. The services have dealt with this issue at many levels and in
    many forms. At the November 2000 SROC meeting, the Department approved
    a recommendation that a joint approach to the noise problem be
    implemented. Accordingly, a Unified DOD Noise Program is being
    developed to work cross-service noise issues affecting our test and
    training ranges. By working together, this group will be able to assess
    recurrent noise problems, help to determine action priorities,
    coordinate DOD noise investments, and share lessons learned across the
    services.
        Joint Land Use. Urban growth is the-root of most encroachment
    concerns affecting our ranges today. Noise complaints, air quality
    compliance issues, declining endangered species habitat, and airwave
    frequency conflicts are all directly attributable to increasing
    physical development around formerly isolated DOD lands. As our
    separation decreases, we must work harder to ensure land uses on both
    sides of the range fence are compatible.
        The DOD Air Installations Compatible Use Zone (AICUZ) Program has
    been operating through the military departments since 1975 to address
    aircraft noise and encourage compatible community development in
    jurisdictions surrounding installations. The AICUZ program was
    supplemented by the DOD Joint Land Use Study (JLUS) program in 1985,
    which provides greater outreach to state and local governments and can
    make grants to these levels of government to develop strategies for
    dealing with encroachment.
        The DOD Office of Economic Adjustment administers JLUS and has
    agreed to expand their emphasis to test and training ranges.
        Outreach. The SROC recognized a comprehensive approach to
    encroachment will require more than internal DOD planning and
    implementation. It is equally important that DOD be able to communicate
    the encroachment issues we face, explain our proposed approaches, and
    work with other interested parties to achieve workable and mutually
    agreeable solutions. Test and training ranges are part of the larger
    social, economic, and environmental fabric of a region. The Department
    recognizes that other Federal agencies as well as state, local and
    tribal governments, private citizens, and other interested parties are
    stakeholders in ensuring sustainable ranges. The Department will strive
    to ensure a strong outreach program to work with such stakeholders on
    our mission and readiness needs and address their concerns.
        Other issues. Based on the Sustainable Ranges Initiative, the DOD
    Policy Board on Federal Aviation recently initiated a joint DOD-FAA
    working group to identify and resolve issues surrounding the National
    Air Space System. The Navy, recently designated the Executive Agent for
    Maritime Sustainability, is actively working with the other services
    and Federal regulators to resolve constraints on testing and training
    at sea. Finally, the Range Spectrum Requirements Working Group (RSRWG)
    which has responsibility for DOD frequency spectrum problem-solving and
    an active role in addressing spectrum encroachment issues, has expanded
    its role to both test and training ranges.

        7. Senator Inhofe. Mr. DuBois, what recommendations do you have
    regarding further actions in this area?
        Mr. DuBois. The Department is addressing encroachment's impacts on
    readiness in a number of ways. All these responses are part of an
    evolving, comprehensive strategy to make our test and training ranges
    more sustainable in the future. Many of these initiatives are being
    undertaken at the direction and under the oversight of the Senior
    Readiness Oversight Council (SROC).
        To address an appropriate long-term strategy for range sustainment,
    the new DOD Directive on Sustainable Ranges, currently in coordination,
    will establish a more comprehensive sustainability framework. Critical
    to this framework will be a comprehensive understanding of test and
    training mission requirements, the regulatory regime under which
    mission requirements operate, and the range capabilities used to
    support the mission requirements. This baseline data will aid in
    identifying problems needing attention, both short and long-term, as
    well as the appropriate level for attention, whether it be local,
    regional, national, or a combined response.
        The Sustainable Ranges Working Group is currently drafting
    recommendations for the next SROC encroachment meeting to focus on
    long-term solutions including: (1) policy, (2) funding, (3) leadership/
    organization, (4) legislation/regulation, and (5) outreach.
        Specifically regarding outreach, we plan to implement a state
    government outreach program in an effort to convince states that
    actions must be taken now to protect military assets so further
    encroachment does not occur. I also will expand the DOD Joint Land Use
    Study Program to ranges and test sites, as well as provide a more
    comprehensive approach that will address a multitude of readiness-
    limiting issues.
        I look forward to working with members on the Readiness and
    Management Support Subcommittee on these issues, particularly on
    recommendations requiring statutory assistance to address environmental
    considerations commensurate with the national security of this country.

                  UNEXPLODED ORDNANCE--SCIENCE AND TECHNOLOGY

        8. Senator Inhofe. Mr. DuBois, unexploded ordnance and other by-
    products of test and training activities can cause environmental
    contamination and safety concerns that may trigger restrictions on
    military testing and training. Unfortunately, the technology available
    to address these issues is labor intensive and not cost effective. I am
    aware that the Secretary of Defense included some additional funding in
    the fiscal year 2002 budget request for research and development in
    this area.
        Does the current fiscal year 2002 budget request reflect an
    adequate level of support for research and development in this area? If
    not, what more is needed?
        Mr. DuBois. Yes, the current fiscal year 2002 budget request
    reflects an adequate level of support for unexploded ordnance (UXO)
    science and technology. The fiscal year 2002 funds allow DOD to
    increase its level of effort to develop UXO technologies and improve
    the understanding of the fate, transport and effects of munitions and
    their chemical constituents when used during test and training
    activities on military ranges.

        9. Senator Inhofe. Mr. DuBois, will there be adequate and steady
    funding support in the out-years?
        Mr. DuBois. Since 1995, DOD has invested approximately $35 million
    of RDT&E funds for environmental UXO technology. These funds have
    addressed both science and technology research and the demonstration
    and validation of UXO technologies. DOD is dedicated to minimizing
    environmental contamination and safety concerns from UXO through all
    practicable means, including programming sufficient funding for
    developing and demonstrating technology.

        10. Senator Inhofe. Mr. DuBois, what are the projected funding
    priorities in this area?
        Mr. DuBois. Requirements for identifying, clearing, removing, and
    cleaning up UXO, and for improving our understanding of the transport,
    fate, and effect of munitions on military test and training ranges are
    high priorities. The projected funding priorities for DOD's UXO
    technology investment are to:
        (a) improve our understanding of the underlying science of UXO
    detection and discrimination technologies (e.g. geophysics);
        (b) provide for more effective and efficient technologies for
    conducting UXO response action;
        (c) increase significantly the probability of UXO detection while
    reducing the ``false alarm'' rates;
        (d) increase the applicability of UXO detection systems to a more
    diverse set of geographic applications, including underwater UXO; and
        (e) understand better the fate, transport, and effects of munitions
    and their chemical constituents when used during test and training
    activities on military ranges.

                    AIR FORCE INSTALLATION READINESS RATINGS

        11. Senator Inhofe. General Robbins, last fall General Ryan
    testified for the HASC that: ``We are mortgaging the infrastructure
    aspect of our force readiness to stem the decline in operational
    readiness . . . we cannot continue this underinvestment or it will have
    a compounding effect on our near- and long-term readiness.'' During the
    AF MILCON staff briefing, General Robbins briefed that 64 percent of
    facility classes are rate C-3 or C-4. In fiscal year 2001, 51 percent
    of facility classes were C-3 or C-4.
        What impact will this year's military construction budget request,
    which is the largest in recent memory, have on improving the readiness
    of your facilities?
        General Robbins. Unfortunately there is a very negligible change in
    the installation readiness ratings from the additional funding because
    our backlog is very large. It would take 8-10 years of sustained
    funding at this level to significantly change the ratings in our
    Installations Readiness Report. However, new and/or upgraded facilities
    result in increased efficiencies as well as improved morale, welfare,
    and readiness. The additional funding in the fiscal year 2002 MILCON
    budget was directed toward facility modernization and restoration, not
    new mission or new footprint requirements. As a result, we were able to
    include projects on some of our worst facilities, thus reducing our
    facility recapitalization rate (based on averages through the FYDP)
    from 236 years to 191 years. With continued funding at this level we
    will be able to move toward a recapitalization rate that is more in
    line with private industry.

        12. Senator Inhofe. General Robbins, how is facility readiness
    affecting the ability of the various installations to carry out the Air
    Force's mission?
        General Robbins. Sixty-four percent of the Air Force's facility
    classes were rated C-3 or C-4 in the fiscal year 2000 Installations
    Readiness Report--a 9 percent increase from the 55 percent of Air Force
    facility classes rated C-3 and C-4 in fiscal year 1999. This means that
    significant or major infrastructure deficiencies prevented or precluded
    full mission accomplishment.
        For example in our operations and training facility class, degraded
    airfield pavements pose significant risk of damaging aircraft engines
    and/or structures. This, in turn, impacts everything from basic
    airfield operations to day-to-day aircraft maintenance. Other examples
    of deficiencies in this facility class include obsolete airfield
    lighting systems, inadequate training facilities, and deteriorated/
    inadequate airfield drainage systems. Inoperative fuel hydrant systems
    force refueling by truck, increasing workload for maintenance and
    supply personnel. In addition, our installations are forced to seek
    waivers for explosive quantity distance criteria and for obstructions
    within airfield clear zones due to constrained funding, rather than
    eliminating these flight safety risks. Over $4.0 billion is required to
    restore our operations and training facility class to C-2.
        Deficiencies such as those that I highlighted degrade operational
    efficiency and make operating and maintaining our air bases very
    challenging. Over $19.7 billion in MILCON and O&M funds are required to
    restore our facility classes to the minimum acceptable performance of
    C-2.

                    IMPROVEMENTS AT WAKE ISLAND AND THULE AB

        13. Senator Inhofe. General Robbins, the two largest construction
    projects in the Air Forces current mission construction program are for
    airfield repairs at Wake Island ($25 million) and Thule AB ($19
    million). Both bases are minor bases which have no significant Air
    Force mission.
        If, as you indicate, the Air Force has a constrained military
    construction program, why is the Air Force dedicating more than $44
    million for improvements at Wake Island and Thule AB, which have no
    significant tenant units or strategic role?
        General Robbins. In April 2001, CSAF directed funding to rebuild
    facilities and infrastructure to support contingency operations at Wake
    Island based on PACOM, USTRANSCOM, and U.S. Forces Korea mission
    requirements. Due to limited O&M funding over the past 8 years, the
    wharf access, airfields, and utilities require significant upgrade to
    even meet limited operations capabilities. The installation will be
    used to support deploying forces, as a divert base for transient
    aircraft and for test and evaluation support (BMDO). The island will be
    operated under a very limited operations concept.
        The Thule AB mission provides tactical warning/attack assessments
    of sea-launched ICBMs, satellite tracking and control, and support for
    enroute airlift operations during contingencies. Airfield ramps and
    taxiways have deteriorated to the point aircraft loading/unloading is
    done on the runway. For 10 months of the year, this airfield is the
    only access for supplies to support the 800 personnel assigned. To
    continue to meet mission requirements, nine MILCON projects are planned
    between fiscal years 2002 and 2007 for the airfield and to improve the
    quality of life for our men and women serving at this very remote
    location.

        14. Senator Inhofe. General Robbins, what are the total
    infrastructure improvements costs at these installations?
        General Robbins. Wake Island MILCON improvements programmed from
    fiscal years 2002 through 2006 total $109 million. Projects include:
    critical island access repairs to the wharf, marine bulkhead and rail/
    road systems; airfield repairs on the runway, taxiway, and aprons;
    utility repairs to the electrical, water, and wastewater systems, and;
    fuel system repairs to the hydrants, pump stations, off-loading
    systems, and fire protection systems.
        Thule AB MILCON improvements programmed from fiscal years 2002
    through 2007 total $125.1 million. Projects include: critical repairs
    to airfield taxiways and aprons, consolidation of administrative and
    service facilities, a back-up power plant, fitness center, a medical
    clinic, and two dormitories.

                       AIR NATIONAL GUARD BASING SUPPORT

        15. Senator Inhofe. General Robbins, the Air Force is planning to
    establish C-17 units in Hawaii and Alaska and a C-5 unit in West
    Virginia. The current funding profile for the Air National Guard does
    not provide any funding to support these new missions.
        What levels of funding are programmed to support the new mission
    construction for these locations?
        General Robbins. There are no funds currently programmed for design
    or construction in support of these new missions. No official decision
    has been made on this basing to date. Should the decision be made to
    proceed with mission conversions at these Air National Guard locations,
    the associated construction costs would be programmed to meet
    operational needs.

                             NAVY ON-SHORE HOUSING

        16. Senator Inhofe. Admiral Johnson, the Navy has an ambitious
    program to provide on shore housing for all sailors when the ship is in
    its homeport. In the case of San Diego and Mayport, this involves more
    than 25,000 sailors, at other installations the numbers are not as
    large, but the cost will still be significant. Why is this program such
    a priority?
        Admiral Johnson. The Navy believes that single enlisted sailors who
    must live on the ship while in homeport have the worst living
    conditions in DOD. The 1999 Quality of Life Domain Study reflected that
    junior enlisted sailors that live aboard ship while in homeport are the
    least satisfied with Navy life. As a result, both the Secretary of the
    Navy and the Chief of Naval Operations are committed to providing
    shipboard sailors a BQ room when they are in homeport.

        17. Senator Inhofe. Admiral Johnson, what is the scope of the
    program and what resources will be required to support the construction
    of these barracks?
        Admiral Johnson. There are approximately 36,300 E-1-E-4 single
    sailors assigned to shipboard duty. Of these, approximately two-thirds
    are in homeport at any given time. To accommodate shipboard sailors who
    are not authorized to receive basic allowance for housing while in
    homeport, the Navy needs to construct approximately 21,000 spaces.
    Assuming a traditional military construction approach, the estimated
    cost to house these sailors at a ``1+1'' standard is approximately $1.8
    billion.

        18. Senator Inhofe. Admiral Johnson, have the funds been
    programmed?
        Admiral Johnson. Funds have been programmed through fiscal year
    2007 to construct 8,632 of the required spaces. The homeport ashore
    requirement will continue to be addressed in future program/budget
    cycles.

                           SHORTFALL IN BRAC ACCOUNT

        19. Senator Inhofe. Admiral Johnson, the BRAC account, which is
    funded through the MILCON program, is used to fund construction
    resulting from mission realignments and environmental restoration at
    the closed sites. The fiscal year 2002 DOD request for $524 million is
    a decrease from prior years and will be used primarily for
    environmental restoration. The Navy has already identified a $92
    million shortfall for fiscal year 2002. What will be the impact of this
    projected shortfall?
        Admiral Johnson. The shortfalls will have serious, negative
    environmental, property transfer and relationship repercussions.
    Resulting failure to meet Federal Facility Agreement and Federal
    Facility Site Remediation Agreement milestones will catalyze
    significant violations, fines, and enforcement actions from Federal and
    State environmental regulators. Additional delay in certain cleanup
    efforts will pose imminent threats to the environment and human health
    that, in turn, will result in civil lawsuits. As an end result, cleanup
    deferrals will further delay the transfer of the facilities to local
    communities for reuse and undermine relationships with the local
    communities.

        20. Senator Inhofe. Admiral Johnson, if the Department could
    identify the ``must fund'' programs in this account, why were the funds
    not allocated?
        Admiral Johnson. At the time that the fiscal year 2002 budget
    request was submitted to Congress, the Department of the Navy believed
    that unexpended funds from prior years could be used to offset the
    ``must funds.'' After a thorough review from the Naval Audit Service,
    the Department of the Navy has reallocated all available prior year
    dollars to offset unfunded requirements.
        The BRAC account has been significantly reduced over the past few
    years, slowing the rate of environmental restoration and property
    transfer. At the same time, changes in cleanup footprints and discovery
    of increased levels of contaminants at various sites have caused an
    increase in scope and cost of remediation.

                    DECREASE IN FAMILY HOUSING CONSTRUCTION

        21. Senator Inhofe. Admiral Johnson, the Department of the Navy, as
    well as the other services, considers the upgrading of family housing
    as the highest priority quality of life issue. In fact, the President
    included an additional $400 million in the budget specifically for
    housing improvement. Despite this emphasis, the Department of the Navy
    family housing program reflects a 27 percent decrease from fiscal year
    2001. With all the emphasis on family housing, why does the Department
    of the Navy reflect a 27 percent decrease in family housing
    construction?
        Admiral Johnson. The Department of the Navy's fiscal year 2002
    request for family housing construction reflects a balance of
    priorities, given available resources. For example, the Department of
    the Navy's fiscal year 2002 request for bachelor housing construction
    represents a 110 percent increase over fiscal year 2001. Despite the
    decrease in fiscal year 2002 family housing construction funding, the
    Department of the Navy will achieve the goal of eliminating inadequate
    military family housing by fiscal year 2010.

        22. Senator Inhofe. Admiral Johnson, will the level of family
    housing construction funding projected over the FYDP achieve the 2010
    goal for housing improvement?
        Admiral Johnson. Yes. Both the Navy and Marine Corps report that
    they will eliminate inadequate family housing by fiscal year 2010,
    given projected funding levels.

                           PURCHASE OF BLOUNT ISLAND

        23-24. Senator Inhofe. General McKissock, one of the Commandant's
    highest priority issues is the purchase of Blount Island. Despite its
    importance to the Marine Corps, the Commandant has not convinced the
    administration to include the additional $119 million to purchase the
    property.
        If the island is of such significance to the Marine Corps, why have
    the funds not been requested in the budget?
        Are there any funds programmed in the FYDP to purchase the Island?
    If so, when and how much?
        General McKissock. I have included the second phase funding of $123
    million to purchase Blount Island within the FYDP in fiscal year 2003,
    and am continuing to work with the Secretary of the Navy and the Office
    of the Secretary of Defense (OSD) to move it forward in the program.

                         MARINE CORPS' BARRACKS UPGRADE

        25-26. Senator Inhofe. General McKissock, the Marine Corps has
    acknowledged that its barracks are the worst in the Department of
    Defense. To remedy this problem as quickly as possible the Corps will
    build new barracks to the 2+0 standard (2 persons to a room) which is
    less than that of the other services which are building to the 1+1
    standard (individual rooms). When will you complete this barracks
    upgrade?
        Do you eventually plan to improve the barracks to the 1+1 standard?
        General McKissock. The Marine Corps will reach a 2 person per room
    assignment standard by 2019 and a 2x0 construction standard by 2036.
    However, we are exploring the SecNav's goal to improve the quality of
    housing for marines by accelerating the 2x0 construction standard to
    2008. An additional $1,779 million, above controls, would be required
    to reach the 2x0 construction standard by fiscal year 2008.
        The Marine Corps continues to be committed to increasing quality of
    life and mentoring our junior marines. We strongly believe the 2+0
    approach provides the right balance between privacy desired by marines
    and the Marine Corps' desire to provide companionship, camaraderie, and
    unit cohesion. This balance provides the atmosphere we believe is right
    to train and develop marines. We have a permanent waiver from the
    Department of the Navy 1+1 standard; we have no plans to build to the
    1+1 standard.

                             ARMY FORCE PROTECTION

        27. Senator Inhofe. General Van Antwerp, after the bombing at the
    Khobar Towers and the attack on the U.S.S. Cole force protection has
    become a major issue. The Army, which has historically had open
    installations, is now planning to limit access to installations and
    provide security fencing for key facilities. The cost of these actions
    will be significant, and will stress the already constrained military
    construction program.
        What actions are you taking on Army installations to increase force
    protection and at what cost?
        General Van Antwerp. Force protection is a prime consideration in
    our commitment to having world-class installations. In March 2001, the
    Army directed MACOMs to implement mandatory vehicle registration;
    exercise restricted access plans to control installation/facility
    access (i.e., provide continuous entry control 24 hours a day/7 days a
    week); and address protection for mission essential and vulnerable
    areas including high-risk targets, using existing resources, where
    available.
        As of 25 June 2001, out of 326 installations, there are 172 still
    open. Our closed installations have, for example, reduced entry points;
    fencing; mandatory vehicle registration and visitor pass control; new
    or renovated security guard houses; improved communications and
    lighting; trained and armed (military and civilian) security personnel;
    controlled access to mission essential vulnerable areas (MEVAs) and
    high risk targets (HRTs); and vehicle barriers. The costs associated
    with this include manpower and equipment charges. Those increases (for
    CONUS and OCONUS) are 4993 personnel at $183 million, fencing and gates
    at $766 million, for a total of $949 million. We will continue to
    validate costs; will review them on a year-to-year basis; and project
    completion, across the Army, within approximately 5 years.

                        PRIVATIZATION OF UTILITY SYSTEMS

        28. Senator Inhofe. General Van Antwerp, the Defense Reform
    Initiative requires the military departments to privatize all utility
    systems no later than September 30, 2003, except those exempted for
    unique security reasons or when privatization is uneconomical. The Army
    has more than 300 utility systems and has privatized 19 to date. The
    issue on privatization is the long-term cost. When a system is
    privatized, the service avoids maintenance and construction costs, but
    must increase base operations support to pay for the services.
        Although the Army reduces future construction and maintenance costs
    when it privatizes its utility systems, it incurs additional base
    operations support cost to pay for the utility services. What are the
    estimated savings that the Army anticipates due to privatization of
    utility systems?
        General Van Antwerp. The Army does not anticipate any savings since
    utility privatization is not a cost-saving program. Privatization is an
    opportunity for the Army to convey the utility infrastructure to
    qualified utility providers, recapitalize the infrastructure and
    receive safe, reliable, and efficient utility services.

        29. Senator Inhofe. General Van Antwerp, of the 320 utility systems
    in the Army how many do you estimate will be privatized?
        General Van Antwerp. The Army currently has privatized 21 utilities
    systems and has exempted 28 systems because privatization is
    uneconomical or for security reasons. The Army expects at least fifty
    percent, or 160 systems, to be privatized the first time they are
    evaluated. The utilities systems that are not initially economical to
    privatize will be reevaluated and privatized when economical.

             MILITARY CONSTRUCTION COSTS TO SUPPORT TRANSFORMATION

        30. Senator Inhofe. General Van Antwerp, although there has been a
    great deal of publicity regarding the equipment requirements to support
    the Army's transformation, not much is known about the military
    construction requirements.
        What is the projected MILCON cost to support the transformation?
        General Van Antwerp. Initial MILCON cost estimates were based on a
    template of projected requirements that were developed by a site visit
    team. The initial projected MILCON cost to support the transformation
    of the first six Interim Brigade Combat Teams (IBCT) between fiscal
    years 2002 and 2007 was $620.2 million. Since that initial estimate was
    made, the major commands (MACOMs) have submitted project lists that
    identify their requirements. These project submissions exceed the
    initial projected amount. We anticipate that the MILCON costs will
    increase as the MACOM project submissions are reviewed and validated.

        31. Senator Inhofe. General Van Antwerp, have these funds been
    programmed in the FYDP?
        General Van Antwerp. The initial projected amount of $620.2 million
    has been programmed in the fiscal years 2002-2007 FYDP. We anticipate
    that there will be a need for increased MILCON funding once project
    requirements are validated.

        32. Senator Inhofe. General Van Antwerp, what takeoffs will the
    Army have to make to the current MILCON program to support the
    transformation effort?
        General Van Antwerp. No projects from the current MILCON program
    have been deferred or deleted to support the transformation effort.

           FACILITIES' FUNDING FOR ARMY NATIONAL GUARD VERSUS ACTIVE

        33. Senator Inhofe. General Van Antwerp, the overall quality rating
    for Army National Guard facilities is C-4--facilities do not meet unit
    needs of Army standards. The cost to sustain these facilities in
    current condition is $439 million. The cost to bring them up to C-3 is
    $1.5 billion. To meet the sustainment goal for fiscal year 2002 the
    Army National Guard would need an additional $98 million.
        Although the Army National Guard received a substantial increase in
    the fiscal year 2002 budget request, I understand it is only 44 percent
    of the requirement. How does this compare to the active Army's
    shortfall?
        General Van Antwerp. By comparison, the President's budget requests
    funds for 61 percent of the active Army's military construction
    requirement. The difference is primarily that two major active Army
    programs are funded at 100 percent--barracks and chemical
    demilitarization. If fully funded programs are not included, the active
    Army's revitalization construction program is funded at 42 percent.

               STATE CONTRIBUTIONS TO NATIONAL GUARD CONSTRUCTION

        34. Senator Inhofe. General Van Antwerp, since National Guard
    construction usually requires at least 25 percent state contributions,
    what impact do state laws have on the execution of the construction and
    maintenance of facilities?
        General Van Antwerp. Since the States generally have many
    requirements for limited funds, they often do not appropriate the 25
    percent required state share for National Guard Readiness Centers until
    after the 75 percent Federal share of the project has been appropriated
    by Congress. For projects in those States with biennial budgets, this
    makes it very difficult to award the construction project in the year
    of Federal appropriation when this appropriation comes in the off year
    of the State cycle. However, even in States without biennial budgets
    there are execution problems, because some States will not even release
    their share of the design of the project until the Federal
    appropriation is in hand. Execution of sustainment, restoration, and
    modernization projects are also hindered, when there are Federal funds
    available but the State legislature will not appropriate a sufficient
    amount of funds to do all the required projects.
        35. Senator Inhofe. General Van Antwerp, do States routinely
    support the 25 percent commitment?
        General Van Antwerp. The States always provide their share, or the
    Federal Government doesn't release Federal funds for the construction
    project.
        The State must certify that the State share of funds for Army
    National Guard military construction projects is available before the
    National Guard Bureau releases any portion of the Federal share to the
    State.

        [Whereupon, at 3:58 p.m., the subcommittee adjourned.]