[Senate Hearing 107-536]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-536

       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2003

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 5011/S. 2709

    AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR THE 
 DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2003, 
                         AND FOR OTHER PURPOSES

                               __________

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                      COMMITTEE ON APPROPRIATIONS

                ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina   THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa                     PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland        CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada                   MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
PATTY MURRAY, Washington             RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota        JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California         ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois          BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota            LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island              MIKE DeWINE, Ohio
                  Terrence E. Sauvain, Staff Director
                 Charles Kieffer, Deputy Staff Director
               Steven J. Cortese, Minority Staff Director
            Lisa Sutherland, Minority Deputy Staff Director
                                 ------                                

                 Subcommittee on Military Construction

                 DIANNE FEINSTEIN, California, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas
TIM JOHNSON, South Dakota            CONRAD BURNS, Montana
MARY L. LANDRIEU, Louisiana          LARRY CRAIG, Idaho
HARRY REID, Nevada                   MIKE DeWINE, Ohio
ROBERT C. BYRD, West Virginia        TED STEVENS, Alaska
  (ex officio)                         (ex officio)

                           Professional Staff
                            Christina Evans
                              B.G. Wright
                        Sid Ashworth (Minority)

                         Administrative Support
                               Angela Lee
                       Alycia Farrell (Minority)


                            C O N T E N T S

                              ----------                              

                         Tuesday, March 5, 2002

                                                                   Page
Department of Defense:
    Office of the Secretary......................................     1
    Defense agencies:
        Special Operations Command...............................    35
        TRICARE Management Activity..............................    35
        Military Community and Family Policy.....................    35
        Defense Logistics Operations.............................    35
    Department of the Army.......................................    57

                        Tuesday, March 19, 2002

Department of Defense:
    Department of the Navy.......................................    83
    Department of the Air Force..................................   109

 
       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                         TUESDAY, MARCH 5, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:30 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Dianne Feinstein (chairman) 
presiding.
    Present: Senators Feinstein, Hutchison, Stevens, and Craig.

                         DEPARTMENT OF DEFENSE

                        Office of the Secretary

STATEMENT OF HON. DOV ZAKHEIM, UNDER SECRETARY OF 
            DEFENSE (COMPTROLLER)


             OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN


    Senator Feinstein. I know Senator Hutchison is on her way, 
but in the interest of time and not to keep everyone waiting, I 
think we will begin. I would like to call to order this hearing 
of the Subcommittee on Military Construction to review the 
President's fiscal year 2003 military construction budget 
request. Secretary Zakheim, Secretary DuBois, I am very pleased 
to welcome you to the subcommittee again, and we look forward 
to your testimony, and I thank you for all you have done.
    We have an ambitious schedule, so what I would like to do 
is finish my remarks, then hear from the Ranking Member her 
remarks, and then ask all of the witnesses if they would submit 
their prepared statements for the record and try to summarize 
their comments very briefly so that we might move this along.
    Secretary Zakheim, the President's 2003 MILCON budget is 
slightly less than $9 billion. That is a 14-percent cut, or 
decrease from last years' MILCON bill, and it is 10-percent 
decrease from what the President requested last year. It is 
fair to say, I think, that this budget request has raised the 
concern of many members in Congress, and particularly given the 
$48 billion increase in the overall budget request I feel that 
we should as nearly as possible adhere to the President's 
request.
    I am also aware that where investment in military 
construction is needed and necessary, this committee wants to 
provide it, so the real question is whether this can be done 
within these budget constraints, and I believe it is really up 
to you, both Secretaries, as well as the commanders in the 
field and in Washington, that if you feel this budget does not 
meet your needs, that you so state, or as the saying goes, 
forever after hold your peace, because I do not think we can 
play games with this budget in the sense of, well, we can cut 
MILCON but the Congress is going to put it all back again.
    I do not believe that is going to happen this year, so I 
think if there are shortfalls, if there are shortcomings, if 
there are real problems for the men and women in our Armed 
Services, not only abroad but also in this country, that it is 
really up to the commanders to say so and really up to you to 
let us know, both the Ranking Member and myself, or else you 
may end up getting just what has been requested, and I want to 
make that really very clear.
    Senator Tim Johnson requested a statment be put in the 
record.
    [The statement follows:]

               Prepared Statement of Senator Tim Johnson

    Madame Chairwoman, I'd like to thank you and Ranking Member 
Hutchison for holding today's hearing. I appreciate your continued 
leadership on the subcommittee and your commitment to maintaining the 
strength of our military through thoughtful investments in our defense 
infrastructure.
    I'd also like to thanks today's witnesses for coming before the 
subcommittee and to share with us their knowledge and expertise. We are 
grateful for your service to our nation.
    Although military construction appropriations do not go to fund the 
latest fighter aircraft or battleships, it would be a mistake to think 
that the work of this subcommittee is any less important to the defense 
of our nation. In fact, the ultimate success of Operation Enduring 
Freedom--the ongoing fight against global terrorism--will be due in 
large measure to the funding contained in the Military Construction 
Appropriations Bill.
    The funding in this bill will construct and maintain our military 
facilities around the world. It will build new, state-of-the-art 
training facilities. It will upkeep of the runways our Air Force uses 
to fly missions against Al Qaeda. It will create new medical clinics to 
care for sick and injured service members. And it will maintain 
facilities where our high-tech war-fighting equipment is kept in peak 
condition to be used by our soldiers, sailors, airmen, and marines.
    These are just a few examples of the projects that will be funded 
by the Military Construction Appropriations Bill. Projects that will 
provide the foundation for ensuring we continue to field the best-
equipped, best-trained military in the world.
    Madame Chairwoman, as you well know, all of the best weapons and 
all the best facilities in the world will be rendered useless if our 
military personnel and their families are not afforded a good quality 
of life. That is why this subcommittee has placed such a high priority 
on addressing the issue of military housing. I am pleased that we have 
made some progress toward ensuring quality housing for all of our 
military personnel and their families. But more needs to be done. In 
fact, according to the Department of Defense, 20 percent of all service 
members on U.S. military bases live in inadequate housing.
    The President's budget request includes a very modest increase for 
family housing, I am hopeful we can do more because the issue of 
quality housing goes to the heart of military readiness. We should not 
underestimate what poor housing can do to the morale of our military 
families. The stress on morale not only affects the preparedness of our 
military units, but discourages some of our most able personnel from 
re-enlisting, and makes recruitment of the best and brightest even more 
difficult. As you know, South Dakota is home to one active duty 
installation, Ellsworth Air Force Base. As a Lead Wing for the 
Aerospace Expeditionary Force, the 28th Bomb Wing at Ellsworth Air 
Force Base has played a leading role in the war in Afghanistan. In 
fact, the capabilities of the B-1 bombers flying out of Ellsworth is 
one of the reasons the war has been so successful. I am very proud of 
the men and women who are serving at Ellsworth. In my conversations 
with them, I have heard that an upgrade in facilities, especially in 
housing, is essential to their quality of life. This highlights the 
important work of this subcommittee. If we are going to recruit and 
retain quality people for our military, it is necessary for us to 
provide adequate funding to all aspects of the military, not just to 
the weapons programs. I look forward to working with my colleagues to 
address this important matter.
    Since we are privileged to be joined by representatives from the 
Army National Guard, I would also like to take this opportunity to say 
a word about the increasingly important role the National Guard plays 
in defending our nation. Most South Dakotans know at least one of the 
4,500 current members of the South Dakota Guard and Reserves, or the 
thousands of former Guardsmen and Reservists. South Dakota's Guard and 
Reserve units consistently rank in the highest percentile of readiness 
and quality of its recruits. But keeping and recruiting the best of the 
best in the South Dakota National Guard and Reserves is becoming more 
of a challenge as our military's operations tempo has remained high, 
while the number of active duty military forces has decreased. This 
tempo places significant pressure on the members of the reserve 
component, as well as the buildings and other support systems meant to 
sustain them.
    Once again, I would like to thank the witnesses for coming before 
the subcommittee to share with us their expertise. I look forward to 
working with you, Madame Chairwoman, and the rest of my colleagues as 
we move forward with the fiscal year 2003 Military Construction 
Appropriations Bill.

    Senator Feinstein. So with that--and I do not see the 
Ranking Member--Mr. Secretary, why don't we proceed with your 
comments and your statement.

                    FISCAL YEAR 2003 BUDGET REQUEST

    Mr. Zakheim. Thank you, Madam Chairwoman. I am certainly 
honored to be back here again to present the military 
construction component of the President's fiscal year 2003 DOD 
budget request, and I might add that if, indeed, our wishes are 
met and we get what we ask for, I would be delighted. The 
President's budget request advances his commitment to win the 
war on terrorism, to take the best care of our military people 
and their families, and to transform America's defense posture, 
our forces, our capabilities, our infrastructure to enable us 
to counter 21st Century threats decisively.
    The request supports the new defense strategy and 
recommendations from Secretary Rumsfeld's 2001 quadrennial 
defense review and his other strategic assessments. The budget 
includes strong funding both for current demands, most notably 
the ongoing war on terrorism, and for investments for the 
future. It supports the President's defense commitment not only 
through the increased total funding, but also, and most 
important, through the wise allocation of that funding.
    The fiscal year 2003 military construction budget furthers 
the President's defense aims with a balanced program to improve 
the quality of life for our military through better working and 
living conditions. This budget will enhance our sustainment and 
modernization of existing facilities. It will fund critical new 
construction. It will replace facilities that are no longer 
economical to repair. It will address environmental compliance 
requirements; and it will continue caretaker efforts at closed 
bases.
    The request for military construction and family housing 
totals, as you have already noted, about $9 billion, and funds 
over 300 construction projects at more than 185 locations. It 
is true that the request is about $1 billion lower than last 
year's request, but in no way does that imply any easing of our 
commitment to revitalizing DOD's infrastructure. The $9 billion 
total is the second largest request in the past 6 years. In 
addition, we have added $1.6 billion to the 2003 funding that 
had been anticipated in the President's budget request for 
2002. In other words, a year ago we anticipated $1.6 billion 
less in military construction funding for this year than we 
actually asked for.
    I should add that complementing the $9 billion request is 
increased funding for sustainment restoration and 
modernization, or SRM, within the operations and maintenance 
title. Fiscal year 2003 funding for SRM totals $6.2 billion, 
which is $500 million increase over last year's request, and 
this total includes $5.6 billion specifically for sustainment. 
Although we had to make difficult choices because of escalating 
demands for the war on terrorism, especially within the 
operations and maintenance title, we were able to fund 93 
percent of the Services' maintenance requirements. That is an 
increase over the 89 percent provided in last year's budget, 
and a significantly higher level than what was budgeted in the 
previous several years, for example in 2000, when the 
Department met only 78 percent of the Services' facilities 
maintenance requirements.
    Our budget includes $225 million more than requested last 
year for military family housing construction and 
privatization. That keeps us on track to meet Secretary 
Rumsfeld's goal of ensuring adequate housing for all military 
personnel and their families by 2007, which is 3 years earlier 
than was originally planned.
    We are also achieving greater benefit from our housing 
funds, because by joining forces with the private sector we 
will be leveraging our investments to provide quality housing. 
In fiscal year 2003, we are planning to obtain about 35,000 
privatized housing units, nearly twice the number of privatized 
units obtained to date.
    Based on the privatization projects awarded so far, we 
estimate that the DOD investment was leveraged at about 8 to 1. 
In other words, for every dollar we invest, we are getting $8 
of value, so that our 2003 funding request for privatization 
projects of $195 million to provide about 24,000 units, that 
translates with that 8 to 1 leverage to over $1.5 billion worth 
of quality privatized housing. This leveraged return must be 
factored into the overall value of our military construction 
budget.
    Our funding of new infrastructure is sufficient to 
construct new facilities that are absolutely critical. Most 
notably, these are to support new weapons systems coming into 
the inventory. Our new construction funding and our emphasis on 
SRM reflects our multiyear management plan to revitalize DOD 
facilities.
    A critical component of our plan is the congressionally 
approved 2005 base realignment and closure, otherwise known as 
BRAC round, which we hope will achieve the needed 20 to 25 
percent reduction in DOD infrastructure. With a successful BRAC 
round, our planned funding through 2007 will be sufficient to 
achieve, by that time, Secretary Rumsfeld's commitment to and 
goals for facilities recapitalization.
    Highlights of our request for military construction and 
family housing include, with respect to quality of life, $1.2 
billion for new or improved barracks for unaccompanied military 
personnel. This will fund 46 projects to construct or modernize 
barracks and to provide roughly 12,600 new or improved living 
spaces.
    In addition, the budget will allow the Department to 
construct or modernize 13 schools for dependents, seven 
physical fitness centers, two child development centers, and 
three community support centers.
    With respect to overseas construction, in keeping with 
congressional direction, new construction in overseas areas is 
being requested only where construction requirements are of 
high priority; when they are absolutely essential to our 
overseas basing needs; and after all burden-sharing 
opportunities have been explored and found to be unworkable. I 
might mention in this regard, Madam Chairwoman and Senator 
Hutchison, that we have just completed negotiations with the 
Republic of Korea that will effectively, by 2005, have them 
contributing 50 cents on every dollar that is spent.
    That is a significant increase from the past, and it was 
our goal--and, frankly, we have received a lot of help from you 
and other people on the Hill. It is our goal to achieve a 
minimum 50-percent standard with every country in which we are 
based. The 2003 program of $847 million for projects overseas 
therefore meets the criteria I have just laid out.
    A word about chemical demilitarization. Sustaining our 
steady progress, the 2003 budget includes $168 million for the 
construction of chemical demilitarization facilities, and 
reflects change as a result of our review of the program's 
funding and scheduling.
    The NATO security investment program, NSIP: that request 
totals about $168 million. It is the minimum essential U.S. 
contribution for NATO's efforts, and is needed to support both 
our strategic security and our economic interest in the 
European theater.
    Let me return to Family housing, which I have already 
mentioned briefly. This year our request for budget authority 
for fiscal 2003 totals about $4.2 billion, which is up from the 
$4 billion requested a year ago. The Department's 2003 family 
housing inventory will include an estimated $250,000 
Government-owned units, and 29,500 leased units worldwide. Our 
operation and maintenance budget of $2.9 billion will ensure 
that houses in our inventory in an adequate condition for 
occupancy by our military families. We are requesting $1.3 
billion to build, replace, or improve an additional 7,200 
family housing units.
    So in conclusion--I know you want me to keep this short--I 
want to thank you very much again for the opportunity to 
describe our plans both to sustain and revitalize DOD's 
facilities. This budget will enhance the quality of life for 
our service members and their families. It will strongly 
support current requirements and missions, and it will enable 
the long-term streamlining and recapitalization of DOD 
facilities.

                           PREPARED STATEMENT

    Again, we stand by this request. If you were to grant it to 
us, as you said, Madam Chairwoman, we would be delighted. We 
indeed urge your approval of that request. The Department and I 
are ready to provide whatever further details you may need to 
make these important decisions.
    Thank you very much.
    [The statement follows:]

                Prepared Statement of Dr. Dov S. Zakheim

    Madam Chairwoman, Senator Hutchison, members of the committee, I am 
honored to present the Military Construction component of President 
Bush's fiscal year 2003 Department of Defense (DOD) budget request.
    The President's DOD request advances his commitment to win the war 
on terrorism; to take the best care of our military people and their 
families; and to transform America's defense posture--our forces, 
capabilities, and infrastructure--to enable us to counter 21st century 
threats decisively. The request supports the new defense strategy and 
recommendations from Secretary Rumsfeld's 2001 Quadrennial Defense 
Review (QDR) and his other strategic assessments. The budget includes 
strong funding both for current demands--most notably the war on 
terrorism--and for investments for the future. The budget supports the 
President's defense commitment not only through increased total 
funding, but also and most important, through the wise allocation of 
that funding.
    The fiscal year 2003 Military Construction budget furthers the 
President's defense aims with a balanced program to improve the quality 
of life for our military through better working and living conditions. 
This budget will enhance our sustainment and modernization of existing 
facilities, fund critical new construction, replace facilities that are 
no longer economical to repair, address environmental compliance 
requirements, and continue caretaker efforts at closed bases.

                            FUNDING OVERVIEW

    The President's request for Military Construction and Family 
Housing totals $9.0 billion and funds over 300 construction projects at 
more than 185 locations. Although this request is $1 billion lower than 
last year's fiscal year 2002 request, in no way does it imply any 
easing of our commitment to revitalizing DOD infrastructure. The $9 
billion total is the second largest request in the past 6 years. 
Moreover, we added $1.6 billion to the fiscal year 2003 funding that 
had been anticipated in the President's budget request for fiscal year 
2002. This budget clearly supports our critical requirements and 
missions and actually increases funding for sustainment and other key 
functions.
    I should add that complementing this $9 billion request is 
increased funding for Sustainment, Restoration, and Modernization (SRM) 
within the Operation and Maintenance (O&M) title. Fiscal year 2003 
funding for SRM totals $6.2 billion--an $500 million increase over last 
year's request. This total includes $5.6 billion for sustainment. 
Although we had to make difficult choices because of the escalating 
demands from the war on terrorism, especially within the O&M title, we 
were able to fund 93 percent of the Military Services' maintenance 
requirements. That is an increase over the 89 percent provided for in 
last year's budget and represents a significantly higher level than 
what was budgeted in the previous several years, such as in fiscal year 
2000 when the Department met only 78 percent of the Services' 
facilities maintenance requirements.
    Our budget includes $225 million more than requested last year for 
military family housing construction and privatization. This keeps us 
on track to meet Secretary Rumsfeld's goal of ensuring adequate housing 
for all military personnel and their families by 2007--3 years earlier 
than originally planned.
    Moreover, we are achieving greater benefit from our housing funds 
because--by joining forces with the private sector, we will be 
leveraging our investments to provide quality housing. In fiscal year 
2003, we are planning to obtain about 35,000 privatized housing units--
nearly twice the number of privatized units obtained to date.
    Our funding of new infrastructure is sufficient to construct new 
facilities that are absolutely critical, most notably to support new 
weapon systems coming into the inventory. Our new construction 
funding--and our emphasis on SRM--reflects our multiyear management 
plan to revitalize DOD facilities.
    A critical component of our plan is the congressionally approved 
2005 Base Realignment and Closure (BRAC) round, which we hope will 
achieve a needed 20-25 percent reduction in DOD infrastructure. With a 
successful BRAC round, our planned funding through fiscal year 2007 
will be sufficient to achieve--by that date--Secretary Rumsfeld's 
strong goals for facilities recapitalization.

                         MILITARY CONSTRUCTION

    Following are the key elements of our $4.8 billion fiscal year 2003 
request for Military Construction:
    Active Forces and Defense-Wide.--The $4.0 billion budgeted for 
Active Forces and Defense-Wide programs is targeted towards improving 
readiness, quality-of-life, and DOD work places; restoring the most 
seriously degraded facilities; and providing facilities to support new 
weapons systems. The request includes $1.2 billion for barracks 
projects; $1.0 billion for operational and training facilities; $436 
million for maintenance and production facilities; $192 million for 
community facilities; $147 million for medical facilities; $134 million 
for utility facilities; $112 million for administrative facilities; $76 
million for supply facilities; and $33 million for research and 
development facilities.
    Guard and Reserve Facilities.--The $297 million requested for the 
Reserve Components is balanced both to provide the necessary facilities 
to support current and new missions and to replace aging facilities 
that are no longer economical to repair. It is true that the fiscal 
year 2003 request is $646 million less than the fiscal year 2002 
enacted level and $318 million lower than the Department's fiscal year 
2002 request. Nevertheless, the fiscal year 2003 request is higher than 
requests prior to fiscal year 2002.
    The fiscal year 2003 program includes 37 major construction 
projects as well as planning and design work and minor construction. 
Most projects are training centers, maintenance facilities, and 
operational facilities in support of the Reserve Components' mission.
    Quality-of-Life.--A significant portion of the military 
construction program--$1.2 billion--will provide for new or improved 
barracks for unaccompanied military personnel. Our budget will fund 46 
projects to construct or modernize barracks and to provide 12,643 new 
or improved living spaces. Specifically, the Army, Navy, and Air Force 
are continuing to build to the ``1+1'' design (one soldier to a room 
with a shared bathroom) for personnel permanently assigned to a base. 
The Marine Corps is building to the ``2+0'' design (2 E1-E3s to a room, 
each room with its own bathroom) in an effort to improve living 
conditions of Marines sooner than if they followed the 1+1 design 
standard. In addition, the fiscal year 2003 program will allow the 
Department to construct or modernize 13 schools for dependents, 7 
physical fitness centers, 2 child development centers, and 3 community 
support centers.
    Overseas Construction.--In keeping with congressional direction, 
new construction in overseas areas is being requested only where 
construction requirements are of high priority, when absolutely 
essential to U.S. overseas basing needs, and only after all burden-
sharing opportunities have been explored and found to be unworkable. 
The fiscal year 2003 program of $847 million for projects in overseas 
areas meets these criteria. Of the $847 million, $181 million is for 
the Republic of Korea, $246 million for Germany, $131 million for 
Italy, $143 million for other European sites, and $146 million for 
various locations overseas. I should note that we have negotiated a 
burden-sharing agreement with the Republic of Korea and, for the first 
time, expect the Korean share to reach 50 percent during its term.
    Medical Projects.--Consistent with the Department's emphasis on 
quality-of-life improvements and readiness, the fiscal year 2003 budget 
reflects the high priority it places on health care. The budget 
requests $147 million for 5 medical projects, including $53 million for 
the fourth phase of a $133 million replacement hospital at Ft. 
Wainwright, Alaska; $3 million to replace a clinic at Hickam AFB, 
Hawaii; $40 million for the replacement of a hospital at Spangdahlem, 
Germany; and $41 million to replace a medical and dental facility at 
Naples, Italy. It also includes $10 million to pay a contractor claim 
on the recently completed hospital at Elmendorf Air Force Base, Alaska.
    Chemical Demilitarization Construction.--The Department continues 
to make steady progress in its chemical demilitarization efforts. To 
that end, the fiscal year 2003 budget includes $168 million for the 
construction of chemical demilitarization facilities. It reflects the 
completion of an overall review of the program, and--consistent with 
the Department's emphasis on realistic costing--we made funding and 
schedule changes that mirror the Cost and Analysis Improvement Group's 
(CAIG) estimates and timelines. The CAIG estimate reflects the ``end of 
operations'' for all sites (except Pueblo and Blue Grass) to be slipped 
from fiscal year 2007 to fiscal year 2011; no projected end of 
operations has been made for the Pueblo and Blue Grass facilities. This 
revised schedule will require the United States to request a 5-year 
extension (to 2012) to the deadline in the Chemical Munitions Disposal 
Treaty.
    Two chemical demilitarization facilities are now in operation. The 
prototype incineration facility on Johnston Atoll in the Pacific Ocean 
is fully operational and has destroyed 100 percent of the original 
chemical agent stockpile stored there. In addition, the Chemical Agent 
Disposal Facility in Tooele, Utah began operation in August 1996 and 
has destroyed over 39 percent of the original chemical agent stockpile 
stored at that site. We have completed construction of the Chemical 
Agent Disposal Facilities in Anniston, Alabama and Umatilla, Oregon. In 
January 1999, the Army issued a full Notice to Proceed to Raytheon 
Demilitarization Company to begin construction for the Chemical Agent 
Disposal Facility in Pine Bluff, Arkansas. Construction of the Pine 
Bluff facility is 74 percent completed.
    The Army has selected alternative technologies to be used in lieu 
of the baseline incineration process at the two bulk-only chemical 
agent storage sites at Aberdeen Proving Ground, Maryland and Newport, 
Indiana. Systems contractors were selected for the Aberdeen facility in 
October 1998, and for the Newport facility in February 1999. 
Construction of the Aberdeen facility is 47 percent completed, while 
the Newport facility is 24 percent completed. Additional technologies 
are being evaluated for the remaining two chemical demilitarization 
sites: Pueblo, Colorado and Blue Grass, Kentucky. Environment and 
permitting efforts are ongoing, and technology decisions are expected 
during fiscal year 2002 for both locations.
    Energy Programs.--This Administration is committed to energy 
conservation. Reflecting that commitment, the budget includes 
approximately $50 million in fiscal year 2003 for projects that will 
result in energy savings and support long-standing goals to reduce 
energy demand. Last year the Congress appropriated $26.7 million.
    Minor Construction/Planning and Design.--The request contains $89 
million in fiscal year 2003 for minor construction, alterations, and 
modifications to existing facilities. These funds are essential to meet 
unforeseen construction requirements that can impair the health, 
safety, and readiness of our forces. In addition, we are requesting 
$334 million for planning and design. These funds are urgently needed 
to complete the design of fiscal year 2004 projects and to initiate 
design of fiscal year 2005 projects. We seek your support for this 
request so we can proceed with these construction requirements.

                  BASE REALIGNMENT AND CLOSURE (BRAC)

    In the past, the BRAC process has been a major tool for reducing 
our domestic base structure. Between 1988 and 1995, four BRAC 
Commissions proposed the closure or realignment of 152 major 
installations and 235 smaller ones. Implementation of the last round of 
the four approved BRACs was completed on July 13, 2001. Once all 
funding is complete, the Department will have invested about $22.2 
billion and realized savings of about $37.7 billion for total net 
savings of about $15.5 billion over the implementation period from 
fiscal year 1990 to fiscal year 2001. Total annual savings after fiscal 
year 2002 are projected to be about $6 billion. For fiscal year 2003, 
the BRAC request is $545.1 million--for environmental restoration and 
caretaker costs for bases closed under these previous rounds. This 
funding will ensure that bases continue both to be cleaned efficiently 
and to meet environmental standards to speed the transfer of property 
to redevelopment authorities.
    The fiscal year 2003 budget assumes that the additional round of 
base closures and realignment in 2005 will occur, as authorized in the 
fiscal year 2002 National Defense Authorization Act. The Department 
hopes that this round will achieve at least a 20-25 percent reduction 
in military infrastructure and savings of approximately $6.5 billion 
per year. Funds to begin implementation of the 2005 BRAC 
recommendations are currently programmed in fiscal year 2006.

                    NATO SECURITY INVESTMENT PROGRAM

    The NATO Security Investment Program (NSIP) request totals $168.2 
million in fiscal year 2003. This is the U.S. share (approximately 24.7 
percent) of the acquisition of NATO common use systems and equipment; 
construction, upgrade, and restoration of operational facilities; and 
other related programs and projects required in support of agreed NATO 
strategic concepts and military strategy. We anticipate recoupments of 
$11 million from previously financed U.S. projects, which will result 
in a total fiscal year 2003 program of $179.2 million. This request is 
the minimum essential U.S. contribution for NATO's efforts. It will 
support both our strategic security and our economic interest in the 
European Theater.

                             FAMILY HOUSING

    Budget authority for fiscal year 2003 Family Housing totals $4.2 
billion--up from $4.0 billion requested in fiscal year 2002. This 
budget will construct, improve, privatize, operate, maintain, and lease 
family housing units. It will enable the Department to continue the 
aggressive effort begun last year to eliminate inadequate housing by 
2007, 3 years sooner than the previous goal.
    Housing quality also will benefit from our proposed increases in 
the Basic Allowance for Housing (BAH). Through BAH increases, the 
fiscal year 2003 budget will reduce out-of-pocket costs for personnel 
living off-base from 11.3 percent now to 7.5 percent in fiscal year 
2003, and it projects funding to phase out these costs completely by 
2005. Prior to fiscal year 2001, service members had to absorb 18.8 
percent of these housing costs.
    Family Housing Operations.--The Department's fiscal year 2003 
family housing inventory will include an estimated 250,000 government-
owned units and 29,500 leased units worldwide. The government-owned 
units average about 35 years in age. These DOD-owned and leased units 
house approximately one-third of our military families.
    The family housing operation and maintenance budget funds a range 
of services and expenses necessary to support the DOD-owned and leased 
housing units. For example, the operation account funds items such as 
housing administration and management, basic support services, referral 
services, furnishings, and utilities, while the maintenance account 
funds routine maintenance and major repairs. In addition, the family 
housing leasing account provides housing at both domestic and foreign 
locations when the local economy cannot provide adequate support and 
additional assets are needed to satisfy a housing shortfall.
    Our fiscal year 2003 operation and maintenance budget of $2.9 
billion will ensure that houses in our inventory are in adequate 
condition for occupancy by our military families. The fiscal year 2003 
request is $21 million higher than the amount Congress approved for 
fiscal year 2002 due primarily to the need to maintain an aging housing 
inventory.
    Family Housing Construction.--The major emphasis of the Family 
Housing Construction Program is to replace units that are uneconomical 
to repair or renovate and to upgrade the remaining units. We are 
requesting $1.3 billion in fiscal year 2003 to build, replace, or 
improve 7,200 family housing units. This fiscal year 2003 request is 
$159 million higher than the amount enacted for fiscal year 2002, due 
to the President's initiative to improve housing for our troops and 
families.
    Family Housing Privatization.--The fiscal year 1996 National 
Defense Authorization Act provided innovative authorities that enable 
the Department to partner with the private sector to revitalize our 
housing inventory. By means of loan and rental guarantees, direct loans 
and investments, differential lease payments, and the conveyance or 
leasing of land and facilities, the Department has been able to tap 
private sector expertise and capital to provide quality housing more 
quickly than would be possible through traditional construction 
methods.
    Using the funds Congress appropriated directly into the Family 
Housing Improvement Fund (FHIF) or funds for construction projects that 
were later transferred into the FHIF, the Military Services have 
awarded fourteen privatization projects. Based on the projects awarded 
so far, we estimate that the DOD investment was leveraged at about 
eight to one. Our fiscal year 2003 funding request for privatization 
projects is $195 million--to provide about 24,000 housing units. 
Applying that previous 8:1 leverage rate, with our $195 million 
investment we should be able to obtain over $1.5 billion worth of 
quality privatized housing. This leveraged return should be factored 
into the overall value of our military construction budget.
    Highlights of our privatization initiatives:
  --Fort Carson, Colorado.--At Fort Carson, the Army invested $10 
        million to provide a limited loan guarantee and is obtaining 
        1,823 revitalized housing units and 840 new units. The return 
        on the Army's investment in this $229 million project is 22:1 
        when compared to traditional construction approach. The Army 
        has also awarded a contract to privatize 5,912 housing units at 
        Fort Hood, Texas, and is finalizing two deals to privatize 
        3,982 units at Fort Lewis, Washington, and 3,170 units at Fort 
        Meade, Maryland. The fiscal year 2003 budget request includes 
        $153.5 million to privatize 17,483 housing units at six Army 
        bases.
  --South Texas/Everett, Washington.--The Navy entered into a 30-year 
        limited partnership with a private developer to provide 404 
        off-base units in the Corpus Christi-Ingleside-Kingsville, 
        Texas area. These are all new units that required an investment 
        of $9.5 million, less than a third of the $32 million project 
        cost. A similar partnership arrangement provided 185 new family 
        housing units at Naval Station Everett. The Navy invested $5.9 
        million in a $20 million limited partnership project for a 
        return on investment of slightly better than 3:1. Both the 
        south Texas and Everett, Washington projects have been 
        completed. The Navy has since awarded five more contracts to 
        privatize a total of 5,994 units at Everett (288 units), 
        Kingsville (150 units), San Diego (3,248 units), New Orleans 
        (935 units), and a third project in south Texas (661 units). 
        The Marine Corps' first privatization project at Camp 
        Pendleton, California (712 units) is currently under 
        construction. In fiscal year 2003, the Navy is requesting $33.4 
        million to privatize 1,978 housing units at the Naval Complex 
        in Pearl Harbor, Hawaii.
  --Lackland, Texas.--The Air Force's first family housing 
        privatization project, at Lackland AFB, will be completed in a 
        few months. The Air Force employed a combination of limited 
        loan guarantee and small direct loan to finance a 420-unit 
        housing project worth $42 million. For its investment of $6.2 
        million in this project, the Air Force realized a return of 8:1 
        when compared to traditional military construction approach. 
        The Air Force has awarded three more projects--Robins AFB, 
        Georgia (670 units); Dyess AFB, Texas (402 units); and 
        Elmendorf AFB, Alaska (828 units). In the fiscal year 2003 
        budget, the Air Force has identified five projects to privatize 
        4,564 units, and is requesting $7.8 million. The Air Force 
        believes that four of the five projects will not require any 
        up-front funding due to expected leverage from the assets to be 
        conveyed.

                               CONCLUSION

    Thank you again for this opportunity to describe our plans to 
sustain and revitalize DOD facilities. This budget will enhance the 
quality of life of our service members and their families, strongly 
support current requirements and missions, and enable the needed long-
term streamlining and recapitalization of DOD facilities. I urge your 
approval of our request. The Department and I are ready to provide 
whatever details you may need to make these important decisions.

    Senator Feinstein. Thanks very much, Mr. Secretary.
    Secretary DuBois, before we hear from you I would like to 
acknowledge that we have been joined by some of our colleagues, 
the Ranking Member of this committee, the Ranking Member of the 
overall Appropriations Committee, and the distinguished Senator 
from Idaho, and I would like to ask Senator Hutchison if she 
would like to make her remarks at this time.

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. I would, and I thank you, Madam 
Chairman. I will be brief, but first let me say I am very 
pleased about what you just reported regarding Korea, and that 
negotiation. I applaud you for that. I think it is the right 
thing to do, and I think in light of the other necessary 
expenditures that we have right now, that it is appropriate.
    The only other thing that I would just note and ask that 
you address, and we can do it in questions, but that is in the 
area of European military construction. You have got over $1 
billion in military construction projects in Europe. Of those, 
168 million is NATO infrastructure, including a new subregional 
base in Greece.
    Your Spanish expenditures are in Rota, which I think is 
totally appropriate. It is necessary for what we are doing now, 
but down the line we are looking at yet another subregional 
headquarters of NATO in Madrid, and my question is, are we 
asking our European allies to do enough in light of our current 
needs for other places? I think--I have looked at many of your 
other overseas expenditures. They meet the test of current 
necessities, and infrastructure for refueling and those kinds 
of things, but I guess the big question is, are we maybe in 
line to look for a little bit of a realignment with Europe, in 
light of the burden we are carrying in the Middle East and in 
the war on terrorism?
    And then secondly, I would just say the lowering of the 
amount being spent in our domestic bases, I understand that you 
are now looking at a BRAC farther out, but I would like for you 
to address the cost of having to beef up the bases that are 
going to be kept, versus not spending for 3 years. In 
anticipation of a BRAC, could we not continue to upgrade the 
housing and especially the medical facilities where you have, I 
think, four medical facilities in the U.S., and you have a huge 
upgrading of medical facilities in several places overseas. I 
just wonder if we are doing enough to keep up the domestic part 
of health care and housing and quality of life issues with the 
really large cuts in the increases in spending for domestic 
military construction.
    With that, then, I will certainly ask questions, but those 
are the points I would like to make.
    Senator Feinstein. Thank you very much, Senator Hutchison.
    Senator Stevens, did you have a comment you would like to 
make at this time, or any comments?
    Senator Stevens. Well, Madam Chairman, I want to be able to 
ask some questions. I am not sure I am going to be able to 
stay, but I do not have any opening comments.
    Senator Feinstein. Thank you very much.
    Secretary DuBois, would you like to proceed?

STATEMENT OF HON. RAYMOND DuBOIS, DEPUTY UNDER 
            SECRETARY OF DEFENSE FOR INSTALLATIONS AND 
            ENVIRONMENT
    Mr. DuBois. Yes, ma'am. Thank you very much, again, to have 
this opportunity to appear before you and your distinguished 
subcommittee. September 11, as we all know, changed this 
country, perhaps changed it forever, but the imperative 
remains, that imperative to transform our military 
installations and to maintain our commitment to our people in 
uniform with respect to improving their quality of life.
    Senator Hutchison, you are quite right, the quality of life 
initiatives must be focused on, and in addition to the basic 
allowance for housing increases in this year's budget, the 
medical treatment facilities, the MILCON increases, we have got 
to remember that there are a series of investments in resources 
that are put against the so-called facilities, housing 
sustainment, restoration, and modernization accounts, or 
program elements in this budget.
    Now, the context of competing priorities, I think we always 
have to remember that no matter whether it is this fiscal year 
or last, where we had a greater request for MILCON, although, 
as Secretary Zakheim said, this year's request is the second 
largest in 6 years, we have got to remember that there are 
competing priorities, and those priorities shifted on September 
11.
    Now, we believe we have developed a feasible and fiscally 
responsible plan for getting our facilities on a continued path 
to recovery. As I indicated, the basic allowance for housing to 
eliminate out-of-pocket cost by our service members is on a 
glide path to get to zero by 2005. We are also increasing, as 
Secretary Zakheim said, our reliance upon the private sector 
both for access to existing quality housing, but also through 
our military family housing privatization efforts, and we want 
to thank the Congress for having extended our housing 
privatization authority to 2012, although Secretary Rumsfeld's 
goal is to achieve the reduction and elimination of all 
inadequate housing by 2007.
    Having said that, we do have a goal of achieving 
privatization of over 60,000 family housing units by the end of 
fiscal 2003. There is a continuing commitment to our 
unaccompanied service men and women. You touched a little bit 
upon Korea, where we have nearly 95 percent of all military 
personnel are unaccompanied. I did speak with General Schwartz, 
our CINC there, just a couple of days ago about the situation 
there. We are both very thankful, as is the Secretary of 
Defense, for your continued focus on the construction needs of 
our personnel in Korea.
    On the overseas issue, Senator Hutchison, you mentioned 
Europe in particular. Secretary Zakheim has testified to the 
land partnership program in Korea, wherein we are going to 
reduce our footprint from 41 installations to 25 or 26, a very 
substantial reduction. It is true also in Europe, and I spoke 
to General Ralston about this just the other day. He is 
proposing a reduction in Europe. As you know, these kinds of 
programs require the State Department involvement, host country 
Nation involvement, but the European Command is submitting to 
the chairman, and ultimately to the Secretary, a footprints 
reduction and basing structure rationalization for Europe.
    As you also know, I am sure, we have 25 percent of our 
military personnel stationed overseas, and yet only 23 percent 
of our MILCON budget goes to overseas, 77 percent in CONUS. It 
is also even more skewed or unbalanced, as it were, with 
respect to military family housing, 79 percent in the United 
States, 21 percent overseas.
    Let me address briefly now the other critical question I 
think that is before us this afternoon, and that is the 
reduction year over year. As I indicated, and as Secretary 
Zakheim indicated, it is the second largest request in 6 years, 
and I think it is important that we look at total investments. 
As I indicated, you have got new footprint MILCON, you have got 
restoration and modernization military construction, but you 
also have restoration and modernization that come out of the 
O&M account, granted, not in the authority and purview of this 
subcommittee, but still focused on our infrastructure. You have 
got sustainment O&M dollars, not MILCON dollars but sustainment 
dollars focused on our infrastructure and, of course family 
housing construction and family housing maintenance.
    If you take those program elements as a whole, and include 
all four services and the defense agencies, you have a total 
budget year over year with the reduction of about 3 percent. 
Now, granted, the pure MILCON part of this is presidential 
budget year over year 10 percent, but if you look at the total 
investment portfolio focused on quality of life, focused on 
infrastructure, it shows a 3 percent reduction.
    Now, the sustainment part of that total investment 
portfolio is very important to focus on. It is in all accounts 
across the board and all Services, except for the Navy, it is 
in excess of 90 percent. In fact, the Air Force is nearly 100 
percent, and the Marine Corps is at 100 percent of sustainment. 
That is to say, taking care of what we have now, a very 
important issue.
    The recapitalization issue, which is probably somewhat 
arcane to those of us who live outside of the beltway, but a 
very important metric nonetheless to you and to us in the 
Pentagon. It is going up year over year, and it is inescapable, 
and I say this with some concern, because sometimes it gets 
misunderstood.
    It is inescapable that we do have, because you all 
authorized the Secretary to do so, a BRAC in 2005. It is 
important to recognize that just because BRAC sits out there, 
it does not dictate that we invest in one installation today 
over another. It does, however, mean that the Service Chiefs 
and the Service Secretaries making tough decisions, tough 
priorities, funding competing priorities, will invest, in 
MILCON terms, on mission-critical requirements.
    Some mission-critical requirements are at certain 
installations and not others. That is an inescapable fact. The 
recap rates do go up, but it is important, as Secretary Zakheim 
reiterated, and as Secretary Rumsfeld said in his testimony 
before your committee, that the 67-year recap rates will be 
achieved by fiscal 2007.
    I think the other issue that is important to understand is 
the majority, 60 percent of all MILCON projects are for 
restoration and modernization for mission-critical 
requirements. That is both MILCON and O&M.
    Now, BRAC. Certainly, last time that I sat in front of you 
it was an issue that was highly charged. It remains highly 
charged. The Secretary of Defense testified, and not with 
tongue in cheek, I might add, but quite seriously, this is a 
painful process, but it is a process that, with your authority, 
and the fact that it is in 2005, we are going to take a 
comprehensive, and we are going to take a very thorough and 
methodic and deliberate look at our entire real estate asset 
portfolio, and I do want to say on his behalf, on behalf of the 
Secretary of Defense, we do thank the Senate for supporting him 
in his efforts to rationalize our infrastructure, our total 
infrastructure through this process, this needed process 
referred to as BRAC.
    Now, just for purposes of reemphasis, we have not 
deferred--we have not deferred any projects in anticipation of 
BRAC. Our fiscal year 2003 budget request reflects, as I 
indicated, the highest priorities identified by the Service 
Secretaries and the Service Chiefs to support their missions as 
currently configured. We are just beginning to analyze the 
total DOD infrastructure from a BRAC point of view. Specific 
construction projects in this fiscal year's budget request are 
driven, as I said, by military necessity and mission-critical 
requirements.
    One final point, if I might, and I address this because it 
has received a certain amount of press attention. Several 
committees of the House and the Senate have now called a 
hearing specifically to focus on the term and the issue called 
encroachment.
    Twenty-six, 27 years ago, when Secretary Rumsfeld and I 
served in the Pentagon, the word encroachment was not even in 
our lexicon. Maybe it should have been, because today we are 
facing in a number of our test and training ranges and 
installations across the country urban density, environmental 
encroachment, spectrum competition, air space encroachment, 
issues which are now directly impacting upon our ability to 
provide realistic combat training for our troops.
    This encroachment issue has emerged in the last couple of 
years, certainly since Secretary Rumsfeld was sworn in, as a 
very serious concern. We are addressing that concern. We do not 
have all the answers yet. We are in the process of discussing 
this with folks on the Hill, folks in the environmental 
community, folks in the Department of Interior, EPA, NOAA, 
those sister agencies in the executive branch which focus on 
the regulatory aspect of these statutes.
    I am reminded that I believe this is the 30th anniversary 
of the Clean Water Act and other acts, other statutes passed by 
the Congress. Deputy Secretary Wolfowitz back in December set 
out specifically a cross-discipline, cross-service group in the 
Department of Defense cochaired by myself and Paul Mayberry, 
the Deputy Under Secretary for Readiness, to focus on this and 
try to come up with some reasonable approaches, given the 
seriousness of the situation, and we look forward to working 
with you. We absolutely, positively must have your advice and 
counsel as to how to proceed in this regard.
    In closing, I have spent the last 9 months having been in 
this job as Deputy Under Secretary, and I visited over 30 major 
installations here and abroad, also a number of our premier, 
our crown jewels of training and test ranges, several of which 
are in California and Texas and Alaska, as it turns out. We are 
committed in that regard, and I remain committed to advise the 
Secretary as best I can on how to improve and support healthy 
installations, facilities, and housing.

                           PREPARED STATEMENT

    We have to remember that if we are going to transform the 
military, which remains, notwithstanding 9/11, reforming the 
way we think about defense and reshaping the way we manage the 
Defense Department is first and foremost still in Secretary 
Rumsfeld's mind, and he also, I think, appreciates the fact 
that part of that transformation, an integral part of that 
transformation has to be how we transform our platforms, our 
deployment platforms called our installations.
    Thank you very much.
    [The statement follows:]

              Prepared Statement of 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 2003 programs supporting military installations and facilities and 
the Department's environmental management. The Department's goal is to 
restore the readiness of our installations and facilities--which are 
the foundation for military operations and deployments. We are 
continuing to improve the management of our installations and housing 
to ensure that they can fully support the men and women who live and 
work there in the accomplishment of their mission.
    To begin I would first like to recognize you and the Committee for 
the support you continue to provide to the Department. In particular, 
we appreciate this committee's strong support for the Secretary's 
effort to rationalize our infrastructure through a needed round of base 
realignment and closure. We are also grateful for the Congress' 
willingness to extend our housing privatization authority to 2012. 
These actions support the key elements of the Department's program to 
manage military installations and facilities more efficiently.
    Today, I will address the current state of our facility assets and 
the Department's revitalization plans; our sustainment, restoration and 
modernization programs; our management initiatives; and our 
environmental progress.

                       REVITALIZING INSTALLATIONS

    As Secretary Rumsfeld recently testified to Congress, ``September 
11 changed our nation forever.'' Our challenge today and in the future 
is to accomplish three difficult missions at once: to win the war on 
terrorism, to restore our military forces through investments in 
procurement, people and modernization, and to transform our forces to 
meet future demands.
    Last year, the Secretary of Defense undertook a series of 
initiatives to transform our installations and facilities into those 
required for a 21st Century military. Our fiscal year 2003 budget, as 
well as our current future years defense program, supports that 
commitment. In the context of competing priorities resulting from the 
events of September 11, we have developed a feasible and fiscally 
responsible plan for getting our facilities on a path to recovery. Even 
after the events of September 11, we are continuing to transform our 
installations and maintain our commitment to our people by improving 
their quality of life.

Installations' Vision
    Military installations and facilities are an integral component of 
readiness. Installations are the ``platforms'' from which our forces 
successfully deploy to execute their diverse missions. However, they 
are also places where our people live, work and train. The Department's 
sustainment and restoration and modernization programs must enhance 
military readiness while also providing in adequate quality of life an 
adequate working environment and provide for appropriate military 
training.
    Quality of life and quality of workplace are directly linked to the 
quality of our infrastructure. Many surveys have shown that poor 
quality facilities and services are a major source of dissatisfaction 
for families and services members alike. Our aging and deteriorating 
infrastructure has a direct impact on retention.
    To address these long standing infrastructure problems in an 
integrated fashion, the Department is aggressively pursuing a number of 
approaches to benefit service members and improve their quality of 
life. First, we will increase the basic allowance for housing to 
eliminate the out-of-pocket costs paid by service members for private 
sector housing in the United States. The fiscal year 2003 budget 
request includes necessary funding to continue lowering service 
members' out-of-pocket housing costs for those living off-base from 
11.3 percent today to 7.5 percent in 2003. By 2005, the typical member 
living off-base will have no out-of-pocket housing expenses.
    Second, we will increase our reliance upon the private sector--
higher allowances will increase and enhance service member access to 
existing quality housing. Higher allowances will also increase the 
income available to private sector developers, facilitating increases 
in the quantity and quality of privatized housing.
    Finally, we will continue to fund military construction for housing 
where necessary. Our fiscal year 2003 budget requests about $227 
million more for family housing construction than last year. We have 
also maintained our significant investment in barracks modernization. 
The combination of increased allowances and continued use of 
privatization will permit more efficient use of our military 
construction funding. Increased availability of quality private sector 
options will ease pressure for on-base housing, reduce the need to 
maintain our current inventory, and allow us to spend our sustainment 
funding more wisely.
    The Defense Facilities Strategic Plan, published in August 2001, 
defines our facilities vision for the future--healthy, productive 
installations and facilities that are available when and where needed 
with capabilities to support current and future military requirements. 
At the same time, we must spend the taxpayer's investment wisely and 
transform the way we do business to reduce the total operational cost 
of ownership of our installations and facilities.
    We must right size and locate our installations and facilities 
based on military requirements. The recently authorized base 
realignment and closure round in 2005 provides a key tool that will 
allow the Department to align operational forces with the installations 
best suited to their 21st Century missions. Providing the right quality 
installations and facilities also means we furnish quality living and 
working environments that support the warfighters' missions while 
enhancing quality of life for our service members and their families.
    Through providing the right resources and leveraging that funding, 
we will achieve the right size and quality of our installations and 
facilities. We have developed analytical tools and metrics that allow 
us to more accurately forecast our requirements and measure our 
progress. Our tools, like the Facilities Sustainment Model, which 
identifies facility sustainment requirements, and the Facilities 
Recapitalization Metric, which assesses the rate of modernization 
relative to the service life of the facilities' inventory, have 
matured, and we have several new tools under development. For instance, 
we are integrating the Services' real property inventory databases to 
guide and monitor management decisions. Accomplishing these goals will 
ensure that the needs of the warfighters and military families are met.

Current State of Facility Assets
    In fiscal year 2000, 42 Major Commands of the military services 
collectively rated 69 percent of their nine facilities categories C-3 
(have serious deficiencies) or C-4 (do not support mission 
requirements) as reported in their Installations' Readiness Reports. At 
the end of fiscal year 2001, with 43 Major Commands now reporting, this 
percentage is 68 percent.
    The first step to improve our readiness posture is to sustain what 
we own. It will take some time to reach an acceptable state of 
readiness. We are committed to sustaining our facilities appropriately 
to avoid incurring substantial costs in later years. In the fiscal year 
2003 budget request, the Department funds 93 percent of the 
requirement. The fiscal year 2003 recapitalization rate for our 
facilities has increased to about 150 years (121 if one factors in the 
potential 20 to 25 percent reduction that could be achieved from base 
realignment and closure). However, the fiscal year 2003 military 
construction request is the second largest in the past 6 years. We plan 
to invest over $20 billion from fiscal years 2003 through 2007 to 
achieve our goal of a 67-year recapitalization rate by the end of the 
Future Years Defense Program.
    For fiscal year 2003, we are requesting a total of $9 billion for 
military construction, family housing and environmental remediation on 
properties from the 1988 to 1995 base realignment and closure rounds. 
Consistent investment levels over time will help us restore and 
maintain readiness, stabilize and reduce the average age of our 
physical plant, reduce overhead costs, and maximize our return on 
investment. Last year, the Department modernized its treatment of our 
real property requirement. Our approach to sustainment (operations and 
maintenance-like \1\ funds) and restoration and modernization (both 
military construction and operations and maintenance funds), underscore 
our focus on improving infrastructure management.
---------------------------------------------------------------------------
    \1\ Includes O&M as well as related military personnel, host 
nation, and working capital funds.

                           SUMMARY OF REQUEST
               [President's budget in billions of dollars]
------------------------------------------------------------------------
                                                    Fiscal year
            Funding category             -------------------------------
                                           2002 request    2003 request
------------------------------------------------------------------------
New Footprint (MilCon)..................             1.4             1.5
Restoration and Modernization (MilCon)..             3.8             2.5
Restoration and Modernization (O&M-like)              .8              .8
Sustainment (O&M-like)..................             5.1             5.6
Family Housing Construction/Improvements             1.1             1.3
Family Housing Maintenance..............             1.3             1.3
                                         -------------------------------
      Total SRM, New Footprint, FH                  13.5            13.0
       Const. & Maint...................
------------------------------------------------------------------------

    Fully sustained, restored and modernized facilities are more cost 
effective in the long term and result in more prudent use of scarce 
resources. It is more expensive to allow facilities to deteriorate, 
which reduces service life and causes premature recapitalization 
requirements. Further, deteriorated facilities contribute to mission 
interruptions.

                              SUSTAINMENT

    The first principle of sound installation management is taking care 
of what you own, and our fiscal year 2003 budget request supports that 
principle. Our fiscal year 2003 budget request of $5.6 billion 
increases sustainment funding to 93 percent of the requirement, from 89 
percent in last year's budget. Full funding of sustainment throughout 
the program is an appropriate investment that will avoid significant 
costs in the future by stabilizing facility conditions and preventing 
further erosion.
    The fiscal year 2003 budget request also includes $6.1 billion for 
Real Property Services (RPS) which are must pay ``open-the-door'' costs 
generally performed by contract. The RPS account includes purchase of 
utilities, lease payments, custodial services, trash collection, snow 
removal, and grounds maintenance.

                            RECAPITALIZATION

    The Department is requesting $3.3 billion for recapitalization in 
fiscal year 2003 (including both operations and maintenance and 
military construction funds) to restore and modernize our facilities. 
Recapitalization is important not only to restore the readiness of poor 
facilities, but also to maintain the relevance of all facilities to 
future missions of the Department. A consistent modernization program 
tied to expected service life best accomplishes this. The Department 
stands by its goal of achieving a recapitalization rate of 67 years. We 
currently plan to achieve this goal by fiscal year 2007.
    There may be concerns with the increased fiscal year 2003 
recapitalization rate. However, our fiscal year 2003 budget request 
represents a restructuring of our priorities to achieve a more fiscally 
responsible program with lower costs over the long term. Sustaining 
facilities up front will reduce the need for costly restoration of 
facilities in the future, and we are requesting significant increases 
to our sustainment budget to accomplish this. In addition, the majority 
of the military construction budget projects (over 60 percent) are for 
restoration and modernization of mission critical requirements.

     COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
               [President's budget in millions of dollars]
------------------------------------------------------------------------
                                                    Fiscal year
                                         -------------------------------
                                           2002 request    2003 request
------------------------------------------------------------------------
Military Construction...................           5,210           4,054
NATO Security Investment Program........             163             168
Base Realignment and Closure IV.........             532             545
Family Housing Construction.............           1,114           1,341
Family Housing Operations & Maint.......           2,940           2,877
Homeowners Assistance...................              10               0
Family Housing Improvement Fund.........               2               2
                                         -------------------------------
      Total.............................           9,971           8,987
------------------------------------------------------------------------

                                HOUSING

    Military housing is a priority for the President and the Secretary, 
is an integral part of the Administration's Management Plan and is 
crucial to providing a decent quality of life for our service members. 
We are investing $1.2 billion in the budget request to construct or 
revitalize almost 14,000 barracks spaces for our unaccompanied service 
men and women to continue improvements in their quality of life. The 
Services are making great progress toward meeting, or have already met, 
the Department's goal for eliminating gang latrine conditions for 
permanent party unaccompanied service members.
    Our request of $4.2 billion for military family housing in fiscal 
year 2003 will operate and maintain the Department's family housing and 
enable us to eliminate most substandard housing by 2007--3 years 
earlier than previously planned. Our family housing construction budget 
request of $1.3 billion, up from the $1.1 billion requested in fiscal 
year 2002, supports traditional approaches to military family housing 
as well as the Department's plan to renovate, replace, or privatize 
over 35,000 housing units. We plan to have privatized a cumulative 
total of over 60,000 units by the end of fiscal year 2003. The 
Department is also requesting $2.9 billion for operating and 
maintaining almost 280,000 family housing units world-wide, (251,000 
government-owned and another 29,000 leased), approximately 60 percent 
of the government-owned units are considered inadequate.
    The Department's use of housing privatization, aided by Congress' 
extension of our authorities to 2012, continues to leverage our funding 
and has allowed us, to date, to privatize over 17,500 housing units. 
Our most recent projects have been at Fort Hood, Texas, where Army 
personnel have been deployed to support Operation Enduring Freedom and 
Naval Complex South Texas, which includes Naval Air Station Corpus 
Christi and Naval Station Ingleside in Texas.
    Privatizing military housing is a Presidential and Secretary of 
Defense management priority and is recognized as a key item on the 
Administration's agenda to improve the quality of life for our service 
men and women. Because decent, safe and affordable housing is such an 
important component of our service members' lives, we are taking steps 
to ensure that the privatization projects we have already undertaken 
remain fiscally and physically in good shape. To that end, we are 
overseeing the legal and financial documents of these projects through 
our internal oversight document called the Program Evaluation Plan, 
which provides the Secretary of Defense with key information on the 
Services' portfolio management of these projects. We are using this 
report to oversee the Services' progress in project management, meeting 
schedules for housing renovation and construction, customer 
satisfaction, and overall financial management.
    Privatization is intended to enable the military services to 
revitalize their inventories of inadequate housing by leveraging 
appropriations with private capital. Under privatization policy, the 
Services leverage appropriations to get at least three times the 
housing they would get under traditional military construction 
programs. In practice, the current 10 projects in our most recent 
report have leveraged appropriations at a rate of six to one. In 
addition, our data show that our initial ten projects allowed us to 
build and renovate houses on our installations that would have cost 
$600 million more had we used the traditional military construction 
approach. By leveraging available resources, we can revitalize housing 
on other military installations.
    In terms of future steps, the Department plans to build on our 
earlier privatization successes by simplifying the process, 
accelerating project execution, and institutionalizing best practices 
in the Services' deals with the private sector. We plan to sharpen our 
post-award management to ensure fiscal integrity and sound project 
management.

                      IMPROVING BUSINESS PRACTICES

    Our installations' management approach extends to improving our 
business practices. The Secretary of Defense is committed to improving 
the way the Department operates and reducing total ownership costs, and 
one of the methods is through improved information technology (IT) 
systems. The Installations' community is a frontrunner in the 
development and use of IT systems to improve the way we manage 
facilities.
    For example, in the fiscal year 2000 CFO Financial Statement, we 
estimated the funding requirements for sustainment, since we had no 
system to capture or forecast sustainment requirements. Now, using the 
Facilities Sustainment Model which applies industry benchmarks for 
sustainment costs, we are able to precisely identify the requirements. 
Thus, sustainment costs in financial statements for fiscal years 2003 
and beyond will be based on accurate, verifiable information.
    Many of our decision-making tools and financial systems are linked 
to the Department's real property inventory databases. Currently, the 
Department maintains many divergent systems that should be modernized 
using the latest state of the art technology and improved business 
processes. We recently began an effort to improve the availability and 
accuracy of information on our physical plant. Our vision is to improve 
our processes by developing a standardized real property inventory 
information system called the Base Information System. The goal is to 
develop new processes and systems for inventorying real property that 
will allow users of real property information to easily share and gain 
access to the information. During this fiscal year, we will develop an 
enterprise architecture that will help us clearly identify our current 
state and processes, develop a ``to-be'' process and, finally, develop 
the road map for change.
    In addition to our information systems, we are emphasizing several 
management initiatives to improve the efficiency of our installations 
and reduce total ownership costs. For example, the facilities 
demolition program has eliminated almost 62 million square feet of 
excess and obsolete facilities since its inception in 1998, and we 
expect to exceed our goal to eliminate 80.1 million square feet by the 
end of fiscal year 2003. The costs avoided by demolition will also free 
up funding to sustain, restore and modernize other infrastructure in 
our inventory. The demolition program was expanded to include several 
Defense Agencies and will continue past its originally intended 
completion in 2003.
    We have actively solicited ideas to improve the operation and 
management of our installations and are currently developing evaluation 
criteria in order to determine if there are successful candidates for 
the Efficient Facilities Initiatives pilot program authorized in the 
National Defense Authorization Act for fiscal year 2002. The Department 
continues to consider opportunities for enhanced-use leasing, and we 
have established a working group to identify candidates and share 
lessons learned. We anticipate these leasing projects will enable 
better utilization of our infrastructure, reduce ownership costs, 
foster cooperation between the Department and private industry, and 
stimulate the local job market.
    Joint use has been another effective way to better utilize our 
facilities. For example, the Joint Mobility Center at Elmendorf Air 
Force Base, Alaska, saved the Air Force and Army up to 20 percent of 
the cost to build separate mobility facilities. In another recent case, 
the joint Armed Forces Reserve Center at Gray, Tennessee, combined 
three construction projects for the Army Reserve, Army National Guard 
and Marine Corps Reserve into a single facility project, saving 
millions of dollars.

                          FUTURE BASE CLOSURES

    Continuing to operate and maintain facilities we no longer need 
diverts scarce resources that could be better applied to higher 
priority programs, such as improving readiness, modernization and 
quality of life for our service members. We need to seek every 
efficiency in the application of available resources to ensure we 
maintain just what we need to accomplish our missions. In the wake of 
the attacks of September 11, the imperative to convert excess base 
capacity into warfighting ability is enhanced, not diminished. With 
approximately 20 to 25 percent of our base infrastructure estimated to 
be excess to our needs, a significant financial benefit can be realized 
through Base Realignment and Closure (BRAC) 2005 infrastructure 
reductions.
    Prior BRAC actions have resulted in net savings to the Department 
of approximately $16 billion, with annual recurring savings of 
approximately $6 billion. We estimate that the next round of BRAC could 
save an additional $4 billion in annual recurring savings if the 
infrastructure reductions approximate the 12 percent reduction 
experienced in the last two rounds in 1993 and 1995. Greater reductions 
in excess capacity could produce greater annual recurring savings.
    BRAC 2005 is our most important facilities rationalization 
initiative. It will help the Department ultimately save several billion 
dollars annually. But a financial return is not the only benefit--in 
fact, it is not even the primary benefit. The authority to realign and 
close bases we no longer need will be a critical element of ensuring 
the right mix of bases and forces within our warfighting strategy as we 
transform the Department to meet the security challenges of the 21st 
Century. Transformation requires rationalizing our base structure to 
better match the force structure for the new ways of doing business, 
and the Department will conduct this rationalization with an eye toward 
ensuring we look at base capacity across the military services for the 
best joint use possible.
    The Department is currently engaged in the upfront process of 
organizing and planning to accomplish the analysis and reporting 
requirements. We are building on the experiences gained in previous 
BRACs and using the additional time Congress has given us to finalize 
our approach. However, we have not officially ``kicked off'' the 
process.

             UTILITIES PRIVATIZATION AND ENERGY MANAGEMENT

    The Department seeks to reduce its energy consumption and the 
associated costs, while improving utility system reliability and 
safety. To accomplish this, DOD has developed an integrated program 
that optimizes utility system management by conserving energy and 
water, taking advantage of restructured energy commodity markets, and 
privatizing our utilities infrastructure.
    Conserving energy saves the Department money that can be invested 
in readiness, facilities sustainment, and quality of life. Energy 
conservation projects make business sense, historically obtaining about 
$4 in life-cycle savings for every dollar invested. This dynamic 
becomes even more important when you consider that military 
installations spent nearly $2.8 billion in fiscal year 2001 to buy 
energy commodities (almost $400 million more than the previous year--a 
16 percent increase), despite reducing their energy use by about 3 
trillion BTUs (a one percent reduction). We continue to make progress 
in achieving the 2010 energy reduction goal for buildings of 35 percent 
per square foot and have reduced consumption by over 23 percent since 
1985.
    The Department has a balanced program for energy conservation--
installing energy savings measures using appropriated funding and 
private-sector investment--combined with using the principles of 
sustainable design to reduce the resources used in our new 
construction. The fiscal year 2003 budget contains $50 million for the 
Energy Conservation Investment Program (ECIP) to implement energy 
savings measures in our existing facilities.
    The Department places a high priority on privatizing utilities. 
However, we have found implementation to be more difficult than 
originally envisioned. We have made progress and will continue to move 
forward on the privatization of our utility infrastructure in areas 
where it makes economic sense. Privatization allows the Military 
Departments to focus on core defense missions by relieving them of 
those installation management functions that can be done more 
efficiently and effectively by non-Federal entities. Historically, 
military installations have been unable to upgrade and maintain utility 
systems fully due to inadequate funding and competing installation 
management priorities. Utilities privatization will allow military 
installations to benefit from private-sector financing and efficiencies 
to obtain improved utility systems and services.

                         ENVIRONMENTAL PROGRESS

    The Department's environmental program is focused on four 
overarching principles. First, environment is a fundamental component 
of our national power. We must be ever vigilant in ensuring lack of 
attention to environment does not undermine or degrade our national 
power. Second, environmental stewardship is a component of good 
business management. The Department is fully committed to implementing 
environmental management systems to improve efficiency and integrate 
environment into day-to-day operations. Third, environmental 
stewardship reflects the high ethical standards of our soldiers, 
sailors, marines, and airmen. Fourth, completing environmental 
remediation quickly, effectively, and safely, to protect human health 
and the environment from the results of past contamination, is 
important, both at our active and BRAC installations, as well as 
formerly used defense sites and surrounding communities. We are 
committed to continuing to be a leader in the Federal government in 
environmental management, and our fiscal year 2003 budget request, 
highlighted in the table below, reflects this commitment to ensuring 
environment fully supports our defense mission.

                ENVIRONMENTAL PROGRAM--SUMMARY OF REQUEST
               [President's budget in million of dollars]
------------------------------------------------------------------------
                                                    Fiscal year
                                         -------------------------------
                                           2002 request    2003 request
------------------------------------------------------------------------
Cleanup.................................           1,278           1,278
BRAC....................................             491             520
Compliance..............................           1,623           1,706
Pollution Prevention....................             245             247
Conservation............................             138             152
Technology..............................             211             205
                                         -------------------------------
      Total.............................           3,955           4,108
------------------------------------------------------------------------

    To maintain our ability to defend our country against terrorism and 
other security threats, our forces have conducted--and must continue to 
conduct--training and operations on land, at sea, and in the air. 
Environmental degradation can deny access to lands, undermine the 
realism and effectiveness of training, limit operational flexibility or 
productivity, and pose safety risks. Hence, cleaning up past 
contamination is important to sustain the land we hold in the public 
trust. Through the Defense Environmental Restoration Program, we are 
working to cleanup past contamination in all 50 States, the District of 
Columbia, and eight U.S. territories. This program covers environmental 
restoration activities at active installations, installations that are 
closing or have had their missions realigned, and formerly used defense 
sites (FUDS).
    Our environmental restoration request is $1.3 billion for fiscal 
year 2003, slightly higher than in our fiscal year 2002 request. We are 
proud of our cleanup successes but acknowledge that we still have some 
complex issues to address. The Department has built a strong 
environmental cleanup program over the last two decades and is charting 
a course for completing our environmental restoration requirements.
    The environmental cleanup at current BRAC installations continues 
to serve as a model for collaboration among Department cleanup and real 
estate professionals, Federal and State regulators, and communities in 
integrating reuse with cleanup. We have completed environmental cleanup 
requirements under CERCLA at 84 percent of land slated for transfer 
from the Department. To continue the remaining environmental cleanup 
required at previous BRAC installations, we are requesting $520 
million, $29 million more than was requested last year.
    We are also building on the requirements of Executive Order 13148, 
Greening the Government Through Leadership in Environmental Management, 
to improve our business practices. We have recently undertaken an 
initiative to implement environmental management systems across all 
missions, activities and functions. Industry leaders have shown us that 
effective environmental management systems will enable the Department 
to leverage its environmental investment to reduce mission-driven risks 
and associated compliance costs. We believe successful implementation 
of environmental management systems in the Department is essential to 
maintain and improve readiness, mission efficiency, and environmental 
stewardship in light of the increasingly demanding national security 
and environmental requirements of the 21st Century.
    The fiscal year 2003 environmental quality request for $2.1 billion 
includes $1.7 billion for compliance, $250 million for pollution 
prevention and $152 million for conservation. This will allow us to 
continue to comply with environmental laws and regulations and to 
effectively reduce the amount of pollutants we generate in performing 
the defense mission. These funds are a good defense investment. As of 
the end of fiscal year 2001, the Department reduced the number of new 
environmental violations received by 75 percent since 1992, reduced the 
amount of hazardous waste generated by over 60 percent, and completed 
Integrated Natural Resource Management Plans at the vast majority of 
bases.
    For several years, the Department has worked to integrate 
environmental, safety, and occupational health considerations into 
defense acquisition weapon system programs. We believe that smart 
consideration of environmental concerns during the acquisition process 
is the key to efficient, cost effective, and environmentally sound 
weapon system performance.
    We have revised the Directives that impact the major weapon system 
acquisition programs for the Department. These changes clarify and 
strengthen the management of life-cycle environmental issues by 
integrating them into the overall acquisition program management 
process. The new language also drives reduction in the procurement and 
use of hazardous materials to ensure waste minimization and pollution 
prevention are institutionalized in the acquisition process. In 
addition, the program manager is required to assess the life-cycle 
environmental impacts of the weapon system to identify opportunities 
for source reduction and recycling to minimize these impacts. These 
changes help reduce the cost and impact of these weapons systems on the 
people who make them, use them, maintain them and live around 
installations where they are stationed. Such improvements in today's 
weapon system acquisitions will have far-reaching positive impacts on 
``green'' initiatives at all of our installations for many years to 
come.
    Since sound environmental policy is the foundation of future 
improvement in environmental performance, we provided greater emphasis 
on promoting teamwork between environmental and procurement personnel 
to realize the benefit of affirmative procurement policy goals. All of 
these changes have improved our performance of purchasing 
environmentally preferable products, which has reduced our potential 
environmental impact on both the communities around our installations 
as well as our own personnel.
    The Department is fully committed to military explosives safety--
protecting military members and the public from the adverse effects of 
munitions. Last year, after an in-depth review, we divided our 
challenge into two areas of responsibility: Operational Ranges and 
Munitions Response Areas.
    Our operational ranges are needed today and tomorrow. We fully 
appreciate the need for good stewardship and, as a part of our Range 
Sustainment Initiative, we are reviewing how we look at and manage our 
operational ranges. Most immediately, the Department is clarifying our 
operational range clearance policy. We are also developing the 
protocols for determining and responding to any groundwater 
contamination under our operational ranges. For our Munitions Response 
Areas, which include all property which may have unexploded ordnance, 
abandoned munitions, or munitions constituents, and we are building on 
the authority provided to us with the Defense Environmental Restoration 
Program. In so doing, the Department intends to fully comply with 
Sections 311, 312, and 313 of the National Defense Authorization Act 
for fiscal year 2002, Public Law 107-107, which call for several 
significant items, including a site inventories, cost projections and a 
technology roadmaps.

                              ENCROACHMENT

    Civilian encroachment at active military bases and test and 
training ranges can interfere with the ability of our military to carry 
out their missions and can degrade the training and readiness of our 
military personnel at a time we need them most. Encroachment involves 
buildings and structures protruding into navigable air space; 
residential development locating in noisy, high performance aircraft 
approach and departure corridors or too close to gunnery ranges; or it 
can be off-base electrical transmissions interfering with air and 
ground communications. The presence of endangered species or their 
critical habitats in or near gunnery and bombing ranges also 
contributes to encroachment problems.
    Urban growth and development is the most visible form of 
encroachment and has the greatest impact on military operations, 
training, and readiness. Encroachment of incompatible civilian 
activities in whatever form--if allowed to go unmanaged and 
unregulated--will continue to compromise the effectiveness of our 
military forces. Since maintaining the readiness of our forces is one 
of the highest priorities of the Department, we strive to maintain a 
reasonable balance between test and training requirements, the concerns 
of our neighbors near our test and training ranges, and the importance 
of sound environmental stewardship. All of our military services are 
prepared to work with appropriate State and local authorities to 
control and hopefully curtail encroachment on both sides of the fence 
line.
    We are addressing encroachment by developing a comprehensive 
strategy that will consider test and training mission needs, regulatory 
requirements, community support, urban encroachment, and the current 
and projected capability of our ranges to support the mission. The 
Deputy Secretary of Defense established a full time Integrated Product 
Team in the Office of the Under Secretary of Defense for Personnel and 
Readiness to act as the Department's coordinating body for overall 
range encroachment issues. This IPT, which reports to the Senior 
Readiness Oversight Council, has been tasked with developing a 
comprehensive set of proposals to address the encroachment issue.

                          ENABLING LEGISLATION

    Consistent with our work to improve installations and environmental 
business practices, we are developing specific military construction 
legislation that will enable us to conduct our work more efficiently at 
lower cost. The legislation Congress enacted during fiscal year 2002 
greatly improved the Department's freedom to manage, and the 
legislation currently under consideration by the Department will 
continue that trend without diminishing our accountability.

                               CONCLUSION

    Our fiscal year 2003 budget request for military construction and 
for the Department's environmental programs supports the Department's 
obligation to acquire and maintain facilities vital to our changing 
missions and readiness. America's security, today and in the future, 
depends on installations and facilities that support operational 
readiness and changing force structures and missions. We have slowed 
the deterioration of our facilities, and will, over time, fully restore 
their readiness. With the Defense Facilities Strategic Plan as our 
guide, we are committed to providing and supporting healthy 
installations, facilities and housing that will enhance readiness, 
morale and quality of life for our service members and civilians. This 
installations' transformation will continue until all of our facilities 
meet the requirements of a 21st Century military.
    We will also continue to identify opportunities to operate more 
efficiently and leverage our resources through partnerships with the 
private sector on housing and utilities privatization and competitive 
sourcing initiatives. We are committed to divesting ourselves of 
unneeded, underutilized facilities through the Efficient Facilities 
Initiative, facilities demolition, outleasing, and other facility 
reduction initiatives.
    As a leader in environmental management, we will complete 
environmental remediation quickly and effectively at both our current 
and former installations and will protect our service members and 
others from the results of past contamination. In addition, we are 
developing a strategy to address encroachment that considers the needs 
of everyone involved.
    In closing, Mr. Chairman, I sincerely thank you for providing me 
this opportunity to describe the Department's plan for revitalizing our 
installations and facilities and for your very strong support for a 
robust military construction program. I look forward to working with 
you as we transform our plans into actions.

    Senator Feinstein. Thank you very much, Mr. DuBois. I 
might, if I could--and we will do 5-minute rounds--ask about 
the cuts in the guard and reserve. As I understand it, the Army 
National Guard is down 75 percent, the Army Reserve 65 percent, 
the Air Guard 79 percent, the Air Force Reserve 57.4 percent, 
and the Navy Reserve 1.4 percent. How can these entities 
function with these kinds of cuts?
    Mr. Zakheim. Well, let me take a stab at that, Senator, and 
then I will turn it over to my colleague.
    Senator Feinstein. Can you speak up, Mr. Zakheim?
    Mr. Zakheim. Can you hear me better now? I will take a stab 
at that, then turn it over to my colleague.
    The percentages, of course, are true. The real issue, as 
far as we are concerned, is very much the same issue as that 
which Ray DuBois just mentioned and I briefly alluded to, and 
that is one of priorities. The Services' priority, of course, 
is to fund the first-to-fight units, and the guard and reserve 
units tend not always to be first to fight. For this and other 
reasons, they simply did not get priority.
    By way of context, however, if you take the $297.3 million 
that was allocated to the 37 guard and reserve projects in this 
budget, it compares favorably both with the original 2002 
budget, which was at about $224 million, and the 2001 budget, 
which was roughly the same, at $222 million. Again, you had a 
spike in the amended 2002 budget.
    But recalling the context, and again I draw you back to 
what my colleague, Ray DuBois just said earlier, until 9/11 the 
Secretary had as one of his highest priorities bringing down 
the recapitalization rate, and that was reflected in our 
amended 2002 budget.

                REDUCED REQUESTS FOR RESERVE COMPONENTS

    Senator Feinstein. But my question is a little different. 
If you are going to take the Army National Guard from $405 
million to $100 million, how is that guard going to function as 
the primary position from which you draw troops for the 
actives, as well as nay role it might have in homeland defense?
    Mr. Zakheim. Well, my number reflects our request, which 
actually is $267, but I think that does not really answer your 
question.
    Again, it is not that there are no facilities. It is a 
question of modernizing those facilities, and once again it was 
a question of priorities. To place just the Army National guard 
in context, in 2001 we spent just under $60 million for the 
Army National Guard.
    Senator Feinstein. Let me clear this up. The number I am 
using of $405 million is the amount that Congress finally 
appropriated. Are you saying that was not used, because you are 
taking it down to $111 million. You are saying that the $405 
million was not used?
    Mr. Zakheim. I understand it was the amount that you 
appropriated, but I still go back to my point that relative--
there was a spike there last year, and relative to the historic 
levels, I believe I am correct that the $101 million is 
actually somewhat higher, even if one accounts for inflation.
    Senator Feinstein. Are you saying the 400--and I do not 
mean to beleaguer you, but that the $405 million was not used?
    Mr. Zakheim. It was used. It is being used. It was 
appropriated. The number I used--and I am sorry for the 
confusion--was the number that we requested in the amended 
budget. I withdraw that. I do not mean to confuse you. The 
basic answer is, as I said, it is just a question of 
priorities, for example, the ``first-to-fight'' concern. 
Historically the $101 million is actually very much in line 
with previous, other than last year's level, but I am sorry if 
I confused you.
    Senator Feinstein. The same thing is true of the Army 
Reserve, from $167 million to $58 million. I have a hard time 
understanding how you are going to keep a strength and absorb 
this kind of cut.
    Mr. Zakheim. Again, I would have to refer you particularly 
to the Services. They made these allocations, and these were 
the priorities as they saw they best could fund them.
    Senator Feinstein. Are you saying those were the Services' 
requests?
    Mr. Zakheim. Yes, ma'am.
    Senator Feinstein. They have actually requested this kind 
of cut?
    Mr. Zakheim. Yes, ma'am. This is what they agreed to. When 
we went to them and we set our priorities out, they had the 
flexibility to reallocate, readjust, protest, whatever you want 
to say. This is how it came back. This was not forced down 
their throats.
    Mr. DuBois. Madam Chairwoman, if I could possibly suggest 
that we all recognize the dramatic increase last year, both in 
terms of the President's request and in terms of the ultimate 
appropriation. I think it is probably fair to say that as the 
Services allocated their top line and were grateful and happy 
for the plus-up last year, they probably looked at the 
requirements for this year and saw where they could come down 
but historically still stay within the same basic glide path 
that they had been on before with respect to the military 
reserve components.
    I am just suggesting--and that is something, as Secretary 
Zakheim said, is more particularized to the individual Service, 
but last year, both active and reserve components had a 
substantial dramatic increase in terms of appropriation, in 
terms of presidential budget request amended, and in terms of 
the appropriation.
    Senator Feinstein. Well, my time is up, and I did have some 
other questions, but I would be very surprised if they can 
absorb these kinds of cuts without any substantial reduction, 
because they are the largest cuts I have seen since I have been 
in the Senate.
    Senator Hutchison.
    Senator Hutchison. I am going to defer to Senator Stevens.
    Senator Stevens. Thank you very much.
    I am interested in the comments that you have made and the 
comments that Under Secretary Wolfowitz made before our 
committee when he said, earmarks directing infrastructure 
spending on facilities the taxpayers do not need and eventually 
could be closed would be compounding the waste that the delay 
in BRAC is already causing. I think that the implication to us 
has been that there is to be a delay in significant investment 
until the Department knows which are going to be closed, and 
you are saying that is not going on, Mr. DuBois?
    Mr. DuBois. I am suggesting, Senator, that while it is 
inescapable that BRAC is in our future, and it is inescapable 
that because the BRAC is in our future I suspect that the 
services focused their previous MILCON dollars on current 
mission requirements, they do not--MILCON allocations this year 
and next are not and will not be allocated on a facilities-
centric basis. It is on a mission-centric basis.
    Senator Stevens. I am confused about that, because Dr. 
Zakheim, you have told us that you have deferred $400 million 
to low priority MILCON projects because of the uncertainty over 
base closure, and you are saying it is mission-oriented. You 
are telling me that none of these bases that have been delayed 
have any missions that are so important that they should be 
considered now?
    Mr. Zakheim. Well, Senator Stevens, since you quoted me, 
let me explain something about that $400 million, sir. That had 
absolutely no relationship to the BRAC closures and, in fact, 
if you like I can even now give you detail as to how that $400 
million was achieved.
    Senator Stevens. I would like to have a list of the 
projects that have been delayed. Mr. DuBois says that they are 
all mission-oriented, and yet there is a whole series of them 
that have been delayed. Many of the Services, of course, are 
coming in directly to us saying, we had a project that has been 
delayed, and we are going to be looking to adding these back in 
and getting into a fight again with you all.
    Mr. Zakheim. Well, I cannot speak for what the Services 
tell you privately. I can tell you that, for instance, there 
were $22 million worth of projects that were simply accelerated 
by the Congress so that there was no need to put the same money 
in in 2003, and I can give you details of those, the Schofield 
Barracks land project, the basic supply at Incirlik in Turkey, 
the Army National Guard Readiness Center in California. Those 
were all accelerated by the Congress in 2002.
    Senator Stevens. I am not asking about what was 
accelerated. I want to find out those that were delayed, Dr. 
Zakheim. You have testified, and your program shows low 
priority military construction projects delayed. Mr. DuBois 
says we have not delayed any mission-oriented projects directed 
by the service. Am I misquoting you?

                              BASE CLOSURE

    Mr. DuBois. No, sir.
    Senator Stevens. There seems to be a conflict there to me, 
and we are hearing about them, and I would like to know what 
are the delays. I do not have much time. Dr. Zakheim, in terms 
of this statement, it indicates that 152 major installations in 
the last four BRAC rounds, and 235 were proposed, and that 
implementation of the last round of the four approved BRAC's 
was completed on July 13, 2001. Is your testimony that all of 
the BRAC's are closed now, the prior BRAC's? We had four 
rounds. Are they all closed now?
    Mr. DuBois. May I answer that question in the following 
way? They are closed, but not disposed. There is a difference 
between the military making the decision to close an 
installation and whether or not the military department has had 
the opportunity to dispose or convey that property to a local 
redevelopment authority.
    Senator Stevens. Respectfully, to us the question is 
whether they are having the savings you and your predecessors 
have told us they would have. Now, I think there are still 
costs out there that are associated with bases that were 
supposed to be closed that are not really closed, and will not 
be closed because of environmental or public pressures, a lot 
of other things. That is why many of us voted not to go into 
another round of BRAC until we found out what happened to the 
last four and whether they really saved the money we were told 
they would save.
    Now, the implication of your statement today is that they 
are closed and they are saving more than $6 billion a year, is 
that right?
    Mr. DuBois. Yes, sir. According to the statistics that have 
been provided to us by OMB. GAO last summer wrote another 
report on this in this regard, specifically addressing the 
savings that the Department of Defense estimates on a recurring 
basis exists from closed and BRAC'd properties.
    It is true that some of those BRAC'd properties have not 
been conveyed to the local redevelopment authority or put out 
for bid, but that does not mean the savings have not already 
been created.
    Senator Stevens. I have great difficulty with this subject, 
because in my judgment, as I said, there are many of them that 
have not been closed. Are you crediting against those savings 
the continued cost of the bases that are no longer used?
    Mr. DuBois. This is a net savings per annum, sir.
    Senator Stevens. I would like to see the study. I think it 
ought to be broken down. I also again request a list of the 
projects that were deferred for this year for the record.
    Thank you very much, Madam Chairman.
    Senator Feinstein. Thank you, Senator.
    Senator Hutchison.
    Senator Hutchison. Thank you, Madam Chairman. I have to say 
that I would like to see how anybody could say we are saving 
today $6 billion in closed bases when we are still doing 
environmental cleanup and have not even gotten the full bill 
yet for environmental cleanup for many of these bases.
    Mr. DuBois. You are quite right, Senator Hutchison. In fact 
there is probably--we estimate a $4 billion cost to complete 
environmental cleanup of all prior BRAC'd properties, but the 
$6 billion that has been attested to by agencies outside of the 
Department of Defense is a $6 billion current cost avoidance 
cost savings, does not include the cost to complete the $4 
billion that--I do not know how many years it will take us to 
complete this, because as you know, there are a number of 
installations that probably will take some time to clean up and 
some of them may, because of their ranges, unexploded ordnance, 
a very serious issue, it may be the decision to fence those 
areas, as has been the case in the past, and create wildlife 
refuges out of them.
    Senator Hutchison. Well, I would just say that one of the 
reasons that many of us were concerned about another BRAC is 
because we have not yet gotten all the bills for the closures, 
and what we want to assure ourselves of is that if we close a 
base, that it is really going to save money.
    Mr. DuBois. I want to assure you that Secretary Rumsfeld, 
one of the first things he did after I got this job was to ask 
me to review all BRAC'd properties which have been closed, 
which have been conveyed, which have been disposed, and those 
that have not been disposed or conveyed, why not.
    Working, as Senator Feinstein knows, with H. T. Johnson, 
the Assistant Secretary of the Navy, and Mayor Brown in San 
Francisco, we have made several major steps forward. Hunter's 
Point is now conveyed. We have got several other in the 
pipeline, but I will give you a great example, El Toro. Today 
they are voting in El Toro in Orange County on whether or not 
that is going to be a future airport or not. We have had to sit 
there to wait until the local political jurisdictions, plural, 
decided what their future use would be. Depending on the 
referendum today as we sit here we, the Department of the Navy, 
will issue a record of decision and hopefully dispose that 
property forthwith.
    Senator Hutchison. Well, I will just ask you on the issue 
of the BRAC that we now know is going to be in 2005, that you 
come to us in good time with the force structure that we are 
going to need in the next 25 to 30 years in this country, and 
then make sure that we have the training facilities. You talk 
about encroachment in America. What about encroachment overseas 
and our ability to train overseas?
    So let us make sure we know what our troop strength is 
going to be in what services, and probably before September 11 
you would have said we did not need a cavalry any more, and now 
you need to make sure that we have training space for cavalry, 
so we have got--and obviously I am being a little disingenuous 
here, but I am trying to say that we need to really know what 
our training requirements are and our force structure before we 
go into that BRAC.
    Mr. DuBois. You are absolutely right, and as you know, in 
the legislation it requires the Secretary of Defense to report 
to Congress no later than February of 2004 with a force 
structure for the next 20 years.
    Now, I hope everyone in this room understands, because 
certainly the Secretary of Defense does, that that kind of 
report has got a little crystal ball aspect to it. It is tough 
enough to sit there and look over the next several years, but 
he has an obligation to report to you in February of 2004 with 
not just the force structure for the next 20 years, but also, 
as the legislation requires, an inventory capacity analysis, a 
base structure inventory. These are important reports that you 
have correctly required, before we go into that 2004, 12 months 
of very intense debate and analysis as to how that force 
structure superimposes itself on the appropriate 
infrastructure.
    Senator Hutchison. I have another question, but I do not 
know what my time is.

                       NATO MILITARY CONSTRUCTION

    Senator Feinstein. Go ahead.
    Senator Hutchison. I want to go to my European component, 
and with the added burden that we are taking in the war on 
terrorism, which is going to be necessarily proliferating among 
many countries where we are going to have military construction 
projects, I would just ask if the increase in the investment in 
Europe, and the 25-percent NATO requirement which we have, is a 
fair allocation, or is it time for us to look at burden-sharing 
with our European allies and our percentage of NATO? Is any of 
this in the cards, or are we just going to continue to have the 
same responsibilities in Europe and also have to take the 
lion's share of the burden in the war on terrorism?
    Mr. Zakheim. Well, it is in the cards. It is a very, very 
appropriate question at this time. We are in fact looking at 
doing in Europe what we have been able to accomplish in Korea. 
There will be a new burden-sharing report coming out soon, and 
you can take a look at the chart there. You will see that most 
of our European allies contribute less than 40 cents on the 
dollar for what is spent out there.
    There are many, many ways we can get them to increase their 
percentage, for example, as part of the Efficient Basing East 
project that General Ralston has put together. Both Ray DuBois 
and I were in Europe to view progress in this area. About $50 
million is being contributed by the German Government for what 
is called payment in kind. They are doing all kinds of things 
such as landfill for the training facility and so on.
    That is a good model, and we need to ensure that we repeat 
it. I talked extensively with the Secretary about this, and 
with Ray. We have his wholehearted support to go out and get 
our friends to contribute more because we are bearing such a 
massive load. Even the direction the current military 
construction, the thrust of the construction you mentioned 
yourself Greece, Spain--is a southward orientation. This makes 
a lot of sense relative to what we are doing right now and are 
likely to do in the future.
    So there is a reorientation going on. There is efficiency 
going on. General Ralston is committed to that, and at the same 
time we are formulating a strategy, frankly, to approach our 
European friends and say, we need some help here.
    Senator Hutchison. Thank you.
    Senator Feinstein. Thank you, Senator. Just a couple of 
wrap-up things. Before we move this bill, I would like to ask 
you to provide us with a net-net accounting of savings from 
BRAC closures to date. That includes environmental cleanup. I 
mean, do not exclude that, because environmental cleanup has 
always been short-funded, and I want to see what the actual 
numbers are, if I may.
    [The information follows:]

    The net BRAC Savings over the implementation period from 
fiscal year 1990 to fiscal year 2001 is about $15.5 billion. 
The annual recurring savings after fiscal year 2001 are 
projected to be about $6 billion.
    The detailed cost and savings data is available in the DoD 
Base Realignment and Closure Executive Summary and Budget 
Justification for the Fiscal Year 2003 Budget Estimates.

    Senator Feinstein. A second point is, I do not believe, Mr. 
DuBois, Hunter's Point has been conveyed yet. That is probably 
another, I am told by my staff, another year or so away, and 
last year our committee included a direction to submit a joint 
FYDP, or even to submit a plan to develop a joint FYDP by 
February 15 of 2002. Well, we have not received it, and my 
question is, are you really serious about your support of joint 
construction?
    Mr. Zakheim. Let me take that last one first. We are 
putting the report together. We have five joint use projects in 
the current budget, as I think you know, NAS-Atlanta, which is 
about $7 million, the joint reserve base, which is about $3 
million, and New Orleans, about $14\1/2\ million, Norfolk, 
nearly $5 million, Forbes Field, in Topeka, Kansas, about 14\1/
2\ million, so we have those. We are putting that report 
together.
    And by the way, I have also created, and this I guess is 
real green eyeshade stuff, Senator, but what is called a 
program element. Within the FYDP you measure activity. If you 
really want to be specific about it and direct it, you create 
what is called a program element, and a report asks for that. 
You ask for that, and I have done that, so we have moved along 
on those grounds.
    And I also, I guess, again being a numbers guy, I cannot 
resist at least in part not responding to your previous point 
about the net-net savings. Sure, it is true environmental 
remediation is not really a BRAC cost, but I know what you are 
driving at. But nevertheless, the point is that we have $4 
billion, or frankly even $6 billion in remaining cleanup costs, 
the estimates of annual savings is $6 billion, so if you are 
stretching the cleanup cost over a number of years, it is 
clearly a small percentage of annual savings of $6 billion. 
Those savings are real. As you well know, we do not always see 
eye to eye with GAO, and on this one we do.
    Senator Feinstein. Thank you very much.

                        INFRASTRUCTURE IN KOREA

    Senator Hutchison. I just have one follow-up, and that is 
on Korea. Now, last year when we were here talking about Korea, 
I made the observation that it did not seem as if we had 
reassessed our troop strength in Korea for a long time, and we 
were spending a lot of money in Korea. This year, I think it is 
more relevant to spend money in Korea, but I still have to ask 
the question, have we looked at what our long-term requirements 
are going to be in Korea, and are we sizing our commitment 
there correctly?
    Now, obviously there is a tension that would require a 
certain vigilance, but in the long term, is our troop strength 
being looked at for long term needs, and is our military 
construction following what we would think would be a long 
term, because you are cutting off domestic MILCON pretty much. 
Are you doing the same thing in Korea?
    Mr. Zakheim. Well, those are very, very important 
questions, Senator, and as you rightly noted, this is probably 
not a time when we should be thinking very much about reducing 
anything in that part of the world.
    As you know, General Schwartz has worked very hard to 
create a program that would essentially make our footprint in 
Korea far more efficient. The Koreans want that as well, but in 
terms of the force structure, obviously any kind of significant 
change in force structure presupposes a political change on the 
peninsula, and right now we just do not see that.
    Indeed, thinking back to how things went totally out of 
hand in 1950 because we sent the wrong signals to Kim Il Sung, 
the last thing we want to do is send the wrong signals to his 
son by speculating about possible withdrawals, or anything like 
that. They are, given that for the foreseeable future our 
posture in Korea is going to be what it is, and given that the 
state of facilities in Korea is just really horrible, and our 
troops go out there primarily on unaccompanied tours and live a 
very hard life, it seems appropriate to do what we are doing 
there. This is especially because General Schwartz has been so 
attentive to not only modernizing the facilities, but doing it 
in the most efficient way possible.
    Senator Hutchison. But looking at the long term, and I 
understand and agree with everything you have said, you do not 
want to send a signal now that we would be lessening our 
commitment, but given that in the long term there is the 
possibility of a lessening of hostilities, are we looking at 
our military construction for the more permanent kinds of needs 
that we would have there?
    Mr. Zakheim. My understanding is that by doing it more 
efficiently we in effect hedge against that possibility, if it 
ever were to emerge in the foreseeable future, so that we 
provide the right sorts of facilities for our people now. Of 
course we all hope there would be, changes. But the only 
changes as far as we are concerned are some kind of change in 
the north. In that case those facilities would, at least as we 
can see from here on out, and no one is a prophet, would be 
relevant to whatever we would be doing.
    There is no question that our commitment to peace on the 
peninsula and our commitment to the Republic of Korea is 
extremely strong. It has to be, and indeed, our Japanese 
friends want to be sure it is as well, so it is not just Korea 
only. It is our posture in a very potentially dangerous part of 
the world for a long time to come.
    Senator Feinstein. Thank you, Senator. Thank you, 
gentlemen. Thank you so much, and thank you for the Korean 
agreement. I hope it does result in 50 cents on the dollar.
    Mr. Zakheim. Well, they have signed up to it, Senator.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Feinstein. That is great, and I, for one, have 
heard many, many stories about how bad the housing and sanitary 
facilities are for our people there, so I am glad it will be 
getting additional attention.
    Thank you very much.
    Mr. Zakheim. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted to Dr. Dov S. Zakheim

            Questions Submitted by Senator Dianne Feinstein

                     REDUCTION DUE TO PLANNED BRAC

    Question. Do you have any concern the this deferral of military 
construction projects, while you await the next BRAC proposal, may 
create an unmanageable backlog of construction projects in the 
outyears?
    Answer. The Department has not deferred military construction 
projects pending BRAC, hence we do not anticipate a backlog of projects 
in the outyears. This year's military construction request, the second 
largest request in 6 years, supports the most mission critical 
requirements. With programmed investments, we plan on reaching the 
Secretary's goal of a 67-year recapitalization rate by the end of the 
current future years defense program. Military construction 
investments, coupled with increased operations and maintenance funding 
for sustainment, restoration, and modernization, will continue 
improving our facilities and their support for military readiness even 
as we rationalize our base structure.

                              SUPPLEMENTAL

    Question. Do you intend to ask for any additional military 
construction funding in the fiscal year 2002 Defense supplemental?
    Answer. No, there are no military construction projects requested 
in the fiscal year 2002 Supplemental request; however, we are 
requesting authority to execute a construction project not otherwise 
authorized by law if an unforeseen requirement arises.
    Question. What projects are you considering? When do you intend to 
submit your supplemental request to Congress?
    Answer. We do not anticipate funding any military construction 
projects at this time; however, we are requesting authority to execute 
a construction project not otherwise authorized by law if an unforseen 
requirement arises.

                OUTYEARS MILITARY CONSTRUCTION REQUESTS

    Question. Each of the Services are projecting huge spikes in MilCon 
funding in fiscal year 2006 and fiscal year 2007, but outyear funding 
typically tends to shrink when the time comes to pay the bill.
    Are the MilCon budget projections for fiscal year 2006 and 2007 
realistic today, and will they continue to be realistic down the road?
    Answer. The budget projections for fiscal year 2006 and fiscal year 
2007 reflect our current plan to achieve the 67-year recapitalization 
rate within existing priorities. Secretary Rumsfeld is committed to 
achieving the 67-year recapitalization rate, so I believe you will 
continue to see funding for military construction to meet that goal.

          ARREST DISMAL CONDITIONS/LARGE RESERVE COMPONENT CUT

    Question. Dr. Zakheim, last year you testified, and I quote, 
``Regrettably, in the past we did not plow enough back into our 
facilities. We have increased the level of funding we traditionally 
spend on military construction and family housing and hope to spend 
even more in the future to arrest the dismal conditions of many of our 
facilities.'' Well, this is what you said last year. . . . Today is the 
future, but this budget doesn't appear to reflect your previous 
intentions.
    Your previous testimony stated that the Department has, and again, 
I quote, ``taken special care to ensure that the National Guard and 
reserve facilities requirement were fully and fairly incorporated in 
this portion of the process.''
    This year's budget request reflects steep cuts in the Guard and 
Reserve budgets--even if you take away Congressional inserts, the 
reserve component budgets are down 40 percent to 60 percent from last 
year's budget request. Would you please address the reasoning behind 
the sharp cuts in the Guard and Reserve? (He is likely to respond that 
those are Army decisions, and you will have to ask the Army for the 
rationale.)
    Answer. Although the Guard and Reserve request is lower than last 
year's fiscal year 2002 request, in no way does it imply any easing in 
our commitment to revitalizing the Guard and Reserve infrastructure. 
For instance, the $297.3 million request for fiscal year 2003 is higher 
than requests prior to fiscal year 2002. Further, funding for 
Sustainment, Restoration, and Modernizaton of our facilities within the 
Operation and Maintenance accounts has been increased. While last 
year's funding level is not sustained due to higher priorities for 
tranformation, mission requirements, and readiness, our multiyear 
magagement plan to revitalize DOD facilities through construction, 
increased SRM, demolition, and BRAC is on targert to achieve the 67-
year recapitalization rate goal by fiscal year 2007.
    Question. Do you believe the Guard and Reserve budget requests are 
adequate?
    Answer. Yes. Again, I would like to point out that the fiscal year 
2003 request is higher than the requests prior to fiscal year 2002 and 
that the fiscal year 2003 request is just one piece of our multiyear 
management plan to achieve a 67-year recapitalization rate. The fiscal 
year 2003 Guard and Reserve military construction requests support this 
plan.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                      LOW PRIORITY MILCON PROJECTS

    Question. Dr. Zakheim, there has been a lot of discussion about the 
deferral of $400 million of low priority milcon projects because of the 
uncertainty/delay over base closure. Why were they projects deffered? 
Will you provide us that list of projects?
    Answer. The projects were not really of a lower priority. Instead, 
they were either deleted since they were funded elsehwere, i.e. out of 
the Defense Emergency Response Fund (DERF), accelerated by Congress, 
not executable, Funded with prior year savings, or repriced based on 
foreign currency rates or extension of congressional actions.
    I will provide a list of the projects that were deferred depending 
on the ruling of the General Counsel and the Office of Management and 
Budget.

                             MILCON BUDGET

    Question. Dr. Zakheim, has the decision to delay brac until 2005 
impacted the military construction budget in 2003 and how will it 
impact it over the next 2 years? Will we see a smaller milcon budget?
    Answer. The decision to delay BRAC by 2 years has not impacted the 
size of the fiscal year 2003 military construction budget request. The 
fiscal year 2003 military construction budget request was the second 
highest in the last 6 years. The highest request ever was the fiscal 
year 2002 request. I do not believe you will see smaller budget 
requests in the next 2 years since we are not allowed to, nor would we, 
prejudice the BRAC process. The Department will continue to fund the 
most critical requirements in fiscal year 2004 and fiscal year 2005 
regardless of the fact that BRAC has been delayed until fiscal year 
2005.
                                 ______
                                 

             Questions Submitted to Raymond F. DuBois, Jr.

          Questions Submitted by Senator Kay Bailey Hutchison

                          EUROPEAN ALLIES HELP

    Question. Secretary DuBois, I note that this budget contains over a 
billion dollars of major military construction projects for Europe 
alone. This does include funding for the NATO security investment 
account. However, this does not include any funding to operate and 
maintain family housing or bachelor housing in Europe which would be 
additive to the billion dollars.
    Secretary DuBois, I also note that we have projects in the budget 
associated with the expansion of NATO headquarters in Larissa, Greece 
and two projects in Belgium associated with the U.S. component of NATO, 
shape headquarters.
    Secretary DuBois, with the U.S. fighting a worldwide campaign 
against terrorism, is it unreasonable to ask our European allies to do 
more in defense of the alliance and especially help with our 
infrastructure bill to help maintain U.S. military presence in their 
countries, such as in Germany, Italy and Spain? How often do we 
renegotiate burden sharing agreements in Europe?
    Answer. While we encourage our NATO Allies to assume a greater 
share of the burden of providing for the common defense, the Department 
believes that their burdensharing, or responsibility sharing, efforts 
are generally positive. NATO countries have long provided substantial 
indirect support for U.S. forces stationed on their territory. Our 
Allies provide bases and facilities rent-free, various tax exemptions, 
and reduced-cost services. They also provide direct support through 
common-funded budgets such as the NATO Security Investment Program 
(NSIP).
    Since September 11, NATO Allies have shown an unprecedented level 
of support for the United States. The decision to invoke Article 5 of 
the Washington Treaty, the core clause of NATO's founding charter which 
states that an armed attack against one Ally shall be considered an 
attack against them all, is the most profound expression of Alliance 
solidarity. This was the first invocation of Article 5 in the 
Alliance's history.
    Subsequent to invocation of Article 5, the Allies agreed (at the 
request of the United States) to take eight measures to implement it 
and to expand the options available in the campaign against terrorism. 
These measures range from enhancing intelligence sharing to providing 
blanket overflight clearances for U.S. and other Allied aircraft for 
flights related to operations against terrorism.
    Our active participation in NSIP assures the U.S. of a major 
leadership and front-line role in shaping and influencing the 
collective defense posture of the Alliance. We have carefully crafted 
our foreign policy decision to be a leader in the NATO Alliance. And 
while most of the Allies' contributions are less than .5 percent of 
their defense budgets, our contribution represents even less than that.
    The agreed cost sharing formulae determining each member nations' 
cost shares are based primarily on their contributive capacity 
(``ability to pay''), Gross Domestic Product (GDP), and the economic 
and user benefits derived from the program. However, the U.S. cost 
share is only about half what it would be if the GDP measurement 
strictly governed, in recognition of U.S. contributions to non-NATO 
global responsibilities. Our cost share has been reduced from a high of 
44 percent in 1960 to approximately 24.7 percent today. Further 
reductions are foreseen should additional nations be offered membership 
in NATO, a decision expected to be made in the fall of 2002.
    Cost shares are reviewed every second year, but percentages could 
be raised at the ministerial level at any time. The U.S. cost share of 
24.7 percent brings us a high value return--in 2000, 60 percent of the 
total NSIP budget was spent to meet U.S. needs.
    Practical examples abound of the support our European Allies 
provide for regional and collective security affairs. The U.S. received 
NATO infrastructure Allied-nation support for many humanitarian and 
peacekeeping initiatives and operations--for example, DESERT STORM, 
PROVIDE RELIEF, PROVIDE HOPE, PROVIDE COMFORT, SOUTHERN WATCH, ABLE 
SENTRY, DENY FLIGHT, ENDURING FREEDOM, and U.S. operations in the 
former Yugoslavia, Bosnia, and Kosovo. Additionally, peacekeeping 
operations in Somalia and Iraq were executed and sustained through the 
direct use of NATO infrastructure.
    Furthermore, NATO has approved and funded 83 infrastructure 
projects, totaling over $330 million, for the bed down of two fighter 
squadrons at Aviano Air Base, Italy and for quality of life projects 
not historically funded by NSIP. Allied agreement to fund these U.S. 
requirements is particularly significant since NATO facility funding 
for the European Allies has been all but eliminated, while full support 
has continued for U.S. requirements at our European bases. Despite 
this, the cost share percentage for European nations has not been 
reduced (other than a pro-rata reduction for all members when three new 
nations entered into the Alliance). Thus, our European Allies must now 
shoulder the bulk of the costs of NATO-required construction and 
facility restoration within their own budgets while NATO funding 
support for U.S. facility requirements in Europe remains unchanged.
    Regarding your opening comments, NATO is fully funding all 
headquarters, administration, communications, and limited morale and 
welfare facilities for its new command structure. NATO requires 
``sender'' nations to provide baseline support of their own personnel, 
and to pay for support infrastructure such as medical, dental, 
dormitories, housing and other ``quality of life'' facilities. In 
addition, participating nations must provide for housing of personnel 
stationed at NATO headquarters sites.
    The proposed MilCon projects are to provide support facilities for 
U.S. personnel assigned to NATO headquarters, in accordance with U.S. 
national requirements. The fiscal year 2003 budget submission contains 
$33.9 million for U.S. user facilities in support of NATO headquarters 
sites.
    Specific projects are as follows:
  --BEQ/Support Facilities--$14.8M--Larissa, Greece;
  --Two Family Housing Flag Units--$1.2M--Larissa, Greece;
  --Navy Exchange/MWR--$2.9M Madrid, Spain (Joint Subregional HQ West);
  --Barracks Complex-Chievres--$13.6M--Chievres Airbase, Belgium; and
  --SHAPE Elem School Classroom Add--$1.4M--SHAPE, Belgium.
    In addition, the fiscal year 2003 budget includes $2.9 billion to 
operate and maintain DOD family housing world wide. The fiscal year 
2003 budget also includes operation and maintenance funding for 
bachelor housing in Europe as part of DOD's overall operations and 
maintenance request.

                          MASTER BASING STUDY

    Question. Mr. Dubois, as I mentioned earlier, we are expecting the 
overseas master basing study within the next month. How was this review 
used to determine overseas priorities and which military construction 
and family housing projects were recommended in the 2003 budget?
    Answer. The construction projects contained in the 2003 budget 
address the most critical requirements of the Department. The overseas 
master basing study is on going, and it could not be used to determine 
which military construction and family housing projects would be in the 
2003 budget. When the study is finalized, we will work with appropriate 
host nations to expedite implementation of the study recommendations, 
as appropriate, and factor the results into future budgets.
    Question. Mr. Dubois, did the office of the secretary of defense 
have any meaningful input into the study, such as criteria and 
projected force levels?
    Answer. The Secretary of Defense tasked the geographic combatant 
commanders, through the Chairman of the Joint Chiefs of Staff, to 
conduct this study. Force levels used were based upon the recent 
Quadrennial Defense Review. We are now entering in a dialog with the 
Joint Staff on the methodology and preliminary data that have been 
collected, particularly in regard to joint use requirements and 
capabilities.

                    DOMESTIC DEFENSE INFRASTRUCTURE

    Question. Mr. Dubois, the budget gives the appearance that we 
shorted domestic defense infrastructure because of the pending round of 
base closure and instead invested in overseas areas because they are 
not subject to brac. Is this true?
    Answer. No. Our fiscal year 2003 military construction request 
focuses investments on critical military requirements, readiness 
shortfalls, and quality of life, as determined by the Services, without 
regard to specific installations or location. 77 percent of the budget 
request is for U.S. military construction projects while 23 percent is 
for projects overseas. This percentage, although not predetermined, 
seems reasonable since about 25 percent of our forces are stationed 
overseas, and our overseas facilities have been badly neglected.

                               FACILITIES

    Question. Secretary DuBois, I note the rate at which we replace our 
facilities has gone from 83 years in the 2002 budget to 121 years in 
the 2003 budget. There were a lot of promises made last year in the 
budget regarding facilities. Are we back to business as usual and just 
forget about revitalizing our infrastructure?
    Answer. Looking only at the facilities recapitalization portion of 
the fiscal year 2003 budget, it is true that our investment in 
recapitalization is not as robust as the previous year. However, if we 
look more broadly at fiscal year 2003 in the context of our longer 
range plans, and if we look at the overall facilities investment and 
not just the recapitalization portion, then we are definitely not back 
to business as usual. The fiscal year 2003 budget goes a long way 
toward correcting facilities sustainment funding--a necessary first 
step to revitalizing the infrastructure. The budget improves 
sustainment funding every year, from fiscal year 2003 to fiscal year 
2007. Our fiscal year 2003 budget request of $5.6 billion increased 
sustainment funding to 93 percent, up from 89 percent in last year's 
budget. For housing, our fiscal year 2003 budget requests $227 million 
more for family housing construction than last year. These funds will 
allow the Department to renovate, replace, or privatize over 35,000 
housing units. We are also investing $1.2 billion to construct and 
revitalize almost 14,000 barracks spaces for our unaccompanied service 
men and women to continue improvements in their quality of life. In 
addition, the budget improves facilities recapitalization funding 
beginning in fiscal year 2004, and then continues this improvement each 
year thereafter until we reach our minimum recapitalization rate goal 
of a 67-year cycle in fiscal year 2007.
    Question. Mr. Dubois, what kind of message are we sending to the 
young service members and their families about the condition of 
facilities, in which they work, train and live? Are we telling them 
just wait 5 to 7 years, and we will get around to fixing it?
    Answer. We have developed an achievable plan for getting our 
facilities back on track, a process which began in fiscal year 2002. 
However, the deterioration did not happen overnight, and it will take 
time to fully eliminate. The fiscal year 2003 budget request 
concentrated funding on fixing the most degraded facilities while 
increasing sustainment funding to prevent future deterioration in our 
facilities overall.
    Specifically, the fiscal year 2003 military construction request 
focused funding on critical military requirements, readiness 
shortfalls, and quality of life enhancements. We are making significant 
investments in housing through renovating existing housing and 
providing additional quality housing to reduce deficits. We increased 
sustainment funding to 93 percent of the requirement which will help to 
preserve our facilities and reduce the need for future, more costly 
revitalizations. In addition, over 60 percent of the military 
construction budget projects will restore and modernize mission 
critical requirements, decreasing the number of facilities rated C-3 or 
C-4. Even with a slightly lower budget request, we are taking care of 
our people.
                            Defense Agencies

                       Special Operations Command

STATEMENT OF LIEUTENANT GENERAL WILLIAM TANGNEY, DEPUTY 
            COMMANDER IN CHIEF

                      TRICARE Management Activity

STATEMENT OF MAJOR GENERAL LEONARD RANDOLPH, JR., 
            DEPUTY EXECUTIVE DIRECTOR

                  Military Community and Family Policy

STATEMENT OF JOHN MOLINO, DEPUTY ASSISTANT SECRETARY OF 
            DEFENSE

                      Defense Logistics Operations

STATEMENT OF FREDERICK N. BAILLIE, EXECUTIVE DIRECTOR, 
            BUSINESS MANAGEMENT LOGISTICS OPRERATIONS
    Senator Feinstein. We will have the next panel come 
forward. I will just begin the introduction. I am very pleased 
to welcome Lieutenant General William Tangney, Special 
Operations Command, Major General Leonard Randolph from the 
Tricare Management Activity, Mr. John Molino, representing 
Department of Defense Education Activity, and Mr. Frederick 
Baillie, Defense Logistics Agency.
    This is a very diverse panel. It represents several 
defense-wide agencies. We would like to hear from each of you 
gentlemen, and I would ask you to put your statements in the 
record, the record is open, and just summarize your statements.
    General Tangney, before you begin, I think both the Ranking 
Member and I would like to recognize the exceptional 
contributions that the United States Special Forces have made 
and are making even as we speak, and we owe a big debt of 
gratitude to you and to your people, so welcome, and please 
proceed.

            STATEMENT OF LIEUTENANT GENERAL WILLIAM TANGNEY

    General Tangney. Madam Chairwoman, members of the 
committee, I am Lieutenant General Bill Tangney, Deputy 
Commander in Chief of the U.S. Special Operations Command, 
MacDill Air Force Base, Florida. I am pleased to be here today 
to discuss the USSOCOM military construction budget request for 
fiscal year 2003. With the chairwoman's concurrence, I will 
submit my formal statement for the record and present a brief 
summary at this time.
    Senator Feinstein. Please. Thank you.

                       TWENTY-FIRST CENTURY FORCE

    General Tangney. United States Special Operations Command 
(USSOCOM) continues its transition to a 21st Century full 
spectrum multimission special operations force (SOF). In our 
Nation's current war against terrorism, SOF has proved to be 
uniquely capable.
    In order to maintain our status as the force of choice in 
this area of asymmetric warfare, we placed emphasis on funding 
critical readiness programs, eliminating legacy systems, and 
investing in leap-ahead technologies. However, fiscal 
constraints have prevented us from funding modernization and 
military construction at the desired level. Our active and 
reserve special operations forces possess highly technical 
skills used to successfully execute a broad range of joint 
special operations missions.
    The command's MILCON program provides essential facilities 
that contribute to our unique capabilities and current military 
construction projects support our unique training needs, 
enhance our source capabilities, and increase the readiness of 
our personnel and weapons systems to perform their specialized 
missions.
    The MILCON budget request for fiscal year 2003 totals $63.1 
million, consisting of $56.2 million for six major construction 
projects at three installations, $2 million for unspecified 
minor construction, and $4.9 million for military construction 
planning and design. Your support of this program is vital to 
the continued effectiveness of special operations forces and 
their ability to advance our national security.

                           PREPARED STATEMENT

    This committee's support in prior years has greatly 
improved our joint special operations capability. We look 
forward to your committee's continuing support again this year 
and in the future to acquire the facilities which we need to 
perform our mission.
    Thank you very much.
    [The statement follows:]

      Prepared Statement of Lieutenant General William P. Tangney

                              INTRODUCTION

    Madam Chairwoman and members of the committee, I am pleased to 
present the United States Special Operations Command (USSOCOM) Military 
Construction (MILCON) budget request for fiscal year 2003. USSOCOM 
continues our transition to a 21st century full spectrum, multi-mission 
special operations force (SOF). SOF have proved to be uniquely capable 
in our nation's war against terrorism. To maintain our status as the 
force of choice in this era of asymmetric warfare, we have placed 
emphasis on funding critical readiness programs, eliminating legacy 
systems, and investing in leap-ahead technologies. As a result USSOCOM 
has maintained a level of effort for mission-related MILCON and 
supporting Operations and Maintenance (O&M) at approximately 1.6 
percent of our total funding. This level of funding is below the 
minimum required to meet long-term needs--replacing and renovating 
aging facilities, satisfying space deficits, and constructing 
facilities for new missions--because the resources were allocated to 
more pressing needs such as procurement and O&M. Ideally, we would fund 
MILCON and supporting O&M at the level necessary to ensure 
recapitalization of SOF facilities over a 30-year life cycle, and to 
eliminate 75 percent of remaining space deficits within the command. 
Our MILCON program has a direct, positive impact on the training, 
readiness and operational capabilities of our nation's joint SOF. The 
highly specialized skills and equipment required to successfully 
execute the full spectrum of special operations missions require a 
modern array of operations, training, and maintenance and support 
facilities.

                                PURPOSE

    The long term goal of the USSOCOM facilities program, of which 
annual MILCON investment is a major factor, is to have all units and 
personnel working and living in adequate facilities to enhance SOF 
training and operations capabilities. Facility requirements are 
generated by the need to support new weapons systems, force structure 
and missions, and to modernize and replace old inadequate facilities. 
USSOCOM budgets for our own operations, training, equipment 
maintenance, and storage facility requirements. We rely a great deal 
on, and receive support from, the military departments for barracks and 
dormitory, family housing, community facilities, and installation 
infrastructure. The USSOCOM MILCON program, therefore, is planned to 
provide facilities to increase readiness of SOF weapons systems, 
support diverse training needs, and to enhance SOF capabilities. 
Current construction needs consistent with these criteria include: 
replacing weapons training facilities and renovating deteriorated 
command facilities at Fort Bragg, North Carolina; constructing a Close 
Quarters Battle (CQB) training complex and operational facilities at 
Naval Amphibious Base Little Creek, Virginia; and building additional 
command secure space and making hangar modifications at Eglin Auxiliary 
Field#9, Florida. Each construction requirement is part of a USSOCOM 
integrated plan to ensure the most critical projects are constructed 
and that they contribute the greatest value to our mission.
    Your committee's support, whether directly provided to USSOCOM or 
to the military departments on behalf of SOF has aided immeasurably in 
improving our operational capability and the quality of life of our 
personnel. We look forward to working with your committee to acquire 
needed facilities so USSOCOM can continue to perform its missions and 
ensure we have a fully trained and capable force in the 21st Century.

                             MILCON PROGRAM

    USSOCOM's fiscal year 2003 MILCON budget request totals $63.1 
million consisting of: $56.2 million for major construction, $2 million 
for unspecified minor construction, and $4.9 million for Military 
Construction project planning and design. The six military construction 
projects in this program for our joint command include two projects 
each for the Army Special Operations Command, Air Force Special 
Operations Command, and Naval Special Warfare Command. Following is a 
brief description of each project:

SOF Add/Alter Command & Operations Facility Eglin Auxiliary Field #9, 
        Florida--$9.0M
    Constructs a command and operations facility addition to 
consolidate classified mission planning functions to facilitate 
effective emergency operations and mission accomplishment.

SOF Alter Facilities for CV-22 Eglin Auxiliary Field #9, Florida--$2.1M
    Alters an existing aircraft maintenance hangar to install a second 
hangar door and extends aircraft access pavement to enable the hangar 
to accommodate two CV-22 aircraft and facilitate aircraft movement in 
and out of the hangar.

SOF Renovate Bryant Hall Fort Bragg, North Carolina--$11.6M
    Renovates a 30-year old command headquarters facility to 
rehabilitate the heating, ventilation and air conditioning, electrical, 
communications, fire protection and plumbing systems, and to provide 
backup electrical power and force protection measures.

SOF Weapons Training Facility Fort Bragg, North Carolina--$19.2M
    Constructs a facility for storage and maintenance of foreign and 
nonstandard military small arms and builds a weapons training center to 
provide related training for special operations forces.

SOF Seal Team Operations Facility Naval Amphibious Base Little Creek, 
        Virginia--$9.9M
    Constructs a Sea Air and Land (SEAL) Team facility to provide 
platoon areas and unit operations staging space for an existing and 
newly established SEAL Team.

SOF Naval Special Warfare Operations Trainer Naval Amphibious Base 
        Little Creek, Virginia--$4.4M
    Constructs a Close Quarters Battle (CQB) trainer building for Naval 
Special Warfare training of units in unconventional warfare, small arms 
close quarters battle and specialized weapons tactics.

                                SUMMARY

    The proposed military construction investment in fiscal year 2003 
will significantly improve the operational readiness and training 
capability of the U.S. Special Operations Command. Your support of this 
program is essential to ensure the continued quality and effectiveness 
of our nation's special operations forces.

    Senator Feinstein. Thanks very much, General.
    General Randolph.

            STATEMENT OF MAJOR GENERAL LEONARD RANDOLPH, JR.

    General Randolph. Yes, ma'am. Good afternoon, Madam Chair, 
members of the subcommittee. I am Major General Randy Randolph, 
the Deputy Executive Director of the Tricare Management 
Activity of the Office of the Assistant Secretary of Defense 
for Health Affairs. On behalf of Dr. William Winkenwerder, the 
Assistant Secretary, and Mr. Thomas Carrato, my boss, the 
Executive Director, it is both a privilege and an honor to 
again present an overview of TMA's medical military 
construction program for fiscal year 2003.
    I, too, would like to proceed with a short--in fact, I have 
abbreviated my abbreviated statement, and would like to submit 
the longer statement.
    The Tricare Management Activity is committed to having all 
eligible beneficiaries and their providers conduct their health 
care encounters in modern, safe, efficient facilities. The 
Appropriations Committee has been supportive in this ever-
evolving process, and I would like to take this opportunity to 
thank you and to request your continued support in our efforts. 
Our fiscal year 2003 program requests appropriations of 
$147,178,000 for five major line items. We are also seeking 
$3,363,000 for unspecified minor construction, and $14,200,000 
for planning and design efforts to complete designs on fiscal 
year 2004 projects, further design projects identified for 
fiscal year 2005, and commence design on projects for fiscal 
year 2006.
    The total appropriation request for the medical 
construction budget in fiscal year 2003 is $164,741,000. Three 
of the major construction line items are U.S.-based, and two 
are overseas. The first project is a replacement hospital at 
Fort Wainwright in Alaska. This request seeks the fourth of six 
funding phases. We are seeking $53 million in fiscal year 2003 
for this project.
    The second item is a bit unique in that it seeks 
$10,400,000 to reimburse the Treasury Department's Judgment 
Fund, which has paid a settled claim following construction of 
a replacement hospital at Elmendorf Air Force Base, also in 
Alaska. The Department of Treasury fund was paid this claim to 
avoid the accrual of interest. Currently, sufficient military 
construction funds are not available to reimburse the judgment 
fund without cancellation of prior appropriated projects.
    The third project is a replacement life skills project at 
Hickam Air Force Base in Hawaii, at a cost of $2,700,000. The 
current facility is more than a half-century old, as am I, and 
has outlived its useful life.
    The last two projects are overseas. The first consolidates 
medical services between Bitburg Air Force Base and Spangdahlem 
Air Force Base with a 10-bed hospital replacement facility at 
Spangdahlem Air Force Base in Germany at a cost of $39,629,000. 
We are also requesting $41,449,000 for the purchase of a 
medical-dental facility replacement and long-term interest in 
approximately 10 acres of land that is located in Naples, 
Italy. This is part of the Naples Improvement Initiative. All 
of these facilities will include antiterrorism/force protection 
features.
    In conclusion, the medical construction program continues 
to be an integral component of the quality of life for our 
uniformed personnel and eligible beneficiaries. As we go 
forward with these projects, we show our earnest support and 
commitment to providing the highest quality health care to 
those who are committed to standing for the cause of freedom.
    The events of September 11, 2001, put this country on 
alert, and have brought forth the best of American character 
and resolve. The provision of world-class health care seems to 
me one small but very important benefit that we can provide for 
those warriors and their families who stand in harm's way in 
the defense of our great Nation.

                           PREPARED STATEMENT

    Again, thank you for the opportunity to present our budget 
to you today, and this concludes my opening statement.
    [The statement follows:]

       Prepared Statement of Major General Leonard Randolph, Jr.

    Good morning Madam Chair and Members of the Subcommittee. I am 
Major General Randy Randolph, Deputy Executive Director of the TRICARE 
Management Activity, Office of the Assistant Secretary of Defense for 
Health Affairs.
    On behalf of Dr. William Winkenwerder, Assistant Secretary of 
Defense for Health Affairs and Mr. Thomas Carrato, the Executive 
Director, TRICARE Management Activity (TMA), it is both a privilege and 
an honor to again present an overview of TMA's Medical Military 
Construction Program for fiscal year 2003.
    The TRICARE Management Activity is committed to having all eligible 
beneficiaries and providers conduct their healthcare encounters in 
modern, efficient facilities. The Appropriations Committee has been 
supportive in this ever-evolving process. I'd like to take this 
opportunity to thank you and request your continued support in our 
efforts.
    Our fiscal year 2003 program requests appropriations of 
$147,178,000 for 5 major line items. We are also seeking $3,363,000 for 
unspecified minor construction and $14,200,000 for planning and design 
efforts to complete designs on fiscal year 2004 projects, further 
design projects identified for fiscal year 2005 and commence design on 
projects for fiscal year 2006. The total appropriation request for the 
medical construction budget in fiscal year 2003 is $164,741,000.
    Three of the major construction line items are US-based and two are 
overseas.
    The first project is a Replacement Hospital at Fort Wainwright in 
Alaska. This request is seeking the fourth of six funding phases to 
construct a 32-bed facility to support the military, their dependents 
and the surrounding retiree population. This budget seeks $53,000,000 
to continue the proposed construction of the main structure of this 
facility.
    The second item requests $10,400,000 to reimburse the Judgement 
Fund for payment of settled contractor claims surrounding the 
construction of the Replacement Hospital at Elmendorf Air Force Base in 
Alaska. This project was jointly funded by the Department of Defense 
and the Department of Veterans Affairs. Construction was completed in 
December 1998. However, the contractor submitted numerous claims that 
have gone through litigation. The Department of Treasury Judgement Fund 
has paid the $10,400,000 claim to avoid the accrual of interest. In 
compliance with the Department of Defense Financial Management 
Regulation, the Judgement Fund should be reimbursed with available 
Military Construction funds. However, the Financial Management 
Regulation also states that if sufficient funds do not exist within the 
applicable Appropriation, additional funds must be sought. Currently, 
sufficient military construction funds are not available to reimburse 
the Judgement Fund. This is why an appropriation in fiscal year 2003 
specifically to reimburse the Judgement Fund is needed.
    The third project is a replacement Life Skills Clinic at Hickam Air 
Force Base in Hawaii. We are seeking $2,700,000 for this project. The 
current facility is more than a half-century old. It is not feasible to 
renovate the facility due to several structural impediments. The 
utility systems have exceeded their useful life span and have become 
maintenance and energy intensive. Constructing this facility will co-
locate several support activities that will result in improved 
efficiencies and provide a significantly improved facility for 
conducting the sensitive business of mental health, family advocacy and 
substance abuse support services performed by these activities.
    The last two projects are overseas. We are seeking $39,629,000 to 
consolidate medical services currently split between Bitburg Air Base 
and Spangdahlem Air Base with a 10-bed Hospital Replacement at 
Spangdahlem Air Base in Germany. This project results in greater 
efficiencies by eliminating duplicate services and consolidating staff 
in addition to eliminating excessive maintenance cost due to much 
needed upgrades of the electrical, communications, medical gases and 
HVAC systems. There are also concerns about the current facilities 
being located too close to the explosive quantity-distance (Q-D) zone 
for the flight line munitions loading area. This creates greater risk 
to personnel should an explosion occur at the munitions loading area.
    For our last overseas project we are seeking $41,449,000 to 
purchase a Medical/Dental Facility Replacement and a long-term Right of 
Superficie in approximately ten acres of related land in Naples Italy. 
This facility is located at the support complex at Gricignano, Italy 
and is part of the Naples Improvement Initiative. This will give the 
Department the use of the medical building and the associated land 
without having to re-negotiate pricing for 99 years. All of these 
facilities will include Antiterrorism/Force Protection features.

                               CONCLUSION

    The Medical Construction Program continues to be an integral 
component of the quality of life for our uniformed personnel and 
eligible beneficiaries. As we go forward with these projects we show 
our earnest support and commitment to providing the highest quality 
healthcare to those who are committed to standing for the cause of 
freedom.
    The events of September 11, 2001 put this country on alert and have 
brought forth the best of American character and resolve. The provision 
of world-class healthcare seems to me to be one small, but important, 
benefit we can provide for those warriors and their families who stand 
in harm's way in the defense of our great Nation.
    Again, thank you for the opportunity to present our budget to you. 
This concludes my overview request of the Medical Military Construction 
budget for fiscal year 2003.

    Senator Feinstein. I just want to say one thing before the 
other two presentations. All of these budgets are down, yet all 
of you are presenting new projects. Special Ops is down 38 
percent, and I trust you are happy with that. Tricare is down 
20 percent, the education 22 percent, and defense logistics 17 
percent, and I must say, I am just a little puzzled by the 
presentations, because you are so eagerly presenting new 
projects, and yet overall your budgets are down dramatically, 
but if that is the way you want it, that is the way you want 
it.
    Mr. Molino.

                      STATEMENT OF JOHN M. MOLINO

    Mr. Molino. Thank you, Madam Chair. Madam Chair, Senator 
Hutchison, I will limit my oral comments and respectfully thank 
you for making my complete statement part of the record. Thank 
you for the opportunity to testify this afternoon on the 
military construction program for the DOD education activity, a 
very important element of the Department's quality of life 
program.
    The Department's leadership considers itself a part of a 
compact with the members of the military and their families. In 
response to the continued outstanding performance of our highly 
qualified troops and the unwavering support of their families, 
DOD is obliged to underwrite that portion of the military 
child's education delivered by DOD in this, the twelfth largest 
American school district, and certainly the most widely 
dispersed.
    And how have these young students responded? In recent 
national testing, the DOD Education Activity was ranked among 
the top five in the Nation, scoring above the national average 
at every grade tested and in every subject area tested. Indeed, 
we were at the top of the rankings among African American and 
Hispanic students. The results prompted one national newspaper 
to call the DOD system the best-kept secret in Washington, and 
Secretary of Education Rodney Paige told an audience to look to 
the Defense Department to find America's best education success 
story.
    This success is the product of hard work by the students, 
active involvement by the parents and the teachers, concerned 
oversight by the Department, and unwavering, strong support by 
the Congress, particularly this subcommittee. Thank you for the 
leadership you provide in this regard.
    When I last appeared before this subcommittee, I had been 
in this position only a matter of weeks. Since then, I have had 
the privilege of traveling to the Pacific and to Europe to see 
first-hand the dedicated men and women who teach in our 
schools, the enthusiastic students who thrive in diverse 
environments, and the parents who serve on active duty or as 
members of the military family.
    You know better than I that visits of this nature are 
informative at least and, more often than not, inspirational, 
whether we consider school construction, child development 
centers, fitness facilities, or any of the other areas within 
my purview. It is a privilege to serve in this position, to 
serve the men and women in uniform, and to serve the interest 
of their families.

                           PREPARED STATEMENT

    Thank you again for the opportunity to testify, and I am 
happy to entertain any questions you may have.
    [The statement follows:]

                  Prepared Statement of John M. Molino

    Madam Chairwoman and members of the Committee, it is an honor to 
appear before you today to discuss the status of a key component of our 
quality of life program, the Department of Defense Education Activity's 
(DODEA) military construction program. Military members and their 
families make sacrifices in the service of our country and face special 
challenges. We must forge a new social compact with them and recognize 
the reciprocal ties that bind Service members, families and the 
military mission. The Department has made a renewed commitment to 
underwrite family support programs, to provide quality education, to 
support affordable, available child care and to encourage quality 
fitness programs. Quality schools, along with other facilities such as 
first-rate child development and fitness centers are critical to our 
commitment to uphold the quality of life of Service members and 
families in order to attract and retain the best.
    I will begin my testimony by referring to the DODEA program. This 
Committee has a long-standing tradition of advocacy for DODEA's 
programs. You recognize, as do we, the critical necessity and value of 
providing a first-rate educational program for the children of our 
Service men and women. Quality education remains a central quality of 
life issue for our military and supports the President's initiative to 
ensure that no child is left behind.
    The quality of DOD schools is measured in many ways, but most 
importantly, as in other school systems, by student performance. DOD 
students regularly score significantly above the national average in 
every subject area at every grade level on nationally standardized 
tests.
    In addition, students participate in the National Assessment of 
Educational Process (NAEP) tests. NAEP is known as ``the Nation's 
Report Card'' because it is the only instrument that permits a direct 
comparison of student performance between student groups across the 
country. DODEA students, and in particular its African-American and 
Hispanic students, score exceptionally well on this test, often 
achieving a first or second place national rank. This outstanding 
performance led the National Education Goals Panel to commission 
Vanderbilt University to study the instructional program, teaching, and 
other aspects of DODEA schooling to identify the variables that 
contribute to the students' success. The findings, which were published 
in October 2001, received extensive national coverage. Secretary of 
Education Paige has noted that DOD schools can take a diverse, highly 
mobile group of students and do so well on national tests because we 
set high standards, demand accountability and encourage parental 
involvement.
    Providing modern, well-equipped educational facilities is vital to 
the educational process itself. Research shows that students in well-
maintained environments outperform those who attend neglected, poorly 
maintained schools. DODEA serves 106,187 students in 223 schools in 14 
countries, 7 states, one Commonwealth and one Territory, with a total 
facility inventory of over $3.2 billion. Sixty-three percent of our 
schools are over 30 years old, and many are housed in former barracks 
or administrative buildings, not built to be educational facilities. 
The changing educational curriculum, increasing use of technology in 
the classroom, and rising expectations of the military community make 
the state of the facilities more and more important to the education 
process.
    DODEA is aggressively addressing outdated infrastructure through 
the replacement or upgrade of the schools in the worst condition. In 
the past 3 years, we have programmed construction totaling over $189 
million, including $75.9 million in additions and renovations to 
existing facilities, $62.6 million for the replacement of older 
schools, $45.6 million for construction of new schools, and $5.2 
million in minor construction. This includes funding to support a 
worldwide implementation of new educational programs: full-day 
kindergarten and reduced pupil-teacher ratios in the first three 
grades. Both of these initiatives enjoy the strong support of our 
military stakeholders. For the future, we have focused our efforts to 
identify those schools that are in the most urgent need of repair or 
replacement and have programmed Military Construction projects where 
necessary to address those needs.
    The fiscal year 2003 military construction budget before you now 
includes $54.7 million in major construction for DODEA and $6.3 million 
to pay for the new requirements associated with force protection and 
antiterrorism initiatives. This additional funding will enable DODEA to 
comply with the new DOD antiterrorism construction standards and 
increase the safety and security of our children and staff.
    Last year, with your support, there was $70.3 million in DODEA's 
construction program. I'd like to thank the committee for its 
consistent support for the educational program. The fiscal year 2003 
program includes two of our most sorely needed projects, the 
replacement of Berkeley Manor Elementary School, at Camp Lejeune, North 
Carolina, and Seoul Middle School, in South Korea. Berkeley Manor 
consists of a series of pod style buildings constructed in the 1960s, 
as well as single-wide trailers. Seoul Middle School is currently 
housed in facilities built in 1955. It began operation in school year 
2000-2001 in the existing Seoul Elementary and High School without 
dedicated specialist classrooms, a gymnasium, and computer and science 
labs.
    These two projects aside, the fiscal year 2003 budget consists 
solely of projects to support full-day kindergarten and reduced pupil-
teacher ratios in the first three grades. These projects are located at 
Quantico, Virginia; Fort Bragg, North Carolina (2); Fort Jackson, South 
Carolina (2); West Point, New York; and five projects in Europe. This 
educational program allows DODEA to reduce the pupil-teacher ratios in 
the first through third grades from 23:1 to 18:1. The fiscal year 2003 
projects will allow completion of this educational program, one that is 
very popular with our Service members and important to the quality of 
our children's early education.
    In addition to improving facilities, we have been working with 
public school districts and state education authorities to lessen the 
displacement and trauma experienced by children of military personnel 
who are forced to change schools frequently due to the reassignment of 
military members. Within the last 2 years we have brought together over 
300 students, parents, military leaders, school personnel, and state 
policy makers to help address and give visibility to these issues which 
affect about 600,000 children of active duty military personnel.
    In addition to school initiatives, I'd like to report on a second 
program--child development. We have made progress in child development 
during the last 10 years--progress that would have been impossible 
without strong congressional support. The fiscal year 2002 budget was 
$26 million for four centers. I gladly thank the Congress for an 
additional $19 million construction funding in fiscal year 2002. The 
Department received $43 million under the fiscal year 2001 construction 
program for construction or expansion of ten child development centers. 
This was a funding investment of an additional $23 million above the 
fiscal year 2000 level of $20 million.
    The fiscal year 2003 presidential budget request for operations and 
maintenance funding increases the child care funding by $27 million, or 
7 percent. The fiscal year 2003 military construction program contains 
$11 million for two centers.
    The child development program consists of a variety of delivery 
systems to include center-based care, in-home care (on and off the 
installation), school-age care, and resource and referral programs. 
Although we have child development programs at over 300 locations with 
800 facilities and over 9,000 Family Child Care homes, we still project 
a need for an additional 45,000 spaces. We continue to pursue an 
expansion program for quality, affordable child care through a balanced 
delivery system that combines center construction, an increased number 
of family child care homes, and partnerships with local communities. We 
are providing family child care both on and off the installation, 
encouraged by subsidies.
    The DOD child development program is the largest American employer-
sponsored child care program. Since 99.7 percent of DOD centers have 
been accredited, compared with less than 10 percent in the civilian 
sector, the military child development remains a model for the nation.
    In support of the war effort, we expanded operating hours. 
Locations offer around-the-clock care, as necessary. Many have reacted 
to the needs of geographically single parents by offering special 
operating hours and instituting projects for children to communicate 
with absent parents.
    The third program I am reporting on is our fitness centers. Fitness 
centers consistently rank as the top Morale, Welfare and Recreation 
program. According to the 1999 DOD Survey of Active Duty Personnel, 80 
percent of the respondents said they use the installation fitness 
center at least once per month, with 40 percent using the facility 11 
times or more per month. This equates to an average usage of 
approximately 12 million visits to fitness centers per month.
    Over the past 4 years, the Department has received an average of 
$136 million annually for fitness and physical training facility 
construction. This provided the funding for the construction and major 
upgrade of 57 facilities. Thirty-four percent of these were funded as 
congressional inserts. For fiscal year 2003, the Department has 
requested $60.1 million for construction and major upgrades of 7 
facilities. We appreciate the continued recognition by Congress of 
fitness as an essential part of military life and an important 
contributor to force readiness.
    The Department has crafted a strategic plan recognizing the 
contribution provided by each of these elements. A critical step in 
achieving the objectives of this strategic plan is to bring fitness 
centers, staffs and programs up to a consistent standard of quality.
    The Services have conducted assessments of their programs based on 
Department-wide program standards that were developed using industry 
guidelines. The results show that 37 percent of installation fitness 
facilities meet the standards. Clearly, the Department still has a long 
way to go to achieve full compliance with these program standards. The 
support provided to renovate and replace fitness centers enhances both 
opportunities to improve individual fitness and also the quality of 
life of Service members and their families.
    Physical fitness contributes to force readiness in numerous ways. 
It is critical to providing forces that are more resistant to illness, 
less prone to injury and the influence of stress, and better able to 
recover quickly should illness or injury occur. Fitness centers provide 
a key element, along with unit commanders, physical trainers, and 
health promotion specialists, in maintaining the physical performance 
of Service members.
    Thank you for the opportunity to appear before this subcommittee 
and for your strong and consistent support of our programs in the past. 
I look forward to working with you closely during the coming year.

    Senator Feinstein. Thank you very much.
    Mr. Baillie.

                   STATEMENT OF FREDERICK N. BAILLIE

    Mr. Baillie. Thank you, Madam Chairman. With your 
permission, I will submit my prepared statement for the record 
and proceed with a very short oral summary.
    Madam Chairman, Senator Hutchison, the Defense Logistics 
Agency's (DLA) fiscal year 2003 Military Construction request 
is $142 million for 10 projects. As in previous years, we 
continue our emphasis on sustaining and enhancing the 
Department's fuel storage and distribution infrastructure. 
Through your support, our program to rebuild America's 
strategic airlift and refueling capability is on schedule. We 
expect to program the last project in fiscal year 2005. In 
fact, more than 58 percent of these projects are already 
operational or under construction.
    This year's request includes four projects at $81 million 
to support strategic mobility at several critical military 
installations. At three other critical military installations 
that provide vital links for the flow of deploying forces and 
logistics, we request $41 million to improve fuel storage and 
distribution systems. Equally important to us is our need to 
safeguard the environment and eliminate current environmental 
hazards associated with fuel storage.
    At the Naval Air Station Joint Reserve Base in New Orleans, 
Louisiana, we propose to replace seven 45-year-old underground 
fuel tanks with three above-ground tanks for $9.5 million.
    At DLA's Supply Center in Richmond, Virginia, we propose to 
modernize a 60-year-old command headquarters building for $5.5 
million to make it accessible to our disabled employees and 
visitors, and to replace substandard electrical and fire 
protection systems.
    Finally, at our Supply Center in Columbus, Ohio, we have an 
opportunity to relocate a physical fitness facility that is in 
a mostly vacant World War II warehouse scheduled for 
demolition. This fitness center is in an isolated part of the 
installation, more than 1 mile from the vast majority of users. 
Our $5 million project locates a new facility in the hub of the 
center's activities. This fitness facility will vastly improve 
the quality of life for more than 2,300 active duty military, 
reserve, and National Guard service members.
    In summary, our military construction program supports the 
DLA vision to be America's Premier Logistics Combat Support 
Agency by providing vital facilities that enhance our military 
services' war fighting capabilities.

                           PREPARED STATEMENT

    Madam Chairman, this concludes my oral statement. Thank you 
for asking me to appear today, and I will be pleased to answer 
questions at your convenience.
    [The statement follows:]

               Prepared Statement of Federick N. Baillie

    Madam Chairman, and Members of the Subcommittee: I am Frederick N. 
Baillie, Executive Director of Business Management, Logistics 
Operations, at the Defense Logistics Agency (DLA). I am pleased to have 
the opportunity to provide information about DLA's fiscal year 2003 
Military Construction (MILCON) request.

                     MILITARY CONSTRUCTION REQUEST

    The Defense Logistics Agency requests $142.0 million for its fiscal 
year 2003 MILCON program. This program consists of 10 projects that 
will enhance strategic airlift en route fueling capability, increase 
mission responsiveness, reduce environmental hazards, and improve 
facility readiness at our activities in support of the Agency's 
missions. This request includes:
  --$122.0 million to replace deteriorated, obsolete hydrant fuel 
        systems and fuel storage tanks, or provide new systems, at 
        seven critical Air Force and Navy installations.
  --$9.5 million to provide aboveground fuel storage tanks to eliminate 
        potential environmental hazards associated with deteriorated 
        underground tanks at a naval air station joint reserve base.
  --$5.5 million to modernize an installation headquarters building at 
        DLA's Defense Supply Center Richmond, Virginia, to provide 
        accessibility for disabled employees and visitors and to meet 
        current life-safety and fire protection codes.
  --$5.0 million to replace a physical fitness facility currently in a 
        converted World War II warehouse at the Defense Supply Center 
        Columbus, Ohio, so this mostly vacant building may be 
        demolished.

                     FUEL FACILITIES INFRASTRUCTURE

    In fiscal year 1996, DLA assumed new responsibilities for 
programming fuel-related MILCON projects for bulk and intermediate fuel 
storage and hydrant fuel systems at the Services' installations. The 
Agency places a high priority on sustaining and enhancing the 
Department's fuel distribution, storage, and handling infrastructure. 
This year, our requested funding of critical fuel facilities 
improvements amounts to 93 percent of our total military construction 
program. This level of funding reflects the priorities of the Joint 
Chiefs of Staff to provide critical fuels infrastructure to support 
strategic airlift en route mobility and correct environmental 
deficiencies at defense fuel support points.

             STRATEGIC AIRLIFT EN ROUTE FUEL INFRASTRUCTURE

    Our proposed investment to replace old and deteriorated hydrant 
fuel systems, or provide new bulk fuel storage tanks at critical 
overseas bases, is $81.0 million. These projects all support strategic 
en route mobility requirements. Because of past congressional support, 
our program to rebuild America's strategic en route fuel infrastructure 
is on schedule to complete programming in fiscal year 2005. More than 
58 percent of these projects are already operational or under 
construction.
    At Andersen Air Force Base (AFB), Guam, we will replace an existing 
hydrant fuel system for wide-bodied aircraft supporting strategic 
airlift en route mobility requirements in the Pacific with a modern, 
pressurized fuel hydrant system of 11 outlets for $17.6 million. This 
project DRAFT provides the last of four hydrant systems needed to meet 
a total requirement of 67 hydrant outlets. Currently, the base operates 
a 45-year-old hydrant system that is failing and cannot support 
peacetime missions or strategic airlift en route mobility requirements 
in contingency or wartime operations. As with other obsolete hydrant 
systems elsewhere, repair parts are no longer commercially available 
and must be salvaged from other similar systems or individually 
fabricated. In addition, the underground piping system lacks cathodic 
(corrosion) protection. The new hydrant system will include features to 
protect it from the corrosive marine environment and will employ a leak 
detection system. The existing hydrant system will be demolished.
    At RAF Fairford, United Kingdom, we propose to replace four 45-
year-old hydrant systems with a new 15-outlet system for wide-bodied 
aircraft and provide fuel truck fillstands and support facilities. This 
project will cost $17.0 million. A precautionary prefinancing statement 
for the future recoupment of funds from the NATO Security Investment 
Program is being submitted to NATO.
    A bulk fuel storage project for $23.0 million at Yokota Air Base, 
Japan, will provide two 100,000-barrel (15,900 kL) fuel tanks and 
supporting facilities for additional fuel storage capacity for 
strategic airlift en route refueling and force projection in the 
Pacific. At this location, there is insufficient on-site storage 
capacity to satisfy the projected fuel demand during a contingency. 
This project is ineligible for funding consideration by the Japanese 
Facilities Improvement Program. This is the second of two projects to 
provide a total of 300,000 barrels DRAFT (47,700 kl) of additional 
storage capacity at this site. The first project for one 100,000-barrel 
tank, approved in the fiscal year 2002 DLA MILCON program, will be 
constructed this year.
    At the Naval Station, Rota, Spain, we will construct a 16-outlet 
hydrant fuel system for $23.4 million to support the strategic airlift 
en route mobility of peacetime and contingency operations in Europe, 
Southwest Asia, and Africa. This project is part of a larger Air Force 
initiative to expand airfield aprons and aircraft support facilities 
for wide-bodied aircraft passing through Rota. Congress approved the 
aircraft-support-facilities project in fiscal year 2001. The apron work 
will be programmed in the Air Force's MILCON programs in fiscal years 
2003 and 2004.

                   OTHER CRITICAL FUEL INFRASTRUCTURE

    Though not designated as strategic airlift en route bases, per se, 
several critical military installations support the strategic airlift 
mobility mission by providing vital links for the flow of deploying 
forces and logistics. At three of these locations, we propose to invest 
$41.0 million to improve fuel infrastructure to meet current 
operational requirements.
    At Travis Air Force Base (AFB), California, aging fuel storage 
tanks and supporting facilities will be replaced for $16.0 million. Two 
100,000-barrel (15,900 kL) fuel storage tanks will be constructed to 
meet the base's required fuel storage demand. These tanks will replace 
two aging tanks of only 55,000-barrels total capacity.
    In the Azores at Lajes Field, we will provide a nine-outlet hydrant 
fuel system for $19.0 million to replace an old hydrant system that had 
been taken out of service due to DRAFT environmental concerns and 
interference with airfield communications and operations. This base 
provides essential support for Expeditionary Air Force deployments as 
well as ground and in-flight refueling of aircraft transiting the 
Atlantic Ocean. The base has had a pivotal role in supporting Operation 
Enduring Freedom.
    The two naval fuel piers in Guam under the Commander, Naval Forces 
Marianas, are an essential element of the strategic infrastructure in 
the Pacific since these fuel systems receive and transfer bulk fuels to 
Andersen Air Force Base and naval vessels in this region. The current 
method of unloading fuel from ships by using hoses, cranes, and several 
workers is time and manpower intensive. We propose to install six 
marine fuel loading arms on these piers for $6.0 million to improve 
efficiency and reduce the potential for environmental accidents in 
handling fuel hoses. These mechanical loading arms will be the same as 
commercial systems that are now a standard fuel-handling feature on 
fuel piers in the United States.

                       ENVIRONMENTAL STEWARDSHIP

    At the Naval Air Station Joint Reserve Base New Orleans, Louisiana, 
we need to replace seven 45-year-old underground fuel storage tanks 
that no longer comply with Federal and State underground storage tank 
regulations. One of these tanks has already been taken out of service 
because of a fuel leak. To meet current fuel storage requirements at 
this base, we plan to construct three 12,000-barrel (1,908 kL) 
aboveground tanks and fuel support facilities for $9.5 million.

                       SUPPLY CENTER INVESTMENTS

    At DLA's Defense Supply Center Richmond, Virginia, we need to 
modernize the interior of a command headquarters building to comply 
with requirements of the Americans with Disabilities Act (ADA) and 
life-safety and fire protection standards. Currently, disabled 
employees and visitors do not have direct access to the commander's 
office or the Center's primary conference facilities. In addition, 
restrooms are not ADA compliant. This $5.5 million project will provide 
this essential accessibility and replace substandard electrical, 
mechanical, and fire protection systems with ones that conform to 
current building codes and standards.
    At the Defense Supply Center Columbus (DSCC), Ohio, we propose to 
replace an old, existing physical fitness facility for $5.0 million. 
The existing facility occupies approximately 34,000 square feet (SF) of 
a mostly vacant 288,000 SF World War II warehouse. This warehouse and 
several other unused warehouses in the western part of the installation 
are planned for demolition as part of a program to reduce 
infrastructure sustainment costs. Construction of new administrative 
buildings in the 1990s in the eastern section of the base and the 
reduction of depot-operations personnel have resulted in the existing 
fitness facility now being in an isolated section of the installation, 
more than one mile from the vast majority of the employee population. 
Relocating this fitness facility within the campus of administrative 
buildings at DSCC will make it more accessible to employees and enhance 
DLA's workplace quality of life objectives. This facility will support 
more than 2,300 active-duty military, Reserve, and National Guard 
personnel.

                                SUMMARY

    DLA's fiscal year 2003 MILCON request reflects our efforts to 
support military readiness, protect the environment, and provide safe 
and adequate working conditions for our military and civilian work 
force. Eight of the ten proposed projects provide vital fuel facilities 
to support the Services' warfighting requirements. The remaining two 
projects are needed to provide an accessible, quality working 
environment to attract and retain DLA's most valuable resource--its 
employees.
    Thank you, Madam Chairman, for this opportunity to present our 
fiscal year 2003 Military Construction program.

    Senator Feinstein. Thanks very much, Mr. Baillie.
    Let me begin with you, General Tangney. Was your projected 
request approved as submitted to OSD, or was it reduced by the 
Pentagon?
    General Tangney. Our budget request in fact was plussed-up 
by OSD for 2003 in the operational and readiness accounts. 
Military construction was what we requested.

                DEPARTMENT OF DEFENSE EDUCATION ACTIVITY

    Senator Feinstein. All right. Mr. Molino, as I understand 
it, as part of the efficient basing initiative in Italy the DOD 
Education Activity is expected to receive approximately 340 
additional students. Is it true that the construction project 
is not in the program at this time, but you will need 
additional classrooms, a gymnasium, storage, administrative 
facilities, and additions to administrative facilities?
    Mr. Molino. Madam Chair, that is true in the case you cite. 
It is also true in several other cases that services are 
considering as part of their restationing moving units around 
and centralizing their locations. Some of these programs are, 
in fact, in the long-term program but will not be ready by any 
means should the services decide to go forward with these 
plans.
    Guam is a good example, for instance. We have two schools, 
an elementary/middle school and a high school. Only one school, 
the high school is in the program for fiscal year 2006. But if 
the Navy does restation the submarines to Guam as they plan, it 
will make worse a need that currently exists, and not only 
that, but it will make it immediate.
    Senator Feinstein. Well, let me ask this question, then. 
How are you going to take care of the cost of these projects, 
and when will they be requested?
    Mr. Molino. We are working, in fact, have been working last 
week and this week with the Comptroller to do everything 
possible to take those programs that are in the FYDP and move 
them to the left, if you will, get to them sooner, get to them 
in 2003, if possible, 2004 by all means, in order to meet the 
needs.
    Senator Feinstein. But you will not get to them within the 
confines of this budget.
    Mr. Molino. That is absolutely correct. What will happen 
then is, it will increase class sizes, it will require us to 
take facilities, for instance a lunch room, and turn it into 
something else. We will move temporary classrooms in by way of 
single wide trailers. In other cases we will actually be adding 
single wide trailers to locations where we already have single 
wide trailers, in order to accommodate the burgeoning 
population.
    Senator Feinstein. Thank you. I am puzzled, General 
Tangney, because in your prepared testimony you note that the 
level of MILCON funding is below the minimum needed to meet 
your long-term requirements for replacing and renovating aging 
facilities, satisfying space deficits, constructing facilities 
for new missions, and yet you say that your budget was actually 
plussed-up. How could that be?
    General Tangney. Not on the military construction side. The 
budgetary guidance given to the services by the Department was 
to use fiscal year 2002 as a baseline of departure adjusted for 
inflation when we put together our mini-POM or POM 2003 to 
2007. When we did that, we had a very, very constrained amount 
of dollars, readiness, O&M, MILCON not the least.
    Given the budgetary situation that we are looking at, we 
asked for the program which is presented, which is $63.1 
million, recognizing that there were other projects that we 
would like to have funded, but we could not fund, given the 
impact on readiness and the POM. When we put our POM together, 
we actually had to unfund our flying hour program by 
approximately 15 percent. We were facing a service life 
extension on our Air Force rotary wing helicopters, which we 
could not afford. That was not in the program due to the slip 
on V-22, and we had a number of other shortfalls, so when we 
went into the POM build process the Department plussed us up to 
rectify those shortfalls.
    They gave us back the money for the flying hour program we 
were forced to reduce, they gave us the money to extend our Air 
Force helicopters, so in that sense, yes, we received a plus-
up, but in the MILCON side of the house we still remain 
constrained, because of the overall number of dollars available 
and other competing priorities to the program which is under 
discussion today.
    Senator Feinstein. I see. Thank you.
    Senator Hutchison.
    Senator Hutchison. Thank you, Madam Chairman.

                       TRICARE MANGEMENT ACTIVITY

    General Randolph, you now have the over-65 included in 
Tricare for Life, and the military has always said that it is 
more efficient to treat veterans and retirees at military 
facilities rather than in a Tricare situation, and the active 
duty as well, I suppose. My question is, you do have, I think, 
a modest number of new hospitals to be constructed, or clinics. 
Are you doing enough to meet this huge added demand that you 
have?
    General Randolph. Senator, thanks for the question. In 
fact, it is very similar to the one you asked me last year. I 
would like to answer that and then make a comment from the 
chairperson's comments also, if that is all right. I do believe 
that we are adequately managing Tricare for Life at this time, 
and this is why. There are two parts to your question. Tricare 
for Life, the way it was designed, it was not designed 
primarily to have care given in our facilities.
    It has taken a while for those of us who work in those 
facilities to really realize that, quite frankly, but in fact 
Tricare for Life was designed to take the patients who were age 
65 or over and were already in stable situations with 
providers. Why? Because they could not get care in our 
facilities, and they paid Medicare, a Medicare premium, and in 
fact when they went to see their provider the Medicare bill was 
paid after the forms went forward, and then they received a 
bill for a copay of some sort, and out of that came the medigap 
policies that I know you are very familiar with.
    Tricare for Life was done in such a way that once Medicare 
has paid, there is an immediate and automatic cross-over to 
Tricare for the remaining bill, and that is now being paid by 
Tricare. So the out-of-pocket costs for that age 65 and over 
beneficiary is normally zero, so most are very happy where they 
are at this particular time.
    The second part of your question, though, is, would it not 
be great to have our folks in our facilities? It is cheaper.
    Senator Hutchison. They like it better.
    General Randolph. I am glad you said that. Tricare Plus is 
our vehicle to begin winning some of the people who have been 
very settled in their previous age 65 and over situation with 
our situation. That is a local facility program. So each 
facility will have a different way of looking at that and it is 
based on their individual capacity. So far it has been my 
experience in looking at our data that most facilities have 
that capability.
    This allows patients age 65 and over who were already--this 
is primarily already being seen in our facility because of 
graduate medical education, because they were being seen by the 
local cardiologists in the facilities. If for some reason they 
were already in our facility, it allowed them an opportunity to 
remain within our facility. That has been a very popular 
program also. So we are balancing the two as we are trying to 
make sure that we fill our capacity with those who would like 
to come back from the Tricare for Life into our facilities 
where they are happy to do that.
    But obviously, once someone is pretty happy in a stable 
medical condition, they kind of like staying where they are. So 
that is going to be a hard sell.
    Senator Hutchison. Well, let me ask you this, because most 
military retirees that I talk to would prefer to be treated in 
a military facility, but many of them have to travel so far 
that they just cannot do it.
    In my home State, many people in South Texas would like to 
have a hospital, but they have to go to San Antonio, but if you 
upgraded the clinic there, that would help them a lot, so I am 
asking if you have enough capacity to serve the people that 
want to be in a military facility, and is your expansion 
program too modest, because I know a number of areas of the 
country, not just Texas but in other areas of the country, I 
hear the same thing, so should you be looking at more clinics 
and hospitals, and not relying on the Tricare out-sourcing if 
it is more efficient to do it in military facilities?
    General Randolph. Yes, ma'am, that is a great question, and 
it is a little different from the way I interpreted the 
question.
    First, the capacity does exist within a great majority of 
our facilities now, but as you mention, there are some folks 
who cannot get there from here. Should we, in fact, be looking 
at facilities in other places, smaller ones that can do the 
primary care? The answer is that we are doing that. We are 
looking at that.
    We have for the first time an overarching committee now 
that is Tri Service and oversees the steering committee. We now 
also have a strategic plan, something last year I could not 
have told you, and that is one of the key things we are looking 
at now, is basing. Where should they be? Where should Wilford 
Hall be, for instance. That kind of thing, so we are looking at 
it from the major medical center down to the clinic. Are they 
in the right places? If they are not, what can we do to move 
them to the right places?
    Senator Hutchison. You are certainly not thinking of moving 
Wilford Hall?
    General Randolph. No, ma'am. That is the Air Force 
Flagship, if you will. So the short answer to your question is, 
yes indeed we are looking at that in the long range plan of the 
committee. Each of the services is also looking at that 
individually. By the way, and if I may, I would like to give 
you a little bit of a spin on the budget for medical MILCON. It 
is, in fact, less as you pointed out. I believe our budget last 
year was around $225 million, something like that, certainly 
more than now.
    As you may know, each one of the five line items I 
mentioned today are mid-1950's or earlier facilities. Last 
year, the great majority of those projects were mid-1950's or 
earlier. Now, we are getting to a point where we are actually 
getting into the sixties with some of our facilities, and those 
still are amenable to a fair amount of restoration and 
sustainment, and perhaps modernization. So what we have done, 
instead of spending as much or requesting as much as we had 
last year for construction, we have increased the amount that 
we are using for sustainment, restoration, and modernization, 
approaching perhaps 3 percent now, as opposed to the 2\1/2\ or 
so percent 2 years ago.
    Senator Hutchison. Thank you.
    Senator Feinstein. Well, thank you very much, gentlemen. We 
appreciate it. We are delighted you are all happy with the cuts 
in your budget.
    Senator Hutchison. There was one other question I had of 
Mr. Molino, and that was, I appreciate the job that you are 
doing in education, but my question to you is more global, I 
guess. Is it more efficient for the Department to continue to 
operate school districts, or should we be looking at turning 
over the DOD schools to contiguous school districts?
    Mr. Molino. Senator, I assume you are talking domestically 
and not overseas.
    Senator Hutchison. Yes, I am.
    Mr. Molino. In fact, that is a question that I asked when I 
first came to the job. It is a question the Secretary has asked 
us to consider as part of the litany of asking hard questions 
even though we may be uncomfortable with the process that 
yields to an eventual answer. I have been asked that question 
by a colleague of yours in the other body about the West Point 
Elementary and Middle School, for example.
    What we have at West Point, and I think that is a good 
example to explain where we are going, what we have at West 
Point is an excellent elementary school and middle school run 
by the Department of Defense on the property. When the students 
graduate and move to high school, they go to the local high 
school in the Highland Falls Fort Montgomery School District, 
which is just outside the gate. I visited those schools. In 
fact, I visited them last Friday.
    What I found outside the gate were very good elementary, 
middle, and high schools run by very qualified people with very 
good programs, and so the question then is, for educational 
reasons, can I justify maintaining a DOD school at West Point, 
and the answer is, in the considered opinion of the experts, 
the educators who were traveling with me, that for educational 
reasons we cannot, because there is not a dichotomy between the 
quality of education. The kids outside the gate are getting a 
very good education.
    The next question is, can you justify it fiscally, and that 
is what we are looking at right now. New York may be a peculiar 
situation, but I understand we have other arrangements around 
the country. Eight percent of the land that is encompassed by 
the school district outside the gate of West Point is taxable 
property. They run their school district on 8 percent of the 
land being taxed. Ninety-two percent of the land is untaxable, 
because it is either Federal or State land, so currently, we 
pay tuition for the high school students that go out, nearly $2 
million a year for tuition and transportation.
    There are roughly seven times as many middel and elementary 
school students as there are high schoolers. I do not know if 
we can afford to pay tuition for them, and that is what I am 
looking at right now to see if fiscally it makes sense.
    A third aspect is, any time you do a change like this, it 
is vitally important that the community is well-educated about 
what we are going to do, or what we are considering, and they 
become supportive. At this point I can tell you that just from 
my asking questions to various people while at West Point, I do 
not sense a great deal of support in the West Point community 
to make that kind of a transfer.
    There is a perception once you leave the DOD school you are 
going into a bad school system. That is not the case outside 
the gate at West Point. It is an excellent school system, 
performing well above the national average, but there is still 
that perception, and we will have to do that if we decide that 
fiscally it is the responsible thing to do.
    Senator Hutchison. Well, I think that is the right 
assessment criteria. You have to assure that the quality of 
education would be the same if you moved out, but there is a 
situation in San Antonio where the infrastructure in the DOD 
school system has been way behind, and it is leaking roofs, it 
is asbestos, it is a lot of infrastructure problems, so you 
just have to ask the question, with very good schools 
contiguous to the base, are you better off staying with the 
investment in infrastructure on the base, or are you better off 
fiscally going outside, and I guess in some cases the quality 
of education would not be comparable. In this case, I am sure 
it would be.
    Mr. Molino. There are some examples within the United 
States, Senator, where the quality of education would not be 
comparable. We also have situations, and West Point would 
actually be in this situation, where the capacity does not 
exist outside the gate to house these students, so what would 
likely happen if we went to the next step, just hypothetically 
what would likely happen is, the school district would want to 
teach those children in the current buildings, but they would 
certainly require that they be brought up to whatever State 
standards might exist.
     We have a reprogramming that your subcommittee approved 
that we are hopeful that the HAC will approve as well to try to 
build a gymnasium at the West Point Elementary School if that 
school stays DOD. If that school goes to the West Point School 
District, or the school district outside the gate, there is a 
dire need for that gymnasium at the elementary school 
regardless of the situation, and what happens sometimes if you 
transfer, you then move some of these costs you have spread out 
over the years. They become immediately bills that are due 
because the school district will not accept a building unless 
you do them immediately, and so again the fiscal concern.
    Senator Hutchison. Are you doing major work at all of the 
DOD school districts to determine if it is a fiscally 
responsible thing to not offer the DOD school district and go 
into the community and reimburse the community, obviously, 
versus just leaving it the way it is.
    Mr. Molino. I do not know how you would describe the major 
study. After my visit to West Point I have concluded that we do 
need to look at the situation. We have been directed by 
Congress----
    Senator Hutchison. This is throughout the system?
    Mr. Molino. Yes, ma'am. We have been directed in the past 
by Congress to do such a study, and have done a number over 
time. What I have found in just reviewing the results of those 
studies is, they come up with a gross conclusions and I do not 
see individual schools being looked at and decided on an 
individual basis. Whatever we do in the future, we need to do 
that.
    Senator Hutchison. Do you need to be directed by Congress 
to do such a study, even if you, say, look at each individual 
school, and the first criteria would be, would you get a 
comparable education outside, then the second criteria would 
be, is it fiscally more efficient? Would you need language from 
Congress to direct you to do such a study, or would you be 
willing to commit to doing it on your own?
    Mr. Molino. I think the answer is yes to both. I am 
determined to do the study and to direct that we put our 
resources to do that, but I would certainly not object if the 
Congress asked or directed that we do such a study.
    Senator Hutchison. Thank you.
    Senator Feinstein. Just to add, I think it is 
extraordinarily important that it be done school by school. I 
do not think you can generalize. Some school districts are 
good, some are not good. I mean, that is just an unsavory fact 
of life in our country. I would kind of hope you would do this 
without legislation, because I think it is very hard to get a 
study that covers the entire United States that is really going 
to give you the kind of results that you can depend on.
    Mr. Molino. Yes, Madam Chair, I agree with you, and that is 
one of the shortcomings I found. We look at the system, and we 
reach a gross conclusion, but we do not get into the eaches, 
and I think it is necessary in this instance to get into the 
eaches.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Feinstein. Thank you very much, gentlemen. We 
appreciate your testimony, and the fact that you are all very 
happy with cuts in your budgets. It is a first for me. In my 
budget years when I was mayor of San Francisco it never 
happened that way. Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Defense Agencies for response subsequent 
to the hearing:]

             Questions Submitted to General William Tangney

            Questions Submitted by Senator Dianne Feinstein

                      ENCROACHMENT ISSUES/CORONADO

    Question. General Tangney, How has encroachment at the training 
beaches at Coronado, California affected the training capabilities of 
the Navy SEAL Teams at Coronado, and what are you doing to ensure that 
these key military personnel are able to achieve the training they 
need?
    Answer. Environmental encroachment at Coronado, California beaches 
may present increased obstacles to Navy SEAL training at that location 
in the future. The exact impact of encroachment and environmental 
issues are currently under review by the U.S. SOCOM Range Tiger Team, 
which is conducting an in-depth strategic study into all range issues 
impacting the training and readiness of special forces worldwide. The 
outcomes and findings of this extensive effort will be forwarded when 
finalized. The Tiger Team has implemented an effective methodology and 
quality control to ensure depth and scope of information, minimize 
bias, and involve personnel at each level for an ``all angles'' 
perspective.
    The Naval Special Warfare Command continues to maintain the highest 
standards of training and readiness under the current constraints. Our 
professional Naval officers and non-commissioned officers using 
innovative training and leadership skills have managed to perform work-
arounds at all levels and ensure the highest level of SEAL training in 
spite of encroachment impediments. Most importantly, the findings and 
analysis of the Tiger Team will provide a tool to better identify and 
anticipate the future impact of encroachment on readiness and national 
security.
    Question. Do you have any requests for land acquisition in the 
Future Years Defense Plan for training sites in the Coronado area?
    Answer. No.
                                 ______
                                 

       Questions Submitted to Major General Leonard Randolph, Jr.

            Questions Submitted by Senator Dianne Feinstein

            DECREASE IN CONSTRUCTION APPROPRIATIONS REQUESTS

    Question. General Randolph, your budget this year is about 20 
percent less ($204 million in fiscal year 2002--$164 million in fiscal 
year 2003) than last year's request.
    Realizing that many of your projects are high dollar, phased 
projects, how does a 20 percent decrease in construction appropriations 
requests affect your long-term program?
    Answer. The fiscal year 2003 President's Budget is actually more in 
line with our budget requests for fiscal year 2000 and fiscal year 
2001. The anomaly is fiscal year 2002 when the President's Amended 
Budget increased the entire Defense budget, medical construction 
program included. The medical program through the Department's Future 
Years Defense Program (FYDP) is closer to the fiscal year 2001 budget 
with inflation.

                        PLANNING & DESIGN FUNDS

    Question. General Randolph, You have requested $14 million in 
planning and design funds this year, but, if I am correct, you also 
have a planning and design backlog.
    What is the amount of that backlog and should that requirement be 
addressed this fiscal year?
    Answer. We do not have a planning and design backlog. The $14 
million we have requested in fiscal year 2003 will adequately support 
the planned expenditures required to ensure that the medical program 
stays on track and that requested projects meet the Congressionally 
imposed milestone of 35 percent design by January 1 of the preceding 
budget year.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                       HOSPITAL PROJECTS OVERSEAS

    Question. General Randolph, almost half of your 2003 budget request 
is for two hospital projects overseas--in Italy and Germany--about $81 
million. Last year we provided funding for hospital/clinic replacement 
projects in Greenland, Germany and Portugal.
    I know from my travels around the country the sad state of some of 
our domestic military clinics and hospitals. How are priorities 
established and why the continuing focus on overseas?
    Answer. The prioritization depends upon the mission of the 
hospital, its physical condition, functionality of existing spaces, 
compliance with the national fire and life safety codes, Joint 
Commission Accreditation on Healthcare Organizations standards and the 
facility requirements to deliver healthcare efficiently and cost-
effectively. Our goal is not to balance our request on a CONUS/OCONUS 
basis but to request the replacement or modernization of our most 
needed medical facilities each year.

                       DOMESTIC MEDICAL PROJECTS

    Question. General Randolph, are you deferring domestic medical 
projects because of the 2005 round of brac?
    Answer. No medical construction projects have been deferred because 
of a pending round of BRAC in fiscal year 2005. Our mission is to 
ensure medical readiness and to provide for the healthcare needs of our 
eligible beneficiary population. The projects in this budget request 
support that mission.
                                 ______
                                 

                 Questions Submitted to John M. Molino

          Questions Submitted by Senator Kay Bailey Hutchison

                              GYM PROJECT

    Question. Mr. Molino, I understand that the request to add a gym to 
the west point elementary schools is ``on hold.'' I also understand the 
department is studying whether the two DOD schools at West Point should 
be turned over to the local school district. Can you provide the 
subcommittee an update on the gym situation, why is this project so 
important, and what is the current situation?
    Answer. The project is important because the current facilities at 
West Point are woefully inadequate. The middle school presently offers 
physical education classes in a gymnasium that was constructed in 1934. 
The gym is not handicap-accessible and is unsuited for this or any 
school's physical education (PE) program due to obstructions, low 
ceilings, poor lighting, and no seating. The elementary school 
presently offers physical education classes in a multipurpose room that 
also serves as the school cafeteria. As a result, PE programs are 
curtailed due to the time required to set up and take down tables for 
breakfast and lunch. Because of limited storage space at the elementary 
school, food service and other school equipment are stored in the 
multipurpose room around the play court creating a dangerous 
environment for the small children running and playing there. 
Additionally, the Elementary School Occupational/Physical Therapy 
Program is offered in a makeshift classroom at the back of the 
multipurpose room stage. The stage is cluttered with desks, chairs, and 
teaching equipment, and doesn't leave enough space for the mobility 
instruction requirements of this program. The area used is also not 
accessible to the physically challenged. Heating for this area is not 
available except with space heaters, and the stage curtain is the only 
thing that separates this area and the multipurpose room that houses 
the PE and food services programs.
    In June 2001 a reprogramming request was sent by the Department of 
Defense Education Activity (DODEA) to the Office of the Under Secretary 
of Defense (Comptroller) Directorate of Construction, requesting the 
use of fiscal year 1999 MILCON funds from another DODEA MILCON project 
to fund the balance required for the West Point gym project and other 
critical needs. Following a revision requested by the Comptroller's 
Directorate of Construction, it was submitted and in September 2001 the 
Senate Appropriations Committee approved the reprogramming request. The 
House Appropriations Committee (HAC) deferred its decision on the DODEA 
reprogramming request until a later date. On January 24, 2002, the 
Chairman of the House Subcommittee on Military Construction approved 
most of the reprogramming request, but not the part of the request for 
the West Point gym project.
    On February 14, 2002, New York District Corps of Engineers extended 
the current bids for another 60 days. On March 20, 2002, Deputy 
Assistant Secretary of Defense (Military Community and Family Policy) 
met with the Chairman of the HAC Military Construction Subcommittee. On 
March 21, 2002, DOD received the HAC approval for the reprogramming 
action.

                          OVERSEAS DOD SCHOOLS

    Question. Mr. Molino, over the past several years, the department 
has expanded its overseas bases to several new locations, such as 
Larrisa, Greece, and Vicenza, Italy. How do we ensure that we have 
Department of Defense schools in these places when our service members 
and their families arrive?
    Answer. The Department of Defense Education Activity (DODEA) has 
been routinely informed of restationing decisions only after a 
restationing plan has been approved. The Department is working with the 
Services to ensure that the Under Secretary of Defense for Personnel 
and Readiness is involved sooner and during the planning process. In 
this way, we will be better able to plan for a restationing's impact on 
the entire spectrum of quality of life services, including schools, 
commissaries, exchanges, child development centers, and fitness 
facilities. Early involvement will also ease funding concerns that 
always accompany late notifications.
                                 ______
                                 

              Questions Submitted to Frederick N. Baillie

          Questions Submitted by Senator Kay Bailey Hutchison

            STRATEGIC EN-ROUTE FUEL INFRASTRUCTURE PROJECTS

    Question. Mr. Baillie, I understand that a signifant portion of 
your 2003 budget request is for strategic en-route fuel infrastructure 
projects. How are those requirements developed and prioritized?
    Answer. The Commander-in-Chief (CINC), U.S. Transportation Command, 
specifies the requirements for fuel infrastructure to support the 
strategic en route airlift mission in coordination with the other 
geographic combatant CINCs. Fuel infrastructure projects are developed 
from strategic mobility requirements studies to support worldwide 
operations plans, contingencies, and readiness.
    Each year a Defense Logistics Agency (DLA) Fuel Installation 
Planning and Review Board meets to set priorities for all DLA fuel 
MILCON projects. This board consists of representatives of the 
combatant CINCs' Joint Petroleum Offices, Joint Staff J-4, Military 
Services' Energy Offices, and DLA's Defense Energy Support Center,

                         EXCESS INFRASTRUCTURE

    Question. Mr. Baillie, senior Defense officials have recently 
testified that the Department has between 20-25 percent excess 
infrastructure. Does the Defense Logistics Agency have 25 percent more 
facilities than you currently need?
    Answer. With the DOD force structure review not completed yet, it 
would be premature to speculate whether the Defense Logistics Agency 
(DLA) has excess infrastructure at this point. While DLA's 
infrastructure is a very small percentage of the Department's overall 
inventory, it will be aligned with the pending force structure review 
in the next BRAC round to meet mission requirements.

                            MILCON PROJECTS

    Question. Mr. Baillie, are you deferring military construction 
projects because of a pending brac round in 2005?
    Answer. No, the Defense Logistics Agency has not deferred any 
projects because of BRAC 2005 considerations. For the most part, our 
fiscal year 2003 MILCON program will provide or replace essential fuel 
storage and distribution facilities requested by the combatant commands 
and Military Services.
                         Department of the Army

STATEMENT OF HON. MARIO P. FIORI, ASSISTANT SECRETARY 
            OF THE ARMY (INSTALLATION ENVIRONMENT)
ACCOMPANIED BY:
        MAJOR GENERAL ROBERT L. VAN ANTWERP, JR., ASSISTANT CHIEF OF 
            STAFF FOR INSTALLATION MANAGEMENT
        MAJOR GENERAL JAMES R. HELMLY, COMMANDER, 78TH DIVISION 
            (TRAINING SUPPORT), U.S. ARMY RESERVE
        BRIGADIER GENERAL MICHAEL J. SQUIER, DEPUTY DIRECTOR, ARMY 
            NATIONAL GUARD
    Senator Feinstein. Now, the next panel.
    Welcome, gentlemen. I am very pleased to welcome the panel, 
Hon. Mario Fiori, the Assistant Secretary of the Army for 
Installations and Environment, Major General Robert Van 
Antwerp, Assistant Chief of Staff for Installation Management, 
Major General James Helmly, United States Army Reserve, and 
Brigadier General Michael Squier, Deputy Director, Army 
National Guard.
    Gentlemen, I think you heard my puzzlement over the cuts 
that you each have achieved and how you are going to be able to 
sustain those cuts and still provide the kind of services and 
personnel that you are going to be requested and required to 
provide, so why don't we begin with Dr. Fiori, and perhaps as 
you put your remarks into the record you might deal with these 
very large cuts.

                    STATEMENT OF HON. MARIO P. FIORI

    Dr. Fiori. Thank you, Madam Chairman, Senator Hutchison. I 
am pleased to appear before you with Major General Van Antwerp, 
Generals Helmly and Squier, to discuss our fiscal year 2003 
Military Construction budget. We have provided a detailed 
written statement for the record, but I want to comment briefly 
on the highlights of our program.
    The Army has many challenges in front of it. Our goal is to 
ensure that all our garrisons throughout the world have an 
equal and outstanding level of service for our soldiers and 
their families. As I visited selected Army installations, I 
have observed the progress that has already been made, and I 
attribute much of the success directly to the longstanding 
support of this committee and your staff.
    The Army's overall budget request for fiscal year 2003 
supports he Army vision--people, readiness, and 
transformation--and the strategic guidance to transform to a 
full spectrum force while ensuring the war fighting readiness. 
It reflects a balanced base program that will allow he Army to 
remain trained and ready throughout fiscal year 2003 while 
ensuring we fulfill our critical role in the global war on 
terrorism.
    Our military construction budget request is $3.2 billion, 
and will fund our highest priority facilities and family 
housing requirements. In fiscal year 2002 we presented a budget 
that was a down payment on our goal to better support our 
infrastructure. When we developed this year's budget, in light 
of the events that took place last year, we had some very 
difficult decisions to make. The need to fund our military pay 
raises, Army transformation, OPTEMPO, the war on terrorism, 
increases in health care, and other key programs were all 
included in the decisions leading to our request. Thus, the 
Army budget provides the best balance between all of our 
programs, including military construction.
    A few critical areas in the military construction request 
include the Army Transformation at Fort Lewis, Fort Wainwright, 
and Fort Polk. We have eight projects for $195 million included 
in the program to ensure that the transformation continues to 
progress as envisioned by our leadership.
    Our Army family housing is a success this year. We are now 
on target to eliminate inadequate family housing through 
construction or privatization by 2007. Our budget includes $180 
million for the Residential Communities Initiative to continue 
acquisition and transition of the 11 installations currently 
underway, and 7 new installations for a total of 50,000 housing 
units. RCI is a great success story. I visited Fort Carson on 
February 25th and am delighted to report that the RCI program 
there is 3 months ahead of schedule. There are 338 new units 
that are occupied, 500 units renovated, and we are getting new 
units on line at 20 per month, and 40 renovated units per 
month, for a total of 2,600 units. So in fact at Fort Carson we 
will be completed by year 2004.
    The combination of privatization and construction will meet 
our goal of fixing family housing 3 years earlier than was 
reported last year. A portion of our military construction, 
Army, and our family housing construction program this year is 
dedicated to overseas construction. Seventy-five percent of the 
overseas military construction request will be used to provide 
better barracks for almost 3,000 soldiers, mainly in Europe and 
Korea. We are also constructing new facilities to support the 
Efficient Basing, East initiative in Germany, which will 
consolidate 13 smaller installations into a single installation 
at Grafenwoehr.
    Two projects in our request will finalize the Army's 
construction requirements for Efficient Basing, South 
initiative in Italy, which will station a second airborne 
infantry battalion at Vincenza. Each project is vital to 
maintaining a suitable working and living environment for our 
soldiers and families overseas.
    At the end of fiscal year 2003, we will have 106,000 of our 
permanent party single soldiers, 77 percent of our goal for 
barracks modernization will be funded. Our strategic mobility 
program will be 100-percent funded. We will have completed all 
base closures and realignments, and will concentrate this year 
on the final phases of disposal of these properties.
    The Army National Guard anticipates that 30 of 32 weapons 
of mass destruction/civil support team facilities will be 
initiated. Our sustainment, restoration and modernization 
request is $2.4 billion, which provides 92 percent of our 
requirements.
    I want to conclude by telling you about one of the most 
important initiatives in the facilities area, the way in which 
The Army manages installations. Last year, the Secretary of the 
Army approved the concept of centralized installation 
management through a regional alignment. We will implement this 
new management structure, called TIM, or transformation of 
installation management, on 1 October, 2002. A top-down 
regional alignment creates a corporate structure with the sole 
focus on efficient and effective management of all our 
installations. It frees up our mission commanders to 
concentrate on readiness. They will still have an influence on 
the important installation decisions, but not the day-to-day 
headaches. We believe centralized management will also enhance 
our ability to integrate the Active and Reserve components, and 
to develop multi-functional installations to support the 
evolving transformation force structure.
    In closing, Madam Chairman, I look forward to continuing 
our work in taking care of our soldiers and their families. 
Thank you.
    [The statement follows:]

                Prepared Statement of Dr. Mario P. Fiori

    Madam Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Active Army and Reserve Components' 
military construction request for fiscal year 2003. This request 
includes initiatives of considerable importance to America's Army, as 
well as this committee, and we appreciate the opportunity to report on 
them to you.
    This budget provides resources in our construction and family 
housing programs essential to support The Army's role in our National 
Military Strategy. It supports The Army's Vision and Transformation 
strategy.
    The program presented herein requests fiscal year 2003 
appropriations and authorizations of appropriations of $1,476,521,000 
for Military Construction, Army (MCA); $1,405,620,000 for Army Family 
Housing (AFH); $101,595,000 for Military Construction, Army National 
Guard (MCNG); $58,779,000 for Military Construction, Army Reserve 
(MCAR). There is no request this year for the Homeowners Assistance 
Fund, Defense.
    At the turn of the century, The Army published its Vision--People, 
Readiness, and Transformation--that defined how we meet the Nation's 
military requirements today and into the future. We started the arduous 
task of self-transformation that will allow us to continue to dominate 
conventional battlefields but also provide the ability to deter and 
defeat adversaries who rely on surprise, deception and asymmetric 
warfare to achieve their objectives.
    Army Transformation was already well under way when the attacks on 
September 11, 2001, provided a new urgency to our efforts. By 
accelerating Transformation, we will provide additional capabilities to 
the warfighting CINCs, enabling them to assure allies and friends; 
dissuade future military competition; deter any threats; and, if 
necessary, defeat any adversary.
    To meet the challenges of accelerating transformation and carrying 
out today's missions at home and abroad, 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, both 
Active and Reserve Component, must fully support our war fighting 
needs, while providing soldiers and their families with a quality of 
life that equals that of their peers in civilian communities.
    To support the transformation of our installations, the Secretary 
of the Army has approved the concept of centralized installation 
management through a regional alignment. The implementation date of the 
new management structure is October 1, 2002.
    The regional alignment creates a corporate structure with a sole 
focus on efficient and effective management of installations. Mission 
commanders can concentrate on readiness but still influence critical 
issues through the rating chain for Garrison Commanders and membership 
on the Installation Board of Directors.
    This approach will ensure standard and equitable delivery of 
services from installation to installation. It will also ensure that 
all tenants, including the Reserve Components, are treated equally. It 
enables the Army to resource to standards.
    The future will increasingly trend toward multi-functional 
installations. Supporting transformation, geographic-based regions 
provide the maximum flexibility for the future. In the end, it will 
allow improved facilities provided to soldiers and their families and 
better permit us to implement our facilities strategy.

                          FACILITIES STRATEGY

    The Army's Facilities Strategy (AFS) is the centerpiece of our 
efforts to fix the current state of Army facilities over 20 years. It 
addresses our long-term need to sustain and modernize Army-funded 
facilities in both Active and Reserve Components by framing our 
requirements for both sustainment, restoration and modernization (SRM) 
and military construction (MILCON) funding. The AFS addresses 
sustainment, recapitalization, quality and quantity improvements, and 
new mission requirements so that The Army will have adequate facilities 
to support our 21st Century missions. 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 sustainment funding, which comes 
from the Operation and Maintenance (O&M) SRM accounts, has greatly 
improved thanks to the support from Congress. We are funded at over 90 
percent of our requirements in fiscal year 2003. This level of funding 
may be sufficient to prevent further deterioration of Army facilities. 
Our current C-3 conditions are a result of years of underfunding. We 
must have sufficient O&M 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 buy down the SRM backlog, we will centrally 
manage resources towards focused investments. This capital investment 
requirement will primarily require MILCON funding, supplemented by O&M 
SRM project funding. Our goal is to raise Army facilities from current 
C-3 ratings to C-2 by the end of 2010 by bringing a focused set of 
facilities to C-1 during that timeframe. Also, we plan to eliminate 
facility shortfalls where they exist over the entire 20-year strategy. 
These shortfalls are a result of facilities modernization not keeping 
pace with our weapons modernization and supporting force structure.
    We are basing the initial focused set of facilities on Commanders' 
ratings in our Installation Status Report. The facilities we chose 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 (O&M SRM) and the capital investment (MILCON and O&M SRM) 
pieces be funded as a single, integrated program.
    The third (recapitalization) and fourth (new mission) pillars of 
our strategy address improving recapitalization of our facilities to a 
67-year cycle and ensuring adequate facilities keep pace with future 
force structure changes and weapons modernization programs (such as 
transformation). These four pillars will enable us 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 
our policy of eliminating excess facilities throughout the entire Army 
to allow us to use our limited resources where they have the most 
impact. During fiscal years 1988-2003, our footprint 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 also expanding the 
privatization of military family housing in an effort to provide 
quality residential communities for soldiers and their families.

                   MILITARY CONSTRUCTION, ARMY (MCA)

    This year's MCA program focuses on six major categories of 
projects: mission facilities, transformation, well-being, efficient 
basing, installation support, and chemical demilitarization. I will 
explain each area in turn.

                           MISSION FACILITIES

    In fiscal year 2003, there are 10 mission facility projects to 
ensure The Army is deployable, trained, and ready to respond to meet 
its national security mission. Projects in this program conclude the 
successful Army 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 six mobility projects in our 
fiscal year 2003 budget request 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 started in the early 1990's to upgrade 
our strategic mobility infrastructure, enabling The Army to maintain 
the best possible power projection platforms. We are requesting $53.6 
million. The fiscal year 2003 projects will complete the Strategic 
Mobility program. A follow-on program, Army Power Projection Program 
(AP3) is being implemented as a result of changes in force structure 
and stationing.
    The six projects in our request include improving our deployment 
capability by upgrading a deployment facility at Fort Stewart, Georgia; 
constructing a truck loading/unloading facility at Fort Carson, 
Colorado; and providing ammunition storage/outloading facility 
improvements at Anniston Army Depot, Alabama, Blue Grass Army Depot, 
Kentucky, and Letterkenny Army Depot, Pennsylvania. In addition, to 
improving fuel storage, we plan to consolidate multiple fuel points at 
Fort Bragg, North Carolina, into one modern facility.
    Training and Readiness.--To improve soldier training, we are 
requesting $23.8 million to construct four training and readiness 
projects. Our request includes a Modified Record Fire Range at 
Darmstadt, Germany, and a live fire Shoot House at Fort Drum, New York. 
These ranges will provide our soldiers with realistic, state-of-the-art 
marksmanship training. We are also requesting a Military Operations in 
Urban Terrain (MOUT) Urban Assault Course at Fort Benning, Georgia, 
that will provide realistic urban combat training necessary for many 
scenarios in today's environment. A Tactical Vehicle Simulator facility 
at Fort Leonard Wood, Missouri, is requested to train new motor 
transport operators with our new vehicle simulators.

                             TRANSFORMATION

    Our budget contains $194.9 million for eight projects at three 
installations, Fort Lewis, Washington; Fort Wainwright, Alaska; and 
Fort Polk, Louisiana, that support the deployment, training, unit 
operations, and equipment maintenance and motor pool facilities of the 
Interim Brigade Combat Team (IBCT) new transformed force. These 
projects include one maintenance facility for new vehicles, three 
ranges, a Military Operations in Urban Terrain (MOUT) facility, a 
Battle Simulator Center and a Mission Support Training Facility to 
ensure our forces are properly trained, and a Battalion Headquarters/
Company Operations Facility to provide a command and control facility 
for the increased unit size. We will continue to identify and validate 
additional requirements associated with transformation and will include 
these projects in future budgets.

                         EFFICIENT BASING, EAST

    The Army is requesting the first year of a five-year plan to 
support the Efficient Basing, East, initiative in Germany. The 
initiative will move a Brigade Combat Team to Grafenwoehr from 13 
smaller installations over a five-year time frame. This year's budget 
requests three projects at Grafenwoehr totaling $69.9 million. Army 
construction for the entire initiative is expected to cost $596 
million. The three projects in this year's budget will complete the 
site preparation for the brigade, construct infrastructure to and 
around the brigade complex, and renovate existing barracks to the 
current Army standard. These projects will support the Brigade 
headquarters element.

                          WELL BEING PROJECTS

    Fifty-four percent of our MCA budget is dedicated to providing for 
the well being of our soldiers, their families, and civilians. Although 
our first priority is to move permanent party soldiers out of gang-
latrine type barracks, we are also requesting Phase II of the Basic 
Combat Trainee barracks project at Fort Jackson, South Carolina, that 
was authorized in fiscal year 2002. We are also requesting two child 
development centers, one physical fitness center, and the expansion of 
a community support center. These projects will improve not only the 
well being of our soldiers and families, but also the readiness of The 
Army. We are requesting $796.8 million for well being projects this 
year.
    Whole Barracks Renewal 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. The new complexes provide 
increased personal privacy, 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, 77 percent of our barracks requirement will be funded at the 
new standard for our permanent party soldiers. Between fiscal years 
2004 and 2009, we plan to invest an additional $4.0 billion in MCA and 
host nation funds, supplemented by $400 million in SRM funding to 
achieve our goal of providing improved living conditions for all of our 
single soldiers by fiscal year 2009. 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 having been historically funded at lower levels than 
installations in the United States. A large portion of the remaining 
modernization effort, 41 percent, is in these overseas areas.
    In fiscal year 2003, we are planning 21 barracks projects. This 
includes 4 projects in Europe and 5 projects in Korea. The 
installations with the largest investment are Fort Bragg, North 
Carolina, with $100 million (2 projects), and Schofield Barracks, 
Hawaii, with $91 million (2 projects). Large soldier populations and 
poor barracks conditions require sustained high investment through 
fiscal year 2008 at both of these installations to provide quality 
housing. We are completing a complex at Fort Carson, Colorado, which 
was authorized in fiscal year 2002; and we are continuing second phases 
at Fort Lewis, Washington, and Fort Richardson, Alaska, which were also 
fully authorized in fiscal year 2002. At Fort Campbell, Kentucky, we 
are requesting authorization for all phases of a multi-phase barracks 
complex; however, we are only requesting the appropriation needed for 
the fiscal year 2003 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. Barracks projects are also requested for Fort Hood, Texas; 
Fort Riley, Kansas; Fort Benning, Georgia; and Fort Detrick, Maryland.
    Basic Combat Training Complexes.--We are requesting Phase 2 to 
complete the Basic Combat Training complex at Fort Jackson, South 
Carolina, that was authorized in fiscal year 2002. This project will 
provide 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.
    Community facilities.--Our budget request includes two new child 
development centers to replace failing or inadequate facilities in 
Bamberg, Germany, and Vicenza, Italy. To improve soldier physical 
fitness and community wellness, our budget includes a physical fitness 
training center at Camp Castle, Korea. The expansion of a Community 
Support Center at Fort Detrick, Maryland, is also included in our 
request.

                     INSTALLATION SUPPORT PROGRAMS

    This category of construction projects provides vital support to 
installations and helps improve their readiness capabilities. We are 
requesting one project for a Centralized Wash Facility at Schweinfurt, 
Germany, $2 million. A classified project is also requested at $4 
million.

                      AMMUNITION DEMILITARIZATION

    The Ammunition Demilitarization (Chemical Demilitarization) Program 
is designed to destroy the U.S. inventory of lethal chemical agents, 
munitions, and related (non-stockpile) 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 $167.6 million in The Army's fiscal year 2003 
budget to continue the Chemical Demilitarization projects previously 
authorized, and a Non-Stockpile Chemical Munitions Facility at Pine 
Bluff, Arkansas. Table 1 summarizes our request:

                       TABLE 1.--FISCAL YEAR 2003
                              [In dollars]
------------------------------------------------------------------------
          Installation                    Type               Amount
------------------------------------------------------------------------
Aberdeen PG, MD.................  Ammun Demil                $30,600,000
                                   Facility, Phase V.
Blue Grass AD, KY...............  Ammun Demil                 10,300,000
                                   Facility, Phase
                                   III.
Blue Grass AD, KY...............  Support Facility,            8,300,000
                                   Phase III.
Newport AD, IN..................  Ammun Demil                 61,494,000
                                   Facility, Phase V.
Pine Bluff AD, AR...............  Non-Stockpile               18,937,000
                                   Munitions Facility.
Pueblo AD, CO...................  Ammun Demil                 38,000,000
                                   Facility, Phase IV.
                                                      ------------------
      Total.....................  ...................        167,631,000
------------------------------------------------------------------------

    The destruction of the U.S. stockpile of chemical weapons is a 
major priority of The Army, DOD and the Administration. These chemical 
weapons must be destroyed to reduce the risk to the stockpile storage 
communities and eliminate these weapons as potential terrorist targets. 
The MILCON funding for the chemical weapons facilities is essential to 
achieving this goal.

           PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

    The fiscal year 2003 MCA budget includes $119.8 million for 
planning and design. The fiscal year 2003 request is a function of the 
construction programs for three fiscal years: 2003, 2004, and 2005. The 
requested amount will be used to design-build a portion of the fiscal 
year 2003 program, complete design in fiscal year 2004, and initiate 
design of fiscal year 2005 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 
$36 worth of Host Nation Construction. The fiscal year 2003 budget 
request for $23.7 million will provide oversight for approximately $850 
million of construction in Japan, Korea, and Europe.
    The fiscal year 2003 budget also contains $20.5 million for 
unspecified minor construction.

                          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 as of January 2, 
2002, the out-of-pocket expenses for soldiers living off post were 
approximately 11.3 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 by 2005. 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 family housing 
improvements 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 2007 to provide adequate housing to all military 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 the 
Congress in 1996 and extended to December 31, 2012 to implement an 
aggressive program to create modern residential communities in the 
United States. The Army is leveraging appropriated funds and government 
assets by entering into long-term partnerships with private sector real 
estate development and management firms to obtain financing and 
management expertise to construct, repair, maintain, and operate Army 
family housing communities.
    The RCI program includes projects at Fort Carson, Colorado; Fort 
Hood, Texas; Fort Lewis, Washington; and Fort Meade, Maryland. Fort 
Carson transitioned to privatized operations in November 1999, and Fort 
Hood transitioned in October 2001. Forts Lewis and Meade are expected 
to transition by mid-2002. The projects include over 15,000 housing 
units. Army families have already moved into new and renovated housing 
at Fort Carson and our experience to date has been very positive.
    The program is expanding to 20 additional privatization projects 
between fiscal years 2002 and 2004. These projects will privatize more 
than 48,000 additional housing units. Using funds appropriated in 
fiscal year 2002, The Army kicked-off nine projects. The 2003 budget 
request will continue to expand the program, adding five projects 
covering seven installations (Fort Polk, Louisiana; Fort Belvoir, 
Virginia; Forts Eustis and Story, Virginia; Fort Leonard Wood, 
Missouri; and Fort Shafter and Schofield Barracks, Hawaii).
    The Army is using the development partners' experience and 
resources, and market-based incentives, to bring about dramatic 
improvements in the Army family housing and the quality of life for 
soldiers and their families.
    Our fiscal year 2003 request for Army Family Housing is 
$1,405,620,000. Table 2 summarizes each of the categories of the Army 
Family Housing program.

             TABLE 2.--ARMY FAMILY HOUSING--FISCAL YEAR 2003
------------------------------------------------------------------------
                Facility category                   Dollars     Percent
------------------------------------------------------------------------
New Construction................................       27,942          2
Post Acquisition Const..........................      239,751         17
Planning and Design.............................       15,653          1
Operations......................................      183,408         13
Utilities.......................................      212,432         15
Maintenance.....................................      485,257         35
Leasing.........................................      215,251         15
Privatization...................................       25,926          2
                                                 -----------------------
      Total.....................................    1,405,620        100
------------------------------------------------------------------------

                      FAMILY HOUSING CONSTRUCTION

    The total fiscal year 2003 request for construction is 
$283,346,000. 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 2007 goal by providing units that meet current construction 
and adequacy standards.
    New Construction.--The fiscal year 2003 new construction program 
provides WNR projects at four locations. Replacement construction 
provides adequate facilities where there is a continuing requirement 
for the housing and it is not economical to renovate. 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 2003, we are requesting funds for improvements 
to 18,314 existing units at 9 locations in the United States, including 
privatization at 7 installations; 7 locations in Europe; and 1 site in 
Korea. Included within the scope of these projects are efforts to 
improve supporting infrastructure and energy conservation.

               FAMILY HOUSING OPERATIONS AND MAINTENANCE

    The operations, utilities, maintenance, and leasing programs 
comprise the majority of the fiscal year 2002 2003 request. The 
requested amount of $1,122,274,000 for fiscal year 2003 is 
approximately 80 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.

                         FAMILY HOUSING LEASING

    The leasing program provides another way of adequately housing our 
military families. We are requesting $215,251,000 in fiscal year 2003 
to fund existing Section 2835 project requirements, temporary domestic 
leases in the United States, and approximately 8,600 units overseas.

           MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

    The Army National Guard's (ARNG) focus is on two categories of 
projects: transformation and mission.
Transformation
    This year we continue converting twelve brigades and two division 
slices to support the Army Division Redesign Study (ADRS). The ADRS is 
a high priority for this budget. Eight facilities will be constructed 
or converted to house the ARNG's Combat Support/Combat Service Support 
structure. We are requesting $26.8 million for this transformation for 
facilities in Alabama and North Carolina and two projects each in 
California, Kansas, and Nebraska.
Mission
    In fiscal year 2003, the ARNG has requested $55.2 million for five 
mission projects. Two projects are in Wisconsin and will replace part 
of the existing United States Property and Fiscal Office complex made 
up of 23 buildings, ranging in year built from 1895 to 1980. These new 
facilities will permit all personnel to perform the necessary tasks 
that will improve their own readiness as well as provide fiscal and 
logistical support for the entire Wisconsin Army and Air National 
Guard.
    The first phase of a project for administrative buildings at 
Barbers Point, Hawaii is also included. These units are currently 
stationed in the Diamond Head State Monument area, in older, pre-World 
War II facilities. The renovation of an existing building at Barbers 
Point will help with the Diamond Head State Monument Plan, allowing the 
Monument area to revert back to a semi-wilderness condition.
    As part of The Army's Facility Strategy, we are requesting a 
Readiness Center at Summersville, West Virginia, and phase one of a 
joint facility with the Marine Corps Reserve and the Kansas Counterdrug 
Office at Topeka, Kansas.

           PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

    The ARNG's fiscal year 2003 budget request contains $14.7 million 
for planning and design and $4.9 million for unspecified minor 
construction.

               MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)

    The fiscal year 2003 MCAR budget focuses on mission facilities that 
support the Army Reserve's mission of providing trained and ready unit 
and individuals to mobilize and deploy in support of the National 
Military Strategy.

                           MISSION FACILITIES

    In fiscal year 2003, there are seven mission facility projects in 
the Army Reserve's Military Construction program. These projects 
provide four Army Reserve Centers (Lincoln, Nebraska; Oswego, New York; 
Grand Prairie, Texas; and Fort Story, Virginia); four maintenance 
facilities (Mare Island, California; Lincoln, Nebraska; Grand Prairie, 
Texas; and Fort Story, Virginia); a battalion-size dining facility at 
Fort McCoy, Wisconsin; and an alteration to an Army Reserve training 
facility at Fort Bragg, North Carolina.

           PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

    The fiscal year 2003 MCAR budget includes $6.965 million for 
planning and design and $2.85 million for unspecified minor 
construction.

            SUSTAINMENT, RESTORATION AND MODERNIZATION (SRM)

    In addition to Military Construction and Family Housing, the third 
area in the facilities arena is the O&M SRM program. O&M SRM is the 
primary account in the 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.
    O&M 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 
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 O&M SRM program, there are two areas to highlight: (1) 
our Barracks Upgrade Program (BUP) and (2) the Long Range Utilities 
Strategy. The first area is our BUP program, which is the major 
renovation and restoration of existing barracks and an integral part of 
the Barracks Modernization program's goal to eliminate gang-latrine 
barracks by 2008. However, due to the reallocation of central funding 
of the BUP program in fiscal year 2002, we will now complete the 
program in 2009. At the completion of the fiscal year 2003 program, as 
requested, we will have funded, with MILCON and BUP, adequate housing 
to meet or approximate the DOD 1+1 barracks standard for 77 percent of 
our soldiers. The fiscal year 2004-2008 Military Construction program 
will provide barracks for another 18 percent of eligible soldiers. We 
will use O&M SRM resources to renovate barracks to an approximate DOD 
1+1 standard for the remaining 5 percent of eligible soldiers. We are 
committing an average of about $120 million per year in O&M SRM to 
continue the efforts to upgrade housing for our single soldiers.
    The second area to highlight within the O&M 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 natural 
gas system at Fort Benning, and the water and waste water systems at 
Presidio of Monterey. Of the 320 Army systems available for 
privatization since 1998, 24 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 $188 million in utility modernization 
projects in fiscal years 1998 through 2001 and we plan to accomplish 
$83 million in additional projects in fiscal year 2002 to complete the 
program. 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 92 percent of the OMA, OMNG and OMAR 
requirement in fiscal year 2003. 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 (ISR) shows Army facilities are 
rated C-3 (not fully mission capable) due to years of under-funding. At 
the end of fiscal year 2001, the ISR for The Army showed 28 percent of 
our facilities were ``red''--mission failure; 42 percent were 
``amber''--mission degraded; and only 30 percent were ``green''--
mission supported.

                  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 military 
installations at or near where they are serving or employed are ordered 
to be closed or the scope of operations reduced. For fiscal year 2003, 
there is no request for appropriations and authorization of 
appropriations. Requirements for the program will be funded from prior 
year carryover and revenue from sale of homes. Assistance will be 
continued for personnel at 7 installations that are impacted with 
either a base closure or a realignment of personnel, resulting in 
adverse economic effects on local communities.

                  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 2003, we are 
requesting appropriations and authorization of appropriations of $149.9 
million. This budget represents the Army's budget required to continue 
unexploded ordnance (UXO) removal, environmental restoration and 
property management of those facilities not yet disposed from the first 
four rounds of BRAC. In fiscal year 2001, the Army began saving $945 
million annually upon completion of the 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. The 
Army supports the need to close and realign additional facilities and 
we appreciate the Congress' authority to have an additional round in 
fiscal year 2005.
    The Army is now in the first year of exclusively care taking and 
completing the remaining environmental restoration activities at BRAC 
installations. The Army implemented innovative approaches to 
environmental restoration at BRAC sites in fiscal year 2001, which will 
support the early transfer of several properties. The Army will 
continue to support early property transfers in fiscal year 2002 and 
beyond and requests $149,878,000 in fiscal year 2003 to continue this 
important work. These funds allow us to properly care take these 
properties and to continue environmental and ordnance removal efforts 
that will facilitate economic revitalization and will render these 
properties safe. Our efforts will make 24,854 acres of property 
available for reuse in fiscal year 2002 and complete restoration 
activities at 7 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.
    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. Your support of 
our Efficient Basing, East, military construction project will allow us 
to continue reducing the number of installations in Europe. In Korea, 
the number of installations is dropping 20 percent. The total number of 
Army overseas sites announced for closure or partial closure since 
January 1990 is 680. Additional announcements will occur until the base 
structure matches the force identified to meet U.S. commitments.
    The significant challenges posed by the removal of unexploded 
ordnance, the remediation of groundwater, and the interface of a 
variety of regulatory authorities continue to hinder the disposal of 
property. A number of innovative approaches for environmental 
restoration were recently developed in an effort by the Army to 
expedite the transfer of property, while ensuring the protection of 
human health and the environment. Two innovative mechanisms are being 
utilized to complete environmental restoration efforts: Guaranteed/
Fixed Price Remediation (G/FPR) Contracts and Environmental Services 
Cooperative Agreements (ESCA). A G/FPR Contract obligates BRAC funds 
necessary for regulatory closure of specified restoration activities. 
The Army retains responsibility for completion of the environmental 
restoration, overseeing the contractor and ensuring that regulatory 
closure of the property is obtained. An ESCA is a different mechanism, 
authorized under the environmental restoration program that obligates 
Army BRAC funds and apportions some amount of liability to a 
governmental entity representing the reuse interests of the particular 
BRAC installation, in exchange for specific environmental restoration 
services outlined in the ESCA.
    We remain committed to promoting economic redevelopment at our BRAC 
installations. We are supporting early reuse of properties through 
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 leasing options approved 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.
    The BRAC process has proven to be a 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 2003.

                        FISCAL YEAR 2003 SUMMARY

    Mr. Chairman, our fiscal year 2003 budget is a balanced 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 initiates privatization at seven 
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 2003 request for the Active Army is for 
appropriations and authorization of appropriations of $2,882,141,000 
for Military Construction, Army and Army Family Housing.
    The request for appropriations and authorization of appropriations 
is $101,595,000 for Military Construction, Army National Guard and 
$58,779,000 million for the Military Construction, Army Reserve.
    Madam Chairman, this concludes my statement. Thank you.

    Senator Feinstein. Thank you very much. Dr. Fiori, I am 
told that the three military gentlemen are not here to make 
speeches but to answer questions. Is that correct, Dr. Fiori?
    Dr. Fiori. Yes, ma'am.

                           LOW MILCON BUDGET

    Senator Feinstein. So we will proceed with the questions. 
Let me begin with you, General Van Antwerp. The Army's MILCON 
budget request is 15-percent cut from last year's funding 
level. I would like to ask you the same question I asked Mr. 
Zakheim. Is this budget request adequate to meet all your 
MILCON needs for fiscal year 2003?
    General Van Antwerp. Ma'am, I will start out by saying 
first of all this MILCON funds 38 percent of our requirement, 
so there is a lot of the requirement that is not funded here. 
We had to make budget tradeoffs, of course, to decide what were 
the priorities, so we funded along priority lines.
    We did keep our barracks, permanent party barracks, which 
is the Army's top priority, funded at 100 percent, and we kept 
our strategic mobility projects, which provides the ability for 
our forces to deploy from their bases at 100 percent, so we 
took the cut in the other revitalization areas, so if we ask, 
did we get everything that absolutely we want and need, no, but 
we have funded our highest priority, to answer your question.
    The comments you made about the services and personnel on 
the installation, we fund the services and personnel out of the 
base ops account, which is the O&MA account, rather than the 
MILCON account, so whether MILCON is up or down, it does not 
impact the people as much as it does when you have a 
substandard facility that you really cannot do the mission in. 
That is when you do the upgrade or a new facility.
    Senator Feinstein. But you are saying you could live with 
this budget and that the MILCON is adequate to maintain 
readiness and quality of life?
    General Van Antwerp. Well, we would live with it. I will 
tell you that our facilities are at what we call C-3, as 
opposed to our units at C-1, C-1 being fully mission-capable, 
C-3 being marginally mission-capable, and so our facilities 
with this budget will remain at the marginally mission-capable 
level.
    Dr. Fiori. That is with the exception of the housing, which 
we will get into C-1 by 2007.
    Senator Feinstein. And you would say the same for the Guard 
and the Reserve, right?
    General Van Antwerp. Yes, ma'am. I can let them speak.
    Senator Feinstein. Perhaps they would speak for themselves, 
then. Gentlemen, you heard the question. Would you like me to 
repeat it?
    General Helmly. Ma'am, I would ask you to repeat it, if you 
would.
    Senator Feinstein. My question is that you have had a 
substantial cut in MILCON, and I would like to ask whether the 
cut is such that you can continue to operate effectively, that 
neither readiness nor quality of life will be affected by it.
    General Helmly. Yes, ma'am. In the near term, I will say 
that for the Army Reserve it will not be affected negatively. 
Our Sustainment and Restoration and Modernization funding, SRM, 
as was mentioned by Dr. Fiori, is adequate, and that provides 
the near-term sustainment for the facilities. MILCON obviously 
is longer-range, as this committee well knows. Our MILCON is 
definitely down from $111 million requested last year to $58.9 
million requested this year.
    I would only note that last year--we have all alluded to 
the events of 11 September. Last year was the first year that I 
believe you would see that all of us were beginning to encroach 
upon, to use that negative word, the negative funding we had 
seen for years. We requested in the Army Reserve $111 million, 
and this committee with the help of the Congress appropriated 
$165 million.
    We were on the road to requesting the same kinds of amounts 
again, but the events of 11 September precipitously changed 
that. Our focus, as previous witnesses have stated, changed 
materially. It is decidedly, this moment, on operations, 
readiness for near-term operations, so it was with the 
understanding of our leadership that we took this precipitous 
reduction.
    I would note again, that reduction is in longer-term 
MILCON. Short-term we are adequately funded at 91 percent of 
our SRM budget. We do not like the cut, but it is something 
that we are quite willing to live with, given our priorities in 
the Nation and in turn in the Armed Forces and in the Army 
Reserve today.
    Senator Feinstein. Thank you. General Squier, would you 
like to comment?
    General Squier. Madam Chairman, of course I would like to 
make some comments in support of the issues that we bring to 
the table.
    Senator Feinstein. General, could you move the mike over 
and speak directly into it?
    General Squier. As General Van Antwerp and General Helmly 
have already alluded to, this is a tough issue for us, to 
balance our competing requirements for readiness, especially 
since the things that have evolved since 9/11. There are a lot 
of competing interests. Yes, the long-term recapitalization 
program that we worked with the Army is on target for what we 
can afford right now. For the long-range plan, and given the 
sustainment dollars, we have been able to program in the 
interim.
    Would we like more money? Of course we would, but we will 
work that issue harder with the Army for the future, on our 
road to the future.
    Senator Feinstein. I guess what concerns me, because 
everybody seems so happy with what they have, that we will 
begin to get phone calls from commanders and others saying, you 
know, we cannot possibly live with this, you have got to help 
us, and of course we will want to do it, and many people 
believe that that is the game that is played in this 
institution with this particular budget, that they really look 
at the Congress to kind of plus it up after it has been 
requested, and I guess what I am saying is, that very well 
might not happen this year.
    If you are all happy with it and you are coming before us 
and saying this meets our short-term needs, and there are other 
things that are more important, and we are going to be fine 
with this level of funding, that is a signal to me, and I think 
even to the Ranking Member, to hold firm at this number.
    Dr. Fiori. We have looked at the budget, and I was 
fortunate to be pretty much at the front end of the budget 
process this year. We weighed all the different items that 
affected our budget, and as General Van Antwerp said, our 
budget took care of the most important construction issues--
barracks, strategic mobility, and transformation. We gave 70-
percent to the Army National Guard Division Redesign program, 
and then what was remaining we split up among the components. 
None of our total requirements are going to be met, nor will 
they ever be met every year. These were balanced things we had 
to do to fund other things.
    The one thing we did do, of course, the Active Army, Army 
National Guard and Army Reserve, is to make sure our 
sustainment was going to be equal, and that is 92 percent. 
Ideally, obviously, if we could have afforded 100 percent, we 
would have done that. This is where we came out.

               EFFICIENT BASING, SOUTH--SCHOOL ENROLLMENT

    Senator Feinstein. Let me ask you one question. I was 
briefed last year by General Miggs regarding Efficient Basing 
South and the rationale for the development in Vincenza, Italy, 
and General Miggs emphasized the need for this initiative, 
which would move an additional battalion to Vincenza.
    Now, I understand the existing Vincenza Elementary High 
School cannot anticipate the anticipated enrollment increase, 
and I am just wondering what is going to happen long term, and 
then there is Grafenwoehr, which will cost $70 million this 
year and another $492 million in the future, and that does not 
include other things as well.

                         EFFICIENT BASING EAST

    Dr. Fiori. The quick lesson I learned from listening to the 
testimony is, I am going to check on the school and the 
Grafenwoehr project. I am going to ask General Van Antwerp to 
answer the question about Vincenza, since we are almost 
finished everything there. I certainly was not aware of the 
school issue, but the Grafenwoehr issue, we are doing another 
validation of our economic study to show why it makes both 
financial sense and also sense just for the soldiers for time 
away from home, all the other soldier issues, to get ourselves 
into one area, instead of 13 that we are in presently.
    We are also finding that Germany will contribute the 
housing. We are going to be leasing the housing from them. We 
are going to have some savings there, but we have an economic 
analysis, and we are reverifying it, and we will have that 
report in April.
    General Van Antwerp. The end of April.
    Dr. Fiori. So we are going to look at the financial aspect 
of it, and we will also look at the aspect of what OSD is 
providing in this. I just cannot answer that at the moment.
    Senator Feinstein. My time is up. Senator Hutchison.

                    FORT BLISS DESALINIZATION PLANT

    Senator Hutchison. I am going to ask a question first on a 
more local issue, and that is the issue of the desalinization 
plant at Fort Bliss. In the fiscal year 2002 military 
construction budget there was $2.8 million for the planning and 
design activities at that plant. As you know, there is a 
dwindling supply of potable water at Fort Bliss, and yet the 
Army has not yet executed any of those funds, and here we are 
in March. What is the hold-up?
    Dr. Fiori. I was briefed on this earlier, in the last few 
days, and we are looking at what is the status basically of the 
$2 million that was provided in the 2002 Defense Bill, it has 
been obviously earmarked for Fort Bliss in the funding letter 
to TRADOC, and the funds will be sent to TRADOC, or should have 
been sent by now. We have not defined the best methods of 
disposal of brine solution byproducts from desalinization, and 
this will help fund the reinjection of the brine back into the 
aquifer.
    There are pre-design studies that still have to be done, 
and my understanding is the Army cost for this co-venture is 
going to be $29 million. The total cost of the venture with the 
City will be $50.4 million.
    The $2 million will fund engineering studies required prior 
to design. The current estimated time to perform these 
engineering studies is going to be 12 to 18 months. The project 
will also require an environmental study that could take up to 
24 months, and this effort would cost $1\1/2\ million, which 
Fort Bliss has submitted to TRADOC for action during the 
midyear review process. It is premature to initiate any design 
work, and I think that may be the issue that appears to be 
slowing things down, before these engineering studies are 
completed.
    General, can you add anything to that?
    General Van Antwerp. We will be doing the studies, and then 
that will tell us what we need to do for the planning and 
design, but this first phase for the studies, we will be 
beginning those very shortly. The engineer district will get 
those funds probably in the next week or so to begin those 
studies.
    Senator Hutchison. Well, that did not sound like we are 
really on top of this. I would just ask you to go back and make 
this happen. It has been sitting there since October 1, and we 
would like to get going on it. It is very important. It is a 
joint effort with the City of El Paso, as you mentioned, and I 
think it is essential for Fort Bliss and essential--I think it 
cuts the cost by doing it in a joint venture. It is good for 
the city as well, but I just would like to see it not be 
delayed further.
    I mean, I know there is a lot of work to do, but the 
studies have been appropriated, so I think we should go 
forward.
    General Van Antwerp. Actually, ma'am, we did not get the 
money in order to be able to put our funding letter out, until 
very recently, to the field, so we did not have the money on 1 
October to do it. We just recently put the funding letter out, 
and it has now gone through TRADOC.
    Senator Hutchison. So it is imminent?
    General Van Antwerp. It is.
    Senator Hutchison. You do not see any further hold-up?
    General Van Antwerp. No.

                             REPROGRAMMINGS

    Senator Hutchison. Last question. The services normally 
will take excess funds as bill-payers to offset other MILCON 
projects. That, I think, has been the norm if it meets certain 
criteria, 25 percent or less, or less than $2 million, and it 
is my understanding that the services tried to do that in its 
normal course last year, reprogramming money saved from Korea 
to Fort Belvoir's fire station, and that was held up by the 
House Appropriations MILCON Congressman.
    I understand that now there has been, I do not know, a 
policy or an edict or something that says you cannot use money 
that is programmed for Korea or Germany to fund other projects. 
Is that the case, and what is happening there, and if it is the 
case, is that going to hurt your capability to fully utilize 
money where you need it most?
    Dr. Fiori. This has certainly been under discussion, of 
course, and I will let General Van Antwerp answer.
    General Van Antwerp. Ma'am, you are correct. When we were 
reprogramming for the ARVN Physical Development Center at West 
Point, we were looking at funds. We originally proposed $27 
million that we got from bid savings in Korea to reprogramming 
for that facility.
    We were requested by the House to not use those funds from 
Korea for that, but to keep those funds for other Korea 
projects, so what we did was go back and found other 
reprogramming sources where we could take a little bit from an 
awful lot of projects, and where we had bid savings and other 
things.
    Where it leaves us today is, we have very little money left 
if we cannot reprogram those dollars in other areas, if they 
are confined to Korea or Europe. I am not aware of the Europe 
restriction, but the Korea restriction right now is that we 
have no ability to use those funds anywhere else, so they are 
just sitting there right now. We have not used those funds.
    Senator Hutchison. Do you think that is hurting your 
capability to decide your priorities?
    General Van Antwerp. I think it does. We have needs to 
reallocate that money elsewhere, and we are not able to.
    Senator Hutchison. Thank you.

            WEAPONS OF MASS DESTRUCTION/CIVIL SUPPORT TEAMS

    Senator Feinstein. I have one last question for General 
Squier, if I might. General, I wanted to ask you about the WMD 
civil support teams that have gone from 20 to 32, and without 
going into the history of the funding, I think we are all 
hopeful that that will be completed in the coming year. Are the 
funds adequate to fund those 32 teams?
    General Squier. Ma'am, thanks for the question. We do have 
a shortfall in unspecified minor, making sure that we can stand 
up these last five teams that were announced this year. It will 
be about $3.5 million. That would help.
    Senator Feinstein. Another $3.5 million?
    General Squier. Yes, ma'am.
    Senator Feinstein. Okay, because I think that is a 
priority, I think, for us, to see that those teams are set up, 
and I am pleased you are telling me what it will take to do it, 
but if there was another $3.5 million, that would take care of 
32 teams in place when?
    General Squier. By the end of 2003.
    Senator Feinstein. The end of 2003?

                     ADDITIONAL COMMITTEE QUESTIONS

    General Squier. Yes, ma'am. Those last five teams were just 
announced this year. The first 27 are going to finish up this 
year in 2002, and there will be those last five stood up and 
completed by the end of 2003. $3.5 million in unspecified money 
will help us facilitate that.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted to Dr. Mario P. Fiori

            Questions Submitted by Senator Dianne Feinstein

                   UNITED STATES FORCES KOREA BRIDGE

    Question. Secretary Fiori, the US Forces Korea plans to construct a 
$7.9 million bridge linking its two military posts (main post and south 
post) in Yongsan in central Seoul. Understanding the convenience that 
is offered by this project, however, I am still concerned. Is it true 
that the land proposed for the building of this bridge is not in 
accordance with the Status of Forces Agreement (SOFA)? And, with plans 
to move Yongsan at a cost of nearly $10 billion, during the next 
decade, is a project of this magnitude justified?
    Answer. The project is being funded with construction funds 
provided by the Republic of Korea (Host Nation Funded Construction). 
This project is not for convenience, but to improve force protection 
and reduce the negative impact of our controlled access procedures on 
the city. There is no land required, only a right of way (easement). 
The SOFA provides for such requirements, and the SOFA Joint Committee 
set up by treaty to negotiate such actions is already engaged. The 
Republic of Korea government is providing the easement, and both the 
Korean Federal and Seoul city governments support the project. Our 
force protection requirements and controlled access, particularly 
during heightened threat conditions, cause a tremendous traffic problem 
for the city. This project will significantly reduce the impact on the 
city of our force protection requirements, and thus has their full 
support. There are no ``plans'' to move Yongsan garrison. There is an 
agreement from 1990 stating Yongsan will relocate (by 1996) and the 
Korean government will pay for it. This agreement has lain dormant for 
many years. Recently, the Korean government has expressed interest in 
revisiting the issue, but there is no agreed upon new location, no 
scope of work for the relocation, no designs, and no master plans. 
Should the Korean government decide to aggressively pursue the 
relocation, it will take years to accomplish. In the interim, the 
overpass will still help improve USFK force protection and reduce our 
impact on the city.

                   CHEMICAL DEMILITARIZATION PROGRAM

    Question. Dr. Fiori, the President's budget requests $168 million 
for the Defense Department's Chemical Demilitarization Program in 
fiscal year 2003. Yet, in an evaluation from the Office of Management 
and Budget accompanying the fiscal year 2003 budget, the program was 
rated ``ineffective'' because of a 60 percent cost increase estimate 
and delays stemming from ``unrealistic schedules, site safety and 
environmental concerns, and poor planning.'' That evaluation doesn't 
give me a lot confidence that the budget request is justified or will 
be well spent.
    Since it is the Army that administers that program, could you 
please comment on the budget evaluation and tell us what your 
department is doing to improve the chem-demil program?
    Answer. The Office of the Secretary of Defense (OSD) completed a 
major program review (September 2001) that resulted in the recognition 
that the prior stockpile destruction milestones would not be met. The 
current schedule approved by the Defense Acquisition Executive projects 
completion of disposal operations at six chemical stockpile sites 
between 2007 and 2011, and associated costs of $24 billion. Schedules 
for the Pueblo, CO, and Blue Grass, KY, sites will be published once 
the technology decisions are made, now projected for the 3rd Quarter, 
fiscal year 2002 and the 1st Quarter, fiscal year 2003, respectively. 
The revised program cost and schedules are based on operational 
experience obtained at the Johnston Island and Tooele, UT, chemical 
agents disposal facilities. Chemical agent destruction efforts at these 
sites were evaluated to develop realistic schedules for other 
incinerator sites. The significant cost drivers are revised processing 
rates; disposal facility operations extensions; stockpile conditions 
that affect processing rates (e.g., gelled chemical agent in rockets, 
frothing and solidification with mustard agent; and heavy metal 
contamination in ton containers); higher labor rates; increased 
equipment and construction costs; technology maturity and design 
evolution. The schedule extensions have also increased the costs of 
emergency response and preparedness. In addition, facility closure 
estimates for CONUS sites have increased based on ongoing closure 
efforts at the Johnston Island facility.
    The Army has consolidated the management of the Chemical 
Demilitarization Program under the Assistant Secretary of the Army 
(Installations and Environment). I have extensive experience in 
managing environmentally sensitive and complex Government facilities 
and programs. The revised milestones and associated costs are 
incorporated into a new set of program requirements by which OSD and 
the Army will monitor schedule, cost and performance of the program. 
The Army has accelerated the neutralization process by as much as 3 
years for disposal of mustard bulk agent at Aberdeen, MD. The Army is 
studying the feasibility of a similar effort to accelerate disposal of 
the bulk VX nerve agent stockpile at Newport, IN, and will continue to 
evaluate options at other sites. This approach will save time and 
money. I assure you that the Army will continuously review options for 
potential cost savings and utilization of resources, while not 
jeopardizing the safety of the public, workers and environment.
    Question. Do you believe that the fiscal year 2003 budget request 
is the actual amount that will be needed in fiscal year 2003, or is it 
more of a guesstimate?
    Answer. The fiscal year 2003 Military Construction budget request 
is based on historical experience and detailed engineering estimates 
for the work to be performed in fiscal year 2003. The fiscal year 2003 
budget request represents funds needed to begin, continue and complete 
Chem Demil projects during the year. Significant activities during 
fiscal year 2003 are: (a) completion of construction activities 
associated with the accelerated neutralization initiative at Aberdeen; 
(b) continuation of facility construction activities at Newport, IN; 
(c) award of the design-build systems contract at Pueblo, CO; (d) 
execution of technology dependent infrastructure projects at Blue 
Grass, KY (technology decision expected September 2002); and (e) 
completion of construction activities at Pine Bluff, AR (no fiscal year 
2003 funds requested). For work already under contract, the budget 
requests are based on projected obligation and expenditure to support 
the planned workload. For work not yet awarded, the budget requests are 
based on government estimates based on past experience. Decisions 
regarding accelerated destruction of the chemical agent stockpile (over 
and above what is currently scheduled) may alter the fiscal year 2003 
funding requirements.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

               MILITARY CONSTRUCTION SPENDING AND BACKLOG

    Question. Dr. Fiori, last year senior Defense officials testified 
that after many years of neglect, the Department intended to start 
investing in infrastructure. They stated that our facilities had been 
allowed to deteriorate to unacceptable levels and that we needed to 
address these shortfalls. The fiscal year 2002 budget was a major step 
forward in that regard. However, I note that we are back to business as 
normal with a proposed recapitalization rate of 123 years in the 2003 
budget versus the 83 year rate in the fiscal year 2002 budget. Is the 
Army serious about improving Army facilities, and if so, why the 
reduction in MILCON spending in this budget?
    Answer. Our military construction budget request is $3.2 billion 
and will fund our highest priority facilities and family housing 
requirements. In fiscal year 2002, we presented a budget that was a 
down payment on our goal to better support our infrastructure. When we 
developed this year's budget in light of the events that took place 
last year, we had some very difficult decisions to make. The need to 
fund our military pay raises, Army transformation, OPTEMPO, the war on 
terrorism, increases in health care and other key programs were all 
included in the decision leading to our request. Thus, the Army budget 
provides the best balance between all our programs, including military 
construction.

        BACKLOG OF ACTIVE AND RESERVE COMPONENT MILCON PROJECTS

    Question. What is your backlog of Active and Reserve Component 
MILCON projects?
    Answer. The Army's backlog is $17.7 billion based on the fiscal 
year 2001 Installations Status Report (ISR) and the associated cost to 
improve the condition of our facilities to C-1. Much of this backlog 
will require MILCON funding because the facilities require extensive 
renovation. Some of the work will be accomplished with Operation and 
Maintenance (O&M) funds. The component breakout of the backlog 
requirement is Active $9.6 billion, Army Reserve $1.7 billion, and Army 
National Guard (Federally Funded portion) $6.4 billion.

                  INTERIM BRIGADE COMBAT TEAMS (IBCTS)

    Question. I understand that there is a disconnect between the 
fielding of the Interim Brigade Combat Teams and the amount of funding 
available for the military construction facilities necessary to support 
those brigades. Can the Army provide me a list of the unfunded MILCON 
requirements essential for all of the IBCTs?
    Answer. Yes. When the fiscal year 2003 budget was developed, all 
known IBCT requirements were funded. However, while budget decisions 
were being made, we continued to refine military construction 
requirements, using emerging IBCT doctrine and lessons learned from 
fielding and training in the first two IBCTs. As a result, we have 
since identified $276.4 million in emerging Military Construction, Army 
(MCA) requirements for the IBCTs, primarily in Alaska and Hawaii (Table 
follows).

                     EMERGING BILLS PROGRAM CATEGORY
------------------------------------------------------------------------
              Location                     Description         Dollars
------------------------------------------------------------------------

                ARMY

Alaska:
    Fort Richardson................  Sniper Range..........        3,650
    Fort Richardson................  Mission Support              34,000
                                      Training Facility.
    Fort Richardson................  Multipurpose Training        14,800
                                      Range.
    Fort Wainwright................  Combined Arms                24,000
                                      Collective Training
                                      Facility.
    Fort Wainwright................  MOUT Upgrades.........       10,880
    Fort Wainwright................  Company Operations            7,500
                                      Facilities (2).
    Fort Wainwright................  Brigade Motor Pool           32,000
                                      Phase 2.
    Fort Wainwright................  Ammunition Supply            13,000
                                      Point.
    Fort Wainwright................  Battle Area Course....       48,000
Hawaii:
    Schofield Barracks.............  Mission Support              43,000
                                      Training Facility.
    Schofield Barracks.............  Information Systems          22,000
                                      Facility.
Washington: Fort Lewis.............  Arrival Departure             2,600
                                      Airfield Control
                                      Group.
Worldwide: Various.................  Planning and Design...       21,000
------------------------------------------------------------------------

    Question. What caused this delay in getting projects lined up for 
the interim brigades? Have you all fixed the problem?
    Answer. The delay in the development of the total requirements was 
due to several factors. The announcement of the locations for IBCTs 3 
through 6 occurred in July 2001. Since then, interim doctrinal 
development and lessons learned from training and fielding the first 
IBCTs has resulted in changing project requirements, particularly for 
Alaska and Hawaii. With a better opportunity to analyze specific 
installations' on-hand facilities against more developed IBCT 
requirements, additional requirements have emerged that are critical to 
support the fielding, training and sustaining these IBCTs.
    The Army is fixing these problems. We are working to synchronize 
the Interim Force requirements process with the MILCON process and 
capture the refined facilities requirements to support fielding IBCTs 3 
through 6. We are addressing these emerging requirements in the Army's 
program development for fiscal years 2004 through 2009. The Army is 
leveraging IBCT lessons learned to better plan and program the fielding 
of the Objective Force.

                          PROJECT BID SAVINGS

    Question. What is the Army's Policy towards MILCON bid or project 
savings generated in South Korea and Germany?
    Answer. Construction contract bid savings or project savings need 
to be used wherever there is a justified MILCON program shortfall. The 
country, state or installation location that generated the savings is 
not a factor in the decision on where the savings will be used to fund 
an Army MCA shortfall.
    Question. What are the policy implications to the rest of the 
MILCON program of maintaining bid savings in each state or country?
    Answer. There would be an impact on the Army's ability to 
effectively manage and execute the MILCON program. Maintaining bid 
savings in each state or country might result in the eventual 
expiration of unexpended funds in areas with no requirement, reduction 
in required project scope in areas with no bid savings, or possible 
cancellation of projects where further scope reductions would impact 
the functionality of the facility.

                       U.S. ARMY SOUTH RELOCATION

    Question. Dr. Fiori, I understand that the Army is in the process 
of sending evaluation teams to five or six bases to determine their 
suitability to serve as the new home to U.S. Army South (USARSO). Will 
the criteria these installations be evaluated on include: Proximity to 
an international airport with direct flights to Central and South 
America? Abundant spousal employment opportunities? Existing 
infrastructure capable of absorbing USARSO, without the need for new 
construction?
    Answer. Senator Hutchison, the Army is not currently evaluating any 
locations for a future home for USARSO. The Army is, however, studying 
the necessity of moving USARSO and a decision is expected soon. If a 
decision is made to move USARSO, criteria, to include such criteria as 
you mentioned in your question, will be developed and utilized in the 
process of reviewing possible relocation sites and in making a final 
selection.

                              MILCON CUTS

    Question. When I look closely at the proposed MILCON budget and 
break it out by state, I find that four of the states that received the 
lion's share of the cuts from previous budgets are California, Florida, 
Texas, and Hawaii. Am I to believe that this is coincidence that these 
states are heavily represented on the appropriations committees or can 
I conclude that the administration purposely under funded these states 
with the intent that the committees would then take the role of making 
them ``whole?''
    Answer. The Army funds our priorities without respect to specific 
states, but with regards to where our most important requirements 
exist. The Army has identified certain facility types for focused 
investment. These facilities are our first priority for funding.
    Our Permanent Party Barracks will be replaced or modernized to the 
new Army standard barracks of 1+1 by fiscal year 2008.
    Strategic Mobility will be complete with this budget and a follow 
on Army Power Projection Program will apply additional funding to 
requirements that have been identified through new missions and 
changing force structure.
    The Transformation of the Army requires significant facility 
investment at all impacted installations.
    Ammunition (Chemical) Demilitarization supports the destruction of 
the U.S. stockpile of chemical weapons to reduce the risk to the 
communities surrounding he stockpile sites and is a major priority of 
the Army.
    National Guard Army Division Redesign Study (ADRS) provides 
facilities for new wartime and domestic support requirements.
    Critical C-3 and C-4 Facilities. We will focus also on critical 
categories of facilities in poor condition (vehicle maintenance shops, 
tactical equipment shops, general instruction buildings, Chapels, 
Reserve Centers, National Guard facilities, etc)
    Last, is recapitalization of existing facilities. Our goal is to 
reach a 67 year cycle by 2010. We are currently on a 123 year cycle.
                                 ______
                                 

          Questions Submitted to Major General James R. Helmly

            Questions Submitted by Senator Dianne Feinstein

                 ADEQUATE FUNDING FOR THE ARMY RESERVE

    Question. The Army Reserve requirements and funding profile for 
fiscal year 2003 indicate that the President's budget request will meet 
just 26 percent of the Reserve's MILCON requirement. Do you consider 
that to be an adequate level of funding?
    Answer. I consider the Army Reserve military construction funding 
to be adequate within the context of the fiscal year 2003 budget. The 
Army had some very difficult decisions to make in light of the events 
that took place last year. The need to fund the war on terrorism, 
military pay raises, Army transformation, OPTEMPO, increases in health 
care and other key programs were all included in the decisions leading 
to our budget request. Although the Army Reserve has other military 
construction projects we would like to see funded, the budget provides 
the best balance between all Army programs.

                    ANTI-TERRORISM/FORCE PROTECTION

    Question. General Helmly and General Squier. I see no specific 
requests in the budgets of the reserve components addressing increased 
force protection requirements. However, understanding that this amount 
could be in the billions of dollars, the Army Guard has made an initial 
cut as to the amount that could be executed in the next fiscal year. I 
assume the USAR has a similar estimate. Would you please provide your 
estimated requirement for the Committee?
    Answer. The Army Reserve estimates increased force protection 
MILCON requirements will cost $13 million for fiscal year 2003. This 
estimate encompasses the resources required to consistently assess our 
force protection posture, fix deficiencies discovered during that 
process, secure our installations and Reserve centers, and emplace the 
communication links necessary to gather intelligence and coordinate 
response plans.

                QUALITY OF LIFE FOR MOBILIZED RESERVISTS

    Question. With more Guardsmen and reservists employed full-time, 
what concrete efforts are being planned to address quality of life for 
these soldiers.
    Answer. We have established a much more robust Family Support 
network to educate, assist and support soldiers' families on the 
requirements, responsibilities and entitlements associated with being 
mobilized and serving on active duty as well as demobilization and the 
soldiers' return to civilian work.
    The OSD TRICARE demonstration which affords mobilized Reservists 
greater coverage and entitlements is a good step toward understanding 
and compensating for the health issues of the soldier and, more 
importantly, his or her family. Further considerations to deal with any 
loss of health care and afford our Reserve family a true continuum of 
health care are ongoing.
    Our Reservists continue to benefit from the Uniformed Services 
Employment and Reemployment Rights Act of 1994, as amended, and the 
work of the National Committee for Employer Support of the Guard and 
Reserve Ombudsman program.
                                 ______
                                 

       Question Submitted to Brigadier General Michael J. Squier

             Question Submitted by Senator Dianne Feinstein

                ADEQUATE FUNDING FOR THE NATIONAL GUARD

    Question. General Squier, the National Guard requirements and 
funding profile for fiscal year 2003 indicates that the President's 
budget request will meet only 14 percent of the Guard's MILCON 
requirement in fiscal year 2003. Do you consider this an adequate level 
of funding?
    Answer. Last year, the Army made a down payment against their 
requirements to increase funding for both the Active and Reserve 
Component facilities. Unfortunately, the Army could not sustain that 
level this year due to higher Army priorities for transformation, 
mission and readiness.
                                 ______
                                 

    Questions Submitted to Major General Robert L. Van Antwerp, Jr.

            Questions Submitted by Senator Dianne Feinstein

                    ANTI-TERRORISM/FORCE PROTECTION

    Question. General Helmly and General Squier. I see no specific 
requests in the budgets of the reserve components addressing increased 
force protection requirements. However, understanding that this amount 
could be in the billions of dollars, the Army Guard has made an initial 
cut as to the amount that could be executed in the next fiscal year. I 
assume the USAR has a similar estimate. Would you please provide your 
estimated requirement for the Committee?
    Answer. The Army Reserve estimates increased force protection 
MILCON requirements will cost $13 million for fiscal year 2003. This 
estimate encompasses the resources required to consistently assess our 
force protection posture, fix deficiencies discovered during that 
process, secure our installations and Reserve centers, and emplace the 
communication links necessary to gather intelligence and coordinate 
response plans.

                QUALITY OF LIFE FOR MOBILIZED RESERVISTS

    Question. With more Guardsmen and reservists employed full-time, 
what concrete efforts are being planned to address quality of life for 
these soldiers.
    Answer. We have established a much more robust Family Support 
network to educate, assist and support soldiers' families on the 
requirements, responsibilities and entitlements associated with being 
mobilized and serving on active duty as well as demobilization and the 
soldiers' return to civilian work.
    The OSD TRICARE demonstration which affords mobilized Reservists 
greater coverage and entitlements is a good step toward understanding 
and compensating for the health issues of the soldier and, more 
importantly, his or her family. Further considerations to deal with any 
loss of health care and afford our Reserve family a true continuum of 
health care are ongoing.
    Our Reservists continue to benefit from the Uniformed Services 
Employment and Reemployment Rights Act of 1994, as amended, and the 
work of the National Committee for Employer Support of the Guard and 
Reserve Ombudsman program.

                          UNFUNDED PRIORITIES

    Question. General Van Antwerp: General Shinseki (Army Chief of 
Staff) reported last week that the Army has nearly $9.5 billion in 
unfunded priorities for fiscal year 2003. What portion of that amount 
involves military construction?
    Answer. The total MILCON identified in the unfunded priorities for 
fiscal year 2003 is $621,871,000. The program categories are Facilities 
Revitalization and Emerging Bills.
    Question. Would you please provide for the Committee a list of the 
Army's unfunded MILCON priorities?
    Answer. The projects are listed below:

               FACILITIES REVITALIZATION PROGRAM CATEGORY
------------------------------------------------------------------------
              Location                     Description         Dollars
------------------------------------------------------------------------

                ARMY

Alaska: Fort Richardson............  Mylar Window Glazing..        1,115
Alabama: Anniston AD...............  Igloo Mods for THAAD..        2,150
Colorado:
    Fort Carson....................  Multi-Purpose Machine         2,700
                                      Gun Range.
    Fort Carson....................  Arrival Departure            50,000
                                      Airfield Control
                                      Group & Ramp.
District of Columbia:
    Walter Reed AMC................  Physical Security,            3,450
                                      Main Section.
Georgia:
    Fort Benning...................  Cantonment Fencing....       14,600
    Fort Gillem....................  Modified Record Fire/         4,400
                                      Combat Pistol Qual
                                      Course.
Kansas:
    Fort Leavenworth...............  Cantonment Fencing....        1,300
    Fort Riley.....................  Cantonment Fencing....        7,000
    Fort Riley.....................  Combined Arms                27,000
                                      Collective Training
                                      Facility.
Kentucky:
    Fort Campbell..................  Combined Arms                12,779
                                      Collective Training
                                      Facility.
    Fort Campbell..................  Shoot House...........        1,250
New York:
    Fort Drum......................  Combined Arms                14,500
                                      Collective Training
                                      Facility.
    Fort Drum......................  Parallel Taxiway......        8,600
    Fort Drum......................  Mountain Ramp and Hot        15,000
                                      Pad.
North Carolina:
    Fort Bragg.....................  Shoot House...........        1,250
    Fort Bragg.....................  Anti-Armor/Infantry           6,900
                                      Squad Battle Course.
Oklahoma:
    Fort Sill......................  Railroad Equip/Engine         2,100
                                      Maintenance.
    McAlester AAP..................  Consolidated Shipping         2,500
                                      Center LCL.
Texas:
    Fort Hood......................  Qualification Training        8,100
                                      Range.
    Fort Hood......................  Urban Assault Course..        1,400
    Fort Hood......................  Urban Assault Course..        1,000
Washington:
    Fort Lewis.....................  Guard House...........       15,500
    Fort Lewis.....................  Fencing...............        2,400
    Fort Lewis.....................  Shoot House...........        1,250
Germany: Grafenwoehr Training Area.  Combined Arms                31,850
                                      Collective Training
                                      Facility.
Kwajalein:
    Kwajalein......................  Vehicle Paint and Prep       10,000
                                      Shop.
    Kwajalein......................  Cover Raw Water Tanks.        4,516
Puerto Rico: Roosevelt Roads.......  SOF Aircraft                 18,500
                                      Maintenance Hangar.
Worldwide: Various.................  Planning and Design...        7,780

            ARMY RESERVE

California: Los Alamitos...........  Perimeter Security            1,773
                                      (fencing, gates,
                                      lighting, doors,
                                      camera, IDS), 63rd
                                      RSC.
Massachusetts: Devens..............  Upgrade and                   1,331
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      94th RSC.
New York: Fort Totten..............  Upgrade and                   1,400
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      77th RSC.
Pennsylvania: Oakdale..............  Upgrade and                   1,651
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      99th RSC.
Utah: Salt Lake City...............  Upgrade and                   2,500
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      96th RSC.
Washington: Seattle................  Upgrade and                   2,235
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      70th RSC.
Puerto Rico: Ft Buchanan...........  Upgrade and                   1,235
                                      Installation of
                                      fencing, gates,
                                      lighting, gates,
                                      doors, camera, IDS),
                                      65th RSC.
Worldwide: Various.................  Planning and Design...          857

           NATIONAL GUARD

Arkansas:
    Camp Robinson..................  Cantonment Fencing....        1,600
    Camp Robinson..................  Fence Training Areas..        4,805
    Fort Chaffee...................  Relocate Parking lots.        2,000
Connecticut:
    Bradley Intl Airport...........  State Area Reserve            2,300
                                      Command (STARC) (-)
                                      and alt EOC. Install
                                      Force Protection.
    Bristol Armory.................  State Area Reserve            1,900
                                      Command (STARC)--
                                      Install Force
                                      Protection.
    Enfield Armory.................  Install Barriers,             1,250
                                      gates, fences.
    MTA Cp Rowland.................  Install Barriers,             1,250
                                      gates, fences.
Illinois:
    Springfield....................  New Standoff Mail/            2,000
                                      Receiving Center.
    Springfield....................  New Entrance /Exit,           1,500
                                      Harden Guard Bldg.
Indiana: Camp Atterbury............  Installation Boundary         7,429
                                      Fence with Patrol
                                      Road.
Kansas: Topeka.....................  Inspection facility, &        2,242
                                      internal access lines.
Maryland: Fifth Regiment Armory....  State Headquarters            1,200
                                      (STARC).
New York:
    Latham STARC...................  Fencing, lighting,            2,500
                                      CCTV.
    Troy Armor/OMS.................  fencing, lighting,            1,500
                                      CCTV.
    New York.......................  Relocate entrance,            1,500
                                      drive, guard house.
North Dakota: Camp Grafton.........  Upgrade and harden            1,500
                                      perimeter Security
                                      Fence.
South Dakota:
    Rapid City.....................  Enhance site perimeter        2,500
                                      barriers & access
                                      gates, provide guard
                                      houses.
    SD, Sioux Falls................  Barriers, Fencing.....        2,000
Tennessee: Smyrna..................  Replace fencing and           1,802
                                      Improve.
Virginia: Fort Pickett.............  Install perimeter             4,500
                                      security.
Worldwide: Various.................  Planning and Design...        4,291

------------------------------------------------------------------------


                     EMERGING BILLS PROGRAM CATEGORY
------------------------------------------------------------------------
              Location                     Description         Dollars
------------------------------------------------------------------------

                ARMY

Alaska:
    Fort Richardson................  Sniper Range..........        3,650
    Fort Richardson................  Mission Support              34,000
                                      Training Facility.
    Fort Richardson................  Multipurpose Training        14,800
                                      Range.
    Fort Wainwright................  Combined Arms                24,000
                                      Collective Training
                                      Facility.
    Fort Wainwright................  MOUT Upgrades.........       10,880
    Fort Wainwright................  Company Operations            7,500
                                      Facilities (2).
    Fort Wainwright................  Brigade Motor Pool           32,000
                                      Phase 2.
    Fort Wainwright................  Ammunition Supply            13,000
                                      Point.
    Fort Wainwright................  Battle Area Course....       48,000
Hawaii:
    Schofield Barracks.............  Mission Support              43,000
                                      Training Facility.
    Schofield Barracks.............  Information Systems          22,000
                                      Facility.
Washington: Fort Lewis.............  Arrival Departure             2,600
                                      Airfield Control
                                      Group.
Worldwide: Various.................  Planning and Design...       21,000
------------------------------------------------------------------------

     INCREASING COSTS OF THE EFFICIENT BASING INITIATIVE IN EUROPE

    Question. General Van Antwerp, I want to get a handle on the real 
costs and efficiencies of the Efficient Basing Initiatives--both East 
and South. I am told that the Efficient Basing effort in Grafenwoehr 
will cost $70 million this year, another $492 million in the future, 
and this doesn't include $90 million for DODEA in Germany alone. That's 
a lot of cash. Plus, we're looking at almost $35 million this year in 
Vicenza alone. Are there hidden outyear costs there?
    Answer. We have identified all known costs for both initiatives and 
we have provided that information to various members and staff. If 
changes in costs or requirements occur we will continue to keep 
Congress informed.
    Efficient Basing East (Grafenwoehr). The total construction costs 
are $695 million, of which $70 million is programmed in fiscal year 
2003 as part of the Military Construction, Army (MCA) budget request, 
and the remaining requirement is split between Army ($492 million), 
Military Construction, Defense-wide (MCD) ($99 million) and planning 
and design. These non-Army construction requirements are for schools, 
medical facilities and Army and Air Force Exchange System facilities. 
There is no construction requirement for Army Family Housing (AFH) 
because our family housing requirements will be provided through Build 
to Lease facilities--currently estimated at $34 million per year funded 
out of our AFH Operations account.
    Efficient Basing--South (Vicenza). Construction requirements total 
$53 million, of which $39 million is funded in MCA and $14 million is 
part of a larger MCD school expansion project (totaling $17 million) to 
be programmed. Family housing requirements can be satisfied on the 
local economy.
    Question. What is the bottom line? Is the Efficient Basing 
Initiative really efficient? Answer. The initiatives are necessary and 
efficient.
    Efficient Basing--East consolidates a heavy Brigade Combat Team 
from 13 small, scattered installations to a single installation. It is 
good for soldiers, it will improve operations and training, and it 
saves money. Soldiers will be located next to their major training 
area, work in facilities built to support their job most efficiently 
and housed in modern barracks and family housing, properly sized and 
outfitted to today's standards. This initiative saves money because in 
the long run it is cheaper to build new in a single location than 
rehabilitate and refurbish old outmoded facilities in a dispersed World 
War II footprint.
    Efficient Basing--South will increase forces in the NATO Southern 
Region and provide CINCEUCOM with more flexibility to deploy assets 
across the spectrum of military scenarios--it provides operational 
efficiencies rather than economic efficiencies. Vicenza was selected 
because of its robust support structure, availability of quality of 
life services and facilities, and least overall cost.
    Question. I would like to see an analysis of the payout of this 
initiative.
    Answer. For Efficient Basing East, an independent economic analysis 
(EA) is being conducted to determine savings and benefits. We will 
forward it to you when it is completed and reviewed by the Army. An 
initial estimate provided by US Army Europe indicates an approximate 
savings of $12 million per year. As for Efficient Basing South, the 
initiative was based on military operational requirements rather than 
for base efficiencies.

                    ANTI-TERRORISM/FORCE PROTECTION

    Question. MG Van Antwerp: Regarding Anti-Terrorism-Force Protection 
requirements following the events of September 11th, I would assume 
that the demand for increased force protection measures is great. Can 
you tell me how much of this demand was addressed in this year's budget 
request ?
    Answer. Due to the events of September 11th, approximately $200 
million from Defense Emergency Response Fund (DERF) Program Year 2001 
was allocated to improve Access Control on military installations Army-
wide. The fiscal year 2003 Budget Request contains $691 million for 
DERF to be used for Military Construction and other Access Control 
Measures. If approved, it will provide equipment packages for Perimeter 
Access Control Points, Internal Limited Access Control Points and Cargo 
Inspection Points at mission essential vulnerable areas. Under 
``Combating Terrorism'' within the fiscal year 2003 President's Budget 
there is over $2.0 billion for Army Anti-Terrorism-Force Protection 
measures. The intent of funding these packages is to mitigate risk at 
entry points and reduce manpower requirements.

                QUALITY OF LIFE FOR MOBILIZED RESERVISTS

    Question. General Van Antwerp, with the recently declared ``war on 
terrorism'' the readiness of reservists is key to our success. We need 
modern ranges, training areas, and facilities that will allow all our 
service members the training and education they need. However, this 
disproportionate budget seems to be divided between ``the haves and the 
have nots.'' If you do not address the service-wide needs of soldiers 
this year, what guarantee do the members of Congress have that they 
will be addressed in coming years?
    Answer. The Army's military construction budget supports all Army 
soldiers, active and reserve. The Army has funded sustainment of our 
facilities at 92 percent for both active and reserve components' 
facilities inventory. Also, one-fourth of the projects in the active 
Army's military construction budget are available for joint use with 
the Army National Guard and Reserve. The fiscal year 2003 Army Military 
Construction budget request includes several major programs and 
initiatives which are funded at higher percentages, for example: 
barracks (100 percent), strategic mobility (100 percent), 
transformation (100 percent), chemical demilitarization (100 percent), 
and Army National Guard Division Redesign (69 percent). After these, 
the Army funded all remaining revitalization requirements for the 
Active Army at 9 percent of requirements, for the Army National Guard 
at 9 percent, and for the Army Reserve at 26 percent. The Army is 
committed to addressing the needs of soldiers in all components of the 
Army equitably.
                                 ______
                                 

           Question Submitted by Senator Kay Bailey Hutchison

                          FORT BLISS--CAPACITY

    Question. General VanAntwerp, as you are well aware, large land 
areas for maneuver training are at a premium in the U.S. and, because 
of this scarcity, their use needs to be maximized. I'm sure you are 
also aware that the Fort Bliss/White Sands training area is the largest 
in the U.S., yet there are no major maneuver forces permanently 
stationed at Fort Bliss. Do you see the movement of a division, or 
perhaps one of the Army's new Interim Brigade Combat Teams (IBCTs), to 
Fort Bliss to take advantage of this unmatched maneuver space?
    Answer. Fort Bliss is home to a robust array of U.S. Army Air 
Defense Artillery units, schools, and related activities. The Air 
Defense Artillery Center and School trains Army air defenders and Army 
leaders with a host of courses and facilities. Major units include the 
32nd Army Air and Missile Defense Command, four (4) Air Defense Brigade 
Headquarters and Headquarters Batteries, seven (7) Patriot Battalions, 
and seven (7) Maintenance Companies. Several of these units were 
relocated to Fort Bliss after 1995 to maximize Army usage of the range 
spaces there. Air defense missile firing requires a great amount of 
range space to safely conduct under realistic engagement conditions and 
distances, and Fort Bliss is well suited for this very mission.
    Both Active Component and Reserve Component (both Army National 
Guard--from several states--and United States Army Reserve) units and 
personnel currently conduct extensive training exercises, mobilization 
activities, and support missions at Fort Bliss. Additionally, the Army 
staffs, equips, and jointly operates other United States Government 
elements at Fort Bliss such as Joint Task Force-6, Operation Alliance, 
and the El Paso Intelligence Center.
    Fort Bliss, like all other installations, is being considered for 
future stationing options for different units. Each installation has 
its advantages and disadvantages, in terms of maneuver and range 
availability, power projection capacity, and installation support 
capacity. Fort Bliss is currently undergoing some important upgrade 
projects regarding the fielding of Theater High-Altitude Area Defense 
System (THAADS), and the installation will continue to meet the 
important needs of soldiers, civilian employees, and families.

                          SUBCOMMITTEE RECESS

    Senator Feinstein. All right. Does anybody else have 
anything they would like to bring to the attention of the 
committee?
    If not, then, I thank you very much. This hearing is 
recessed.
    [Whereupon, at 4:30 p.m., Tuesday, March 5, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2003

                              ----------                              


                        TUESDAY, MARCH 19, 2002

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:30 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Dianne Feinstein (chairman) 
presiding.
    Present: Senator Feinstein.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF H.T. JOHNSON, ASSISTANT SECRETARY OF THE 
            NAVY FOR INSTALLATION AND ENVIRONMENT
ACCOMPANIED BY:
        REAR ADMIRAL DAVID D. PRUETT, CIVIL ENGINEER CORPS, USN, 
            DIRECTOR, CIVIL ENGINEERING READINESS DIVISION, CHIEF OF 
            NAVAL OPERATIONS
        REAR ADMIRAL NOEL G. PRESTON, USNR, DEPUTY DIRECTOR OF NAVAL 
            RESERVE
        BRIGADIER GENERAL (SELECT) RONALD S. COLEMAN, USMC, DEPUTY 
            ASSISTANT COMMANDANT OF THE MARINE CORPS FOR INSTALLATION 
            AND LOGISTICS FACILITIES

             OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. I would like to call this meeting of the 
Military Construction Subcommittee of the Defense 
Appropriations Committee to order and I welcome our witnesses 
and members of the subcommittee. I am sorry the ranking member, 
Senator Hutchison of Texas, has an unavoidable commitment and 
cannot be here today. But we will proceed in any event. I want 
everybody to know that the Appropriations Committee has 
officially entered the cyber age and all our witnesses should 
know that the audio of our hearing is being broadcast live over 
the Internet. So the mikes are live at all times.
    Today we are going to hear from representatives of the Navy 
and the Air Force on their respective 2003 military 
construction programs. The prepared statements of all the 
witnesses will be entered into the record in their entirety. So 
I will ask the witnesses to summarize their oral remarks and if 
you can do it within five minutes that is really wonderful and 
then we will have some time for questions. If you cannot, that 
is all right, too.
    The total fiscal year 2003 budget request for military 
construction is slightly less than $9 billion. Now that is a 15 
percent drop from what Congress appropriated last year and, it 
is a 24 percent drop in active component military construction. 
When you break it down by service, the Navy's active military 
construction program is down 20 percent and the Air Force is 
down 48 percent.
    For the reserve components, the Navy Reserve has level 
funding, while the Air Force Reserve is down almost 69 percent 
and the Air Guard is down nearly 75 percent. These are major 
reductions from last year and so I want these witnesses to know 
that this committee would like to support an adequate program 
for military construction. We have been concerned because the 
budget is cut so dramatically in military construction and as I 
said last time, I generally go by what the military believe 
they need in military construction to carry out their work. So 
I would encourage everybody to speak as frankly as you can.

                  BASE REALIGNMENT AND CLOSURE CLEANUP

    At the last hearing, the military said they could live with 
these cuts. So I take them at their word. But last year the 
Navy and the Air Force submitted inadequate budget requests for 
their BRAC environmental cleanup programs and I want you to 
know that I appreciate the effort that both services put forth 
to help correct the situation.
    Secretary Johnson, you in particular have been very helpful 
with the Hunter's Point shipyard problem and I appreciate that 
very much. Last year we were able to bail the services out on 
this environmental remediation of closed bases, but it is going 
to be very difficult to do so this year within the budget 
constraints. And I think we regard environmental cleanup as 
being a very vital part of the BRAC process. It is also the 
reason, or one of the major reasons, why base conversion has 
been so slow and so difficult.
    Because the cleanup of many of these bases has been 
dramatically underestimated by the military and local 
jurisdictions that have the bases transitioned to them really 
cannot use them unless the cleanup is carried out, and of 
course they do not have the money on the local level to do the 
cleanup. So I believe very strongly when the services make 
promises to affected communities, those promises must be kept 
and so I look forward to hearing progress reports on the BRAC 
cleanup program today.
    Let me begin by introducing panel number one. The Honorable 
H.T. Johnson, Assistant Secretary of the Navy for Installations 
and Environment; Rear Admiral David Pruett from the Chief of 
Naval Operations, Civil Engineer Corps; Rear Admiral Noel 
Preston, United States Navy Reserve; and Brigadier General 
Ronald Coleman, United States Marine Corps. I would ask each of 
you to summarize your statements if you can. We will put your 
whole statement in the record and let's begin now. Secretary 
Johnson. Welcome.

                             NAVY TESTIMONY

    Mr. Johnson. Thank you. I am very pleased to be with you 
and you have introduced my partners and they are partners not 
only in this hearing, but also working the MILCON and also 
taking care of our people in the Marine Corps and the Navy.
    We would like to highlight a few items and we have many 
more in our statement, of course. We have done well in the 
current budget climate. The Department of Navy budget for 
installations overall is $9.3 billion. A bit higher than the 
$8.9 billion appropriated in 2002. We have tilted towards our 
top priority our sailors, Marines, their families and our 
civilian work force.
    There is $375 million for family housing construction and 
improvement. This is a 15 percent increase over this year's 
enacted levels. This will allow us to build 1,1,00 new homes 
and renovate some 31,000 existing homes--31 hundred--three 
thousand one hundred. We have also funded 4,400 new bachelor 
quarter homes for our single sailors and Marine Corps. Of 
these, 600 and--correction, 764 are for homes for our shipboard 
sailors.
    We have 31,000 sailors who don't have a home except on the 
ship. This is lowest quality of life in the Department of 
Defense. We want to give them a home ashore by 2008. We have 
also added $269 million to better sustain our existing 
facilities. This is 15 percent higher than this year's level.
    Unfortunately as you mentioned, our active and reserve 
military construction request, MILCON, is $948 million, 21 
percent below this year's enacted level. This reflects the 
priorities that I mentioned keeping the balance across all of 
our Department of Navy priorities. There was some thought early 
on that we had anticipated a BRAC 2005. We have not. No one in 
the Department of Navy considered that and it is not part of 
our priority system. You mentioned cleanup, Madam Chair, but we 
have done very well. Last year you mentioned that you helped us 
a bit and we appreciate that. This year, we are using the funds 
that we got from the Congress. In the 2003, we are fully 
funded. And looking out, we are also funding all the 
requirements.

                          BASE CLOSURE CLEANUP

    You mentioned that BRAC is very, very difficult and it is 
true. We never know exactly what is going to come up next. When 
you uncover a rock, you have to look under it and Hunter's 
Point is certainly one that you and I know very well. Every 
time we dig up a bucket full of dirt, we find something new.
    Looking just at a few of our successes and some of our 
challenges, Mare Island, I am not sure if you know it or not, 
but the Governor just last week approved the transfer of the 
eastern parcel. That is some 668 acres--the industrial part of 
Mare Island. In fact, all of the industrial part has been 
transferred. There are 3,000 acres in the western parcel, which 
was wetlands. It is on the Governor's desk for approval. So 
very shortly we should have all of Mare Island completed.
    This is a new approach. We gave the cleanup funding to the 
city and their contractor teammate for both the eastern sector, 
some $78 million, and for the western sector a like amount. So 
Mare Island is fixed, if you will. Hunter's Point, we have 
forged a good relation good partnership under your tutelage 
with the mayor, the city, the local contractor and certainly 
the Department of Navy. We are anxious to integrate our cleanup 
with development.
    We are very pleased at Tustin. We are about to transfer 
most of Tustin, but we keep some property for the Federal 
Government to sell. So we will make a little bit on Tustin. 
Oakland Naval Hospital, that is up for sale and that seems to 
be going well also.
    Turning now to the part that our Secretary and Department 
focuses on is housing. As I believe you know, the Secretary of 
Defense accelerated the goal for having good homes for all of 
our family members from 2010 to 2007. The Navy service will 
make 2007. The Marine Corps will make it 2 years early in 2005, 
which is quite an accomplishment.

                  PUBLIC PRIVATE HOUSING PARTNERSHIPS

    We also have some good news. We have been very successful 
at privatization and this has worked out very well for the 
Department of Navy. We have Public Private Partnerships at six 
locations for some 6,600 homes. We have another 1,800 homes at 
two locations underway--solicitations, and we have plans for 
12,000 more at seven locations. That has worked very, very well 
and we get a good up front leverage and it is a self-sustaining 
entitlement for our sailors and Marines.
    We believe we have real opportunity to use the 
privatization concept for bachelor housing and we are working 
that very hard. We are working on three pilots and we are 
working with your staff and other congressional committees to 
gain support for this concept. We are also pleased at what we 
have done in energy. We are concerned about our facilities, but 
we are also concerned about conserving our energy and 
utilities. The Department of Navy won two of four energy awards 
that were passed out by the Vice President last Fall. That is 
quite an accomplishment for our people and we are very proud of 
that. If I may turn it over to Admiral Pruett now ma'am?
    Senator Feinstein. Thanks, Mr. Secretary. Admiral?
    Admiral Pruett. Good afternoon, Madam Chairman. It is a 
pleasure to be before the committee to discuss the fiscal year 
2003 MILCON budget request. I just have a couple of additional 
comments to amplify a couple of the areas mentioned by 
Secretary Johnson in his opening statement.
    First of all and primary, mission accomplishment is what we 
call our main thing, but our people, of course, are our top 
priority. Truly both mission accomplishment and the people are 
inextricably linked. As Secretary Johnson discussed, we have 
over 31,000 sailors that are living on board ships while in 
home port and these sailors like all sailors in the Navy endure 
a very austere lifestyle aboard ship while underway on 
deployment. When the ships are in home port, we need to offer 
them a better place to call home. This is a major quality of 
service issue and we are programming and executing projects 
that will resolve this challenge, as the Secretary mentioned.
    But we also need to come up with some more innovative ways 
to further expedite the housing of these shipboard sailors as 
well as our other eligible sailors ashore. This year's budget 
does have two projects for 764 shoreside sailor rooms for the 
junior sailors who would otherwise continue to live aboard the 
ship. Our goal is to have them off the ships while at home 
port, shore side living spaces by 2008. And this initiative 
will help lessen the divide with regards to housing for our 
single sailors compared to our married sailors.
    Next, protection of our people while at work and at home 
has of course taken on a paramount importance in the wake of 
the attacks of September 11. I want to assure you that our 
facility projects are designed to meet the latest anti-
terrorism force protection engineering standards, and those 
include shatter resistant glass, building hardening, perimeter 
protection and structural reinforcing. We employ these 
standards based upon local conditions and our threat analyses.
    Quality facilities and infrastructure are an integral 
component of our readiness. Our installations serve as our 
launch platforms from which our sailors and Marines deploy to 
execute their mission, while their families remain behind. 
These are the places where our sailors, Marines and their 
families live, work, train and relax. We do remain committed to 
assure readiness even though as you've mentioned, we have a 
smaller MILCON budget this year.
    There are no quick fixes and we must stay the course and 
look at our available funding, continue to balance it across 
the different facility accounts. First of all, we need to 
sustain our facilities. This is with what we call our SRM 
budget--Sustainment, Restoration and Modernization budget, to 
stop the growth of C3 and C4 deficiencies. And we need to 
correct those deficiencies and then achieve this 
recapitalization rate goal of 67 years.
    The continued support by the Congress and the 
administration over the long term is vital to improving the 
condition of our facilities in order to support the fleet 
readiness both now and in the future.

                           PREPARED STATEMENT

    So I sincerely thank you for your continued support that 
this committee and your staff have given the Navy and Marine 
Corps team. In closing, I will just leave you with a thought. I 
started out saying mission was our main thing, people are our 
top priority, but you could say mission first, people always. 
Thank you ma'am.
    [The statement follows:]

                   Prepared Statement of H.T. Johnson

    Madam Chairwoman and members of the Committee, I am H. T. Johnson, 
Assistant Secretary of the Navy (Installations and Environment). I 
appreciate the opportunity to speak to you today on the Department of 
the Navy's shore infrastructure.
    We are all justifiably proud of the way this Nation's military 
forces have responded to the September 11 terrorist acts in New York, 
Pennsylvania and Washington DC. From providing increased security for 
homeland defense at airports and port facilities against future 
potential threats, Tomahawk cruise missiles fired from ships and 
submarines, and carrier-based Navy and Marine Corps aircraft providing 
80 percent of the combat sorties over Afghanistan, Sailors and Marines 
have served proudly and with distinction to eliminate terrorist threats 
in what was previously considered a landlocked sanctuary. In 
``Operation Enduring Freedom'' and the global ``War on Terrorism,'' on-
station Naval Forces were first to respond, first to fight, first to 
secure U.S. interests.
    It takes highly trained and motivated individuals, using advanced 
technologies and weapon systems, to successfully pursue U.S. military 
objectives. Our bases and stations provide direct and indirect support 
to forward-deployed Naval Forces. Perhaps more importantly, such 
installations are the means by which Naval forces are formed, trained, 
maintained, and housed. And our environmental programs help ensure our 
continued use of military training areas on land and at sea, while also 
complying with national and international environmental standards.
    The Secretary of the Navy has repeatedly said people are our most 
important asset. Military pay and benefits are obviously important. But 
members of this Committee know that a modern, well maintained 
infrastructure is a very strong ``people'' program; it's the pier, the 
hangar, the warehouse, where Sailors, Marines, civilian employees and 
contractors report to work; it's the classroom, the training range 
where they learn and hone their skills; it's the nice home in a good 
neighborhood where our military members and their families live. It's 
also the commitment to effective safety and occupational health 
programs that protects them from the daily hazards they face, whether 
on the job or off. The military mission is inherently a dangerous one. 
Whether it is training for the mission, carrying out the mission, or 
preparing the weapons and weapon systems that may be employed, we need 
to, and are, pursuing a vision of zero mishaps for the future by 
institutionalizing operational risk management, embracing best business 
practices, and adopting key safety technologies.
    I will begin by summarizing our fiscal year 2003 budget request, 
and follow with more details in each program area.

                      THE FISCAL YEAR 2003 BUDGET

Shore Infrastructure Budget
    The Department of the Navy shore infrastructure budget includes 
these appropriations: Military Construction, Navy; Military 
Construction, Naval Reserve; Family Housing, Navy and Marine Corps; 
Base Realignment and Closure; and the Operations and Maintenance 
accounts which provide base support and Sustainment, Restoration and 
Modernization.



    Our fiscal year 2003 infrastructure budget request continues the 
progress we have made in last year's budget. Our budget request of $9.3 
billion represents a 4.5 percent increase over the enacted fiscal year 
2002 level of $8.9 billion. While maintaining the overall forward 
momentum, we have emphasized housing and the sustainment of our 
existing facilities, consistent with the priorities of the Secretary of 
Defense, the Secretary of the Navy, the Chief of Naval Operations, and 
the Commandant of the Marine Corps. There are notable gains in these 
areas.

            FISCAL YEAR 2003 DON FAMILY HOUSING CONSTRUCTION
------------------------------------------------------------------------
                                                            Millions of
                Location                       Homes          dollars
------------------------------------------------------------------------
Construction:
    Lemoore, CA.........................             178       \1\ $41.0
    New London, CT......................             100        \1\ 24.4
    Mayport, FL.........................               1             0.3
    Meridian, MS........................              56         \1\ 9.8
    Larissa, GR.........................               2             1.2
    St. Mawgan, UK......................              62            18.5
    Twentynine Palms, CA................              76        \1\ 19.4
    Kaneohe Bay, HI.....................              65        \1\ 24.8
    Camp Lejeune, NC....................             317        \1\ 43.7
    Quantico, VA........................             290        \1\ 41.8
Improvements (Various Locations):
    Navy................................           2,928           123.9
    Marine Corps........................             209            15.6
Planning & Design.......................  ..............            11.3
                                         -------------------------------
      Total Construction................           4,284          375.7
------------------------------------------------------------------------
\1\ Replacement construction.

    Housing is a cornerstone of our efforts. The fiscal year 2003 
family housing construction request totals $376 million, a 15 percent 
increase over the fiscal year 2002 enacted level of $328 million. This 
funding will allow us to build 1,147 new homes (all but 65 are 
replacement construction) and renovate 3,137 existing homes. Included 
in this improvement request is $33 million for privatization at Pearl 
Harbor, HI. Our family housing operations and maintenance request 
totals $868 million, a 4 percent reduction below the fiscal year 2002 
enacted level. This reduction is due to a net reduction of 
approximately 5,000 government owned homes, primarily the result of 
privatization efforts.
    Our military construction request for the active component totals 
$895 million, consisting of 43 Navy and 19 Marine Corps projects. The 
facts are that there are other pressing requirements, most of which are 
associated with the conduct of the war on terrorism. After the 
September 11 attack, the Department was required to make some difficult 
choices to pursue the war on terrorism. The Secretary had to achieve 
balance across many competing needs. This military construction budget 
request is the second largest in 6 years. It is exceeded only by our 
fiscal year 2002 request, and is considerably larger than previous 
requests. We are planning to use some of the funds allocated for anti-
terrorism/force protection (AT/FP) from the Defense Emergency Response 
Fund toward military infrastructure. These additional funds are not 
included in any tables or other discussion in this statement.

                                           MILITARY CONSTRUCTION NAVY
----------------------------------------------------------------------------------------------------------------
                                                               Navy                        Marine Corps
                                                 ---------------------------------------------------------------
                Type of facility                      No. of        Millions of       No. of        Millions of
                                                     projects         dollars        projects         dollars
----------------------------------------------------------------------------------------------------------------
 Quality of Life................................              12            $270               6             $73
Operational.....................................              15             118               1               3
Training........................................               1               6               2              10
Maintenance/Storage.............................               3              63               8              75
Utilities.......................................               2              34               1               5
RDT&E...........................................               1               9  ..............  ..............
----------------------------------------------------------------------------------------------------------------

    Nearly three-quarters of the military construction request is for 
restoration and modernization projects. Consistent with our focus on 
solving housing needs, the active military construction request 
includes a robust bachelor housing effort totaling $275 million to 
construct, improve and replace 4,360 bachelor-enlisted quarters beds. 
There is also $69 million for six Navy and two Marine Corps quality of 
life projects, including fitness centers and dining facilities. We have 
included $69 million for planning and design efforts, and raised our 
request for unspecified minor construction to $23 million under the 
expectation that further AT/FP efforts will be needed.
    Our Military Construction, Reserve request totals $52 million, 
about the same as the fiscal year 2002 enacted level. There are six 
Navy (including a bachelor enlisted quarters for 92 spaces) and three 
Marine Corps projects totaling $48 million, $2.5 million for planning 
and design, and $1 million for unspecified minor construction.
    Our prior Base Realignment and Closure (BRAC) request totals $259 
million, a 20 percent increase over the fiscal year 2002 enacted level 
of $215 million. This funding supports caretaker functions and cleanup 
of contamination at base closures under the four previous rounds (i.e., 
BRAC 1988, BRAC 1991, BRAC 1993, and BRAC 1995). This request meets all 
current regulator and community expectations for cleanup at our BRAC 
bases. I am pleased to report we have resolved our fiscal year 2002 
shortfall as a result of the additional funds provided by Congress, the 
availability of land sale revenue, and the use of prior year BRAC funds 
which we have determined are no longer needed for their original 
intended purpose. These prior year BRAC funds are being reallocated to 
fund fiscal year 2002 BRAC cleanup needs.
    Our Sustainment, Restoration and Modernization (SRM) funded by 
Operations and Maintenance accounts request totals $2,066 million, a 15 
percent increase over the fiscal year 2002 enacted level of $1,797 
million. This $269 million increase in funding allows the Marine Corps 
to achieve 92 percent, and Navy 84 percent, of the sustainment 
requirement for the existing facilities inventory based on the current 
requirements model. This provides the highest level of sustainment 
funding achieved using this metric, considerably higher than the 
estimated 80 percent for Marine Corps in fiscal 2002, and the estimated 
71 percent Navy average over the three previous years.
    I would now like to address specific program areas in more detail:

                                HOUSING

    We have two overarching housing principles:
  --Our Sailors and Marines, and their families, are entitled to 
        quality homes; and
  --Housing that we provide, either directly through ownership or 
        indirectly through privatization, must be self-sustaining over 
        the long term. ``Self-sustaining'' means that we must ensure 
        that the resources are there to operate, maintain, and 
        recapitalize the home throughout its life.

Family Housing
    Our family housing strategy consists of a prioritized triad:
  --Reliance on the Private Sector.--We rely first on the local 
        community to provide housing for our Sailors, Marines, and 
        their families. Three out of four Navy and Marine Corps 
        families receive a Basic Allowance for Housing (BAH) and own or 
        rent homes in the community. Our bases have housing referral 
        offices to help newly arriving families find suitable homes in 
        the community.
  --Private Financing through Public/Private Ventures (PPVs).--With the 
        strong support from this Committee and others, we have 
        successfully used statutory PPV authorities enacted in 1996 to 
        partner with the private sector and meet our housing needs, in 
        part, through the use of private sector capital. These 
        authorities, which I like to think of in terms of public/
        private partnerships, allow us to leverage our own resources 
        and provide better housing faster to our families. We are 
        aggressively seeking additional opportunities to meet our 
        housing needs through the use of PPVs.
  --Military Construction.--Military construction will continue to be 
        used where PPV authorities don't apply (such as overseas) or 
        where they don't make financial sense for the Department.
    Some years ago, the Secretary of Defense established a goal to 
eliminate inadequate military family housing units by fiscal 2010. 
Secretary Rumsfeld recently accelerated that goal by 3 years, to fiscal 
year 2007. Through a combination of increased funding and increased use 
of PPV authorities, I am pleased to say that the Navy and Marine Corps 
have stepped up to the challenge: the Navy will meet the Office of the 
Secretary of Defense (OSD) goal and eliminate their inadequate family 
housing by fiscal year 2007. The Marine Corps will exceed the goal and 
eliminate their inadequate housing by fiscal year 2005.

Bachelor Housing
    Our budget request continues the emphasis on improving living 
conditions for our unaccompanied Sailors and Marines. While we are 
nearing the achievement of our goal for improving family housing, our 
track record in addressing the housing needs of our single members has 
been uneven. One of our top priorities is to focus attention and 
resources on improving bachelor housing. There are three challenges:
  --Provide Homes Ashore for our Shipboard Sailors.--There are 
        approximately 31,000 Sailors worldwide who are required to live 
        aboard ship even while in homeport. This situation is 
        unacceptable. The recent change in law allowing E4s to receive 
        BAH is a step in the right direction. Under current levels of 
        funding, the Navy estimates that it will be able to achieve its 
        ``homeport ashore'' initiative by fiscal year 2008. Our fiscal 
        year 2003 budget includes two ``homeport ashore'' projects that 
        will provide homes ashore to 764 shipboard Sailors at Norfolk, 
        VA and Bremerton, WA. Through continued emphasis on military 
        construction and the use of private financing authorities for 
        bachelor housing, I strongly believe we can, and must, do even 
        better.
  --Ensure our Barracks Meet Today's Standards for Privacy. We are 
        continuing our efforts to construct new and modernize existing 
        barracks to provide increased privacy to our single Sailors and 
        Marines. The Navy applies the ``1+1'' standard for permanent 
        party barracks. Under this standard, each single junior Sailor 
        has his or her own sleeping area and shares a bathroom and 
        common area with another member. To promote unit cohesion and 
        team building, the Marine Corps was granted a waiver to adopt a 
        ``2+0'' configuration where two junior Marines share a room 
        with a bath. Both configurations allow for more private 
        quarters for our senior Sailors and Marines. Our fiscal year 
        2003 request reflects a recent change in OSD criteria that 
        gives the Services flexibility to adjust the proportion of 
        living area and common space within an overall limitation of 66 
        square meters (710 square feet) per module. The Navy will 
        achieve these barracks construction standards by fiscal year 
        2013; the Marine Corps by fiscal year 2010.

                    DON BARRACKS CONSTRUCTION REQUEST
------------------------------------------------------------------------
                                                            Millions of
                Location                      Spaces          dollars
------------------------------------------------------------------------
NS Norfolk, VA..........................             500       \1\ $37.3
NAF Andrews, MD.........................             120             9.7
NTC Great Lakes, IL.....................           1,056            43.4
NTC Great Lakes, IL.....................           1,056            41.7
NWS Yorktown, VA........................             168            15.0
JHCS Larissa, GR........................              40            14.8
CNM Guam................................              72            13.4
NS Bremerton, WA........................             264        \1\ 35.1
NAS Atlanta, GA.........................              92             6.7
MCB Camp Pendleton, CA..................             400            23.2
MCAGCC 29 Palms, CA.....................             384            25.8
MCB Quantico, VA........................             200            10.3
MCB Quantico, VA........................             100             5.0
                                         -------------------------------
      Total.............................           4,452          281.5
------------------------------------------------------------------------
\1\ Homeport Ashore. Family Housing Privatization

  --Eliminate gang heads. The Navy and Marine Corps remain on track to 
        eliminate the inadequate barracks with gang heads for permanent 
        party personnel \1\. The Navy will achieve this goal by fiscal 
        year 2008; the Marines by fiscal year 2005.
---------------------------------------------------------------------------
    \1\ Gang heads remain acceptable for recruits and trainees.
---------------------------------------------------------------------------
Family Housing Privatization
    We are using a two-step approach for PPV. The first step (Request 
for Qualifications (RFQ) phase) allows a list of proposers to be 
narrowed to those who are judged to be highly qualified on the basis of 
their experience, financial capabilities, and vision for meeting our 
needs. Those proposers judged to be ``highly qualified'' (typically 
four to six) are then invited to submit technical and financial 
proposals to achieve our project objectives. We then select a preferred 
developer with whom we enter into exclusive negotiations. In all PPV 
projects, we have established the following objectives:
  --Self-sustaining projects that provide for necessary 
        recapitalization over the long-term without additional 
        infusions of cash;
  --A legally recognized voice in key decisions made over the life of 
        the agreement;
  --Flexibility to accommodate unforeseen changes over the life of the 
        agreement; and
  --Protection of Government interests and minimization of Government 
        exposure in case of default, poor performance, or non-
        performance.

DON Family Housing Privatization--Project Awarded

        Location                                            No. of homes
Corpus Christi/Ingleside/Kingsville, TX...........................   404
Everett, WA.......................................................   185
Kingsville (II), TX...............................................   150
Everett (II), WA..................................................   288
San Diego, CA..................................................... 3,248
New Orleans, LA...................................................   935
South Texas, TX...................................................   661
Camp Pendleton, CA................................................   712
                                                                  ______
      Total Awarded............................................... 6,583

    We have now awarded eight PPV projects totaling 6,583 homes. 
Through the use of these authorities we have leveraged $135 million in 
DON funds with $478 million in private sector capital for a combined 
investment of $613 million in homes for our Sailors, Marines and their 
families. We have effectively expanded our buying power by stimulating 
over $4.50 of construction for each $1.00 we have contributed. We 
currently have two additional projects in procurement (not yet awarded) 
and another eight projects in planning. All told, the projects, either 
in procurement or planning, total 13,792 homes.

DON Family Housing Privatization--Projects in Process

                                                            No. of homes
In Procurement:
    Beaufort/Parris Island, SC.................................... 1,165
    Stewart Army Subpost, NY......................................   171
                                                                  ______
      Total in Procurement........................................ 1,836
                        =================================================================
                        ________________________________________________
In Planning:
    Northeast Region..............................................   564
    Lakehurst, NJ.................................................   212
    Oahu Regional, HI............................................. 1,978
    Mid-South, TN.................................................   626
    San Diego (II), CA............................................ 4,981
    Hampton Roads, VA............................................( \1\ )
    Camp Pendleton (II), CA....................................... 3,595
                                                                  ______
      Total in Planning...........................................11,959

\1\ To be determined.
---------------------------------------------------------------------------
Private Financing Alternatives for Bachelor Housing
    I believe that there are real opportunities for applying PPV 
authorities to our barracks needs. We held an industry forum last 
November with developers, lenders, and property managers. We learned 
that there is a potential to use private sector financing to improve 
bachelor housing. We are developing three bachelor housing pilot 
projects--Hampton Roads, VA; Camp Pendleton, CA (Del Mar); and 
Quantico, VA (Basic School). We look forward to bringing these 
proposals to the Committees in the near future.
Housing Issues
    We appreciate Congress extending the military housing public/
private venture authorities to 2012. DOD is considering additional 
legislative changes to improve our efforts in family housing and remove 
obstacles for the application of these authorities to bachelor housing, 
such as combining family and bachelor housing privatization accounts 
into a single fund to facilitate joint projects.

                               FACILITIES

Sustainment, Restoration and Modernization
    With this budget, the DON is implementing the new DOD methodology 
for facilities maintenance and repair. ``Sustainment'' is the amount of 
funding required for scheduled maintenance and facility component 
repairs over the expected service life of the facility. It does not 
improve the condition or readiness of the facility. It is calculated 
using the DOD Facilities Sustainment Model (FSM), which considers 
facilities quantity data (most often square feet), and unit cost 
factors (most often dollars per square foot) derived from private 
industry. The calculated sustainment requirement is unique to the DON 
infrastructure inventory and adds, consistency and audit ability in 
determining our requirement. FSM projects inventory gains (new 
construction) and losses (demolition, privatization, excess facilities) 
to arrive at a total sustainment requirement. The sustainment metric is 
the percentage funded of the FSM generated requirement. While competing 
budget pressures precluded us from doing better, this budget request 
meets more than 85 percent of the Department of Navy FSM calculated 
requirement--much better than in previous years.
    ``Restoration and Modernization (R&M)'' is the portion of SRM that 
goes beyond sustainment to improve the condition and readiness of the 
facility, using Operations and Maintenance as well as military 
construction funds. The O&M funds help to correct poorly rated 
facilities and to recapitalize the inventory. R&M requirements are 
based on an investment level to achieve a DOD average 67 year 
recapitalization rate, with all facilities satisfactorily sustained. 
Over the FYDP, R&M (O&M and MILCON) is funded to eliminate facility 
deficiencies by 2013. The fiscal year 2003 recapitalization rate is 122 
years and the FYDP (03-07) average is 83 years.


Anti-terrorism/Force Protection
    Every installation has increased its security posture since the 
attacks of September 11. Additional security personnel, technology 
(security systems, detection devices), security fencing, barriers, 
security boats, and training are being used to enhance our AT/FP 
posture. The SRM budget includes $147 million in AT/FP projects. These 
measures include shatter resistant windows, structural reinforcement, 
and building hardening.
    The military construction budget request has incorporated AT/FP 
measures within the scope of each project, where appropriate. These 
measures include standoff distances, shatter resistant windows, 
structural reinforcement and building hardening. These features account 
for $17.5 million within the projects requested in the fiscal year 2003 
MILCON program.
    There are seven military construction projects totaling $107 
million that support specific AT/FP enhancements and/or improvements. 
These projects were identified after the September 11 attacks:
  --Advanced Explosive Ordnance Disposal Training Facility, Eglin AFB, 
        FL--$6.4 million.
  --Shoreline Security Fencing, Naval Station, Norfolk, VA--$2.0 
        million.
  --Installation Services Support Center, Naval Support Activity, 
        Bahrain--$26.0 million.
  --Parking Garage and Perimeter Security Upgrade, Naval Air Station, 
        Sigonella, Italy--$19.6 million.
  --AT/FP Improvements, Naval Shipyard, Kittery, ME--$11.6 million.
  --AT/FP Improvements, Naval Shipyard, Portsmouth, VA--$19.7 million.
  --AT/FP Improvements, Naval Shipyard, Puget Sound, Bremerton, WA--
        $21.7 million.

Building Demolition
    Our centralized demolition program remains a success story. Defense 
Reform Initiative Directive 36 directed the Navy and Marine Corps to 
dispose of excess facilities over the period of fiscal year 1998 
through fiscal year 2002. Navy will exceed its goal of 9.1 million 
square feet (MSF) in fiscal year 2002. The Marine Corps met its goal of 
2.1 MSF in fiscal year 2000. Both Services will continue the demolition 
program. Our fiscal year 2003 budget request continues this effort, 
with Navy planning to spend $42 million on 50 projects to demolish 2.0 
MSF and Marine Corps planning to spend $5 million on 15 projects to 
demolish 0.5 MSF. The Navy has expanded the use of the central account 
funds to allow limited relocation and repair costs to consolidate 
functions before demolishing the vacated building. These actions will 
eliminate obsolete excess facilities, and further reduce SRM needs.

Energy and Utilities Privatization
    To comply with Executive Order 13123 goals, Federal agencies must 
reduce energy consumption 30 percent by fiscal year 2005 and 35 percent 
by fiscal year 2010, using fiscal year 1985 as the baseline. I am 
pleased to report that we have reduced consumption by nearly 25 percent 
through fiscal year 2001, exceeding our target of 24 percent. To meet 
these goals, we are implementing energy efficient technologies, 
conducting energy awareness programs, and using private sector 
expertise. I am delighted that the DON energy program received two of 
the four government wide Presidential Energy Awards presented by the 
Vice President at a Ceremony on October 18, 2001.
    We are also expanding the use of geothermal energy production at 
Naval Air Warfare Center China Lake, CA and Naval Air Station Fallon, 
NV. This gives us a cost efficient method to use private sector 
financing to generate additional energy in the western U.S. while using 
our land for military training needs.
    Defense Reform Initiative Directive 49 directed the Services to 
privatize their natural gas, water, wastewater and electrical systems 
except where uneconomical or where precluded by unique security 
reasons. Privatization is expected to reduce total ownership costs 
while upgrading the reliability of our utility systems. The DON is 
continuing efforts to privatize, where economically beneficial, 704 
systems at 122 activities worldwide by fiscal year 2005. Proposals are 
now being evaluated to privatize utility systems at the Marine Corps 
base at 29 Palms, CA and Navy and Marine Corps installations in the 
Great Lakes and Washington, DC regions.

Facilities Issues
    The DOD is considering a number of facilities related proposals, 
including:
  --Reduction in long-term facility maintenance costs.--Expands the 
        demonstration program under Section 2814 of the fiscal year 
        2002 National Defense Authorization Bill, now limited to the 
        Army, to allow a single contractor to design, build, operate 
        and maintain facilities funded with military construction 
        funds. It would allow additional demonstration projects that 
        seek to reduce life cycle costs for facilities within the DOD.
  --Conveyance of surplus real property for natural resource 
        conservation purposes.--Allows the transfer of environmentally 
        sensitive property with endangered species habitat to a non-
        governmental organization. This type of property can now only 
        be transferred to governmental entities. This proposal would 
        expand the field of potential recipients, expanding the 
        opportunity to dispose of excess property that has limited 
        commercial development potential.
  --Amend 10 USC 2810 Construction Projects for Environmental Response 
        Actions.--Based on Congress' new definition of repair, the 
        Services are not able to continue to define environmental 
        restoration of soil as repair. The unintended consequence of 
        this redefinition is that these cleanups would have to be 
        classified as MILCON, with all of the necessary approvals 
        inherent with that funding source. This proposal would return 
        the status of environmental restoration projects as repair and 
        allow these cleanup projects to be funded from the 
        Environmental Restoration accounts in the DOD Appropriations 
        Bill. Notification would be submitted for projects estimated 
        over $10 million.

                   PRIOR BASE REALIGNMENT AND CLOSURE

Status
    We are now in the home stretch to complete environmental cleanup 
and property disposal from the four prior rounds of BRAC, 1988 under 
Public Law 100-526 and 1991, 1993, and 1995 under Public Law 101-510. 
We were authorized to implement a total of 178 actions consisting of 46 
major closures, 89 minor closures, and 43 realignments. We have 
completed closure and realignment of all bases except one move from 
leased space to government owned space.
    Our focus is now on cleanup and property disposals for 595 parcels 
at 90 installations. I am pleased to report that to date we have 
transferred 354 parcels comprising over 69,000 acres. Conveyance 
actions are complete at 60 of the 90 installations. Still to go are 241 
parcels at 30 installations. Completing environmental cleanup is 
generally the critical path to conveyance. The fiscal year 2003 budget 
is sufficient to meet all regulator requirements and commitments to 
local redevelopment authorities.

    ----------------------------------------------------------------

                    Fiscal Year 2001 BRAC Highlights
    Cecil Field, FL: 29 acre parcel transferred to the city of 
Jacksonville, FL with no-cost economic development authority. Of the 
17,037 acres, just 768 acres remain to be conveyed.
    Trenton, NJ: final 27 acres of the former Naval Air Warfare Center 
was sold for $1.2 million.
    Long Beach, CA: 323 acres transferred to the City of Long Beach 
under a Port Public Benefit Conveyance. Of the original 1,483 acres, 
only 235 acres remain to be conveyed.
    El Toro, CA: 901 acres conveyed to the Federal Aviation 
Administration.
    Barbers Point, HI: 148 acres transferred to the Hawaii National 
Guard.
    Philadelphia, PA: the last 2.9 acres of the Naval Complex were 
conveyed to the Philadelphia Authority for Industrial Development.
    Perth Amboy, NJ: 3 acres of the former Naval Reserve Center were 
sold for $1 million.

    ----------------------------------------------------------------

A look ahead
    We have ambitious plans for property disposals during the remainder 
of fiscal year 2002 and into fiscal year 2003. At Mare Island we have 
signed early transfer agreements that will convey approximately 3,670 
acres to the City of Vallejo and the State of California for economic 
use and development. At Hunters Point, the Secretary of the Navy signed 
an agreement with the City of San Francisco to work with a public/
private partnership to accelerate the conveyance of this property. And 
at the former Oakland Naval Hospital, we have initiated action with the 
General Services Administration to sell the 174-acre property by public 
sale. We are nearing conveyance of the final parcels at each of the 
following locations: Annapolis, Long Beach, Louisville, Naval 
Activities Guam, New London, and Orlando, with another seven locations 
working toward planned transfer in fiscal year 2003.

                               CONCLUSION

    In conclusion, I believe our infrastructure is well positioned for 
the future. We are accelerating the solution to long-standing housing 
shortfalls for Navy and Marine Corps families and enlisted personnel. 
We are making real progress on family housing PPV, and look to apply 
these tools to bachelor housing. Funding to support our prior BRAC 
efforts is on track, and we have a strong environmental cleanup and 
property disposal plan for this year and next.
    This concludes my statement. I look forward to working with the 
Committee and staff to best support our Sailors, Marines, and our 
Nation.

    Senator Feinstein. Thank you very much. Appreciate it. 
Admiral Preston and then General?
    This was a Marine Corps team, Madam Chairman.
    That is a good answer. Very diplomatic. Please proceed, 
Admiral.
    Admiral Preston. Madam Chairman, thank you for giving me 
the opportunity to come here today and represent Vice Admiral 
Totushek----
    Senator Feinstein. Can you pull the mike a little closer 
and speak directly into it? Great.
    Admiral Preston. Thank you for giving me the opportunity to 
come and represent Vice Admiral Totushek, the Director of the 
Naval Reserve and our some 88,000 Naval Reservists that we have 
serving our country. First I would like to thank you for your 
support in fiscal year 2002. Congress provided the Naval and 
Marine Corps reserve some $53 million in budget request and 
adds to support our Sailors and our reserve Marines as they 
accomplish our Nation's missions and we thank you very much for 
that.
    Our budget for fiscal year 2003 is almost the same. It 
totals approximately $52 million of which $36 million is for 
Naval reserve projects. We believe that these projects are well 
aligned to the Chief of Naval Operations and Admiral Totushek's 
top priorities for our naval reserve manpower and readiness.
    I will keep it short. Again, thank you for giving me the 
opportunity to speak today and thank you for the support you 
have provided to our reserve Sailors and Marines.
    Senator Feinstein. Thank you very much. Just a point of 
clarification, did you say that the Naval Reserve budget totals 
$56 million this year?
    Admiral Preston. If I did, I misspoke. It should be $52 
million for Naval and Marine Corps.
    Senator Feinstein. Yeah, $51.5 million exactly.
    Admiral Preston. Yes, ma'am.
    Senator Feinstein. Okay. Thank you. General, welcome.
    General Coleman. Yes, ma'am.
    Senator Feinstein. General Coleman.
    General Coleman. Thank you very much, ma'am. Ma'am, I would 
like to thank you for allowing us here this afternoon and tell 
you it is a pleasure to appear before you. Top line constraints 
over most of the last decade forced us to defer investment in 
areas that did not have an immediate impact on near-term 
readiness, such as investment in military construction, family 
housing and maintenance of our existing facilities. We 
sustained our combat readiness at the expense of construction 
because we had no other option.
    These were painful decisions because ultimately combat 
readiness is more than just a well-trained and equipped Marine. 
I have been fortunate to visit all of our Marine Corps bases 
and have spoken with many of our Marines and their families. I 
am pleased to report that they are more optimistic than at any 
time in the past.
    Family housing, bachelor housing and operational facilities 
construction supported by this committee has finally begun to 
become visible on Marine Corps installations. Our fiscal year 
2003 military construction family housing and reserve budget 
provides over $500 million. Our proposals will support most of 
our urgent requirements for readiness and quality of life 
construction.
    Overall our program will continue to provide in excess of 
$50 million for new barracks and construction. I am happy to 
report that in fiscal year 2003, the administration supported 
the Commandant's request to increase family housing 
construction funding by 19 percent over fiscal year 2002. In 
fiscal year 2003, all these projects continue to focus on our 
enlisted Marines.
    Every dollar you spend for our facilities is an investment 
that pays long-term dividends in readiness, retention and 
mission accomplishment. The Marine Corps thanks you for your 
support, ma'am.
    Senator Feinstein. Thank you very much, General Coleman.
    I will begin with the questions now. Secretary Johnson, the 
Navy's budget is reduced over 20 percent from last year's 
enacted budget. Admiral Blair, the Pacific Command Commander, 
recently told a House Subcommittee and I quote, ``We can't 
sustain forever. MILCON is usually last on the list of 
priorities.'' Given this statement from a Commander that 
controls more of the globe than any other CINC, how do you 
justify a request 20 percent lower than the previous year?
    Mr. Johnson. Certainly we would like to have had the 
opportunity to take care of more of his and other people's 
desires. We looked at the overall requirements for the 
Department of Navy and Department of Defense. As I mentioned 
earlier, our overall infrastructure installation budget has 
gone up.
    The MILCON is down the 20 percent you talked about, but the 
family housing is up 15 percent and bachelor housing. So 
overall for the installations, we have done pretty well. We 
have not done as well as we did last year. In military 
construction alone, last year was a very good year. This is the 
second best year in the past six, exceeded only by last year.
    Senator Feinstein. Admiral Pruett, do you consider this 
request adequate?
    Admiral Pruett. Yes, ma'am. I think our emphasis is and I 
am sure you may have--staffs may have briefed you or you have 
other information on the OSD facility sustainment model, we are 
taking an approach where we have some very good metrics. The 
Secretary mentioned that we have been using this model for the 
first time this year and we are focusing on funding sustainment 
of the facilities and sustainment so that they do not further 
deteriorate. And that has caused some increase in that part of 
our installations funding. Also base operating support, which 
sometimes eats into our sustainment funding, is funded at a 
better level this year. So I think that our focus from here 
should be to improve on what we do to take care of C3 and C4 
deficiencies.

                          FLAG OFFICER HOUSING

    Senator Feinstein. All right. While you are answering 
questions, let me ask you one more. I would like to begin by 
saying that I think the Navy is to be commended for its efforts 
to eliminate inadequate family housing by 2007 and the Marine 
Corps for your 2005 goal. I have a question though regarding a 
$1.2 million request for two general officer quarters in Italy. 
Can you tell us what that is all about?
    Admiral Pruett. Yes, ma'am. There is a new NATO joint 
command headquarters in South Central Europe. The Navy has been 
designated by EUCOM as the administrative agent. Typically, the 
projects that are funded by the U.S. for NATO installations are 
the administrative and support type facilities, whereas NATO 
funds the operational facilities. This project is for two flag 
officers who are in high risk billets. The project builds two 
3,000 square foot homes. There's a high geographic area cost 
factor of about one and a quarter. The fact that it is just two 
projects does not give us much economy of scale.
    We do have some added cost because there is a requirement 
to manufacture and factory build housing using U.S. firms and 
then ship to the project site. And in this particular location, 
I do not have some of the specifics, but there is a significant 
cost in utility mains and site improvements. But the cost 
really is seismic bracing, safe haven rooms and other force 
protection types of issues.
    Senator Feinstein. Is this on-base housing?
    Admiral Pruett. Yes, ma'am. It is in the compound that is 
being constructed.
    Senator Feinstein. And you need all the special security 
requirements for on-base housing?
    Admiral Pruett. Well, the safe haven rooms are a 
requirement as we understand it, and the seismic bracing is 
another piece of it, which is not ATFP. That is more for the 
seismic standards.
    Senator Feinstein. Are there any other more cost-efficient 
alternatives?
    Admiral Pruett. None that I have available to address, 
ma'am.
    Senator Feinstein. Okay. General Coleman, the Marine Corps 
has released a fiscal year 2003 unfunded priorities list that 
includes 30 MILCON and family housing projects totaling over 
$400 million. Why is that? That sounds like the Marine Corps 
funding and the President's budget falls short of what the 
Corps actually needs. Can you comment on the discrepancy 
please?
    General Coleman. No, ma'am. Excuse me. Yes, ma'am. I would 
just say that it is just the way we prioritize. I feel that the 
Commandant's unfunded priority list is just those things that 
we were not able to fund for originally, but I would not say 
that we were underfunded, ma'am.
    Senator Feinstein. So there are no priorities on that list?
    General Coleman. I beg your----
    Senator Feinstein. Is that correct?
    General Coleman. You say there are none, ma'am?
    Senator Feinstein. Yes.
    General Coleman. Yes, ma'am. They are--the Commandant 
together with I&L (Installation & Logistics) comes up where we 
decide what our list should be. The list that you have seen is 
in no prioritized order.
    Senator Feinstein. Well, now I am talking about the 
unfunded priority list----
    General Coleman. I'm sorry.
    Senator Feinstein [continuing]. And what you're saying is 
That list is in no priority order? I don't know that I am 
understanding you correctly.
    General Coleman. Well, I--and that is my fault. Ma'am, the 
list that you should have received or the list that you 
received is a list of unfunded items, but the list--the only 
one that knows the priority of that list would be the 
Commandant, ma'am.
    Senator Feinstein. Oh, I see.
    General Coleman. The order of precedence.
    Senator Feinstein. Okay. There are 30 MILCON and family 
housing projects on that list and they are all unfunded and 
what you are saying is then they are in no priority order. The 
only one that knows what the priority is, is the Commandant?
    General Coleman. No, ma'am. I misspoke. Excuse me. That is 
a prioritized list. I am sorry, ma'am. I misunderstood you. The 
list that you have is a prioritized list. I apologize.
    Senator Feinstein. The list I have what?
    General Coleman. It is--the unfunded prioritized list is in 
prioritized order.
    Senator Feinstein. All right. That----
    General Coleman. I apologize, ma'am.
    Senator Feinstein. Thank you very much. Secretary Johnson, 
last year the Navy did not request--we have talked about this--
adequate funding for BRAC environmental cleanup. Do I have your 
assurances that the Navy's BRAC budget for 2003 is sufficient 
to meet all of your commitments and obligations?
    Mr. Johnson. It is all of our known commitments when we put 
it together. As we talked earlier, you never know what comes 
up, but it certainly is fully funded to the best of our 
knowledge. If I may follow on to General Coleman, the Navy and 
all services presented their unfunded priority lists. The Navy 
list did not include the MILCON breakout. That will be 
available if you want it, they had the amount, but not the 
amount----
    Senator Feinstein. I think it would be helpful if we could 
have it. Appreciate that very much.
    Mr. Johnson. And I am sure all services did the same thing.
    Senator Feinstein. And again, let me just thank you because 
on January when we signed the Hunter's Point agreement, it was 
the first time a meaningful agreement has actually been signed 
and it is my understanding that the Navy has requested $36 
million for environmental cleanup at the base. May I ask you 
how those funds will be allocated and whether they are 
sufficient to cover the obligation?
    Mr. Johnson. I cannot give you the specific allocations 
among parcels, but they are sufficient in 2003. After 2003, we 
think there will be another $68 million to complete. That is to 
the best of our knowledge.
    We are working with the city and the contractor team to 
prioritize our work. We finished parcel A. We are working on B. 
We will continue to work on E, which is a landfill. As we move 
from A through D we are working in essence on all of them, but 
in the priority established by the city and their developer 
team.
    Senator Feinstein. Thank you. When you testified before the 
Senate Armed Services Subcommittee on Readiness 2 weeks ago, 
you talked at some length in your prepared statement on the 
problem of encroachment. And one of the examples you cited was 
Naval Air Base Coronado, where you said there was a loss of 
over 80 percent of its training beaches because of 
encroachment, and that the Navy has had to substantially alter 
training activities and conduct them elsewhere. Do you have any 
requests in this budget for land acquisition and future years 
defense for training sites to accommodate this problem?
    Mr. Johnson. We do not for Coronado. We have done very well 
there with the nesting of the endangered birds. We have 
increased their nests and also their population obviously. In 
that case, our SEALS work----
    Senator Feinstein. Is the encroachment from birds? Is that 
what you are----
    Mr. Johnson. Yes.
    Senator Feinstein. I thought it was development. No?
    Mr. Johnson. Not at Coronado. In fact, developers 
indirectly cause things, but I do not think at Coronado. At 
Pendleton to the north, developers take up the available land 
and the endangered species end up being on the only land left 
between Los Angeles and San Diego at Camp Pendleton. At 
Coronado, we have been helping the species grow. Our Marines 
and sailors go out and protect nests, move them and at certain 
times a year we cannot use the beaches because of that and 
other times we have to be careful what parts we use. So that is 
strictly an endangered species. Now again, developers help 
because they take up other available land.
    Senator Feinstein. Oh, are you saying that the SEALS cannot 
conduct water exercises because of nests on the beach?
    Mr. Johnson. They are----
    Senator Feinstein. What are those nests?

                      TRAINING AREAS ENCROACHMENT

    Mr. Johnson. They are constrained by the nests because we 
protect them and they have certain marked-off areas you cannot 
use. And the two types are the California Least Tern. Back in 
1987, there were 30 nests. In 1993, 187. In our conservation 
effort, we have built it to 925. We have done very well, but we 
have also decreased our training space.
    The other one is the Western Snowy Plover nests. In 1987, 
there were zero. By 1992, we had 12. Now we have 49. So we are 
proud of what we are doing to help endangered species, but at 
the same time, it does constrain our maneuver area.
    Senator Feinstein. So what are you doing to carry out the 
SEAL exercises at Coronado?
    Mr. Johnson. We worked with the environmental groups and we 
mark off certain areas. There are rules about the number of 
birds and other things that you can harm or potentially harm. 
So we have to restrict our activities. At Coronado, we continue 
to do it, we work around the birds.
    Others, like San Clemente, we have a bigger problem in that 
certain times of the year during their breeding cycle, we 
cannot fire into the island. Other times we have to be careful 
about starting fires. But we work very carefully with the 
environmentalists. We are working with the Department of 
Defense, all the services are, to try put together a package 
that will be coordinated throughout the Administration and come 
to you to help us both from a legislative standpoint to 
regulatory, we can do that within the administration--and 
administrative standpoint.
    Senator Feinstein. But, basically you are able to carry out 
your exercises one way or another?
    Mr. Johnson. Yes, ma'am. But it is more and more difficult. 
You will never find a Marine or sailor who will tell you they 
cannot carry out their mission. The Marines for instance, if we 
may for a moment, when they do amphibious exercises, they get 
on the ships, go down to San Clemente, approach the beach and 
oftentimes they cannot land there. So they administratively go 
up to Camp Pendleton. There is only 500 yards on the 17-mile 
beach of Camp Pendleton that they can land on.
    Senator Feinstein. Let me ask you this. Does the Endangered 
Species Act take precedence over national security?
    Mr. Johnson. Sometimes it does. We have something called 
the Sikes Act, which allows us to do an integrated Natural 
Resources Protection Plan--Management Plan, I think it is. And 
that takes everything into consideration, the military needs, 
the endangered species and so forth.
    Some would say that you also have to have habitats, 
critical habitats for the endangered species. We say the Sikes 
Act NRMP is sufficient and we are trying to get that accepted 
by all agencies. So far the Fish and Wildlife have accepted it, 
but some people are suing us about it. Interesting enough, one 
of the suers is a group of developers.
    Senator Feinstein. What is, just out of curiosity, the 
nature of their suit? Well, because development would certainly 
come much lower in terms of priority than national security.
    Mr. Johnson. Not in their eyes.
    Senator Feinstein. Not in?
    Mr. Johnson. Their eyes. No. They would like to build right 
up to the base boundary and push all the birds, animals and so 
forth into the sanctuary of our military bases. I believe early 
on you asked if we were building some buffers around bases. The 
Army has the best example so far down at Fort Bragg. They got 
some environmental easements around the base. We are trying to 
do that at Camp Lejeune and we're also trying to do some in 
California, but land is awfully hard to procure in California.
    Senator Feinstein. Well, if I can be helpful, let me know 
because----
    Mr. Johnson. I have heard that you----
    Senator Feinstein [continuing]. We do want you to carry out 
your exercises and there is probably a way through some form of 
habitat conservation plan to make areas available in exchange 
for committing areas for preservation. But I would be happy to 
work with you in that regard.
    Mr. Johnson. We would like to welcome you for a visit at 
Camp Pendleton when you are in California sometimes--Senator 
Feinstein: Thank you. I would love that. And show you the 
challenges.
    Senator Feinstein. Thanks very much, Secretary. Admiral 
Preston, of all the service requests submitted in this budget, 
yours remains virtually unchanged from last year's amount. 
Although it is meager, your budget is strong. What have you 
done to maintain that level and avoid a cut? You seem to maybe 
have some magic formula.

                     NAVY AND MARINE CORPS HOUSING

    Admiral Preston. I do not think we have a magic formula. We 
have some pretty strong requirements and we have been very 
fortunate to get those identified and supported, ma'am.
    Senator Feinstein. And what are those requirements?
    Admiral Preston. Well, we have six projects that we are 
looking at in 2003. One of them is bachelor enlisted quarters 
at NAS Atlanta that will give us approximately 92 more spaces, 
which is something we really need to support our Sailors' 
quality of life, quality of service. We have three projects in 
New Orleans again to support our readiness and our ability to 
support the operational units there. We are building a new 
reserve center.
    We would like to build a new reserve center in Montana, 
which we feel is very important, in Billings, to maintain the 
Navy presence there. And we are also looking at expanding the 
Navy and Marine Corps Reserve center at Little Creek in 
Norfolk, Virginia, which we need because of the growth we have 
there.
    Senator Feinstein. Thank you very much.
    Admiral Preston. Yes, ma'am.
    Senator Feinstein. General----
    Admiral Preston. I'd like to give a plug here.
    Senator Feinstein. Yes. Please.
    Mr. Johnson. Our reserve forces are very important at all 
times, but certainly now we have them around the world, around 
the country working as part of the total force team and we are 
very proud of what they do and very pleased to have them 
supported so well by the Congress and the service.
    Senator Feinstein. Thanks, Secretary. I thought there may 
be some magic formula there with Mitch Daniels that I was not 
aware of, but we will let it go. General Coleman, you have 
stated that family housing at Quantico would be fixed by 2003. 
However, your unfunded priority list lists the need for new 
barracks bases at the same facility. How are you going to 
accomplish these goals and how does the Marine Corps plan to 
address the inadequate barracks listed as unfunded priorities?
    General Coleman. Yes, ma'am. Remembering, ma'am, that we 
look at family housing and BEQs in two different frames, ma'am. 
But anyway to answer the question, the Marine Corps because of 
the plus up in the basic allowance for housing along with--and 
that was about a 19 percent increase in some areas--and the 
increased PPV from Camp Pendleton phase two, we are going to be 
able to take the money and combine those two projects and fix 
all family housing at Quantico. Now we will still have some 
fixes in the bachelor quarters, but with 2003 funds, we will 
fix all family housing at Quantico.
    Senator Feinstein. 2006? I thought it was 2005?
    General Coleman. No, ma'am. 2003, we will fix----
    Senator Feinstein. Oh, just in Quantico?
    General Coleman. Yes, ma'am. Quantico.
    Senator Feinstein. All right. Thank you.
    General Coleman. Yes, ma'am.
    Senator Feinstein. Thank you very much.
    Mr. Johnson. If I may add something----
    Senator Feinstein. Secretary?
    Mr. Johnson. We are trying to work a pilot on the bachelor 
quarters PPV, Public Private Venture and we wanted three 
locations. A Navy one at Norfolk, which is fairly large. One is 
down near Oceanside, it is called Del Mar in Camp Pendleton and 
then with that one also one at Quantico. So the barracks you 
talk about we would like to have in a pilot.
    We would like to do these pilots to prove number one, that 
they are financially proper and number two, that they provide 
the proper housing for our Marines and sailors and three, that 
it makes sense not only to us, but also to the Congress and we 
have a road map to move forward if this proves successful.
    Senator Feinstein. Thank you very much.
    Admiral Pruett. Last year Admiral Blair was good enough to 
fill me in on his needs at Guam, particularly with the new 
submarines and my understanding is that you have 3,000 service 
members currently in Guam and they are going to be increased by 
an additional 1,000. And my understanding is that there is a 
need for an elementary and a high school at a cost of $40 and 
$35 million respectively. Admiral Blair said that these schools 
and another $7 million in Korea for a school did not make the 
DOD education activity budget cut. What are you going to do 
about that?
    Admiral Pruett. Ma'am, we are working with the DOD 
education activity which includes the Department of Defense 
dependent schools and well, that is the group that is affected 
by these schools in Guam. There are two schools as you 
mentioned: the high school, which was never intended to be a 
permanent school or facility anyway, it was the old 
headquarters for COMNAVMAR; and then there is another one that 
is an old building for the middle school and for the elementary 
school. We are working with that agency, DODEA, and looking at 
what we can do with our 2004 budget or their 2004 budget to see 
what can be done to fund those two schools. That is where we 
are now. Admiral Fargo was----
    Senator Feinstein. So you have pushed it out a year 
essentially?
    Admiral Pruett. Well, we have not necessarily pushed it out 
a year as much as we have had Admiral Fargo working--he has put 
some emphasis on it and we are just now getting that emphasis 
and we are trying to see what we can do with DODEA.

                    OVERSEAS FINANCIAL CONTRIBUTION

    Senator Feinstein. Okay. Just one final question. It is my 
understanding that this year Japan and Korea are going to 
contribute $942 million in financial assistance and I think I 
heard somewhere that Korea was going to contribute 50 percent 
for housing in Korea? I was visited by a Korean parliamentary 
delegation and I thought that is what they said. What is the 
percentage that Japan contributes?
    Mr. Johnson. It is in essence 100 percent, but I hope David 
can give----
    Admiral Pruett. It is for new construction, ma'am, 
facilities that are identified that need to be constructed to 
support our forces. It is 100 percent. If the----
    Senator Feinstein. Both Japan and Korea?
    Admiral Pruett. No, ma'am. Just for Japan.
    Senator Feinstein. Oh, I see. All right.
    Admiral Pruett. I cannot address the--it is called the CDIP 
program, Combined Defense Program In Korea. I do not know the 
figure there. I will have to check that, but----
    Senator Feinstein. Well, is that $942 million all Japanese 
money or is that a combination of both?
    Admiral Pruett. I am not familiar with that figure, ma'am, 
as far as what that split is, but I do know it is 100 percent 
for Japanese contribution to our construction. When it comes to 
replacement facilities or major rehabs, that is when we pick up 
the tab.
    Senator Feinstein. And the Korean situation, that is 50 
percent. Is that correct?
    Admiral Pruett. I cannot answer that.
    Mr. Johnson. We will give you something for the record.
    Senator Feinstein. Could I get some information on that 
reimbursement and what the standard is and if other Nations 
other than Japan and Korea are doing the same thing?
    [The information follows:]

    Japan and Korea are planning to contribute $942 million in 
financial assistance. In the proposed Japan fiscal year Facilities 
Improvement Program (FIP), the U.S. expects to receive $801 million of 
which $122 million for Navy and $133 million for Marine Corps. The 
Korean cost-sharing programs include Combined Defense Improvement 
Program (CDIP) and Republic of Korean Funded Construction (ROKFC). The 
calendar year 2001 programs are $47 million and $95 million 
respectfully. The Navy received $1.1 million in each program. The 
calendar year 2002 programs are under development.

    Mr. Johnson. There are some others who contribute some, but 
Japan is far and away the biggest and they are 100 percent and 
we will give you what we know about Korea, but we have very 
little Naval forces in Korea.
    Admiral Pruett. Right.
    [The information follows:]

    Japan contributes 100 percent for new construction of all but 
exempted projects such as those related to offensive operations and 
some Morale, Welfare and Recreation (MWR) facilities. Korea funds 100 
percent related to improved combat operations, war reserves and 
combined U.S./ROK operations.

    Senator Feinstein. Is this just Navy or was this Army, too?
    Admiral Pruett. This is Navy.
    Senator Feinstein. It is just Navy?
    Admiral Pruett. Yes, ma'am.
    Mr. Johnson. We will give you--for the record, ma'am.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Feinstein. Okay. Thank you very much. That takes 
care of my questions. If anybody has anything to add, I would 
be happy to hear it. If not, then I hope you can get along with 
these budgets.
    Mr. Johnson. We appreciate your help and we look forward to 
being your partner.
    Senator Feinstein. Thank you. I will be happy to do what I 
can. Thank you very much, gentlemen. And we will go now to 
panel two.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                  Questions Submitted to H.T. Johnson

            Questions Submitted by Senator Dianne Feinstein

                             MILCON FUNDING

    Question. Admiral Vernon Clark reportedly told the House Armed 
Services Committee that the Navy will be $8.67 billion short in funding 
in fiscal year 2003. Do you know if any of that shortfall includes 
Milcon? (If so, what is the Milcon shortfall?)
    Answer. Admiral Vernon Clark's letter of 20 February 2002 to 
Congressman Skelton provided a list of requirements not selected for 
funding in the fiscal year 2003 President's Budget. The list provided 
by the Chief of Naval Operations included $667 million of military 
construction (active and reserve) projects.
    Question. Does the Navy have any unfunded Milcon priorities? Would 
you provide the Committee with a list of your unfunded priorities, in 
priority order.
    Answer. Admiral Vernon Clark's letter of 20 February 2002 to 
Congressman Skelton provided a list of requirements not selected for 
funding in the fiscal year 2003 President's Budget. The list provided 
by the Chief of Naval Operations included $667 million of military 
construction (active and reserve) projects. Attached is the list of 
projects in priority order.

                                 CNO UNFUNDED REQUIREMENT PRIORITY #52 MCON ATFP
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Current
                Activity                   PNO                          Title                          Estimate
----------------------------------------------------------------------------------------------------------------
MCON DESIGN............................     203  MCON DESIGN........................................      15,064
CORPUS CHRISTI TX NAS..................     355  PUBLIC SAFETY FACILITY.............................      15,790
INDIAN HEAD MD NSWCTRDIV...............     171  AT/FP IMPROVEMENTS.................................      14,000
YORKTOWN VA............................     617  MAIN GATE IMPROVEMENTS.............................       2,610
MILLINGTON TN SUPPACT..................     360  IMPV GATE/PERIMTR SECURITY.........................       4,200
KITTERY ME PORTSMOUTH NSY..............     280  GATE 2 IMPROVEMENTS................................       2,350
MERIDIAN MS NAS........................     310  AIRFIELD PERIMETER FENCING.........................       5,150
WHITING FLD FL NAS.....................     245  INSTL/RELOCATE PERIM FENCE.........................       3,020
GREAT LAKES IL NTC.....................     771  REPLACE PERIMETER FENCE............................       3,610
PEARL HARBOR HI NSY....................     905  PERIMETER/SECURITY LIGHTG..........................      20,637
MAYPORT FL NS..........................     774  SECURITY BLDG PASS/ID OFC..........................       1,770
JACKSONVILLE FL NAS....................     268  AIRFLD PERIM SECURTY ENHAN.........................       3,230
EARLE NJ NWS...........................     034  MAIN GATE IMPROVEMENTS.............................       4,610
LITTLE CREEK VA NAVPHIBSE..............     535  GATE 1 IMPROVEMENTS................................       3,860
NEWPORT RI NAVSTA......................     457  GATE 1 (MAIN) IMPROVEMENTS.........................       2,440
WHIDBEY IS WA NAS......................    075A  AULT FIELD SECURTY FENCING.........................       4,600
NEWPORT RI NS..........................     345  CONSOL FIRE/POLICE&SEC FAC.........................       6,660
MECHANICSBURG NAVSUPPACT...............     575  NORTH GATE IMPROVEMENTS............................       2,820
MECHANICSBURG PA NAVICP................     573  OXFORD GATE IMPROVEMENTS...........................       4,150
LITTLE CREEK VA NAVPHIBSE..............     406  POLICE & SEC OPRS FAC..............................       4,970
LITTLE CREEK VA NAVPHIBSE..............     376  PERIMETER SECURITY FENCE...........................       2,760
DAHLGREN VA NSWCTR DIV.................     305  INFRASTRCT ASSURANCE FAC...........................       6,400
BETHESDA MD NSWCCARDEROCK..............     901  SECURITY FACILITY..................................       5,800
GREAT LAKES IL NTC.....................     773  RELOCATE SECURITY FACILITY.........................       4,430
KEYPORT WA NUWC DIV....................     392  EMERGENCY COMMAND CENTER...........................       7,600
ORLANDO FL NAWCTSD.....................     003  SECURTY/PERIMTR FENCE/WALL.........................       2,370
PATUXENT RIVER MD AWCACDV..............     986  FORCE PROT IMPV GUARD HSE..........................      13,400
NEW LONDON CT NSB......................     446  LOWER BASE PARKING FAC.............................       9,000
DAHLGREN VA NAVSPACECOM................     017  PHYS SECTY ENHANCE (CENT)..........................       7,390
YORKTOWN VA NWS........................     460  STATION SECTY PERIM FENCE..........................       3,650
PEARL HARBOR HI NS.....................     624  MAIN GATE IMPROVEMENTS.............................       8,600
MAYPORT FL NS..........................     776  AT/FP CENTRALIZED PARKING..........................       3,350
BARKING SANDS HI PMRF..................     413  SECURITY FENCING & LIGHTING........................       8,000
LUALUALEI HI NM........................     177  PERIMETER/SECURITY LIGHTG..........................       4,100
PEARL HARBOR HI NS.....................     616  PERIMETER/SECURITY LIGHTG..........................       1,600
PATUXENT RIVER MD AWCACDV..............     123  SECURE MAIL FACILITY...............................       2,040
KEFLAVIK ICELAND NAS...................     565  BASE PERIMETER SECTY FENCE.........................       2,600
PEARL HARBOR HI FISC...................     194  SECURITY FENCING...................................       2,000
BARKING SANDS HI PMRF..................     416  SECURITY FACS & PARKING............................       2,000
MILLINGTON TN SUPPACT..................     363  VEHICLE STAND-OFF..................................       4,500
DAHLGREN VA NSWCTR DIV.................     300  EMERGENCY OPERATIONS CTR...........................       5,000
KEY WEST FL NAF........................     901  CVQ AT/FP UPGRADES.................................       2,120
KEY WEST FL NAF........................     903  CVQ & GALLEY AT/FP UPGRADE.........................       5,070
JACKSONVILLE FL NAS....................     270  GUARD AND WATCH TOWERS.............................       3,400
NORFOLK VA NS..........................     994  SECURTY/PERIMTR FENCE/WALL.........................       4,000
LUALUALEI HI NM........................     167  SECURITY LIGHTING..................................       5,800
LUALUALEI HI NM........................     166  SECURITY LIGHTING..................................       5,400
PEARL HARBOR HI NB.....................     002  SECURTY/PERIMTR FENCE/WALL.........................      12,000
PEARL HARBOR HI PWC....................     706  SECURTY/PERIMTR FENCE/WALL.........................       4,500
KEY WEST FL NAF........................     902  CVQ AT/FP UPGRADES.................................       1,790
NEW LONDON CT NSB......................     433  REALIGN PERIM FENCE/NEW RD.........................       3,200
                                                                                                     -----------
      TOTAL............................  ......  ...................................................     269,411
----------------------------------------------------------------------------------------------------------------


                              CNO UNFUNDED REQUIREMENT #98 RECAPITALIZATION ($340M)
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Current
                Activity                   PNO                          Title                          estimate
----------------------------------------------------------------------------------------------------------------
OMN/OMNR...............................  ......  ...................................................      83,200
MCON:
    MCON DESIGN........................     203  MCON DESIGN ($400M Design).........................      13,000
    CHINA LAKE CA NAWCWPNDIV...........     268  BEQ TRANSIENT......................................       6,330
    NEW LONDON CT NSB..................     463  REPLACE PIER 6.....................................      24,800
NORFOLK VA NS..........................     526  A/C MAINTENANCE HANGARS............................      37,500
SIGONELLA ITALY NAS....................     635  BASE OPS SUPPORT I.................................      32,300
SAN DIEGO CA NAS NORTH IS..............     751  SQUADRON OPERATIONS FAC............................      36,930
CHINA LAKE CA NAWCWPNSDIV..............     521  AIRFIELD PAVEMENT UPGRADE..........................      13,260
EL CENTRO CA NAF.......................     207  APRON & HANGAR RECAP...............................      47,850
INDIAN HEAD MD NSWCTRDIV...............     160  WATER SYSTEM IMPROVEMENTS..........................      15,270
SAN DIEGO CA NAS NORTH IS..............     748  TAXIWAY/TOWER......................................      14,040
                                                                                                     -----------
      TOTAL............................  ......  ...................................................     241,280
                                                                                                     ===========
MCNR:
    MCNR DESIGN........................     223  MCNR DESIGN........................................       1,100
    ALBANY NY NMCRC....................     598  RESERVE CENTER.....................................      10,000
    ASHEVILLE NC NRD...................     596  RESERVE CENTER.....................................       3,140
NEW ORLEANS LA NAS JRB.................     187  PERIMETER ROAD AND FENCE...........................       1,280
                                                                                                     -----------
      TOTAL............................  ......  ...................................................      15,520
----------------------------------------------------------------------------------------------------------------


             CNO UNFUNDED REQUIREMENT #100 RECAPITALIZATION AND C3/C4 DEFICIENCY CORRECTION ($173M)
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Current
                Activity                   PNO                          Title                          estimate
----------------------------------------------------------------------------------------------------------------
OMN/OMNR...............................  ......  ...................................................      32,700
MCON:
    MCON DESIGN........................     203  MCON DESIGN ($400M Design).........................       7,400
    LEMOORE CA NAS.....................     217  AIRCRAFT MAINT HANGAR..............................      24,880
WASHINGTON DC NRL......................     010  ADVANCED COMPUTING FAC.............................      12,800
    EL CENTRO CA NAF...................     201  BEQ AND GALLEY.....................................      26,530
PUGET SOUND WA NAVSHIPYD...............     346  CVN MAINTENANCE COMPLEX............................      18,600
NORFOLK VA LANTFLTHQSPACT..............     830  CLF/TYCOM HQ FAC INC I.............................      45,000
                                                                                                     -----------
      TOTAL............................  ......  ...................................................     135,210
                                                                                                     ===========
MCNR:
    MCNR DESIGN........................     223  MCNR DESIGN........................................          90
    ATLANTA GA NAS.....................     349  PW COMPLEX.........................................       5,000
                                                                                                     -----------
      TOTAL............................  ......  ...................................................       5,090
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                          NATO SUB-REGIONAL HQ

    Question. Secretary Johnson, I understand that the Navy has several 
projects in the fiscal year 2003 in support of new sub-regional NATO 
headquarters in Greece and Spain. Can you tell me how those 
requirements are developed and how is it determined that the Navy will 
fund them?
    Answer. The Department of the Navy (DON) has Executive Agent 
responsibilities for U.S. support facilities related to NATO in Spain 
and Greece. DON, as Executive Agent, is responsible for providing 
support facilities, such as housing and other community support 
facilities, to U.S. forces at these locations. Facility requirements 
are determined based on planning criteria utilized for all DON 
projects.
    Question. What additional projects related to the Larrisa and 
Madrid headquarters are in the Navy's outyears Milcon plans?
    Answer. At this time, the Department of the Navy does not have 
plans to provide any other facilities at Madrid and Larissa beyond 
those included in the fiscal year 2003 President's Budget Request.

                                  BRAC

    Question. Secretary Johnson, I understand that the Navy has fully 
funded the BRAC account in the fiscal year 2003 budget request. Is that 
true?
    Answer. Yes, the fiscal year 2003 budget request of $261 million 
includes sufficient funds to meet agreements reached with local 
redevelopment authorities, State and Federal regulators and communities 
affected by the previous BRAC rounds for environmental cleanup of the 
properties.
    Question. Should the Congress expect that the Navy will fully fund 
the BRAC account in future budget submissions?
    Answer. Yes. Completion of the previous BRAC program is a high 
priority for the Department of the Navy.

                         FACILITIES REPLACEMENT

    Question. Admiral Pruett, I note that the rate at which we replace 
our facilities has gone from 106 years to 122 years in the 2003 budget. 
There was a lot of promises made last year in the budget regarding 
facilities. Are we back to business as usual with regard to neglecting 
our facilities?
    Answer. The Navy is committed to providing adequate funding to (1) 
sustain our facilities in a current state of acceptable readiness, and 
(2) replace and modernize those facilities, which have outlived their 
useful life and function. This year's budget request focuses on 
providing funding for sustaining facilities in a C1/C2 condition of 
readiness. Although the fiscal year 2003 military construction budget 
request is lower than last year's budget, it is the 2nd largest 
military construction budget request in 6 years. The Navy is developing 
its future year's military construction program such that the Navy can 
achieve the Department of Defense goal of a 67-year recapitalization 
rate by fiscal year 2007.

                        CONDITION OF FACILITIES

    Question. What kind of message are we sending our young Sailors and 
families about the condition of the facilities in which they live, work 
and train?
    Answer. The Navy is committed to providing a better quality of life 
and workplace to our Sailors and their families:
  --We are on track to eliminating all inadequate family housing by 
        fiscal year 2007 through a combination of military construction 
        and public-private ventures.
  --We are beginning to bring our Sailors off of their ships while in 
        homeport and plan to complete this initiative by fiscal year 
        2008.
  --The Navy is replacing and modernizing its bachelor quarters in 
        accordance with the Department of Defense (DOD) standards that 
        provide much more privacy for the service members. The Navy 
        plans to complete this initiative by fiscal year 2013.
  --Finally, the Navy is replacing and modernizing its workplace by 
        programming and budgeting for projects to replace aging 
        facilities. The Navy is developing its future year's military 
        construction program such that the Navy can achieve the DOD 
        goal of a 67-year recapitalization rate by fiscal year 2007.
    Through the initiatives outlined above, the Navy is sending the 
message that it wants to improve the quality of service for the Sailors 
and their families in and out of the workplace.

                            HOMEPORT ASHORE

    Question. Admiral Pruett, can you explain your ``Homeport Ashore'' 
initiative and what is the Navy's long-term plan to get Sailors off of 
ships?
    Answer. The Navy has determined that single enlisted Sailors who 
must live on ship while in Homeport have the worst living conditions in 
Department of Defense. The 1999 Quality of Life Domain Study reflected 
that these Sailors 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 bachelor quarters room when 
they are in homeport. The Navy has drafted a plan to accelerate moving 
shipboard Sailors ashore by construction of 1+1 bachelor housing units 
to temporarily accommodate four Sailors in each unit which would allow 
junior shipboard Sailors to live off ships by 2008.
    Question. Currently, how many additional barracks rooms do you need 
to accommodate all of the single Sailors who are living on ships?
    Answer. The Navy needs to construct about 10,850 rooms to 
accommodate an additional 21,700 Sailors ashore. This does not include 
the requirement for shipboard Sailors in Japan (to be satisfied by the 
Government of Japan), nor does it include rooms already provided in 
Hawaii and Guam, or rooms already funded in fiscal year 2002 at San 
Diego and Mayport.

                   FORCE PROTECTION IN PRIVATIZED BQS

    Question. Secretary Johnson, I understand that the Navy is looking 
to privatize barracks, but there are still financial issues that must 
be worked out. How do you address the issue of force protection with 
privately opened and operated barracks?
    Answer. We will include Anti-Terrorism/Force Protection measures in 
our projects as deemed necessary as a result of a risk assessment. We 
will also establish priorities for occupancy that, where necessary, 
will avoid potential compromises of a base's mission or security 
without adversely affecting a project's viability.
    Question. What are the major cost concerns that will potentially 
impact this initiative?
    Answer. The major elements of cost in barracks privatization are 
the initial Government investment, if necessary, and the annual housing 
allowances required. We have been able to leverage limited resources to 
accelerate elimination of inadequate family housing through 
privatization, and are pleased with the success we have enjoyed with 
those efforts. We would like to build on that success with similar 
efforts for barracks. We are committed to ensuring that barracks 
privatization initiatives are cost-effective on a life cycle basis.

                      DEPARTMENT OF THE AIR FORCE

STATEMENT OF NELSON F. GIBBS, ASSISTANT SECRETARY OF 
            THE AIR FORCE FOR INSTALLATION, ENVIRONMENT 
            AND LOGISTICS
ACCOMPANIED BY:
        MAJOR GENERAL EARNEST O. ROBBINS, II, USAF, AIR FORCE CIVIL 
            ENGINEER
        BRIGADIER GENERAL DAVID A. BRUBAKER, USAF, DEPUTY DIRECTOR, AIR 
            NATIONAL GUARD
        BRIGADIER GENERAL ROBERT E. DUIGNAN, USAF, DEPUTY TO THE CHIEF, 
            AIR FORCE RESERVE
    Senator Feinstein. I am very pleased to welcome this panel. 
Is Mr. Gibbs present?
    Mr. Gibbs. Yes, ma'am.
    Senator Feinstein. There he is. The Honorable Nelson F. 
Gibbs, Assistant Secretary of the Air Force for Installation, 
Environment and Logistics; Major General Earnest Robbins, The 
Air Force Civil Engineer; Brigadier General David Brubaker, 
Deputy Director of the Air National Guard; and Brigadier 
General Robert Duignan--from the Air Force Reserve. I would ask 
each one of you to summarize your statement for the record. 
Secretary Gibbs, would you begin?
    Mr. Gibbs. Thank you very much, Madam Chairman. I will be 
the only one making opening remarks.
    Senator Feinstein. All right.
    Mr. Gibbs. And I will try to beat your 5-minute time limit 
by at least 40 percent. Madam Chairman, good afternoon. I 
appreciate the opportunity to appear before you today to 
discuss the Department of the Air Force fiscal year 2003 budget 
requests for military construction (MILCON), military family 
housing and dormitories. The Air Force's total force military 
construction and military family housing programs play a vital 
role supporting Air Force operational needs, workplace 
productivity and quality of life.
    This committee's support for this program has remained 
steadfast over the years. The Air Force's top priorities within 
this year's President's budget are to sustain the facilities 
that already exist, enhance quality of life by improving 
housing for both single and married members, complying with 
existing environmental statutes and supporting new missions and 
weapon systems.

                AIR FORCE FACILITIES AND INFRASTRUCTURE

    For fiscal year 2003, the Air Force is requesting over $4.2 
billion to invest in Air Force facilities and infrastructure, 
the same level as submitted in the fiscal 2002 budget request. 
This includes nearly $2 billion for sustainment, restoration 
and modernization to maintain our existing infrastructure and 
facilities, an increase of over $360 million from fiscal year 
2002. This budget request also reflects the Air Force's 
continued commitment to taking care of its people and their 
families. Their welfare is a critical factor to overall Air 
Force combat readiness and the family housing program, 
dormitory program and other quality of life initiatives reflect 
a commitment by the Air Force to provide its people the 
facilities that they deserve.

                             FAMILY HOUSING

    The Air Force is requesting $1.5 billion for military 
family housing of which $700 million is to replace more than 
2,100 worn-out units at 23 bases and improve more than 1,700 
units at 11 bases. This request also supports privatization of 
more than 4,500 units at five bases. To improve the quality of 
life for the Air Force's unmarried junior enlisted members, the 
Air Force is requesting $135 million for its fiscal year 2003 
dormitory program, which consists of 11 enlisted dormitory 
projects at 10 stateside bases and one overseas base.

                              F-22 BASING

    The fiscal year 2003 request also includes $500 million for 
active force military construction, $50 million for the Air 
National Guard and $30 million for the Air Force Reserve. 
Included are 33 new mission projects totaling over $350 
million. This includes investments to base the F-22 Raptor at 
Nellis Air Force Base for operational test and evaluation and 
at Langley Air Force Base, the home of the first operational 
wing.

                          NEW MISSION PROJECTS

    Also the request includes new mission projects to support 
B-2 forward operations in the United Kingdom and at Diego 
Garcia and basing of the Global Hawk Unmanned Vehicle at Beale 
Air Force Base. These projects also include expanded aircraft 
parking at Naval Station Rota in Spain and at Ramstein Air Base 
in Germany.

                           PREPARED STATEMENT

    In conclusion, I want to thank you and the rest of the 
committee for its continuing strong support of the Air Force 
military construction, military family housing and dormitory 
programs. With the committee's assistance and support, the Air 
Force will continue to 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 
air and space force in the world. Thank you very much, Madam 
Chairman.
    [The statement follows:]

                 Prepared Statement of Nelson F. Gibbs

                              INTRODUCTION

    Madam Chairman and members of the committee, good afternoon. I 
appreciate the opportunity to appear before you and discuss present the 
Department of the Air Force's fiscal year 2003 military construction 
and military family housing programs.

                                OVERVIEW

    The Air Force's total force military construction and military 
family housing programs play a vital role supporting Air Force 
operational needs, work place productivity, and quality of life. This 
committee's support for those programs has remained steadfast over the 
years, and the Air Force is gratefull believe that privatization is a 
key component to accomplish this goal quickly and in a cost-effective 
manner. In recent years, the committee's support for innovative 
programs such as privatizing military family housing has given the Air 
Force additional tools for improving the quality of life for its 
members, and that support has been appreciated.
    As Secretary Rumsfeld recently testified to Congress, ``September 
11 changed our nation forever.'' The Air Force's challenge is to 
simultaneously accomplish three difficult missions: to win the war on 
terrorism, to restore the force through investments in procurement, 
people and modernization, and to transform the force to meet 21st 
Century demands. In the area of installations and facilities, this 
transformation began last year with the fiscal year 2002 budget.
    Last year the Secretary of Defense made a commitment--to tranform 
the Department of Defense installations and facilities into those 
required for a 21st Century military. Given the competing priorities 
resulting from September 11, the Air Force has developed an executable 
and fiscally responsible plan for getting its facilities on a path to 
recovery.
    While the Air Force acknowledges the importance of robust funding 
for facility sustainment and modernization, other priorities and 
insufficient Department of the Air Force topline have not permitted it 
to fully address the problems associated with an aging infrastructure. 
In fiscal year 2002, this administration proposed a significant 
increase in military construction and housing programs--to $2.7 
billion, the largest in 20 years the last decade. That increase was 
supported and, in fact, enhanced by this committee and other members of 
Congress, and was welcomed by the Air Force.
    For fiscal year 2003, the Air Force is requesting over $4.2 billion 
to invest in Air Force facilities and infrastructure. This request 
includes $2.3 billion for total force military construction and 
military family housing. This request includes including $644 million 
for active force military construction, $1.5 billion for military 
family housing, $54 million for Air National Guard military 
construction, and $32 million for Air Force Reserve military 
construction. In addition, the Air Force has increased the request for 
operations & maintenance sustainment, restoration, and modernization 
(SRM) funding by $360 million over the fiscal year 2002 request, 
bringing the total force facility investment request to the same level 
as submitted in the fiscal year 2002 budget request.
    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 demolition of excess, uneconomical-to-maintain facilities.
    For fiscal year 2003, the Air Force's top priorities within the 
President's budget are to sustain the facilities that already exist, 
enhance quality of life by improving housing for both single and 
married members, comply with existing environmental statutes, and 
support new missions and weapon systems.
    Air Force missions and people around the world clearly depend upon 
this committee's understanding of, and support for Air Force 
infrastructure programs. That support has never wavered, and for that 
the Air Force thanks you.

                 OPERATIONS AND MAINTENANCE INVESTMENT

    To sustain, restore, and modernize what it owns, the Air Force must 
achieve a balance between military construction and operations & 
maintenance programs. Military construction restores and re-capitalizes 
facilities. Operations & maintenance funding ensures the Air Force can 
perform facility sustainment activities, without which facilities would 
fail prematurely. Without proper sustainment, facilities and 
infrastructure wear out sooner. Operations & maintenance funding is 
also used to directly address many of the critical restoration and 
less-expensive recapitalization needs. Without these funds, commanders 
in the field are unable to address facility requirements that impact 
their near-term readiness.
    With last year's ``shot in the arm'' provided to military 
construction, the Air Force is now in a position to restore its 
operations & maintenance balance. In fiscal year 2003, the sustainment, 
restoration, and modernization share of the Air Force operations & 
maintenance funding is $2.0 billion--meeting the required sustainment 
level for the first time in many years. Included in this amount is 
nearly $160 million in operations & maintenance programmed for 
restoration and modernization work.

                       INVEST IN QUALITY OF LIFE

    The Air Force is committed to taking care of its people and their 
families. Quality of life initiatives acknowledge the increasing 
sacrifices airmen make in support of the nation and are pivotal to 
recruiting and retaining the Air Force's most important resource--its 
people. When members deploy, they want to know that their families are 
stable, safe, and secure. Their welfare is a critical factor to overall 
Air Force combat readiness, and the family housing program, dormitory 
program, and other quality of life initiatives reflect a commitment by 
the Air Force to provide its people the facilities they deserve.

                             FAMILY HOUSING

    The Air Force Family Housing Master Plan provides the road map for 
meeting the Department of Defense goal of providing safe, affordable, 
and adequate housing for our members. The Air Force has increased its 
fiscal year 2003 housing request by $132 million over the fiscal year 
2002 request.
    The $677 million fiscal year 2003 military family housing 
replacement and improvement program replaces more than 2,100 worn-out 
units at 23 bases, improves more than 1,700 units at 11 bases, and 
supports privatization of more than 4,500 units at five bases. The Air 
Force housing privatization program will be covered in more detail 
later. The fiscal year 2003 housing operations and maintenance program 
totals $844 million.

                              DORMITORIES

    Just as the Air Force is committed to provide adequate housing for 
families, it has an ambitious program to improve the housing for its 
unaccompanied junior enlisted personnel. The Air Force Dormitory Master 
Plan is a comprehensive, requirements-based plan, which identifies and 
prioritizes dormitory military construction requirements. 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 the Air Force is 
now concentrating on the final two phases of the investment strategy.
    The total requirement is 79,400 Air Force dormitory rooms. There is 
currently a deficit of 12,700 rooms, and the existing inventory 
includes 3,900 inadequate rooms. It will cost approximately $1 billion 
to execute the Air Force Dormitory Master Plan and achieve the fiscal 
year 2009 Air Force goal to eliminate the deficit and replace the worst 
existing dormitories.
    The fiscal year 2003 dormitory program consists of 11 enlisted 
dormitory projects at ten CONUS bases and one overseas base, for a 
total of $135 million. On behalf of all the airmen benefiting from this 
important quality of life initiative, I want to thank the committee for 
its continued support of this critical quality of life effort.

                            FITNESS CENTERS

    Other quality of life investments include community facilities, 
such as fitness centers, vital in the effort 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 the airmen. The fiscal year 2003 military 
construction program includes fitness centers at Andersen Air Force 
Base, Guam; Hanscom Air Force Base, Massachusetts; and Royal Air Force 
Lakenheath, United Kingdom.

                        ACCOMMODATE NEW MISSIONS

    New weapon systems provide the rapid, precise, global capability 
that enables combat commanders to respond quickly to conflicts in 
support of national security objectives. The fiscal year 2003 total 
force new mission military construction program consists of 33 
projects, totaling $339 million.
    These projects support the initial basing of a number of new weapon 
systems; two of special significance are the F-22 Raptor and the C-17 
Globemaster III. The F-22 Raptor is the Air Force's next generation air 
superiority fighter. Tyndall Air Force Base, Florida, will house the F-
22 flying training program. Nellis Air Force Base, Nevada, will be the 
location for F-22 Follow-on Operational Test and Evaluation. Langley 
Air Force Base, Virginia, will be home for the first operational 
squadrons. The requirements for F-22 related construction at Tyndall 
were funded in the fiscal year 2002 military construction program. The 
fiscal year 2003 military construction request includes one F-22 
project at Nellis for $3 million, and three F-22 projects as Langley 
totaling $40 million.
    The C-17 Globemaster III aircraft is replacing the Air Force's 
fleet of C-141 Starlifters. The C-17 provides rapid global mobility by 
combining the C-141 speed and long-range transport capabilities; the C-
5 capability to carry outsized cargo; and the C-130 capability to land 
on short, forward-located airstrips. The Air Force will base C-17s at 
Charleston Air Force Base, South Carolina; Altus Air Force Base, 
Oklahoma; McChord Air Force Base, Washington; McGuire Air Force Base, 
New Jersey; and Jackson Air National Guard Base, Mississippi. Thanks to 
support from this committee, construction requirements for Charleston, 
Altus, and McChord were all funded in prior-year military construction 
programs. The request for fiscal year 2003 includes a $25 million 
facility at McGuire Air Force Base, two facility projects for $35 
million at Jackson International Airport, and $31 million for C-17 
facilities at a soon to be announced location.
    Other new mission requirements in fiscal year 2003 include 
supporting the Air Force's Global Strike Task Force by building B-2 
aircraft hangars at Royal Air Force Fairford, United Kingdom, and B-2 
aircraft parking pads at Diego Garcia. To support the Space/C2ISR Task 
Force the Air Force will build facilities to base the Global Hawk 
unmanned aerial vehicle at Beale Air Force Base, California and to 
support the Defense Satellite Program and future SBIRS at Buckley Air 
Force Base, Colorado. Finally, to support the Global Response Task 
Force the Air Force will build facilities to support Combat Search and 
Rescue aircraft at Davis-Monthan Air Force Base, Arizona, C-130J 
aircraft at Little Rock Air Force Base, Arkansas, and expand aircraft 
parking at Naval Station Rota, Spain, and at Ramstein Air Base, 
Germany.

                            OVERSEAS MILCON

    The quality of overseas installations continues to be a priority 
for the Air Force because of the impact it has on both individual and 
family morale. Even though the majority of Air Force personnel are 
assigned in the United States, 14 percent of its forces are serving 
overseas, including 33,000 Air Force families. The Air Force overseas 
base structure has stabilized after years of closures and force 
structure realignments. At this level, the overseas infrastructure 
still represents 19 percent of the total Air Force physical plant. The 
fiscal year 2003 military construction request for European and Pacific 
installations is $233 million totaling 14 projects. The program 
consists of infrastructure and quality of life projects in Korea, the 
United Kingdom, Germany, Italy, and Spain as well as critical 
facilities on Guam, Diego Garcia, and Wake Island. The committee's 
support for these operational and quality of life projects is equally 
as important as its support for stateside projects.

           PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

    The Air Force will request $53 million in planning and design for 
fiscal year 2003. These funds are required to complete design of the 
fiscal year 2004 construction program, and to start design of the 
fiscal year 2005 projects. The Air Force is also requesting $21 million 
in fiscal year 2003 for the total force unspecified minor construction 
program, which is the primary means of funding small, unforeseen 
projects.

              OPTIMIZE USE OF PUBLIC AND PRIVATE RESOURCES

    In order to accelerate the rate at which it revitalizes its housing 
inventory, the Air Force has taken a measured approach to housing 
privatization. It started with a few select projects, with the goal of 
identifying successes and ``lessons learned'' to guide follow-on 
initiatives. The first housing privatization project was awarded at 
Lackland AFB, Texas, in August of 1998, and all 420 of those housing 
units are constructed and occupied by military families. There are 
three additional projects under construction that will result in 1,900 
privatized units at Dyess Air Force Base, Texas; Elmendorf Air Force 
Base, Alaska; and Robins Air Force Base, Georgia. In addition, the Air 
Force is on track to award eight projects in the next 12 months that 
will result in an additional 9,000 privatized units across the Air 
Force. On average, the Air Force has realized a five to one leverage on 
the military construction investment for housing privatization, and 
this kind of favorable ratio is expected to hold steady or even 
increase on other projects in the out-years. As mentioned earlier, the 
fiscal year 2003 budget request includes $7.8 million to support the 
privatization of more than 4,500 units at five bases: Maxwell Air Force 
Base, Alabama; Hanscom Air Force Base, Massachusetts; Cannon Air Force 
Base, New Mexico; Shaw Air Force Base, South Carolina; and F.E. Warren 
Air Force Base, Wyoming.
    The Air Force continues to pursue privatization of utility systems 
at Air Force installations. The goal is to privatize utility systems 
where it makes economic sense and does not negatively impact national 
security. The Air Force has identified 434 of 513 systems as potential 
privatization candidates, and has released requests for proposals for 
242 systems and have completed the process on 161 systems.

       DEMOLITION OF EXCESS, UNECONOMICAL-TO-MAINTAIN FACILITIES

    For the past 6 years, the Air Force has pursued an aggressive 
effort to demolish or dispose of facilities that are not economical to 
sustain or restore. From fiscal year 1998 through fiscal year 2001, the 
Air Force demolished 9.6 million-square feet of non-housing building 
space. It expects to demolish an additional 4.4 million-square feet in 
fiscal year 2002 and fiscal year 2003, for a total reduction of 14 
million square feet. 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 it to reduce the strain 
on its infrastructure funding by eliminating unneeded facilities.

                        REALIGNMENT AND CLOSURES

    This summer the Air Force lowered the flags at Kelly and McClellan 
Air Force Bases, its two most complex closure actions resulting from 
the Base Realignment and Closure Acts. The Air Force has now completed 
all 39 of its base closure and realignment actions (22 closures and 17 
realignments). As part of the closure process, the Air Force has worked 
with the local reuse authority at each base to minimize the impact on 
the local community from the closure. This effort has led to the 
creation of over 48,000 jobs and an annual payroll of $1.4 billion in 
the affected communities.
    While these facilities are being returned to their respective 
communities, the Air Force has a continuing responsibility for 
environmental clean up from past industrial activities. The Air Force 
takes this responsibility seriously, having spent $2.4 billion since 
1991 in environmental clean up at closing bases. For fiscal year 2003, 
the Air Force is requesting $119 million to continue the clean up.
    Although past base closure rounds have reduced its infrastructure 
footprint, the Air Force still retains excess infrastructure. 
Maintenance of this excess infrastructure forces the Air Force to sub-
optimize use of available operations and maintenance funds. The Fiscal 
Year 2002 National Defense Authorization Act provides the Air Force an 
opportunity to divest itself of this unneeded infrastructure. In 
preparation for the 2005 base closure round, the Air Force will focus 
first on sizing its force, and then on sizing the infrastructure to 
support that force.

                               CONCLUSION

    In conclusion, I again thank the committee for its strong support 
of Air Force military construction and military family housing 
programs. With the committee's assistance and support, the Air Force 
will 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 air and space force in the world.

                        MCCLELLAN AIR FORCE BASE

    Senator Feinstein. Thanks very much, Secretary. I am going 
to jump right to California, in particular to a base that has 
had a lot of problems, and that is McClellan and the 
environmental remediation. I have been informed by the local 
reuse authority for Sacramento County that in January, the Air 
Force staff at McClellan had submitted a $27.7 million plan to 
meet the fiscal year 2003 restoration schedule. By early 
February that number had been reduced to $12.7 million and the 
final budget, it is now $11.7 million.
    In the Air Force briefing of which I have a copy, it says 
McClellan has been tasked with the identification of 2003 
deferments within anticipated 2003 funding. It goes on to say 
these deferments are necessary to ensure that fiscal year 2004 
to 2009 is properly budgeted in case no fiscal year 2003 
supplemental funding is received. Now, Secretary Gibbs, in 
these hearings last year, I was assured that there would be no 
repeat of a deliberate underfunding of environmental 
remediation, and it looks to me like you have submitted a 
budget that cuts funding to California bases with the 
expectation that this committee will restore the funds. Is that 
the case?
    Mr. Gibbs. No, ma'am. It is not.
    Senator Feinstein. So you are prepared to maintain your 
commitment with this amount of money?
    Mr. Gibbs. Yes, ma'am. Back in I believe it was in the 2000 
budget year, there was a reduction in funding for environmental 
remediation across all services for BRAC bases. At that point 
with that conclusion, the Air Force reprogrammed all of its 
remedial actions throughout. We have a detailed plan for each 
of the bases in which a remedial treatment is necessary. And 
McClellan was one of those. In 2004, we reached the point where 
we have to again----
    Senator Feinstein. Please speak directly into the mike.
    Mr. Gibbs. Excuse me. In 2004, we reached the point where 
we have to go back and pick up for some of those funds which we 
did not get back in 2000 on the bases. What we have in 2003 is 
the continuation of the program that started out or was 
reprogrammed in 2000, and the overall request for environmental 
remediation is approximately $120 million for BRAC bases.
    Senator Feinstein. The cost is $400 million.
    Mr. Gibbs. The anticipation is in 2004, that request will 
have to be increased to about $180 million to stay on track for 
our program.
    Senator Feinstein. Well, you know, if the cost for 
environmental remediation of that base is $400 million, how are 
we going to get there at amounts like--what you are proposing? 
You cannot get there. It would take 35 years to get there.
    Mr. Gibbs. Unfortunately that is very close. In McClellan 
specifically, the plan calls for all of the remedial processes 
to be in place by 2015 and it will take another 20 years or so 
after that for all of the processes to complete what it is they 
have to do. It is a passage of time.
    One of the areas that McClellan, and to be quite honest 
with you, I wish it were only going to cost $400 million--that 
is close to what we have already spent and it is going to be 
substantially more. But, at this point, much of what is 
occurring, because of the discoveries of the past 2 years 
really, are studies as to how best to achieve the cleanup. And 
moving some of the studies forward would not substantially 
change the completion dates, either the completion dates for 
the installation of the remedies or the ultimate cleanup of the 
site.
    Senator Feinstein. Is the Air Force capable of executing 
greater funding in 2003 at McClellan?
    Mr. Gibbs. Yes, ma'am.
    Senator Feinstein. And how much would that be? How about 
$22 million?
    Mr. Gibbs. That would be very close. That would be almost 
exact as a matter of fact. There are a number of studies that 
can be done. That is a number of individual projects that we 
would be capable of getting going that would--most of them as I 
said are in the study area and we would be capable of getting 
the people going on the studies and getting them started in 
2003. If you would like, I can provide for you a list of those 
individual projects.
    Senator Feinstein. I would. If you would not mind. Thank 
you very much.
    Mr. Gibbs. We will provide that to the committee next week.
    [The information follows:]
                        McClellan Air Force Base
    Potential fiscal year 2003 Projects--$23.0 Million.
    The following is a list of McClellan 2004 projects that can be 
accelerated and executed in 2003.

                        [In millions of dollars]

        Project Description                                             
Ground water pump and treatment/containment system expansion......   5.6
Soils feasibility study...........................................   0.8
West Creeks feasibility study.....................................   0.5
Hexavalent chrome cleanup.........................................   3.0
Remedial investigation building 252...............................   0.4
Groundwater treatability study....................................   2.8
Disposal pit treatability study...................................   3.0
Basewide, sewer and landfill radiological investigations..........   6.9
                                                                  ______
      Total.......................................................  23.0

    Senator Feinstein. The Air Force budget request for current 
mission MILCON appears to be at its lowest point in 20 years. 
With 63 percent of your facilities rated at C3 or C4, how do 
you justify a 48 percent MILCON reduction from last year's 
enacted level? And I guess the question I am going to ask, that 
I hope you will answer honestly is, does this budget request 
provide adequate military construction funding for the Air 
Force?
    Mr. Gibbs. I think if I may, I will answer part of it and 
then I will ask General Robbins also to answer from his 
position. The Air Force made a specific decision this year in 
preparing its budget that what we needed to do first and 
foremost was to maintain and shore up that which we have. And 
that is what I mentioned in my remarks earlier on that the 
sustainment aspect of the budget was increased $360 million. 
Effectively, we are attempting to fund sustainment at 100 
percent of the Department of Defense (DOD) sustainment model 
because we believe that is the right thing to do and it is also 
the best use of the money.

                    CURRENT AND NEW MISSION PROJECTS

    Senator Feinstein. But let me just interrupt you because my 
understanding is you are funding only five Air Force projects. 
So my question would be what are the five?
    Mr. Gibbs. You mean other than new mission projects? We are 
funding about 35 or 40 projects, ma'am, but there are----
    Senator Feinstein. Five current mission----
    Mr. Gibbs [continuing]. Only five that are not new mission 
projects.
    General Robbins. Yes, I can find the list.
    Senator Feinstein. Could you just tell us what those five 
are?
    General Robbins. The list I have here are just the new 
mission projects.
    Senator Feinstein. Perhaps then would you get that to the 
committee staff?
    Mr. Gibbs. Yes, ma'am. We will provide that to you also.
    [The information follows:]

                    Current and New Mission Projects
    The Air Force has requested a total of 48 projects for the active 
component in the fiscal year 2003 President's Budget Request. Of those 
48 projects, 25 support new mission beddown and force realignment, 14 
support quality of life initiatives, four correct environmental 
deficiencies, and five are for current mission facility requirements. 
The following table lists those projects.

                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
             Category                    State/Base                           Project                     Cost
----------------------------------------------------------------------------------------------------------------
New Mission....................  AR--Little Rock..........  C-130J 2-Bay Hangar.......................      12.9
New Mission....................  AR--Little Rock..........  C-1 30J Engine Storage Facility...........       2.1
New Mission....................  AR--Little Rock..........  Add to and Alter Fuselage Trainer Facility       2.5
                                                             for C-1 30J.
New Mission....................  AR--Little Rock..........  C-130J Maintenance Training Facility......       8.1
New Mission....................  AZ--Davis-Monthan........  HH-60 Apron/Taxiway Shoulders.............       3.7
New Mission....................  AZ--Davis-Monthan........  HH-60 Maintenance Hangar..................       6.4
New Mission....................  CA--Beale................  Global Hawk Squadron Operations Facility/        3.7
                                                             Aircraft Maintenance Unit.
New Mission....................  CA--Beale................  Dining Facility...........................       3.5
New Mission....................  CA--Beale................  Upgrade Maintenance Dock for Global Hawk..       4.6
New Mission....................  CO--Buckley..............  SBIRS Mission Control Station.............       6.9
New Mission....................  CO--Buckley..............  Wing Headquarters/Administrative Facility.      10.8
New Mission....................  NJ--McGuire..............  C-17 Flightline Operations Facility.......      24.6
New Mission....................  NV--Nellis...............  F-22 Munitions Maintenance Facility.......       3.2
New Mission....................  TX--Sheppard.............  Euro-NATO Joint Training Flight Simulator.       6.0
New Mission....................  VA--Langley..............  F-22 Infrastructure and Utilities.........      10.7
New Mission....................  VA--Langley..............  F-22 Flight Simulator.....................       8.1
New Mission....................  VA--Langley..............  F-22 Squadron Operations Facility/Aircraft      20.8
                                                             Maintenance Unit.
New Mission....................  O/S--RAF Fairford........  B-2 Maintenance Hangar/Apron..............      19.0
New Mission....................  O/S--Diego Garcia........  B-2 Aircraft Parking Apron................      17.1
New Mission....................  O/S--Rota................  Aircraft Parking, Phase 1.................      31.8
New Mission....................  O/S--Ramstein............  Passenger Terminal Annex..................      17.7
New Mission....................  O/S--Ramstein............  Combined Fleet Service/In-flight Kitchen         7.5
                                                             Facility.
New Mission....................  .........................  Classified project........................       2.0
New Mission....................  .........................  Force Protection Improvements (Classified       23.0
                                                             Location).
New Mission....................  TBD--TBD.................  C-17 (Various Facilities).................      30.6
QOL............................  AZ--Davis-Monthan........  Dormitory (120 rooms).....................       9.1
QOL............................  FL--Hurlburt.............  Dormitory (144 rooms).....................       9.0
QOL............................  LA--Barksdale............  Dormitory (168 rooms).....................      10.9
QOL............................  MA--Hanscom..............  Fitness Center............................       7.7
QOL............................  MS--Keesler..............  Dormitory (200 rooms).....................      22.0
QOL............................  NC--Pope.................  Dormito (144 rooms).......................       9.7
QOL............................  NV--Nellis...............  Dormitory (144 rooms).....................      12.3
QOL............................  OH--Wright-Patterson.....  Dormitory (144 rooms).....................      10.4
QOL............................  TX--Lackland.............  Dormitory (200 rooms).....................      18.5
QOL............................  TX--She pard.............  Dormitory (144 rooms).....................      10.0
QOL............................  VA--Langley..............  Dormitory (96 rooms)......................       8.3
QOL............................  O/S--Andersen............  Fitness Center............................      16.0
QOL............................  O/S--Lakenheath..........  Fitness Center............................      10.8
QOL............................  O/S--Osan................  Dormitory (156 rooms).....................      15.1
Environmental..................  AK--Belson...............  Upgrade Central Heat Plant Baghouses......      21.6
Environmental..................  AK--Clear................  Upgrade Power Plant.......................      14.4
Environmental..................  CA--Vandenberg...........  Repair Water Distribution, Phase 2........       7.4
Environmental..................  CA--Vandenberg...........  Install Stormwater Drainage...............       3.1
Current Mission................  NV--Nellis...............  Land Acquisition..........................      15.0
Current Mission................  O/S--Ramstein............  Repair Ramp 1, Phase 1....................      23.7
Current Mission................  O/S--Wake Island.........  Repair Airfield Pavement, Phase 2.........      24.9
Current Mission................  O/S--Lakenheath..........  Mobility Processing Facility..............       2.6
Current Mission................  O/S--Ramstein............  Kaiserslautern Military Community Center..      21.3
Other..........................  .........................  Planning and Design.......................      41.5
Other..........................  .........................  Unspecified Minor Construction............      11.5
                                --------------------------------------------------------------------------------
      Total....................  .........................  ..........................................     644.1
----------------------------------------------------------------------------------------------------------------


    Senator Feinstein. Could you also give us a list of those 
projects funded with the Defense Emergency Response Fund 
(DERF)?
    General Robbins. Yes. There are four of those. One was the 
Dover Mortuary project--military construction $19 million, I 
believe. And then there were three classified location projects 
in Southwest Asia.
    Senator Feinstein. And those are funded?
    General Robbins. Yes that is correct.
    Senator Feinstein. Right.
    General Robbins. In 2002. Out of the 2002 DERF.
    Senator Feinstein. Do you feel your budget is adequate for 
your needs?

                      BACHELOR AND FAMILY HOUSING

    General Robbins. One of the advantages of going second 
after the Navy is to think about your answer to that question 
and it's like asking one of my teenage daughters do they have 
enough money to spend. An engineer will never have all that 
they think they could use, but I would echo what Mr. Gibbs said 
in terms of the process the Air Force goes through to reach the 
conclusion that we have reached in terms of taking care of 
bachelor and family housing, the new mission bed downs that we 
know we have to do and then our most compelling environmental 
requirements. It is sufficient to at least help us hold the 
line when you throw in this increase in sustainment dollars 
that we have requested. So we will hold the line on our overall 
infrastructure readiness with this budget.
    Senator Feinstein. Well, let me just repeat something that 
I said last time. I am told by people who have done this for a 
long time that this is sort of typical. The MILCON budget gets 
cut and the belief is well, the Congress is going to plus it 
up, but everybody this year is saying, oh this is fine, we can 
handle all our needs with this. You may just actually have that 
as the final result, and I just want to say that publicly that 
the game may not take place this year.
    Mr. Gibbs. That certainly would be acceptable to the Air 
Force, ma'am.
    Senator Feinstein. Okay. So in other words, you are not 
going to try, General Robbins, to bring all the Air Force's C3 
and C4 rated facility classes to at least C2?
    General Robbins. Not with this budget. Not with the 2003. 
What we are on track to do, and I believe it was in Mr. Gibb's 
testimony, but I am not sure, is that we believe by the time we 
reach the end of this 5 year defense program, fiscal year 
defense program, that we will be on the glide path to meet the 
defense planning guidance that says by 2010 we should be on a 
67 year recap rate.
    Senator Feinstein. Well, but the goal was 2007. Now you are 
changing it to 2010.

                             FAMILY HOUSING

    General Robbins. Actually I believe that 2007 goal had to 
do with family housing.
    Senator Feinstein. Substandard family housing.
    General Robbins. Right.
    Senator Feinstein. That is correct.
    General Robbins. And I'm speaking to overall----
    Senator Feinstein. Oh. I beg your pardon.
    General Robbins. Yes, ma'am.
    Senator Feinstein. Well, will the substandard family 
housing be brought up to par then by 2007?

                  AIR FORCE FAMILY HOUSING MASTER PLAN

    General Robbins. Want me to answer that?
    Mr. Gibbs. The Air Force plan--the master plan for family 
housing is for all of the substandard housing to be brought up 
to par, in your terms, by 2010. The specific reason for that is 
that there are several bases which are planned to have a 
construction project every year from now until 2010, that an 
attempt to bring any of those forward to close them out 
earlier, we believe would cause substantial disruption on the 
individual bases and would effectively dispossess more 
individuals from where they are living, and that it would be 
inappropriate from a mission perspective and also from how we 
want to treat our people to force them to do that.
    Senator Feinstein. So they are going to live in substandard 
housing?
    Mr. Gibbs. Well, they actually have two options. The 
housing--yes, to that extent. Or, they can seek Basic Allowance 
for Housing (BAH) and live off of the facility.
    Senator Feinstein. General Brubaker, this budget includes 
just $85 million for the Air Guard and Reserve out of the $2.2 
billion overall request and the Air Force MILCON is down 
sharply. But the Air Guard and Reserve constitute more than 50 
percent of the Air Force's war fighting capability and comprise 
more than 25 percent of the work force, yet only 4 percent of 
your MILCON budget is being allocated to the Air Guard and 
Reserve. Do you believe this is a fair and balanced program?

                AIR NATIONAL GUARD MILITARY CONSTRUCTION

    General Brubaker. Ma'am, we would like to have more and our 
needs are greater. The Air Force had to make some real tough 
decisions and we played fully in that decision process and it 
did not happen that we got more. We are ready to execute the 
projects that we did get and we are hopeful next year that we 
might see some increases that enable us to do some other 
things.
    Senator Feinstein. What percentage of your facility 
inventory do you consider substandard or inadequate?
    General Brubaker. We estimate that approximately 50 percent 
of the Air National Guard facilities are substandard. They 
would be those that we consider small and antiquated, those 
that are malpositioned, those with severe violations for life, 
safety and fire codes. The categories of facilities with the 
most pressing problems are the operations, training and support 
facilities and aircraft pavements.
    Senator Feinstein. Can I ask you a question? What was your 
request for funding in this area?
    General Brubaker. Our total request was for over 30 
projects and over $200 million.
    Senator Feinstein. And the budget is at what for them? $200 
million. So that is a 75 percent cut in essence of your 
request.
    General Brubaker. We got a lot less than----
    Senator Feinstein. You got $50 million rather than $200 
million.
    General Brubaker. Yes, ma'am.
    Senator Feinstein. And you can live with it?
    General Brubaker. We are going to make do.

                AIR FORCE RESERVE MILITARY CONSTRUCTION

    Senator Feinstein. Okay. I would like to ask a question 
about the Reserve. General Duignan, 23 percent of the Air Force 
Reserve projects were congressional adds last year. The 2003 
Air Force Reserve budget request funds only four projects, all 
of them in Portland, Oregon to support the KC-135 tanker 
relocation program. For 2004 the future year's defense plan 
includes only six Air Force Reserve projects, five of them for 
the KC-135 program in Portland. The Air Force Reserve 
infrastructure encompasses five major installations, seven air 
stations and 55 other locations. Why is the Reserve focusing 
its 2003 and 2004 request really solely on Portland?
    General Duignan. Like our brothers in the Guard, we 
submitted--we have many more projects, but they are submitted 
through the corporate process in the Air Force and compete with 
the Air National Guard and the active force to fill the most 
important needs of the Air Force. In 2003, the most pressing 
requirement was the conversion of the rescue unit in Portland 
to the KC-135s. That will not be completed in 1 year so we have 
to continue that in the 2004 program. We do have additional 
projects that we have that we need to complete, but based on 
the priorities, the Portland ones are the top ones to get 
finished.

                                 KOREA

    Senator Feinstein. Okay. General Robbins, at a House 
hearing, General Schwartz, the Commander in Chief of our forces 
in Korea, submitted a list of potential MILCON inserts for 
Korea. The list includes three Air Force projects, a 
mechanically protected personnel processing center, a missile 
maintenance shop complex and the replacement of an aircraft 
fuels maintenance dock. That's $27 million worth of projects 
for the Air Force. Are you familiar with this list?
    General Robbins. No, ma'am.
    Senator Feinstein. Do you know if General Schwartz 
requested them?
    General Robbins. No, ma'am.
    Senator Feinstein. Do you know why they were not included 
in the budget request?
    General Robbins. Why they were or were not?
    Senator Feinstein. Were not.
    General Robbins. I am not familiar with those three 
projects.
    Senator Feinstein. Okay. Could we get answers to those 
questions?
    General Robbins. Sure.
    [The information follows:]

    The projects referenced by Senator Feinstein are shown below. None 
are in the fiscal year 2003 budget request.

                          [Dollars in millions]
------------------------------------------------------------------------
                                      Programmed
              Project                   amount         PACAF priority
------------------------------------------------------------------------
Kunsan AB Consolidated Personnel             $4.9  Fiscal year 2007
 Processing Facility.
Osan AB Fuel System Maintenance               7.5  ( \1\ )
 Shop.
Kunsan AB Missile Maintenance                16.O  ( \1\ )
 Facility.
------------------------------------------------------------------------
\1\ Not in FYDP.

    The Air Force prioritizes requirements, based on each command's 
priority and their impacts to mission, readiness, and quality of life, 
into one integrated priority list (IPL). This IPL is submitted to Chief 
of Staff of the Air Force and Secretary of the Air Force for 
endorsement, then to the Office of the Secretary of Defense and 
eventually Office of Management and Budget, for inclusion into the 
President's Budget.
    The Air Force fiscal year 2003 MILCON submission includes $73.1 
million for overseas bases in the Pacific theater. It includes projects 
at Diego Garcia, Wake Island, Guam, and Korea.

                  GLOBAL HAWK AT BEALE AIR FORCE BASE

    Senator Feinstein. I wanted to ask a question about Global 
Hawk at Beale. Are the funds in this budget sufficient for 
Global Hawk?
    Mr. Gibbs. Ultimately--I cannot answer your question. 
Ultimately but for what is planned out for the next couple of 
years. Yes, ma'am. Do you know?
    General Robbins. Yes. The 2003 budget as you know, has the 
three projects I guess at Beale. And then in 2004 there are two 
more, and in 2005 there are two more, or one more, and then 
2006 one more. So it's spread out ranging from the initial bed 
down mission support type requirements which are in the early 
years going out to a dormitory to bed down the additional 
people that will flow in as we get the iron into Beale, and 
then even a visiting quarters to handle the TDY rotations that 
will go up as a result of the bed down and new mission.
    General Robbins. So it extends out through 2006.
    Senator Feinstein. And from a military point of view, that 
is adequate to meet the mission needs for Global Hawk?
    General Robbins. Yes, ma'am. If this 2003 budget request is 
supported and we phase these other projects as I have laid them 
out here, that will match the flow of the actual aircraft into 
Beale.
    Mr. Gibbs. I would comment for that. That is based upon the 
current----
    Senator Feinstein. I'm sorry. I cannot hear you.
    Mr. Gibbs. That is predicated on the current anticipated 
buy of Global Hawks. Should that change, then we would have 
additional facility requirements.
    Senator Feinstein. Right. Thank you. I think that takes 
care of my questions. Oh, General Robbins, let me ask you about 
last week's fire----
    General Robbins. Oh, yes.

                        BARKSDALE AIR FORCE BASE

    Senator Feinstein [continuing]. At the 8th Air Force 
headquarters at Barksdale in Louisiana?
    General Robbins. Yes, ma'am.
    Senator Feinstein. We are told that it may take a year and 
$13 million to repair. Could you just describe the extent of 
the damage and how the Air Force intends to fund its repair?
    General Robbins. Right. They have not even got a definitive 
cost estimate on the damage yet, because last I heard, it was 
still smoldering. Although they were prepared to go in with 
some temporary tarpaulins to cover the undamaged portions of 
the roof once they could do that. The $13 million number that 
you quote is the first initial estimate for what it would cost. 
Some portion of that was for furnishings and equipment, but 
about $9 million I believe was facility. Again, first estimate 
for facility repairs. Depending upon the cost--how much this 
grows or does not grow, we will probably try to do it with 
Operations and Maintenance (O&M) dollars. Try to make the 
repairs using O&M dollars and the appropriation. But again 
until we get----
    Senator Feinstein. Sorry. Using what dollars?
    General Robbins. O&M. Operations and Maintenance.
    Senator Feinstein. And you have sufficient O&M dollars to 
do that?
    General Robbins. We would request that, yes.
    Senator Feinstein. Oh, I see, but----
    General Robbins. Through the Air Force budget. We would 
have to go in through--as you know the way the O&M account 
works, they control the outlays over the year, there are 
residual funds that may not execute. So they would come in by 
the end of the year and request that we be allowed----
    Senator Feinstein. A rollover.
    General Robbins. As you know, there's a $7.5 million 
threshold. If a repair project exceeds $7.5 million, we have to 
come to this committee and request permission to proceed with 
it as an O&M funded project versus MILCON.
    Senator Feinstein. Right. Okay. I mean, I would assume you 
are going to do that.
    General Robbins. We are going to fix it. And if it is over 
$7.5 million, we will come to you with a request. If that is 
the--we really have to wait and see how much damage was done on 
the facility. We do not know what the total bill's going to be 
yet.
    Senator Feinstein. Just one last question. I have been very 
concerned with the housing in Korea. Do you believe that the 
money that is in this request is adequate to do what we began 
to do last year to bring our housing up to standard in Korea?
    General Robbins. Right. You want me to take it. Yes, ma'am. 
That is a three phase project. This request is to cover the 
first one-third of the units that are to be required there--it 
is around 120 units as I recall--to be followed in subsequent 
fiscal years with the remaining two-thirds. The command 
sponsored billets tours there at Osan are steady right at about 
360, 365. And so if we follow this phased approach, then that 
should address the concerns of the Commander and the families 
that live there.
    Senator Feinstein. Because I know the chairman of the House 
subcommittee was very concerned about this and I am too, I just 
want to make that clear. I mean, I think we ought to house our 
people in decent quarters doing that duty there. So I want to 
be sure that what we have committed to last year is followed 
through this year. Do I have your assurance?
    General Robbins. Yes, ma'am. The budget request includes 
the first tower and as I discussed with your staff members when 
we met over at our place a few weeks ago, what has changed is 
the site where we were going to build this first tower, but the 
cost will remain the same. Same number of units. We are just 
moving it to a different location on Osan.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Feinstein. Okay. All right. Gentlemen, is there 
anything else you would like to say? Otherwise, you are all 
just happy campers with your budget. I think that is wonderful 
that you set a model for taking 75 and 50 percent cuts and big 
smiles and that is wonderful.Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
    Mr. Gibbs. Thank you. Madam Chairman.

                 Questions Submitted to Nelson F. Gibbs

             Question Submitted by Senator Dianne Feinstein

                             MILCON FUNDING

    Question. Secretary Gibbs, do you have any concern that by reducing 
MILCON funding this year, by deferring needed MILCON projects, you will 
be setting the Air Force up for a MILCON train wreck in the out years?
    Answer. We are very concerned with the magnitude of our military 
construction requirements backlog, which is the result of many years of 
undersized military construction budgets. Not counting last year's 
shot-in-the-arm, the fiscal year 2003 MILCON request is the largest 
since fiscal year 1994. Further, we have programmed increasing MILCON 
budgets across the future years defense plan, which keeps us moving in 
the right direction of gradually buying down the backlog.
    It will take a number of years of steady, adequate funding to fully 
recapitalize our infrastructure to an acceptable desired condition.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                            OVERSEAS PROGRAM

    Question. Secretary Gibbs, I understand that your fiscal year 2003 
overseas program is consistent with last year's MILCON program. Can you 
explain to me how you determine your overseas priorities against the 
domestic requirements?
    Answer. The Air Force investment strategy concentrates scarce 
resources on its Total Force top priorities. The Air Force integrates 
Total Force MILCON requirements into a single priority list and funds 
the most urgent needs of the Total Air Force within budget constraints. 
After ``must pay'' requirements are funded, we utilize a MILCON scoring 
methodology to fund remaining urgent requirements. Urgency of need 
takes precedence over ``fair share.''
    Question. Secretary Gibbs: Your proposed budget for MILCON has very 
few projects compared to other years. Did the Air Force place more 
emphasis in the 2003 budget on overseas because of the uncertainty of a 
future round of base closure?
    Answer. No. Future base closures are not factors in determining 
MILCON priorities.
    Question. Secretary Gibbs, last year, senior DOD officials 
testified that after many years of neglect, the Department intended to 
start investing in infrastructure. Your proposed budget barely funds 
new mission initiatives, let alone replacement facilities. What is the 
corporate Air Force position on revitalizing Air Force facilities?
    Answer. The Air Force has a balanced program that attempts to 
maximize the utilization of its facilities. The MILCON focus is, in 
descending order of priority, on (1) environmental, legal, or treaty-
driven requirements; (2) quality of life initiatives; (3) new weapon 
systems requirements and (4) fixing C3/C4-rated facilities. In 
addition, this budget fully funds sustainment to ensure facilities last 
their full life. Our balanced program: (1) attempts to maximize scarce 
resources on our top MILCON priorities; (2) continues to reduce 
physical plant and associated Operation and Maintenance costs, and (3) 
relies on alternative approaches to MILCON, particularly privatization.

                     BACKLOG OF MILCON REQUIREMENTS

    Question. What is the backlog of Active, Guard, and Reserve Air 
Force requirements for military construction?
    Answer. Active: The Air Force calculates its backlog of restoration 
and modernization construction requirements using data from our 
Installations Readiness Report, updated and submitted to Congress 
annually per 10 USC 117. We define the backlog as the cost to restore 
all facility classes to ratings of C-2 or higher. The following table 
details that backlog for the Active, Guard, and Reserve components.

                                      BACKLOG OF CONSTRUCTION REQUIREMENTS
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                        O&M           MILCON           Total
----------------------------------------------------------------------------------------------------------------
Active Air Force................................................           1,592          12,016          13,608
Air National Guard..............................................             388           2,182           2,570
Air Force Reserve...............................................              89             279             368
                                                                 -----------------------------------------------
      Total.....................................................           2,069          14,755          16,546
----------------------------------------------------------------------------------------------------------------
Note: The table above includes requirements met with MILCON and Facility Restoration and Modernization (O&M)
  funding. It does not include an additional $1.8 billion in requirements met with other fund sources (e.g.,
  host-nation funding, medical and RDT&E appropriations). Including those other fund sources, the Total Air
  Force backlog is $18.3 billion.

    Guard: Unspecified Minor Construction (UMC).--The annual funding 
for unspecified minor construction is roughly $5 million. The annual 
shortfall is roughly $8 million. The fiscal year 2003 budget includes 
$4.4 million for unspecified minor construction. This funding is $7.9 
million short of the requirement.
    Current Mission Military Construction (MILCON).--The Air National 
Guard backlog of mission MILCON stands at over $2 billion. This backlog 
includes projects that replace or repair aging pavements and facilities 
at our 176 locations. The Air National Guard could execute $200-$250 
million per year toward the backlog if funding were available.
    New Mission MILCON.--There are several critical new mission 
beddowns in progress. The outstanding construction bill associated with 
the announced conversions is nearly $200 million. Pending conversions 
which are being discussed could add another $325 million to this new 
mission bill.
    Restoration and Modernization.--The Restoration and Modernization 
backlog is $928 million. Projects include repairs to degraded airfield 
pavements, leaking roofs, failed fire suppression systems, failed 
heating and ventilating systems, and other failed utility/building 
systems.
    Reserve.--The total backlog of currently identified Air Force 
Reserve Military Construction projects is $650 million.
                                 ______
                                 

      Questions Submitted to Major General Earnest O. Robbins, II

            Questions Submitted by Senator Dianne Feinstein

                            CURRENT MISSION

    Question. General Robbins, the Air Force MILCON budget appears to 
fund only five current mission projects. How many Air Force major 
commands did not get their #1 current mission MILCON requirement funded 
in this request?
    Answer. Eight. They include Air Combat Command, Air Force Materiel 
Command, Air Force Reserve Command, Air Force Special Operations 
Command, Pacific Air Forces, United States Air Force Academy, the 11th 
Wing, and Air Intelligence Agency.
    Question. General Robbins, can you provide, for the record, a list 
of those #1 unfunded priorities?
    Answer. Those priorities are:
    Air Combat Command.--Hurlburt Field, FL--Air Force Command and 
Control Training and Innovation Group Systems/Warrior School Complex 
($13.8 million).
    Air Force Materiel Command.--Robins AFB, GA--Corrosion Control 
Paint Facility ($27.0 million).
    Air Force Reserve Command.--Keesler AFB, MS--Fuel Cell ($7.2 
million).
    Air Force Special Operations Command.--Hurlburt Field, FL--Special 
Tactics Advance Skills Training Facility ($7.9 million).
    Pacific Air Forces.--Osan AB, ROK--Add/Alter Operations/Aircraft 
Maintenance Unit Facility ($15.0 million).
    United States Air Force Academy.--Upgrade Academic Facility, Phase 
4 ($22.5 million).
    Eleventh Wing.--Bolling AFB, DC--Physical Fitness Center ($13.0 
million).
    Air Intelligence Agency.--Lackland AFB, TX--Information Operations 
Center ($8.8 million).
    Question. General Robbins, what is the Air Force's recapitalization 
rate based on the fiscal year 2003 budget? What was it in fiscal year 
2002?
    Answer. The fiscal year 2003 President's Budget request has a 
fiscal year 2003 recapitalization rate of 227 years. The fiscal year 
2002 recapitalization rate was 113 years
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                        CONDITION OF FACILITIES

    Question. General Robbins, I note that the majority of your 
facilities are in a condition C-3 or C-4. What would be the bill to 
bring all of the Air Force C-3 and C-4 facilities to at least C-2?
    Answer. Our installation commanders identified over $18.3 billion 
in facilities restoration and modernization investment is needed to 
restore the Air Force's C-3 and C-4 facility classes to at least C-2.

                       MAJCOM UNFUNDED PRIORITIES

    Question. General Robbins, how many of the Air Force major air 
commands did not get their number one priority MILCON budget funded in 
this request? Can you provide a list of those unfunded number one 
priorities for the record?
    Answer. Eight major air commands did not get their number one 
priorities funded in this year's budget request: Air Combat Command, 
Air Force Materiel Command, Air Force Reserve Command, Air Force 
Special Operations Command, Pacific Air Forces, United States Air Force 
Academy, the 11th Wing, and the Air Intelligence Agency.Those 
priorities are:
    Air Combat Command.--Hurlburt Field, FL--Air Force Command and 
Control Training and Innovation Group Systems/Warrior School Complex 
($13.8 million).
    Air Force Materiel Command.--Robins AFB, GA--Corrosion Control 
Paint Facility ($27.0 million).
    Air Force Reserve Command.--Keesler AFB, MS--Fuel Cell ($7.2 
million).
    Air Force Special Operations Command.--Hurlburt Field, FL--Special 
Tactics Advance Skills Training Facility ($7.9 million).
    Pacific Air Forces. Osan AB, ROK--Add/Alter Operations/Aircraft 
Maintenance Unit Facility ($15.0 million).
    United States Air Force Academy.--Upgrade Academic Facility, Phase 
4 ($22.5 million).
    Eleventh Wing.--Bolling AFB, DC--Physical Fitness Center ($13.0 
million).
    Air Intelligence Agency.--Lackland AFB, TX--Information Operations 
Center ($8.8 million).

                            RECAPITALIZATION

    Question. General Robbins, with the funding proposed in the 2003 
budget for MILCON, what does that do to the Air Force recapilatization 
rate? What is the Air Force long term plan regarding recapitalization 
of facilities?
    Answer. The fiscal year 2003 President's Budget level of funding 
results in a recapitalization rate of 227 years for fiscal year 2003, 
up from 113 years in fiscal year 2002 and 209 years in fiscal year 
2001. Our long-term plan is to properly sustain and modernize our 
facilities and infrastructure to ensure we have the right facilities at 
the right time and place to support military readiness. To do this, we 
are fully funding sustainment across the future years defense plan and 
are on a funding path to meet goals of buying out the C3/C4 rated 
facilities backlog as well as achieving a 67-year recap rate by 2010.

                        PLANT REPLACEMENT VALUE

    Question. General Robbins, is the Air National Guard portion of 
your budget request proportionate to the Guard's share of the Air 
Force's plant replacement value?
    Answer. The Air Force investment strategy concentrates scarce 
resources on its Total Force top priorities. The Air Force integrates 
Total Force MILCON requirements into a single priority list and funds 
the most urgent needs of the Total Air Force within budget constraints. 
After ``must pay'' requirements are funded, we utilize a MILCON scoring 
methodology to fund remaining urgent requirements. Urgency of need 
takes precedence over ``fair share.''
    However, the Air National Guard (ANG) portion of this budget 
request is proportionate to the ANG's share of the overall Air Force 
plant replacement value (PRV). The same is true for the Air Force 
Reserve. The table below shows the breakout.

------------------------------------------------------------------------
                                                            Fiscal year
                                             PRV share      2003 MILCON
          Air reserve component              (percent)     budget share
                                                             (percent)
------------------------------------------------------------------------
Air National Guard......................             7.9             7.3
Air Force Reserve.......................             3.8             4.4
------------------------------------------------------------------------

                   DYESS AFB--MILITARY FAMILY HOUSING

    Question. Last November, the Air Force provided a brief on the 
future of Dyess AFB. In that brief, the Service indicated that the next 
MILCON for Dyess would be in fiscal year 2004. The plan was to build 
164 units of MFH for $14 million. While it appears the Air Force moved 
the project up by a year, the number of MFH units the Air Force plans 
to buy for $14.8 million has now fallen to only 85. This does not 
appear to be a good value. Why did this happen?
    Answer. The differences in scope between last year and this year 
are due to the different unit size and a more accurate estimate of 
associated support costs (site preparation, utilities, streets and 
roads, etc.). Starting with the fiscal year 2003 program, the Air Force 
implements new size standards which more closely approximate the size 
of homes constructed in the local community.
                                 ______
                                 

       Questions Submitted to Brigadier General David A. Brubaker

            Questions Submitted by Senator Dianne Feinstein

                            CURRENT MISSION

    Question. General Brubaker, the Air Guard has been given the 
responsibility for executing Operation Noble Eagle. Can you explain 
whether that added responsibility has had any impact on your 
infrastructure needs?
    Answer. Operation Noble Eagle has had a significant impact on the 
ANG infrastructure requirements in a number of ways. We have spent 
approximately $29.5 Million from our Sustainment, Restoration, and 
Modernization (SRM) account in the effort. Alert facilities at numerous 
locations were in disrepair prior to 9-11. Aircraft alert facilities 
were shut down and placed in a caretaker status in the early 1990's, or 
these aircraft alert facilities were re-used to meet other facility 
shortfalls. The SRM funds were used to make the alert aircraft 
facilities habitable, and to bring the facilities up to current 
standards.
  --Temporary trailers were leased to provide alert crew quarters to 
        support these missions: F-15/F-16 fighters, KC-135 tankers and 
        C-130 airlift aircraft.
  --Temporary alert aircraft shelters were constructed at Air National 
        Guard locations where alert shelters did not exist or where the 
        number of alert shelters were insufficient for the mission.
  --The estimated cost to provide a long term permanent fix for Noble 
        Eagle requirements, and eliminate the temporary shelters and 
        leased trailers will require approximately $100 Million in the 
        Military Construction (MILCON) Program.
    Question. General Brubaker, do you need any additional MILCON 
funding to meet those needs? If so, what do you need?
    Answer. The estimated cost to provide a long term permanent fix for 
Noble Eagle requirements, and eliminate the temporary shelters and 
leased trailers will require approximately $100 million in the Military 
Construction Program. The Air National Guard's most urgent requirements 
are identified in the future year defense program and the 10543 report.

                         CONCLUSION OF HEARINGS

    Senator Feinstein. I think that completes our hearing for 
the day and hearing is recessed.
    [Whereupon, at 3:48 p.m., Tuesday, March 19, the hearings 
were concluded, and the subcommittees was recessed, to 
reconvene subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Baillie, Frederick N., Executive Director, Business Management 
  Logistics Operations, Defense Logistics Operations, Defense 
  Agencies, Department of Defense................................    35
    Prepared statement...........................................    44
    Questions submitted to.......................................    55
Brubaker, General David A., USAF, Deputy Director, Air National 
  Guard, Department of the Air Force, Department of Defense......   109
    Questions submitted to.......................................   126

Coleman, Brigadier General (SELECT) Ronald S., USMC, Deputy 
  Assistant Commandant of the Marine Corps for Installation and 
  Logistics Facilities, Department of the Navy, Department of 
  Defense........................................................    83

DuBois, Hon. Raymond, Deputy Under Secretary of Defense for 
  Installations and Environment, Office of the Secretary, 
  Department of Defense..........................................    11
    Prepared statement...........................................    14
    Questions submitted to.......................................    32
Duignan, Brigadier General Robert E., USAF, Deputy to the Chief, 
  Air Force Reserve, Department of the Air Force, Department of 
  Defense........................................................   109

Feinstein, Senator Dianne, U.S. Senator from California:
    Opening statement............................................    83
    Questions submitted by.......30, 53, 73, 77, 78, 105, 123, 125, 126
    Statement of.................................................     1
Fiori, Hon. Mario P., Assistant Secretary of the Army 
  (Installation Environment), Department of the Army, Department 
  of Defense.....................................................    57
    Prepared statement...........................................    59
    Questions submitted to.......................................    73
    Statement of.................................................    57

Gibbs, Nelson F., Assistant Secretary of the Air Force for 
  Installation, Environment and Logistics, Department of the Air 
  Force, Department of Defense...................................   109
    Prepared statement...........................................   110
    Questions submitted to.......................................   123

Helmly, Major General James R., Commander, 78th Division 
  (Training Support), U.S. Army Reserve, Department of the Army, 
  Department of De
  fense..........................................................    57
    Questions submitted to.......................................    77
Hutchison, Senator Kay Bailey, U.S. Senator from Texas:
    Questions submitted by........31, 32, 54, 55, 75, 82, 107, 123, 125
    Statement of.................................................    10

Johnson, H.T., Assistant Secretary of the Navy for Installation 
  and Environment, Department of the Navy, Department of Defense.    83
    Prepared statement...........................................    87
    Questions submitted to.......................................   105
Johnson, Senator Tim, U.S. Senator from South Dakota, prepared 
  state- 
  ment...........................................................     2

Molino, John, Deputy Assistant Secretary of Defense, Military 
  Community and Family Policy, Defense Agencies, Department of 
  Defense........................................................    35
    Prepared statement...........................................    41
    Questions submitted to.......................................    54
    Statement of.................................................    40

Preston, Rear Admiral Noel G., USNR, Deputy Director of Naval 
  Reserve, Department of the Navy, Department of Defense.........    83
Pruett, Rear Admiral David D., Civil Engineer Corps, USN, 
  Director, Civil Engineering Readiness Division, Chief of Naval 
  Operations, Department of the Navy, Department of Defense......    83

Randolph, Major General Leonard, Jr., Deputy Executive Director, 
  TRICARE Management Activity, Defense Agencies, Department of 
  Defense........................................................    35
    Prepared statement...........................................    39
    Questions submitted to.......................................    53
    Statement of.................................................    38
Robbins, Major General Earnest O., II, USAF, Air Force Civil 
  Engineer, Department of the Air Force, Department of Defense...   109
    Questions submitted to.......................................   125

Squier, Brigadier General Michael J., Deputy Director, Army 
  National Guard, Department of the Army, Department of Defense..    57
    Question submitted to........................................    78

Tangney, Lieutenant General William, Deputy Commander in Chief, 
  Special Operations Command, Defense Agencies, Department of 
  Defense........................................................    35
    Prepared statement...........................................    36
    Questions submitted to.......................................    53

Van Antwerp, Major General Robert L., Jr., Assistant Chief of 
  Staff for Installation Management, Department of Army, 
  Department of Defense..........................................    57
    Questions submitted to.......................................    78

Zakheim, Hon. Dov, Under Secretary of Defense (Comptroller), 
  Office of the Secretary, Department of Defense.................     1
    Prepared statement...........................................     6
    Questions submitted to.......................................    30


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                            Defense Agencies

                       SPECIAL OPERATIONS COMMAND

                      TRICARE MANAGEMENT ACTIVITY

                  MILITARY COMMUNITY AND FAMILY POLICY

                      DEFENSE LOGISTICS OPERATIONS

                                                                   Page
Additional committee questions...................................    53
Construction, decrease in appropriations requests................    53
Department of Defense Education Activity.........................    47
Domestic medical projects........................................    54
Encroachment issues/Coronado.....................................    53
Environmental stewardship........................................    46
Excess infrastructure............................................    55
Fuel:
    Facilities infrastructure....................................    45
    Infrastructure:
        Other critical...........................................    46
        Strategic airlift en route...............................    45
        Strategic en-route projects..............................    55
Gym project......................................................    54
Hospital projects overseas.......................................    54
Milcon:
    Program......................................................    37
    Projects.....................................................    55
Military construction request....................................    45
Overseas DOD schools.............................................    55
Planning & design funds..........................................    53
Purpose..........................................................    37
Supply center investments........................................    46
TRICARE mangement activity.......................................    48
Twenty-first century force.......................................    36

                      Department of the Air Force

Accommodate new missions.........................................   112
Additional committee questions...................................   123
Air Force:
    Facilities and infrastructure................................   109
    Reserve military construction................................   120
Air National Guard Military Construction.........................   119
Barksdale Air Force Base.........................................   122
Current and new mission projects...............................116, 117
Current mission................................................125, 126
Demolition of excess, uneconomical-to-maintain facilities........   114
Dormitories......................................................   112
Dyess AFB--military family housing...............................   126
F-22 basing......................................................   110
Facilities, condition of.........................................   125
Family housing...................................................   110
Fitness centers..................................................   112
Global Hawk at Beale Air Force Base..............................   121
Housing:
    Air Force family master plan.................................   119
    Bachelor and family..........................................   118
    Family.....................................................112, 119
Korea............................................................   120
Majcom unfunded priorities.......................................   125
McClellan Air Force Base.......................................114, 116
Milcon:
    Funding......................................................   123
    Requirements, backlog of.....................................   124
New mission projects.............................................   110
Operations and maintenance investment............................   111
Overseas:
    Milcon.......................................................   113
    Program......................................................   123
Overview.........................................................   111
Planning and design/unspecified minor construction...............   113
Plant replacement value..........................................   126
Public and private resources, optimize use of....................   113
Quality of life, invest in.......................................   112
Realignment and closures.........................................   114
Recapitalization.................................................   126

                         Department of the Army

Active and Reserve component milcon projects, backlog of.........    75
Additional committee questions...................................    73
Ammunition demilitarization......................................    62
Anti-terrorism/force protection..............................77, 78, 81
Army:
    Family housing...............................................    63
    Reserve, adequate funding for the............................    77
Base realignment and closure (BRAC)..............................    67
Chemical demilitarization program................................    74
Efficient basing:
    East.........................................................70, 61
    South--school enrollment.....................................    70
Europe, increasing costs of the efficient basing initiative in...    80
Facilities strategy..............................................    60
Family housing:
    Construction.................................................    64
    Leasing......................................................    65
    Operations and maintenance...................................    64
Fiscal year 2003 summary.........................................    68
Fort Bliss:
    Capacity.....................................................    82
    Desalinization plant.........................................    71
Homeowners assistance fund, defense..............................    66
Installation support programs....................................    62
Interim brigade combat teams (IBCTs).............................    75
Low milcon budget................................................    68
Milcon cuts......................................................    76
Military construction:
    Army (MCA)...................................................    61
    Army National Guard (MCNG)...................................    65
    Army Reserve (MCAR)..........................................    65
    Spending and backlog.........................................    75
Mission facilities...............................................61, 65
National Guard, adequate funding for the.........................    78
Planning and design/unspecified minor construction...............63, 65
Project bid savings..............................................    76
Reprogrammings...................................................    72
Reservists, quality of life for mobilized....................77, 78, 81
Sustainment, restoration and modernization (SRM).................    65
Transformation...................................................    61
U.S. Army south relocation.......................................    76
Unfunded priorities..............................................    78
United States Forces Korea Bridge................................    73
Weapons of mass destruction/civil support teams..................    73
Well being projects..............................................    61

                         Department of the Navy

Additional committee questions...................................   104
Base:
    Closure cleanup..............................................    85
    Realignment and closure......................................
        Cleanup..................................................    84
        Prior....................................................    95
BQs, force protection in privatized..............................   108
BRAC.............................................................   107
Budget, the fiscal year 2003.....................................    88
Facilities.......................................................    92
    Condition of.................................................   107
    Replacement..................................................   107
Flag officer housing.............................................    97
Homeport ashore..................................................   108
Housing..........................................................    90
Housing:
    Navy and Marine corps........................................   101
    Public private partnerships..................................    86
Milcon funding...................................................   105
NATO Sub-Regional HQ.............................................   107
Navy testimony...................................................    84
Overseas financial contribution..................................   103
Training areas encroachment......................................   100

                        Office of the Secretary

Additional committee questions...................................    30
Arrest dismal conditions/large Reserve component cut.............    31
Base:
    Closures.....................................................    25
        Future...................................................    18
    Realignment and closure (BRAC)...............................     8
        Reduction due to planned.................................    30
Budget request, fiscal year 2003.................................     3
Business practices, improving....................................    18
Domestic defense infrastructure..................................    33
Enabling legislation.............................................    22
Encroachment.....................................................    21
Environmental progress...........................................    19
European allies help.............................................    32
Facilities.......................................................    34
Family housing...................................................     8
Funding overview.................................................     6
Housing..........................................................    17
Korea, infrastructure in.........................................    29
Master basing study..............................................    33
Milcon:
    Budget.......................................................    31
    Projects, low priority.......................................    31
Military construction............................................     6
NATO:
    Military construction........................................    27
    Security investment program..................................     8
Outyears military construction requests..........................    31
Recapitalization.................................................    16
Reserve components, reduced requests for.........................    23
Revitalizing installations.......................................    14
Supplemental.....................................................    30
Sustainment......................................................    16
Utilities privatization and energy management....................    19

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