[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.]

                                 
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