- DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 2004

[Senate Hearing 108-241]
[From the U.S. Government Publishing Office]

S. Hrg. 108-241, Pt. 3

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

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

HEARINGS

before the

COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

S. 1050

TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2004 FOR MILITARY
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR
OTHER PURPOSES

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PART 3

READINESS AND MANAGEMENT SUPPORT

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MARCH 6, 13, 19; APRIL 1, 9, 2003

Printed for the use of the Committee on Armed Services

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004--Part 3

READINESS AND MANAGEMENT SUPPORT

S. Hrg. 108-241, Pt. 3

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

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

HEARINGS

before the

COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

S. 1050

__________

PART 3

READINESS AND MANAGEMENT SUPPORT

__________

MARCH 6, 13, 19; APRIL 1, 9, 2003

Printed for the use of the Committee on Armed Services

U.S. GOVERNMENT PRINTING OFFICE
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COMMITTEE ON ARMED SERVICES

JOHN WARNER, Virginia, Chairman

JOHN McCAIN, Arizona CARL LEVIN, Michigan
JAMES M. INHOFE, Oklahoma EDWARD M. KENNEDY, Massachusetts
PAT ROBERTS, Kansas ROBERT C. BYRD, West Virginia
WAYNE ALLARD, Colorado JOSEPH I. LIEBERMAN, Connecticut
JEFF SESSIONS, Alabama JACK REED, Rhode Island
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
JOHN ENSIGN, Nevada BILL NELSON, Florida
JAMES M. TALENT, Missouri E. BENJAMIN NELSON, Nebraska
SAXBY CHAMBLISS, Georgia MARK DAYTON, Minnesota
LINDSEY O. GRAHAM, South Carolina EVAN BAYH, Indiana
ELIZABETH DOLE, North Carolina HILLARY RODHAM CLINTON, New York
JOHN CORNYN, Texas MARK PRYOR, Arkansas

Judith A. Ansley, Staff Director

Richard D. DeBobes, Democratic Staff Director

______

Subcommittee on Readiness and Management Support

JOHN ENSIGN, Nevada, Chairman

JOHN McCAIN, Arizona DANIEL K. AKAKA, Hawaii
JAMES M. INHOFE, Oklahoma ROBERT C. BYRD, West Virginia
PAT ROBERTS, Kansas BILL NELSON, Florida
WAYNE ALLARD, Colorado E. BENJAMIN NELSON, Nebraska
JEFF SESSIONS, Alabama MARK DAYTON, Minnesota
JAMES M. TALENT, Missouri EVAN BAYH, Indiana
SAXBY CHAMBLISS, Georgia HILLARY RODHAM CLINTON, New York
JOHN CORNYN, Texas MARK PRYOR, Arkansas

(ii)
?

C O N T E N T S

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CHRONOLOGICAL LIST OF WITNESSES
Military Construction and Environmental Programs
march 6, 2003

Page

DuBois, Raymond F., Jr., Deputy Under Secretary of Defense
(Installations and Environment)................................ 7
Johnson, Hon. Hansford T., Acting Secretary of the Navy.......... 19
Fiori, Hon. Mario P., Assistant Secretary of the Army
(Installations and Environment)................................ 33
Gibbs, Hon. Nelson F., Assistant Secretary of the Air Force,
(Installations, Environment, and Logistics).................... 44

The Impacts of Environmental Laws on Readiness and the Related
Administration Legislative Proposal
march 13, 2003

Keane, Gen. John M., USA, Vice Chief of the Army................. 98
Fallon, Adm. William J., USN, Vice Chief of Naval Operations..... 105
Nyland, Gen. William L., USMC, Assistant Commandant of the Marine
Corps.......................................................... 114
Foglesong, Gen. Robert H., USAF, Vice Chief of the Air Force..... 119

Acquisition Policy and Outsourcing Issues
march 19, 2003

Aldridge, Hon. Edward C. ``Pete,'' Jr., Under Secretary of
Defense for Acquisition, Technology, and Logistics............. 158
Walker, Hon. David M., Comptroller General of the United States,
United States General Accounting Office........................ 166
Styles, Hon. Angela, Administrator, Office of Federal Procurement
Policy......................................................... 176
Soloway, Stan Z., President, Professional Services Council....... 205
Harnage, Bobby L., Sr., National President, American Federation
of Government Employees........................................ 224

Impacts of Environmental Laws on Readiness and the Related
Administration Legislative Proposal
april 1, 2003

Suarez, Hon. John Peter, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. Environmental
Protection Agency.............................................. 280
MacDonald, Julie A., Special Assistant to the Assistant Secretary
for Fish, Wildlife, and Parks, Department of the Interior...... 284
Lent, Dr. Rebecca, Deputy Assistant Administrator for Fisheries,
National Marine Fisheries Service, National Oceanic and
Atmospheric Administration..................................... 291
Pirie, Dr. Robert B., Jr., Senior Fellow, Center for Naval
Analysis....................................................... 302
Ketten, Dr. Darlene R., Senior Scientist, Department of Biology,
Woods Hole Oceanographic Institution........................... 305

(iii)

Young, Nina M., Director of Marine Wildlife Conservation, The
Ocean Conservancy.............................................. 309
Clark, Jamie Rappaport, Senior Vice President for Conservation
Programs, National Wildlife Federation......................... 318
Siegel, Lenny, Executive Director, Center for Public
Environmental Oversight........................................ 348
Benevento, Douglas H., Executive Director, Colorado Department of
Public Health and Environment.................................. 393
Cohen, Benedict S., Deputy General Counsel, Environment and
Installations, Department of Defense........................... 401
Mears, David K., Senior Assistant Attorney General, Office of the
Attorney General, Ecology Division, State of Washington........ 415

Readiness of the Military Services to Conduct Current Operations and
Execute Contingency Plans
april 9, 2003

Mayberry, Dr. Paul W., Deputy Under Secretary of Defense for
Readiness...................................................... 539
Schwartz, Lt. Gen. Norton A., USAF, Director for Operations, The
Joint Staff.................................................... 546
Cody, Lt. Gen. Richard A., USA, Deputy Chief of Staff, G-3,
Department of the Army......................................... 556
Green, Vice Adm. Kevin P., USN, Deputy Chief of Naval Operations
for Plans, Policy, and Operations.............................. 560
Bedard, Lt. Gen. Emil R., USMC, Deputy Commandant for Plans,
Policy, and Operations......................................... 568
Schmidt, Maj. Gen. Randall M., USAF, Assistant Deputy Chief of
Staff, Office of the Deputy Chief of Staff for Air and Space
Operations..................................................... 578

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

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THURSDAY, MARCH 6, 2003

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

MILITARY CONSTRUCTION AND ENVIRONMENTAL PROGRAMS

The subcommittee met, pursuant to notice, at 2:07 p.m. in
room SR-232A, Russell Senate Office Building, Senator John
Ensign (chairman of the subcommittee) presiding.
Committee members present: Senators Ensign, Inhofe, Allard,
Cornyn, Akaka, Bill Nelson, and Pryor.
Majority staff members present: William C. Greenwalt,
professional staff member; Ann M. Mittermeyer, counsel; and
Lucian L. Niemeyer, professional staff member.
Minority staff members present: Maren R. Leed, professional
staff member; Peter K. Levine, minority counsel; and Christina
D. Still, professional staff member.
Staff assistants present: Leah C. Brewer and Jennifer Key.
Committee members' assistants present: John A. Bonsell,
assistant to Senator Inhofe; Douglas Flanders, assistant to
Senator Allard; D. Armand DeKeyser, assistant to Senator
Sessions; D'Arcy Grisier, assistant to Senator Ensign; Lindsey
R. Neas, assistant to Senator Talent; Russell J. Thomasson,
assistant to Senator Cornyn; Davelyn Noelani Kalipi and Richard
Kessler, assistants to Senator Akaka; William K. Sutey and
Douglas Bush, assistants to Senator Bill Nelson; Andrew
Shapiro, assistant to Senator Clinton; and Terri Glaze,
assistant to Senator Pryor.

OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

Senator Ensign. Good afternoon. The Readiness and
Management Support Subcommittee meets for the first time this
year to receive testimony on fiscal year 2004 military
construction, family housing, and environmental budget program
requests. This is my first opportunity to serve the Senate and
our military forces as a subcommittee chairman, and I look
forward to continuing the legacy of commitment and dedication
to our armed services exemplified by my senior colleague,
Senator Akaka, who returns to this subcommittee after 2 years
as chairman. I feel confident that with his seasoned expertise
and experience, we can continue this subcommittee's legacy of
cooperation with the mutual goal of ensuring our forces are
ready and supported with the best this country has to offer.
I would also like to take a moment to acknowledge the
significant accomplishments of this subcommittee under the past
leadership of Senator Inhofe. While he has assumed the
chairmanship of the Committee on Environment and Public Works,
I am indeed fortunate to be able to rely on his counsel and the
advice of this subcommittee.
I would also like to welcome returning members as well as
fellow new members to the subcommittee. I know Senator Akaka
joins me in welcoming our witnesses, the Honorable Hansford T.
Johnson, Acting Secretary of the Navy; the Honorable Mario P.
Fiori, Assistant Secretary of the Army; the Honorable Nelson
Gibbs, Assistant Secretary of the Air Force; and Raymond
DuBois, Deputy Under Secretary of Defense.
I appreciate the efforts of Secretary Johnson to be present
in his role as the Assistant Secretary of the Navy for
Installations and the Environment after his testimony this
morning to the full committee as the acting Service Secretary.
I am sure you have spent more than a few hours getting ready
for today. My thanks for your participation this afternoon.
This year's budget request for military construction and
family housing continues the same stagnant funding trends as
last year. Mr. DuBois, the Department keeps setting goals for
facility revitalization that on paper look like vehicles of
change moving in the right direction, but end up sidetracked by
other priorities.
In 2001, the Secretary of Defense directed the Department
of Defense (DOD) components fund facilities to achieve a 67-
year recapitalization rate, the number of years required to
regenerate a physical plant. The fiscal year 2001 budget
request reflected a positive step in reversing years of
decline, but in the fiscal year 2004 budget request the
recapitalization rate for the Services will range from 145 to
180 years, a substantially regressive slide from the fiscal
year 2003 budget.
Another issue of concern is that the majority of military
construction funds requested by the Department for fiscal year
2004 actually adds more square footage to support new missions,
rather than recapitalizing or replacing existing deteriorated
facilities and infrastructure. That means more facilities that
will eventually have to be recapitalized. This trend has a more
significant impact in the Reserve and Guard components, where
their substantially smaller construction programs are consumed
by new mission projects to the point where only one or two
recapitalization projects can be funded per year.
In August 2002, the Department published a facilities
recapitalization front end assessment, establishing a standard
measurement and proposed procedures for using data to aid in
budget development. The goal stated in this assessment was to
achieve the desired 67-year recapitalization rate by 2007. This
goal has now slipped to 2008, and it is proposed in the Future
Years Defense Program (FYDP) to be achieved by tripling the
level of military construction investment by 2008 to levels
never seen before in the military budget requests.
We continue to see underfunded budget requests, with the
promise of more adequate levels in the outyears, but those
years never seem to materialize. One glimmer of hope for this
trend is the 2005 round of base closure and realignment, which
will allow the Department to remove excess capacity and
facilities while maximizing warfighting capability and
efficiency. This reduction will result in a more realistic rate
of facility recapitalization, assuming the Department follows
through with their plans to increase funding for military
construction and restoration accounts through fiscal year 2009.
The Department has proposed an average facilities
sustainment funding level, the maintenance and repairs
necessary to keep facilities in working order, at 93 percent of
the requirement, just shy of the goal of 100 percent. This is
an excellent strategy to keep the infrastructure from getting
worse, and we support this request, but the proposed budget
request for the restoration and modernization accounts does
little to address the 70 percent of Army facilities, or 66
percent of Air Force facilities, that are rated C-3 or worse in
the installation readiness report, meaning that major
deficiencies exist in a facility that significantly degrade
mission effectiveness. These deficiencies can only be corrected
with substantial facility restoration and modernization funds
from both the military construction (MILCON) and operations and
maintenance (O&M) accounts. Those funds are not currently
proposed.
The Services have historically responded to this
restoration underfunding by diverting sustainment dollars to
critical repair projects, some costing tens of millions per
project. This is the migration the General Accounting Office
(GAO) recently observed in a February 2003 report, where
obligated sustainment funds at the installation levels range
from 35 percent to 77 percent. The high sustainment funding
level has not been realized at the installation level.
Both the Army and the Navy are addressing this migration of
funds in part by establishing new installation agencies with
regional offices to centrally manage facility accounts. We
applaud their attempts to find efficiencies through regional
management and look forward to hearing about the resulting
increased funding levels at the installation level over the
next year.
During this hearing, we will also review the Department's
fiscal year 2004 environmental programs. I would like to hear
about the environmental budget reductions between fiscal years
2003 and 2004, the status of Federal standards of perchlorate
and trichloroethylene, and other environmental initiatives that
support quality of life and the mission.
It is my understanding that many of the funding reductions
are as a result of management efficiencies and environmental
cleanup successes. I look forward to hearing more about each
one of your success stories in this area.
I am concerned, however, about the ongoing controversy
among regulators, commercial developers, defense contractors,
and the Department of Defense over the Environmental Protection
Agency's (EPA) consideration of drinking water standards for
perchlorate, a soluble, oxygen-rich chemical used in rocket
fuel and other explosives. Perchlorate has been detected in the
Colorado River in Nevada, Arizona, and California. As a result,
I am sensitive to the need to regulate perchlorate. However, I
believe that Federal drinking water standards should be based
on sound science.
The EPA's January 2002 risk assessment document proposed a
standard of one part per billion for perchlorate, despite the
availability of new data that supports a higher risk base
threshold. The EPA's process for trichloroethylene risk
assessment is equally troubling, because it reflects major
departures from EPA guidelines for carcinogen risk assessment.
The cost implications of a lower cleanup level based on the
assessments could be enormous, because trichloroethylene, or
TCE, is such a pervasive contaminant.
I know the Department of Defense has worked hard to address
both these regulatory concerns, and I am interested in hearing
more about your effort. We understand that the Department is
attempting to modernize, transform, improve morale, act as good
environmental stewards, and evaluate its base structure while
at the same time fighting a war in a constrained fiscal
environment. These are the right things to do.
No doubt competing requirements and high priorities have
resulted in some hard decisions. Military construction and
facility O&M accounts have taken their share of the budget
reductions. Future assessments may also negate facility
recapitalization requirements, resulting in cost avoidance
savings. The Department has used this rationale in justifying
the recent low levels of military construction investment, and
this subcommittee sees the rationale to want to make smart
business decisions on the infrastructure we will retain.
This logic must be applied overseas as well. This budget
contains requests for over $1 billion in overseas construction
and installation support at a time when new initiatives are
being vetted with the Department to establish the most
efficient basing of our forces overseas. While the budget
request supports limited consolidations of overseas forces, DOD
may be proposing investments at locations that do not support
the long term national security interests of our country.
While I am firm supporter of the process we have authorized
for the Department to reduce and realign base structure within
the United States, it will be difficult to defend that
authorization if we do not know for sure what forces we plan on
bringing home from overseas locations.
I look forward to hearing from all of you on these issues,
and hope we can work together during this cycle to find ways to
improve the quality of life and work environment for both our
active and Reserve components. Your prepared statements will be
made part of the record. Therefore, I urge you to keep your
oral statements to not more than 5 minutes in order to allow
sufficient time for questions.
Now, Senator Akaka, I turn the floor over to you for any
opening statements, and before you got here I said what a great
job you have done the last couple of years, and I am looking
forward to working with you.

STATEMENT OF SENATOR DANIEL K. AKAKA

Senator Akaka. Thank you very much, Mr. Chairman. I deem
myself fortunate and look forward to working with a good
friend, one that I have come to respect very much. I want to
welcome you, Senator Ensign, as the new chairman of the
Readiness and Management Support Subcommittee, and I know that
together we can continue the valuable work accomplished by this
subcommittee in support of our military missions and our men
and women in uniform, as well as their families.
I would also like to welcome our newest members and
recognize Senator Inhofe for his distinguished service as both
past chairman and, most recently, ranking member of this
subcommittee. Over the past several years I have had the honor
of working with him to tackle many important issues together,
and I know that all of us will benefit greatly from the wealth
of knowledge he brings from his leadership on this
subcommittee.
I thank our witnesses for joining us today to discuss the
fiscal year 2004 budget request, military construction, family
housing, environmental, and other installation programs of the
Department of Defense. I look forward to your testimony and to
your continued partnership with this subcommittee as we address
the many significant readiness issues and challenges that we
face both today and also in the future. I have had the
experience of working with you already, and I look forward to
working closely with you in this Congress.
I ask that you outline for the subcommittee not only the
funding levels and major programs in this budget, but also the
philosophy and priorities you used in putting this budget
together. Our military is still adjusting to a new threat
environment. Budget priorities have been placed on fighting the
global war on terrorism, on transformation initiatives, and on
modernization efforts in support of our critical military
missions. While all of these are important priorities, they
should not replace our previous commitment to improving the
quality of life. Improvement to our military installations and
the housing that we provide for our servicemen and women and
their families remains important.
I am disappointed that the fiscal year 2004 budget request
of $9 billion for military construction and family housing is
$1.5 billion below the level provided by Congress last year.
Without a sustainable funding path for our facilities and our
housing, we risk undermining not only the mission goals we are
working so hard to achieve, but also the quality of life we are
working so hard to provide for our men and women in uniform, in
both the short and long terms.
In an effort to prevent the continuing deterioration of
installations and to improve and sustain the condition of our
facilities moving forward, DOD has set forth several key
objectives across the Services, including fully funding
sustainment, reaching a 67-year average recapitalization rate
by 2008, and eliminating almost all inadequate housing across
the Services by 2007.
While progress has been made toward these facilities
improvements, our ability to achieve these goals is based on
unprecedented levels of investment in the budget outyears.
Relying on large funding increases in the future is a risky and
unrealistic strategy. Decisions we make today regarding our
installations will have significant long term consequences for
our overall mission in the future, and I am confident that we
will achieve a more realistic sustainable funding path for
military construction as we move forward.
Turning now toward environmental programs, the Department
as a whole has spent roughly $45 billion on its environmental
programs over the last 10 years, and each of the military
Services has worked hard to ensure that it can comply with
applicable environmental laws and regulations in a manner that
has a minimum impact on military training and readiness.
Looking at the past decade, I do not question the Department's
environmental record, but I am concerned that this year's
budget proposes a reduction of $400 million, or almost 10
percent in the Department's environmental programs.
I recognize the successful execution of environmental
programs and how it can reduce costs over time. However, this
reduction comes at a time when we face huge problems with
cleanup of unexploded ordnance (UXO), which we have hardly
begun to address, and when we continue to move back the
deadlines for addressing environmental problems with formerly
used military sites. Accordingly, I am deeply disappointed by
the Navy's decision to reduce the budget for its environmental
programs by more than $200 million, or almost 20 percent.
I am even more disappointed by the Army's decision to
deliberately underfund its environmental compliance program,
providing only 79 percent of the funding which the Army itself
has determined is necessary to assure compliance with
applicable environmental laws and regulations. Even the
Department's proposed budget for pollution prevention and
environmental technology, the spending that will help us
address the environmental problems of the future, is down by
more than $125 million, or almost 30 percent from last year's
appropriated level.
Four years ago, when a previous administration proposed to
underfund a number of key environmental accounts, this
committee issued the following warning in our report on the
National Defense Authorization Act for Fiscal Year 2000, and I
am quoting:
``The environmental programs of the DOD and Military
Departments are essential for the protection of human health
and safety of installation personnel and the public. Moreover,
good faith support for funding levels necessary to meet
environmental requirements, enables the DOD and Military
Departments to sustain installation and training operations
through and establish credibility as responsible stewards of
over 25 million acres of public lands. If that credibility is
placed in doubt because of inadequate funding for environmental
programs, public support could fade, and regulatory scrutiny
could intensify, potentially resulting in unnecessary
operational impediments.''
This year, the Department of Defense has once again asked
Congress to enact a range and readiness preservation initiative
which would exempt certain DOD activities from a number of
environmental laws. One of the arguments the Department makes
in support of the legislative proposal is that its track record
as a good environmental steward of Defense lands demonstrates
that it can be counted upon to act in an environmentally
responsible manner even if it is exempted from the
environmental laws.
I do not believe that the funding decisions that I have
described in this year's budget are consistent with the kind of
good environmental stewardship which the Department has made a
centerpiece of its case for legislative exemptions from the
environmental laws. I believe it is our responsibility to carry
out our activities in a way that protects the environment and
earns the trust of the American people, especially those who
live on and near our installations.
I hope that the witnesses will be able to address these
concerns, as well as any challenges that they may face or other
questions we might have regarding this year's budget request. I
look forward to your testimony.
Thank you very much, Mr. Chairman.
Senator Ensign. At this point, unless any Senators have an
overwhelming desire to make an opening statement, all opening
statements will be made a part of the record. We look forward
to the testimony from our panel, and we will start with
Secretary Johnson, and your full testimony will be made a part
of the record.
Secretary Johnson. Sir, if I may, I would like to defer to
our Deputy Under Secretary of Defense. He has some overarching
comments, if he may.
Senator Ensign. Try to keep your comments within the time
period.

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

Mr. DuBois. On behalf of the Secretary of Defense, Donald
Rumsfeld, I am very pleased to be here, and thank you for very
much for this opportunity to appear with my three colleagues,
the Assistant Service Secretaries for Installations and
Environment (I&E).
I want to make a quick reference to Senator Akaka's comment
about philosophy and not just numbers. I think it is important
to note at the onset of this hearing that Secretary Rumsfeld
has adopted a different way of approaching, managing, and
investing in the so-called installation and environment
portfolio, or as some have referred to, the ``quality-of-life''
portfolio.
It is more than just military construction appropriations
and family housing. It also includes utilities and energy
management, safety, occupational health, environmental funding
both in the cleanup arena and conservation programs arena. It
also includes contributions from other appropriations account,
such as the personnel account, the O&M account, especially the
research and development (R&D) account, and also other
appropriated funds such as the working capital funds.
Now, with this definition in mind, the fiscal year 2004
budget request in support of the total DOD I&E portfolio is
nearly $20 billion, when one defines it as I have, and if you
add base operations on top of it, that is to say, the O&M
funding that we invest in all of our installations around the
world, you are closer to $40 billion. In short, one should not
judge the quality-of-life investment solely on military
construction appropriations.
Now, one of the cornerstones, as both the chairman and the
ranking member have addressed, of that portfolio is military
family housing. The President and the Secretary of Defense
early on in this administration made it a top priority, and to
that end, we have employed a three-pronged approach to
eliminating inadequate housing: 1) increase the basic allowance
for housing; 2) increase housing privatization; and 3) sustain
military construction for housing. The fiscal year 2004 budget
request is on a glide path to reduce out-of-pocket expenses for
our military personnel to zero in 2005. It reduces from 7.5
percent in 2003 to 3.5 percent in 2004, and zero out-of-pocket
housing expenses in 2005.
The housing privatization efforts have gained traction. The
calculus of housing privatization, the rate of increase, is
increasing. We are achieving success, and by the end of fiscal
year 2004, the budget that the President presented to Congress
will have in excess of 102,000 military family units contracted
to be privatized.
Now, military construction, as I said, is the third leg of
this very important approach to resolving inadequate military
housing. We are requesting $4 billion in new budget authority
for family housing construction and operations and maintenance,
and we believe this will enable us to continue to achieve our
goal of reducing all inadequate housing, or nearly all, by
2007.
Now, we are also focused on improving the work environment,
and thus the readiness of our military, through proper
facilities sustainment and recapitalization. There is no
question that full sustainment does improve the performance of
our facilities. It reduces those life cycle costs. We maximize
our return on capital investments in new footprint construction
only by maintaining an appropriate level of repair and
replacement. These facilities deteriorate over time. They also
become obsolete at some point in the future. We must not only
repair, we must replace.
Now, sustainment in the repair sense is, however, not
enough. As I indicated, restoring and modernizing and replacing
is also quite crucial to our program. Our request of $3.4
billion for restoration and modernization (R&M) does maintain,
in the Secretary's view, his commitment to improving that work
environment and achieving the 67-year recap rate by the goal of
2008.
You mentioned, Mr. Chairman, overseas basing and overseas
presence strategy, and I would be glad to address that in
questions and answers. It has received a lot of attention
lately, as well it should.
Now, on the environmental front, a number of references
were made by both the chairman and the ranking member, to the
readiness initiative with respect to our training ranges. We
can certainly get into that during the questions and answers,
and I understand we also have a hearing next week specifically
focused on encroachment, and the details, of course, will come
out, as it should in that hearing.
You mentioned, Mr. Chairman, the issue of perchlorate. I
will be glad to answer the questions on perchlorate, as I have
been intimately involved in discussions over the past several
months with the EPA, the Office of Management and Budget (OMB),
the Council on Environmental Quality (CEQ), the Department of
Energy, and NASA on this very crucial issue. It is a science
issue, it is a science policy issue, and it is also an enormous
issue pertaining to potential costs to the Department and to
industry.
Briefly, as I indicated, both today we can address these
issues on Range Readiness Preservation Initiative (RRPI), as
well as next week, but we, the Secretary of Defense, and the
President, have asked Congress again to address the five issues
that were not embraced in the last legislative cycle, that is
to say, our request on clarifications for the Endangered
Species Act, the Marine Mammals Protection Act, and the three
media statutes, the Resource Conservation and Recovery Act
(RCRA), the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA), and Clean Air Act, and I and my
colleagues are prepared to answer any of your questions in that
regard.
In closing, this subcommittee--and I must say, Mr.
Chairman, your opening statement and that of Senator Akaka
represent a very clear articulation of the challenges and the
complexities that we, the managers of the installation and
environment portfolio, face every day, the hard choices that we
and our colleagues at the Pentagon have gone through to
determine what a suitable appropriation request will be. In
that regard, this subcommittee is instrumental in helping us--
yes, helping us come to the right conclusions and yes, helping
the entire Department to an appropriate level of funding for
infrastructure and sustaining quality-of-life investments.
Thank you very much.
[The prepared statement of Mr. DuBois follows:]

Prepared Statement by Raymond F. DuBois, Jr.

Mr. Chairman and distinguished members of this subcommittee, I
appreciate the opportunity to discuss the President's budget request
for fiscal year 2004 and the plan of the Department of Defense for
improving its facilities. The Department is transforming its force
structure to meet new security challenges and transforming the way it
does business. In Installations and Environment, this translates into a
renewed emphasis on taking care of our people, providing facilities to
support the warfighter by eliminating facilities we no longer need and
improving those that we do, and modernizing our business practices--all
while protecting the environment and those assets for which we have
stewardship responsibility.
To prevail in the global war on terrorism and to prepare for future
threats to American security, the Secretary of Defense has argued
forcefully that we must transform the military. Our military
capabilities must become more lethal, agile, and prepared for surprise.
This transformation was under way before the attacks on September 11.
But, let us be clear, transformation is about more than new weapon
systems, doctrinal innovation, and the employment of technology; it
also is about changing our approach to the fundamental business
practices and infrastructure of the Department of Defense.
The Department currently manages more than 620,000 facilities,
valued at around $600 billion, and over 46,000 square miles of real
estate. Within that portfolio of real estate and facilities, we manage
threatened and endangered species, diverse geological features, and
important historical resources, including 68 registered National
Historic Landmarks and over 14,000 properties currently listed on, or
eligible for, the National Register of Historic Places.
The Defense Facilities Strategic Plan is our roadmap for managing
this portfolio and outlines our long-term plan--healthy, productive
installations and facilities that are available when and where needed
with capabilities to support current and future military requirements.
In recent years, we have developed models to more accurately determine
our requirements and a sound management plan for getting our facilities
back on track.
Today, I will address our accomplishments and future plans for
restoring readiness to our facilities by taking care of our people,
taking care of what we own, improving our business practices, and
transforming our bases and infrastructure.

THE ROAD TO RECOVERY

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. Over many years,
these ``platforms'' have deteriorated. For instance, each year the
Major Commands of the Military Services rate the readiness of their
facilities by category. In the 2001 Installations' Readiness Report
(IRR), the Component Commanders--the force providers--collectively
rated 68 percent of facilities categories C-3 (have serious
deficiencies) or C-4 (do not support mission requirements), a slight
improvement from the 69 percent rate in 2000. The 2002 IRR is roughly
the same as 2001. Investments made since fiscal year 2002 will take
several years before the affects are apparent. We are in the process of
reversing the decay, but much remains to be done. From fiscal years
2002 to 2004, we will have put over $28 billion in the sustainment and
revitalization of our facilities, and we are beginning to see the
results.
The installations management approach of the Department led us to a
different way to view our installations and environmental portfolio.
This portfolio is more than simply military construction and family
housing. It also includes environmental funding and other contributions
from appropriations such as military personnel, host nation support,
non-appropriated funds and working capital funds, in addition to
operations and maintenance (O&M). This funding sustains our facilities
through day-to-day maintenance and contributes to our restoration and
modernization program. The fiscal year 2004 budget request includes
over $19 billion in fiscal year 2004 to support our entire portfolio.
The Facilities Sustainment program funds the normal and scheduled
maintenance and repairs for the inventory, using operations and
maintenance funds primarily, supplemented by other sources. Sustainment
preserves the inventory and allows it to reach its expected service
life. For the O&M-funded sustainment requirement, we are sustaining our
facilities at 94 percent of commercial benchmarks, slightly over the 93
percent requested last year. We plan to achieve full sustainment not
later than fiscal year 2008.
Our Facilities Restoration and Modernization program repairs or
replaces damaged or obsolete facilities and implements new or higher
standards where necessary. The Restoration and Modernization program
applies both military construction and operations and maintenance
appropriations to recapitalize our facilities and housing.
Our fiscal year 2004 funding request allows us to achieve a
recapitalization rate of 148 years for the Military Departments, down
from 149 years in fiscal year 2003, meaning the Department renovates or
replaces its facilities an average of every 148 years. We now include
the Defense Logistics Agency, DOD Education Activity and Tricare
Medical Activity in the calculations, resulting in a corporate rate of
136 years for fiscal year 2004. Our goal remains a 67-year
recapitalization rate, consistent with commercial practices, and our
current program would achieve that level in fiscal year 2008.
In the near term, obsolete facilities pose risks to mission
effectiveness, safety, quality of life, productivity of the workforce,
and cost efficiencies, but these risks are mitigated to some degree by
eliminating facilities through Base Realignment and Closure (BRAC),
facilities demolition programs, and an aggressive acceleration of
recapitalization rates in the Future Years Defense Program.
Facilities revitalization will take time. However, the indicators
are trending in the right direction, showing that we are indeed making
progress. With continuing attention to our Defense Facilities Strategic
Plan and current planning guidance, we can achieve our goal.

TAKING CARE OF OUR PEOPLE

Our priority is to support the warfighter, ensure superior living
and working conditions and enhance the safety of the force and quality
of the environment. At the outset of this administration, the President
and Secretary Rumsfeld identified military housing as a top priority
for the Department. Sustaining the quality of life of our people is
crucial to recruiting, retention and readiness. To that end, the
Department is committed to providing quality housing using the
established three prong approach--increased basic allowance for housing
(BAH), increased housing privatization, and sustained military
construction for housing.
In January 2001, the Department had about 180,000 inadequate family
housing units. Today, through housing privatization and our military
construction program, we have reduced that number to roughly 163,000.
This number will continue to come down as we pursue the Secretary's
goal of eliminating inadequate housing by 2007.
We remain committed to reducing--and then eliminating--the out-of-
pocket housing costs for the average military member through changes in
the basic allowance for housing, a key component of the Department's
approach to quality housing. The fiscal year 2004 budget request
includes necessary funding to continue lowering out-of-pocket housing
costs for members living off-base from 7.5 percent in 2003 to 3.5
percent in 2004. By 2005, the typical member living in the private
sector will have zero out-of-pocket housing expenses. Eliminating out-
of-pocket expenses is good for military personnel, but also serves to
strengthen the financial profile of the housing privatization program
by providing members the ability to pay appropriate market rents.
Privatizing military housing is a priority for the President and
the Secretary and is an integral part of the Administration's
Management Plan. Our housing privatization program is crucial to
providing a decent quality of life for our service members.
We believe our housing privatization efforts have gained
``traction'' and are achieving success. As of February 2003, we have
awarded 18 projects, which include 27,884 military family housing
units. We also have one award in its final stage of approval--Kirtland
AFB, New Mexico--which we expect to award next month. We project more
than 20 more privatization awards each in fiscal years 2003 and 2004--
bringing our cumulative total to about 102,000 units privatized.
Projects at five installations have their renovations and
construction completed: Naval Air Station Corpus Christi/Naval Air
Station Kingsville, Texas, Naval Station Everett Phases I and II,
Robins Air Force Base, Georgia, Lackland Air Force Base, Texas, and
Dyess Air Force Base, Texas. During fiscal year 2004, we expect several
other bases to have their renovations and construction completed or
close to completion, including those at Fort Carson, Colorado and Naval
Complex New Orleans, Louisiana.
Our policy requires that privatization projects yield at least
three times the amount of housing as traditional military construction
for the same amount of appropriated dollars. Recent projects have
demonstrated that leveraging is normally much higher. The first 17
projects we've analyzed thus far reflect an average leverage ratio of
over 10 to 1. Tapping this demonstrated leveraging potential through
housing privatization has permitted the Department, in partnership with
the private sector, to provide housing for about $276 million of
military construction funding that would otherwise have required over
$2.7 billion for those awarded projects if the traditional military
construction approach was utilized.
More important than the raw numbers is the reaction of uniformed
personnel and their families to the housing developed under the
initiative. It is overwhelmingly positive based on the high quality
product produced by the projects.
Military construction is another tool for resolving inadequate
military housing. In fiscal year 2004, we are requesting $4.0 billion
in new budget authority for family housing construction and operations
and maintenance. This funding will enable us to continue operating and
maintaining the Department's family housing as well as meeting the goal
to eliminate inadequate housing by 2007--3 years earlier than
previously planned.
We also are improving housing for our unaccompanied service members
through increases in bachelor housing funding. The Department's fiscal
year 2004 budget request includes funding that would build or renovate
over 12,000 bed spaces. The Services are making significant progress
toward meeting, or have already met, the Department's previous goal for
eliminating gang latrine conditions for permanent party unaccompanied
members. Additionally, the Services are currently preparing Barracks
Master Plans, similar to the Family Housing Master Plan, for managing
their inventory and outlining their plans for eliminating inadequate
permanent party barracks by 2007.
As we gain momentum in privatizing family housing, we also are
exploring and encouraging the possibility of privatizing barracks that
support our unaccompanied service members. The Department strongly
supports barracks privatization and has attempted to overcome barriers
that impede our ability to execute a program.
The Secretary of the Navy was authorized by the National Defense
Authorization Act for Fiscal Year 2003 to execute a pilot program for
barracks privatization that includes authority for the payment of
partial basic allowance for housing. The Navy considers barracks
privatization a key part of their ``Homeport Ashore Initiative''. We
have discussed with the Navy some of their plans in this area, and we
expect to review a pilot proposal later this year.
We recognize that a key element in maintaining the support of
Congress and of the private sector is the ability to define adequately
the housing requirement. The Department's longstanding policy is to
rely primarily on the private sector for its housing needs. Currently,
two-thirds of military families reside in private sector housing, and
that number will increase as we privatize the existing inventory of
housing units owned by the Military Departments. Only when the private
market demonstrates that it cannot provide sufficient levels or quality
of housing should we consider the construction, operation, and
maintenance of Government-owned housing.
An improved housing requirements determination process, recently
approved by the Deputy Secretary, combined with increased
privatization, is allowing us to focus resources on maintaining the
housing for which we have a verified need rather than wasting those
resources duplicating private sector capabilities. The improved housing
requirement process is being used by the Department to better determine
the number of family housing units needed on installations to
accommodate military families. It provides a solid basis for investing
in housing for which there is a verified need--whether through direct
investment with appropriated funds or through a privatization project.
By aligning the housing requirements determination process more
closely with the analysis utilized to determine basic allowance for
housing rates, the Department is better positioned to make sound
investment decisions necessary to meet the Secretary's goal to
eliminate inadequate housing by 2007. Further, as more military
families opt to reside in the private sector as housing out-of-pocket
expenses decrease for the average member, the Services on-base housing
requirement should generally also decline. This migration should permit
the Services to better apply scarce resources to those housing units
they truly need to retain.

TAKING CARE OF WHAT WE OWN

Sustaining, Restoring, and Modernizing Facilities
The Department's program for modernizing military housing is well
underway. We are also focused upon improving the work environment
through proper facilities sustainment and recapitalization. As we have
seen through the Installations' Readiness Report, the quality of our
infrastructure directly affects readiness. Our first priority is to
fully sustain our facilities, and we have made significant progress in
this area. Full sustainment improves performance and reduces life cycle
costs, maximizing the return on our capital investments. Repairing and
replacing facilities once they have deteriorated is more expensive. Our
recent investments in sustainment and recapitalization, along with
continued investment over time, will restore readiness, stabilize and
reduce the average age of our physical plant, reduce operating costs
and maximize our return on investment.
Despite the challenges, we have preserved funding for facilities
sustainment and restoration and modernization. The Department is
requesting $6.4 billion in fiscal year 2004 for sustainment. The budget
funds sustainment at 94 percent of standard benchmarks. That is not an
average of the Military Departments--it is the floor we established for
all the Military Departments, an improvement over last year, and we
have a plan to achieve full sustainment by 2008.
But sustainment alone is not enough. Even well-sustained facilities
eventually wear out or become obsolete, and we have a lot of facilities
in that condition now. So, in addition to sustainment, we must also
restore and modernize facilities. Some of this recapitalization is
critical and cannot wait. Our fiscal year 2004 funding request of $3.4
billion for restoration and modernization maintains our commitment to
improving the work environment while weighing the requirements against
other Departmental priorities.
We measure the rate of restoring and modernizing against an average
expected service life of our inventories, which we calculate at 67
years. The fiscal year 2004 Military Department recapitalization rate
is about 148 years, compared with 149 years for fiscal year 2003. With
the Defense Agencies included, our corporate rate for fiscal year 2004
is down to 136 years, an improvement over last year's request. Our
program funds the 67-year rate in fiscal year 2008, and between now and
then we plan to follow a smooth glide path to that level. This past
year, we thoroughly reviewed and standardized our Facilities
Recapitalization Metric, so we can track and report on our progress
toward the goal with confidence.
Improved Facilities Footprint Management
We continue to explore methods for reducing our footprint and
better utilizing existing facilities. Demolition is a valuable tool for
eliminating excess and obsolete facilities. From fiscal years 1998
through 2002, the Services demolished and disposed of over 75 million
square feet of unnecessary, deteriorated facilities, resulting in
significant cost avoidance in sustainment and restoration and
modernization expenses to the Department. We expect to exceed our goal
of demolishing 80.1 million square feet by the end of 2003, and we are
requesting about $80 million in fiscal year 2004 to carry on this
successful program.
While we use demolition for excess facilities, the enhanced-use
leasing program enables us to make better use of underutilized
facilities. As we transform the way we do business, the Department
remains committed to promoting enhanced-use leasing where viable. This
type of lease activity allows us to transform underutilized buildings
and facilities, with private sector participation, into productive
facilities. Examples of these opportunities include, but are not
limited to, the creation of new or joint-use opportunities for office
space, warehouses, hotels/temporary quarters, vehicle test tracks, wind
tunnels, energy generation plants, recreational playgrounds, and sports
venues. Additional benefits can accrue by accepting base operating
support or demolition services as in-kind consideration; thereby,
reducing the appropriations needed to fund those activities. Finally,
enhanced-use leasing provides opportunities to make better use of
historic facilities and improve their preservation as both cash and in-
kind consideration may be used for those purposes. The Army is a leader
in this regard, with pilot projects being discussed at Fort Sam Houston
and Walter Reed Army Medical Center.
Improving Energy Management
As we sustain, restore and modernize facilities, part of our focus
is to reduce our energy consumption and associated costs. To accomplish
this, the Department is developing a comprehensive energy strategy that
will continue to optimize utility management by conserving energy and
water usage, improve energy flexibility by increasing renewable energy
usage and taking advantage of restructured energy commodity markets as
opportunities present themselves and modernize our infrastructure by
privatizing our deteriorated and outdated utilities infrastructure
where economically feasible.
With approximately 2.2 billion square feet of facilities, the
Department is the single largest energy user in the Nation. Conserving
energy will save the Department funds that can be better invested in
readiness, facilities sustainment, and quality of life.
Our efforts to conserve energy are paying off. In fiscal year 2002,
military installations reduced consumption by 3.1 percent, resulting in
a 6 percent decrease in the cost of energy commodities from the
previous year. With a 25.5 percent reduction in fiscal year 2002 from a
1985 baseline, the Department is on track to achieve the 2010 energy
reduction goal for buildings of 35 percent per square foot.
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. Energy conservation projects make business sense,
historically obtaining about four dollars in life-cycle savings for
every dollar invested. The fiscal year 2004 budget contains $69.5
million for the Energy Conservation Investment Program (ECIP) to
implement energy saving measures at our facilities. This is a 39
percent increase from fiscal year 2003 budget request of $50 million.
The Department will also continue to pursue renewable energy
technologies such as fuel cells, geothermal, wind, solar, and purchase
electricity from these environmentally-friendly renewable sources when
it is life-cycle cost-effective. In fiscal year 2002, military
installations used 4.5 trillion British Thermal Units of renewable
energy, doubling the amount from the previous year. The pursuit of
renewable energy technologies is critical to the Department's and
Nation's efforts in achieving energy flexibility.
A key part of our energy program is our utilities management
efforts, focused on modernizing systems through utilities
privatization. By incorporating lessons learned and industry feedback,
the Department has strengthened efforts to take advantage of private
sector innovations, efficiencies and financing. We have over 2,600
systems with a plant replacement value of approximately $50 billion.
Thirty-eight systems have been privatized using the utilities
privatization authority in current law. Another 337 systems were
privatized using other authorities, and privatization solicitations are
ongoing for over 850 utility systems.
The Services plan to request privatization proposals for the
remaining 450 systems over the next 2 years. We are on track to
complete privatization decisions on all the available water, sewage,
electric and gas utility systems by September 2005. Congressional
support for this effort in fiscal year 2004 is essential to maintain
the procurement momentum and industry interest, as well as maximize the
benefits of modernizing the Department's utility infrastructure.
Improving Environmental Management
The Department continues to be leaders in environmental management.
We are proud of our environmental program at our military installations
throughout the world, and we are committed to pursuing a comprehensive
environmental program.

In fiscal year 2004, we are requesting $3.8 billion for
environmental programs. This includes $1.3 billion for cleanup, $0.4
billion for BRAC environmental, $1.6 billion for compliance; about $0.2
billion for pollution prevention, and about $0.2 billion for
conservation.
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\1\ Funding levels reflect total requirement (TOA).
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By the end of fiscal year 2002, we reduced new environmental
violations by 77 percent from the 1992 baseline. The Department
continues to reduce the percent of enforcement actions received per
inspection, with roughly one enforcement action per 12.5 inspections,
down from one for every three inspections in 1994. We have also
improved our treatment of wastewater and the provision of drinking
water for those systems we control.
We reduced the amount of hazardous waste we generate by over 64
percent since 1992, and we are avoiding disposal costs by diverting
non-hazardous solid waste from landfills by recycling and other
approved methods. These pollution prevention techniques continue to
save the Department needed funds as well as reduce pollution. As an
example, the Department saved about $95 million in disposal costs in
2001. We have increased the number of alternative fueled vehicles that
we use in order to reduce the demand for petroleum, and we continue to
reduce the number and amount of toxic chemicals we release through our
industrial processes and training operations.
The Department's commitment to its restoration program remains
strong as we reduce risk and restore property for future generations.
We are exploring ways to improve and accelerate cleanup with our
regulatory and community partners. Achieving site closure and ensuring
long-term remedies are challenges we face. Conducting environmental
restoration activities at each site of the installations in the program
requires accurate planning, funding, and execution of plan. The
Department must plan its activities years in advance to ensure that
adequate funding is available and used efficiently.
The Defense Environmental Restoration Program goals assist the
Components in planning their programs and achieving funding for
activities. We achieved our goal to reduce 50 percent of high risk
sites at active installations by the end of fiscal year 2002 and are on
track to achieve 100 percent by the end of fiscal year 2007. At BRAC
installations, final remedy for 90 percent of the sites was in place by
the end of fiscal year 2001, and we anticipate completion by the end of
fiscal year 2005.
We also are working to mitigate unexploded ordnance (UXO) on our
military ranges. Our operational ranges are designed to train and make
combat-ready our Nation's warfighters and prepare them as best as we
can for combat. UXO on ranges is a result of our military preparedness
training activities. However, we are actively seeking ways to minimize
the amount of UXO on our operational test and training ranges. The
Department is developing policies on the periodic clearance of UXO for
personnel safety and to ensure chemical constituents do not contaminate
groundwater.
For the areas other than operational ranges which have a UXO
challenge--our Formerly Used Defense Sites, BRAC installations, and
closed ranges on active installations--we are currently developing the
reports requested by Congress in the National Defense Authorization Act
for Fiscal Year 2002. We will have an inventory of our munitions
response sites, cost estimates, a comprehensive plan, and will define
the current technology baseline with a roadmap for future action.
In addition, we are developing new technologies and procedures
through the Environmental Security Technology Certification Program and
the Strategic Environmental Research and Development Program. These,
along with the Army and Navy's Environmental Quality Technology
Program, have enabled us to make tremendous strides for realizing our
goals of reducing cost, completing projects sooner and sustaining the
safety of our communities.
As you may know, the Defense Science Board (DSB) assessed the UXO
issue in 1998. Last year, the Under Secretary of Defense for
Acquisition, Technology and Logistics commissioned a new DSB Task Force
to look at this entire issue. Their report is due for completion this
summer, and we look forward to acting on their recommendations.
Beyond the dollars, we have implemented a new environmental
management systems (EMS) policy as a part of the administration's
emphasis that enables us to train and operate more effectively and
efficiently, while reducing our impact on the environment. Through this
``systematic approach,'' we can continually improve both our mission
performance and our environmental management. We are implementing this
across all military missions, activities and functions to modernize the
way we manage the environment entrusted us by the American people, and
we are on-track to achieve the EMS goal established in Executive Order
13148. We hope to reach the level where our mission activities are so
well managed from an environmental perspective that our environmental
impacts would be virtually eliminated and remove our liabilities from
long-term compliance bills. EMS is the systematic approach to achieve
this goal and resolve the perceived conflict between mission and
environmental stewardship.
We also look to our stakeholders and Government agencies to help us
better identify our environmental management issues. On February 5th,
we hosted a defense environmental forum at the National Defense
University. At the meeting, recognized leaders from Federal, tribal,
State and local governments, the private sector, academia, the
scientific and research community, and other non-governmental
organizations exchanged insights on pressing environmental issues
facing the Department. Our objective was to identify and diagnose the
major issues associated with the twin imperatives of military readiness
and environmental protection. This new initiative will improve our
communication with stakeholders and enable us to more effectively
manage our mission and environmental challenges.
Another significant environmental accomplishment is in the area of
natural resources. The Department has been managing natural resources
for a long time--we currently manage more than 25 million acres. In
October of 2002, we issued a new policy for ``Integrated Natural
Resource Management Plans'', or ``INRMPs'', used by the Department to
protect natural resources on our installations. Previous guidance
emphasized early coordination with all stakeholders, the U.S. Fish and
Wildlife Service and appropriate State agencies to ensure that we meet
the conservation requirements of the Sikes Act and focus on the
preservation and maintenance of healthy and fully functional
ecosystems. The new guidance emphasizes coordination requirements,
reporting requirements, implementation requirements, and other
miscellaneous requirements. The miscellaneous requirements highlight
the need to ensure that we manage our assets in accordance with the
INRMPs to ensure that there is no net loss in the capability of
military installation lands to support the military mission of the
installation, in this case test and training opportunities, as well as
preserving the natural resources entrusted to us.
We have completed integrated natural resource management plans at
the vast majority of bases. We also are pursuing the completion of
integrated cultural resource management plans at our installations to
ensure that we identify and preserve historical treasures. This will
allow us to test and train to maintain a ready military force without
fear of endangering our heritage. We acknowledge there are still some
very complex and difficult challenges, but we are making progress.
Preserving Ranges and Training Areas
The Department takes seriously the fact that an important part of
our national defense mission is to defend and preserve the natural
environment entrusted to us. Our personnel take understandable pride in
their environmental record--a record with documented examples of
impressive management of critical habitats and endangered species.
However, the impacts on readiness must be considered when applying
environmental regulations to military-unique training and testing
activities. The ever-growing problem of ``encroachment'' on our
military training ranges is an issue for us here at home, as well at
our overseas training locations.
We are addressing the effects that encroachment poses to our
ability to ``train as we fight.'' This effort, known as the Readiness
and Range Preservation Initiative, is the Department's broad-based
effort to find solutions to a variety of pressures on our test and
training lands.
This past year, Congress enacted two legislative provisions that
allow us to cooperate more effectively with local and State
governments, as well as private entities, to plan for smart growth
surrounding our training ranges. These provisions allow us to work
toward preserving habitat for imperiled species and to limit
development to land uses that are compatible with our training and
testing activities. Congress also provided the Department a temporary
exemption from the Migratory Bird Treaty Act for the incidental taking
of migratory birds during military readiness activities. These were
three of the eight provisions the Department sought approval on as part
of our Readiness and Range Preservation Initiative in the National
Defense Authorization Act for Fiscal Year 2003.
Today, we are developing a long-term process to address
encroachment by creating a multi-year, comprehensive program to sustain
training and testing. This program will pursue not only legislative
clarification but also regulatory and administrative changes, internal
policy and procedure adjustments, and an active stakeholder engagement
strategy.
The administration will seek legislative clarification where laws
are being applied beyond their original legislative intent. We believe
that modest legislative reforms are needed to ensure the preparedness
of this Nation's Armed Forces, and we will continue to work with
Congress to seek enactment of legislation to address these concerns.
We are in the process of evaluating all of the circumstances that
create problems for our test and training ranges. Some of these may be
solved with administrative or regulatory changes. We are working with
the Military Services, other Federal agencies, tribes, States, and
local communities to find ways to better balance military, community
and environmental needs.
The Department also is developing a suite of internal policy and
procedure adjustments, the capstone of which is a new Department of
Defense Directive recently signed by the Deputy Secretary to ensure
long-range, sustainable approaches to range management. In addition, we
intend to strengthen and empower management structures to deal with
range issues. We also have taken a pro-active role to protect bases
from urbanization effects by working with local planning and zoning
organizations and other stakeholders.
The actions taken by Congress last year will greatly assist in this
process by allowing us to work toward preserving habitat for imperiled
species and to limit development to land uses that are compatible with
our training and testing activities. The Services will identify
opportunities to utilize these new authorities. We plan to convene a
workshop early this year with key land conservation organizations and
representatives from State and local communities to develop an
implementing Memorandum of Understanding and sample cooperative
agreements that can be utilized under the new authorities.
The Department also is planning to address the long-term
sustainment process by reaching out to and involving other
stakeholders. We need to improve the understanding of readiness needs
among affected groups such as State and local governments, and non-
governmental organizations. We must establish dialogue and form
partnerships with these groups to reach our common goals by focusing on
areas of common interest. This will enable us to take a proactive
stance against encroachment and protect our bases into the future.

IMPROVING BUSINESS PRACTICES

Adopting a Common Approach to Managing Real Property
We are undertaking an aggressive initiative to make management of
our real property more efficient and effective. This project is called
the Real Property Enterprise Solution (RPES), and is part of the larger
Financial Management Modernization Program.
Our vision is to improve the accuracy, reliability, timeliness, and
usefulness of real property information necessary by all levels of
decision-making to support the Department's overall mission, resources,
accounting, accountability and reporting requirements. We will
accomplish our vision through development and implementation of a
standard, Defense-wide real property enterprise architecture resulting
in: standard business practices and processes, standard categorization,
definitions and terminology and a standard system (or systems).
We are teaming with the Office of the Under Secretary of Defense
(Comptroller) to develop and update our plans. We are 80 percent
finished with our enterprise architecture for real property. An
enterprise architecture catalogs the current real property activities
and leads to identification of the optimal business processes and
technical standards, with a transition plan showing how to get from the
current to the optimal state, recognizing any business constraints. By
the end of this calendar year, we plan to complete the market research
and solution assessment and expect to field a pilot system or systems
in calendar year 2005 for a significant portion of the real property
business area.
As part of the reform of the Department's business practices, we
developed the Facilities Sustainment Model (FSM) and the Facilities
Recapitalization Metric (FRM). The Facilities Sustainment Model and the
Facilities Recapitalization Metric, based on standard commercial
processes, improve the way we inventory and account for facilities and
more clearly define our facilities sustainment and recapitalization
requirements. The Services have used FSM to define their sustainment
requirements since fiscal year 2003, and the Defense Agencies were
included for fiscal year 2004.
This past summer we thoroughly reviewed and standardized the FRM,
so we can track and report on our progress toward our recapitalization
goals with confidence. The revised metric is now used throughout the
Department to calibrate the rate at which we restore and modernize
facilities and to ensure that all elements of the Department are moving
forward toward our corporate goals. With these two new tools, we have
finally established a common requirements generation process and a
sound method for forecasting funding requirements.
In developing these models, we also changed the program element
(PE) structure for fiscal year 2002 budget execution, doing away with
the real property maintenance PEs, and creating sustainment and
restoration/modernization (recapitalization) PEs. These newly defined
program elements align our financial management and accounting cost
elements with this new, transformed management structure and permit
tying dollars and budgets to performance.
Reducing Cycle Time
An imperative within the acquisition community is to reduce cycle
time while also reducing total ownership costs. In the Installations
and Environment community, we viewed this as a challenge to improve
business processes, enabling resources--both money and people--to be
better used elsewhere.
We established an integrated product team (IPT), with the Services
and Defense Agencies, to identify alternatives to reduce cycle time for
military construction. Facility construction typically takes about 5 to
8 years from requirements determination to beneficial occupancy. We
researched and adapted private sector practices, where possible, but in
some cases we may need legislative change. We will urge your
consideration of such proposals should they be necessary.
Focusing on Core Competencies
As we consider approaches to better utilize our personnel,
competitive sourcing provides a methodology for focusing on our core
capabilities. The Department will obtain needed products or services
from the private sector where it makes sense. We support the
Competitive Sourcing Initiative in the President's Management Agenda.
To meet the target initiated by the Office of Management and Budget,
the Department has initiated six pioneer projects as alternatives to A-
76. The Army's ``Third Wave'' is an example of our new aggressive
approach to identify the best way to do business. We will also announce
an additional 10,000 traditional A-76 initiatives this fiscal year. The
Services will submit their plans to meet the President's management
initiative objectives through the use of A-76 and alternatives in their
fiscal year 2005 Program Objectives Memoranda submissions.
Consistent with our approach of focusing on our core competencies,
the Department believes our security guard functions could be better
accomplished by contractors, freeing our military and civilians to
focus on other tasks that will enable us to fight and win wars. We
remain supportive of repealing the restriction in 10 U.S.C. 2465 that
prohibits the Department from contracting for security guards. The
current provision inhibits the Department's ability to quickly increase
or decrease the number of security guards, as threat conditions
warrant. This provision would provide increased flexibility as the
Department continues to enhance anti-terrorism/force protection
measures.

TRANSFORMING BASES AND INFRASTRUCTURE

One of the most effective tools we have to transform the military
is through the BRAC process. From 1988 through 1995, approximately 387
closure or realignment actions were approved, and the Department has
completed each action within its respective statutory deadline. We have
rationalized much of our infrastructure through the previous BRACs--but
much more needs to be done. We believe the Department has anywhere from
20 to 25 percent excess capacity in its facilities. By removing that
excess capacity we hope to save several billion dollars annually. For
instance, prior BRAC actions have resulted in net savings to the
Department--to the taxpayer--of approximately $17 billion, with annual
recurring savings of approximately $6 billion.
Continuing to operate and maintain facilities we no longer need
diverts scarce resources that could be better applied to higher
priority programs--like improving readiness, modernization and quality
of life for our Service members. We must utilize 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, 2001, the imperative to convert excess base capacity into
warfighting ability is enhanced, not diminished.
However, achieving savings is not the only reason to realign and
close bases. The more important reason is to enable us to attain 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.
Congress authorized a Base Realignment and Closure in 2005 to
accomplish this ``base transformation''. BRAC 2005 should be the means
by which we reconfigure our current infrastructure into one in which
operational capacity maximizes both warfighting capability and
efficiency. Through BRAC, we will eliminate excess capacity that drains
our scarce resources from defense capability.
The process will not be simply a process to reduce capacity in a
status-quo configuration, but rather, as the foundation to
transformation, it will allow us the opportunity to examine a wide
range of options for stationing and supporting forces and functions to
make transformation what it truly should be--a ``re-tooling'' of the
base structure to advance our combat effectiveness and make efficient
use of our resources. A primary objective of BRAC 2005 process is to
examine and implement opportunities for greater joint activity.
Our installations transformation is not limited to the United
States. We also are assessing our facilities overseas to determine the
proper size and mix. Since 1990, the Department of Defense has returned
or reduced operations at about 1,000 overseas sites, resulting in a 60
percent reduction in our overseas infrastructure and a 66 percent
reduction in Europe, in particular, and we continue to review overseas
basing requirements of the Combatant Commanders and examine
opportunities for joint use of facilities and land by the Services,
consolidation of infrastructure, and enhanced training.

CONCLUSION

Our facilities continue to recover, and we are seeing the results
of investments made over the last several years. The Defense Facilities
Strategic Plan and our installations management approach have provided
a framework that enables us to focus on our overarching goals: taking
care of our people, taking care of our facilities and enhancing our
business processes. We have made significant progress toward providing
quality housing for our service members, and we are now focused on
improving the work environment.
BRAC 05 is our most important initiative to help us accomplish
this. By consolidating, realigning and reducing unneeded
infrastructure, the Department can focus investments on maintaining and
recapitalizing what we actually require, resulting in ready facilities
for the warfighters while more prudently using the taxpayer's money.
As we prepare to rationalize our base structure, we also are
addressing encroachment issues that impact our ability to effectively
utilize our test and training ranges. The Readiness and Range
Preservation Initiative is identifying solutions to these challenges.
We have developed a plan of action and are proceeding with
implementation. A key element of the plan is our proposed legislation
that combines military readiness with environmental stewardship.
Our Real Property Enterprise System (RPES) efforts will result in
much improved and standardized business practices while enhancing our
financial stewardship. Market research and solution assessment should
be complete by the end of this fiscal year with pilot fielding of a new
system(s) or modification to existing systems to follow.
In closing, Mr. Chairman, I sincerely thank you for this
opportunity to outline our successes in military facilities and review
our plans for the future. We appreciate your strong support of our
military construction program, and I look forward to working with you
as we transform our infrastructure.

Senator Ensign. Thank you. Secretary Johnson.

STATEMENT OF HON. HANSFORD T. JOHNSON, ACTING SECRETARY OF THE
NAVY

Secretary Johnson. Thank you, Mr. Chairman, Senator Akaka,
distinguished members of the subcommittee. I am proud to appear
today as Assistant Secretary of the Navy for Installations and
Environment. I would like to highlight a few items that we have
in this area.
First of all, we have had a very difficult time, as you are
well aware, balancing our need for readiness, our increase in
aircraft and ship procurement with our facilities and
environment. I think facilities and environment have fared
fairly well.
Housing is always a great concern to all members of the
military. We find, as I will point out in a minute, we have
done pretty good in family housing. This year, if we had to
err, we erred in favor of better bachelor quarters. We put $269
million in the bachelor quarters. As we have talked about
before, we had some 18,100 sailors that did not have a bed
ashore, we call it ``homeport ashore,'' and we are making good
progress. In Hawaii we have already done a lot; and in Guam, we
have three projects this year that will make a big difference.
When we provide for homeport ashore, we are going to build
to the ``one-plus-one'' DOD, and I think your standards, but to
get sailors off of ships earlier, we will put two people to
each single room initially. Any room ashore at all is much
better than their accommodations on the ship. We will go back
to ``one-plus-one'' when we get there, of course.
We have had great success with the public-private ventures
in family housing. We are going to try this year to propose
three sites to do bachelor quarter pilots. We will do a pilot
at Norfolk, San Diego, and also at Camp Pendleton, where we
bring in a private contractor to build dormitories, and we will
be their partner, as we are with family housing.
We have a little bigger problem with the bachelor housing
than the family housing, because we have to make sure that
those rooms will be filled, and we also have to make sure that
if, for some reason, everybody goes away, the dormitory is
severable, so we will build it on the edge of a base.
Going back to family housing, we have been very successful.
We let a contract just last week for Beaufort and Parris
Island. That is the second largest one we have done. It is
1,700 units. That is working very well, but we also find with
your great support the basic allowance for housing has
increased, particularly in the high rent areas, and more and
more of our members want to live on the local economy. We think
that our sailors and marines are Americans first, and if they
can live on the local economy, that is what we would like.
We see a decline in the requirement a little bit. We still
are able to fill all of our quarters, but we are very pleased
with that result.
The MILCON program is a robust one. It is nearly $1.2
billion. It is near where we proposed last year. It is under
the final President's budget. This year, besides the bachelor
quarters, we are also placing emphasis on counterterrorism,
continuing that effort that we began last year.
We also have several large projects. One of them is in
Florida, at Blount Island. Blount Island is where our maritime
prepositioned ships operate from, and we are going to buy some
land at Blount Island as well as the safety buffer for the
ammunition requirements.
We are also planning to build some outlying fields for the
new F/A-18E/F that are coming to the east coast, and we are
doing test facilities for the next generation launch system, so
we are moving forward.
In the sustainment-restoration area, we are doing pretty
well in sustainment. The Navy has improved from 84 percent to
93 percent this year. The Marines have held at a very
respectful 97 percent, which is probably as high as we need to
go. As you mentioned in your statements, we have not done as
well on the restoration. We should get down to 67 years.
The Marines have done pretty well. They went down from 156
to 88 years. The Navy did not do as well. They went from 116 to
140 years. In all cases, by the end of the Future Years Defense
Plan (FYDP) we will meet the required 67 years. We all have a
lot of work to do in the restoration models as well as how we
perform to meet those.
We are working very hard to manage risk to limit the
degradation of our operational capabilities as well as
training, quality of life, and facilities.
We worked very hard on our shore infrastructure, and we
have done as the Army had already done and you took note in
your opening comments. We are going to one client for all
installations. In the past, we passed the money through a
couple of levels, and each level sometimes some of it got lost
going through that level. We want to make sure that the money
that you give us goes directly to the installations, and we are
confident that will work well. We are about 6 to 9 months
behind the Army and are learning from them, but we are very
confident of it.
You talked about the environmental program. It has declined
about $200 million, but there are some reasons for that. First
of all, we meet all of our requirements, and at the Kaho'olawe,
as Senator Akaka will know very well, we do not have that next
year, and that was around $75 million there. We will finish
Kaho'olawe on November 11 of this year, and we will move
forward from that.
Also in the prior Base Realignment and Closure (BRAC)
cleanups, our BRAC environmental went down. It went down
because we are selling some land, and the revenue from those
land sales go into environmental cleanup, so the actual funding
in there is increased because of the land sales, but as far as
you are concerned it has gone down, but we have taken care of
that with the land sales.
We are very pleased with our activities with the prior BRAC
land sales. It is working quite well. We have a good
partnership with the General Services Administration (GSA), and
more and more of the local reuse authorities are realizing that
it is better if we sell the property than them trying to
develop it. Originally, everybody wanted to give everything to
the community, but they find it is much easier now--we have a
couple of cases where they are saying, please, take this burden
off our back and go sell it and get it back into the economy.
It increases the tax base, also.
I recognize the Vice Chiefs are going to talk about the
environment, but certainly everybody at the table strongly
supports the things that Mr. DuBois talked about, and we are
strongly behind the environmental efforts. We are trying to
find a balance, not be exempted.
Thank you very much, sir.
[The prepared statement of Secretary Johnson follows:]
Prepared Statement by Hon. Hansford T. Johnson
Mr. Chairman and members of the subcommittee, I am H.T. Johnson.
While I have recently been designated as the acting Secretary of the
Navy, I am also the Assistant Secretary of the Navy (Installations and
Environment), and it is in this latter capacity that I appear before
you today to provide an overview of the Department of the Navy's shore
infrastructure programs and environmental efforts.

FISCAL YEAR 2004 BUDGET OVERVIEW

Before his recent departure to the Department of Homeland Security,
Secretary of the Navy Gordon England articulated several overarching
Department of Navy goals for the fiscal year 2004 budget:

Successfully prosecuting the global war on terrorism
while sustaining our current readiness;
Recapitalizing and transforming our Navy and Marine
Corps to meet the challenges of the future;
Fully networking our forces at sea and ashore to
operate seamlessly in a joint environment;
Continuing to invest in our sailors and marines; and
Sustaining the quality of our operational training.

I believe the fiscal year 2004 Department of Navy's budget request
meets all of these goals and represents a successful balance between
funds needed to operate, recapitalize and transform our fleet assets
with funds needed to do the same for our shore installations. Allow me
to provide you with an overview of our budget, with further details to
follow later in this statement.
Our Fiscal Year 2004 Military Construction, Family Housing, and
Sustainment, Restoration, and Modernization (SRM) request of $4.2
billion is $764 million below the fiscal year 2003 enacted amount, but
generally on par with our fiscal year 2003 budget request. Looking at
the individual components, the fiscal year 2004 Military Construction,
(MILCON) Navy (active + Reserve) request is a very robust $1.16
billion, similar to the fiscal year 2003 request. I note that the
fiscal year 2003 enacted amount includes $236 million in one-time
combating terrorism projects that were part of the fiscal year 2003
Supplemental request. These projects met the criteria for military
construction and were included in the fiscal year 2003 MILCON
appropriation.

We have reduced our fiscal year 2004 Family Housing, Navy request
by 17 percent compared to the fiscal year 2003 enacted amount or 16
percent compared to our fiscal year 2003 request. However, expanded use
of our housing privatization authorities, and increases to the Basic
Allowance for Housing (BAH), which makes housing in the community more
affordable, allow us to still meet the Department of Defense goal of
eliminating inadequate homes by fiscal year 2007. SRM funding \1\ is
down 15 percent compared to the enacted level, a reflection of overall
affordability within the Secretary's priorities. Compared to our fiscal
year 2003 request, the fiscal year 2004 request represents a 1.5
percent reduction.
---------------------------------------------------------------------------
\1\ Refers only to the Operations and Maintenance portion of SRM.
---------------------------------------------------------------------------
Our fiscal year 2004 request for environmental programs totals $1.0
billion, a reduction of about $200 million from the fiscal year 2003
enacted level and a 12 percent reduction from our fiscal year 2003
request. Much of the reduction is due to the completion of cleanup on
the island of Kaho'olawe, a former Naval bombing range in Hawaii. Title
X required the Navy to conduct a 10-year cleanup, which will end on 11
November 2003. We are working to transition full control of the island
to the State of Hawaii.

The decline in technology investments is due to the completion of
environmental research to retrofit non-ozone depleting equipment. This
equipment is now being installed on ships. Our must-fund environmental
cleanup requirements for bases closed under the Bases Realignment and
Closure rounds in 1988, 1991, 1993, 1995, which I will refer to as
Prior BRAC \2\, are less in fiscal year 2004 than in fiscal year 2003,
while cleanup at active bases is unchanged from fiscal year 2003.
---------------------------------------------------------------------------
\2\ Prior BRAC amounts shown in the graphic are only for
environmental cost, and exclude $12 million in fiscal year 2003, $11
million in fiscal year 2004 for caretaker costs, which are a portion of
the Prior BRAC budget request. The fiscal year 2004 budget request
includes $68 million in expected land sale revenue to be applied to
cleanup Prior-BRAC bases.
---------------------------------------------------------------------------
Environmental Quality (EQ) includes funds for compliance with
existing environmental standards, pollution prevention, and
conservation of natural and historic resources on Navy and Marine Corps
Bases. Approximately half of these funds are for routine functions such
as personnel salaries, environmental permits and fees, environmental
sampling and laboratory analyses, and hazardous waste disposal costs,
while the rest are for one-time projects. The decline in environmental
quality funds is due to the completion of one-time pollution prevention
projects and a reduction in equipment purchases.

HOUSING

We have made a special effort in this budget to maintain progress
on improving the quality of housing for our sailors and marines.
Family Housing
Our family housing strategy consists of a prioritized triad:

Reliance on the Private Sector. In accordance with
longstanding Department of Defense and DON policy, we rely
first on the local community to provide housing for our
sailors, marines, and their families. Approximately 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.
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.

Military Construction. Military construction will
continue to be used where PPV authorities don't apply (such as
overseas), or where a business case analysis shows that a PPV
project is not financially sound.

The Department remains on track to eliminate the inadequate family
housing units we own by fiscal year 2007, in large measure because we
have increased our emphasis on privatization. We will be able to
eliminate almost two-thirds of our inadequate inventory through the use
of public/private ventures. As of 1 February, we have awarded eight
projects totaling almost 6,600 units. During Fiscal Years 2003 and
2004, we plan to award projects totaling over 17,000 homes at ten Navy
and Marine Corps locations. This will allow us to improve our housing
stock and provide more homes to sailors, marines, and their families
much faster than if we relied solely on traditional military
construction.
Another important factor is the continuing initiative to improve
the basic allowance for housing (BAH). With higher BAH, our members are
finding suitable, affordable housing in the private sector. This, in
turn, reduces the need for military housing, thus allowing us to divest
ourselves of excess, inadequate units in our inventory.
Bachelor Housing
Our budget request of $269 million for Bachelor Quarters
construction projects continues the emphasis on improving living
conditions for our unaccompanied sailors and marines. There are three
challenges:

1. Provide Homes Ashore for our Shipboard Sailors. There are
approximately 18,100 sailors worldwide who are required to live
aboard ship even while in homeport. This requirement is less
than reported last year because of a recent change to Navy
policy allowing unaccompanied E4s to live off base. This new
policy is tied to the National Defense Authorization Act for
Fiscal Year 2001 that authorized the payment of BAH to E4s
without dependents who are assigned to sea duty. The Navy
continues to project that it will be able to achieve its
``homeport ashore'' initiative by fiscal year 2008 by housing
two members per room. Our fiscal year 2004 budget includes two
``homeport ashore'' projects. One represents the second
increment of a Norfolk, VA project that will provide a total of
500 spaces. The second project would construct 500 spaces for
shipboard sailors at San Diego, CA.
2. 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. The Navy will achieve these
barracks construction standards by fiscal year 2013; the Marine
Corps by fiscal year 2012.
3. Eliminate gang heads. The Navy and Marine Corps remain on
track to eliminate inadequate barracks with gang heads \3\ for
permanent party personnel. The Navy will achieve this goal by
fiscal year 2007; the Marines by fiscal year 2005.
---------------------------------------------------------------------------
\3\ Gang heads remain acceptable for recruits and trainees.

We appreciate the support from Congress in our efforts to extend
the principles of privatization to our critical bachelor housing needs.
We envision that privatization will prove to be as successful in
accelerating improvements in living conditions for our single sailors
and marines as it has been for family housing. We are developing pilot
unaccompanied housing privatization projects for Hampton Roads, Camp
Pendleton, and San Diego. We hope to be able to brief you on our
concepts for these projects before the end of this fiscal year.
Military Construction Projects
In addition to the $269 million in Bachelor Housing projects, our
fiscal year 2004 military construction program includes $361 million in
Operational and Training facilities such as waterfront and airfield
projects, and $44 million in compliance projects. There is $32 million
for counter-terrorism (CT) projects; additional CT costs are included
as a portion of the total project where appropriate.
This budget includes $473 million in ``new footprint'' projects,
representing an unusually large 41 percent of the military construction
program. While many barracks and CT projects are new-footprint, there
are several other important projects that will support the
transformation to new weapon systems of the future.

$116 million to complete the purchase of the Blount
Island facility and safety buffer in Jacksonville, Florida.
Blount Island is the maintenance site for the Marine Corps'
Maritime Pre-positioning Force. The purchase of this site,
along with a surrounding safety buffer, will ensure the long-
term viability of this strategic national asset.
$28 million to support the first phase of an outlying
field for east-coast basing of the F/A-18E/F Super Hornets.
Selection of a specific basing of this aircraft is pending
completion of an Environmental Impact Statement (EIS). The EIS
is scheduled for completion this summer.
$24 million to construct a Joint Strike Fighter test
facility.
$21 million to construct a facility to develop the
next generation shipboard aircraft launching system to be used
on the new aircraft carrier CVN21.
Facilities Sustainment, Restoration, and Modernization (SRM)
The Department of Defense uses models to calculate life cycle
facility maintenance and repair costs. These models use industry wide
standard costs for various types of buildings. Sustainment funds in the
Operations and Maintenance accounts maintain shore facilities and
infrastructure in good working order and preclude its premature
degradation. Both the Navy and Marine Corps increased sustainment
funding in fiscal year 2004, with the Navy improving to 93 percent of
the full sustainment requirement, and the Marine Corps staying at or
very near the Department of Defense goal of full sustainment.

Restoration and Modernization provides for the major
recapitalization of our facilities using Military Construction and
Operations and Maintenance funds. While both the Navy and Marine Corps
achieve the Department of Defense goal of a 67-year recapitalization
rate by fiscal year 2008, 1 year later than expressed last year, the
fiscal year 2004 recap rate increases to 140 years for Navy while
improving to 88 years for the Marine Corps. The Navy will manage the
near-term investment in facilities recapitalization to limit
degradation of operational and quality-of-life facilities.
While additional funds would certainly improve the situation, it is
unrealistic to believe that we will simply ``buy'' our way to attain
these facility goals. We must seek and implement greater efficiency in
our infrastructure

INFRASTRUCTURE EFFICIENCIES

Prior BRAC
The BRAC rounds of 1988, 1991, 1993, and 1995 have been a major
tool in reducing our domestic base structure and generating savings.
The Department closed and must dispose a total of 90 bases, and has
achieved a steady state savings of $2.7 billion per year. All that
remains is to complete the environmental cleanup, with an estimated
cost of $785 million, and property disposal.
We have completed disposal of 64 bases to date; 8 more bases are
planned in fiscal year 2003, 5 in fiscal year 2004. Legislation was
enacted last year that will allow the Navy to transfer nearly all of
the former Naval Air Station Adak, Alaska to the Department of
Interior, who will in turn exchange this property for other wildlife
refuge property owned by The Aleut Corporation. The United States will
then retain title to wildlife refuge property previously designated for
transfer to the Aleuts under the Alaska Native Claims Settlement Act.
We are working the final details for the transfer and hope to complete
the property exchange later this year. That transfer, along with the
planned disposals this fiscal year, should leave us with less than
12,000 acres still to dispose.

I am proud of the hard work and innovation that the Navy and Marine
Corps team have displayed in working with environmental regulators to
expedite property cleanup and support local redevelopment efforts to
speed reuse. Congress provided the necessary legislative authority to
allow the Navy to pursue early transfer opportunities. With the
concurrence of environmental regulators and the State Governor, we
transfer the deed to the property while environmental cleanup
continues, or pass mutually agreed cleanup funds to the developer who
becomes responsible for doing the cleanup. We have used this authority
many times, including the transfer of 1,300 acres at Mare Island Naval
Shipyard last year.
The spirit of innovation continues. Taking a cue from the popular
commercial uses of the Internet, we worked closely with General
Services Administration (GSA) to use its web site to auction 235 acres
of highly desirable property at the former Marine Corps Air Station
Tustin in California. We have deposited $51 million from this sale,
with settlement for the balance this spring. Existing statutes require
that all BRAC leasing and land sale revenue be deposited into the Prior
BRAC account to meet caretaker and environmental cleanup needs. We will
increasingly rely on BRAC land sale revenue to accelerate the remaining
BRAC cleanup efforts. I am very pleased with using the GSA web site to
auction real estate. It can attract a very wide audience of potential
bidders, ensure that the government receives the maximum value for the
property, and can help the community quickly resolve reuse needs. We
will pursue more BRAC property sales using the GSA web site.
BRAC 2005
The National Defense Authorization Act for Fiscal Year 2002 amended
the 1990 Defense Base Closure and Realignment Act to authorize another
round of BRAC in 2005. We will apply the BRAC process to examine and
implement opportunities for greater joint use of facilities, thus
eliminating excess physical capacity, and to integrate DON
infrastructure with defense strategy. Continuing to operate and
maintain facilities we simply no longer need is unfair to the taxpayer
and diverts resources that would be better applied to recapitalize the
operating forces (ships, aircraft, and equipment) for the future.
The BRAC statute sets out a very fair process.

All bases are treated equally;
All recommendations based on 20-year force structure
plan, infrastructure inventory and published selection
criteria;
Statutory selection criteria include:

Preserve training areas for maneuver by
ground, naval, or air forces;
Preserve military installations in the United
States as staging areas for the use of the Armed Forces
in homeland defense missions;
Preserve military installations throughout a
diversity of climate and terrain in the United States
for training purposes;
Consider the impact on joint warfighting,
training, readiness, contingency, mobilization, and
future total force requirements at both existing and
potential receiving locations to support operations and
training.

All data certified as accurate and complete and
provided to the Commission and Congress.

We are working closely with the Office of the Secretary of Defense
and the other Military Departments to develop opportunities for joint
basing that would further eliminate excess infrastructure among the
Services.
Commander, Navy Installation Command
The Navy will consolidate the management of its shore establishment
on 1 October 2003 from 8 installation claimants across 16 regional
commanders to a single Navy Installation Command. This consolidation
will achieve economies of scale, increase efficiency, and reduce
headquarters staffs while also standardizing policies, procedures, and
service levels across all Navy installations, much as the Marine Corps
now enjoys. We estimate that the benefits of this streamlining will
save the Navy $1.6 billion over the FYDP.
There is still much work to be done to implement this change. The
Navy must still define the personnel impacts, finalize the reporting
relationships, and identify the appropriate funding transfers. I
believe this effort will result in a more focused, leaner organization
that will improve services to the Fleet.
Utility Privatization
We are proceeding with plans to privatize utility systems (water,
wastewater, gas, electric) where it is economically feasible and does
not pose a security threat. Utility privatization is an integral part
of our efforts to improve our utility infrastructure. The Secretary of
Defense issued new utility privatization guidance last fall that
requires the Services to complete a source selection decision on each
system by September 2005. We are on track to do so for the 662 Navy and
Marine Corps systems under consideration for privatization.

Strategic Sourcing
Strategic sourcing uses commercial business practices such as
process re-engineering, divestiture of non-core functions, elimination
of obsolete services, and public/private competitions under Office of
Management and Budget A-76 guidelines to improve efficiency. We expect
to achieve $1.6 billion in annual steady state savings in fiscal year
2005 from strategic sourcing initiatives.
Our fiscal year 2004 budget includes A-76 competitions for 2,000
positions. OMB has been trying to bring about much needed process
changes for conducting these competitions. We will incorporate these
process changes, as well as some of our own initiatives, to speed the
process while still ensuring a fair playing field between in-house and
private sector interests. We are also supporting the Secretary of
Defense's Business Investment Council efforts to identify non-core
functions for divestiture. The Navy has identified the manufacturing of
eyewear for military personnel as a pioneer project for divestiture.
Naval Safety Program
Although safety is foremost a personnel program to avoid accidental
human injury or death, the private sector has also recognized safety
programs for their contribution to the bottom line in avoiding damage
to expensive equipment or facilities, inadvertent loss of highly
skilled personnel, and long-term injury compensation costs. We have
established a senior executive in my office, the first in Department of
Defense, to help foster a new Naval safety vision for the future. A
Safety Task Force has been meeting to consider the relationships
between safety staffs and funding mechanisms. We have engaged Navy and
Marine Corps installation commanders to recognize and work to reduce
the incidence of civilian manhours lost due to injury even as we
participate in a Department of Defense-sponsored Employee Work Safety
Demonstration project at four bases. We plan to provide basic
Operational Risk Management training to all new sailors and marines,
with more advanced training to senior personnel.
We are also pursuing safety improvements for the more visible
aviation mishaps, for which past experience shows that 85 percent are
in part attributable to human errors. We plan to try a new technique
that would store critical flight performance data and allow the pilot
to later replay a realistic animation of the flight.

ENVIRONMENTAL PROGRAMS

Shipboard Environmental
The U.S. Navy is a recognized world leader in environmental
stewardship at sea. In recent years the Navy has completed installation
of pulpers, shredders and plastic waste processors on its surface
ships. This ensures no plastic discharge to the world's oceans and
provides environmentally benign disposal of other solid wastes, such as
food, paper, cardboard, metal and glass. The Navy expects to have its
submarine fleet fully outfitted with solid waste equipment by the end
of 2005, well in advance of the 31 December 2008 Act to Prevent
Pollution from Ships deadline. Next year, the Navy will begin to
upgrade the solid waste equipment in the surface fleet. These upgrades
will mean shipboard personnel will expend less time, energy and
resources in processing solid waste.
The Navy continues to convert shipboard air-conditioning and
refrigeration plants to ones that use non-ozone depleting,
environmentally friendly refrigerants. As of today, over 75 percent of
the fleet is CFC-free. Additionally, the Navy continues to upgrade the
fleet's ability to safely and effectively handle hazardous materials by
installing pollution prevention equipment on all our surface ships. We
continue to work with the Environmental Protection Agency to set
Uniform National Discharge Standards for all Armed Forces vessels, and
in developing best management practices for preparing vessels for use
as artificial reefs. These programs, along with others in the shipboard
environmental program, reap enormous environmental and public relations
benefits while maintaining the primary goal of allowing our ships to
operate anywhere in the world in a manner that complies with or exceeds
domestic and international environmental laws and agreements.
Cleanup Program at Active Bases
For the second year in a row, the number of cleanups completed at
active bases exceeded the planning target. While we still have work to
do, almost 70 percent of all sites now have remedies in place or
responses complete. At the end of fiscal year 2002, 2,225 of the 3,668
sites at active installations have responses complete. We plan to
continue this pace. By the end of fiscal year 2004 we plan to have
about 2,500 sites completed at active bases.
Vieques Cleanup
On January 10, 2003, the Secretary of the Navy signed the letter of
certification to Congress confirming that the U.S. Navy and Marine
Corps will cease military training on the Vieques Inner Range by May 1,
2003. The Department of the Navy has identified training alternatives
that will collectively provide equivalent or superior training to the
options provided on the island of Vieques. The law requires the Navy to
transfer Vieques to the Department of Interior. We have been working
with Interior and the Environmental Protection Agency to do so.
We plan to conduct munitions clearance and any necessary cleanup in
accordance with applicable laws. The clearance and cleanup will be done
in a manner that is consistent with land use designated in the
governing statute and where appropriate, minimizes disturbance of the
natural environment. The designated land uses, once transferred to the
Department of Interior, are wilderness area for the live impact area
and a wildlife refuge for the remaining portions. We will be
considering the need for land use controls to ensure long-term
protectiveness as part of the remedial actions, including consideration
of future land use plans. We have identified $2 million in fiscal year
2004 funds from our Munitions Response Program line within the
Environmental Restoration, Navy (ER, N) appropriation to begin
munitions clearance efforts.
Environmental Range Management
The Navy and Marine Corps have initiated efforts to better
understand and manage the environmental concerns on its ranges. The
Navy has $15.8 million in fiscal year 2004 to begin this effort at the
Southern California, Fallon, Key West, and Gulf of Mexico range
complexes. This environmental program addresses three major areas:

Conduct living marine resource assessments, including
ocean surveys of marine mammal population densities;
Assess groundwater, surface water, soils conditions,
natural resources and the environmental compliance status for
each of the complex's land-based ranges and associated
airspace;
Integrate this information into complex-wide
environmental planning in accordance with the National
Environmental Policy Act, which will in turn drive Navy range
complex management plans.
Encroachment
The military readiness of our forces is the highest priority of the
Department of the Navy. Unfortunately, sustaining military readiness is
becoming increasingly difficult because over time a host of factors,
including urban sprawl, increasing regulation, litigation, and our own
accommodations, although reasonable when viewed in isolation, have
cumulatively diminished the Department of the Navy's ability to train
and test systems effectively. Military bases and ranges represent some
of the few remaining undeveloped large tracts, and are being looked at
more and more by Federal and State regulators as a solution for
difficult and costly conservation efforts. For example, initial
proposals for critical habitat designations would have included about
56 percent of Marine Corps Base, Camp Pendleton, California. The Marine
Corps and the U.S. Fish and Wildlife Service worked together in an
effort to devise an approach that would satisfy the needs of both
agencies. As a result of these efforts, the Secretary of the Interior
determined that the speculative benefits of critical habitat
designation were outweighed by military training needs at Camp
Pendleton. This determination led to the designation of only 5 percent
of Camp Pendleton's lands as critical habitat. However, a lawsuit
challenging the U.S. Fish and Wildlife Service final rule quickly
followed. As a result, U.S. Fish and Wildlife Service withdrew the
designation. A new critical habitat designation is still pending.

We--Congress, Federal and State regulators, and the military
services--must identify a reasonable balance between the competing
national priorities of military readiness and environmental
stewardship. The Department of the Navy, in conjunction with the
Department of Defense, has begun working with some regulatory agencies
to identify changes in regulations and agency policies that can help
restore the appropriate balance. However, many environmental laws do
not always lend themselves to such changes because when enacted, no one
considered their applicability to the military readiness activities of
today.
The need for legislative change was demonstrated again recently
when the use of a new defensive sensor known as Surveillance Towed
Array Sonar System Low Frequency Active (SURTASS LFA), which was
developed to deal with the threat of quiet diesel submarines now being
deployed by potential adversaries, was recently restricted by a court
order. The Navy had undertaken an unprecedented research program to
ensure that marine mammals would not be injured, and worked closely
with the National Marine Fisheries Service to develop mitigation
measures so that marine mammals would not be injured. The Navy
concluded that based on tests and analysis conducted by an independent
panel of scientists, which was subjected to peer review and approved
through a public rule making process by the National Marine Fisheries
Service--the Federal regulatory agency tasked with protection and
preservation of marine mammals, the system would have little impact
upon marine mammals. Yet a Federal judge determined that the Marine
Mammal Protection Act (MMPA) would not allow the Navy to deploy the
defensive sensor in question in the manner the Navy had determined was
needed. In the court's view, there were serious issues raised with
regard to whether National Marine Fisheries Service had used a proper
mechanism to identify the ``specified geographic region'' required
under the MMPA to issue a ``small take'' authorization for the Navy's
deployment of the sensors. The court ordered the Navy to confer with
plaintiffs over possible restrictions on deployment of SURTASS LFA
until the final hearing on the merits of the case currently scheduled
for June 2003. Following these discussions, the court issued a
preliminary injunction restricting the Navy's use to an area in the
western Pacific between Japan and Guam.
The military services have been criticized by some for seeking
legislative relief without first using national defense exemptions or
Presidential waivers built into environmental laws. Although many of
the laws contain some provision for the President to waive compliance
with a specific requirement, these waivers are of limited scope and
duration. Some laws have no provision for an exemption or require an
adverse decision by a court before the exemption can be pursued. For
example, the MMPA contains no waiver provision, even for actions that
are absolutely necessary for national defense. Many environmental laws,
when enacted, did not consider their impact on military readiness
activities. The exemptions or waivers that do exist were not intended
to serve as routine management tools; they were designed to provide
short term fixes for unanticipated or emergency situations.
Last year, the Department of Defense recommended legislative
changes to address specific areas of environmental laws that had the
greatest adverse impact on sustaining military readiness. Congress
provided some relief in one critical area--the applicability of the
Migratory Bird Treaty Act (MBTA) to military readiness activities. We
are working with the Department of Interior to craft a mutually
acceptable proposed rule consistent with report language accompanying
the National Defense Authorization Act for Fiscal Year 2003 authorizing
take of migratory birds for military readiness activities, and a
Memorandum of Understanding to promote migratory bird conservation, as
required by Executive Order 13186, for non-readiness related military
actions.
The other five involved proposed changes to the MMPA, Endangered
Species Act (ESA), Clean Air Act (CAA), Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), and the Resource
Conservation and Recovery (RCRA) Act were not made. The Department of
the Navy is particularly concerned with MMPA and ESA, and the need
remains for a legislative solution. For example, the Department of Navy
uses special management plans called Integrated Natural Resource
Management Plans (INRMPs), pursuant to the Sikes Act, to protect
habitat on military installations. A Federal district court in Arizona,
however, recently decided the substitution of special management plans
for critical habitat designation is impermissible under the ESA. In
this case, which involved forest management plans, the court determined
that the special management considerations could not substitute for the
designation of critical habitat. The Department of Navy is concerned
this reasoning could be relied upon by other Federal courts when
reviewing INRMPs. The U.S. Fish and Wildlife Service is using other
administrative options in an attempt to exclude installations with
approved INRMPs from critical habitat designations, but more certainty
would be provided by legislative actions.
In addition to the decision concerning restricting deployment of
the SURTASS LFA system I mentioned earlier, two other recent decisions
by different Federal district courts stopped scientific research after
the court determined that the National Marine Fisheries Service had
improperly authorized harassment of marine mammals during research by
the National Science Foundation off the coast of Mexico and a Navy
funded project to study the effects of underwater sound on Grey Whales
off the coast of California.
We recognize the importance of resource preservation. We are not
looking for wholesale suspension of environmental laws as they apply to
military readiness. We are not attempting to avoid the issues that
American industries and businesses face regarding environmental
compliance. We are not abandoning the outstanding stewardship over the
lands entrusted to us or shrinking from environmental protection
requirements. We are merely trying to restore balance where
environmental requirements adversely affect uniquely military
activities--activities that are necessary to prepare sailors and
marines to engage in combat and win.

LEGISLATIVE PROPOSALS

I would like to call your attention to several legislative
proposals of particular importance to the Department of Navy.
Readiness & Range Preservation Initiative
This legislative proposal is a top Department of Defense priority.
It would provide legislative relief for military readiness activities
under various environmental statutes. Of particular interest to the
Department of the Navy are:

Modifications to MMPA that would clarify the MMPA's
definition of ``harassment'' as a biologically significant
response, and resolve other procedural issues related to the
MMPA.
Modify the ESA to allow use of Integrated Natural
Resources Management Plans now required under the Sikes Act to
provide the special management considerations in lieu of the
need to designate critical habitat on military lands.
Property Conveyance for Housing
We propose to extend to barracks existing authority that allows the
transfer of land at locations closed under prior year BRAC actions for
family housing. The administration's request also includes a similar
proposal that would allow the Services to transfer land at locations
not related to BRAC for either housing, land suitable for siting
housing, cash, or some combination of these. These proposals would
provide additional tools that we could use to obtain housing for our
sailors and marines and their families faster.
MILCON Streamlining
We propose several initiatives to streamline the administrative
aspects of the military construction process. It typically takes 5 to 8
years from inception to completion for a military construction project.
That's too long. Our proposal would increase the minor construction
threshold to permit faster execution of smaller projects, and allow the
use of the planning and design sub account to initiate early project
design on design build projects. Such projects now include most of the
design funds as part of the project cost, and thus must await line item
authorization and appropriation of the project by Congress to begin
design work in earnest.

CONCLUSION

In conclusion, I would ask the members of this subcommittee to not
judge the merits of the Department of the Navy's installations and
environmental program solely through a single lens comparison of this
year's budget request vs. last year's enacted level. We continue
progress on most fronts, and the decline in funding is generally due to
reduced requirements or less costly alternatives.
We remain steadfast in resolving inadequate housing concerns.
Consistent with Department of Defense and our own priorities, we will
eliminate inadequate family housing by fiscal year 2007 through
increased reliance on our privatization efforts and the help of BAH
increases that it more likely for our members to find good, affordable
housing in the community. We have maintained momentum to fix housing
for our single sailors and marines, particularly with respect to
getting our shipboard sailors a place ashore they can call home when
their ship is in homeport. We hope to extend the benefits of family
housing privatization to barracks with three pilot projects that are
being developed. The very robust $1.2 billion military construction
request will revitalize existing facilities while acquiring those to
support future weapon systems and readiness needs. We will apply the
proceeds from selling Prior BRAC property to accelerate cleanup of
remaining BRAC property. Facilities sustainment, restoration, and
modernization trends are positive, with the exception of the Navy
recapitalization rate; regrettably, affordability required that we
defer near term progress in using Operations and Maintenance, Navy
funds to revitalize facilities.
We have fully funded all environmental commitments. The decline in
environmental funds is tied to finishing the cleanup on Kaho'olawe, and
the completion of several research and development projects and
pollution prevention initiatives. Encroachment remains the primary
environmental issue we must deal with. We will work with the Department
of Interior to craft mutually acceptable solutions under MBTS. However,
other environmental statutes, with ESA and MMPA of particular interest
to the Department of Navy, remain to be resolved. We need to craft an
appropriate balance between environmental stewardship and military
readiness.
That concludes my statement. I appreciate the support of each
member of this subcommittee, and will try to respond to any comments or
concerns you may have.

Senator Ensign. Secretary Fiori.

STATEMENT OF HON. MARIO P. FIORI, ASSISTANT SECRETARY OF THE
ARMY (INSTALLATIONS AND ENVIRONMENT)

Secretary Fiori. Mr. Chairman, members of the subcommittee,
I am very pleased to appear before you to review the Army
Fiscal Year 2004 Military Construction program. The Army's
overall budget request for fiscal year 2004 supports the Army
vision, transformation, readiness, and people. Our military
construction budget request of $3.2 billion will fund our
highest priority facilities and family housing requirements.
Transformation is one facet of the Army vision. The Army is
fundamentally changing the way we fight and creating a force
more responsive to the strategic requirements of the Nation.
Our fiscal 2004 budget includes facilities to support both the
active and Reserve components in this transition.
First, I would like to tell you briefly about how we are
transforming installation management. Recognizing the
requirement to enhance support for the commanders and buttress
Army transformation, the Secretary of the Army directed the
reorganization of the Army's installation management structure.
On October 1, 2002, the Army placed the management of Army
installations under the Installation Management Agency. 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 transformation and readiness.
Second, in support of Army transformation, our budget
contains $329 million for 17 projects at core active
installations and an additional $85 million for 31 Army
National Guard projects. Facilities requested cover the
spectrum needed for effective operations and training,
including ammunition supply point upgrades, mobilization
facilities, training land acquisition, maintenance facilities,
ranges, information system facilities, barracks, and family
housing.
A second facet of the Army vision is readiness. Army
installations are our Nation's power projection platforms, and
they provide critical support to the Army in joint operations.
We have requested funding for key projects that specifically
focus on readiness. These include live-fire ranges,
maintenance, test, and deployment facilities, Army National
Guard readiness, and Army Reserve centers. These critically
needed projects constitute about $266 million.
Our third facet of the Army vision is people. The Army
continues its major campaign to modernize barracks to provide
enlisted permanent party soldiers with quality living
environments. The new complexes provide increased personal
privacy and larger rooms with new furnishings. With the
approval of our budget, 79 percent of our barracks requirement
for permanent party soldiers will be funded.
According to our surveys, adequate and affordable housing
continues to be a major concern to soldiers and their families.
With the approval of the fiscal year 2004 budget, the out-of-
pocket expenses for soldiers will be reduced to 3\1/2\ percent
and, as Mr. DuBois said, by 2005 they will be brought down to
zero.
This year's budget expands family housing privatization and
increases improvements in existing housing. It supports our
goal to have contracts in place by 2007 that will provide
adequate housing to all on-base military families. Our
privatization effort has been particularly successful. The
current program of 28 projects will transition to privatized
operations by the end of fiscal year 2006. These projects will
include almost 72,000 homes, more than 80 percent of our
inventory in the United States.
We have already transitioned four installations to
developers. At Fort Carson, for example, we transferred 1,823
existing homes, and the partner-developer will construct 840
more. So far, 618 homes have been constructed and 943 have been
renovated. Families have moved into those homes, and the
process has been very positive to date.
In closing, Mr. Chairman, I sincerely thank you for the
opportunity to outline our program. As I visited many
installations, I have witnessed 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.
I look forward to answering any questions of the
subcommittee, including those relating to the environment.
[The prepared statement of Secretary Fiori follows:]

Prepared Statement by Hon. Mario P. Fiori

Mr. Chairman and members of the subcommittee, it is a pleasure to
appear before you to discuss the active Army and Reserve components'
military construction budget request for fiscal year 2004. This request
includes initiatives of considerable importance to the Army, as well as
this subcommittee, and we appreciate the opportunity to report on them
to you.
Our budget provides resources in our construction and family
housing programs essential to support the Army's role in our National
Military Strategy and our role in the global war on terrorism. The
budget supports the Army's vision and our transformation strategy.
The program presented herein requests fiscal year 2004
authorization of appropriations and appropriations of $1,536,010,000
for Military Construction, Army (MCA); $1,399,917,000 for Army Family
Housing (AFH); $168,298,000 for Military Construction, Army National
Guard (MCNG); and $68,478,000 for Military Construction, Army Reserve
(MCAR).
The Army has begun one of the most profound periods of
transformation in its 227-year history. In 1999, we published the Army
vision--people, readiness, and transformation--that defined how we meet
the Nation's military requirements today and into the future. After 3
years, we are on the road to implement the 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.
The attacks against our Nation and the ongoing global war on
terrorism validated the Army's vision and our transformation. To meet
the challenges of Army transformation and to carry 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.
Installations are a key component in all three tenets of the Army
vision. They are the operational and service support centers where our
soldiers and civilians work, live, and train; and from which we deploy,
launch, and accomplish our missions. Our worldwide installations
structure is inextricably linked to the Transformation of the Army and
the successful fielding of the Objective Force.
Army installations, both active and Reserve component, must fully
support our warfighting needs, while at the same time provide soldiers
and their families with a quality of life that equals that of their
peers in civilian communities. The Army vision begins and ends talking
about the well-being of people. Our installations are the hometowns to
many of our people. To improve our installations, we realized we had to
transform installation management to improve the way we operate and
manage this important resource.
In support of the Transformation of Army installations, on October
1, 2002, the Army activated the Installation Management Agency (IMA).
This activation symbolized a radical transformation in how the Army
manages installations. Through the IMA, the Army has created a
corporate structure for managing its installations. By shifting that
responsibility from the 14 formerly land-holding major commands, the
IMA seeks to enhance effectiveness in installation management, achieve
regional efficiencies, eliminate the migration of installation support
dollars, and provide consistent and equitable services and support.
Major Commanders can now focus solely on their primary missions.
Though the major commands no longer have a primary responsibility for
installation management, the support they receive from installations is
a paramount mission of the IMA. The IMA exists to support and enable
mission commanders. The senior mission commander on each installation
is part of the rating chain for the garrison commander of that
installation. The most senior commanders of the major commands, as well
as the Director of the Army National Guard and the Chief of the Army
Reserve, also sit on an Installation Management Board of Directors,
providing oversight and guidance to the operations of the IMA.
The Army's transformation of installation management represents a
significant paradigm shift in the way the Army manages installations.
It represents a new commitment to installation management as a key
component of Army Transformation. Mission readiness no longer competes
with installation management tasks; and the soldier's well-being and
quality of life on the installations does not compete with the mission.
It will allow us to provide for our soldiers and their families and to
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 sustainment, restoration, and modernization (SRM)
using operations and maintenance (O&M) and military construction
(MILCON) funding. The AFS addresses sustainment, recapitalization,
quality, and quantity improvements so that the Army will have adequate
facilities to support Transformation and our 21st century missions.
The first objective of the strategy requires us to halt further
deterioration of our facilities. Our sustainment funding, which comes
from the O&M SRM accounts, has improved. Our budget request funds 93
percent of our requirements in fiscal year 2004. This level of funding
may be sufficient to slow further deterioration of Army facilities. We
use the Installation Status Report (ISR) to rate the condition of our
facilities. A C-1 quality rating indicates facilities support mission
accomplishment; a C-2 quality rating indicates facilities support the
majority of assigned missions; a C-3 quality rating indicates
facilities impair mission performance; and a C-4 rating indicates
facilities that significantly impair mission performance. Currently,
the Army's overall quality rating is C-3 (impairs mission performance).
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 objective of our strategy addresses improving
recapitalization of our facilities to a 67-year cycle. This will ensure
we have adequate facilities to keep pace with future force structure
changes and weapons modernization programs. The focus is on the Army's
most obsolete infrastructure, such as vehicle maintenance facilities,
Army National Guard Readiness Centers, and Army Reserve Centers.
Unfortunately, our budget resources limit our recapitalization rate to
144 years for fiscal year 2004.
The third objective is to raise the Army facilities from the
current C-3 quality rating (impairs mission performance) to an overall
C-2 quality rating (supports majority of assigned missions) by the end
of 2010. This will be accomplished by bringing a focused set of
facilities to C-1 (supports mission performance) during that timeframe.
Since we cannot 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.
The fourth objective is to reduce 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. Ranges and training
facilities are an example.
Modest MILCON investment will be made in fiscal year 2004 for these
objectives. These four objectives will enable us to improve the health
of Army real property and the ability to successfully support our
worldwide missions and our soldiers. This year, our highest priority
went to sustainment to achieve a 93 percent funding level.
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 (including overseas
reductions), resulted in the disposal of over 400 million square feet
worldwide from our fiscal year 1990 peak of 1,157,700,000 square feet.
In fiscal year 2004, we plan to reduce an additional 2.7 million square
feet. We continue our policy of demolishing at least one square foot
for every square foot constructed.

MILITARY CONSTRUCTION, ARMY (MCA)

This year's MCA program focuses on the Army's vision and four major
categories of projects: people, readiness, transformation, and other
worldwide support. I will explain each category in turn.
People
Fifty percent of our MCA budget is dedicated to providing for the
well-being of our soldiers, their families, and civilians. We are
requesting 23 barracks (plus an additional 1 for transformation), a
dining facility and 2 physical fitness centers. These projects will
improve not only the well-being of our soldiers and families, but also
the readiness of the Army. We are requesting $776.2 million for these
projects.
Whole Barracks Renewal Program
The Army continues its major campaign to modernize barracks to
provide enlisted permanent party soldiers with quality living
environments. 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, $737.9 million, as
requested, 79 percent of our barracks requirement (including the
transformation barracks), will be funded at the new standard for our
permanent party soldiers. Between fiscal years 2005 and 2009, we plan
to invest an additional $3.5 billion in MCA and host nation funds.
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 the fact that these areas have been
historically funded at lower levels than installations in the United
States. A large portion of the remaining modernization effort--37
percent--is in overseas areas.
In fiscal year 2004, we are planning 23 barracks projects as part
of our barracks modernization program, including 7 projects in Europe
(one of which supports our Efficient Basing East initiative) and 3
projects in Korea. This will provide new or improved housing for at
least 5,500 soldiers. The installations with the largest investment are
Fort Bragg, North Carolina, with $102 million (3 projects), and
Schofield Barracks, Hawaii, with $98 million (2 projects). At these
installations, large soldier populations and inadequate barracks
require sustained high investment to provide quality housing. Barracks
projects are also requested for Fort Hood, Texas; Fort Riley, Kansas;
Fort Campbell, Kentucky; Fort Lewis, Washington; Fort Richardson,
Alaska; Fort Drum, New York; and Fort Stewart, Georgia. A barracks
project supporting Transformation is also requested at Fort Wainwright,
Alaska. Although we are requesting authorization for all phases of a
multi-phase barracks complex at Fort Drum and Fort Bragg, we are only
requesting the appropriation needed for the fiscal year 2004 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.
Community Facilities
Our budget request includes a dining facility at Fort Meade,
Maryland, for $9.6 million. Also included are two physical fitness
centers at Hohenfels, Germany ($13.2 million) and Fort Stewart, Georgia
($15.5 million) to improve soldier fitness and community wellness. The
physical fitness center at Fort Stewart has been selected as a pilot
project for the demonstration program for the reduction of long-term
facility maintenance costs. We believe this demonstration program will
decrease our maintenance expenses and increase the quality of our
facilities. This project is one of three included in fiscal year 2004.
An Army Reserve and a National Guard demonstration project are also
included in the budget.
Readiness
In fiscal year 2004, there are 11 projects, $153 million, to ensure
the Army is deployable, trained, and ready to respond to meet its
national security mission. The projects provide enhanced training and
readiness via live-fire ranges and simulators, maintenance and test
facilities, and a deployment facility.
To improve soldier training, we are requesting $45.8 million to
construct five training and readiness projects. Our request includes
Modified Record Fire Ranges at Schweinfurt, Germany; Fort Knox,
Kentucky; and Fort Sill, Oklahoma; an instrumented Multipurpose
Training Range Complex at Fort Benning, Georgia; and a live-fire urban
operations Shoot House at Fort Lewis, Washington. All five ranges will
provide our soldiers with realistic, state-of-the-art live-fire
training.
A project to construct troop support facilities, including a
physical fitness center and dining facility, and to renovate a
headquarters facility and a postal facility at a cost of $46 million
will support the Efficient Basing, East, initiative at Grafenwoehr,
Germany.
We are requesting three maintenance facilities for $41 million to
support Army missions.
Our request also includes $5.5 million for a Vibration Dynamic Test
facility at Redstone Arsenal, Alabama. This facility will enable the
Army to test small rocket systems and components for reliability to
ensure that equipment can withstand the rigors of military operations.
To support deployment of an airborne battalion ready task force,
our request includes $15.5 million for a Joint Deployment Facility in
Aviano, Italy. This facility will be constructed on an Air Force Base
and will provide support for deployments of the 173rd Airborne Brigade
stationed in Vicenza, Italy. In addition, the facility will support
other U.S. and NATO forces deploying through Aviano Air Base.
Transformation
Our budget contains $285.3 million for 16 projects at 4
installations that will support the deployment, training, unit
operations, and equipment maintenance for Army Transformation. The
projects include one barracks, one multi-purpose training range
complex, one live-fire urban operations Shoot House, upgrades to an
existing Military Operations in Urban Terrain (MOUT) facility, two
Mission Support Training Facilities (and the acquisition of additional
lands in Hawaii to ensure our forces are properly trained), two Alert
Holding Areas, expansion of a Deployment Staging Facility, an upgrade
to an existing Ammunition Supply Point, a Pallet Processing Facility,
an Information Systems Facility, Arms Storage, and an Aircraft
Maintenance Hangar. The proposed projects in Hawaii will support the
legacy force requirements that are currently not being met and future
combat systems.
Following the Persian Gulf War, Congress charged the Department of
Defense to determine strategic mobility requirements to support the
revised national strategy of greater reliance on CONUS-based
contingency forces and power projection capabilities. The Army
established the Army Strategic Mobility Program (ASMP) in fiscal year
1994 that centered on the capability to deploy a five division
contingency force with its associated support structure anywhere in the
world within 75 days. We will successfully complete funding the program
in fiscal year 2003. Over the 10-year period we funded approximately
$800 million in projects to support our strategic mobility.
The Army has reviewed the lessons learned from the successful ASMP
and has analyzed current and future strategic environment; multiple,
astute, and dynamic adversaries; and identified the need to deploy a
brigade combat team anywhere in the world in 96 hours after liftoff, a
division on the ground in 120 hours, and five divisions in theater in
30 days. To meet these goals, the Army has developed the Army Power
Projection Program (AP\3\) beginning in fiscal year 2004. Five of the
Transformation projects listed above support our new deployment
requirements for a transformed Army and initiate the start of the AP\3\
program.
Other Worldwide Support Programs
The fiscal year 2004 MCA budget includes $100.7 million for
planning and design (P&D). The fiscal year 2004 P&D request is a
function of the construction programs for 2 fiscal years: 2005 and
2006. The requested amount will be used to complete design of fiscal
year 2005 projects and initiate design of fiscal year 2006 projects.
Without this level of funding, our ability to design future year
projects will be impaired and this will ultimately impact delivery of
critically needed facilities to our soldiers.
Host Nation Support (HNS) P&D
The Army, an executive agent, provides HNS P&D for oversight of
host nation funded design and construction projects. The U.S. Army
Corps of Engineers oversees design and construction to ensure
facilities meet the Army's requirements and standards. Lack of
oversight may result in an increase in design errors and construction
deficiencies that might require United States dollars to rectify.
Maintaining the funding level for this mission results in a payback
where $1 of United States funding gains $44 worth of host nation
construction. The fiscal year 2004 budget request for $22 million will
provide oversight for over $950 million of construction in Japan,
Korea, and Europe.
The fiscal year 2004 budget also contains $20 million for
unspecified minor construction. This funding level will allow us to
address unforeseen, critical needs that cannot wait for the normal
programming cycle.

ARMY FAMILY HOUSING

According to the Military Family Housing Standards Study done in
April 2001, adequate and affordable housing continues to be a major
concern to soldiers and their families. We have waiting lists at all of
our major posts. Out-of-pocket expenses for soldiers living off post,
though less than in prior years due to increases in Basic Allowance for
Housing, will be reduced to 3.5 percent of the total cost of their
housing with the approval of the Army fiscal year 2004 budget. By
fiscal year 2005, we will meet our OSD goal to reduce our out-of-pocket
expenses to zero. Maintaining and sustaining safe, attractive, and
convenient housing for our soldiers and families is one of our
continuing challenges. This year's budget expands privatization and
increases improvements to existing housing. It supports the Secretary
of Defense's goal to provide adequate housing to all military families
by 2007.
Our fiscal year 2004 request for Army Family Housing is
$1,399,917,000. Table 1 summarizes each of the categories of the Army
Family Housing program.

TABLE 1--ARMY FAMILY HOUSING
Fiscal Year 2004
------------------------------------------------------------------------
Facility Category ($000) Percent
------------------------------------------------------------------------
New Construction................................ 126,600 9
Post Acquisition Construction................... 197,803 14
Planning and Design............................. 32,488 2
Operations...................................... 179,031 13
Utilities....................................... 167,332 12
Maintenance..................................... 432,605 31
Leasing......................................... 234,471 17
Privatization................................... 29,587 2
-----------------------
Total......................................... 1,399,917 100
------------------------------------------------------------------------

Family Housing Privatization
The Army continues to implement the Residential Communities
Initiative (RCI) to create modern residential communities in the United
States, using the military housing privatization authorities granted by
Congress. We are 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 family housing
communities.
The current program of 28 projects will transition to privatized
operations by the end of fiscal year 2006. These projects include over
71,000 homes, more than 80 percent of our family housing inventory in
the United States. We already have transitioned four installations to
privatized operations: Forts Carson, Hood, Lewis, and Meade. These
projects include over 15,700 housing units. Families have moved into
new and renovated housing at those locations and our experience to date
has been very positive.
We have selected development partners and are currently negotiating
Community Development and Management Plans (50-year construction,
operations, and financing plan) at 8 additional locations with over
23,000 units. Five of these projects (Fort Bragg, Fort Campbell,
Presidio of Monterey, Fort Irwin/Moffett Army Airfield/Camp Parks, and
Fort Hamilton) will transition to privatized operations in fiscal year
2003 and the remaining three (Fort Belvoir, Forts Eustis/Story/Monroe
and Fort Stewart) will transition in fiscal year 2004. In addition to
these projects, four other projects are in various stages of the
procurement process (Walter Reed Army Medical Center, Fort Shafter/
Schofield Barracks, Fort Polk, and Fort Detrick). Twelve more projects
are scheduled for the future (Fort Leonard Wood, Fort Sam Houston, Fort
Bliss, Fort Drum, Fort Benning, Fort Rucker, Fort Gordon, Fort Knox,
Fort Leonard Wood, Picatinny Arsenal, Carlisle Barracks, and Redstone
Arsenal).
Our development partners expertise, experience, and resources are
resulting in significant improvements in our family housing
communities. The fiscal year 2004 budget request is necessary to
support continued implementation of this quality-of-life program.
Family Housing Construction
The total fiscal year 2004 request for construction is $356.9
million. It continues the Whole Neighborhood Revitalization initiative
approved by Congress in fiscal year 1992, and supported consistently
since that time, and our Residential Communities Initiative program.
These projects are based on life-cycle economic analyses and support
the Department of Defense's goal funding the elimination of inadequate
housing by 2007.
New Construction
The fiscal year 2004 new construction program provides Whole
Neighborhood Revitalization projects at 4 locations, 496 units for
$126.6 million. Replacement construction provides adequate facilities,
built to local standards, where there is a continuing requirement for
the housing and it is not economical to renovate the current housing.
New (deficit elimination) construction provides additional housing to
meet requirements. All of these projects are supported by housing
surveys, which show that adequate and affordable units are not
available in the local community.
Construction Improvements
The Construction Improvements Program is an integral part of our
housing revitalization program. In fiscal year 2004, we are requesting
$197.8 million for improvements to 6,883 existing units at 6 locations
in the United States and 5 locations in Europe. 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 2004 request. The requested
amount of $1.043 billion for fiscal year 2004 is approximately 74
percent of the total family housing budget. This budget provides for
annual operations, municipal-type services, furnishings, maintenance
and repair, utilities, leased family housing, demolition of surplus/
uneconomical housing and funds supporting management of the Military
Housing Privatization Initiative.
Family Housing Leasing
The leasing program provides another way of adequately housing our
military families. We are requesting $234.5 million in fiscal year 2004
to fund over 14,300 housing units including existing Section 2835
(formerly known as 801 leases) project requirements, temporary domestic
leases in the United States, and approximately 7,800 units overseas.

MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

Focused on the Army's vision, the Army National Guard's military
construction program for fiscal year 2004 is giving special attention
to people, readiness, and transformation. The fiscal year 2004 Army
National Guard program supports these elements.
Transformation
This year we have concentrated on Army Division Redesign Study
(ADRS) projects. ADRS addresses a long-standing Army problem of lack of
Combat Support and Combat Service Support Force. The Army National
Guard, in support of the National Military Strategy and wartime
requirement shortfalls, is reorganizing selected units toward this end,
i.e., Chemical, Medical, and Military Police units.
We are requesting $84.9 million for 31 ADRS projects. These funds
will support the construction of Readiness Centers, Organizational
Maintenance Shops, Training Fire Stations, an Armed Forces Reserve
Center, and a Working Animal Building.
The ADRS transformation, which began in fiscal year 2001, is
scheduled to be completed by fiscal year 2009.
Readiness Centers/Armed Forces Reserve Center
To accommodate the force structure change, the Army National Guard
will make additions or alterations to 14 readiness centers in Alabama,
Indiana, Kansas, Kentucky, Nebraska, New Mexico, New York and North
Dakota. Six new readiness centers are planned for California, Kentucky,
Michigan, Missouri, Nebraska and North Carolina.
We will also construct an Armed Forces Reserve Center in Mobile,
Alabama. This facility will house all elements of a Support Group,
Chemical Company, Medical Battalion, and Special Forces Detachment, as
well as the Marine Reserves Reconnaissance Company, Intelligence
Company, and the Marine Corps Inspector and Instructor staff.
Training Fire Stations
Six training fire stations are scheduled for Alabama, Connecticut,
Kentucky, North Carolina (2), and Nebraska. These training fire
stations will provide the necessary administrative, training,
maintenance and storage areas required for the units to achieve
proficiency in their required training tasks.
Organizational Maintenance Shops
The Army National Guard has three Organizational Maintenance Shops
requested in fiscal year 2004. These facilities require additional
space and upgrades to support the ADRS initiative. They are located in
Montana (two) and New York.
Working Animal Building
As a result of ADRS, there will be two Military Police Working Dog
Teams assigned to the Connecticut Army Nation Guard. These facilities
will provide for all phases of dog training for patrol and protection.
Mission
In fiscal year 2004, the Army National Guard has requested $55.3
million for the revitalization of four mission projects. They include a
readiness center, a Consolidated Maintenance Facility (Phase I), an
Army Aviation Support Facility and a Military Education Facility (Phase
III).
Readiness
A new readiness center at Lenoir, North Carolina, will replace the
current 48-year-old facility that was built in a flood plain. The State
will provide 41 acres of State land to relocate the new readiness
center. This project has been selected as the Army National Guard
fiscal year 2004 candidate for the demonstration program for the
reduction of long-term facility maintenance cost.
Maintenance
The Consolidated Maintenance Facility at Pineville, Louisiana, will
consist of a Combined Support Maintenance Facility, a Maneuver and
Training Equipment Site, and two Organizational Maintenance Shops.
These facilities will provide direct support, general support, and
limited depot maintenance for all vehicles and equipment in Louisiana
and full-time organizational maintenance support to selected units.
This facility will permit Army National Guard personnel to work in a
safe and efficient environment.
An Army Aviation Support Facility in South Burlington, Vermont,
will replace the current facility that was built in 1954. The new
facility will provide the additional 80,650 square feet required to
support 3 aviation units with 18 aircraft.
Training
The Military Education Facility (Phase III) at Camp Shelby,
Mississippi, is the last and final phase of this regional school
project. This regional training center, a Category A training site,
supports units from Mississippi, Alabama, Arkansas, Kentucky,
Louisiana, Oklahoma, Tennessee, and Texas. The school conducts
leadership training, maintenance training, and armor crewman training.
Worldwide Unspecified Funding
The Army National Guard's fiscal year 2004 budget request contains
$26.6 million for planning and design of future projects and $1.5
million in unspecified minor construction to address unplanned health
or safety issues that may arise during fiscal year 2004.

MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)

This year's MCAR program focuses on the Army Reserve's highest
priority--readiness. Army Reserve centers are the key component to the
readiness of units and provide support to soldiers and their families.
In fiscal year 2004, the Army Reserve has requested $57.9 million to
construct three Army Reserve centers and a maintenance and storage
facility.
Mission Facilities
Army Reserve Centers
Three Army Reserve centers will be built in Fort Meade, Maryland;
Cleveland, Ohio; and Nashville, Tennessee. The Fort Meade Army Reserve
center will replace 50 World War II wood buildings, which will be
returned to the installation for demolition. This project has been
selected as the Army Reserve fiscal year 2004 candidate for the
demonstration program for the reduction of long-term facility
maintenance cost. The Cleveland Army Reserve Center will replace two
1950s era facilities and three leased facilities. The Nashville Army
Reserve Center will replace a high-cost leased facility.
Maintenance
An Organizational Maintenance Shop/Direct Support Maintenance Shop
and Storage facility will be built on Fort Gillem, Georgia.
Planning and Design/Unspecified Minor Construction
The fiscal year 2004 MCAR budget includes $7.712 million for
planning and design (P&D), which provides essential planning and design
capability in order to properly execute the MCAR program. The fiscal
year 2004 budget also contains $2.886 million for unspecified minor
construction to satisfy critical and emergent mission requirements.
Sustainment, Restoration, and Modernization
In addition to MCA and AFH, the third area in the facilities arena
is the O&M portion of the SRM program. Sustainment is the primary
account in installation base support funding responsible to maintain
the infrastructure to achieve a successful readiness posture for the
Army's fighting force. Installation facilities are the power projection
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 costs and
contracts 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 restoration of facilities damaged by inadequate
sustainment, excessive age, natural disaster, fire, accident or other
causes. Modernization includes alteration or modernization 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. The active Army's OMA sustainment
funding request in fiscal year 2004 is $1.8 billion. The Army National
Guard is requesting $380 million and the Army Reserve is requesting
$182 million.
In fiscal year 2004, the Army 's top O&M priority in SRM is to
sustain its facilities. This prevents further deterioration of the
facilities we own and allows the facilities to support the Army's
mission. The basic maintenance and repair of all Army facilities is
funded at 93 percent of the O&M requirement. At the current funding
levels, facilities will be properly maintained and deterioration will
be minimal. Restoration and modernization initiatives supplement MILCON
funding and meet recapitalization requirements. The Army has used the
O&M R&M for barracks, strategic mobility, and other needs. The Army's
demolition program will eliminate unneeded facilities. In fiscal year
2004, we plan to eliminate approximately 2.7 million square feet of
facilities worldwide.
The Army's privatization or outsourcing of utilities is the first
part of our Long Range Utilities Strategy within the SRM program to
provide reliable and efficient utility services at our installations.
All Army-owned electrical, natural gas, water, and waste water systems
are being evaluated to determine the feasibility of privatization. When
privatization appears economical, we use competitive contracting
procedures as much as possible. The Army is on track and continues to
seek ways to privatize as many systems as possible by September 30,
2003. OMA restoration and modernization resources will be programmed
for systems we are not able to privatize so that all systems are
brought to a C2 (quality) status by 2010. To date, 18 percent (64 of
351 systems) of all CONUS systems and 23 percent (250 of 1,068) of
systems worldwide have been privatized. During fiscal year 2003, the
negotiation and evaluation process for an additional 103 CONUS systems
will be completed. Recent successes include privatization of the
natural gas system at Fort Campbell, Presidio of Monterey and Fort
Benning; electrical systems at Fort AP Hill, Picatinny Arsenal,
Presidio of Monterey, Red River Army Depot, and Fort Bliss; and water
and waste water systems at Red River Army Depot and Presidio of
Monterey.
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. Our budget includes the Army's requirement 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
$924 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 Congress' authority to have an additional round in fiscal
year 2005.
The Army is now in the second year of exclusively caretaking and
completing the remaining environmental restoration activities at BRAC
installations. This budget will continue this important work. These
funds allow us to properly caretake these properties and to continue
environmental and ordnance removal efforts that will facilitate
economic revitalization and will render these properties safe. 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. The Army implemented innovative approaches
to environmental restoration at BRAC sites in fiscal year 2002, which
supported the early transfer of several properties. The Army will
continue to support early property transfers in fiscal year 2003 and
beyond.
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 continuing to reduce the number of installations
overseas. The total number of Army overseas sites announced for closure
or partial closure since January 1990 is 685. Additional announcements
and efficient basing initiatives 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.
The Army used a G/FPR to accelerate regulatory closure from 2003 to
2002 at Fort Pickett, Virginia, at a cost that will not escalate over
the course of the work. We estimate that this $2.9 million contract
saved us $0.8 million based on our initial estimates. An ESCA allows
the Army to transfer property and associated cleanup responsibilities
to a local reuse authority or developer. This allows the developer to
integrate cleanup with their redevelopment plans. An ESCA completed in
2001 was used in conjunction with early transfer authority at Military
Ocean Terminal, Bayonne, New Jersey, saving the Army an estimated $5
million. An ESCA will facilitate the early transfer in fiscal year 2003
of property at Oakland Army Base, California. The benefits of the G/FPR
and ESCA initiatives are that they limit Army environmental remediation
cost growth liability and facilitate property disposal.
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 and 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.

SUMMARY

Mr. Chairman, our fiscal year 2004 budget is a balanced program
that permits us to execute our essential construction programs;
provides for the military construction required to improve our
readiness posture; provides for family housing leasing, operations and
maintenance of the non-privatized inventory; and initiates
privatization at four additional installations. This request is part of
the total Army budget request that is strategically balanced to support
the current war effort, the readiness of the force and the well-being
of our personnel.
Over the past few years with your support, we have successfully
improved our infrastructure posture and postured ourselves for further
improvements as the Army moves to the Objective Force and the Army of
the future. We implemented a revolutionary management system with the
establishment of the Installation Management Agency. We have reduced
our infrastructure by a third. In addition, we have initiated efforts
to privatize family housing and utilities systems where it makes
economic sense and supports our military mission. We have the resources
to improve the living conditions of 106,000 single soldiers and will be
79 percent complete with approval of this budget. We have expedited the
process to turn over closed facilities and save the taxpayers money.
Our long-term strategy can only be accomplished through sustained,
balanced funding, divestiture of excess capacity, and improvements in
management and technology. With your support, we will continue to
streamline, consolidate, and establish community partnerships that
generate effective relationships and resources for infrastructure
improvement, continuance of services, and improved quality of life for
soldiers, their families, and the local communities of which we are a
part.
The fiscal year 2004 request for the active Army is for
authorization of appropriations and appropriations of $2,935,927,000
for Military Construction, Army, and Army Family Housing.
The request for authorization of appropriations and appropriations
is $168,298,000 for Military Construction, Army National Guard, and
$68,478,000 for the Military Construction, Army Reserve.
Mr. Chairman, this concludes my statement. Thank you.

Senator Ensign. Secretary Gibbs.

STATEMENT OF HON. NELSON F. GIBBS, ASSISTANT SECRETARY OF THE
AIR FORCE, (INSTALLATIONS, ENVIRONMENT, AND LOGISTICS)

Secretary Gibbs. Mr. Chairman, Mr. Akaka, other
distinguished members of the panel, I have submitted a written
statement. In the interests of time, I will try to be very
brief.
I am here today to discuss with you the Air Force portion
of the President's budget request as it relates to military
construction, military family housing, dormitories, and
sustainment, restoration, and modernization of those
facilities. That request is approximately 5 percent higher in
2004 than it was in 2003, an increase of approximately $200
million.
In the area of the environment, the budget request this
year is down approximately 2 to 2\1/2\ percent, and I will be
happy to discuss with you during the question and answer period
the specific reasons why that occurs.
I thank you for the opportunity to be here, and I look
forward to the questions that you may have of me. Thank you
very much.
[The prepared statement of Secretary Gibbs follows:]

Prepared Statement by Hon. Nelson F. Gibbs

INTRODUCTION

Mr. Chairman and members of the subcommittee, good morning. I
appreciate the opportunity to appear before you and present the
Department of the Air Force fiscal year 2004 military construction
program. Today, I will present to the subcommittee the Air Force
investment strategies for facilities, housing, and environmental
programs.

OVERVIEW

Our Total Force military construction and military family housing
programs (MFH) play vital roles supporting Air Force operational needs,
work place productivity, and quality of life. Today, when our Nation
needs its Air Force more than ever before, our installations are the
platforms from which we project the global air and space power so
important to combat operations overseas. During Operation Enduring
Freedom, we flew the longest bomber combat mission in history . . . 44
hours traveling more than 16,000 miles . . . from Whiteman Air Force
Base, Missouri, against targets in Afghanistan. Our military
construction program is a direct enabler of this kind of dominant
combat capability. In that same vein, as we send tens of thousands of
airmen overseas to prepare for possible conflict with Iraq, the peace-
of-mind they enjoy, knowing their families are safe and secure, living
in adequate housing with state-of-the-art quality-of-life facilities,
has direct impact on their ability to focus on the task at hand.
While the Air Force has always acknowledged the importance of
robust funding for facility sustainment and recapitalization, in the
past we have found that higher competing priorities have not permitted
us to address all the problems we face with our aging infrastructure.
We turned a corner with our fiscal year 2002 and 2003 military
construction and family housing budget requests, both well in excess of
$2 billion. You supported those requests and increased them to nearly
$3 billion, making the last 2 years' infrastructure investment programs
the two largest in more than a decade. We sincerely appreciate your
support.
We're continuing this positive trend in fiscal year 2004 . . . we
are requesting more than $2.4 billion for Total Force military
construction and Military Family Housing, a $160 million increase over
last year's request. The request includes more than $770 million for
active military construction, $60 million for Air National Guard
military construction, more than $40 million for Air Force Reserve
military construction, and more than $1.5 billion for Military Family
Housing. In addition, we have maintained our focus on Operations and
Maintenance (O&M) sustainment, restoration, and modernization (SRM)
funding. Last year's O&M SRM request was nearly $400 million more than
in fiscal year 2002. This year, we protected and actually increased
that program growth. With the fiscal year 2004 budget request, we will
invest more than $2 billion in critical infrastructure maintenance and
repair through our O&M program.
When one considers our level of effort across the entire
infrastructure spectrum (military construction, MFH, and O&M SRM), we
plan to invest more than $4.4 billion in fiscal year 2004.
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,
Continue demolition of excess, uneconomical-to-
maintain facilities, and
Base realignment and closure.

Mr. Chairman, Air Force missions and people around the world
clearly depend upon this subcommittee's understanding of and support
for our infrastructure programs. That support has never wavered, and
for that we are most grateful.
With this background, I will discuss in more detail our military
construction budget request for fiscal year 2004.

ACCOMMODATE NEW MISSIONS

New weapon systems will provide the rapid, precise, global
capability that enables our combat commanders to respond quickly to
conflicts in support of national security objectives. Our fiscal year
2004 Total Force new mission military construction program consists of
43 projects, totaling more than $273 million. These projects support a
number of weapons system beddowns; two of special significance are the
F/A-22 Raptor and the C-17 Globemaster III.
The F/A-22 Raptor is the Air Force's next generation air
superiority fighter. Tyndall Air Force Base, Florida, will house the F/
A-22 flying training program. Nellis Air Force Base, Nevada, will be
the location for F/A-22 Follow-on Operational Test and Evaluation.
Langley Air Force Base, Virginia, will be home for the first
operational squadrons. The fiscal year 2004 military construction
request includes one F/A-22 project at Tyndall for $6 million, and
three F/A-22 projects at Langley totaling $25 million.
The C-17 Globemaster III aircraft is replacing our fleet of C-141
Starlifters. The C-17 provides rapid global mobility by combining the
C-141 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. We are planning to bed down C-17s at
Elmendorf Air Force Base, Alaska; Travis Air Force Base and March Air
Reserve Base in California; Dover Air Force Base, Delaware; Hickam Air
Force Base, Hawaii; Jackson Air National Guard Base, Mississippi;
McGuire Air Force Base, New Jersey; Altus Air Force Base, Oklahoma;
Charleston Air Force Base, South Carolina; and McChord Air Force Base,
Washington. Thanks to your support, construction requirements for
Charleston and McChord were all funded in prior-year military
construction programs. Our request for fiscal year 2004 includes a $1
million facility project at Altus, a $8 million assault runway at Camp
Shelby (near Jackson, Mississippi), two facility projects for $12
million at McGuire, and six facility projects for $63 million at
Hickam.
Other new mission requirements in fiscal year 2004 include the
Global Hawk beddown at Beale Air Force Base, California; Combat Search
and Rescue aircraft beddown at Davis-Monthan Air Force Base, Arizona;
C-130J beddown at Pope Air Force Base, North Carolina, and Little Rock
Air Force Base, Arkansas; and Joint Strike Fighter facilities at
Edwards Air Force Base, California.

INVEST IN QUALITY-OF-LIFE IMPROVEMENTS

The Air Force is committed to taking care of our people and their
families. Quality-of-life initiatives acknowledge the increasing
sacrifices our airmen make in support of the Nation and are pivotal to
recruiting and retaining our best. When our members deploy, they want
to know that their families are stable, safe, and secure. Their welfare
is a critical factor to our overall combat readiness. Our family
housing and dormitory programs, and other quality-of-life initiatives
reflect our commitment to provide facilities they deserve.
Family Housing
Our Air Force Family Housing Master Plan provides the road map for
our Housing military construction, O&M, and privatization efforts, to
meet the goal of providing safe, affordable, and adequate housing for
our members. Our fiscal year 2003 budget request reflected an increase
of more than $140 million over the prior year--we have built on that
increase with our fiscal year 2004 request and in the programmed
budgets for the next 3 years. With the exception of four northern-tier
locations, we will eliminate our inadequate housing units in the United
States by 2007. The inadequate units at those four northern-tier
locations will be eliminated by 2008, and the inadequate units at our
overseas installations will be eliminated by 2009.
For fiscal year 2004, the $700 million we have requested for
housing investment constructs nearly 2,100 units at 18 bases, improves
more than 1,500 units at 8 bases, and supports privatization of nearly
7,000 units at 7 bases. I'll discuss our housing privatization program
in more detail later. Our fiscal year 2004 housing operations and
maintenance program totals nearly $835 million.
Dormitories
Just as we are committed to provide adequate housing for families,
we have an ambitious program to house our unaccompanied junior enlisted
personnel. The Air Force Dormitory Master Plan is a comprehensive,
requirements-based plan, which identifies and prioritizes our 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 a new, Air Force-designed private room
standard to improve airman quality of life. Phase 1 is complete, and we
are now concentrating on the final two phases of the investment
strategy.
Our total requirement is 79,400 Air Force dormitory rooms. We
currently have a deficit of 11,400 rooms, and the existing inventory
includes 3,700 inadequate rooms. It will cost approximately $1 billion
to execute the Air Force Dormitory Master Plan and achieve Office of
the Secretary of Defense's (OSD) fiscal year 2007 goal to replace all
of our inadequate dormitory rooms. This fiscal year 2004 budget request
moves us closer to that goal.
The fiscal year 2004 dormitory program consists of 12 dormitory
projects at 9 U.S. bases and 3 overseas bases, for a total of $203
million. On behalf of all the airmen affected by this important
quality-of-life initiative, I want to thank the subcommittee. We could
never have made it this far without your tremendous support.
Fitness Centers
Other traditional quality-of-life investments include community
facilities, such as fitness centers, vital in our efforts to attract
and retain high-quality people and their families. A strong sense of
community is an important element of the Air Force way of life, and
these facilities are important to that sense of community as well as to
the physical and psychological well-being of our airmen. The fiscal
year 2004 military construction program includes fitness centers at
Lajes Air Base, Azores; Mountain Home Air Force Base, Idaho;
Spangdahlem and Ramstein Air Bases, Germany; and Royal Air Force Bases
Lakenheath and Mildendall in the United Kingdom.

CONTINUE ENVIRONMENTAL LEADERSHIP

The Air Force continues to ensure operational readiness and sustain
the public trust through prudent environmental stewardship. We are
meeting our environmental cleanup commitments and Department of Defense
goals through effective outreach and partnering with Federal and State
regulators and team-building with stakeholders and communities. Meeting
our legal obligations remains a primary objective of the Air Force
environmental quality program. Our record of environmental stewardship
illustrates our environmental ethic, both here in the United States and
overseas.
In addition to ensuring our operations comply with all
environmental regulations and laws, we are dedicated to enhancing our
already open relationships with both the regulatory community and the
neighborhoods around our installations. We continue to seek
partnerships with local regulatory and commercial sector counterparts
to share ideas and create an atmosphere of better understanding and
trust. By focusing on our principles of ensuring operational readiness,
partnering with stakeholders, and protecting human health and the
environment, we remain leaders in environmental compliance, cleanup,
conservation, and pollution prevention. We have reduced our open
enforcement actions from 263 in 1992 to just 22 at the end of 2002.
We have one project ($7 million) in our fiscal year 2004
environmental compliance military construction program. With it, we
will install arsenic treatment systems on water wells at Kirtland Air
Force Base, New Mexico, to ensure the base is in full compliance with
the U.S. Environmental Protection Agency's (EPA) new standard for
maximum arsenic levels allowed in drinking water. Failure to install
these treatment systems could result in fines from the EPA, shutdown of
water wells at Kirtland, and the increased cost of purchasing and
distributing potable water on the base.

SUSTAIN, RESTORE, AND MODERNIZE OUR INFRASTRUCTURE

Overseas Military Construction
The quality of our installations overseas continues to be a
priority to us. Even though the majority of our Air Force personnel are
assigned in the United States, 16 percent of our forces are permanently
assigned overseas, including 29,000 Air Force families. The Air Force
overseas base structure has stabilized after years of closures and
force structure realignments. At this level, our overseas
infrastructure still represents 11 percent of our Air Force physical
plant. Now, old and progressively deteriorating infrastructure at these
bases requires increased investment. Our fiscal year 2004 military
construction request for European and Pacific installations is $171
million totaling 22 projects. The program consists of infrastructure
and quality-of-life projects in the United Kingdom, Germany, the
Azores, Italy, Turkey, and Korea, as well as critical facilities on
Wake Island. We ask for your support of these operational and quality-
of-life projects.
Planning and Design/Unspecified Minor Construction
We are also requesting planning and design and unspecified minor
construction funding. Our request for fiscal year 2004 planning and
design is $102 million. These funds are required to complete design of
the fiscal year 2005 construction program, and to start design of our
fiscal year 2006 projects. We have requested $23 million in fiscal year
2004 for our total force unspecified minor construction program, which
is our primary means of funding small, unforeseen projects that cannot
wait for the normal military construction process.
Operations and Maintenance Investment
To sustain, restore, and modernize what we own, we must achieve a
balance between our military construction and O&M programs. Military
construction allows us to restore and recapitalize our facilities. O&M
funding allows us to perform facility sustainment activities necessary
to prevent facilities from failing prematurely. Without proper
sustainment, facilities and infrastructure wear out sooner. We also
rely on O&M funding to directly address many of our critical
restoration and less-expensive recapitalization needs. These funds
enable commanders in the field to address the facility requirements
that impact their near-term readiness.
Since the early 1990s, constrained defense budgets resulted in
reduced military construction funding. For a few years, adequate O&M
funding partially offset this military construction decline. However,
between fiscal year 1997 and fiscal year 2001, competing priorities
forced the Air Force to cut sharply into both military construction and
O&M funding. Our effort to sustain and operate what we own was strained
by minimally funded O&M, which forced us to defer much-needed
sustainment and restoration requirements. Thankfully, along with the
robust military construction programs provided in the last two years,
we have been able to restore our O&M balance for the second year in a
row. In fiscal year 2004, our sustainment, restoration, and
modernization share of the Air Force O&M funding is more than $2
billion--allowing us to properly invest in facility sustainment (to
keep our good facilities good) and invest some O&M funding in
restoration and modernization work compared to fiscal year 2003. Our
known restoration and modernization O&M backlog has grown to nearly $8
billion, so it will be important for us to continue this precedent of
higher O&M facility investment in the future.

OPTIMIZE USE OF PUBLIC AND PRIVATE RESOURCES

In order for the Air Force to accelerate the rate at which we
revitalize our inadequate housing inventory, we have taken a measured
approach to housing privatization. We started with a few select
projects, looking for some successes and ``lessons learned'' to guide
our follow-on initiatives. We awarded our first housing privatization
project at Lackland Air Force Base, Texas, in August of 1998, and all
420 of those housing units were constructed and are occupied by
military families. Since then, we have completed two more projects (at
Robins Air Force Base, Georgia, and Dyess Air Force Base, Texas) and
have two more under construction (at Elmendorf Air Force Base, Alaska,
and Wright-Patterson Air Force Base, Ohio). Once these two projects are
complete, our privatized unit total will exceed 3,800. We are on-track
to award another eight projects in the next 12 months. Looking at 2005
and beyond, we are targeting an end-state of privatizing 60 percent of
the U.S.-based housing inventory. Our fiscal year 2004 budget request
includes $44 million to support the privatization of nearly 7,000 units
at seven bases: Luke Air Force Base, Arizona; Altus and Tinker Air
Force Bases in Oklahoma; Shaw Air Force Base, South Carolina; Sheppard
Air Force Base, Texas; McChord Air Force Base, Washington; and F.E.
Warren Air Force Base, Wyoming.
We continue to pursue privatization of utility systems at Air Force
installations. Our goal is to privatize utility systems where it makes
economic sense and does not negatively impact national security. The
Air Force has identified 420 of our 650 systems as potential
privatization candidates. We expect to release approximately 190
requests for proposal over the next 24 months.

CONTINUE DEMOLITION OF EXCESS, UNECONOMICAL-TO-MAINTAIN FACILITIES

For the past 7 years, we have 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 2002, we demolished
more than 12 million square feet of non-housing building space. We
expect to demolish an additional 2 million square feet in 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. Looking at fiscal year 2004 and beyond, we will
continue to identify opportunities for Air Force demolition through
facility consolidation. In general, we consider our facility demolition
program a success story enabling us to reduce the strain on our
infrastructure funding by getting rid of facilities we don't need and
can't afford to maintain.

BASE REALIGNMENT AND CLOSURE

The Air Force views the fiscal year 2005 Base Realignment and
Closure (BRAC) process as a unique opportunity to reshape our
infrastructure to optimize military readiness and to ensure we are most
efficiently postured to meet new security challenges. In January of
this year, we created a Basing and Infrastructure Analysis group within
Headquarters Air Force. This office will serve as the Air Force focal
point for the fiscal year 2005 BRAC process. Our major commands are
following suit with creating their own analysis structures to support
the BRAC process. As in previous rounds of base closures, we are
establishing a Base Closure Executive Group (BCEG) composed of general
officers and senior civilians representing a variety of functional
areas, including those with range and airspace operational expertise.
We continue to participate in joint BRAC forums with our sister
services and the Office of the Secretary of Defense to meet the
Secretary of Defense guidance and develop the required processes and
procedures.
The Air Force leadership is committed to meeting the BRAC fiscal
year 2005 statutory deadlines and ensuring our analytical processes are
unbiased and defensible.
The Air Force continues to work with the local reuse authority at
each base closed under previous rounds of BRAC to minimize the impact
on the local community from the closure. This effort has led to the
creation of over 48,000 jobs with 86 percent of the property
transitioned for reuse.
While these facilities are being returned to their respective
communities, the Air Force has a continuing responsibility for
environmental cleanup from past industrial activities. The Air Force
approaches this responsibility at our BRAC bases with the same prudent
environmental stewardship as at our active bases. We have spent $2.2
billion since fiscal year 1991 in environmental cleanup at closing
bases, and for fiscal year 2004, the Air Force is requesting $176
million to continue the cleanup.

CONCLUSION

In conclusion, Mr. Chairman, I thank the subcommittee for its
strong support of Air Force military construction and family housing.
With your help, we will ensure we meet the most urgent needs of
commanders in the field while providing quality facilities for the men
and women who serve in and are the backbone of the most respected
aerospace force in the world. I will be happy to address any questions.

Senator Ensign. Thank you, Secretary Gibbs. We appreciate
your brevity.
Let me start with a question on the recapitalization rates.
In discussions with the Secretary of Defense on this next round
of BRAC, and I have a question about the overseas stuff in a
second, but let us just assume what is going to happen in the
United States.
If we were successful reducing our bases by about 20, 21
percent in the United States, what would be the effect then on
the recapitalization rate?
Mr. DuBois. Mr. Chairman, I think it is important to note
that the Secretary, when he used that 20 to 25 percent figure,
was referring to a 1998 study based on excess capacity. There
is no question in my mind that we are not going to reduce our
installations by 20 to 25 percent. Remember that BRAC is a
realignment exercise first and foremost. It is not a closing
exercise.
Senator Ensign. Let us just say that, whatever the
projection out there that you all think now, in 2003 numbers,
what is the effect going to be on recapitalization?
Mr. DuBois. I think it potentially has two positive
effects. Number 1, if one closes certain bases and moves those
missions to other bases, you will have new construction done
under the BRAC MILCON account. You are thereby entering into
the inventory brand new buildings which automatically reduces
in the calculation your recap rate.
Number 2, we would hope that a rationalization would, in
point of fact, reduce the numbers of facilities. We have a
replacement value of $600 billion worth. By reducing the
numbers of facilities, especially the older ones----
Senator Ensign. Do you have any idea of a number?
Mr. DuBois. No, sir. That is sheerly hypothetical at this
point.
Senator Ensign. I guess it is something that should be
looked at, if you have an idea of approximately what the goal
of DOD has for closing bases. They have a target list, I am
sure, in mind. I know it is not a public target list, that
would certainly seem to be able to be factored in a range from
this level to this level on how it is going to affect some of
these numbers.
Mr. DuBois. I will only say, sir, there is no target list.
We are beginning this process. In fact, we are having our
second, only our second infrastructure steering group meeting
tomorrow afternoon with the Vice Chiefs and these three
gentlemen.
Senator Ensign. I will just say it for the future, then. As
you are studying this, there would be a number that I think
would be very helpful to have for this subcommittee.
Mr. DuBois. To both us and you.
Secretary Gibbs. Senator Ensign, if I may.
Senator Ensign. Yes.
Secretary Gibbs. The Air Force intends, given the current
stock of facilities that it has, to meet the Department of
Defense goal for recapitalization in 67 years in 2006 and 2007.
To the extent there is a reduction in the overall stock
requirement due to the BRAC initiative, we would be in the
enviable position of either beating that particular statistic
very handsomely, or reallocating funds, if we choose to
maintain it at that level, reallocating funds for other
activities. So either way it should be a winning combination.
Senator Ensign. I would like to turn very briefly to some
environmental questions, especially addressing the perchlorate
problem. In January 2002, the Environmental Protection Agency
published its second draft risk assessment document for
perchlorate, which contained a proposed standard of one part
per billion. Any of the four of you feel free to answer this
question: Do you believe that this proposed standard is
supported by sound science; if not, what efforts have been made
to address this concern on behalf of the DOD, and assuming a
standard of one part per billion, what are the estimated costs
for site characterization and cleanup?
Mr. DuBois. Mr. Chairman, the Department of Defense, and I
will be quite blunt about this as I believe that NASA and the
Department of Energy share our concerns, has serious science
policy concerns over the EPA's draft report.
Now, we have been in negotiations, as I indicated, with the
EPA, and at the behest and under the tutelage, if you will, of
the Office of Management and Budget, with the CEQ there, the
Department of Energy, and NASA to address our concerns.
Now, to resolve our concerns, I believe I can say that the
interested parties have agreed to refer this issue, this
perchlorate toxicity issue, to the National Academy of Sciences
for further review. It is not necessarily a de novo review, as
they say, but it is going to be a thorough review of both the
evidence, the data collected, and how it was collected, how it
was analyzed by EPA in order to have as objective an assessment
as possible.
Now, unfortunately the news stories and some of the State
regulatory authorities have misinterpreted, and I underline
that word, misinterpreted, EPA's draft reference dose as the
safe limit for perchlorate consumption. In reality, a reference
dose is defined by EPA as, ``an estimate, with uncertainty
spanning, perhaps, several orders of magnitude,'' and this is
something that gets lost in the articles in the press.
Therefore, designing this ballpark estimate is merely the
starting point for EPA's process of setting safe drinking water
standards, and this is especially true, I think, Mr. Chairman,
of the perchlorate reference dose, which is a draft, which is
being referred, as I indicated, for further review to the
National Academy.
Now, unfortunately, and I want to emphasize this, because I
think it is important for the American public to understand,
regulatory action based on misinterpretation of this draft
reference dose is incorrect and, in my view, bad public policy.
Senator Ensign. Do any of the rest of you want to comment
on that, just very briefly?
Secretary Johnson. Certainly Mr. DuBois knows more than I
do, but we have excited the American people with little science
to back it up. We recognize there are some challenges here, but
there has been no proof at all, from the scientific standpoint,
on the proper levels.
Secretary Gibbs. Sir, members of my staff participate with
Mr. DuBois' staff in some of the discussions we have been
having with the council and with EPA. Being a resident of Los
Angeles and drinking Colorado River water, it is of particular
concern to me as an individual. In reading the local newspapers
I was interested in a quote from one of the water managers out
in the desert area east of Los Angeles about this particular
issue. Basically what he said was that we need to get on with
something, and we should not spend a great deal of time arguing
about whether it is one, two, or three. I think having a more
reasonable level to begin the process, rather than wasting a
lot of time, would certainly move the ball forward.
Senator Ensign. Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. DuBois, with the 2005 BRAC round still ahead, and it is
ahead of us and drawing closer, I will ask for the record
again, as I did last year--all I need is a simple yes or no
answer, and this is the question: Did the administration use
future BRAC rounds as a consideration in the preparation of
fiscal year 2004 budget requests?
Mr. DuBois. The answer, in short, is that we did not. Now,
Senator, the building of our budget request this year for
military construction and all the ancillary and associated
accounts and references that I made during my opening statement
was done in concert with our colleagues in the acquisition
area, the research and development area, the personnel area,
the O&M area, and procurement.
As Secretary Johnson said, the procurement issues are very
important, as are these, but I can say categorically we did not
build the MILCON account for fiscal year 2004 with any future
number, installation, facility, or potential goal in mind. We
did it on the basis of mission-critical requirements both here
and abroad. Now, I can address those in more detail later, and
we believe it to be the right amount.
I defer to my three colleagues if they want to add to that.
Secretary Johnson. We certainly did not intentionally or,
to my knowledge, unintentionally consider BRAC in any way in
developing our recap rate or MILCON program.
Secretary Fiori. The answer is no, sir.
Secretary Gibbs. No, sir.
Senator Akaka. Secretary Fiori, could you please outline
the current plans for the fifth and sixth Stryker Brigade
Combat Teams? What are the military construction requirements,
including land acquisition, needed to support the expected
fiscal year 2005 implementation of the fifth Stryker Brigade,
and how many of these requirements are actually funded?
Secretary Fiori. Yes, sir. We are still studying and have
to report back to the Secretary of Defense, and the Secretary
of Defense has to make a decision on whether to proceed on the
fifth and sixth Stryker Brigades. The money requested in the
military construction budget, particularly for the fifth
Stryker Brigade that may get to Hawaii, is for items of
acquisition for training needs. They are for facilities that we
will need if it is a Stryker Brigade, or whatever the future
brigade is.
We are moving to a lighter, faster force, and the
facilities that we are requesting in the 2004 budget request
would support that. There is no difference of my requirements
for 2004, even if we do not go after a ``Stryker Brigade.'' The
things that we requested we would need to support our forces in
Hawaii.
The sixth Stryker Brigade in Pennsylvania, the National
Guard is not requesting much money this year. It is more for
planning, and it is in my budget request, the exact things that
we are looking to spend for Pennsylvania.
Senator Akaka. Secretary Fiori, 4 years ago the Air Force
came to us with a budget that underfunded its environmental
compliance accounts. This committee stated the following in its
report, and I quote:
``Insufficient funding to meet Air Force compliance
requirements suggests a distinct lack of support for
installation commanders. These commanders could be subject to
criminal sanctions for such deficiencies. The Air Force has
suggested that installation commanders will likely avoid fines
and penalties by using funding for readiness priorities to pay
unfunded compliance requirements. The committee views this as
an unacceptable result.''
This year, the Army has done the same thing, proposing a
budget that would reduce compliance spending by $89 million
from last year's level, and funding over 79 percent of the
expenditures needed to comply with requirements of law and
regulation. My questions are, why has the Army decided to put
its installation commanders at risk by requiring them to risk
fines and even criminal penalties for noncompliance, and which
readiness accounts does the Army expect its installation
commanders to raid to pay for unfunded compliance requirements
to avoid such sanctions?
Secretary Fiori. Sir, we are funding in the 2004 budget
$552 million for compliance. We believe that is sufficient for
our compliance requirements. We do not use readiness accounts.
Particularly this year, where the Installation Management
Agency (IMA) controls the money, our readiness accounts, in
general, are not in the domain of the garrison commander. So
should he have additional fines, which we are reducing
dramatically over the years, by the way, the IMA will be
required to find the money to help pay for those things.
Right now, we do not have a serious problem whatsoever in
the compliance area, nor do I anticipate one. My request was
about $71 million less than last year. It is a risk we are
willing to take, but we are not putting the garrison commanders
at risk at all. The risk is more an Army risk, should we have
some significant fines, or some serious noncompliance problems,
which we do not anticipate having.
Senator Akaka. Thank you. I appreciate your responses.
Mr. Chairman, my time has expired.
Senator Ensign. Senator Allard. We are going by the early
bird rule.
Senator Allard. Thank you, Mr. Chairman. Mr. DuBois or
Secretary Fiori, whichever one of you feels most qualified to
take this, a group of programs, what we call the formerly used
defense sites (FUDS) programs, those requirements have been
increased dramatically, I understand, from the original
estimates. Are the budget requests continued in a way that we
can meet those increased program requirements?
Secretary Fiori. We have submitted a budget of $213 million
for FUDS this year, and we feel this will carry us along. Quite
honestly, it is maintaining a balance between a lot of
different issues, FUDS plus unexploded ordnance and also our
long-range cleanup issues. We are picking those cleanup issues
and characterizing them as we speak throughout the country. It
is a large mortgage. It could overwhelm my budget if I try to
fix it in 5 years. I have heard various estimates of how many
years it will take to fix, but none of them are particularly
satisfying right now.
This is where we are. We are not endangering anyone. We are
not breaking any laws, and they are in protected areas where we
know they are.
Senator Allard. So the answer is that no, you are not
keeping up with the increased requirements. Are the new program
requirements going to be readjusted to the real amount of
dollars needed to finish the program successfully?
Secretary Fiori. We are going to do our best to try to
balance the requirements we have with the money we have and go
after the ones that are most critical to clean up first.
Mr. DuBois. Senator Allard----
Secretary Fiori. Maybe I could get some more help from OSD
on this one. [Laughter.]
Mr. DuBois. It is a question of who is most qualified and
who is most comfortable in answering the question.
Let us be perfectly clear, Tier 1 FUDS, those that are
determined to have a potential for an immediate health or
safety impact are going to be addressed, and we adjust every
year to the recharacterization, if you will, of some of these
FUDS.
Now, in a little place not far from where we are sitting,
where I did some of my growing up as a child, we found things
that we did not know that were there. They were undocumented,
and in Spring Valley (Washington, DC) came as a shock to
everyone, including myself, who had lived there. The fact is
that we had to adjust, in that year's accounts, fiscal year
2002, upwards of $60 plus million to immediately address that
issue.
Now, where did that $60 million come from? The FUDS account
was not plussed up during the middle of the fiscal year. It
came from Tier 2 and Tier 3 FUDS that have been postponed in
terms of being addressed, but I think it is important to know
that the Secretary will make the adjustments as necessary in
Tier 1.
[The information referred to follows:]

Current Funding and Formerly Used Defense Sites Cleanups

In March 2000, the Department researched five management options
aimed at enhancing formerly used defense sites (FUDS) overall program
management and execution. Each option featured varying levels of
contract management and private industry involvement: (1) U.S. Army
Corps of Engineers (Corps) and contractor managed cleanups; (2) Corps
and industry competed contracts; (3) total program management by
contract; and (4) industry proposals. The Department decided to retain
Corps management of the program, based on the Corps' demonstrated
expertise, experience, and geographic capability, but would continue to
pursue innovative contracting methods in an effort to further increase
overall efficiency and effectiveness of FUDS cleanups.
The Corps currently uses a variety of contracting approaches,
including fixed-price, cost-reimbursement, incentive, indefinite-
delivery, and contractor managed cleanups for FUDS. At Rocky Mountain
Arsenal, the Army implemented a Program Management contract to manage
the cleanup, which has resulted in both accelerated cleanup and
significant cost savings. Other innovative contracts under
consideration by the Corps include the Guaranteed Fixed Price
Remediation (GFPR) contracts and State and local government entity
cleanups.
The GFPR contracting approach, currently used by the Army at BRAC
installations, emphasizes performance to achieve defined cleanup
objectives, helping to limit risks from uncertainties normally
encountered in traditional fixed-price contracting.
The Environmental Services Cooperative Agreement (ESCA) is an
agreement authorized under the Defense Environmental Restoration
Program (DERP) statute (10 USC 2701(d)) between the Army and a State or
local governmental entity for environmental restoration services. Used
in Army BRAC transfers, the Army retains lead agent oversight, while
the State or local public entities (Local Reuse Authorities) or
qualified conservation entities receiving property for conservation
conduct the cleanup. Applicability of ESCAs has been interpreted as
limited only to a State or local public entity or a non-governmental
organization receiving a conservation transfer. Army is evaluating the
need for additional authority for application of ESCA to the privately
held properties in the FUDS program.

Senator Allard. In order to meet some of those program
demands, does it make sense to do some privatization efforts on
some of those programs?
Mr. DuBois. Privatization of cleanup of the FUDS?
Senator Allard. Privatization of cleanup.
Secretary Fiori. Most of our cleanup, per se, is being done
under contract. The Corps of Engineers is in charge, and they
get contractors to come in. So I guess that would be
privatization. There are potential ways to clean up BRAC sites
that we could work out for contractors. It would be trading
land for cleanup. We have done that type of thing.
Senator Allard. In Colorado we have some cleanup sites
going, Rocky Flats, for example, where the contractor is
cleaning that up, basically.
Mr. DuBois. The DOE is paying for it.
Senator Allard. They are paying for it, but the contractor
has put out the plan and organized it and gone ahead and done
it, and they are ahead of schedule. We put some incentives in
there. They are ahead of schedule, and things are moving along
very well. We are under budget, actually, and so I wondered if
the same philosophy cannot be applied to the cleanup of some of
these FUDS.
Mr. DuBois. The FUDS program is an OSD or Department-level
program, and the Army's executive agent and Secretary Fiori and
I will look into this and report back to you.
Senator Allard. That is all I ask. Thank you.
There is a requirement in an international treaty that the
United States destroy our chemical munitions stockpiles by
2007. How well are we progressing towards that goal, and does
this year's budget request continue sufficient funding for the
United States to meet the 2007 deadline, as required by that
international treaty on destroying our chemical munitions
stockpile by 2007?
Mr. DuBois. The oversight for that chemical
demilitarization program is with Secretary Aldridge, the Under
Secretary of Defense for Acquisition Technology.
Again in this case, as it was in the FUDS case, the Army is
the executive agent for that program. The management
responsibility within the Department of the Army is with the
Assistant Secretary of the Army for Acquisition, Logistics, and
Technology (AL&T). It is no longer in the portfolio of
Secretary Fiori. I would be glad to address the specifics of
your issue, or send up here Dale Klein, who is the Assistant
Secretary of Defense for Chemical and Biological Issues, who
has the, if you will, oversight day to day, or Secretary Claude
Bolton of the Army, Assistant Secretary for AL&T, who can give
you more detail on that particular program.
It is a program, no doubt, no question, of high political
visibility, and one that takes a considerable amount of time of
Mr. Aldridge, and he will be responsive to your questions.
Senator Allard. Very good. Lance Landry or Jayson Roehl in
my office, I would like to have them come and sit down and talk
about the program.
Mr. DuBois. I know the Pueblo issue is well-known to those
of us who have touched upon this issue.
Senator Allard. Thank you, Mr. Chairman.
Senator Ensign. Prior to your arriving, Senator Inhofe,
both myself as the new chairman and our past chairman sang your
praises. You were not here to hear them.
Senator Inhofe. You can do them again if you would like.
[Laughter.]
Senator Ensign. You were the next person to arrive, so we
will turn the questioning over to you.
Senator Inhofe. Do not count this against my time. Let me
just say how much I appreciate your comments. [Laughter.]
For about 6 years with Danny Akaka I was either ranking
minority or chairman, and I have been very distressed over our
readiness situation, so I will be very active on your
subcommittee here, since under Republican rules you cannot
chair a whole committee and also a subcommittee, so I will be
looking forward to working with you on this.
Secretary Gibbs, were you there this morning when we had
Secretary Roche and the rest of the Secretaries?
Secretary Gibbs. No, sir, I was not.
Senator Inhofe. During that time I spent some time giving a
lot of credit and expressing my appreciation to Secretary Roche
in that he made one of his first trips--I think he said it was
his first trip after confirmation with me to go and really
spend some time on ALCs. We went to Tinker, we looked at the
history behind it, the national security ramifications of the
potential of being dependent upon a sole source, and just
talking about what core work really is, and no serious
investment has been made in it, and yet we are supposed to have
this capability.
Now, your workforce shaping initiatives, they have worked
out real well. I know that in the case of Tinker we are now
cranking those KC-135s through in 200 days instead of 400 days,
and so I was very complimentary of him, but I am also aware
that you are the guy that did the work, so let me thank you
very much for that.
I understand the $150 million that is going to be going to
the ALCs, do you have any indication, or can you share with me
how that will be divided up, what priority is going to be used?
Secretary Gibbs. The $150 million that the Senator is
referring to, for those of you who may not be that familiar
with the program the Air Force is running, is a special set-
aside program to reinvest in its three organic depot activities
to try to make up for substandard amount of investment over the
decade of the 1990s.
Specifically in the 2004 budget we started out with $150
million, and we had it until the last moment of the budget
process, but there is something I learned this time. There is a
thing called negative inflation that flows through the process
at the last moment, and that cost us $5 million, so I have to
report to you we only have $145 million in, not the $150
million we requested.
From a budgetary perspective, it effectively is included in
three different places. There is a piece of it that is in the
military construction budget. There is a piece of it that
really is buried in O&M, and there is a third piece that is
really in the sustainment type accounts.
The amounts are spread across the three different depots
based upon a competition that is held. The depots, up through
their Major Command, Air Force Materiel Command (AFMC), suggest
particular projects to the AFMC ranking authority, and based
upon, to a certain extent objective, but somewhat subjective
judgment of the command, the projects either win and are funded
or do not win.
Senator Inhofe. Okay. I do not want to run out of time too
quickly here. Is it safe to say, though, that this money is not
going to replace the existing MILCON or anticipated MILCON?
Secretary Gibbs. No, it did not.
Senator Inhofe. All right, that is fine. Thank you very
much for all your work in that.
Mr. Chairman, this morning I was reading some of the things
that General Jones was talking about, and I was really
interested, as--when I was chairing this subcommittee we took
the time to go all around the world, as well as here in the
United States, and look at some of the installations, the
conditions of the buildings, and I particularly was concerned
about Germany. Some of the work we are doing there now,
particularly on family housing, is doing real well.
As I understand, General Jones is talking about, and I just
read this, primarily two things. One is, we might be giving
serious consideration to moving from Western Europe to Eastern
Europe, and to me this is a very attractive notion because of
the environmental encroachments that we are having in Germany
and other places. I think he mentioned Poland, Bulgaria, and
Romania.
I have been spending some time talking to some of the
people from these countries, and specifically the other day,
Valentyn Zaichuk, who is the Chief of the Verkhovna Rada
Administration Staff (Urkainian legislature) in the Ukraine.
They would love to have the opportunity to extend to us an
invitation to use their facilities to build ranges, and I think
we would have a lot fewer problems.
The other idea that he mentioned was that we might change
this, instead of moving families over for an extended period of
time, to have a rotation, where they would leave families home
and maybe go over for 2, 3, or 4 months, as we have done in
some other places. Now, if that is true, that would certainly
affect any future BRAC round that would come up. So I guess
what I would like to ask anyone who would like to respond to
this, what these two prospects look like to you, whether you
think they are a good idea and, if so, how that might affect
BRAC rounds.
Mr. DuBois. Senator Inhofe, in the Quadrennial Defense
Review (QDR) published in September 2001, the Secretary of
Defense made it very clear that his charge from the President
to reform and reshape the global footprint was a necessary
ingredient to transforming the military.
In that light, and since his memorandum to the combatant
commanders of that summer 2001 to ask them to look at their
overseas basing strategy, he, the Secretary of Defense, has
concluded that the global presence, our global presence and our
global infrastructure, is in point of fact an inherited global
presence and global infrastructure, as it is a legacy of the
Cold War. It is a legacy of the Cold War, it is a legacy of the
Warsaw Pact, facing NATO troops in the inter-German border and
the North German plains.
The world is different today, significantly, and we have an
obligation, in the Secretary's view, to ask the combatant
commanders, especially the new combatant commander in Europe,
Jim Jones, to assess the military construction currently in the
pipeline, as well as projected, to determine whether or not
those decisions, which arguably were made 2, 2\1/2\, 3 years
ago, are still directly supporting the military requirements
that we have today.
How this unfolds, how the Secretary and the Joint Chiefs
and the combatant commanders, with General Myers and General
Pace, integrate the future global presence with the future
global infrastructure, is going to be a process that is going
to take probably another 4 to 5 months, but I will say this,
and you are quite right in connecting the two, Congress
authorized the BRAC in 2005, a domestic BRAC. The Secretary of
Defense, of course, does not need the authority to look at how
we reorganize or reconfigure outside the United States and its
territories. He, however, is very cognizant of the fact that
one cannot do an effective domestic BRAC, prior to an effective
international or overseas BRAC, if you will.
He had a meeting, actually, now I guess it is 3 weeks ago,
with all combatant commanders and the Joint Chiefs and
discussed this very issue, and they are all seized with it.
Senator Inhofe. That is good. Mr. Chairman--if the rest of
you for the record could just submit something in writing--I am
very much interested in this--if you have any thoughts on it, I
would appreciate it.
[The information referred to follows:]

Secretary Johnson. The Department of the Navy will work with the
combatant commanders, the major claimants, and the Office of the
Secretary of Defense on facilities issues arising from any proposals to
relocate overseas naval forces.
Secretary Fiori. In August 2001 the Secretary of Defense directed
all combatant commanders to review overseas basing requirements and
examine opportunities for joint use of facilities and land by the
Services, consolidation of infrastructure, and enhanced training. While
that particular task is completed, the Department of Defense is
continuing to examine our overseas basing and presence within the
context of a global strategy. Specifically, combatant commanders have
been asked to provide priorities regarding their fiscal year 2003 and
fiscal year 2004 military construction programs by April 20. To
complement that effort, the Department of Defense is developing a
comprehensive and integrated presence and basing strategy looking out
10 years. We anticipate that effort to be completed by July 1, 2003.
Secretary Gibbs. BRAC law has in fact incorporated overseas basing
factors into the BRAC 2005 round. Section 2912 of the BRAC law requires
that DOD's infrastructure inventory be conducted ``world-wide'' and
specially consider ``[t]he anticipated continuing need for and
availability of military installations outside the United States,
taking into account current restrictions on the use of military
installations outside the United States and the potential for future
prohibitions or restrictions on the use of such military
installations.'' Accordingly, DOD's analysis and determination of
excess infrastructure inside the United States must and will consider
overseas installations. The Secretary of Defense on March 20, 2003,
directed combatant commanders to make recommendations for appropriate
locations for the global positioning of our forces and supporting
infrastructure outside the United States so we are able to determine
future infrastructure needs now and in the future.

Senator Inhofe. I know my time is up. I have two committee
hearings taking place right now, and I am chairing the other
one and I have to leave. Could I have one more minute? Would
that be all right, Senator Pryor?
Senator Pryor. That is fine.
Senator Inhofe. Thank you very much. There is an outrageous
article this morning that I saw that someone who is supposed to
know what he is talking about, but obviously he does not, made
the statement. It says that there has been no degradation in
training as a result of environmental encroachment. I would
just like to ask if any one of the four of you agrees with that
statement.
Secretary Johnson. No, sir.
Secretary Gibbs. No, sir.
Secretary Fiori. No, sir.
Mr. DuBois. No, sir.
Senator Inhofe. Thank you. Finally, this would be to you,
Mr. DuBois, on the matter of perchlorates. I have to pronounce
it before I can address this in my hearing of the Committee on
Environment and Public Works.
But as far as that is concerned, I would suggest to the
Ranking Member we are going to be taking this up in my
committee, too, and we are interested, and all I am asking for
is sound science, and I know that is outrageous to some people,
but I am going to be doing it anyway.
Mr. Chairman, thank you for your indulgence.
Senator Ensign. Thank you, and I would like to welcome one
of the new members of the subcommittee, Senator Pryor.
Senator Pryor. Thank you. I look forward to working with
you, Mr. Chairman. It is great to be here.
I did not have questions as much as a couple of
observations, and that is, having been around some of our
military facilities in Arkansas, mainly Little Rock Air Force
Base and the Pine Bluffs Arsenal, I have witnessed first hand
the conditions of some of those facilities.
For example, at Little Rock Air Force Base, I think they
have done a good job in trying to modernize their housing, but
there is still quite a bit of housing at the air base that is
very antiquated. I can see how it would be very unattractive
for the people stationed there to live there, and certainly
raise families there. It is something I really do want to work
with you all on, to try and make sure we have the right kind of
housing and solutions that make sense, both fiscally, and also
for morale purposes and security purposes and everything else.
In addition to that, the Pine Bluff Arsenal, which has the
only white phosphorous manufacturing facility, I think, in the
Western Hemisphere and the only one in the DOD, of course, but
that is a facility that, if my history was correct, was built
in World War II. Even though the arsenal's mission has been
greatly expanded and changed over time since its original
construction, they still are using some of those World War II
era buildings, and even though they have some state-of-the-art
things like the nerve gas disposal facility they have been
building and working on and testing, where they will destroy
tons of lethal gas agents there. I just want to work with you
all to upgrade our military facilities again in ways that make
sense.
I look forward to not just having some oversight, but
having some input, and to help you all accomplish your mission
as best you can, and I know you have a very full plate, and I
just look forward to working with all of you on these matters.
Thanks for being here today.
Mr. DuBois. Senator Pryor, Secretary Gibbs may want to
address the Little Rock Air Force Base issue, but I note in my
briefing materials here that the Air Force does have it
scheduled for a housing privatization program for award in this
fiscal year to address 1,535 military family housing units.
Senator Pryor. Great.
Mr. DuBois. So it is in the queue, as it were.
Senator Pryor. That is great news, and I know that when I
was there a few weeks ago we looked at various options, and
they were very hopeful that would happen and be a reality, so I
do appreciate you all being mindful of that. Thank you.
Senator Ensign. We will go with a second round of
questions. I have some questions.
Mr. DuBois, you were asked in last year's hearing by
Senator Inhofe what support is the United States getting to
maintain or build new facilities from various countries in
Europe, the Pacific, or Southwest Asia. You responded that,
``burden-sharing reports will be published soon, and we are
exploring additional opportunities to increase burden-sharing
by our allies.''
I want to ask the same question. What support is the United
States getting to maintain or build facilities from various
countries in Europe, Korea, or Southwest Asia, and what
progress has been made on exploration of additional
opportunities to increase burden-sharing?
Mr. DuBois. Mr. Chairman, I will refer to Korea first.
Secretary Dov Zakheim, the Under Secretary of Defense
(Comptroller), negotiated on behalf of the United States
Department of Defense, or renegotiated, if you will, a special
measures agreement with the Republic of Korea, which is
basically your host nation funding mechanism. As a result, the
Republic of Korea funding construction for the United States
forces in Korea increased by over 35 percent.
With respect to the Government of Japan, as you may know,
that government provides us with about $680 million per year in
construction under the Japanese Facility Improvement Program
(JFIP). Those two programs alone are very impressive in terms
of their contributions to our presence.
Senator Ensign. What was the total dollar number in Korea?
Mr. DuBois. The total dollar number in Korea in calendar
2003--Korea is $156 million, projected in calendar 2004, $170
million. I might add there are two pieces to the Korean host
nation funded construction program. The program that funds and
supports quality of life and other nonreadiness type
construction, and then the combined defense improvement
program, that constructs combat readiness facilities, so I gave
you the first number for calendar 2003 of $156 million. That is
the first category, called life, nonreadiness. The second
category is $60 million, which is combat readiness facilities,
so that in calendar 2003 the programs will be funded to the
level of $215.9 million by the Government of Korea.
Now, you asked also about Europe. We do not have any
burden-sharing programs per se, or burden-sharing agreements in
Europe. Does that mean that there ought to be? I would
obviously defer to this subcommittee, as well as the full
committee to deliberate on that issue. It is true, however,
that when we do close bases in Europe, we do have an agreement
that we negotiate what is called a residual value.
Some Members of Congress have asked when we close a base,
are we not taking on a liability to environmentally clean it up
in Western Europe, for instance. What we try to do is to
calculate a residual value. That is to say, the improvements
that we have made, the U.S. taxpayer has made to the facilities
on that particular foreign installation has a value. We net out
the estimated remediation costs that would be required, and a
check is then cut to the United States Government. It is a
negotiation that is difficult, but it is essentially the model
that we try to follow, but more particularly to your question
about burden-sharing, we do not have any burden-sharing
agreements in Europe.
Senator Ensign. Just one comment from the chair, and that
is, from this Senator's point of view I think it is outrageous
we do not have burden-sharing in Europe. Not just considering
what is going on at this point, but I think it should have been
going on all along.
I think that the Europeans have developed this false sense
of security in thinking that negotiations can solve all the
problems in the world because of the United States military and
the protection we are giving them, and for them not to be
sharing significantly in that cost I think is something that
this subcommittee and the full committee should take a serious
look at and work with the Department of Defense and the State
Department to try to address that problem.
Secretary Johnson, do you want to comment?
Secretary Johnson. Our only overseas Marine Corps
facilities are in Japan, and the JFIP that Ray talked about
contributed $310 million in 2003. We had $140 million of that
for the Marine Corps. Not to disagree with my partner here, in
Italy, our European Center for the Navy, Italy did provide the
land for us to build houses on. They also provide, through
leases, support and housing facilities. They do not give money,
as Mr. DuBois said, but we do have good relationships with
them, and we have done some magnificent things. I think you
have visited there and have seen the housing and facilities
that we have built in Italy, with their full cooperation, but
not the revenue-sharing that Japan has done.
Secretary Gibbs. In the case of the Air Force, we receive
funding either for our individual-use facilities or joint-use
facilities in excess of $500 million a year from the three
countries you mentioned, the largest piece being in Japan,
where we have three major Air Force bases.
In the case of Europe, although we do not have country-to-
country arrangements, particularly on the two Air Force bases
in Germany, in excess of $100 million is being used for NATO
joint use type facilities on those two bases, and we also have
an agreement with various levels of the German Government, from
the federal down through states and local communities, to bear
a substantial portion of the move costs and rebuilding as we
are vacating the main transshipment terminal at Rhein-Main
Airport and consolidating it in Ramstein Air Base. They have
committed in excess of $350 million to that series of projects
both at Ramstein Air Base and also for runway additions and
repairs over at Spangdahlem Air Base.
Senator Ensign. Thank you. Just very briefly--my time has
expired--I will let Secretary Fiori answer in just a second,
but Secretary Johnson, I would like to submit a question for
the record on Fallon Naval Air Station. It is an environmental
question dealing with the water treatment plant, with the
cancer cluster that was up there and the recent reports about
tungsten and about the Navy's contribution.
Secretary Johnson. We would be very pleased to answer that,
and we have not had any more cases recently.
Senator Ensign. You have seen the reports in the papers
lately about tungsten. I guess that is maybe possibly going to
be difficult.
Secretary Johnson. We certainly will talk about that, but
we had nothing to do with tungsten, and we are working with the
State, of course.
Senator Ensign. Secretary Fiori.
Secretary Fiori. I would just add to what Mr. DuBois said.
As far as Korea, I am a beneficiary of most of the $215
million. In calendar year 2004, we will be getting about $236
million in Korea, and $680 million in Japan. We are the
executive agent, and so we distribute that and control it in
Japan. But turning back facilities and payment in kind, our
records show that we have received $182 million in cash, and
$853 million in payment in kind for services in Germany over
the years.
Senator Ensign. Senator Akaka.
Senator Akaka. Thank you, Mr. Chairman. DOD Instruction
(DODI) 4715.6, which establishes budgeting requirements for
environmental compliance, states that DOD components shall fund
``all projects and activities that are currently out of
compliance, or will be out of compliance if funding is not made
available.''
Secretary Fiori, is the Department of the Army in
compliance with this DOD instruction?
Secretary Fiori. Sir, I have not read the detailed
requirements of DODI 4715.6. I do know that we are meeting all
the compliance requirements for our facilities today and in the
budget year.
Senator Akaka. Thank you.
Secretary Johnson, the Navy will be transferring access to
Kaho'olawe to the State of Hawaii on November 11, 2003. Title
IX of the Fiscal Year 1994 Defense Appropriations Act
envisioned at that time clearance of 100 percent of the island.
Ten years later, we are aware of the challenges and limitations
that have prevented such results, and these are my questions.
What actions have been taken by the Navy to maximize
clearance efforts in fiscal year 2003? How much of the island
will be cleared by November 11, 2003, and given the fact that
unexploded ordnance will remain on Kaho'olawe after access is
transferred to the State, what are the Navy's plans with
respect to the discovery of undetected ordnance after November?
Secretary Johnson. Yes, sir. As you well know, better than
I, it has been a very difficult task, and I think we
collectively have come up with the best solution we can. We
have tried to maximize the cleanup within the budget. Also, we
said last year that the budget was as much as we could spend,
so the maximum effort by November 11, and we worked with the
local Kaho'olawe Island Reserve Commission (KIRC) organization
to prioritize the areas that we will clear. I will get back for
the record the actual numbers.
[The information referred to follows:]

The Navy expects to be able to clear ordnance on the island of
Kaho'olawe on a total of 19,500 net acres to the Tier 1 (surface)
standard, of which 2,500 net acres are further cleared to the Tier 2
(subsurface from 1 to 4 feet) standard by November 11, 2003.

Secretary Johnson. Certainly there will always be the
potential for new finds of UXOs. The agreement that we are
working with the State of Hawaii and the KIRC is to agree on
the circumstances to go back--remember, there are two tiers.
Tier 1 is no access, but we do ground clearance. Tier 2 would
go down to 4 feet, I believe.
We propose that anything that is in Tier 2, we will clean
it to the depth cleared whenever we find it, and at Tier 1,
anything that would affect Tier 2 we certainly will clear that,
and anything outside those two tiers that will affect the
access in Tier 2, we will do that.
The law says any time anything is found, we hope to
transfer this to the Army under FUDS. We recognize the
ongoing--and the best intentions, you can clear all the UXOs,
and the ground process, they come up out of the ground on
occasions, as they did in Spring Valley, so to say we ever
clean it perfectly is an overstatement in anybody's words.
Senator Akaka. Secretary Gibbs, could you please discuss
the Air Force plans for the C-17 bed-down? What are the
military construction requirements of the C-17 bed-down, and
which of these requirements are funded, and the final question,
is the C-17 bed-down plan fully updated to reflect the air
mobility force structure plan, and if that is not so, then what
needs to be adjusted?
Secretary Gibbs. Sir, all of the known requirements for the
C-17 bed-down within the FYDP, the 5-year planning cycle, are
fully funded. There may be additional requirements as the last
units come on for that particular weapons system, but
everything that is required within the FYDP is fully funded.
Senator Akaka. Secretary Fiori, the Army Corps of Engineers
determined more than a year ago that a FUDS at Waikaloa and
Waimea, Hawaii, has a medium to high potential for human health
and safety risk from unexploded ordnance.
Last spring, our committee report directed the Army to
develop a comprehensive plan for addressing risks to human
health and safety at Waikaloa and Waimea FUDS. A report on this
plan was due to the congressional defense committees on
February 2. You have notified us that it will not be available
until July 31, and my question is, what is the current state of
the Army's effort to assess risks to human health and safety at
Waikaloa and Waimea?
Secretary Fiori. Sir, I am afraid I am going to have to
take that for the record. I have a perfect opportunity when I
go visit the U.S. Army Corps of Engineers tomorrow to get a
good answer from them.
Sir, I would like to address your previous question. I am
not familiar with the DOD instruction, but I will review it to
make sure that I understand the nuances of what the instruction
says, just to confirm the fact that we are, in fact, meeting
those requirements, and I will put that on the record also.
[The information referred to follows:]

Waikoloa and Waimea Formerly Used Defense Site

The Army has conducted an investigation of the 123,000-acre site
and has identified 11 areas, comprising 48,000 acres, which could pose
a medium to high explosives safety risk. In December 2002, the Army
awarded a contract to begin munitions removal on three of the areas
determined to pose the highest explosives safety risk. The
environmental cleanup planned for the Waikoloa and Waimea formerly used
defense site will be one of the largest, most complex, and most
expensive undertaken. At current funding levels, the entire cleanup
cannot be fully resourced in the near term. The number and diversity of
munitions that have been identified and are suspected to be present at
the site and the proximity of these munitions to residential areas
complicate response actions. The Army has also initiated an outreach
program to ensure all residents and property owners are informed of the
possible risks and reporting procedures should munitions be
encountered.

DOD Instruction 4715.6

Yes, the Army is in compliance with the DOD instruction on funding
environmental compliance requirements. The Army environmental quality
must fund policy requires that commands and activities must fund their
environmental requirements at a level to ensure compliance with legally
mandated standards.

Senator Akaka. Thank you very much for that response to my
previous question.
My time has expired, Mr. Chairman.
Senator Ensign. Senator Nelson.
Senator Bill Nelson. First of all, Secretary Johnson, why
don't you put on the record what you and I talked about
yesterday with regards to the Marine Corps on Blount Island.
Secretary Johnson. Yes, sir. Blount Island is the home
station, if you will, for all the Marine preposition ships.
This year, we have money in to buy the Blount Island real
property that we are occupying, but we also have funded
activities that will allow us to enforce the explosive safety
arc around Blount Island. Two weekends a month we handle
ammunition, and we have to have a rather large safety arc of
activity and control the activity within the arc when we are
offloading the ammunition.
That seems to be in good shape. There are three tenants, if
you will, three partners there. We have agreements with one.
The second one seems straightforward. The third one,
Jacksonville Port Authority, we think we are close with them
also, sir.
Senator Bill Nelson. Thank you. I suppose I might address
this to Mr. DuBois. Over a year ago--as a matter of fact, it
was about a year and a quarter ago, I had asked DOD for an
explanation, classified if necessary, about the former
activities at the old Boca Raton Airfield in Florida, because
this has been shrouded in secrecy. This is testing that was
done back in the 1950s, apparently when we were trying to
figure out how we were going to kill the Soviet wheat crop, and
so they were testing a spore to kill wheat.
They were testing it in Florida because we do not grow
wheat in Florida, and that was tested at several different
places, but specifically at Boca Raton, and I was first told to
buzz off, and I do not do that very well. So, I persisted, and
that briefing is going to come in another week or two, about a
year and a quarter after I first asked for it. I do not want
you to have to get involved in that, because it looks like it
is finally going to come to fruition, but from the standpoint
of the public concern about public safety, I clearly do have a
role and a responsibility.
Now, over the years, the Armed Forces have used various
military installations for the storage and the testing of
chemical and biological weapons. Understandably, there is some
perception out there in the community that this might have some
problem with regard to community health. At the same time,
clearly we have a need, for the protection of the United
States, to go about testing, anticipating, understanding, and
mitigating the vulnerability of our forces to chemical or
biological attack.
So the question is, how do you do this in concert with the
needs of the community, particularly something that testing was
done half a century ago? When you look at just the question of
use of property, long since, this is not a military facility.
It is now Florida Atlantic University and the Boca Raton
General Aviation Airport, but there is a portion of this
airport that is not developed, which is thought to be the area
of the old testing.
It is about 60 acres, and so the concerns, in the midst of
high density urbanization, is this property contaminated in
some way? Is its value less than what otherwise its fair market
value would seem to be?
So I want you to contemplate what can be done to protect
both military secrets and restore public confidence in the
safety of former military property that has been in the past
involved in chemical and biological testing activities. Would
you contemplate that, please?
Mr. DuBois. Senator, with respect to a situation such as
you are addressing, I am glad that the Department has finally
responded to your request for a briefing. I will be as
interested in its brief as you are.
I think that it is important to note that we have
situations such as Boca Raton, and I have been to Florida
Atlantic University. As I mentioned before you came in today,
when it comes to places like Spring Valley here in the Nation's
capital, we are unfortunately presented with prior issues,
undocumented, but when we find out, as the Army has done, I
think, fairly well, the Army Corps of Engineers with respect to
Spring Valley, it is acted upon. Moneys are moved to address
these so-called Tier 1 situations.
On the other side of that coin, if you will, I think you
have raised a very interesting and very important question, and
that is, how do we go about the testing, research, and
development on weapons of mass destruction, specifically
chemical and biological ones, which, as we all know, there is a
fellow in Baghdad who has no compunction about using them. If
our troops go into battle, it is of grave concern to the
President and the Secretary what they may face in that regard.
We maintain testing, we maintain research and development
on detection, defenses in that regard, as well we should. The
extent to which we keep them classified so that potential
enemies do not know our ability to detect and defend is an
important one. There will no doubt be--if you so desire, if the
chairman so desires, we can go into closed hearing and discuss
some of those issues, but I appreciate your bringing them up.
Your concern is shared.
Senator Bill Nelson. Thank you, Mr. Chairman, and after I
get my briefing and find out what happened 50 years go, let us
have a conversation.
Mr. DuBois. Yes, sir.
Senator Ensign. Senator Pryor.
Senator Pryor. I have a quick follow-up, if I may, on
Senator Inhofe's points a few moments ago about the
environmental considerations with facilities and locations. All
four of you said that you do not agree with the statement made
in the paper that, I have forgotten exactly the phrase he used,
but basically the environmental concerns have not encroached on
your ability to do what you need to do, and I would like to
hear from all four of you specifically why you disagree with
that, and I do not need a lengthy answer, but just a couple of
minutes from each, if possible.
Mr. DuBois. Senator, that article was, needless to say,
very troubling to me, and I am being charitable. Insofar as all
four of us at this table have repeatedly gone on the record
publicly before the press, before Congress, and in meetings
with nongovernment organizations, conservation organizations,
environmental organizations, to try to express and articulate
as best we can the narrowness of the provisions which we have
suggested, to have a newspaper article which in this particular
case misrepresents a GAO report--and I made sure that I was
correct in this regard. I mean, the article says, the GAO
report says that encroachment is not a problem, that DOD can
and should do a better job of quantifying the impacts of
encroachment.
The second clause is correct, and I testified to that
effect last year, but the report, and I quote page 9 of that
very report from June 2002, and it says, ``over time, the
impact of encroachment on training ranges has gradually
increased. While the effect varies by Service and individual
installation, in general, encroachment has limited the extent
to which training ranges are available, or the types of
training that can be conducted.'' So when I read things like
this in the newspaper, it is disturbing.
The quote that was referred to by the Administrator of EPA,
Governor Whitman, while I have not seen the transcript from her
testimony in front of the Environment and Public Works
Committee of the Senate, I will say this. Last year, over a
period of approximately 100 days, as a number of the staffers
in this room appreciate and understand, I was in high level
negotiations with EPA, with the Department of Commerce, the
National Oceanic and Atmospheric Administration (NOAA), with
the Council on Environmental Quality, and OMB, so that when the
administration put forth its proposals last year, as is the
case this year, it is the administration's proposal fully
supported by the EPA Administrator, Secretary of Commerce, the
head of NOAA, the head of the Fish and Wildlife Service, et
cetera.
The other issue, and I just think it is worth the time
spent this afternoon, the term exemption, the Department asking
for blanket exemptions, this is a myth that keeps getting
repeated and repeated and repeated in the media. We are not
asking for blanket exemptions.
We have been as clear as we possibly can be that the
clarifications we are asking Congress to address have to do
with only military training readiness activities on operational
ranges. It does not apply to any of those activities that this
Department every day undergoes. Paint shops and wastewater
water plants, construction, everything the rest of the society
has applied to them in terms of environmental statute continues
to apply to the Department of Defense.
I think Secretary Johnson made an interesting comment to me
this morning, and I think it bears repeating.
Secretary Johnson. I cannot remember the comment, but when
you go out to Camp Pendleton, we have 17 miles of beach, and we
can use under certain conditions 200 yards for amphibious
assaults, and we have examples like that. We are not asking
for, certainly, to change all the laws. We are asking for
balance, and we are getting good support within the
administration.
Mr. DuBois. I apologize, it was Nelson's well-articulated
words to me before the hearing started.
Secretary Gibbs. I will speak to it generally. There is
degradation in training, but the military that I work with in
the Air Force works very hard to ensure that training is
obtained in other manners.
To give you one example, down on the Barry Goldwater Range,
relative to the Pronghorn Saw Net, we have a requirement that
before we use the range we employ five biologists whose full-
time activity is to watch over the antelope, and before we use
the range, they have to find all the antelope and make sure
they are not any place in the range that we are going to use on
that particular day. If they are, on a number of occasions we
have had to cancel training, because the antelope were moving
across a section of the range we wanted to use.
Does that mean that our pilots do not get trained? No. The
pilots are going to get trained. We are going to find a way to
do it, but it has impinged upon it.
The comment that Mr. DuBois and I were talking about
earlier, and it was brought on by this article, in the comment
about exemptions--we are not asking for exemptions. Let me pick
two particular pieces in the legislation relative to CERCLA and
RCRA. We are talking there about ordnance on active ranges, and
what we are asking really for is for Congress to declare their
intent, and was it Congress' intent to include the discharge of
live munitions on an active military range as a discharge, as
it is defined in those two pieces of legislation.
In a way, we are just trying to anticipate a problem. If we
do not get a definition now, there is every likelihood we are
going to end up in litigation by someone coming to us saying
that is a discharge, we will spend 5 to 10 years in litigation,
it will significantly impact training, we will spend a lot of
money in terms of defending a net, and eventually we will come
back to Congress and say, please, now, after the fact, define
it for us, after the courts finish going through the issue.
We are just trying to get ahead of the problem in those two
particular cases. A similar kind of concept in the legislation
we are asking for is the discussion of using the planning
mechanisms that we have now in force, and we use with DOD in a
number of cases, to look after endangered species without
having to go through the full ramification of having the
critical habitat designation, which makes it a very
bureaucratic process.
In all I have found since I have been here in the last
month, and working with the people on my environmental staff
and with the active offices out on the program, the military
services really do try very hard and actually do a very good
job in these particular areas. So, what we are saying is,
please define them for us so that we can make sure we can get
on and we are doing it in the way you had intended it to be
done.
Secretary Johnson. We have become the best stewards,
because all the endangered species migrate to our ranges, and
our young men and women take good care of them, but we have to
find the right balance to do what the ranges are there for.
Secretary Fiori. Sir, each of us was frustrated by this
article today. We are good stewards of the environment. We can
prove that, and in quantitative matters. The number of species
we have that we take care of does affect our training.
The red-cockaded woodpecker at Fort Bragg, we have learned
how to live with the bird. We are looking at mechanisms to move
it out of our training areas so we can do training without
putting ropes or white lines around a tree. You cannot get but
so close to keep disturbing them. We even have time frame
issues on training for certain species that are in certain
areas of our many ranges.
So it does affect our training, and our people work very
hard to get their training anyway. Ultimately, as we go to a
faster, lighter force, we are going to need more area. We have
to figure out how to do it smartly, and the blanket exemption
idea is just not true.
Senator Pryor. Thank you, Mr. Chairman.
Senator Ensign. Thank you, and I want to thank the entire
panel. I think it has been a very productive first hearing of
this subcommittee in the 108th Congress. I look forward to
working with each and every one of you. You have some huge
challenges ahead of you, especially in the world that we are
facing today, so thank you all for being here, and this hearing
is adjourned.
[Questions for the record with answers supplied follow:]

Questions Submitted by Senator James Ensign

FACILITY RECAPITALIZATION RATES

1. Senator Ensign. Secretary Gibbs, the 2004 budget request for
military construction and restoration accounts is described in
Department of Defense (DOD) press releases as ``supporting the
reduction of the current recapitalization rate of its facilities to 67
years by 2008.'' This represents a 1-year slip compared to last year's
goal of 2007 for the same level and assumes unprecedented amounts of
investment over the Future Years Defense Program. In addition, the
overall recapitalization rate across the Services remains around 140
years, 50 years more than fiscal year 2002 rates. I am concerned about
the continued unrealistic level of recapitalization rates for the
Services. Unfortunately, the 2004 budget request for Air Force
construction continues a disconcerting trend with a proposed investment
level equal to 180 years in comparison to last year's rate of 165
years.
What funding levels for both military construction and restoration
funds are required to achieve the 67-year cycle and when does the Air
Force intend to provide the funds to support this goal?
Secretary Gibbs. The Air Force requires approximately $2 billion
per year in the military construction and O&M restoration and
modernization accounts to recapitalize existing facilities and
infrastructure at a 67-year rate. That $2 billion should be comprised
of approximately $1.3 billion in military construction and
approximately $700 million in O&M restoration and modernization
funding.
The facility funding in the fiscal year 2004 budget request
supports a 180-year recapitalization rate. This is an improvement over
the fiscal year 2003 rate, which was 284 years based on the fiscal year
2003 budget request and 195 years based on the enacted fiscal year 2003
budget.
The Air Force future years defense plan allows us to meet Office of
the Secretary of Defense's (OSD) 67-year recapitalization rate goal by
fiscal year 2008.

2. Senator Ensign. Secretary Gibbs, do you believe that competing
Air Force priorities in readiness, acquisition, and modernization will
allow you to meet OSD goals to achieve a 67-year facility
recapitalization rate by 2008?
Secretary Gibbs. We continue to build our future years defense plan
based on our most urgent and compelling requirements. In doing so, our
current plan meets OSD's 67-year recapitalization rate goal by fiscal
year 2008.

3. Senator Ensign. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, assuming the current balance between operations and
maintenance accounts versus military construction, what overall amount
of military construction funding for your Service per year is required
to meet the OSD goal?
Secretary Johnson. Investment resources utilized to reduce the
recapitalization rate are a combination of military construction and
operations and maintenance funding. Total investment resources needed
to meet the DOD goal of a 67-year recapitalization rate within each
year of the FYDP are as follows:

[In millions of dollars]
------------------------------------------------------------------------
Fiscal Year Navy Marine Corps
------------------------------------------------------------------------
2004.................................. 1,567 285
2005.................................. 1,600 290
2006.................................. 1,604 294
2007.................................. 1,665 301
2008.................................. 1,700 307
2009.................................. 1,735 315
Average............................... 1,645 298
------------------------------------------------------------------------

Secretary Fiori. The Army is currently investing $1.1 billion
against the OSD recapitalization goal, with approximately $35 million
from operation and maintenance funds. The cost to the Army to meet a
67-year recapitalization rate would be $2.5 billion annually.
Secretary Gibbs. In order to recapitalize our facilities at a 67-
year rate, we estimate that approximately $1.3 billion of our annual
military construction request would need to be dedicated to facility
restoration and modernization.

MIGRATION OF OPERATIONS AND MAINTENANCE FUNDS

4. Senator Ensign. Secretary Johnson, the General Accounting Office
released a report last month that suggested changes in funding
priorities and strategic planning were needed to improve the conditions
of military facilities. There is a lack of consistency in the Services'
information on facility conditions, making it difficult for Congress,
DOD, and the Services to direct funds to facilities where they are most
needed. In addition, facility sustainment funds are routinely held back
at various headquarters levels to fund other priorities. As a result,
while the Services intended to fund sustainment across the board at 78
to 98 percent, a survey of bases across the country revealed
sustainment funding ranging from 35 to 77 percent of installation
requirement. What is happening at the installation level to the funding
you ask for and we provide for sustainment?
Secretary Johnson. The Navy is presently in the first year of the
transformation to sustainment, restoration, and modernization (SRM)
execution. Three impacts on the delivery of sustainment funds to
installations have been identified.
The first is the migration of funds to other operation and
maintenance (O&M) accounts. The Navy is consolidating installation
management from eight commands to a single Commander Navy Installations
who will receive and allocate O&M funds to the installations.
The second is resource flow patterns. The GAO surveys were
conducted in mid fiscal year 2002 when resources had been withheld in a
typical pattern to ensure availability for priority O&M accounts. The
Navy has recognized that resources are flowing in a ``bathtub profile''
with a large percentage of resources arriving late in the fourth
quarter causing inefficiencies. Commander Navy Installations will be
charged with the responsibility to level resource flow across the
fiscal year to ensure the best sustainment program efficiencies.
The third is ``SRM awareness.'' With the advent of the new SRM
program, installation leadership is not yet fully aware of the scope of
sustainment. Sustainment includes recurring and preventative
maintenance as well as replacement of the components. Many Installation
level managers have not yet realized that final piece--replacement is
part of the Sustainment function. Additionally, higher dollar value
projects and other requirements that are resourced at higher management
levels can include Sustainment functions and should be included in the
Sustainment rate calculation. Navy installations are typically not
including these resources provided outside of installation funding in
their anecdotal statements on the level of sustainment funding. The
Navy is transforming its Facility Management policies to align them
with the new SRM facility investment structure.
Sustainment funding migration is a recognized issue. It will take
time to fully resolve. The first steps have been taken with the
creation of a Commander Navy Installations to lead the effort.
The GAO report indicated that the Marine Corps did not have the
problem with its installations receiving a small percentage of the
sustainment funding. The one Marine Corps base visited by GAO, Marine
Corps Combat Development Command (MCCDC) Quantico, VA, was funded at 97
percent of sustainment. This was expressly noted as an exception to the
low funding levels found at other Services' bases. The report went on
to explain the procedures the Marine Corps uses to control funding:
``According to Marine Corps officials, their Service does not permit
sustainment funds to be taken away from installations by intermediate
commands without the explicit permission of Headquarters' facilities
staff.''

5. Senator Ensign. Secretary Fiori, the Army recently established
an Installation Management Agency (and the Navy is working in the same
direction) to centralize control prioritization of facility
requirements. Will this new agency ensure a greater percentage of
sustainment funds are invested at the installation level?
Secretary Fiori. Yes. Garrisons will receive almost all of the base
support funds that are allocated to the Installation Management Agency
(IMA). Effective fiscal year 2003, concurrent with the activation of
the Army IMA, the Army implemented a policy that any request to migrate
base support funds to mission programs must be approved by Army
leadership. This policy should ensure a greater percentage of
facilities sustainment funds are distributed to the installations.

6. Senator Ensign. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, please provide by installation what percentage of the
sustainment requirement was executed in fiscal year 2002?
Secretary Johnson. The Department of the Navy cannot readily
provide what percentage of the sustainment requirement for each
installation was executed in fiscal year 2002 because the data is not
available. Fiscal Year 2002 Facility programs were executed in the
previous ``Real Property Maintenance (RPM)'' mode. The execution
reports were structured for the RPM metrics that did not separate the
sustainment function from the recapitalization function. The Department
of the Navy Facility Cost Accounting Code (CAC) structure has been
converted to the SRM metrics beginning with fiscal year 2003. The
Department will be able to report sustainment execution at all
organizational levels with the modernized CAC structure beginning with
fiscal year 2003.
Secretary Fiori. The fiscal year 2002 Army-wide average for
sustainment was 71 percent. Unfortunately, we cannot provide
comparisons of funding versus requirement at the installation level.
The reason is that the Department of Defense generates requirements
using the Facilities Sustainment Model, which is a macro level tool
that is useful on an Army-wide basis.
Secretary Gibbs. The Facilities Sustainment Model (FSM) is a macro-
level tool, designed to address sustainment requirements in aggregate.
Due to the cyclical nature of many sustainment requirements (upon which
the model is based), FSM may not be pinpoint accurate for a specific
12-month period at installation level. This is because, at the
installation level, certain specific sustainment actions may not be
required every year. The model does take this reality into
consideration however, and averages the cyclical requirements across
years. Therefore, accuracy improves over longer time periods.
Accuracy also improves as installations are aggregated into Major
Command (MAJCOM) total costs. This is because while some installations
within a MAJCOM may not require a specific sustainment action during a
given year, others within the MAJCOM will.
As we reported in our fiscal year 2002 financial statements, we
executed 68 percent of the Facilities Sustainment Model requirement Air
Force wide in fiscal year 2002. Over a 12-month period, individual
installations would vary significantly from the overall Air Force
average--even if the overall Air Force average were 100 percent. We
have addressed this issue in our response to a recent recommendation
from the General Accounting Office. We are improving from the fiscal
year 2002 level in fiscal year 2003 and have budgeted 95 percent of
required sustainment in fiscal year 2004.

7. Senator Ensign. Mr. DuBois, what is the Department doing to get
their hands around the problem of inconsistent information, varying
methods for data collection, and different assessments of facility
conditions?
Mr. DuBois. We are working to implement a new quality status
indicator (or ``Q'' rating) that will be reported within the
Department's standard real property inventories. These ratings--which
we plan to collect from the military departments and Defense agencies
beginning in October 2004 will avoid subjective judgments of condition
and instead rely on a quantitative assessment of the investment needed
to achieve a ``Q-1'' status. This is the third leg of our evolving
sustainment, restoration, and modernization paradigm. When fully
operational, it will allow us to more accurately quantify and report
those restoration requirements that go beyond normal rates for
sustainment and recapitalization of facilities.

USE OF MILITARY PAY FOR RECAPITALIZATION

8. Senator Ensign. Mr. DuBois, the Department published a
Facilities Recapitalization Front-End Assessment in August 2002 that
identifies and adds new funding programs to determine the final rate
for facility recapitalization. One fund source identified is ``military
pay appropriations that support recapitalization.'' Can you elaborate
on what facility programs military pay will support?
Mr. DuBois. To be precisely clear about our requirements, our
models and metrics identify all potential sources of funding--even
those that are relatively small. Military pay provides a modest
contribution to facilities sustainment and a very small contribution to
facilities restoration and modernization. Our requirements models count
this funding as a contribution that would otherwise be paid for from
operations and maintenance appropriations. Military members perform
some facilities sustainment work in each of the four military Services,
although practices vary by military department and the largest
contribution is in the Air Force and Marine Corps. Only the Navy uses
military members for certain recapitalization (restoration and
modernization) tasks.

9. Senator Ensign. Mr. DuBois, can you give a general estimate of
the amount of military pay appropriations that is proposed to be spent
on facility recapitalization in the 2004 budget?
Mr. DuBois. $5 million in the Navy.

UTILITIES PRIVATIZATION

10. Senator Ensign. Mr. DuBois, Congress granted the Department the
authority to take advantage of private sector financing and
efficiencies by entering into privatization agreements for deteriorated
utility systems (electrical distribution, water, waste/sewer, and
natural gas--2,600 systems total, valued at $50 billion). Utility
systems had suffered from years of under-funding and low priority. DOD
has made slow progress citing industry complexity and inconsistent
initial results. A new privatization goal has been established to
complete evaluations of all systems by September 2005 to determine
candidates for privatization. In your written statement you say,
``Congressional support for this effort in fiscal year 2004 is
essential to maintain the procurement momentum and industry interest.''
What do you perceive to be the level of industry interest in taking
over deteriorated utility systems and what can Congress do to maintain
the level of interest?
Mr. DuBois. The level of interest has varied. In general, utility
providers have expressed interest and provided proposals on systems.
The components have found adequate competition for DOD utilities
privatization on larger installations near metropolitan areas,
especially where the systems are currently operated and maintained near
industry standards. There has been less interest in systems in poor
condition or located on small installations in rural areas. In
particular, many utility privatization solicitations for Air National
Guard installations did not receive an industry response. In areas
where utility systems did not receive interest, the components are
collecting information from potential utility providers. This
information should assist efforts to obtain adequate interest in the
future.
Most importantly, Congress can help maintain the level of industry
interest by supporting the level of funding requested by the components
in the President's fiscal year 2004 budget request. These requests are
based on the current schedules developed by each Service to complete
utility privatization decisions by September 2005. Additionally,
Congress could help simplify the utilities privatization effort by
deleting the requirement to provide a 21-day notification prior to
proceeding with a utility conveyance. With over 1,300 evaluations
scheduled for completion during the next 30 months, this notification
requirement will continue to cause unnecessary delays in completing the
actions. The Services have taken a number of steps to improve the
process used to evaluate systems for privatization and obtain proposals
from the industry.

11. Senator Ensign. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, recognizing the slow pace, what problems are you
experiencing in your privatization initiatives and what lessons have
you learned?
Secretary Johnson. The Department of the Navy has not experienced
any major problems with the Utilities Privatization program, and is on
schedule to meet the Department of Defense goal of completing a source
selection decision on each system by September 2005. The Department has
established a thorough and methodical approach to utilities
privatization. This approach includes an open-ended performance based
request for procurement that allows industry sufficient time to
assemble a team and prepare an offer.
Secretary Fiori. Utilities Privatization contracts are non-
traditional 50-year contracts that require significant capital
investment. The procurement process is complex and is successful when
the Government partners with the utility provider. We have made
significant progress in developing a standard procurement process. With
the assistance of industry, we have developed a standardized utilities
privatization Request for Proposal format that promotes competition
among the broadest selection of providers, including municipal,
private, regional, district or cooperative utility companies, and other
interested parties. In addition, we maintain two Centers of Expertise
for utilities privatization acquisition. One is located at the Defense
Energy Support Center, Fort Belvoir, Virginia, and the other at the
Huntsville Engineering and Support Center, U.S. Army Corps of
Engineers, Huntsville, Alabama. The contracting specialists at both
centers are well trained in the procurement process.
Secretary Gibbs. The Air Force has developed a pace for the
utilities privatization program that is measured, balanced, and
accountable. We are overcoming several issues perceived by industry as
barriers to privatization, including the lengthy solicitation process
timeline, our caution in granting access to Air Force installations,
and the complicated Federal source selection process.
The most significant lesson we have learned is how important it is
for us to educate potential offerors on how to deal with the Federal
acquisition process and prepare responses to Requests for Proposals.
Most prospective offerors are long-established utility companies with
little or no experience with Federal acquisition requirements. For the
uneducated or inexperienced, the process can be overwhelming.
Additionally, most offerors have little understanding of Air Force
installation access requirements and our determination to keep bases
physically secure. There are also some inherent differences between
various types of offerors, e.g., regulated vs. non-regulated and
publicly owned vs. for profit, which cannot be overcome by the Air
Force. In some cases these differences further impede or slow-down the
competitive process, or otherwise make it more costly to privatize
systems. In nearly every case, we have found the best solution has been
to interact often and candidly with industry offerors to reach a mutual
understanding.

MILITARY CONSTRUCTION RECOUPMENT THROUGH THE NATO SECURITY INVESTMENT
PROGRAM

12. Senator Ensign. Mr. DuBois, many of the military construction
projects in the 2004 program have been certified as not eligible for
funding through the North Atlantic Treaty Organization (NATO) Security
Investment Program, yet these same projects are required to support
NATO missions. An example would be the Consolidated Combat
Communication facility at Ramstein Air Force Base for over $19 million.
What is the Department doing to rigorously vet these projects through
the host nation and following up on requests for reimbursement and can
you assure that full reimbursement has been received for qualified
projects?
Mr. DuBois. The NATO Security Investment Program provides the
minimum fixed and mobile infrastructure necessary for NATO wartime,
crisis, peace support, and deterrence operations and NATO-unique
training requirements--as determined by and prioritized by NATO
Strategic Commanders. Minimum refers to Minimum Military Requirement or
MMR, which means providing the least possible to satisfy the
requirement. This is accomplished by strict eligibility criteria,
austere construction standards and by NATO control of the detailed
scope of a project. When U.S. facility requirements exceed NATO's MMR,
the U.S. must nationally fund this.
Each DOD Service component in Europe is responsible for reviewing
future projects and, where eligible, seeking NATO funding. They ensure
maximum use is made of the NATO Security Investment Program.
Eligibility is based upon a number of key concepts in addition to
the MMR, such as whether the project supports a NATO requirement rather
than a national requirement. If a particular project is deemed
eligible, then it is included in a capability package and NSIP funding
is sought. If the project is not eligible, then the component may
prefinance the project using U.S. funds.
Prefinancing does not end the components efforts to seek NATO
funding. Each prefinanced project is tracked by the components and
continuing efforts are made to seek NATO funding.
The Combat Communication Facility at Ramstein is being tracked by
U.S. Air Force Europe (USAFE). The project has been pre-financed, and
USAFE is working with NATO in an attempt to get some portion of it
accepted as a NATO requirement. Since the scope of the project greatly
exceeds the NATO MMR, only a minimal amount of NSIP funding can be
expected.

FALLON, NEVADA WATER SUPPLY

13. Senator Ensign. Secretary Johnson, a leukemia cluster was
identified in Fallon, Nevada, with 16 cases diagnosed in children from
1997 to 2002. The expected rate for leukemia in a town the size of
Fallon is one case every 5 years. The final report from the Centers for
Disease Control and the Agency for Toxic Substances and Disease
Registry indicated there was no link between environmental causes and
the leukemia. Nevada State health officials have initiated studies of
similar northern Nevada communities. Though Fallon's last case of
leukemia counted in Nevada health statistics occurred over 15 months
ago in December 2001, health officials will not declare the cluster
over for another 3 to 4 years.
Extensive Federal and State studies of Fallon drinking water
resulted in finding arsenic, tungsten, and six other metals (antimony,
barium, cesium, cobalt, molybdenum, and uranium) at elevated levels.
Though the Navy has contributed some $6 million to the construction of
Fallon's new water treatment plant, there are doubts as to whether or
not the new water treatment plant will resolve issues regarding the
metal substances other than arsenic. Furthermore, I am aware that the
Navy currently provides filtered and bottled water to all Navy homes
and facilities.
Please provide the Navy's position with regard to the Fallon water
supply in general and, in particular, are you investigating the Navy's
possible contribution to the elevated metal content of the water?
Secretary Johnson. No scientific or medical data exist linking
acute lymphocytic leukemia, in general, or the Fallon childhood
leukemia cluster, in specific, to environmental causes or metals in
drinking water. However, the Navy and the City of Fallon are
cooperating in the development of a water treatment facility in
response to Environmental Protection Agency notices of violation for
their common water source exceeding the maximum contaminant level of
arsenic in drinking water. Arsenic is the only substance in the City/
Naval Base water supply that does not currently meet State and Federal
safe drinking water standards. Though there are no historic or current
data which indicate that the health of Navy personnel (or the civilian
residents of Fallon) has been adversely affected by local drinking
water, the Navy elected to make filtered and bottled water available to
Naval personnel and dependents ordered to Fallon until the local water
supply meets Federal standards. According to all existing studies,
including recent studies conducted by the Centers for Disease Control
and the Agency for Toxic Substances and Disease Registry, the water
supply for the City of Fallon, Naval Air Station Fallon and local wells
have not been impacted by site-related contaminants from the Naval Air-
Station (this includes metals and volatile organic chemicals/fuels).
The studies state that elevated metals in the local water supply are a
result of local geology and natural erosion processes.

14. Senator Ensign. Secretary Johnson, what actions have you
implemented to ensure the Navy is not contributing to a water problem
yet to be discovered?
Secretary Johnson. Naval Air Station (NAS) Fallon maintains
extensive environmental monitoring and compliance programs and is
regulated by State and Federal laws and inspections. Additionally, NAS
Fallon maintains an Arsenic and Total Dissolved Solids Plan to ensure
minimization of such products discharge to surface waters from the
station's wastewater treatment plant. Reducing the release of these
contaminants to local surface waters will help minimize infiltration
into the ground and potential contamination of groundwater. NAS Fallon
is upgrading a number of sewer systems to provide for such
minimization. NAS Fallon also operates a ``Hazardous Material
Pharmacy'' (HazMart) for the authorization, purchase, storage, and
issuance of hazardous materials utilized by the installation. Mandatory
training of hazardous material handlers is also conducted to ensure
proper management of such products. Through training and the HazMart
process, NAS Fallon reduces the storage and use of hazardous products.
This translates to less generated waste, and a lower potential for
releases that may otherwise impact local waterways and groundwater.
Finally, the Navy environmental team at NAS Fallon has developed
partnerships with local, State, and Federal agencies, as well as a
number of environmental, conservation and Native American organizations
to work on regional issues, share information and develop a common
vision for environmental restoration, land use, resource conservation,
community health and development.
______

Questions Submitted by Senator John Cornyn

DORMITORY FACILITIES AT SHEPPARD AFB

15. Senator Cornyn. Mr. DuBois, I commend you for the work that you
are doing to ensure that the men and women who serve in our Armed
Forces have top-notch housing facilities. It is essential that we
continue to invest in quality-of-life improvements, such as improved
housing, especially right now when we are asking for such a tremendous
sacrifice from not only the Service members, but their families as
well. I am particularly interested in what the Air Force is doing to
improve dormitory facilities. I recently visited with some
representatives from Sheppard Air Force Base, and they expressed the
urgent need to renovate some of the dormitories at that installation.
I understand that the Air Force has a Dormitory Master Plan which
prioritizes dormitory military construction projects. Could you provide
me a better understanding how the Air Force goes about prioritizing
which dormitories get renovated? Please elaborate where the dormitories
at Sheppard Air Force Base are on any such priority list.
Mr. DuBois. The Air Force Dormitory Master Plan is a comprehensive,
requirements-based plan, which identifies and prioritizes their
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 a new, Air Force-
designed private room standard to improve airman quality of life. Phase
1 is complete, and the Air Force is now concentrating on the final two
phases of the investment strategy.
The Air Force currently has a deficit of 11,400 rooms, and their
existing inventory includes 3,700 inadequate rooms. Their program to
eliminate the remaining dormitory room deficit is prioritized based on
the size of deficit at each installation. Those installations with the
largest dormitory room deficits are highest on the priority list. Once
the Air Force eliminates its deficit they will focus on its inadequate
rooms. Dorm ``adequacy'' is based on the condition of its building
systems, i.e., heating, ventilation, and air conditioning; electrical;
roof; doors; windows; plumbing. Those dorms with the worst building
system condition receive the highest priority for renovation or
replacement.
Sheppard AFB has two types of dormitories, both are included in the
Dormitory Master Plan. The first type of dormitory is permanent party.
These dormitories house unaccompanied E1-E4 airmen assigned to the
installation in a permanent duty status. These dormitories are built to
the Air Force standard where each airman gets a private room and
private bath; every four airmen share a common kitchen and living area.
The second type of dormitory is a student pipeline dormitory. Pipeline
dormitories are used to house airmen who have completed their Basic
Military Training and are now receiving additional career-field
specific training. While living in pipeline dormitories, they are still
under control of training instructors. Two airmen share one room and
one bathroom. Based on the current dormitory room deficit and
condition, the Air Force is making, and has programmed, significant
dormitory investment for Sheppard AFB. They are constructing one 144-
room permanent party dormitory at Sheppard AFB in their fiscal year
2003 program and have included a 300-room student dorm in their fiscal
year 2004 budget request. Additionally, they have programmed four
additional dormitory projects for Sheppard AFB in their future years
defense plan.

BRAC 2005

16. Senator Cornyn. Mr. DuBois, there has been much talk recently
about how this round of BRAC will not be entirely Service specific, but
also have as a primary objective how the DOD can ``implement
opportunities for greater joint activity.'' I understand that the
Infrastructure Executive Council will recommend to Secretary Rumsfeld
in April what facility categories or functions should be considered for
joint-Service consolidation and which should remain Service-centric.
Could you give me a better understanding on the process of how you are
determining which functions will be viewed as joint rather than Service
specific for the purposes of BRAC?
Mr. DuBois. The Infrastructure Steering Group (ISG), a senior BRAC
oversight group chaired by the Under Secretary of Defense (Acquisition,
Technology, and Logistics), is responsible for recommending to the
Infrastructure Executive Council for the Secretary's approval those
functions that may receive joint cross-Service analysis. These
recommendations will be based on the guidance contained in the
Secretary's November 15, 2003 memorandum, Transformation Through Base
Realignment and Closure. If a function is either common (conducted in
more than one Service or Agency) or business-oriented (not exclusively
conducted by the military), then that function is eligible for joint
cross-Service analysis. The ISG is currently deliberating on what
specific functions will receive joint cross-Service analysis.
______

Questions Submitted by Senator Daniel K. Akaka

ANTI-TERRORIST/FORCE PROTECTION FUNDING

17. Senator Akaka. Mr. DuBois, according to the administration,
homeland defense funding drops in the fiscal year 2004 budget request
due to one-time force protection investments in 2003. Out of the
approximate $2 billion decrease across DOD, homeland defense funding
for MILCON, which represents much of DOD's Anti-Terrorist/Force
Protection (AT/FP) funding, drops from $733 million to $82 million. Is
this attributable to the one-time investment last year?
Mr. DuBois. The Department's AT/FP program has been evolving since
September 11. The fiscal year 2003 MILCON appropriation included the
one-time investment of $733 million funding which paid for numerous
anti-terrorism projects required as a result of current threat
assessments. This $733 million was requested as part of the Defense
Emergency Response Fund for fiscal year 2003. The Department, however,
began integrating AT/FP investments into individual MILCON projects
beginning with the fiscal year 2002 program.
In addition to the $82 million investment level identified by
Congress for AT/FP projects, the fiscal year 2004 MILCON budget request
also includes an additional $49 million for AT/FP requirements as a
result of the new AT/FP standards incorporated into the design and cost
of all other MILCON projects across the Department.

18. Senator Akaka. Mr. DuBois, what progress have we made in the
buy-out of AT/FP requirements for our installations?
Mr. DuBois. The fiscal year 2003 Defense Emergency Response Fund
addressed the most urgent and immediate anti-terrorism requirements.
The Department has just begun addressing AT/FP requirements for all of
its buildings and will continue as buildings are restored and
modernized over time.

19. Senator Akaka. Mr. DuBois, are we almost finished, or should we
expect additional requirements in fiscal years 2005, 2006, 2007, and
the future?
Mr. DuBois. We currently invest in AT/FP requirements, and we
anticipate that these requirements will continue into the out-years. As
threats change, and as criteria and technology evolve, the level of
investment will also fluctuate.

QUALITY OF LIFE

20. Senator Akaka. Mr. DuBois, funding for a number of budget areas
that directly affect quality of life for our servicemen and women and
their families has decreased in this year's budget request. Some
examples include a $1.5 billion drop in overall MILCON, a $200 million
cut to family housing, and a reduction that brings Army restoration and
modernization (R&M) down to 10 percent of the fiscal year 2002 level.
What impact will cuts such as these have on the quality of life and
work of our servicemen and women and their families?
Mr. DuBois. The fiscal year 2004 President's budget request for
military construction is roughly equivalent to the 2003 request.
We do not anticipate any negative impacts on the quality of life
and work life resulting from our budget request. We continue to improve
the quality of life and work for our Service members. The 2004 request
reflects our highest priorities for improving quality of life and
resolving critical readiness shortfalls. For quality of life, the
military construction request sustains funding for family and bachelor
housing and increases the number of housing units privatized. We
increased funding for facilities sustainment, raising the corporate
sustainment rate from 93 to 94 percent, which will improve the work
environment by preserving our facilities and reducing the need for
future, more costly revitalizations. We also preserved funding for
recapitalization, another component of our plan to improve the work
environment.

DEMOLITION

21. Senator Akaka. Mr. DuBois, what is the Department's current
guidance to the Services on demolition of excess infrastructure?
Mr. DuBois. The current guidance--which expires at the end of this
fiscal year 2003--is the same guidance that has been in place since
fiscal year 1998. That is the guidance that directed the disposal of 80
million square feet of identified excess facilities over 6 years. We
are on track to finish that effort this year. For the future, we have
funded a continuing demolition program for each military Service
through fiscal year 2009.

22. Senator Akaka. Mr. DuBois, are the Services' funds for
demolition adequate?
Mr. DuBois. Yes.

23. Senator Akaka. Mr. DuBois, are we continuing to support
facilities that we do not need?
Mr. DuBois. Yes. The April 1998 Report of the Department of Defense
on Base Realignment and Closure estimated approximately 23 percent of
DOD's base capacity is excess to support forces projected for 2003. In
its review of that report, the GAO stated: ``. . . our prior work
supports the report's general conclusion that DOD continues to retain
excess capacity.'' However, any estimate of excess capacity is just an
estimate--only a thorough BRAC analysis can indicate where unnecessary
infrastructure can precisely and prudently be eliminated.

24. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, could each of the Services please discuss their
demolition programs?
Secretary Johnson. Demolishing excess facilities which have
outlived their life cycle usefulness is a key component in properly
managing our ashore infrastructure since it eliminates associated
maintenance and repair requirements for these obsolete buildings. Where
applicable, the Department of the Navy complies with the National
Historic Preservation Act before undertaking demolition. The Department
of the Navy utilizes military construction funds, operations, and
maintenance funds, and Navy Working Capital funds to demolish old,
excess facilities in compliance with State Historic Preservation Act
standards.
Secretary Fiori. In fiscal year 2004, the annual target of 2.7
million square feet is funded at $36 million. The Army is on track to
meet the Defense goal to eliminate 53.2 million square feet of excess
capacity by the end of fiscal year 2003. The Army will fund at a
minimum of $30 million each year between fiscal years 2005 and 2009 to
demolish excess capacity.
Secretary Gibbs. We have pursued an aggressive effort to demolish
or dispose of facilities that are not economical to sustain or restore.
From fiscal years 1998 through 2002, we demolished more than 12 million
square feet of non-housing building space in support of Defense Reform
Initiative Directive #36. We expect to demolish an additional 2 million
square feet in fiscal year 2003, for a total reduction of 14 million
square feet and thereby meet the Defense Reform Initiative Directive
goal. 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. In general, we consider our facility
demolition program a success story, enabling us to reduce the strain on
our infrastructure funding by getting rid of facilities we do not need
and cannot afford to maintain.

25. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, what are each of you doing to eliminate excess
facilities?
Secretary Johnson. The Department of the Navy is relying heavily on
its demolition programs to eliminate old, excess facilities. Where
applicable, the Department of the Navy complies with the National
Historic Preservation Act before undertaking demolition.
Secretary Fiori. The Army has a Facility Reduction Program with a
plan to demolish 53.2 million square feet (MSF) of unneeded facilities
between fiscal years 1998 and 2003. To date, we have demolished 47.5
MSF. We expect to meet our goal by the end of fiscal year 2003. In
fiscal year 2004 we plan to demolish an additional 2.7 MSF.
Secretary Gibbs. The Air Force continues to eliminate excess
infrastructure through our operation and maintenance-funded demolition
program. Beyond Defense Reform Initiative Directive #36 (fiscal year
2004 and beyond), we plan to continue to reduce footprint through
facility consolidation, which will enable demolition/disposal of excess
facilities (subject to funds availability). This approach considers
consolidating several compatible functions into one facility, then
demolishing/disposing of resultant excess buildings.

BRAC LAND SALES

26. Senator Akaka. Secretary Johnson, could you please describe the
Navy's practices to date for clean-up and disposal of bases closed in
the BRAC rounds of 1988, 1991, 1993, and 1995?
Secretary Johnson. The Department of the Navy seeks to transfer
surplus property as quickly as possible to local communities. While we
often use leases as an interim step to facilitate reuse, our focus has
been on moving to final transfer of the property. This helps the
community with reuse and job generation and saves the Navy from
extended carrying costs. The Department of the Navy uses all available
tools to accomplish this goal. Some highlights of the Department's
efforts are:

Use of the standard Federal conveyance mechanisms as
well as the BRAC-unique method of Economic Development
Conveyance;
Close coordination with environmental regulators to
expedite the characterization and clean-up remedy selection;
Clean-up actions focused on those parcels where early
reuse is most promising;
Offering the community the use of early transfer
authority to convey property before remediation is in place;
Use of Environmental Services Cooperative Agreement to
provide funding to support clean-up or caretaker efforts after
conveyance;
Integration of the environmental clean-up into the
redevelopment construction effort to save time and money for
both the developer and the Department of the Navy;
Immediate conveyance of the cleaned portions of
parcels, while other areas undergoing remediation are conveyed
later; and
Use of land sale revenue provides additional funds
that are used to accelerate clean-up.

To date we have fully transferred 64 installations. Of the
remaining 26 installations, over half of the land has already been
conveyed. By the end of this year, we expect to have 18 installations
containing 12,000 acres still to be disposed.

MANAGEMENT OF INSTALLATION PROGRAMS

27. Senator Akaka. Mr. DuBois, in 1999 DOD developed a standard
rating scale known as ``C-Ratings'' in order to assess the condition of
military facilities in each Service. Even though this standard was
established, a recent GAO report published just last month states that
there still exists a lack of consistency in how the Services define
each C-Rating, as well as how often they conduct their assessments, and
how broad a range of facilities are included in their studies. These
inconsistencies pose a challenge to the ability to direct funds to the
facilities that are in the most need of funding, and they also remove
the ability to accurately track progress made in addressing the Office
of the Secretary of Defense's goals to reach a 67-year recap rate and
to eliminate inadequate facilities. Has there been any consideration by
DOD to create more of a consistent rating scale by modifying how these
ratings are defined and determined by the Services and if not, why not?
Mr. DuBois. The Department is continuing to consider how to manage
and report on military installations and facilities. The guidance and
definitions for facility C-Ratings were established for the
Installations' Readiness Report, which the Department submits to
Congress in accordance with public law. The foundation for this report
lies with facility condition assessments conducted at military bases.
DOD is moving now to require common condition reporting. This will help
overcome some of the inconsistencies GAO found in the Services'
assessments and in the Installations' Readiness Report C-Ratings as
well as improve each Service's ability to prioritize work and direct
funding. The Installations' Readiness Report is the Department's
initial attempt to establish a correlation between facilities and
readiness. As that report matures, the Department meets with Service
representatives to refine its application and enhance its validity with
the purpose of creating more consistent ratings.

INSTALLATIONS MANAGEMENT AGENCY

28. Senator Akaka. Secretary Fiori, the Army established the IMA in
October of last year to handle the management of its installations
programs. How is the Agency structured?
Secretary Fiori. The IMA is a field operating agency for the
Assistant Chief of Staff for Installation Management. IMA consists of a
headquarters element and seven regions worldwide. IMA headquarters,
located in Crystal City, VA, provides installation management planning,
programming and budgeting guidance to the regions. The region offices
manage execution functions for all Army installations and garrisons
within a geographical area. Three of the regions are outside the
continental United States in Europe, Korea and the Pacific. The four
regions in the continental United States align with other Federal
regions (Federal Emergency Management Agency and Environmental
Protection Agency). In addition, the Installation Management Board of
Directors (IMBOD) advises IMA leadership on compelling installation
issues. The IMBOD consists of 11 senior Army executives (to include
General Officers, Assistant Secretaries, other Senior Executive Service
members and the Sergeant Major of the Army) who meet quarterly to
recommend strategic goals and objectives; recommend program, resource
and finance strategies; and monitor performance measures and standards.

29. Senator Akaka. Secretary Fiori, could you please discuss the
specific problems you hope to address?
Secretary Fiori. The transformation of installation management,
represented by the IMA, is a supporting initiative to the overall Army
transformation. Through the IMA, the Army has created a corporate
structure for managing all of its installations. IMA uses the corporate
management structure to streamline procedures for managing
installations. IMA will conduct business process re-design to develop
more efficient and effective region and installation management
business practices. In addition, by shifting the installation
management responsibility from 14 land-holding major commands (MACOMs),
the IMA seeks to enhance effectiveness in installation management,
achieve regional efficiencies, eliminate the migration of installation
support dollars, and provide consistent and equitable services and
support. MACOMs can now focus solely on their primary missions. Though
the major commands no longer have a primary responsibility for
installation management, the support they receive from installations is
a paramount mission of the IMA. The IMA exists to support and enable
mission commanders.
IMA enhances the Army's ability to provide consistent and
standardized services from installation to installation. Soldiers and
their families can better predict the level and quality of housing,
child development, safety, recreational programs, educational
opportunities and overall well-being support services as they move from
one Army home to another.
This transformation streamlines the flow of funding directly from
IMA to garrison commanders; therefore, they can better plan and execute
installation support programs. In addition, IMA seeks efficiencies by
maximizing technological enhancements and standardizing statements of
work and business processes.
IMA positions installations for Army and Department of Defense
transformation initiatives. Clearly, IMA represents a new commitment to
improve installations, preserve the environment, enable well-being of
soldiers, civilians and family members and support mission readiness of
all stakeholder units.

30. Senator Akaka. Secretary Fiori, what are the benefits to the
Army?
Secretary Fiori. An important part of the Army's overall
transformation, IMA is another facet of the Army's effort to streamline
operations to become more efficient and responsive in meeting a wide
range of missions. IMA provides the Army with a structure focused
solely on installation management support requirements and assets. IMA
furthers the Army's long-standing programs to provide the best quality
of life possible for soldiers and their families. IMA enables the
development of multi-function installations to support evolving
structure and needs. IMA also provides maximum management flexibility
through a geographic focus, instead of a functional focus as in the
past.

31. Senator Akaka. Secretary Fiori, the primary purpose of the IMA
is to create efficiencies, but one result has been that funds
previously available to base commanders for their facilities are now
directed through the regions and the overall IMA organization. What
solutions might exist to address the shortfalls that base commanders
previously depended upon to address maintenance problems for their
facilities?
Secretary Fiori. Prior to this reorganization, separate Army MACOMs
managed installation operations. Each MACOM commander divided his
attention between installations and performing his primary mission.
Examples of primary missions include training soldiers, maintaining
ready forces, developing/maintaining/providing supplies and equipment,
and operational testing. Previously, major command commanders received
funds from the Department of Army to perform both installation and
mission functions. With these funds came a level of discretion to
reprogram between installation and mission accounts. As a consequence,
installations often suffered, and soldiers encountered a wide disparity
in terms of services and infrastructure provided from one installation
to the next.
Centralized installation management will allow MACOM commanders to
focus on their primary mission with the Installation Management Agency
having the responsibility of managing installation support operations.
A primary goal of the Installation Management Agency is to establish
common levels of base support services. With the Installation
Management Agency focusing on improving the quality of installations,
better installation management decisions can be made. Centralized
management of our installation operations ensures that the Army has a
strong installation advocate and provides better control over
installation funds.
The separation of mission and installation support functions and
their respective funding support provides increased controls for
ensuring funds will be spent for their intended purpose. To migrate
installation support funds to support other activities requires the
approval of Department of Army and provides added control over their
being used in areas other than their originally designated purpose.

32. Senator Akaka. Secretary Fiori, what is the current status of
the IMA and any future plans for the organization?
Secretary Fiori. Currently, IMA is at initial operating capability.
IMA is meeting the mobilization, deployment, redeployment, and other
related support requirements of the Army. IMA is creating partnerships
with Network Enterprise Technology Command (NETCOM) and the Army
Contracting Agency to improve efficiencies. Recruiting continues to
fill vacancies at headquarters and regions. The Army Reserve integrated
its headquarters engineering functions into the IMA Headquarters, with
an additional policy office established at the Assistant Chief of Staff
for Installation Management. The transfer of the remaining headquarters
base operations functions will be accomplished in conjunction with the
Army Reserve Restructuring initiatives.
Starting in fiscal year 2004 headquarters, IMA will fund the
garrisons directly. Volunteers will move among region offices into
permanent positions (right skills in the right locations). Garrisons
will be on the IMA table of distributions and allowances (TDA). By the
end of fiscal year 2004 region TDAs will be adjusted to reflect
business process redesign and full operating capability will be
achieved.

33. Senator Akaka. Secretary Fiori, how have current operations and
funding to support them affected the Army's implementation of IMA?
Secretary Fiori. Current operations have not expressly hurt Army's
implementation of IMA but have made IMA's mission much more complex.
The requirement to cash-flow or borrow against current funds to support
the global war on terrorism and Operation Iraqi Freedom has put
pressure on an already constrained base support program. In addition to
the cash-flow complexity, installation facilities and services are
operating at increased levels to support soldiers and their families,
driving costs further above budgeted levels. As a consequence, the
Army's cash position is getting perilously low, and we urgently need
full restoration in the form of a supplemental appropriation. IMA has
instructed installation commanders that support of current operations
supercedes other requirements and to fund these needs as they arise. In
order to remain solvent many installation commanders have deferred
facility restoration and modernization projects to conserve funds for
these needs. Without adequate restoral from requested supplemental
appropriations, installation facilities will continue to deteriorate
and many vital services will suffer.

NAVY INSTALLATION COMMAND

34. Senator Akaka. Secretary Johnson, in your written testimony you
discuss the creation of the Navy Installation Command planned for
October 2003 with an associated cost savings estimate of $1.6 billion
over the next 6 years. What are the factors of this initiative that
account for the estimated $1.6 billion cost savings?
Secretary Fiori. We anticipate savings in personnel, facilities and
base operational costs due to:

Streamlining of shore installation management
procedures and policies;
Elimination of redundant headquarters management
functions and cost;
Greater contractual efficiencies to provide facilities
services;
Simplification of the budgeting and funding process;
Increased consistency in standards and levels of
performance for base operations across Navy installations;
More focused support from contractors and support
organizations;
Expansion of regional management concept in providing
installation support; and
Greater use of information technology tools to
increase efficiency.

35. Senator Akaka. Secretary Gibbs, what steps has the Air Force
taken to efficiently manage its installations and to ensure that the
correct facilities are receiving the funding that they need?
Secretary Gibbs. The Air Force considers its installations critical
to operational success. We fly and fight from our installations, both
overseas and in the United States. During Operation Enduring Freedom,
we flew the longest bomber combat mission in history . . . 44 hours
traveling more than 16,000 miles . . . from Whiteman Air Force Base,
Missouri, against targets in Afghanistan. We believe that facility
management success begins at the bottom--direct installation commander
involvement is crucial.
Accordingly, ultimate responsibility for an installation rests with
the installation commander. Installation commanders are kept apprised
of facility related issues and control the major facility management
priorities for the installation. They ``own'' indigenous facility
management capabilities--facility operations and maintenance;
engineering planning, design, and construction management; fire
protection; and environmental management.
The Air Staff and MAJCOMs employ facility management staffs to
support installations with continuity of management standards and
certain core technical expertise not practically staffed separately at
each installation.
Although the Air Force takes a generally decentralized approach to
installation management, certain programs are managed centrally at the
Air Staff.
Military construction project prioritization. Installations develop
and submit military construction project programs to the MAJCOMs
(including the Air National Guard and Air Force Reserve), who in turn
submit MAJCOM military construction programs to the Air Staff. The Air
Staff uses the Air Force MILCON Model to develop a single, integrated
priority list (IPL). The resultant IPL emphasizes overall Air Force
priorities, which stem directly from installation commander priorities.
Military family housing and dormitory investment prioritization.
The Air Force's family housing and dormitory master plans are road maps
for meeting OSD's housing and dormitory investment goals. The Air Staff
centrally manages these plans, in order to provide consistent facility
standards and investment recommendations across all MAJCOMs and
installations. Our annual housing and dormitory budget requests are
developed using these plans.
Environmental restoration. The restoration program and funding
strategy are aligned with Defense Planning Guidance restoration program
goals to address Air Force-wide ``worst first'' requirements, based on
risk to human health and the environment.

HOUSING INITIATIVES

36. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, it seems that each of the Services has a different
approach to addressing inadequate housing concerns. Could each of you
please discuss your priorities for improving both barracks or
dormitories and family housing?
Secretary Johnson. Eliminating inadequate family and bachelor
housing is a high priority for the Department of the Navy. We are on
track and aggressively pursuing the elimination of inadequate family
and bachelor housing by fiscal year 2007.
Secretary Fiori. The Army places a very high priority on improving
housing for single soldiers and families. The fiscal year 2004 budget
contains $737.9 million in Military Construction, Army funds to improve
barracks for 5,500 soldiers bringing our extensive capital investment
campaign to 79 percent of completion. Three years ago we had a program
to improve our family housing by 2014. Today, thanks to significant
funding and an aggressive privatization program, we have plans and
funding in place to eliminate our inadequate housing by 2007. Further,
DOD has raised housing allowances so families living off post are able
to find adequate housing.
Secretary Gibbs. The Air Force Dormitory Master Plan is a
comprehensive, requirements-based plan, which identifies and
prioritizes our 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 a private room
standard to improve airman quality of life. Phase 1 is complete, and we
are now concentrating on the final two phases of the investment
strategy.
Our priority for family housing investment is to eliminate all of
our inadequate housing. The Family Housing Master Plan is our roadmap
and outlines our requirements for revitalization, divestiture through
privatization, and demolition. Currently, the Air Force has 40,000
inadequate units in its inventory. With the exception of four bases, we
will eliminate all of our inadequate housing in the United States by
2007. The remaining U.S. bases will be complete in 2008, and inadequate
bases at our overseas bases will be eliminated by 2009.

37. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, please discuss your experience with privatization
programs to date.
Secretary Johnson. The Department of the Navy has executed 9
Public-Private Venture Family Housing projects to date (Corpus Christi/
Ingleside TX, Kingsville TX, Everett 1 and 2 WA, Camp Pendleton 1 CA,
San Diego 1 CA, New Orleans LA, South Texas, and Beaufort/Parris Island
SC) resulting in the privatization of over 8,300 homes. These 9
projects conveyed 1,100 adequate homes (no renovation work required)
and will result in the renovation, replacement or new construction of
over 7,200 homes over the first few years.
The Department of the Navy has realized over $746 million in
initial construction for a Government investment of only $159 million.
This is over four times as many homes as we would have been able to
address utilizing traditional methods, with quality that surpasses
traditional military construction projects.
The Defense Authorization Bill for Fiscal Year 2003 contained pilot
Public Private Venture (PPV) authority for acquisition or construction
of bachelor housing. This legislation gave the Department of the Navy
authority to pursue no more than three unaccompanied bachelor housing
PPV pilot projects. We are developing pilot unaccompanied housing
privatization projects for Hampton Roads, VA; Camp Pendleton, CA; and
San Diego, CA. We hope to be able to complete the concepts for these
projects before the end of this fiscal year.
Secretary Fiori. The 1996 Military Housing Privatization Initiative
(MHPI) improves housing much faster and at less expense than
traditional military construction (MILCON). The Army's flexible
procurement approach reduces time, costs, and allows for the
collaboration with a development partner to design and build integrated
residential communities. We have seen significant progress at the 4
installations that have transitioned to privatized operations. Over 700
new homes have been constructed, more than 1,000 homes renovated; and
over 700 new homes are under construction. We have learned and applied
many lessons in the process.
Key stakeholder involvement is critical to the success of the
project (e.g., local governments, school districts, businesses,
employees, and soldiers and their families). Key issues such as
schools, infrastructure upgrades, environmental issues, historic
preservation compliance, housing market analysis, basic allowance for
housing surveys, and other issues must be addressed early on and during
the entire process. The Army developed RCI minimum standards for new
and replacement housing to ensure quality housing and communities for
all installations. The RCI program is also developing standard
boilerplates where appropriate, but generally each Community
Development and Management Plan is negotiated to reflect the unique
characteristics of the installation and local community. Further, as
the process evolves and the different review agencies gain familiarity
with the program/projects, review times are being reduced.
The Army is implementing a portfolio management process for
monitoring construction, renovation, operations, and project finances.
The goal of portfolio management is to systematically oversee the
management of real estate assets to protect the government's interests
over the 50-year term of the projects.
Secretary Gibbs. We have had success with our program to date, with
five projects awarded. While this equates to less than one project per
year since we received the Military Housing Privatization Initiative
authorities in fiscal year 1996, we expect to award an additional eight
privatization projects in the next 12 months.
While each project is different, we have been successful in
leveraging private-sector funds in each housing privatization project,
with an average in excess of 6: 1. This means that for every dollar of
government funds we commit to the project, we get better than six
dollars in equivalent military construction, a very good return on our
investment.
The projects that have been awarded to date were pilot projects,
and we have learned many lessons from each of these projects as well as
the projects that are currently in solicitation. We are incorporating
these lessons into each new project. For example, we use a generic
Request for Proposal template to accelerate and standardize the
submissions and evaluations, and we benchmark the fees and construction
costs the developers propose to ensure that we are getting a good deal
and maximize the benefit to the government.
In terms of quality of life on the part of the military member and
their families, they are very satisfied with the quality of the homes
and with the operations and maintenance by the real estate management
firms. Despite initial misgivings on the part of some commanders, the
projects are now well received by the commanders, as they see the
benefits to the member and to the Air Force.

38. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, what are your plans for privatization in the future?
Secretary Johnson. The Department of the Navy ultimately plans to
privatize approximately 69 percent (53 percent Navy and 95 percent
Marine Corps) of its worldwide family housing inventory by the end of
fiscal year 2007 in order to eliminate all inadequate family housing
and improve community support facilities for marines, sailors, and
their families.
The quality of homes and services obtained through public-private
venture initiatives has been excellent and residents have been pleased.
Privatization initiatives will not only accelerate the improvement of
family housing, but will ensure the homes and facilities are maintained
in good condition over the next 50 years.
We are developing pilot unaccompanied housing privatization
projects for Hampton Roads, VA; Camp Pendleton, CA; and San Diego, CA.
Secretary Fiori. The Army's RCI program includes 28 projects
totaling over 71,000 houses in the U.S. projects at Forts Carson, CO;
Hood, TX; Lewis, WA; and Meade, MD (consisting of over 15,700 houses)
have been implemented, and the remaining 24 projects are in progress or
planned through fiscal year 2005. Our plans are to transition these
projects to privatized operations in a timely manner, while ensuring
the long-term value and stability of the privatization agreement.
Ongoing and future project information is provided below.
The Army has selected partners for nine additional projects: (1)
Fort Bragg, NC; (2) Presidio of Monterey and Naval Postgraduate School,
CA; (3) Fort Campbell, KY; (4) Fort Belvoir, VA; (5) Fort Hamilton, NY;
(6) Fort Irwin, Moffett Community Housing and Parks Reserve Forces
Training Area; (7) Fort Stewart and Hunter Army Airfield; (8) Forts
Eustis, Story, and Monroe; and (9) Fort Polk. Installation teams are
collaborating with these partners to develop 50-year business plans
called Community Development and Management Plans. Transfers of assets
and operations are expected to occur in late fiscal year 2003 and
fiscal year 2004.
The Army has four projects in various stages of procurement: (1)
Picatinny Arsenal, NJ; (2) Walter Reed Army Medical Center, DC; (3)
Fort Detrick, MD; and (4) Fort Shafter and Schofield Barracks, HI.
The Army plans to solicit partners for the remaining 11 projects in
fiscal year 2003 and 2004: (1) Fort Leonard Wood, MO; (2) Fort Sam
Houston, TX; (3) Fort Bliss, TX; (4) Fort Drum, NY; (5) Carlisle
Barracks, PA; (6) Fort Benning, GA; (7) Fort Rucker, AL; (8) Fort
Gordon, GA; (9) Fort Knox, KY; (10) Fort Leavenworth, KS; and (11)
Redstone Arsenal, AL.
The Army is also implementing a portfolio management process for
monitoring construction, renovation, operations, and project finances.
The goal of portfolio management is to systematically oversee the
construction, operations, finances, and management of the project to
ensure operational compliance and financial stability over the 50-year
term of the projects.
Secretary Gibbs. We plan to award eight projects in the next 12
months, and we continue to analyze our U.S. bases for additional
privatization opportunities. We may add as many as 19 additional
privatization initiatives to meet our aggressive 2007 timeline. In the
end, we expect to privatize roughly 60 percent of our U.S. housing
inventory.

39. Senator Akaka. Secretary Johnson, could you please give us an
update of the Navy's Homeport Ashore initiative?
Secretary Johnson. There are approximately 18,100 sailors worldwide
who are required to live aboard ship even while in homeport. This
requirement is less than reported last year because of a recent change
to Navy policy allowing unaccompanied E4s to live off base. This new
policy is tied to the National Defense Authorization Act for Fiscal
Year 2001 that allowed the payment of BAR to E4s without dependents who
are assigned to sea duty. The Navy expects to achieve its ``home port
ashore'' initiative by fiscal year 2008 by housing two members per
room. Our fiscal year 2004 budget includes two ``homeport ashore''
projects. One represents the second increment of a Norfolk, VA project
that will provide a total of 500 spaces. The second project would
construct 500 spaces for shipboard sailors at San Diego, CA.

40. Senator Akaka. Secretary Johnson, in your written testimony you
state that the Navy ``relies first on the local community to provide
housing for our sailors, marines, and their families.'' Given today's
threat environment, how does the Navy propose to address force
protection concerns for those sailors and marines living off base on
the local economy?
Secretary Johnson. The Navy's force protection plans for families
living in the private sector are much the same as for civilians.
Currently, about three out of every four Navy families live in the
private sector, side by side with their civilian counterparts. Security
and protection for these families are provided through the existing
network of Federal, State, and local law enforcement authorities
currently protecting all of our citizens.
The dispersal of military personnel into the private sector reduces
the exposure of military personnel to force protection threats.
The regular training and awareness provided active duty members on
the issue of anti-terrorism and force protection contributes to the
safety of military families regardless of where they live.

UTILITIES PRIVATIZATION

41. Senator Akaka. Mr. DuBois, in last year's testimony you stated
that the Department was in the middle of reviewing the direction to the
Services to privatize all utility systems by September 2003. As a
result of your review, have you adjusted the completion milestone for
utilities privatization? If so, what is the new completion target date?
Mr. DuBois. Yes, following a review of each of the Service's plans
for completing utility privatization evaluations, the Deputy Secretary
of Defense directed the Defense Components to make source selection
authority decisions on all utility privatization evaluations by
September 30, 2005.

42. Senator Akaka. Mr. DuBois, what were the factors that
contributed to the decision to move back the completion date?
Mr. DuBois. The DOD Utilities Privatization Program has proven to
be more complex and time consuming than originally envisioned. The
Defense Components have taken longer to complete evaluations than was
anticipated when the previous completion date was set in 1998. In the
fall of 2001, industry representatives indicated that the quantity of
utility privatization solicitations was too great for them to complete
quality proposals prior to the closure dates. With over 750
solicitations already pending and the potential for another 500 being
issued, it was prudent to refine the guidance to incorporate numerous
lessons learned by the Components in new solicitations to make a number
of process improvements. The Components are aggressively executing
their utility privatization programs on schedule.

43. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, could each of you please discuss the status of your
utilities privatization efforts?
Secretary Johnson. The Department of the Navy is following a
thorough and deliberate process of privatizing its utility systems. As
of March 2003, the Department has issued requests for proposal (RFPs)
for 618 of 662 utility systems, or 93 percent. Of these 618 proposals,
RFPs for 278 systems, or 45 percent, have closed, and these systems are
now being evaluated, and three systems have been privatized. A total of
24 systems have been exempted from privatization due to security
concerns prior to issuance of an RFP, or due to economic reasons as a
result of the RFP.
Secretary Fiori. The Army has a successful utilities privatization
program. At overseas locations, we use host nation laws and regulations
and international agreements to privatize eligible systems. We have
privatized 215 of 589 systems in Europe. In Japan and Korea, 128
systems are exempted because privatization is not possible. We are
focused on privatizing large systems in the United States and have
privatized 67 and exempted 27 of 351 eligible systems. The remaining
257 systems are in various stages of the privatization procurement
process.
Secretary Gibbs. In accordance with OSD guidance, the Air Force
will attempt to privatize its utility systems through competitive
sourcing first, followed by sole source negotiations with the local
provider if there is no market interest. Of the 499 utility systems
available for privatization, there are 194 utility systems still
remaining to go through a privatization evaluation. These systems will
be released by May 2004, under revised Request for Proposal and Right
of Way templates that were developed in conjunction with utility
industry representatives. In addition, we have developed a Request for
Proposal template specifically for sole-source solicitations with
regulated utility providers. We anticipate these efforts will increase
interest in Air Force systems and streamline the evaluation process.

44. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, how many of your utilities systems have been
identified as candidates for privatization?
Secretary Johnson. The Department of the Navy has 662 utility
systems that have been identified as available to privatize. Of these,
24 systems have been exempted to date for either security or economic
reasons. The remaining 638 systems are candidates for privatization. Of
these, three systems have been privatized.
Secretary Fiori. The Army identified 351 systems for privatization
in the United States. Of these, the Army has privatized 67 and exempted
27 with the remaining 257 currently available as candidates for
privatization.
Secretary Gibbs. Of the 650 utility systems in the Air Force, 499
are available to privatize.

45. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, approximately what percentage of your utilities
systems do you expect to be able to privatize?
Secretary Johnson. The Department of the Navy has not made any
predictions of what percentage of its utility systems will be
privatized. Not all utility systems have the same potential to provide
industry with the return on investment they feel necessary before they
make a proposal. The final number of awards will be dependent upon
industry's ability to develop innovative proposals. The Department's
open-ended performance solicitations are meant to facilitate industry's
ability to develop these business opportunities.
Secretary Fiori. We are advertising 100 percent of our systems for
privatization. There are a total of 940 systems in Europe and the
United States. Of that total we expect to privatize approximately 80
percent.
Secretary Gibbs. Based on the level of interest and the economics
of the proposals we have received to date, we estimate privatizing 20
percent of our candidate systems.

46. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, are you on track to meet the date set by the Office of
the Secretary of Defense?
Secretary Johnson. In its 9 October 2002 ``Revised Guidance for the
Utilities Privation Program,'' the Office of the Secretary of Defense
established a date of 30 September 2005 for the Services to have a
source selection decision for each of its utility systems. The
Department of the Navy is on schedule to complete the utilities
privatization process to meet this goal.
Secretary Fiori. Yes, the Army is on track to complete a
privatization evaluation for each utility system by September 30, 2005
as set by the Office of the Secretary of Defense.
Secretary Gibbs. The Air Force has developed a very aggressive
schedule that will allow us to meet OSD's 30 September 2005 completion
milestone.

OVERSEAS BASING AND MILITARY CONSTRUCTION

47. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, could each of you please discuss the support you
currently receive through host nation construction programs such as
Japan Facilities Improvement Program (JFIP) in Japan and the Funded
Construction Program in Korea as well as support in Europe?
Secretary Johnson. The Navy and Marine Corps receives host nation
funded construction (burden-sharing) support from Japan and Korea. The
Japanese Facilities Improvement Program is funded by the Japanese
Defense Agency and supports four categories of projects: force
structure or mission increases, family housing and community support,
Japanese initiatives including environmental and safety issues, and
service initiatives. In Korea, two cost sharing programs are in use
including the Combined Defense Improvement Fund (CDIP) and the Republic
of Korea Construction Fund (ROKCF). The CDIP supports construction of
facilities to improve combat operations, war reserves and combined
U.S./Korea operations. The ROKCF supports quality of life and sole U.S.
use projects. In Europe, we use every available funding source,
including the NATO Security Investment Program (NSIP) for those
eligible projects, residual value and payment-in-kind in partnership
with the host nations.
Secretary Fiori. The host nation funded construction programs
consists of the Facilities Improvement Program (FIP) in Japan, the CDIP
and the ROKFC program in Korea. In Europe, we also have a payment-in-
kind (PIK) program in Germany under which we use residual value to
build facility.
The primary host nation funded construction program is the FIP,
which has provided about $700 million of construction per year. The
program was implemented in 1979 and over the past 20 years, the
Government of Japan has built $19 billion of new quality of life and
operational facilities for our U.S. service members.
In Korea, the CDIP was initiated in 1982 by the Republic of Korea
(ROK) to share the financial burden of maintaining U.S. forces in
Korea. The CDIP funds projects that support only warfighting and
operational facilities and total about $50+ million of construction per
year.
The ROKCF program was established in 1991. It provides well-being
facilities, infrastructure, as well as warfighting projects. The ROKCF
program funds about $135+ million of construction per year.
Residual value is a method for Germany to provide compensation for
the Army's improvements to facilities on installations we return to
Germany. PIK is residual value that comes in the form of construction
credits. The PIK program awarded $244 million in construction projects
through fiscal year 2002.
Secretary Gibbs. The Air Force receives support, in the form of
host-nation funded construction, from NATO, Japan, and Korea. In recent
years, that support has averaged roughly $300 million per year. The
funds provided by these countries are used to construct facilities that
directly support Air Force missions, as well as facilities that support
quality of life for Service members and their families stationed
overseas.
For example, The NATO contribution helps offset construction
supporting the Air Force's roles in the NATO mission. The Japan
Facilities Improvement Program (JFIP) supports ``defensive''
warfighting capabilities, such as aircraft shelters, and may be used to
replace ``offensive'' capability facilities that predate 1979. The
Korean CDIP funds combined Republic of Korea-United States warfighting
requirements; while the ROKCF program funds mission support and
quality-of-life requirements.
In addition, under the Rhein Main transfer program, Germany is
helping to pay for facility construction at Ramstein and Spangdahlem
Air Bases necessary to relocate the missions currently at Rhein Main
Air Base. In total, Germany is investing nearly $400 million to help
pay for construction associated with this relocation. The majority of
this construction will occur in 2004 and 2005.

48. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, what is the status of each of these programs and how
do we currently benefit from these partnerships?
Secretary Johnson. All of these programs are active and help share
the financial burden of a forward deployed posture. In fiscal year 2002
we received $341 million from the JFIP program to include $80 million
for improvements to the Yokosuka Carrier Pier, and $4.5 million from
ROKCF to include a $3.8 million Medical Clinic in Chinhae. In Europe,
we use every available funding source, including the NATO Security
Investment Program (NSIP) for those eligible projects, residual value
and payment-in-kind in partnership with the host nations.
Secretary Fiori. The various host nation funded construction
programs continue to be active and important programs for our forces
overseas by providing quality of life and operational facilities at
little or no cost to the U.S. taxpayer.
Secretary Gibbs. The Air Force receives support, in the form of
host-nation funded construction, from NATO, Japan, and Korea. In recent
years that support has averaged roughly $300 million per year. The
funds provided by these countries are used to construct facilities that
directly support Air Force missions, as well as facilities that support
quality of life for Service members and their families stationed
overseas.
For example, The NATO contribution helps offset construction
supporting the Air Force's roles in the NATO mission. The Japan
Facilities Improvement Program (JFIP) supports ``defensive''
warfighting capabilities, such as aircraft shelters, and may be used to
replace ``offensive'' capability facilities that predate 1979. The
Korean CDIP funds combined Republic of Korea-United States warfighting
requirements; while the ROKCF program funds mission support and
quality-of-life requirements.
In addition, under the Rhein Main transfer program, Germany is
helping to pay for facility construction at Ramstein and Spangdahlem
Air Bases necessary to relocate the missions currently at Rhein Main
Air Base. In total, Germany is investing nearly $400 million to help
pay for construction associated with this relocation. The majority of
this construction will occur in 2004 and 2005.

49. Senator Akaka. Secretary Fiori, could you please give an update
on the Army's Efficient Basing East (EBE) initiative? What were the
reasons to pursue these initiatives, and what are the benefits or cost
savings that we expect to gain?
Secretary Fiori. EBE will consolidate the activities of 13
installations in Germany onto one installation in the Grafenwoehr area,
allowing for the closure of 12 aging inefficient installations and the
partial closure of a 13th. EBE will enhance unit readiness and
effectiveness by improving command and control by consolidating a
brigade now scattered over 25 square miles to one location. It will
enhance force protection by reducing the number of installations that
must be guarded. Training will improve by relocating units closer to
major training areas. Soldier quality of life will also be improved
because new housing, and renovated or new mission facilities will be
provided in lieu of currently occupied poor condition and inefficient
pre-WWII facilities.
EBE is a 5-year phased program (fiscal years 2003-2007). The total
cost for EBE military construction, Army (MCA) construction is
estimated at $558.2 million. In fiscal year 2003, projects for site
preparation, utilities infrastructure, and barracks are funded at $69.9
million. In fiscal year 2004, $76 million has been requested to
construct troop barracks, troop support facilities, maintenance
facilities, and operations facilities. In fiscal year 2004, Department
of Defense Education Activity has programmed $37.1 million for school
projects and Department of Defense Health Affairs has programmed $12.6
million for a dental/health clinic expansion. Army family housing
requirements will be satisfied with construction of 1600 build-to-lease
units in fiscal years 2005-2008.
Approximately $19 million annually in estimated savings will be
achieved once EBE is completed. Savings will be from reduced base
operational costs and installation management overhead because of a
reduced footprint and eliminating small, costly, and inefficient
installations. Additional savings will also be realized from reduced
operational training costs.

50. Senator Akaka. Secretary Fiori, could you please give an update
on the Land Partnership Plan with Korea?
Secretary Fiori. The Land Partnership Plan (LPP) agreement was
signed in March 2002 and ratified by the Korean government in November
2002. It is now being executed though no land has been exchanged.
However, host nation funded projects have been started at enduring
locations associated with LPP. The locations of U.S. Forces Korea
installations in the LPP are currently under review based on the
requirement by the Secretary of Defense that geographic combatant
commanders prepare an integrated presence and basing strategy by 1 July
2003. The LPP has a provision to modify the installations specified if
needed.

51. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, recently there has been discussion surrounding the
increased strategic importance of both Guam and Hawaii in considering
future forward presence in the Pacific. Could each of you please
discuss future strategic considerations for both Guam and Hawaii as
they relate to your respective missions?
Secretary Johnson. The Navy and Marine Corps has long recognized
the strategic value played by both Guam and Hawaii in support of the
Joint Force. Both are essential to maintaining the U.S. forward Naval
presence within the Asia Pacific Rim and significantly improve the
operational flexibility and efficiency of Naval forces.
Together with the Office of the Secretary of Defense, we are
studying various options for both Guam and Hawaii as we move forward
with the Navy and Marine Corps' new Global Concept of Operations
(CONOPs). Under the Global CONOPs, today's carrier battle groups
(CVBGs) and amphibious ready groups (ARGs) will be re-configured into
carrier strike groups (CSGs) and expeditionary strike groups (ESGs). In
addition, the CONOPs also envisions surface action groups (SAGs)
devoted to theater ballistic missile defense. Both Guam and Hawaii are
being reviewed in various contexts to ascertain the best way of
maximizing the forward deterrent value of these forces.
The Navy has already taken steps to improve its forward deployed
posture by implementing a plan to homeport three fast attack submarines
(SSNs) in Guam. Submarine Squadron 15 was established in Guam in fiscal
year 2002, the U.S.S. City of Corpus Christi arrived in October 2002,
the U.S.S. San Francisco arrived in December 2002, and the U.S.S.
Houston is to arrive in 2004. Forward basing SSNs in Guam reduces
transit time to/from station, equating to greater time ``in theater''
and additional mission days to fulfill national and fleet requirements.
Guam is 2,100 nautical miles (7 full steaming days) closer to the
Arabian Gulf than Norfolk and Pearl Harbor, and as such, it is uniquely
positioned to support continued Naval forward presence in the Pacific
in the future. Additionally, its status as a U.S. territory allows
storage and loading of pre-positioned war munitions without the need to
obtain the consent of a foreign government. Moreover, Guam can be used
as an intermediate staging base and safe haven for potential non-
combatant evacuation operations within the Pacific theater. Finally,
both Guam and Hawaii do not have any diplomatic issues to address.
Guam, as a U.S. territory, is the only guaranteed fail-safe against the
loss of basing rights in East Asia.
Hawaii is home to the Commander, U.S. Pacific Fleet, U.S. Submarine
Force, three submarine squadrons and their 25 submarines assigned to
Pearl Harbor. COMNAVMIDPAC Headquarters and numerous surface warships
are homeported in Pearl Harbor, Hawaii. The Pacific Fleet's Maritime
Surveillance and Reconnaissance Commander's headquarters (with four VP
and VPU (P-3) squadrons) are located at MCB Kaneohe Bay. These forces
are approximately 1 week closer to the Asia Pacific region than are
West Coast forces, and thus, add flexibility/quicker response times to
mission essential tasking. Pearl Harbor is the largest U.S. Naval Base
outside of the continental United States. Consideration is being given
to a proposal to relocate additional warships from the West Coast to
Pearl Harbor to take advantage of Hawaii's proximity to the WESTPAC
theater of operations. However, considerable infrastructure would be
required to make such a move. Lastly, NCTAMS PAC is the main hub for
Pacific Command (Joint) Communications.
Secretary Fiori. East Asia and the Pacific will continue to be a
region of strategic importance and is the focus of the Army's
transformation efforts. Given the vast expanse of the Pacific Ocean and
the great distances between the Continental United States (CONUS) and
East Asia, stationing U.S. Army forces forward is absolutely critical
to reducing response time for potential contingency operations in the
region. Hawaii and Guam are key locations for basing of forces and
providing sustained logistical support to Army forces.
In the future, Hawaii will continue to be an important forward base
in support of U.S. military objectives in the Pacific. The 25th
Infantry Division will play a critical role in the Army's efforts to
transform the Legacy Force into the Objective Force of the future that
will provide Commander, Pacific Command (PACOM) with a more lethal and
survivable force that maximizes the use of the latest information
technology. Starting in fiscal year 2004, military construction
resources will be dedicated to preparing facilities in Hawaii for
interim and future transformation efforts. Key programs include
upgrades of training facilities, expansion of troop barracks and
construction of an information systems facility.
Guam's location provides the Army with an indispensable support
base for operations in the East Asian Littoral. While there are no
active Army combat forces stationed on Guam, Guam provides important
logistical and maintenance support for the Army vessels that make up
the Army Pre-positioned Stocks (APS) 3 afloat fleet. With its airfield,
seaport and strategic location, Guam can serve as an Intermediate
Staging Base (ISB) to support contingencies in the East Asian Littoral,
as well as Northeast Asia. The Army National Guard has a construction
project in the Future Years Defense Program for a Combined Maintenance
Facility on Guam.
Secretary Gibbs. Both Hickam Air Force Base, Hawaii, and Andersen
Air Force Base, Guam, are important strategic enroute locations for air
power projection in the Pacific theater. The robust infrastructure, to
include extensive airfield pavement and fuel storage, at both locations
make them key in creating and sustaining the airbridge connection
between the continental United States and points in the Pacific region.
With the global war on terrorism and heightened tensions in Southwest
Asia, combined with the loss of our military installations in the
Philippines, these bases have become increasingly vital.

52. Senator Akaka. Secretary Johnson, Secretary Fiori, and
Secretary Gibbs, what kind of MILCON requirements do you foresee in
support of these missions?
Secretary Johnson. No additional military construction is currently
needed at Guam to support the homeporting of three fast attack
submarines.
The Navy is considering a proposal to relocate additional warships
from the West Coast to Pearl Harbor to take advantage of Hawaii's
proximity to the WESTPAC theater of operations. However, considerable
infrastructure would be required to make such a move. If this proposal
is considered to be in the best interests of the Navy, infrastructure
requirements (if necessary) would be reflected in future budget
submissions.
The roles of Guam and Hawaii in the Marine Corps strategic basing
plans are under study. When the Marine Corps strategic plans are
complete, MILCON requirements will be programmed accordingly.
Secretary Fiori. The Army is planning to make significant MILCON
investment in Hawaii in support of our presence in the Pacific.
Currently known Military Construction, Army (MCA) requirements that
support the Hawaii transformation and combat systems include various
training facilities, land acquisition, airfield upgrades, maintenance
facilities, barracks and road improvements. The Army National Guard and
Army Reserve have requirements that include training and maintenance
support facilities and an Army Reserve Center.
The Army National Guard has a requirement for a Combined
Maintenance Facility on Guam.
Secretary Gibbs. At Hickam AFB, we are bedding down C-17s, which
will drive over $100 million in military construction requirements.
We are considering a number of permanent beddown options at
Andersen AFB. If we decide to beddown any new missions at Andersen AFB,
we will require military construction projects to enhance the flight
line and base operations, construct additional personnel housing,
improve the utilities infrastructure, and provide community support
facilities.

VIEQUES

53. Senator Akaka. Secretary Johnson, what are the MILCON or land
acquisition requirements associated with the Navy's Training Resource
Strategy and the cessation of training at Vieques?
Secretary Johnson. There are no MILCON projects for Training
Resource Strategy (TRS) in the fiscal year 2004 future years defense
plan. We are in the process of determining possible facility needs at
NAS Key West in support of TRS.
The Training Resource Strategy uses existing Department of Defense
ranges and training facilities along the East and Gulf coasts. The Navy
is providing minor construction enhancements and repairs to existing
facilities in order to provide the support needed for TRS requirements.
There are no known land acquisition requirements associated with
TRS.

54. Senator Akaka. Secretary Johnson, how many of these
requirements are funded across the future years defense plan?
Secretary Johnson. All minor construction enhancement and repairs
to existing facilities in order to provide support needed for TRS
requirements are accounted for in the fiscal year 2004 future years
defense plan.
There are no MILCON projects to support TRS in the fiscal year 2004
future years defense plan. However, if it is determined that MILCON is
needed to satisfy TRS requirements, these projects would be included in
future budget submissions.

ENVIRONMENTAL PROGRAMS

55. Senator Akaka. Mr. DuBois, last year, Congress appropriated
$478 million for pollution prevention (also called ``P2'') and
environmental technology, the budget categories designed to help us
with the environmental problems of the future. This year, the
Department has requested only $362 million for P2 and technology, a
reduction of almost 30 percent. Does the administration believe that
its budget fully addresses all potential areas of environmental
research and pollution prevention that would have a long-term payback
for the Department, and that nothing has been left on the table?
Mr. DuBois. The Department has made great strides in implementing
pollution prevention and there continue to be areas in environmental
technology, including pollution prevention, that are ripe for
investment.
Yes, the Department of Defense's budget request does fully address
our pollution prevention needs. The Department's pollution prevention
program has evolved over the past several years. The DOD components
have achieved all of the pollution prevention goals previously
established. They have also worked diligently to incorporate pollution
prevention into every day decision making across all missions and
functions. Many of the pollution prevention investments have been
initial purchases of equipment and material substitution, which the DOD
components have completed. Instead of using pollution prevention funds,
the various functional areas are now investing in the new generations
of equipment and materials that are both more efficient and less
polluting, as part of normal equipment cycles and budgets. In addition,
many of the investments in compliance, while they address a traditional
compliance driver, are focused on the front end of a process or a
material substitution--prevent the creation of pollution rather than
collecting and treating pollution. The next evolution is the
establishment of environmental management systems (EMS). Effective EMS
will further help installations and activities identify, prioritize,
and address risks--risks to mission, risks to resources, risks to the
environment (pollution).
Executive Order 13148 established new pollution prevention goals--
reduce Toxic Release Inventory (TRI) emissions 40 percent between 2001
and 2006. We have just received the 2001 TRI numbers. The DOD
components are now analyzing the TRI numbers and identifying areas that
are economically and technically feasible for reductions. They will
budget to address these problems in future budget requests.
The Department is committed to sound investments in technology,
including the Strategic Environmental Research and Development Program
(SERDP). As reflected in the President's budget, the Department
continues to be strongly committed to SERDP. This technology program is
critical to meeting our environmental obligations, preserving access to
DOD ranges, and lowering the environmental costs across the Department.

56. Senator Akaka. Secretary Gibbs, we have been told that the Air
Force has agreed to indemnify Lockheed Martin approximately $100
million for the cost of remediating perchlorate in the ground water at
a Lockheed plant. Section 348 of the National Defense Authorization Act
for Fiscal Year 1998 required the Department to develop uniform
guidelines for cost recovery and cost-sharing in environmental
remediation. Section (c)(2) of that provision specifically required the
Department to develop a process to ``identify any negligence or other
misconduct that may preclude indemnification or reimbursement by the
Department of Defense for the costs of environmental restoration at (an
environmental remediation) site or justify the recovery or sharing of
costs associated with such restoration.'' Is it true that the
Department has agreed to indemnify Lockheed-Martin $100 million for
perchlorate releases at one of its defense plants?
Secretary Gibbs. Current policies and procedures under the Defense
Contracting Audit Manual, Section 7-2120.3 (2002) allow contractors to
recover environmental costs from the United States as a cost of doing
business absent a showing of gross negligence or willful misconduct.
While the Air Force has a continuing dialogue with Lockheed Martin
about perchlorate clean-up at one of its facilities, there is no
agreement to indemnify it for any portion of the clean-up.

57. Senator Akaka. Secretary Gibbs, has the Department conducted a
legal analysis to determine whether it is required to indemnify the
contractor for such clean-up?
Secretary Gibbs. A legal analysis has been initiated therefore the
issue of indemnification has not been resolved. Issues of potential
negligence or misconduct have yet to be fully investigated or
addressed. Be assured that any agreement in this matter will be fully
investigated and analyzed in accordance with applicable law.

58. Senator Akaka. Secretary Gibbs, did the analysis specifically
address the question of possible negligence or other misconduct by the
contractor?
Secretary Gibbs. As previously indicated, the analysis has been
initiated therefore, the issue of indemnification has not been
resolved. Issues of potential negligence or misconduct have not yet
been fully investigated. Please be assured that this matter will be
fully investigated and analyzed in accordance with applicable law. Any
future agreement will be made on the basis of that investigation and
the applicable law.

59. Senator Akaka. Secretary Gibbs, may we have a copy of any such
analysis?
Secretary Gibbs. We do not have a completed analysis at this time.
Once completed, if the analysis is not otherwise privileged from
disclosure, we would be pleased to provide you a copy.

60. Senator Akaka. Secretary Gibbs, in view of the fact that this
$100 million expenditure could just be the tip of the iceberg in terms
of perchlorate remediation, would you agree that the Department has a
strong interest in developing more cost-effective means of remediation?
Secretary Gibbs. The Department has and continues to have a strong
interest in developing more cost-effective remediation technologies.
The DOD Strategic Environmental Research and Development Program
(SERDP) has recently developed new remediation technologies that will
significantly reduce the cost of perchlorate clean-up. These
technologies are now undergoing field testing under the Environmental
Security Technology Certification Program (ESTCP); In addition to
investing in improved remediation technologies, the DOD through SERDP
plans a significant future investment to develop perchlorate
replacements to avoid future contamination.

61. Senator Akaka. Secretary Gibbs, can you tell us how much the
Department proposes to invest in such technology in this year's budget?
Secretary Gibbs. The DOD through the SERDP and the Environmental
Security Technology Certification Program (ESTCP) invested $1 million
in fiscal year 2002, is investing $1.1 million in fiscal year 2003 and
plans to invest $1.5 million in fiscal year 2004 in perchlorate
remediation technology.

RANGE MANAGEMENT

62. Senator Akaka. Mr. DuBois, Secretary Johnson, Secretary Fiori,
and Secretary Gibbs, DOD is actively engaged in a number of activities
to operate and fund ranges. These include normal testing operations,
Service and joint training, and experimentation. Given the increasing
pressures on range requirements, including increasing weapon ranges and
challenges of urbanization, it seems that the imperative for maximizing
the use of DOD ranges is growing. To that end, what are each of you
doing to ensure that range use for all three purposes (testing,
training, and experimentation) is being optimized?
Mr. DuBois. The pressures and demands facing our range
infrastructure are certainly increasing. DOD recognizes that we must
find flexible and creative solutions to be able to continue to test and
train effectively. While our existing range lands are clearly critical
to the military mission, we realize that we cannot easily expand or
duplicate these capabilities elsewhere to satisfy emerging needs. DOD
is responding aggressively to optimize the use of our ranges. The
Sustainable Ranges Initiative is identifying range requirements,
documenting capabilities and shortfalls, and considering utilization
solutions as one aspect of a comprehensive solution to long-term
preservation of our Nation's test and training capabilities.
The distinction between testing and training ranges is already
blurred. Many of our premier test ranges are heavily involved in
Service and joint training activities, and vice versa. Eglin AFB, FL,
is a prime example; as a premier Air Force test range, it supports a
wide range of weapons systems and ordnance testing, while
simultaneously sustaining a spectrum of Air Force, sister Service and
joint training and experimentation needs. San Clemente Island, CA, a
naval training range supporting the Pacific Fleet, conversely supports
a number of testing activities for the Navy and sometimes other
Services. Many other test and training ranges support each other's
requirements, and this trend towards increasing collaboration will
continue. As you note, joint training and experimentation capabilities
are also of increasing importance to our Nation's defense. The Joint
National Training Capability, a new DOD initiative to meet today's
joint force training needs, will stress the development and
implementation of joint training/exercise capabilities at many premier
ranges. This and similar DOD efforts are leading the way to more
integrated range use.
Secretary Johnson. Department of Defense ranges serve a wide
variety of users who, in turn, have a wide variety of requirements that
must be met. Historically, we have managed our ranges based on their
principal mission and the associated instrumentation required to
support that mission. ``Customers'' utilize the ranges that best fit
their respective circumstances and needs. For example, training events
are nearly 20 percent of the Navy Test and Evaluation (T&E) range
customer base, where they perform training missions such as Electronic
Warfare (EW), Mining Exercises, Air-to-Ground ordnance delivery,
undersea warfare and missile shoots. Similarly, operational T&E is
normally conducted in conjunction with fleet training events using
training venues. Various events in T&E, training and experimentation
are conducted where it makes the most sense to accomplish the task.
In order to bring together the range managers and range users at
all levels, the VCNO chartered the Navy Training Range and Oparea
Organization (NTROO) in the fall of 2001. With a 2-star executive
steering group and membership across all Navy disciplines, NTROO
ensures a better coordinated plan to address range needs and concerns
through a regularly held collaborative venue. The organization includes
not only training range members, but also representatives from the T&E
ranges and Marine Corps Training and Education Command.
For the East Coast, the implementation of the Training Resources
Strategy (TRS) will increase the use of some of the CONUS-based ranges
as a result of the closure of Vieques. However, this increased activity
at the ranges fits well within their operating capacity, and TRS
encourages greater joint interaction opportunities since we are using
multiple resources in closer proximity to our force's home bases. Using
existing range capabilities and capacities regardless of Service
affiliation optimizes training. Optimized use of these ranges is
further enhanced by ongoing regional range cooperative agreements used
to link range missions together in an effort to share limited resources
supporting Service training and test requirements. Examples of these
efforts include, but are not limited to, Navy SEALs training at the
Army's Aberdeen Range, Ft. Knox, KY, and the USMC's Chocolate Mountain
Range in Arizona. Under TRS, aircraft from carriers in the Gulf of
Mexico will use Eglin AFB's range of real world electronic threats and
deliver live ordnance against defended targets.
Though the Marine Corps does not have any ranges specifically
dedicated to testing or experimentation, it does have extensive
training lands that have been subjected to all of the pressures of
urbanization and that face the ongoing challenge of meeting the
changing training demands dictated by new weapon systems and new
tactical employment doctrine. The Marine Corps established an Office of
Range and Training Area Management in October 2001 and that office has
embarked upon a three-part program to sustain, upgrade, and modernize
ranges to assure their continued accessibility and viability.
To preserve and protect our ability to train today and in the
future, the Department of the Navy is fully supporting the Range
Readiness Preservation Initiative currently before Congress. The
provisions approved by the last legislative session included the
critical ability to acquire buffer lands around our ranges to assist in
mitigating the impacts of urbanization. We have a number of initiatives
underway to make use of that legislation by obtaining land that would
help in buffering both the direct effects of urban building at base
boundaries and the secondary consequences of urban growth that have
made our bases ``islands of biodiversity'' in otherwise unconstrained
urban growth areas. In addition, to better optimize our use of ranges
today, the Marine Corps has partnered with the United States Army to
develop a web-based range scheduling and utilization program that will
provide efficiencies in range usage, promote cross-Service utilization
of ranges, and help relate our ranges to the readiness of our bases and
forces. The program will also allow us to better articulate the value
of ranges that are threatened by encroachment and to better plan for
future range development.
To ensure that our ranges meet our future training needs, the
Marine Corps has commissioned a study to assess future training
requirements and their associated range requirements and has
articulated, and begun to fund, a range investment strategy that will
permit our ranges to meet both emerging Service and joint training
standards.
Secretary Fiori. Let me address how we are optimizing testing,
experimentation and training range assets in the Army. Some of our test
activities, particularly operational tests, and most experiments are
already conducted on installations that house operational units or
schools that are primarily focused on training. So, training ranges are
used for testing and experimentation. An example of that is Fort Hood,
TX. Our four major test ranges: Aberdeen Proving Ground, MD; Yuma
Proving Ground, AZ; Dugway Proving Ground, UT; and White Sands Missile
Range, NM, are uniquely configured to test specific families of weapons
systems and weapons systems capabilities. However, their ranges also
routinely host training. Such training is primarily conducted by the
Reserve component (RC), but is not limited to our RC. Active component
units engaged in supporting operational tests at those locations will
take advantage of time and facilities there to conduct training. In
addition, we are continuously seeking synergism and commonality in
range technology (targetry and instrumentation) for the testing and
training range functions. Finally, we are undertaking the development
of an Army Range and Land Strategy that will review capabilities and
attributes of all ranges to seek improved dual testing and training use
and to support the Secretary of Defense's Training Transformation (T2)
initiative.
Secretary Gibbs. The Air Force is continually assessing the
adequacy of its ranges in relation to mission. Adequacy can be thought
of in terms of time, proximity, volume, and attributes. Time relates to
having ranges and airspace available when they are needed. Proximity
relates to the distance traveled to a range or airspace. Volume relates
to the physical dimensions of the range or airspace. Attributes relate
to things such as terrain, scoring systems, instrumentation,
facilities, etc. that are necessary to accomplish a given mission. When
a range is judged to be inadequate for a mission an assessment of the
tradeoffs among the various variables needs to be made. In cases where
a change needs to be made that will establish, change the use of,
modify, or delete ranges and airspace a review process exists to vet
how best to meet the requirement in the broader context of total ranges
and airspace available. For instance, although a range may already
exist to meet a particular mission requirement, the time that would be
spent in just traveling back and forth to it would make it more cost
effective to build a new range closer to the user. Analysis such as
these have resulted in the Air Force opening 5 new ranges over the last
5 years while shutting down two and relinquishing another approximately
140,000 acres of public land deemed no longer critical to mission
accomplishment.

63. Senator Akaka. Mr. DuBois, Secretary Johnson, Secretary Fiori,
and Secretary Gibbs, are the funding structures (i.e., revolving funds
vs. appropriations, Service vs. joint funding) appropriate for and
adequate to support the best use of our military land? If not, what
changes would you propose?
Mr. DuBois. As a rule, existing funding structures are appropriate
to support the best use of military lands. In general, range funding
should continue to flow through the appropriations cycle to the
Services, allowing them to address their Title 10 range management
responsibilities in ways most appropriate for their needs. DOD has no
concrete recommendations for change at this point in time. We will
continue to assess the situation and work with Congress as necessary to
address emerging range funding issues.
Secretary Johnson. Yes. The current systems meet the needs of both
the suppliers and users of range services.
There are some concerns in planning for future range usage because
of the emerging and still evolving joint training standards that may
dictate particular range technologies that have not been resourced. We
will continue to work closely with the Joint Forces Command and the
Office of the Secretary of Defense to ensure that we are appropriately
positioned and resourced to support the goals of training
transformation as they pertain to ranges and training areas.
Secretary Fiori. The Army's current means of funding ranges
involves a number of appropriations. We believe the current system of
funding by appropriation within the Services serves our needs.
Secretary Gibbs. I believe adequate mechanisms are being pursued to
make the best use of our military lands, although all these efforts are
in the early stages and will require some time. A number of
appropriations support the use of our military lands with a diverse mix
of functional communities managing these funds. Our operators use
operation and maintenance funds to fulfill day-to-day test and training
activities at our ranges. For example, the civil engineers fund for
functions like natural and cultural resource management. There are also
active duty, Guard, and Reserve components responsible for the ranges--
each with different funding sources.
In order to better understand how this all fits together, our range
community is working towards building a comprehensive range plan that
will delineate requirements and costs for ranges along various
investment areas. We have also instituted an Air Force Ranges
Investment Council. This body reviews investments being made in USAF
ranges by the test and training communities to ensure compatibility and
synergy while minimizing unnecessary duplication.
Finally, we are pursuing capabilities based planning and
programming to help us define the test and training requirements that
underpin our range requirements. From the joint perspective, we are
working with OSD, JFCOM, and the other Services to build a Training
Transformation Implementation Plan that will help us further make the
best use of our lands and resources.

[Whereupon, at 3:55 p.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

----------

THURSDAY, MARCH 13, 2003

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

THE IMPACTS OF ENVIRONMENTAL LAWS ON READINESS AND THE RELATED
ADMINISTRATION LEGISLATIVE PROPOSAL

The subcommittee met, pursuant to notice, at 2:10 p.m. in
room SH-216, Hart Senate Office Building, Senator John Ensign
(chairman of the subcommittee) presiding.
Committee members present: Senators Inhofe, Ensign, Levin,
Akaka, E. Benjamin Nelson, Clinton, and Pryor.
Majority staff members present: William C. Greenwalt,
professional staff member; and Ann M. Mittermeyer, counsel.
Minority staff members present: Maren R. Leed, professional
staff member; Peter K. Levine, minority counsel; and Christina
D. Still, professional staff member.
Staff assistants present: Michael N. Berger, Andrew W.
Florell, and Jennifer Key.
Committee members' assistants present: John A. Bonsell,
assistant to Senator Inhofe; Russell J. Thomasson, assistant to
Senator Cornyn; Davelyn Noelani Kalipi, assistant to Senator
Akaka; William K. Sutey, assistant to Senator Bill Nelson; Eric
Pierce, assistant to Senator E. Benjamin Nelson; Andrew
Shapiro, assistant to Senator Clinton; and Terri Glaze,
assistant to Senator Pryor.

OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

Senator Ensign. Good afternoon. The Subcommittee on
Readiness and Management Support is meeting to review a series
of environmental issues that the administration has identified
as having adverse impacts on military readiness. We will also
address the administration's related legislative proposals.
Senator Akaka will be here shortly. I look forward to
working with him. In an effort to accommodate his interests,
the subcommittee will hold a second hearing that will address
the interests of States and environmental interest groups. I
believe that together these hearings will reflect a shared
desire to seek meaningful and informative testimony that will
help the subcommittee to better understand these environmental
issues and the administration's legislative proposal. I know
Senator Akaka joins me in welcoming the distinguished
witnesses.
I very much appreciate the participation of General John
Keane, Vice Chief of the Army, Admiral William Fallon, Vice
Chief of Naval Operations, General William Nyland, Assistant
Commandant of the Marine Corps, and General Robert Foglesong,
Vice Chief of the Air Force.
Specifically, the issues that the subcommittee will cover
in this hearing will relate to endangered species and critical
habitats, marine mammals, general conformity under air
pollution controls, and the management of munitions and
unexploded ordnance on active ranges. I anticipate that we will
be exploring both the individual and cumulative impact of these
issues.
I am aware that the military departments have been
grappling with these issues for several years. In fact, last
year, Congress received the administration's legislative
proposal for the first time. Unfortunately, those proposals
were submitted relatively late in the year, and it was
difficult for Congress to address them in any kind of
meaningful way.
This year, it is my hope that a valuable record will be
developed as these issues are revisited in this Congress. The
administration's proposed legislative changes have triggered
controversy over the fear that this is an attempt to roll back
important environmental laws. It is my understanding, however,
that efforts to provide training flexibility within the
existing statutory and regulatory framework have resulted in
litigation.
Recently, a Federal district court in Arizona held that the
natural resource management plans could not be used as a
substitute for critical habitat designation under the
Endangered Species Act. The Marine Corps Air Station at Miramar
was confronted with a similar challenge. Both cases raise
concerns about the ability of the U.S. Fish and Wildlife
Service to use management safeguards as a substitute for
critical habitat designation under current law.
The Marine Mammal Protection Act has been the basis of
several lawsuits that impacted the Navy's ability to implement
mission-critical low range, low frequency sonar and stopped the
testing of whale-tracking sonar that could help vessels avoid
hitting whales.
These cases suggest that the current definition of
``harassment'' has profoundly affected both vital training and
research. On April 14, 2002, a coalition of environmental
groups sued the Army and asserted that munitions deposited on
the range at Fort Richardson, Alaska violated environmental
laws. These groups are seeking a permanent injunction to halt
live-fire training at Fort Richardson. If the court rules
against the Army, this case would establish a bad precedent for
other live-fire military training ranges.
I would like to hear about the impact of environmental laws
on readiness, particularly in light of the increased litigation
in this area. With the possibility of war in Iraq, I am very
concerned about environmental restrictions that may diminish
the quality of testing and training capability within the
military departments. I fundamentally believe that it is
possible to strike a balance between environmental requirements
and the need to ensure the readiness of our Armed Forces.
That said, I hope that Congress, the administration, and
other stakeholders will work cooperatively, as this
subcommittee and other committees of jurisdiction review these
environmental restrictions on training and the administration's
related legislative proposal.
All of your prepared statements will be made part of the
record, and I urge you to keep your oral statements to less
than 5 minutes, if possible, in order to allow sufficient time
for questions.
Senator Akaka is not here, so we will reserve his time for
making an opening statement when he makes it.
I also want to welcome Senator Inhofe, who is going to be
chairing. I am also on the Budget Committee and we are doing a
lot of votes today, so Senator Inhofe may be chairing quite a
bit of this. He has shown a lot of leadership, and certainly
with the chairmanship of the Committee on Environment and
Public Works, he will be handling this issue as well. I welcome
Senator Inhofe to the table. There is nobody else here, so if
you would want to make any opening remarks, please proceed.
Senator Inhofe. I have an opening statement I will submit
for the record. I had the honor of chairing this subcommittee
for a number of years, and since I am now chairing a full
committee, the Environment and Public Works Committee, that
means I cannot chair a subcommittee.
Senator Ensign. I appreciate that. [Laughter.]
Senator Inhofe. Which you appreciate, yes. But anyway, this
has been something--I want to submit my entire statement for
the record and then say that in talking to many of the people
that have come into my office to get good examples, it is just
shocking what is going on today. I think a lot of you know--
certainly Admiral Fallon knows this because of the Pace-Fallon
report that you went through--I spent 3 years of my life trying
to keep live fire at Vieques, because we are losing our ranges
all around the world, and because of losing that live-fire
capability. To show this is a life and death issue, we actually
lost five lives, four of whom were Americans, at the Adari
Range in Kuwait. The accident report said they did not have
adequate training because of the restrictions and encroachment
on that training range, so it is a life or death issue.
We look at places like Camp Pendleton. It has 17 miles of
shoreline, but you can only use about 200 yards of it for
amphibious landings, and it is all encroachment problems. So I
think this is something, all these frivolous lawsuits by these
great American organizations, Friends of the Earth and all of
that, they just put us in a situation where they do not seem to
have any concern over the fact that we have to train these
people. I become more and more convinced, Mr. Chairman, that
many of these people do not think we need a military anyway.
So it is a serious problem. It is one that I am glad you
are addressing, and at the same time, we are going to be
addressing it from our other committee also.
[The prepared statement of Senator Inhofe follows:]

Prepared Statement by Senator James M. Inhofe

As the United States prepares for war to disarm Saddam Hussein, our
troops are facing a growing crisis in training and readiness. This is
not because we don't have the finest men and women serving our country.
We do. The problem stems from the extreme agenda of some environmental
groups whose hostile lawsuits threaten to impose dangerous burdens and
restrictions on training bases nationwide.
Environmental groups such as the Natural Resources Defense Council
and the Center For Biological Diversity have launched an unconscionable
war on the military. They believe there are no compromises, even when
the issue involves protecting and preparing our troops for battle. They
would rather file a lawsuit--something they're quite good at, by the
way--than find common sense solutions to balance environmental
protection with the best military training available.
These lawsuits are gradually eroding not just the land available
for training and readiness, but are constraining and seriously
undermining the actual training exercises and live-fire simulations
that are so critical to prepare for real-life combat.
Despite the claims made by environmental groups, the Pentagon has
demonstrated a strong commitment to environmental stewardship. The
evidence is overwhelming. But land development is fast encroaching upon
military facilities, driving wildlife and endangered species into the
relative sanctuary of training ranges.
The military has made environmental accommodations time and time
again, but there is only so much it can do. The flood of environmental
lawsuits is diverting the military away from its all-important training
mission. As a result, training slowly but surely is dying a death of a
thousand cuts.
There are too many egregious examples to recount here. But let me
briefly mention the situation facing Camp Pendleton in California,
which is considered the premier training base for the Marines. Because
of a lawsuit filed by the Natural Resources Defense Council to list the
Gnatcatcher as endangered, 57 percent of the base became ``critical
habitat,'' which in effect means no training and readiness exercises in
that area.
Also, there are 17 miles of beach at Camp Pendleton. Because of
environmental restrictions, only 200 yards of beach are available to
practice amphibious landings. All military vehicles that come ashore
during an amphibious landing are restricted to designated roads. Troops
can only come ashore in single file columns, which is hardly a good
simulation of actual warfighting conditions.
To help stop the degradation of training on our bases, the Pentagon
has proposed reasonable, commonsense legislation to clarify existing
environmental laws. Notably, the Pentagon is not seeking blanket
exemptions from current laws. In fact, many of the Pentagon proposals
were first implemented by the Clinton administration's U.S. Fish and
Wildlife Service.
For example, allowing the military to use Integrated Natural
Resource Management Plans in place of critical habitat designations--a
key component of the Pentagon's proposal--was initially implemented
during the Clinton administration. This will enable the military to
protect natural resources while carrying out critical training
exercises.
The increasing burdens and restrictions on training simply cannot
be tolerated any longer. We are morally obligated to ensure that our
troops are fully trained and prepared for war. Protecting our natural
resources is important, but protecting the lives of the men and women
who serve our country is absolutely essential.

Senator Ensign. I would like to welcome the ranking member
of the subcommittee, and welcome any opening comments you may
have.

STATEMENT OF SENATOR DANIEL K. AKAKA

Senator Akaka. Thank you very much, Mr. Chairman. Thank you
for calling this hearing today, and I want to welcome our
panelists to this hearing. It is our responsibility as a
subcommittee to examine issues impacting military training and
readiness, and I have no doubt that our military has had to
adjust training practices and incur added expenses to address
concerns about critical habitats, the marine environment, air
space management, spectrum availability, air pollution,
unexploded ordnance, and even noise pollution.
Despite these training challenges, the Chairman of the
Joint Chiefs of Staff and the military service chiefs have
testified before our committee that our Armed Forces are more
ready today than they have ever been before, great news for us.
That is because the military services have gone the extra mile
to find constructive ways to comply with the applicable laws
and regulations with a minimum impact on training and
readiness. It takes hard work with regulators and impacted
communities on a case-by-case basis to achieve these solutions,
but the payoff comes in the credibility the Department of
Defense has earned as a good neighbor and a faithful custodian
of public lands.
In my State of Hawaii, I have worked with the military to
try to address issues raised in the community about the impact
of training on cultural and historical sites, endangered
species, fire damage, and other issues. By working together in
this way, I am hopeful that we can continue to find
constructive ways to reconcile military training requirements
with conflicting priorities.
I am also hopeful that this kind of cooperative, case-by-
case approach can help us avoid recurrences of the situation in
Vieques, where festering disagreements between the Department
of Defense and the local community will soon result in the
cessation of military training at one of the Navy's most
important facilities.
Legislative action to exempt the Department from an
environmental requirement may be necessary in some cases, as it
was last year when we acted on the Migratory Bird Treaty Act,
but it must always be a last resort, not a first resort. Where
we do act, I believe that our legislation should be as narrowly
tailored as possible to avoid unintended side effects.
Last week, the administration submitted a legislative
proposal that would exempt a wide range of DOD activities from
the Endangered Species Act, the Marine Mammal Protection Act,
the Clean Air Act, and the Solid Waste Disposal Act, each of
which was rejected by the last Congress. These proposals
deserve the close scrutiny that we will start to provide with
today's hearing.
As we address the issues before us today, we should keep in
mind that the positive relationship between our military
installations and the governments and citizens of the States
and communities in which they are located is dependent to a
significant extent upon the Department's role as a good
neighbor and a faithful steward of the public lands. I believe
that we should do everything in our power to avoid enacting
overreaching legislative proposals that would undermine the
positive relationship.
Mr. Chairman, these are very difficult issues, not only
because of the competing interests of military readiness and
environmental protection, but also because of the complexity of
some of the statutes and regulations involved. That is why I
appreciate your decision to schedule a second hearing on this
subject at which we will have an opportunity to hear from the
representatives of some of the 23 environmental groups and 33
State Attorneys General who contacted the committee in the last
Congress to express concerns about the administration's
legislative proposal. I hope that we will be able to listen
together to the broad range of views on these issues and to
work together to develop a common understanding and
constructive approach to the problem.
Thank you very much, Mr. Chairman. I look forward to the
testimony of our witnesses.
Senator Ensign. General Keane, we will start with you.

STATEMENT OF GEN. JOHN M. KEANE, USA, VICE CHIEF OF THE ARMY

General Keane. Mr. Chairman, Senator Akaka, Senator Inhofe,
I am honored to be here today with my fellow service Vice
Chiefs, and appreciate the opportunity to appear before the
subcommittee to discuss this important issue.
We are a Nation at war, and clearly the events of the last
year and a half in Afghanistan and in the Philippines
demonstrate that our soldiers are trained and ready. This state
of readiness, however, does not just happen. It requires tough,
realistic training under demanding battlefield-like conditions
to effectively meld soldiers and equipment into the best
fighting force in the world.
I talked to a wounded young soldier from the Tenth Mountain
Division, who fought in one of the battles of Operation
Anaconda in Afghanistan. He was in a 12-hour fight against a
force of al Qaeda that outnumbered them six to one, and our
soldiers won that fight. Given those odds, I asked him at
Walter Reed Medical Center what he thought made the difference
in the fight. He said, ``sir, they were as tough as we are.
They gave no quarter. They did not back up. Fundamentally, the
difference was our skill. We shot better than they did, and we
fired and maneuvered better than they did.''
That is the essence of our training, and it produces those
kinds of extraordinary results. Our soldiers cannot fight with
confidence without realistic live-fire and maneuver training,
and we need training areas, maneuver land, and live-fire ranges
to make this happen.
The first time soldiers conduct a realistic operation
cannot, cannot be during time of war. We must train as we
intend to fight, and it is becoming increasingly difficult to
do so under such environmental restrictions. A 2002 General
Accounting Office (GAO) report confirmed that encroachment is
having a negative impact on training at every Army facility
surveyed. That report found that encroachment is diminishing
training realism and restricts the types, locations, and time
of training events, and confirms the need for congressional
action to clarify our environmental legislation.
The Army's major concerns are training restrictions that
stem from two major issues. The first is the management of
threatened and endangered species, and the second is expanded
application of environmental regulations to the use of military
munitions.
In terms of our management of threatened and endangered
species, there are 172 endangered species on 99 Army
installations. Critical habitat has been designated on four
installations. At three of those four installations, the
endangered species has not arrived yet.
That includes Fort Lewis, where 72 percent of the training
land is designated as critical habitat for the Northern Spotted
Owl, who has yet to arrive, and I ask, does this pass the
common sense test? At Fort Bragg, we have other restrictions
that impact our training, as well as other installations
supporting the Red-Cockaded Woodpecker.
What I would like to do is point out to you some of the
restrictions that are currently imposed on us at Fort Bragg so
you can understand the magnitude of what our soldiers and our
leaders have to deal with. I refer to the handout and the chart
that is before you here.
[The information referred to follows:]

It encumbers the circumference of Fort Bragg, and you can
see that the impact area is in purple, the drop zones where us
old folks maintain our youth are in yellow, and the Red-
Cockaded Woodpecker cavities and the endangered plants are in
green and red respectively.
Around each cavity tree, or red area that is depicted on
your map, which are plentiful in number and cover, as you can
see, the vast majority of the 130,000 acres at Fort Bragg,
there is a 200-foot buffer around each tree. Within that
buffer, there is no bivouacking or occupation for more than 2
hours, there is no use of camouflage, no weapons firing other
than 7.62 millimeter and .50-caliber blank ammunition, no use
of generators, no use of riot agents, no use of incendiary
devices, no use of white smoke, and no digging tank ditches or
foxholes. Vehicles cannot come closer than 50 feet.
The impact is profound. We must work around all of these
restrictions to conduct realistic training. At times it is
artificial and, as you can imagine, it frustrates our leaders
and soldiers. I ask again, does this pass the common sense
test? It is tough explaining that to our leaders and our
soldiers.
The Readiness and Range Preservation Initiative (RRPI)
proposal related to the Endangered Species Act that we are
proposing seeks to codify the existing U.S. Fish and Wildlife
Service policy of using management plans to serve as an
alternative to designating an area as critical habitat. These
so-called Integrated Natural Resources Management Plans
(INRMPs) have already proven to be a successful method of
managing an endangered species at a number of Army
installations, to include Fort Bragg.
The problem is that their use of the INRMPs for this
purpose is under challenge, as you pointed out, Mr. Chairman,
and it involves the court case in Arizona which jeopardizes the
progress we had made managing the endangered species using the
INRMP. This is a major step back for us.
Our other concern relates to the application of Resource
Conservation and Recovery Act (RCRA) and Comprehensive
Environmental Response, Compensation, and Liability Act
(CERCLA), and the provisions of the RRPI seek to clarify
Congress' original intent in the application of these statutes
as they pertain to military live-fire training and operating
military ranges. The current statutory language can be used to
shut down live-fire training, and to require investigation and
cleanup of munitions. This would make it nearly impossible for
the Army to fulfill its national security mission.
As you mentioned, the Army at Fort Richardson is currently
engaged in a lawsuit in which the plaintiffs allege violation
of RCRA and CERCLA associated with firing munitions at Eagle
River Flats Range. In other words, the munitions are solid
waste or hazardous waste. If the court agrees with the
plaintiff, then live-fire training and testing operations at
every Army range, which are more than 400 in number, could be
subject to the same code, and would effectively shut us down.
This is an absolute train wreck for the Army, and would have a
dramatic impact on readiness, and we have to ask, was this
really the intent of Congress when we enacted these laws to
protect our environment?
The RRPI proposals affecting RCRA and CERCLA look to
clarify that live-fire training does not constitute disposal of
solid waste or release of hazardous substances. We do not
desire the elimination of environmental laws. What we desire is
targeted legislation appropriate to provide the flexibility
needed to accommodate both military needs and environmental
requirements. We believe this issue is a national priority, and
we are convinced that we can provide for a national defense
while still protecting the environment.
Thank you, Mr. Chairman. I look forward to your questions.
[The prepared statement of General Keane follows:]

Prepared Statement by Gen. John M. Keane, USA

Chairman Ensign, Senator Akaka, and distinguished members of the
subcommittee, thank you for this opportunity to testify before you on
the fiscal year 2004 Defense Department RRPI legislative proposals.
I would first like to thank you for your continued interest in this
subject and for the action taken in the National Defense Authorization
Act for Fiscal Year 2003 to grant the military departments the
authority to establish buffer zones around our ranges to manage
encroachment and ensure compatible land use. This legislation will not
only help prevent urban development that threatens testing and
training, it will facilitate preservation of needed habitat for
potentially imperiled species and lessen the need for additional legal
restrictions on military installations. Your support of this
legislation is a significant step in the right direction, but there is
more work to do. If enacted by Congress, the legislative proposals
within the fiscal year 2004 DOD RRPI will assist us in our continuing
struggle to achieve an appropriate balance between maintaining military
readiness and protecting the land and resources America entrusts to us.
Today our Army is engaged throughout the world--fighting the global
war on terrorism, providing peace and stability to regions throughout
the world, and preparing for a potential war in Iraq. Every day our
soldiers demonstrate that they are trained and ready to respond to
these requirements--to fight and win the Nation's wars. This state of
readiness, however, does not just happen. It requires realistic, multi-
echelon training under battlefield-like conditions to meld soldiers and
equipment into the best fighting force in the world.
During the 12-day battle of Operation Anaconda, our soldiers often
fought outnumbered against a tough, determined enemy that gave no
quarter and did not back down. That battle typifies combat for our
soldiers--a close-range test that is fundamentally about will and
skill. More than anything else, our success in the Shah-i-Kot Valley
came down to our soldiers' skill--we shot better than they did and we
fired and maneuvered better than they did. It was our training that
made the difference. Maneuver land and live-fire ranges are an
essential element of this training process--without them, our soldiers
cannot develop the confidence and skill demonstrated during Operation
Anaconda. We must retain those resources that allow our forces to
maintain the level of readiness the American people have come to
expect, and deserve.
Thirty years ago, we were less aware of the environmental impact of
our training. Looking back, we could have done a much better job
protecting the natural resources entrusted to us. As the consciousness
of America was aroused to protect our natural resources, so too was the
consciousness of the United States Armed Forces. We changed attitudes
and behaviors through education; we committed significant resources to
the preservation of our lands--to include $74 million for compliance
with the Endangered Species Act over the past 5 years alone; and, in
the process, amassed a good record of environmental stewardship. The
Army does not seek to eliminate its responsibility to protect the
environment. Rather, we need to ensure the application of existing law
does not preclude us from conducting quality training.
The fiscal year 2004 DOD RRPI proposals address several of the
Army's concerns regarding environmental encroachment, training
restrictions that stem from the management of threatened and endangered
species and the expanded application of environmental regulations to
the use of military munitions. One proposal confirms an existing U.S.
Fish and Wildlife Service policy that allows integrated natural
resource management plans to make the designation of critical habitat
on DOD lands unnecessary. The other proposal confirms that military
munitions on active military ranges should not be subject to hazardous
waste or Superfund clean-up requirements. These RRPI provisions will be
a major step forward in providing the legislative clarification we
require to continue to train and maintain the best military force in
the world.

THREATENED AND ENDANGERED SPECIES AND CRITICAL HABITAT

The RRPI proposal related to the Endangered Species Act (ESA) and
critical habitat (CH) seeks to codify the U.S. Fish and Wildlife
Service (FWS) policy of allowing the existence of FWS-approved INRMP to
serve as an alternative to designating CH. The Sikes Act requires
military installations to prepare plans that integrate the protection
of natural resources on military lands with the use of these lands for
training. The Sikes Act also requires installation personnel to consult
with the FWS and concerned State agencies as the INRMP is prepared and
to seek their concurrence, as well as public comment, on the final
plan.
``Critical habitat'' as defined in section 3(5)(a) of the act
includes both areas within the geographical area occupied by a species,
at the time it is listed, on which are found physical or biological
features that are essential to the conservation of the species and that
may require special management considerations or protection; and areas
outside the geographic area occupied by a species at the time it is
listed that are essential for the conservation of the species.
Army lands host 172 Federally listed species on 99 installations.
The FWS has designated critical habitat on 14 installations to include
Fort Lewis, Washington and Fort Irwin, California--two installations
that are critical to maintaining the warfighting readiness of the Army.
Designation of critical habitat on Army installations adds management
costs and reduces the availability of land on which to train. New
designations require installations to enter into consultation with the
FWS and limit or cease training activities while consultation is
conducted. Each time the Army proposes an action that may adversely
modify the habitat we must enter into consultation. However, large
scale programmatic consultations can address most of the training needs
of a military installation, potentially precluding the need for
separate consultation on individual actions. Use restrictions and
consultation requirements can even apply when critical habitat is
designated on military installations where the species in question does
not reside. For example, at Fort Lewis 72 percent of the training land
is designated as critical habitat for the Northern Spotted Owl and yet
the owl is not resident anywhere on the installation. This scenario is
also found at two other Army installations.
At the National Training Center (NTC) in Fort Irwin, California,
22,000 acres are designated as critical habitat for the Desert
Tortoise. This designation has effectively eliminated maneuver training
on the 22,000 acres and reduces the amount of training that can be
conducted on the installation by limiting maneuver training to only one
area--the central corridor. We need two corridors to conduct the kind
of training required on the modern battlefield. After almost 20 years
of effort, the expansion of the NTC and reopening of these 22,000 acres
to training are nearly a reality. We are committed to the protection of
endangered species here, but these efforts come at a cost. In 2000,
Congress authorized the expenditure of up to $75 million to acquire and
manage additional land for preservation of and mitigation measures for
the Desert Tortoise and Lane Mountain Milkvetch. We are in the process
now of working with FWS and state regulators to define the scope of
these requirements. Only after we implement the mitigation measures
will it be possible for the Army to use these areas.
In addition to the Army installations where critical habitat has
already been designated, the FWS has proposed to designate habitat for
146 additional species in Hawaii. This proposal affects seven Army
training facilities to include the Pohakuloa Training Area where we
already have a $25 million Multi-Purpose Range Complex that never
opened due to endangered species management requirements.
The Army has been very successful protecting endangered species by
working with adjacent landowners to achieve mutual conservation goals.
These installation programs are recognized as models for balancing
military missions with species conservation on a regional level. As a
matter of policy, we also develop specific Endangered Species
Management Plans for each listed species in consultation with the FWS
and National Marine Fisheries Service (NMFS). We regularly consult with
these two agencies under Section 7 of the Endangered Species Act (ESA)
to fully consider the effects of military activities on listed species.
These programs are a testament to the Army's commitment to balancing
the management of the land entrusted to our care to meet the
requirements of both the military mission and protection of threatened
and endangered species.
The Army also actively participates in the development of Recovery
Plans for endangered species. Based largely on our active role, and on
the existence of approved INRMPs, a number of Army installations have
avoided the need to designate critical habitat. By allowing approved
INRMPs to preclude the need to designate critical habitat, the FWS
provides military installations with the flexibility to manage their
natural resources to support the military mission while providing for
the protection of endangered species.
INRMPs take a more holistic approach to managing natural resources
than critical habitat designation and have proven to be a successful
method of managing endangered species habitat at a number of Army
installations. They strike the necessary balance by integrating
military training needs with natural resources management practices to
ensure that the imperatives of national defense and species protection
are both met. Management under an INRMP, in lieu of critical habitat
designation, allows Army commanders increased flexibility to use the
land on the installation to meet changing mission needs.
Nonetheless, a Federal district court in Arizona recently decided
FWS' reliance on INRMPs to provide adequate habitat protection in lieu
of designation of critical habitat is unlawful. The Army is concerned
this court decision will call into question all of the instances where
critical habitat has been avoided based in part on the existence of an
INRMP. This case reinforces the need for Congress to pass the RRPI
provisions to explicitly support our common sense approach.

RESOURCE CONSERVATION AND RECOVERY ACT (RCRA) AND COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT (CERCLA),
COMMONLY KNOWN AS SUPERFUND

The number of live-fire exercises conducted by the Army cannot be
reduced without serious degradation to readiness and the concurrent
increased risk to our soldiers. The Army determines live training
iteration requirements based on the premise that certain skills are
perishable and must be periodically exercised. Army standards identify
the minimum number of times and specific firing events on which a
soldier must train to achieve a given level of proficiency. Many ranges
operate at maximum capacity so that units can meet the standard. Any
further limitations placed on training facilities would inevitably
cause a reduction in live training below that needed by soldiers to
remain minimally proficient.
Under the current statutory language, it is likely that the use of
environmental statutes, such as the CERCLA and the RCRA, can be used to
shut down live-fire training and to require investigation and cleanup
of munitions and munition-constituents on operational military ranges.
This would make it nearly impossible for the Army to fulfill its
national security mission.
The RCRA and CERCLA provisions of the RRPI seek to clarify
Congress' original intent in the application of these statutes to
military live-fire training and operational military ranges.
Historically, environmental regulatory agencies have used great
discretion in the application of RCRA and CERCLA to operational ranges.
They recognize that these facilities are extremely valuable national
assets and the training conducted on them is critical to national
security. They also recognize that the typical application of these
statutes is to clean up the impacts associated with past practices at
industrial or waste management facilities that are being put to other
uses or to respond to accidental releases or spills of hazardous
substances.
For these reasons, the EPA has never required a RCRA corrective
action to respond to the effects of military training on operational
ranges. Environmental regulators have only used CERCLA authority in a
very small number of cases on operational ranges and only in cases
where they have determined the conditions pose an imminent and
substantial endangerment to human health or the environment. The RRPI
provisions seek to codify this historic practice and prevent expanded
application of these laws beyond Congress' original intent.
In our view, a clarification of the statutory framework applicable
to military training operations is an appropriate manner in which to
address this issue. The development of Federal, State, and local
environmental statutes and requirements addressing waste management,
pollution elimination, and clean-up of contamination did not take into
account, nor foresee, application to military training lands and
military weapon systems. Regulators themselves are vulnerable to
citizen suits for not vigorously applying these and other environmental
laws to munitions and munitions constituents on operational ranges.
The Army at Fort Richardson, AK, is currently engaged in a lawsuit
in which the private party plaintiffs allege violation of RCRA and
CERCLA associated with firing munitions at Eagle River Flats (ERF)
range. The RCRA allegation is that munitions fired into ERF--an
operational range--are subject to state solid waste requirements under
RCRA. If munitions used for their intended purpose are considered solid
waste subject to RCRA's waiver of sovereign immunity, the Army could be
forced to seek an operating permit and to perform corrective action or
remediation of ERF. Live-fire training during the remediation would be
impossible and the only mortar and artillery impact area at Fort
Richardson would be unavailable for training.
The court challenge alleges that CERCLA is rightfully applied to
the act of firing munitions onto an operational range and that the
continued presence of those munitions on the range constitutes a
release of hazardous substances requiring reporting, characterization,
and remediation. If the court agrees with the plaintiff, then live-fire
training and testing operations at every Army range (more than 400
sites) could be subject to CERCLA response requirements. These
findings, along with the potential for further lawsuits, could compel
EPA and state regulators in all U.S. regions to enforce the same
standards on other military ranges. Live-fire training would be
severely constrained throughout the Department and military readiness
would decrease dramatically.
Live-fire training is essential and is often the capstone-training
event of a unit's training cycle. The United States set aside areas
specifically for this purpose as well as to isolate the dangers
associated with this training from the public. These areas are DOD's
operational ranges. They are crucial to maintaining national security
and comprise just over 1 percent of the U.S. land mass. The activities
conducted on this land ensure the security of the United States and
that the young men and women of the U.S. military are ready to do what
is asked of them. The relatively small portion of the U.S. that is set
aside to ensure military readiness provides tremendous benefit to the
entire Nation and the necessary training and testing conducted on this
land should be protected.
The RRPI proposals affecting RCRA and CERCLA clarify that live-fire
training does not constitute disposal of solid waste or releases of
hazardous substances. Furthermore these proposals seek to codify the
existing practice by the Environmental Protection Agency and state
environmental regulatory agencies and remove ambiguity currently in the
law. This clarification will help protect the Army and DOD from the
immediate vulnerability of citizen lawsuits.
Furthermore, RRPI proposals confirm that the cleanup of military
munitions is not required so long as munitions remain on operational
ranges where they were fired. The policies governing cleanup of
munitions located off an operational range and munitions causing
imminent and substantial danger on-range would remain unchanged--as
would policies governing cleanup of former ranges and other defense
sites.
These provisions do not seek to avoid the Army's responsibilities
to cleanup formerly used defense sites or to protect the environment
from potentially harmful impacts. Rather, they seek to clarify and
affirm existing policies and ensure that military ranges, set aside to
allow live training and contain potential impacts, remain available to
the soldiers that need to train for combat. I do not believe that
Congress enacted RCRA and CERCLA with the intent that they be used to
deny the military use of designated training areas. We therefore
request that Congress alleviate this line of litigation by clarifying
language in RCRA and CERCLA.

ARMY STEWARDSHIP OF LIVE-FIRE TRAINING AND TESTING AREAS

Although the Army is concerned with the impact that environmental
encroachment has on training, we are also mindful of public concern for
the potential impact that training and testing may have on the
environment. We are aggressively developing and implementing an
effective, comprehensive Sustainable Range Program. As part of this
effort, we continue to implement studies and local community outreach
programs to better understand and manage the environmental implications
associated with live-fire training.
The Army is conducting Regional Range Studies designed to gather
credible data on the true environmental impact of live-fire training
and weapons testing. The concept is to study ranges at different
installations representing a wide variety of climatic, geologic, and
ecological settings. The program includes the development of field
assessment protocols, field studies and a lessons-learned report that
will include a tool to prioritize future range assessments. Soil,
surface water, sediments, ground water, and vegetation are sampled and
analyzed for explosives and metals related to live fire. Small mammals
are also studied to determine ecological impacts. Field protocols are
being developed and will be continually refined over the course of the
Regional Range Study.
The Army is studying the behavior of military-specific chemical
compounds and the potential effects they may have on human health and
the environment. The major objective of this project is to identify
available data for modeling of chemicals typically associated with
munitions and their respective emissions and to compile toxicity
benchmarks for these chemicals. Our findings will help develop
strategies for the removal or destruction of harmful byproducts, or to
design processes and products that minimize environmental impact.
Testing and training ranges produce scrap metals as byproducts of
live-fire training. We regularly remove this scrap from the range as
part of maintenance operations. Much of the range scrap contains
valuable metals that can be recycled and some of this scrap may contain
hazardous residues that are handled in compliance with state and
Federal requirements. In response to issues associated with the removal
of range residue, the Army is chemically characterizing this material
and developing best management practices for solid wastes generated
from the use of munitions at Army troop training ranges.
We are also investing in research and development to eliminate
potentially harmful compounds from our ammunition throughout their
lifecycle. The most notable of these efforts is the Army's ``Green
Bullet.'' The Army has developed a substitute, non-toxic material
(tungsten/tin or tungsten/nylon) for the lead core bullet of our 5.56mm
(M-16) round. We have authorized the procurement of approximately 5
million rounds this year and expect to complete our transition to the
``Green Bullet'' by fiscal year 2005. A similar effort is underway for
our other small arms rounds including 7.62mm and 9mm rounds. The Army
also recognized the need to eliminate potentially harmful dyes from two
smoke grenades and developed alternative materials for these smoke
grenades.

CLEAN AIR

The RRPI proposal affecting the application of the Clean Air Act to
military training seeks a 3-year window for new operations to come into
conformity with State Implementation Plans. As the Army transforms and
fields the new weapons systems for the Stryker Brigade Combat Teams and
the Objective Force, we require this 3-year window to develop methods
of compliance that do not cause unacceptable training impacts. We also
recognize that the RRPI Clean Air Act provision is extremely valuable
to our sister Services and will allow them vital time to plan for and
execute stationing decisions for their fighter and bomber aircraft.

MARINE MAMMAL PROTECTION ACT

DOD also seeks to clarify the definition of the term ``harassment''
within the Marine Mammal Protection Act (MMPA) to make it more
consistent with what we believe was Congress' original intent. Although
the Army has not identified any specific training constraints
associated with application of this statute to Army operations, we
believe it is a common sense and important modification for all
Services. Given the joint nature of military operations, any
degradation in the ability of our sister services to conduct realistic
training impacts directly upon the Army's ability to effectively
execute complex joint operations.

NATIONAL SECURITY EXEMPTIONS

The existence of National Security Exemptions is frequently used as
an argument against the legislative clarifications proposed in DOD's
RRPI. Although some environmental statutes do allow for national
security exemptions, they were never intended as a permanent solution
to recurring requirements. Such exemptions are generally reserved for
approval at the presidential level, apply only to very specific
activities at individual sites, and remain in effect for only 1 year.
The readiness activities we are concerned with are not ``one-time''
events. They are part of the day-to-day training regimen of our
soldiers and it is simply unrealistic to expect the military to request
exemptions for training that must occur on a regular basis. Rather, we
should resolve the basic issue through the clarification of Congress'
original intent.

CONCLUSION

The Army is committed to its responsibility as an environmental
steward for the 16.5 million acres America entrusts to us. However, we
are equally committed to another precious resource that America
entrusts to us--her sons and daughters. We are obligated to provide our
soldiers with the most realistic training scenarios possible to prepare
them for the rigors of war. The Army will never abandon its
environmental responsibilities, but we must have land to train.
Unless we can resolve several issues at our key training areas, we
face the very real possibility that we will lose some of our critical
training areas or, at a minimum, we will be forced to deny our soldiers
the opportunity to participate in the number and type of exercises
required to learn and retain perishable skills.
For nearly 228 years, the Army has kept its covenant with the
American people to fight and win our Nation's wars. In all that time,
we have never failed them, and we never will. Building and maintaining
an Army is a shared responsibility between Congress, the
administration, those in uniform, and the American people. Working with
Congress, we will keep the Army ready to meet the challenges of today
and tomorrow.
Thank you, Mr. Chairman and distinguished members of the
subcommittee, for allowing me to appear before you today. I look
forward to working these issues with you.

Senator Ensign. Admiral.

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

Admiral Fallon. Thank you very much, Mr. Chairman, Senator
Akaka, Senator Inhofe.
Senator Ensign. I am sorry, we had a vote that started. I
think we can hear one more statement and then we can go and
come back. We will hear from Admiral Fallon and then we will
recess and we will come back and reconvene.
Admiral Fallon. Mr. Chairman, distinguished members of the
subcommittee, it is truly an honor to be back before the
subcommittee to represent the United States Navy to testify on
this very, very important matter for us. We need high-quality,
realistic training. Without it, we do not feel we are going to
be in a position to carry out our responsibilities to organize,
train, and equip our forces.
As with General Keane, we have had recent combat
experience, and if I could relate a couple of anecdotes, I also
had a chance to visit one of our servicemen, a Navy SEAL who
was critically wounded in the same battle at Operation Anaconda
up on the mountains in Eastern Afghanistan. This young man lost
a leg as a result of his wounds, and he spent an overnight on a
mountain alone. He survived because of his guts, determination,
and the teamwork of his fellow SEALs, and because he was aided
by members of all the other armed services that were
coordinated in that battle.
He credited his survival to his training. Sometimes we can,
I think, forget about the impacts, or do not realize how
significant seemingly minor restrictions on training can be,
but there is a direct tie here. This SEAL and his fellow team
members have only a few places in the United States where they
can actually train with live fire. One of them happens to be
out in the Chocolate Mountains of California.
Because of critical habitat designations, the places where
they can do small arms live-fire training is effectively
limited to one sector of the compass. This is not the kind of
environment they encountered in Afghanistan. It is not likely
to be what they will encounter should they be called upon in
Iraq and other places. These are the kinds of things that we
do, our people are interested in trying to accommodate both
sides of this issue. We often make compromises, but the end
result I think has a major impact when our forces go forward
around the world.
One other comment, an example from Afghanistan. 80 percent
of the sorties that were launched from our aircraft carriers
did not have their targets fixed before they came off of the
decks of the carriers. They were able to be highly successful
in their efforts because of the confidence they had in their
training, in the fellows, in the teams that they had practiced
with in their live ordnance training prior to that time, and it
is these critical competencies that we are very mindful of and
seek to retain.
Our forces today are very well-trained. Senator Akaka, you
mentioned the high readiness levels that we enjoy, and I will
tell you right now that your Navy is in great shape. Witness
the number of ships, two-thirds of the Navy, almost 70 percent
of our entire Navy is forward-deployed as we sit here today.
Their training levels are high, their readiness levels are
high, but there are many factors that go into those readiness
levels. I will tell you, and tip my hat to you and to your
colleagues, the most important factor that I think is at play
here is that our people are there in the numbers that we need
to sustain the effort that we have ongoing. The reason that we
are manned at about 99 percent across-the-board in the Navy
today is because our people have made the decision to stay with
us. We were able to recruit high-quality people and, more
importantly, to retain the people that we have, and that would
not happen, first and foremost, without the support that you
and Congress have given to them over the past year, and 2 years
in particular, I salute you for that.
There are lots of other factors. One of the most critical
things is the issue we are facing today. How do we sustain this
readiness, and how do we ensure the readiness in the future for
our people who are going to come behind that, given the
environment? The reality today is that we are facing an
increasingly challenging task to provide appropriate training
because of this constant pressure and encroachment from a whole
range of issues, most of them large, when taken individually,
but collectively are really beginning to have an effect.
We are committed to maintaining the readiness of our
forces, and we are also committed to maintaining the
environment. We believe we are good stewards of the
environment. We would invite you, and certainly the American
people, to come look at our record over the past couple of
decades, and I think we will demonstrate pretty clearly not
only our good intentions, but the results.
We ask your support today, and we need your help. There are
existing laws on the books that are being interpreted in ways
unintended, based on our read of the history, which are
severely inhibiting our ability to carry out our
responsibilities in the readiness area. What we are seeking is
a rebalancing of these issues. We intend to react and
accommodate both imperatives for ourselves and the American
people, but we really need your help.
If I could give you a couple of examples of the challenges
we face today, I have a chart up.
[The information referred to follows:]

We have an event that just occurred here in the last week.
Out in Hawaii, Senator Akaka, on the Island of Kauai, we have a
facility on the west coast--you can see in the picture, I hope
you can see this at least to some degree from the podium. This
facility is the Pacific Missile Range facility. It is very,
very narrow, less than a \1/2\-mile wide, a strip about 7 miles
long that runs down the coast.
The issue today is that just last week significant portions
of this very narrow coastal strip have been designated a
critical habitat for a grass that does not even exist on those
lands. This is the kind of thing that we are facing today on an
increasing basis.
This facility, I believe, is one of our most critically
important installations as we look to the future. This is
primarily because, as we attempt to come up with a missile
defense system for this Nation, it is ideally located in one of
the very few largely uninhabited areas with a large water and
land air space adjacent to it in which we can test the long
range missiles. The missiles that we think we are going to need
and employ. We have had a number of shots here in the last year
launching out of this facility, and so encroachment in this
area is going to have an immediate and severe effect on that
program and other ongoing activities.
One other area which has been severely impacted this year
is related to the Marine Mammal Protection Act. We have a
system, a new system called low frequency active sonar, or LFA,
for short. We have been attempting to test this system for 7\1/
2\ years.
We have had an environmental impact statement done and
concluded an agreement with the regulatory agencies. We have
currently been enjoined by a court which has effectively
stopped, or actually severely restricted the training. We have
a limited period in which we can do some testing, but for
example, the area that we had already agreed in the
environmental impact statement has been reduced by 90 percent.
We are restricted to severe limits on what we need to do.
This system is important because in today's world, the
submarine threats that we face are different from what they
were in the Cold War. We are faced now with very, very quiet
diesel submarines operating coast to coast. The way we used to
go about detecting these submarines primarily was by passive
acoustic means, where we would listen, pick up these sounds of
these moving, typically nuclear submarines. These new boats
operate in a very different manner. They are very quiet. They
sit still, and we have found that one of the very few ways that
we can find them is to actively seek them, and hence LFA. We
are not going to be able to bring this forward if we do not get
some help in this area right now, and we are severely
restricted.
So we think we really need to provide comprehensive
training. We are asking for your help to try and rebalance
this. I thank you for your attention. I have a written
statement that I have submitted for the record, and I stand by
to answer your questions when we reconvene. Thank you, sir.
[The prepared statement of Admiral Fallon follows:]

Prepared Statement by Adm. William J. Fallon, USN

INTRODUCTION

Mr. Chairman and members of the subcommittee, thank you for this
opportunity to share my views regarding the growing negative effects of
encroachment on military readiness and training prior to sending
American sailors into combat. I appreciate your attention to this vital
and timely topic, which is of great importance to national security and
the environment.

READINESS

I am pleased to report today that the readiness of the Navy is
excellent, as evidenced by the large percentage of our fleet that is
forward deployed in support of the global war on terrorism and
defending our vital interests elsewhere in the world. Indeed, 208 of
our 305 ships--representing fully 68 percent of our force--are
underway, including 7 aircraft carrier battle groups, 10 amphibious
ready groups, and numerous other combat and supporting units, totaling
over 76,000 sailors. Most of these units are preparing for possible
combat operations in Iraq.
The high quality of training we provide to these sailors is largely
unseen and often taken for granted, yet it is an essential element of
their impressive level of combat readiness. Clearly, before this Nation
sends its most precious asset--its young men and women--into harm's
way, we must be uncompromising in our obligation to prepare them to
fight, survive, and win. This, in turn, demands the most realistic and
comprehensive training we can provide.
Realistic, demanding training has proven key to survival in combat
time and again. For example, data from World Wars I and II indicates
that aviators who survive their first five combat engagements are
likely to survive the war. Similarly, realistic training greatly
increases our combat effectiveness. The ratio of enemy aircraft shot
down by U.S. aircraft in Vietnam improved to 13-to-1 from less than 1-
to-1 after the Navy established its Fighter Weapons School, popularly
known as TOPGUN. More recent data shows aircrews who receive realistic
training in the delivery of precision-guided munitions have twice the
hit-to-miss ratio as those who do not receive such training.
Similar training demands also exist at sea. New ultra-quiet diesel-
electric submarines armed with deadly torpedoes and cruise missiles are
proliferating widely. New technologies such as these could
significantly threaten our fleet as we deploy around the world to
assure access for joint forces, project power from the sea, and
maintain open sea-lanes for trade. To successfully defend against such
threats, our sailors must train realistically with the latest
technology, including next-generation passive and active sonars.
We rely on full use of our ranges, facilities, and advanced
technology to ensure our forces have a decisive advantage in conflict.
As we prepare for possible conflict today and look to the future, I am
increasingly concerned about the growing challenges in our ability to
ensure our forces receive the necessary training with the weapon and
sensor systems they will employ in combat. Training and testing on our
ranges is increasingly constrained by encroachment that reduces the
number of training days, detracts from training realism, causes
temporary or permanent loss of range access, decreases scheduling
flexibility, and drives up costs.
Encroachment issues have increased significantly over the past
three decades. Training areas that were originally located in isolated
areas are today surrounded by recreational facilities, urban and
suburban sprawl, and constrained by state and Federal environmental
laws and regulations and cumbersome permitting processes which
negatively impact our ability to train.

NAVY'S ENVIRONMENTAL STEWARDSHIP

Meanwhile, the Navy continues its commitment to good stewardship of
the environment. Indeed, our culture reflects this, as the men and
women manning our fleet grew up in a generation with a keen awareness
of environmental issues. The Navy environmental budget request for
fiscal year 2004 totals $1.0 billion. This funding supports
environmental compliance and conservation, pollution prevention,
environmental research, the development of new technologies, and
environmental cleanup at Active and Reserve bases. It is precisely as a
result of that stewardship, as opposed to commercial exploitation of
private land--particularly along the Nation's coasts--that military
lands present favorable habitats for plants and wildlife, including
many protected species. Ironically, our own successful stewardship
programs have helped increase the number of protected species on our
ranges, which has resulted in less training flexibility.

San Clemente Island, CA: Navy spends $2.5 million per
year on habitat preservation and a captive breeding program
that increased the number of endangered Loggerhead Shrike 12
fold.
Navy spent $400 million to develop, install, and
maintain plastic waste processors on all surface ships to avoid
discharging plastics overboard.
American Bird Conservancy recently hailed DOD and
Navy's participation in the Partners in Flight initiative,
praising its efforts to ``defend the stepping stones of bird
migration.''
Navy is spending $7 million annually pursuing various
multi-year marine mammal research projects that include efforts
to detect, classify, and monitor behaviors, habitat, and
migration routes of marine mammal populations using underwater
sound propagation.

BALANCING MILITARY READINESS AND THE ENVIRONMENT

Sustaining military readiness today has become increasingly
difficult because, over time, a number of factors, including urban
sprawl, regulations, litigation, and our own accommodations to demands
from courts, regulatory agencies and special interest groups have
cumulatively diminished the Navy's ability to effectively train and
test systems. Among the greatest threats to proper military training
are laws that include ambiguous provisions and cumbersome process
requirements that result in unintended negative consequences, which
inhibit realistic, timely and comprehensive training. These laws, and
the court decisions which have interpreted and expanded them, have
resulted in Federal courts and regulatory agencies curtailing essential
training and weapons systems testing, notwithstanding the ``best
available science'' supportive of the Navy's ability to train without
harm to the environment. As a result, military readiness requirements
and environmental protection are out of balance.
The Department of Defense's RRPI proposes modest amendments to
several environmental laws which will help restore the balance, meeting
our national security needs and maintaining good stewardship of the
environment. I ask for your help to address the challenges of most
concern to the Navy in the Marine Mammal Protection Act (MMPA) and the
Endangered Species Act (ESA).

MARINE MAMMAL PROTECTION ACT

Last year before the Senate Environment and Public Works Committee
I testified that the definition of the term ``harassment'' of marine
mammals in the MMPA was a source of confusion because the definition is
tied to vague and ambiguous terms such as ``annoyance'' and ``potential
to disturb.'' These terms arguably apply to even the slightest changes
in marine mammal behavior and subject Navy training and testing at sea
to the scrutiny and control of courts, regulatory agencies and special
interests groups, even in the absence of evidence of adverse impacts on
the marine mammals. The severity of the impact on Navy training and
testing is strikingly more apparent now.
In November 2002, a Federal district judge in San Francisco
presiding over a case brought by environmental groups alleging
violation of the MMPA, National Environmental Policy Act (NEPA), and
the ESA issued a court order that strictly limits employment of the
Surveillance Towed Array Sensor System Low Frequency Active (SURTASS
LFA) sonar system. This advanced system is designed to detect and track
the growing number of quiet diesel submarines possessed by nations
which could threaten our vital national security. After highlighting
what the court viewed as flaws in regulatory agency implementation of
the MMPA and ESA, and despite the Navy's unprecedented efforts to
comply with NEPA, the court issued a preliminary injunction restricting
Navy's deployment of SURTASS LFA to a small area in the western
Pacific. As a result of the inherent structural flaws in the laws
themselves as applied to world-wide military readiness activities, the
Navy now finds the deployment and operation of one of our most
important national security assets constrained by a Federal court as a
result of litigation brought by environmental groups that is
specifically designed to deny the Navy use of the system. Future
testing and employment of SURTASS LFA (and potentially other Navy
training and testing programs) are in jeopardy because the MMPA was
originally enacted to protect whales from commercial exploitation and
to prevent dolphins and other marine mammals from accidental death or
injury during commercial fishing operations and did not address
military readiness concerns.
The Navy has immediate need for SURTASS LFA. The Chief of Naval
Operations has stated that Anti-Submarine Warfare (ASW) is essential to
sea control and maritime dominance. Many nations are capable of
employing submarines to deny access or significantly delay execution of
joint and coalition operations in support of our vital interests. The
submarine threat today is real and in some ways has become more
challenging than during the Cold War. Of the approximately 500 non-U.S.
submarines in the world, almost half that number are operated by non-
allied nations. Of greatest concern are the new ultra-quiet diesel-
electric submarines armed with deadly torpedoes and cruise missiles
being produced or acquired by the People's Republic of China, Iran, and
North Korea.
SURTASS LFA Scientific Research Effort
- Evaluated affects of low frequency sound on marine species
- Marine mammal research involved world-renowned experts and
representatives from Cornell University, University of
Washington, University of California Santa Cruz, Hubbs Sea
World Research Institute, Marine Acoustics, Inc., National
Marine Fisheries Service, Marine Mammal Commission, Harvard
Medical School, Bodega Marine Laboratory, Woods Hole
Oceanographic Institution, Scripps Institution of Oceanography,
Raytheon, Office of Naval Research, Naval Facilities
Engineering Service Center
- Scientific Research Project alone, which involved 3 phases
over 2 years, cost $10 million
- Scientific effort concluded that LFA could be operated safely

These diesel submarines are very difficult to detect outside the
range at which they can launch attacks against U.S. and allied ships
using passive sonar systems. Active systems like SURTASS LFA, when used
in conjunction with other anti-submarine sensor and weapons systems,
are necessary to detect, locate and destroy or avoid hostile submarines
before they close within range of our forces. To ensure our sailors are
properly prepared to counter this growing submarine threat, we must
make certain they train with the best systems available.
In meeting its obligations under current environmental laws for
deploying SURTASS LFA, the Navy undertook the most comprehensive and
exhaustive environmental planning and associated scientific research
effort ever conducted to support a major seagoing combat system.
Working cooperatively with the National Marine Fisheries Service
(NMFS)--the Federal regulatory agency tasked with protection and
preservation of marine mammals--the Navy completed an Environmental
Impact Statement (EIS), developed mitigation measures for protecting
the environment, and obtained all required permits pursuant to the MMPA
and ESA. The scientific research and EIS involved extensive
participation by independent scientists from a large number of
laboratories and academic organizations. The Navy also undertook a
wide-ranging effort to involve the public in the EIS process through an
unprecedented program of public meetings and outreach for the Navy.
Based on this monumental effort, NMFS concluded that the planned
SURTASS LFA operations would have negligible impacts on marine mammals.
Despite this extraordinary effort in terms of time, money, and
resources to comply with existing environmental laws, Navy now finds
itself with a Federal court order defining the limits of operation of a
key system needed to address a clear, present and growing national
security threat. Notably, there is no evidence of any negative impact
on marine mammals in the one area in which we are currently operating.
EIS Outreach
- Notice of Intent published in 1996
- 3 public scoping meetings
- 8 public outreach meetings
- 3 public hearings on the Draft EIS (DEIS)
- DEIS distributed to Federal, State, and local government
agencies, citizen groups, and organizations, and 17 public
libraries
- Over 1,000 public comments received on DEIS
- Record of Decision signed in June 2002

While recognizing the national security need for SURTASS LFA, the
court nevertheless felt constrained by the broad language of a law
which was not drafted with application to military readiness activities
in mind. Notwithstanding the plaintiffs' failure to produce scientific
evidence contradicting the independent scientific research sponsored by
the Navy in coordination with numerous outside experts that the system
could be operated with negligible harm to marine mammals, the court
opined that Navy training must be restricted. In reaching this
conclusion, the court noted that under the definition of harassment,
the phrase ``potential to disturb'' hinged on the word ``potential''
and extended to individual animals. Quoting from the opinion, the judge
said, ``In fact, by focusing on potential harassment, the statute
appears to consider all the animals in a population to be harassed if
there is the potential for the act to disturb the behavior patterns of
the most sensitive individual in the group.'' (Emphasis added.)
Interpreting the law this broadly would require authorization (permits)
for harassment of potentially hundreds, if not thousands, of marine
mammals based on the benign behavioral responses of one or two of the
most sensitive animals.
Highlighting how difficult it would be to apply the MMPA to world-
wide military readiness activities under such a broad interpretation of
harassment, the court pointed out that a separate structural flaw in
the MMPA limits permits for harassment to no more than a ``small
number'' of marine mammals. Overturning the regulatory agency's
decades-old interpretation of the MMPA, the court also said that the
``small number'' of animals affected cannot be defined in terms of
whether there would be negligible impact on the species, but rather is
an absolute number that must be determined to be ``small.'' The court's
far-reaching opinion underscores shortcomings in the MMPA which apply
to any world-wide military readiness activity, or any grouping of
military training activities that might be submitted for an overall
review of impact on the environment.
In addition to the decision to restrict deployment of the SURTASS
LFA system, two other recent decisions by different Federal district
courts have stopped scientific research due to concerns about acoustic
impacts to marine mammals. In one case, the court enjoined seismic air
gun research on geological fault lines conducted by the National
Science Foundation off the coast of Mexico based on the court's concern
that the research may be harming marine mammals in violation of the
MMPA and NEPA. In another case, a court enjoined a Navy funded research
project proposed by the Woods Hole Oceanographic Institute designed to
study the effectiveness of a high frequency detection sonar (similar to
a commercial fish finder) in detecting migrating Grey Whales off the
coast of California. The court's order stopped research on the
development of a promising mitigation measure to avoid harming marine
mammals from acoustic sources.
To address these issues, I ask for your consideration of the
narrowly focused amendments to the MMPA proposed in the National
Defense Authorization Act for Fiscal Year 2004, which has now been
transmitted by the President to Congress. Our proposal to clarify the
definition of ``harassment'' and allow authorization of activities
under the MMPA which would have a negligible impact on a stock or
species follows recommendations of the National Research Council of the
National Academy of Sciences, and would reinstate regulatory policies
adopted prior to or during the Clinton administration. Our proposal to
include a national security exception, similar to that in the
Endangered Species Act, is directly responsive to numerous comments we
received from environmental organizations commenting on national
security exemptions in environmental laws.

ENDANGERED SPECIES ACT (ESA)

Negative impacts on military readiness activities have also
resulted from the ESA. For example, the designation of land used for
military training as critical habitat under the ESA can undermine the
primary purpose for which these lands were set aside. Federal courts
have held that critical habitat is intended not only as a safe haven
for species survival, but as a cradle for species recovery--even if the
species is not currently present on the land. Under the ESA, Federal
agencies are required to ensure that their activities do not adversely
modify designated habitats. Hence designation as critical habitat can
drastically limit land uses by placing inflexible restrictions on land
that has been dedicated by our Nation to maintain military readiness.
For example, in 1996, when 40 percent of the Chocolate Mountain
Aerial Gunnery Range was designated as critical habitat, Navy SEAL
training was negatively impacted. Before designation, Navy SEALs
conducted realistic live-fire defense and attack training with multiple
avenues of approach. Today, Navy SEALs training at this important range
must restrict firing weapons to a narrow sector away from the critical
habitat, undermining training realism. The ability to react to hostile
forces coming from any direction is essential to a combat-effective
SEAL and the range cannot provide that training under the critical
habitat restrictions.
Due to environmental restrictions and encroachment from other
sources (e.g., urban sprawl, State and Federal-designated recreation
areas and access limitations) at Camp Pendleton, California where the
Navy and Marine Corps jointly train, only 1,500 meters of the 17 miles
of beach is available to practice amphibious landings and movement from
the beach using the full range of Marine Corps combat vehicles.
Rehearsal of standard line abreast (side-by-side) formations of landing
craft--to prevent the enemy from being able to concentrate fire on a
specific beach location--has been dropped to mitigate potential
disruption to birds and their nests on the beach. Even within this
1,500-meter beach, all military vehicles are restricted to designated
roads, and digging and earth moving is constrained to very limited
areas.
Similar ESA-based restrictions have led to significant curtailment
of Navy training at other important locations, such as the Naval
Amphibious Base at Coronado, California, which has been home to Navy
frogmen and SEALs since their inception in World War II. All of their
basic training and many necessary skills (from diving to hydrographic
reconnaissance) are taught on its beaches and in the bays surrounding
the base. A substantial amount of the SEAL training conducted at this
base has had to be relocated as a result of requirements to mark and
avoid ESA-protected bird nests on the beach that have flourished under
dedicated Navy stewardship. At Tinian in the Marianas Islands in the
Pacific, ESA-based restrictions to protect sea turtles and bird nesting
areas resulted in a decision this year to cancel use of air cushion
landing craft during a major fleet exercise, although this is the best
heavy lift capability the Navy has to support Marine landings.
In some cases, the challenge of critical habitat designation has
become an issue even when the relevant endangered species are not
currently present. Under litigation pressure brought by environmental
groups in Federal court, the U.S. Fish and Wildlife Service (USFWS) has
proposed part of Guam as critical habitat for the Marianas Crow,
Marianas Kingfisher, and Marianas Fruit Bat. The areas under
consideration for designation are currently used as magazines for
forward deployed ordnance storage, jungle training areas (special
operations forces), and low-level aviation training areas by all
military services. None of the animals for which the habitat would be
designated currently live on the land. Just last month USFWS designated
critical habitat for a species of grass at the Pacific Missile Range
Facility (PMRF) in Hawaii. PMRF is a long, narrow strip of land on
Kauai, critical to the testing and evaluation of weapons, and capable
of supporting a broad range of training and testing, including
amphibious landings and Missile Defense Agency efforts to rapidly
achieve an operational ballistic missile defense capability. This
designation, like those proposed on Guam, establishes critical habit
for species which do not even exist there. While the Guam and Hawaii
critical habitat designations are noteworthy current examples, the real
challenge is that special interest groups will use litigation to force
designation of more and more military land as critical habitat even as
other training alternatives become more scarce due to commercial
development and urban growth.
The administration has proposed a legislative solution to this
challenge which would specify that INRMPs be used in lieu of
designating critical habitat. DOD is already obligated under the Sikes
Act to develop INRMPs for lands under military control. INRMPs address
management of natural resources in the context of the missions for
which the lands were placed under control of the military services.
INRMPs are prepared in cooperation with the USFWS and State agencies,
and these agencies recommend ways for DOD installations to better
provide for species conservation and recovery.
INRMPs are an effective tool for protecting the environment. For
example, at Naval Amphibious Base Coronado, the Navy is spending about
$720,000 per year on conservation and management programs for the
Western Snowy Plover and Least Tern, endangered birds that nest in that
area. That effort has successfully increased the number of Least Tern
nests from 187 to 825 (over 4 times as many in 9 years) and the number
of Western Snowy Plover nests from 7 to 99 (nearly 14 times as many in
9 years). Similar good environmental stewardship by the Navy has been
demonstrated at Vieques Island, Puerto Rico, where over 17,000 sea
turtle eggs have been incubated and returned to the environment during
a 10-year program. Vieques is only one part of a Navy-wide sea-turtle
conservation effort in which we invest about $1 million a year.
Adopting the RRPI would better balance training needs with the
protection of threatened or endangered species. Changing the law to
clearly establish that an approved INRMP provides sufficient species
protection--rather than designating more and more military land as
critical habitats--would retain flexibility for the Services in places
where training needs and endangered species protection must coexist.

LEGISLATIVE PROPOSALS

I would like to call your attention to several other important
legislative proposals which would, if enacted, enable the Navy to meet
both its legal obligations to provide ready forces under Title 10 and
to conserve environmental resources.
The Readiness and Range Preservation Initiative is a top Department
of Defense and Navy priority. It would provide legislative relief for
military readiness activities under various environmental statutes
without compromising environmental protection. Each of these provisions
would provide a significant benefit to readiness at a negligible cost
to the environment.

Modifications to MMPA which would clarify the MMPA's
definition of ``harassment'' as a biologically significant
response and authorize permits under the MMPA when there is a
negligible impact on the stock of marine mammals.
Modifications to ESA so that an approved INRMP for
management of all natural resources now required under the
Sikes Act precludes designation of critical habitat on military
lands.
Clarifying and confirming the longstanding regulatory
policy of EPA and the States that firing of munitions on an
operational range does not constitute a ``release'' under the
Superfund statute or the creation of solid waste under the
RCRA--a commonsense policy now being challenged in court. If
the challenges are successful, such an interpretation could
inhibit or even preclude live-fire training on our existing
operational ranges.
Provide modest additional flexibility under the Clean
Air Act to the activities and the States in accommodating new
military readiness activities like beddown of new weapons
systems.

SUMMARY

We face an enemy today which threatens our way of life. The
President has directed us to ``be ready'' to face this challenge. To
fulfill this directive, we must conduct comprehensive and realistic
combat training--arming our sailors and other servicemen and women with
experience necessary to safeguard their lives and our national
interests. This requires full use of our ranges, operating areas, and
weapon systems. The Navy has demonstrated its able stewardship of our
natural resources, and we will continue to promote the health of lands
entrusted to our care. We recognize our responsibility to the Nation in
both of these areas and seek your assistance in balancing these two
requirements.
I thank the subcommittee for your continued strong support of our
Navy and I ask for your consideration of the RRPI legislation. Passage
of RRPI will help the Services sustain military readiness today in this
time of war and in the future. It will also support our on-going
efforts at environmental conservation. Achieving the best balance of
these national imperatives is in the interests of all Americans, and
your Navy is committed to achieving these goals.

Senator Ensign. We will be back in a few minutes. [Recess.]
Next we will hear from General Nyland.

STATEMENT OF GEN. WILLIAM L. NYLAND, USMC, ASSISTANT COMMANDANT
OF THE MARINE CORPS

General Nyland. Thank you, Mr. Chairman. Chairman Ensign,
members of the subcommittee, it is certainly my honor to appear
before you today to provide the Marine Corps' position on
encroachment and encourage Congress to pass the Department's
Readiness and Range Preservation Initiative.
Environmental encroachment directly impacts the ability of
our bases, stations, and ranges to support the readiness
training of our servicemen and women. I greatly appreciate this
subcommittee's willingness and commitment to address this truly
national issue with the holistic view that only the Congress of
our great Nation can provide. I thank you for your continuous
support of our Nation's services, and most particularly for
your Corps of Marines.
I look forward to answering any questions you may have.
[The prepared statement of General Nyland follows:]

Prepared Statement by Gen. William L. Nyland, USMC

Chairman Ensign, Senator Akaka, and members of the subcommittee;
thank you for the opportunity to speak with you concerning the impacts
of encroachment on Marine Corps training ranges, and the Department's
legislation known as the Readiness and Range Preservation Initiative.
Your efforts on behalf of our men and women in uniform will ensure that
the Nation's military remains ready and that our service members and
their families enjoy the quality of life that they deserve. As General
Mike Williams, the Assistant Commandant of the Marine Corps before me,
accurately noted: good quality of life begins with realistic training
because realistic training results in success on the battlefield and
success on the battlefield is the only way your marines can return home
safely to their families.
I welcome the opportunity to offer testimony as the subcommittee
considers the implications of encroachment. The Readiness and Range
Preservation Initiative is fundamentally important to the Nation
because encroachment is on the rise. If left unchecked, encroachment
will detrimentally impact the mission of our bases, stations, and
ranges in the near term and threaten our future military readiness in
the long term. At stake for your Marine Corps is the cost of success in
combat. We must do all in our power to ensure that marines, members of
our sister services, and service member families do not pay an
unnecessarily high price for that success. Marines must train, as they
will fight; to do that requires unencumbered access to sea, land, and
airspace to properly conduct this essential training.
During the last 24 months, service witnesses have appeared before
Congress to speak to encroachment issues at six different hearings:
this subcommittee held a hearing on March 20, 2001; the House Committee
on Government Reform held hearings on May 9, 2001 and May 16, 2002; the
Subcommittee on Military Readiness of the House Armed Services
Committee held hearings on May 22, 2001 and March 8, 2002; and the
Senate Environment and Public Works Committee held a hearing on July 9,
2002. The Readiness and Range Preservation Initiative was introduced
and debated during the course of these hearings. Marine Corps'
witnesses, among others, were afforded the opportunity to articulate in
detail their position on the issue of encroachment.
As a result of these efforts, the 107th Congress enacted a
provision to clarify Department of Defense responsibilities under the
Migratory Bird Treaty Act. Litigation had called into question our
responsibilities under this act, and threatened to halt military
training necessary to be combat ready. Congress took action to remove
this litigation threat, and I thank Congress for this effort. In
accordance with last year's legislation, we will continue with our
efforts to identify measures to monitor, minimize and mitigate--to the
extent practicable, any adverse impacts to migratory birds that may be
attributable to military readiness activities. Further, we will work
with the Interior Department as they develop and prescribe the
regulations Congress directed.
The 107th Congress also granted authority to the military
departments to partner with non-governmental organizations, and State
and local governments to acquire land adjacent/proximate to military
installations to prevent incompatible development, and to convey
surplus real property for natural resource conservation. I would like
to take this opportunity to advise you as to what we have already done
with this new authority. I believe our efforts demonstrate that we take
the encroachment threat seriously.
The Marine Corps is actively pursuing use of the new authority
provided by the 107th Congress; and in fact, Camp Lejeune has already
utilized the authority. The installation is a member of the Onslow
Bight Forum, a group dedicated to protecting the natural heritage of
coastal North Carolina. Participants in the Onslow Bight include The
Nature Conservancy and other non-governmental organizations, several
North Carolina state agencies, the U.S. Fish and Wildlife Service and
the U.S. Forest Service. Recently, 2,500 acres adjacent to the Camp
Lejeune tank and rifle ranges became available for purchase, and was
the subject of interest by a developer hoping to construct 3,000
housing units. The land was purchased by The Nature Conservancy (with
partial funding provided by the Marine Corps) and will be transferred
to the North Carolina Wildlife Resources Commission for inclusion into
the State hunting lands system. The Marine Corps, in exchange for its
funding contribution, received a restrictive use easement that will
prohibit any land use or development of the parcel that is incompatible
with Marine Corps training requirements. The Onslow Bight Forum is
continuing to search for other parcels that further the mutual goals of
its members.
Camp Pendleton, California is also actively engaged in a similar
partnership effort. Camp Pendleton is participating in the South Coast
Conservation Forum, a group whose goal is to acquire lands that will be
set aside to protect as many of the 50 listed species in the area as
possible. Members of this group include Orange, Riverside and San Diego
counties, and non-governmental conservation organizations such as The
Nature Conservancy, Trust for Public Land, Sierra Club and Wildlife
Habitat League. There may be opportunities to purchase buffer areas
adjacent to the north, east and south sides of Camp Pendleton in order
to preserve watersheds, protect natural habitat and avoid urbanization.
The efforts of the 107th Congress, and our subsequent initiatives
within the Marine Corps, have been very beneficial. Much more, however,
must still be done. We continue to face threats to our training
capabilities focused on environmental media the 107th Congress did not
address. This year, therefore, the administration is reintroducing
legislative clarifications for five provisions not approved in last
year's Readiness and Range Preservation Initiative. These
clarifications will:

provide for our integrated natural resource management
plans to obviate the need for critical habitat designation
under the Endangered Species Act;
clarify the definition of ``harassment'' under the
Marine Mammal Protection Act;
provide needed flexibility in working with States
regarding the conformity requirement of the Clean Air Act; and
clarify the role of the Resource Conservation and
Recovery Act and the Comprehensive Environmental Response,
Compensation, and Liability Act to apply when a range closes to
provide a clear demarcation for the application of these laws.

The challenge of encroachment is clear, as is the importance of
this hearing and the proposed initiative. The Readiness and Range
Preservation Initiative is narrowly tailored to protect military
readiness activities, and does not purport to address the entire scope
of Department of Defense activities. The thrust of the Initiative is to
clarify rather than to roll back existing regulation, and each of the
Initiative's proposals would benefit each of the military services to
varying degrees. For the Marine Corps, endangered species issues are at
the forefront of our encroachment concerns. The Readiness and Range
Preservation Initiative proposal that addresses critical habitat,
therefore, is the provision that would provide the Marine Corps with
the greatest training value. (I will address our endangered species
issues in more detail shortly.) The absolute necessity of maintaining
military readiness is beyond debate, and readiness depends upon quality
training that realistically simulates combat conditions. The issue,
then, is how to balance the demands of national security with
environmental stewardship, which at times are competing but are often
complementary.
Most of the Marine Corps' bases and stations were established in
remote areas prior to or during World War II. Since then significant
urban development has occurred around many of these installations. At
the same time, our warfighting doctrine, weapons platforms, and tactics
have evolved to counter new threats. The Marine Corps now requires
greater standoff distances and larger maneuver areas. Simultaneously,
our access to training resources is becoming more constrained,
primarily as a result of growing populations around our bases and
stations. The dramatic urban development near many of our installations
has had numerous unintended consequences. For example, wildlife (often
threatened or endangered species) seek out our installations, as they
are often the last remaining open spaces in areas otherwise overtaken
by human habitation and use.

Previous testimony at the hearings referenced above provided
compelling statements regarding encroachment. The Marine Corps
recognized, however, that evidence of negative encroachment impacts,
though persuasive, were largely anecdotal. Consequently, the Marine
Corps set out to establish quantitative data regarding this issue.
Selecting Marine Corps Base Camp Pendleton, California as the subject
of the study, we examined encroachment impacts on a Marine Air Ground
Task Force during the conduct of an amphibious landing. We relied upon
established standards to measure the proficiency of marines based upon
the Individual Training Standards of their military occupational
specialties. The performance of Marine units was assessed against long
established standards based upon Mission Essential Task Lists. We used
these standards as the building blocks upon which we were able to
quantify encroachment impacts.
There are literally hundreds of elements to a Marine Air Ground
Task Force. The study, therefore, selected three separate combat arms
elements of the Marine Air Ground Task Force to examine: the artillery
battery; the light armored reconnaissance platoon; and the mortar man.
The tasks for each combat arms element were identified, and completion
rates for each task were evaluated. Given that safety during training
is paramount, and therefore certain types of training can be limited
for safety purposes, the study concentrated on non-firing tasks
(defined as all tasks that did not involve the use of live ammunition
or explosives). In doing so, we avoided any concern that the study
would confuse safety with encroachment issues.
The initial results of the Camp Pendleton Quantification Study were
surprising. The three combat arms elements were able to accomplish only
69 percent of established standards for non-firing field training. The
combat engineer Military Occupational Specialty was also examined in
the context of the scenario, as the engineers have important tasks in
support of the three combat arms elements. They were able to accomplish
77 percent of established standards for non-firing field training. In
the study, endangered species was the largest contributing encroachment
factor. Endangered species and their habitat, for example,
significantly constrain individual marines and Marine units from
digging fighting positions, gun emplacements, vehicle defilade, and for
combat engineers earthmoving and vehicle recovery activities. These
findings reinforce my comment above that for the Marine Corps,
endangered species issues are at the forefront of our encroachment
debate.

A second phase of this study is on the verge of completion. A final
report of some 650 tasks is due to the Commanding General, Marine Corps
Base, Camp Pendleton later this month. The second phase examined
additional elements of the Marine Air Ground Task Force, including a
Battalion Landing Team, an Infantry Company, the Cobra Attack
Helicopter, and an Assault Amphibian Vehicle Crewman. I can report that
the second phase's initial findings are consistent with the first
phase. On average, a 70 percent completion rate applies to these
additional elements of a Marine Air Ground Task Force conducting an
amphibious operation at Camp Pendleton.
One of the hundreds of tasks examined in the Pendleton
Quantification Study was simple digging. Digging fighting holes is a
core competency for Marine infantrymen, and one that is severely
constrained at Camp Pendleton due to the presence of endangered species
and habitat, cultural resources, or wetlands. To the layman, it may
sound strange to suggest that digging is a technique that must be
practiced; however, digging must be second nature in combat.
An historical example will prove my point. During the Chosin
Reservoir campaign of the Korean War, a Marine infantry company
occupied a mountain pass for what was to have been a brief rest before
advancing. Beginning that night, and for several days, they came under
constant attack. Eventually, the entire 1st Marine Division fought back
through that pass. Years later, the company commander recalled:

I'll never forget how close we came to not digging in that
first night. It seemed almost foolish at the time, because we
expected to move off the position early the next morning. But
something made me order them to break out those entrenching
tools, even though it was growing dark and we were dead tired.
If we hadn't, we would have been wiped out. We would not have
survived that first night. [Martin Russ, Breakout: The Chosin
Reservoir Campaign, page 316]

The ``something'' to which the company commander refers is
realistic training, which was then--unlike now, unconstrained at Camp
Pendleton. His marines had been trained to dig their fighting holes as
an automatic response in combat conditions. That response came as a
result of repetition and reinforcement in a training environment;
repetition and reinforcement that is not fully available today.
Returning to the Pendleton Quantification Study for 1 minute, I
would like to note that the study is not meant to identify the combat
readiness of any particular Marine unit. Instead, the study is a report
card on Camp Pendleton's ability to provide the training environment
necessary for marines to complete their missions to task or standard.
Marines who cannot get their training at Camp Pendleton must go
elsewhere to train. Naturally, there are associated costs here, not
only in terms of money but also in quality of life.
Evidence of negative encroachment impacts is not limited to the
Camp Pendleton Quantification Study. Perhaps the most sweeping example
within the Marine Corps is a proposal--made in calendar year 2000, to
designate critical habitat on 57 percent of the 125,000-acre Camp
Pendleton and 65 percent of the 23,000-acre Marine Corps Air Station
Miramar. The Marine Corps worked with the USFWS to develop a
scientifically and legally based policy that precluded the need to
designate critical habitat on Miramar, and precluded the designation of
critical habitat on the vast majority of Camp Pendleton. This policy
recognized that Marine Corps Integrated Natural Resource Management
Plans, developed in coordination with the USFWS, can provide the
special management necessary for endangered species, and can preclude
the need to designate critical habitat. Special interest groups have
now challenged the USFWS's final rule in court. With the consent of the
court, the USFWS withdrew their final rule. The USFWS is currently
reconsidering critical habitat designation, and is required to issue a
new draft rule in April 2003.
Meanwhile, the USFWS has been applying their policy to other
Federal agencies with acceptable natural resource management plans. The
USFWS applied the policy, for example, to a Forest Service management
plan on lands that are habitat for the Mexican Spotted Owl. In January
2003, a Federal district court in Arizona held that the USFWS's policy,
as it was applied to the Forest Service management plan, was
``knowingly unlawful.'' The Readiness and Range Preservation Initiative
has within it a provision that would codify current USFWS practice.
Given recent judicial opinions, codification is necessary to confirm
for the courts that the USFWS's policy is lawful. Absent the passage of
this specific provision, environmental litigation may still cause over
65 percent of Marine Corps Air Station Miramar and 57 percent of Camp
Pendleton to be designated critical habitat.
As the legislative response to the Pendleton/Miramar critical
habitat proposals demonstrate, clarification of existing law in
accordance with administration policy is the purpose of the Readiness
and Range Preservation Initiative. The intent of the Initiative is not
to roll back the environmental stewardship responsibilities of the
Armed Forces. Rather, by clarifying relevant environmental statutes,
the Initiative will enhance the ability of the Armed Forces to train
properly for combat.
There are those who note that the military services already have
limited legislative exemptions available in some of the environmental
statutes; they note that these exemptions are seldom used, and suggest
that they are the appropriate venue under which the military should
address encroachment impacts. We disagree. A national security
exemption, such as the one available under the Endangered Species Act,
is like the tool-box in your car. Exemptions, like the automobile tool-
box, are necessary for emergency situations; they should not, however,
be necessary every day for the daily commute to work. We seek
legislative clarification for the day-to-day functioning of our
military installations. National security exemptions are not the
appropriate method to deal with daily operations.
While we seek legislative clarification for the day-to-day
functioning of our military installations, our effort does not address
every function of our military installations. A military installation
can be viewed as a ``tale of two cities.'' On the one hand, our
installations are comparable to many medium-sized cities, complete with
populations of 50,000 residents, schools, wastewater treatment
facilities, power plants, and a hospital. There are environmental
responsibilities associated with each of these amenities, and we seek
no relief from any of these responsibilities. A military installation,
however, is also a military combat test and training center. The
primary purpose of the military installation is to promote military
readiness. No civilian city has a similar purpose. It is within the
venue of military readiness that we seek to address the impact of
encroachment on combat readiness activities. Our goal is to establish
the appropriate balance between our Title X responsibility to be combat
ready at all times, and our additional environmental compliance and
stewardship responsibilities. The Initiative's provisions are focused
solely on readiness activities. Marine Corps activities unrelated to
combat remain unchanged.
Encroachment has grown over time, and while each issue taken
individually may not seem detrimental to our training mission, it is
their cumulative effect, and the predictable increase in these
encroachment pressures that has lead the Department of Defense to seek
the clarifications of existing statutes.
The provisions contained in the Readiness and Range Preservation
Initiative are primarily designed to maintain the status quo so that
our training can continue at its current pace. For example, the
critical habitat provision codifies current USFWS practice. This
practice holds that Integrated Natural Resource Management Plans
prepared pursuant to the Sikes Act provide the special management
considerations necessary under the Endangered Species Act. Critical
habitat designation on military installations is, therefore,
unnecessary. Similarly, the Readiness and Range Preservation Initiative
provision addressing marine mammals provides a definition of harassment
that is consistent with guidance of the National Research Council to
maintain adequate protection of marine mammals. The Clean Air Act
compliance provision provides limited flexibility--a 3-year period,
within which the military services would be required to demonstrate
conformity with applicable State Implementation Plans. Finally, the
military munitions provisions are designed to codify current
administration policy regarding when military munitions are solid and
hazardous wastes.
The Marine Corps is a good steward of the resources entrusted to
it. Even those who question our need for legislative relief acknowledge
that fact. Our responsibility to the American people is to maintain a
high state of readiness while preserving and protecting the environment
of the Nation. Unlike commercial developers, the military needs a
natural environment for realistic field training. As a result, our
environmental management efforts have produced increasing populations
of endangered species on our lands.
The Readiness and Range Preservation Initiative is essential to
ensure a proper balance between two national imperatives: military
readiness and environmental conservation. The Initiative is key to
future readiness. It is an appropriate response to the encroachment
threat, and I encourage your full support for this balanced approach
toward both the requirement to maintain military readiness and the
requirement to protect the environmental resources of the Nation. Thank
you for your interest in this national issue.

Senator Ensign. General Foglesong.

STATEMENT OF GEN. ROBERT H. FOGLESONG, USAF, VICE CHIEF OF THE
AIR FORCE

General Foglesong. Thank you, Mr. Chairman, Senators.
Thanks very much for the opportunity to come over. I am honored
to be here with you today. This is a critical and important
topic for all of our Services. Let me start off by saying I
think we have been good stewards of our environment. We are
primarily interested in the land around our bases and the air
space around our bases. I will comment on that a little later,
but we also have this balancing act, as you all know better
than anybody, of trying to be good stewards of readiness for
our sons and daughters. I think we have also done a pretty good
job of that lately, and I am proud of that.
I do not see those two things as incompatible, by the way,
being a good steward of our environment and being a good
steward of our sons' and daughters' readiness.
I will say that our ranges are absolutely fundamental, in
fact, even critical to our successes. I will also give an
anecdotal story, if I can. I was recently visiting over in the
Persian Gulf and had the opportunity to talk to one of our
fighter pilots who had just returned from a mission and had
just dropped a 500-pound bomb on a gun emplacement that had
been shooting at him. As it turns out, this is not an uncommon
event, and of course they are pretty pumped up when they come
back.
So my question was, ``well, how did this go?'' and the
answer I got back was, ``General, this is not my first rodeo,''
that he had had the opportunity to drop 500-pound bombs before
and had trained up to do this. While the adrenaline was flowing
a little more when somebody is shooting back at you, the
procedures that he used and the techniques, the training that
he had achieved on our ranges, were incredibly useful for him.
So it helped me focus once again on why our range spaces are
absolutely critical to us.
Let me finish by saying that while, as I said earlier, our
focus is primarily on the land around our bases and the air
space around our bases, I am here also in full support of the
Army, the Navy, and the Marine Corps. Because when their
ability to train is impacted, it critically impacts our ability
to train with them, so for the Army and the Marines, when they
are impacted, the air power that is provided by the sea
services and the Air Force also is critically impacted.
I, too, have a statement I would like to turn in for the
record if I could, and I would be happy to take your questions,
sir.
[The prepared statement of General Foglesong follows:]

Prepared Statement by Gen. Robert H. Foglesong, USAF

INTRODUCTION

Mr. Chairman, members of the subcommittee, I am delighted to have
this opportunity to address you today on the growing challenges that
encroachment poses to force readiness. As the Air Force's Vice Chief of
Staff, I want to thank you for your continued focus on the resource
challenges facing our airmen today. The Air Force is dedicated to
maintaining a ready force while protecting our natural resources. We
are committed environmental stewards and do not believe that military
readiness and environmental stewardship are mutually exclusive--in
fact, they can go hand in hand.
Our installations, ranges, and training airspace are critical
national assets that allow the Air Force to test equipment, develop new
tactics, and train our forces to be combat-ready. Access to these
resources is increasingly threatened by urban and commercial growth and
is often restricted or limited by regulations or local laws designed to
conserve resources and manage economic development. At a time when
increased OPTEMPO, aging equipment, and personnel challenges are
threatening our readiness, it is critical that we protect these
valuable resources we need to train our airmen and to develop new
weapon systems.
The loss or restricted use of combat training ranges and operating
areas forces us to find workarounds or to delay and reschedule needed
training. These constraints inhibit our ability to ``train as we
fight,'' degrade our combat readiness, and will eventually limit combat
forces to fight only as they have trained. In the past, the Air Force
dealt with encroachment issues by modifying operations, financing
mitigation, or both. As pressures continue to grow, managing the
operational and financial risks without compromising our mission
becomes increasingly difficult and costly. Without action, we expect to
see a continuing erosion of the training environment.
The Air Force, with all the Services, is committed to addressing
these challenges. We are confident in our ability to provide the
necessary balance between operational needs and environmental
protection. We have a strong record of doing so. Our leadership in
environmental management has ensured resources entrusted to the Air
Force are sustained and restored to the condition needed for future
generations. Our lands offer excellent wildlife habitat; our environs
attract development and competition for clean water and clear air.
The Air Force has made it a priority to identify and quantify the
resources needed to support mission requirements, and to measure and
communicate the impacts of encroachment on mission readiness. The RRPI
will provide needed clarification to specific environmental statutes
and protect access to our training resources while continuing to
protect the environmental resources so valuable to us and the Nation.
Last year, Congress adopted three of the original eight RRPI provisions
providing us with additional options to address land development near
our installations, new opportunities to transfer surplus land, and
relief from Migratory Bird Treaty Act liability for take of birds
incidental to readiness activities for 1 year while we work with the
Department of the Interior on a longer lasting regulatory fix. We need
the remaining provisions to ensure our continued preparedness.

ENCROACHMENT

Encroachment is the result of any and all outside influences that
inhibit necessary training and testing. There are myriad causes.
Competition for airspace in and around military installations from
commercial and general aviation can limit test and training activities.
Conservation of natural resources such as cultural resources,
restrictions on noise levels, caps on air emissions, and efforts to
protect endangered or threatened species can be restrictive. Potential
new critical habitat designations could restrict installation or range
use and development. For example, without clarification, we are facing
acreage restrictions on portions of Beale AFB, F.E. Warren AFB, and
Andersen AFB. A critical habitat designation would restrict all of
Travis AFB. We are also experiencing increasing competition with
commercial users for radio frequency spectrum, interfering with our
command, control, communications, computer, intelligence, surveillance,
and reconnaissance (C\4\ISR) and possibly impacting the next generation
of weapon systems that depend on that data.
We remain concerned about the future impacts of encroachment on our
ability to test and train. New systems, like our standoff weapons and
next generation aircraft, require more airspace and greater range
access. Unfortunately, we cannot simply train somewhere else. Our
existing ranges support a significant infrastructure of testing and
training areas, targets, instrumentation, and other investments--the
costs involved in relocating would be enormous. Maintaining existing
ranges with adequate room to maneuver and the ability to drop live-fire
ordnance is essential to maintaining our combat edge.
The Air Force has a comprehensive strategy to address these
encroachment issues. We identify and quantify the resource base
required to perform the Air Force mission and then quantify the
readiness impairments resulting from any limitations on the resource
base. We work with other Federal resource management agencies to
develop regulatory or administrative improvements, and we dialogue with
State, tribal, and local governments and other interested
organizations. If necessary, we seek statutory modifications to prevent
these unintended impacts to military readiness.
RRPI seeks to do just that. For the most part, we are seeking
definitional clarifications, application of environmental requirements
in more appropriate balance with readiness requirements, and, in some
cases, time extensions to fulfill our requirements. Narrowly defined,
RRPI seeks to address only those regulations that specifically impact
readiness training.
For example, the Air Force's access to and management of our
valuable resources is often controlled or limited by courts and other
governmental agencies that apply existing laws, statutes, and
regulations in ways that limit military readiness. In some cases, there
are laws that, depending on the manner in which they are interpreted,
may contradict one another. Case in point, the Sikes Act states that
military needs are the primary land use consideration, while the
Endangered Species Act (ESA) requires agencies to utilize their
authorities to conserve listed species and their habitat. As a result,
there are currently several legal challenges that threaten to overturn
the Department of the Interior (DOI) policy of using the Sikes Act
planning process to substitute for critical habitat on some military
lands. The Air Force would like to use Integrated Natural Resource
Management Plans in place of critical habitat designation under the
ESA.
Cases like this demonstrate the needed clarification the RRPI
provides. There are more. We need time extensions to comply with State
Implementation Plans in the Clean Air Act. Further clarification of the
circumstances in which explosives, unexploded ordnance, munitions and
their fragments, are included in the definition of ``solid waste'' when
used on operational ranges is needed. Similarly, additional
clarification is needed with respect to those items and the definition
of ``release'' under the Comprehensive Environmental Response,
Compensation, and Liability Act. These and other reasonable steps will
ensure that military training and readiness are not compromised as we
carry out our environmental protection responsibilities. The relief
will allow us to direct our budget and priorities towards sustaining
environmental resources and to spend less of our limited environmental
funding on litigation, administration, support, studies, and
investigations.
The following is illustrative of our environmental commitment and
the associated operational challenges in the areas of species and habit
protection, unexploded ordnance removal, air quality, and spectrum
allocation.

SPECIES AND HABITAT PROTECTION

Currently, 78 Federally listed threatened and endangered species
live on approximately 9 million acres of Air Force property for which
the Air Force provides measures of habitat and species protection. As
an example, we track the movement of Sonoran Pronghorn on the Barry M.
Goldwater Range (BMGR) in Arizona. The DOD flies about 70,000 sorties
yearly on the BMGR, and our biologists monitor the BMGR target areas
for Pronghorn movements. If any are spotted within a 2-hour period
prior to bombing, the live missions projected for that area are
diverted or canceled. Working hand-in-hand with the USFWS and the
Arizona Department of Game and Fish, we strive to ensure the survival
of this endangered subspecies of Pronghorn.
At the Nevada Test and Training Range (NTTR), operated by Nellis
Air Force Base, the Air Force supports the Bureau of Land Management's
wild horse program on over 390,000 acres of the NTTR. In the southern
portion of the range we have fenced target areas to ensure the
endangered Desert Tortoise population is not affected by our
operations. Additionally, in Nevada and Arizona we work with local
communities and Tribal Governments to ensure the protection of cultural
resources. We can do all of this and still meet our training
requirements.
At Tyndall Air Force Base in Florida, we monitor the nests of about
100 threatened Loggerhead and endangered Green Sea Turtles daily,
physically protecting their homes with wire mesh. We do this to ensure
compliance with the ESA.
At Eglin Air Force Base in Florida, we electronically tag and track
endangered Gulf Sturgeon to ensure they are not impacted by our
operations. The water impact/detonation area is monitored for sturgeon
prior to training. If sturgeon are detected in the area, detonation is
moved or delayed. Eglin also serves as a home to the endangered Red-
Cockaded Woodpecker. By working closely with the FWS, we have been able
to nearly double their population. Additionally, our biologists are
doing everything possible to aid the threatened Flatwoods Salamander
and the threatened Eastern Indigo Snake.
We do these initiatives to support the ESA and serve as good
stewards of our Nation's resources while at the same time, maintain our
commitment to combat readiness. However, good stewardship incurs
significant costs. For example, the Air Force spends $300,000 annually
to track Pronghorn movements at BMGR and is preparing a 10-year, $35
million study of endangered bird species in New Mexico, Texas and
Arizona.
In some cases, our installations and ranges are the only large,
undeveloped, and relatively undisturbed areas remaining in growing
urban areas. This can result in Air Force lands becoming the sole area
in the region that can support endangered species. Biological Opinions
resulting from our obligations under the ESA have imposed range and
airspace restrictions mainly associated with aircraft noise and
munitions use. We operate with altitude restrictions because of the
noise and its possible effects on endangered species in states such as
Arizona, Idaho, New Mexico, and Texas.
The potential designation of installation or range areas as a
critical habitat or marine sanctuary may seriously limit our ability to
perform training and test missions. For example, a critical habitat
designation for six species, including three species of shrimp and two
grasses, on Travis AFB could restrict 100 percent of the installation
and impede/stop plans to beddown C-17 aircraft. At Andersen AFB on Guam
a critical habitat designation for the Guam Rail, Micronesian
Kingfisher, Guam Fruit Bat, and Mariana Fruit Bat could restrict 67
percent of the installation.

UNEXPLODED ORDNANCE (UXO)

We have extensively examined our practices and policies for the
disposal of UXO and associated residue material (primarily scrap metal)
on operational ranges. UXO and range residue (used targets, inert
ordnance, etc.) physically occupy only a small part of any air-to-
ground range, but their presence is an increasingly expensive problem.
The costs associated with cleaning up closed ranges have led us to the
conclusion that we need to plan and manage for the entire life-cycle of
a range.
The Air Force first started clearing ordnance from active ranges in
the late 1940s. Today, active range clearance provides for safe target
area operations, while clearing live-drop operational ranges provides
airfield-recovery training for our Explosive Ordnance Disposal
technicians. Air Force policy requires that active air-to-ground ranges
be cleared on a quarterly, annual, and 5-year basis at varying
distances from each target. Our currently scheduled UXO and residue
removal program, along with modifications to our range-clearing
practices, will ensure long-term range sustainability and the safety of
personnel on the range. Our ultimate goal is to manage our ranges
effectively and efficiently throughout the life-cycle process providing
for sustainable operations, safe and effective UXO management and long-
term environmental stewardship.
The Air Force understands its responsibility to manage material
from our ordinance if it travels off-range, and supports the RRPI
legislation that helps to clarify our obligation to respond to
potential off-site impacts from our munitions training.

AIR QUALITY

Many of our largest and most important installations are located in
areas that are experiencing rapid growth and the attendant pressures
resulting from air quality standards. A number of our installations are
currently located in ``non-attainment'' areas, which are places that
failed to meet EPA standards for air pollution, and more bases are in
areas that are trending toward non-attainment. Air quality pressures
generally affect operations at our installations more than on our
ranges, but they potentially limit our basing options for force
realignments and weapon system beddowns. If any beddown action is found
not to conform to the state implementation plan for Clean Air Act
compliance, the Air Force must either obtain air quality credits or
reduce other emissions at the base to counterbalance the impact.
The Air Force supports the RRPI legislative provision that allows
for conformity with each State's air quality implementation plan,
including emissions limits, over a 3-year period so that mission
critical readiness activities can still take place while the steps
necessary to achieve conformity are completed. We continue to work with
State regulators and local communities to ensure we have the
flexibility to base aircraft at our installations which have huge
investments in infrastructure not only on the installation itself, but
also in the ranges used by its aircraft.

SPECTRUM REALLOCATION

The RF frequencies below about 5000 MHz are the most valuable part
of the spectrum for the kinds of highly mobile functions carried out at
our test ranges. Over the past decade, the Federal Government has lost
access to over 235 MHz of bandwidth in this part of the spectrum--due
primarily to international and congressionally-mandated reallocations.
For example, until 1992, the DOD and private sector aerospace industry
were authorized to use 80 MHz of designated spectrum in ``Upper-S
Band'' to transmit real-time telemetry data from flight tests of manned
aircraft. This spectrum bandwidth was needed to support increasing
telemetry bandwidths requirements for future fighters and bombers. In
1992, the World Radio Conference (WRC) reallocated the lower 50 MHz of
this frequency band to provide spectrum for broadcasting high quality
audio from geostationary satellites. In 1997, under the requirements of
the Balanced Budget Act of 1997, we were forced to transfer an
additional portion of this frequency band, leaving us with only a 25
MHz increment for flight test telemetry in this spectrum. Although the
recent National Telecommunications and Information Administration
(NTIA) Advanced Mobile Wireless Viability Study agreement between the
NTIA and Federal Communications Commission will restore a limited
portion of this bandwidth, further loss of this spectrum could impact
our flight-test programs, increase test costs, and threaten our future
telemetry needs.

CONCLUSION

I thank the subcommittee for this opportunity to address our
concerns and to outline workable solutions that will guarantee
continued readiness while preserving our natural resources. The Air
Force understands its obligation to identify competing defense and
environmental needs and to establish a compatible use of resources. At
the same time, we are committed to giving our airmen both the resources
and the training they need to succeed in combat. We owe them no less.
This requires a realistic training environment that approximates the
combat environment. It requires cutting-edge weaponry that will
overwhelm our enemy's capabilities. Let me be clear, when opportunities
to test and train are reduced, our readiness and effectiveness are
reduced. Without appropriate relief from encroachment, the Air Force
will be unduly constrained over time, and we will not be the ready
fighting force this country needs and demands.
We are confident the multi-billion dollar effort in Defense
programs to conserve, protect, and restore the environment will
continue to achieve lasting successes in all areas of protecting human
health and the environment. The Air Force appreciates the
subcommittee's continued support so that we can maintain our
stewardship of the environment and still prepare our men and women for
the daunting challenges of combat.

Senator Ensign. I thank all of you, and I want to start,
first of all, General Keane, when we visited a few weeks ago in
my office I was greatly impacted that day. I really appreciated
the fact that you brought out how many of our soldiers are
there still on the ground, still fighting, still engaging.
Afghanistan does not make a lot of news these days, unless we
are on the trail of enemy number 1. But people are in harm's
way and they are getting wounded.
The acts of heroism that you talked about there I thought
were incredible. The whole battle, and you mentioned it today,
where our troops were so outnumbered, and I think it really
pointed out in a real life situation the importance of training
and readiness. They talk about balance. To me, there is no
balance when it comes to readiness. I mean, we want to be
superior, far superior to our enemies, and balance between
training and taking care of the environment. But not where we
are ever putting our troops at a disadvantage when they are
coming up against the enemy.
Senator Akaka in his opening statement today referenced the
current state of readiness, and I have heard from all of you
that you feel very good about our state of readiness,
especially as we prepare for a possible war against Iraq. The
question, I think is more important, because a lot of these
lawsuits are pending, or they have, as with the Navy and your
LFA, we are talking about future things that are in the
development stages.
What would the answer be, and I would like each one of you
to respond as best you can, I realize some of this is
hypothetical, but as best you can--if these lawsuits are going
to shut down, for instance, what is happening in Alaska, which
could have a ripple effect, as we know, at many other training
ranges? What happens if we ask this question 5 years from now
of the Vice Chiefs? What will be the answer on readiness 5
years from now if the environmental groups are able to use the
current laws and the courts to block what you are doing today?
In other words, if you do not get legislative relief, what will
be the answer to that question 5 years from now?
General Keane. Thank you, sir. For example, the tragedy of
the Arizona lawsuit, which is overruling essentially a U.S.
Fish and Wildlife Service policy, that uses a management policy
to deal with critical habitat, and avoids the critical habitat
designation. The tragedy of the Arizona lawsuit is, on the six
installations we have applied the wildlife management policy in
the United States Army, we have made enormous progress. We are
still protecting the critical habitat. Although not designated
as such, it is growing and flourishing.
In all of the surrounding areas to those military
installations, that critical habitat has been destroyed by
commercial development and urbanization, in complete violation
of the environmental laws. So what we have proven is that we
can work with the U.S. Fish and Wildlife Service to adjudicate
the problem and protect the endangered species. Now comes a
lawsuit, and that effectively will shut us back to where we
were, essentially 7, 8 years ago and the situation I described
to you at Fort Bragg in that chart will get progressively
worse. That is point 1.
A much greater threat to the Army is the CERCLA and RCRA
application of the lawsuit that is pending in Alaska. If we
lose that lawsuit, it will effectively shut that range down,
but it jeopardizes the other 400 that we have, and so 5 years
from now, we are not able to train and to conduct live-fire
operations on any of our impact areas, which is the essence of
what we do in our training.
So I think it is a legitimate question to ask us--we are
the best military in the world, and we are highly trained, and
we are highly skilled, and you seem to be doing all of this
despite some of the environmental challenges that are out
there--what is the problem? Well, the problem is, it is getting
progressively more difficult to do that training, and our
people are working around it. It is frustrating them
considerably to get this thing done, and we are asking,
frankly, just too much of them to do that kind of training in
such an unrealistic environment, and each year it gets worse.
Then with the pending lawsuits, I think what I am trying to
tell you, as well as my colleagues are, is a train wreck is
coming. We see it coming. Let us get out in front of it. Let us
not have the train wreck and then all have to rush in here and
on an emergency basis change these laws. Let us be reasonable
about this thing.
We are good stewards of the environment. We were polluters
20 years ago and as the consciousness of America was raised in
the environmental area, so was ours. We changed rather
dramatically. We had to change. We changed behavior and
attitude of our leaders to be supporters of the environment,
and as my colleagues have said, you can come to any of our
military installations and find verification of that.
So in my judgment, it is a train wreck that is coming. We
see it, and we should stop it from happening.
Senator Ensign. Admiral.
Admiral Fallon. Senator, it is tough to predict the future,
but if I could just recap, the U.S. Navy around the world in
just the last year alone, you are all intimately familiar with
the recent couple of years' activities in and around Vieques.
The end result there is that we are finished training in that
location.
In the far Pacific, last year we had a court that enjoined
us from doing training at a small rock islet, Farallon de
Medinilla (FDM) we call it for short. It is out in the
Marianas. It is really the only place for live fire for the
Seventh Fleet that are forward-based in Japan, and we were shut
down, totally, because of a ruling having to do with the
Migratory Bird Treaty Act.
The act of Congress last year in response to the Office of
the Secretary of Defense (OSD) initiative, the one area in
which we got relief, was dramatically effective for us. We were
able to send, just in the last 6 months, two of our carrier
battle groups down there to train en route to their stationing
in the Middle East. We have another ship, Nimitz, that is on
the way across the Pacific now that we hope to use there too.
Without this relief from Congress in the nick of time, we would
have been shut out of there.
I mentioned earlier the problem out at PMRF, and this is
the future. This facility is going to be critical to our
ability to conduct testing for missile defense and for our
other activities, including submarines, the low frequency
active sonar challenges, we just see an ever-increasing number
of these things.
As General Keane indicated, the amount of time that people
spend doing this instead of preparing our troops, our sailors,
airmen, and marines for their readiness mission is growing day
by day, and this is not what we believe they ought to be
engaged in, but the realities of life are, it is just an
increasing burden that we desperately need some relief from.
Thank you, sir.
Senator Ensign. General Nyland.
General Nyland. Yes, sir. I would certainly echo the
comments of my two colleagues, since we maneuver on the ground
and fire, as does the Army, and operate from the sea, as we do
with the Navy. I would say that clearly it would be a train
wreck for the Marine Corps. Each of our major installations
today has critical species, and also has an integrated resource
management plan that we have worked together with the U.S. Fish
and Wildlife Service to create.
We have shown that we are good stewards, and personally, as
a zoology major, I understand the great value of the animals of
the Nation, but I have worn this uniform for 35 years, and I
also understand the great value of trying to ensure that our
soldiers, sailors, airmen, and marines, when they go forward,
can do so successfully.
I think what we really seek here is a balance. We can do
both, but what we cannot do is continue to watch the
litigation, as General Keane articulated, keep mounting that
continues to threaten it, and should one be upheld, then set
the precedent that would create the downfall for all the rest.
Senator Ensign. General Foglesong.
General Foglesong. Two points, sir, that come to mind to me
about the future here, and I do not want to sound trite about
this, but I have a son and a daughter-in-law both in the
military right now, and it occurs to me that in the future we
never want them to go into a fair fight. We always want the
odds stacked in their favor.
The second point is, we are in this delightful dilemma now
in the Air Force of trying to ensure they are in an unfair
fight. We do this by developing new weapons and new weapons
systems that have more precision, more stand-off capability,
more force protection, if you will. However, this requires that
we have the right range space and the right training and test
space available to go out and ensure that when and if they are
called to war, that they are able to employ in a way that will
be as effective and efficient as can be, yet bring them back
home.
So it is hard to predict 5 years. I agree with what was
said earlier, but what I know is that our range, our air space
in particular is under scrutiny every day. It is death by a
thousand cuts to a degree, unless we have some clarification in
the current status of the laws right now. Our concern is that
we will shrink and shrink and shrink when we actually need what
we have now, possibly even more because of the ranges that are
involved with some of our newer weapons systems.
Senator Ensign. I thank each of you for that answer. Just a
yes or no, if possible: will it seriously hurt readiness if
these things go forward in 5 years?
General Keane. Very much, so.
Admiral Fallon. Yes, sir.
General Nyland. Yes, sir.
General Foglesong. Yes, sir.
Senator Ensign. All of them were affirmative.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Admiral Fallon, I was a bit surprised to hear your
testimony that just last week the U.S. Fish and Wildlife
Service designated critical habitat for a species of grass at
the missile range. So this is news for me.
Admiral Fallon. I did not know it until last evening when I
was back in the office and I was going over my notes, and one
of my aides said, here is a little thing you probably need to
know about.
Senator Akaka. It spurs my interest to the point that I
want to see what the grass looks like.
Admiral Fallon. I cannot pronounce it, by the way. It is a
Latin name. I am kind of rusty.
Senator Akaka. My understanding was that for at least the
last 4 years of the Clinton administration, the military
services were able to avoid new designations of critical
habitat on military lands by gaining approval of the INRMP on a
case-by-case basis as an alternative to critical habitat
designations, and my question then would be, why did it not
work in this case? Is there an INRMP in place for this facility
and, if so, do you know yet why the U.S. Fish and Wildlife
Service did not follow its own rules on the consideration of
the INRMPs?
Admiral Fallon. Senator, I will tell you what I know. When
I found out about this last night I was given a copy of the
Federal Register that had a couple of facts in there, and the
issue was, first of all, there is an INRMP in place for this
facility, an approved INRMP. Evidently, there have been some
negotiations for sometime.
There are apparently several species of grass, or some kind
of vegetation that were in discussion. Evidently there had been
an exchange of documents between the naval service and
Department of Interior or their agents in this thing, and at
our last knowledge of this, there was a discussion in which the
last document that we received, I have not seen it myself, but
apparently it states that the Department of Interior was okay
with several of these particular types of vegetation, but that
this particular one had not been addressed in the interim.
I will go out on a limb and say it probably was because it
was not known, because it did not exist on our lands at the
time. At any rate, there was a reply sent, and this is the next
iteration, that we find out that this has actually been
enacted.
I do not know exactly what went on. I know there was, in
fact, a dialogue in progress, but what is really significant
about this, and I did not get to it in my opening statement,
and it is very difficult--I know you cannot see from up there,
but on this chart, this particular area, the critical habitat
stretches from virtually one end of this facility to the other,
and it occupies the vast majority of the coastal front, and so
it will obviously have a significant impact.
Now, just how this managed to occur, I do not know. We will
go to find out, but this is unfortunately the way things are
done today.
Senator Akaka. Thank you for that explanation.
Admiral Fallon and General Nyland, in my State of Hawaii, I
have worked with the military to try to address issues raised
in the community about the impact of training on cultural and
historical sites and endangered species, fire damage, and other
issues. I have always felt that the best way to avoid
situations, as I said in my statement, like the ones on
Vieques, and to assure continued military training, is to work
within a community on this kind of case-by-case basis.
Late last year, the Secretary of the Navy sent a memorandum
to the Chief of Naval Operations and the Commandant of the
Marine Corps directing that all Endangered Species Act (ESA)
issues be addressed in the Pentagon, rather than at a local
level. The memorandum states, ``. . . the purpose of the
attached policy guideline is to bring back into the building
final decision regarding any deviations from ESA. While I am a
strong proponent of decentralization, it is important that our
well-intentioned personnel in the field not make local
accommodations to introduce new species, habitats, and so on,
on our bases outside or beyond the requirements of ESA. My
concern is that while individual concessions appear
insignificant, over time we die from a thousand cuts.
Additionally, some concessions could run counter to the
legislative relief that we are continuing to pursue with
Congress.''
I am concerned that this statement makes it appear that the
Department of the Navy does not trust its installation
commanders to know what is in the best interests of their
installations, and you want to avoid entering local agreements
that would protect both Navy training and endangered species in
the hopes that Congress will give you a better deal. How do you
explain this memorandum?
Admiral Fallon. I will take the first start. I would not
presume to speak for the former Secretary of the Navy on the
issue. Just an observation that quite frankly, as we get deeper
and deeper into these issues, and occupying a greater
percentage of the time of many of us in the chain of command,
what we are finding is that there are significant disconnects
among our installation commanders in our facilities around the
world. I believe in trying to deal with things at the lowest
possible level, which is exactly what we want them to do.
In fact, we found in some cases opposing activities. I
believe that this was intended to try at least to bring to some
collective central level some idea of what is going on before
people pursue their individual activities. I have not had any
discourse with the Secretary on that particular issue, but I
suspect it is really just trying to get us aligned so that we
are consistent in what we do. It has been my experience that,
in fact, we were all over the place on these issues, and I
believe that is really what it was intended to do.
General Nyland. Sir, I would echo Admiral Fallon's
comments. I am not familiar with the Secretary's stance on
that, but I, like you, believe that these begin only at the
local level where we start to organize them.
My take on that would have been simply that to ensure
consistency across the Department, that they would like them to
be reviewed here at the headquarters to ensure that they were
in line with our position on other INRMPs on other endangered
species.
Senator Ensign. Senator Inhofe.
Senator Inhofe. Thank you, Mr. Chairman.
Admiral Fallon, quite often I have heard people take
statements maybe a little out of context. I want to make sure
that that does not happen in this case. You had made a
statement that--I think it might have been a response to--I
think it was in your prepared statement. You said, we have the
best-trained and most ready forces right now that we have ever
had. People, if they took that alone, might think, well, wait a
minute, there must not be a problem here if that is the case.
Would you take a moment and outline the different elements
of readiness, and show how that statement could be an accurate
statement?
Admiral Fallon. Sure, Senator. The readiness equation,
which we use for shorthand, many components today, as I look at
our forces and I know what condition we were in 3 or 4 years
ago, it is pretty clear to me that the single most significant
factor is the personnel piece. The fact that we have the
appropriate numbers of people, and that they are distributed
and trained at their individual skill sets throughout the Navy,
has made a huge difference.
I believe the next most important thing is the fact that
through the resourcing of Congress and the dedicated efforts of
the CNO, the people have been given the resources to actually
get proficient in their endeavors, for example, the appropriate
number of flying hours and steaming hours and the research
allocations, particularly to spare parts, which have made
available the components that we need to be able to do the work
that we do.
If you were to look at our readiness statistics pretty much
across the Navy, you will see there is a direct response from
the investments in these accounts to the status they enjoy
today, notwithstanding the fact that none of this comes
together without training in the field. That is a critical
element, but I believe that the biggest factors today--or in
the last year or so that have gone into this have been those
other things, but without realistic training none of this is--
--
Senator Inhofe. Well, I chaired this subcommittee for a
number of years, and I knew those elements were there. I knew
there was a serious problem then, and I am glad that we are
correcting that now, but this one is still here.
Now, let me ask you the question, what happens if you lose
this capability in the Barking Sands Range? Where will you
provide the training that you are doing now if you are not able
to use that?
Admiral Fallon. This facility, I believe, is one that is
earmarked for much greater future use than today in response to
some other activities, realities. We are basically shut down on
the east coast, in Vieques, to do long range testing for
missile systems, and our ship-based radars.
On the west coast of the United States, Point Magoo and the
immediate adjacent water and land areas, or water and air space
on the west coast, is under increasing encroachment pressures
from population growth, as is the east coast. The west coast is
about the only United States territory that enjoys a large
water and air space adjacent to it, and I see increasingly the
type of future training and testing that we require migrating
there.
The fact of life is our systems are much longer range today
than they were just a few years ago. We are going to need this
extra air and water space beyond the Hawaiian Islands out to
the northwest of this territory. There is real growth in this
area. Just this year alone, I believe there were four tests by
the Missile Defense Agency conducted at the Pacific Missile
Range Facility, Kanai, Hawaii, but this is a very small
facility, a very limited number of facilities.
I am probably leading the rabbit here, but I think there
will be growth in this area, a desire to do more testing and
training. We had been able to do some of this training closer
to the west coast. As the pressures increase over there, I
believe we will see our battle groups coming out here and doing
more of certain kinds of trainings, so this is really a future
issue, but we are now being severely impacted before we get out
of the blocks.
Senator Inhofe. In your statement, do you make any
reference to Guam in your prepared statement?
Admiral Fallon. I just made reference--in the prepared
statement, there is. I think in the oral statement, just that
the FDM range north of Guam was the site of a shutdown last
year. That has just been temporarily reopened.
Senator Inhofe. Okay, but I understand now in looking at a
number of endangered species, or listed species, there are
three that could create another problem after it is already
opened up that could cause it to--I have always asked the same
question, what you would do without it?
Then third, I am probably the only one up here who has read
the entire Pace-Fallon report on what you do if you lose the
unified training, which we lost at Vieques, and General Nyland,
I could ask you, or Admiral Fallon, either one. If you wanted
to continue to do unified training, live-fire, is there any
place else now that you could go to do that type of training?
I understand they are trying to respond to the problem by
changing and doing more other types of training, but if you
wanted to do that, which I believe we still need to do, is
there any place else where you could get that type of unified
training?
Admiral Fallon. Senator, on the west coast we are doing it
as we were before, off the west coast, in several areas. On the
east coast, I believe you are aware the Commander of the
Atlantic Fleet has a training resource strategy (TRS) which he
is attempting to implement our work-around solution to the
closure of Vieques.
Senator Inhofe. Work-around. Work-around is a very
interesting term. Do you want to define that for us?
Admiral Fallon. If we have a course of action that we
desire to pursue, but for whatever reason we are inhibited,
then we have to come up with another solution to it to get to
where we are going.
Senator Inhofe. Now, quite often, people in talking about
the Endangered Species Act, and I could ask you and General
Keane or any of you, they say there is really no problem
because there is a national security exemption, for any agency
action if the Secretary of Defense finds that such an exemption
is necessary for reasons of national security. Tell us if there
is a problem with that. Why does that not solve all your
problems?
General Keane. Yes, sir. The national security exemptions
were never intended as permanent solutions to recurring
requirements. Generally, they are reserved for approval at the
presidential area. They apply to only specific activities at
individual sites, and they remain in effect for only 1 year.
It is in our judgment--and I do not want to speak for all
my colleagues, but I think we agree on this. It is unrealistic
to expect the military to request exemptions for training that
must occur on a regular basis. It is just too much to ask of us
to use that procedure to solve such a significant problem that
we are facing here.
Senator Inhofe. In other words, you think maybe the
President and the Secretary of Defense have something better to
do.
General Keane. I do not want to speak for them, sir.
[Laughter.]
Senator Inhofe. As a normal procedure, though, you are
saying this is something that would require going back and
getting this exemption with regularity. This is the point I
want to get into the record.
Thank you, Mr. Chairman.
Admiral Fallon. Senator, there is another factor here.
Under the existing regulation--I believe it is 10 U.S.C. 2014--
there is a 5-day period in which to effect this relief. This is
pretty impractical for the kinds of things for which we would
seek help. We are talking about recurring, regular, routine
training evolutions, and I believe that to merit the kind of
instantaneous reaction up the chain of command to the President
for these kinds of things is not at all what was intended here,
and not particularly appropriate to the remedy we seek.
Senator Inhofe. Thank you, Admiral. On the next round I
want to pursue this, the problem you talked about in your
opening statement on the sonar.
Senator Ensign. Senator Clinton.
Senator Clinton. Thank you, Mr. Chairman, and I thank you
for holding this important hearing, and I thank all of the Vice
Chiefs for being here.
I think we can all agree, or maybe we can even stipulate
that we intend to do everything possible to ensure the best
available and successful training for our men and women in
uniform, regardless of the mission that they are assigned. I
think what we are searching for is a way to provide that
without interfering with, or unnecessarily burdening, the
military to become enforcers of the environmental laws that
mean a great deal to our Nation. Just as we owe the very best
possible training to our men and women in uniform, we also owe
them and their dependents and the communities around our bases
the security of knowing that we are protecting the environment
and their health.
That is why many of us are concerned about the Department's
desire to make significant changes to many of the very laws
that are designed to protect human health and the environment,
particularly the Clean Air Act, the Superfund law, the Nation's
solid waste law, known as RCRA, and others that are there not
simply to protect endangered species or critters, but to
protect the rest of us. Part of my assessment of this is to
determine the health impact on our men and women in uniform and
the surrounding communities for wholesale changes in the
environmental laws of our Nation.
I was very impressed by the comments recently made by the
chairman of this full committee, Senator Warner, who serves
with me on the Environment and Public Works Committee, a few
weeks ago, when he said we need to figure out how to keep our
military ranges operational 24 hours a day, 365 days a year
without having to sacrifice our Nation's environmental laws. I
could not agree more, and I think that has to be our objective.
I also believe that Senator Levin is correct in saying that
these proposals belong in the committee of jurisdiction, namely
the Environment and Public Works Committee.
But putting aside procedural issues, I think it is
imperative that we look at where we want to end up. If, indeed,
it is necessary, and I am certainly convinced from the expert
testimony of the vice chiefs and others that some added
flexibility is required in order not just to ensure military
readiness today, but for all the tomorrows ahead, and to avoid
the train wreck that General Keane referred to. Then of course
we have to take that into account and figure out ways to adjust
laws and their implementation in order to protect against any
eventuality and to assure that readiness is the primary
obligation of the military. But, I do believe that we have to
hear many different perspectives, because the adjustments have
to be made taking into account the potential impact on
environment and health.
For example, earlier today there was testimony before the
Environment and Public Works Committee from the Environmental
Protection Agency (EPA) about the impact on the clean air laws
of certain necessary training exercises, the impact on both
those who are in the immediate vicinity and those further away.
I have looked closely at the 30 States Attorneys General who
have expressed opposition to the Department's proposals. These
are people throughout our country who are required to not only
implement existing environmental statutes in their own States,
but often have obligations to enforce national statutes such as
Clean Air, RCRA, and CERCLA. If there is a way we can work
together on this and take into account the overriding necessity
for readiness and the legitimate concerns raised by Attorneys
General and others about existing environmental statutes, then
I think it is certainly an important exercise for us to
undertake in the committee of jurisdiction.
But let me ask, have any of the Services responded to the
concerns of the Attorneys General about the DOD proposal that
you are aware of?
General Keane. I am not aware of it, Senator.
Admiral Fallon. I have not seen it presented, Senator.
Senator Clinton. Mr. Chairman, I think that as I said in
the beginning the stipulation that we want to be as ready as we
possibly can is one that cuts across every committee and every
concern in the Senate. But, I do believe it would be more
productive to have some kind of ongoing task force, or maybe
even joint committee effort to begin to really dig into this so
that we know exactly what we are undertaking.
I am reminded, because of Admiral Fallon's presence here,
of when I went to Fallon, Nevada with my friend Senator Ensign.
We were there because of these unexplained childhood leukemias,
this cluster of cancers. We have no idea what has caused them,
but I think that there is a long list of reasons, and on that
list has to be the presence of the naval base there. We do not
know if it is a contributing factor. Also on the list is the
use of a lot of pesticides for the agricultural produce that is
farmed there. There are a lot of issues.
Until we know more about what the relationship between the
environment and the health of people happens to be, then some
of these acts, which are aimed not at animals or plant life,
but at human life and health, have to be factored into anything
that we do. Certainly those of us who are concerned about the
health of our troops in the Gulf remember what happened the
last time, when healthy young people went over there, and many
came back and we had no idea what caused the problems that they
were encountering. Many of us concluded something that we are
just not quite aware of in combination impacted their health.
So this is an area that has broad ramifications for the
health and readiness of our men and women in uniform and the
dependents, the civilian employees, and the surrounding
communities. I think we should go at it with that sense of
complexity and concern moving forward.
Senator Ensign. Senator Clinton, if I may, is Ben Cohen,
Deputy General Counsel for Environment and Installations at the
Department of Defense in the room? Would you like to address or
just respond to the Attorneys General letter of opposition? Is
there anything you would like to say? That is what the staff
had advised me up here.
Mr. Cohen. Sure thing, Mr. Chairman.
Senator Ensign. Maybe come to the microphone so they can
get it down on the record. I just thought it might be
appropriate.
By the way, Senator Clinton, we are going to have a second
hearing on this issue in this subcommittee as well. Senator
Akaka had some issues, some various other witnesses that he
wanted to call forward.
Mr. Cohen. Thank you, Mr. Chairman. I am Ben Cohen. I am
the Deputy General Counsel for Environment and Installations at
DOD. I would just say we have been engaged since last year on a
fairly vigorous interaction and dialogue with a variety of
State regulators, the Attorneys General, the solid waste
regulators, and others, and we think that has been very
productive. We think it has helped us improve the legislation
that we introduced this year, which actually includes some
changes designed to respond to their concerns. We intend to
continue that dialogue and have high hopes that we will be able
to reach a broad measure of agreement with them on all the
statutes that they are concerned about.
Senator Clinton. Thank you, and Mr. Chairman, perhaps we
could add a representative of the Attorneys General to a future
panel as well.
Senator Ensign. That is one of the things we are looking
at.
Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman. One thing I need to
disclose on the front end is, I am new to this committee, and I
am trying to get a handle on just how widespread the problem
is. Certainly I have talked to some of you individually and
privately about this issue, and I have talked to a few Senators
individually and privately about this issue, and you have
brought in the example of Fort Bragg. The question I have for
you with regard to Fort Bragg is, are you telling the
subcommittee that Fort Bragg is representative of the problem?
In other words, do all of your forts like that and all of your
installations like that have these environmental problems or
these concerns?
General Keane. Fort Bragg is an interesting illustration
and that is why I brought it forward, because it is
representative of how much management has to take place on
130,000 acres of land to manage an endangered species which is
there, in the case of the animal, which is the Red-Cockaded
Woodpecker, and the five endangered plants that they have.
But the flip side of that is, it is also an area where for
the last 6 or 7 years, using the U.S. Fish and Wildlife Service
management policy, or INRMP, which is what Senator Akaka
referred to, that we have been able to mitigate a lot of those
challenges as well. So what Fort Bragg represents is the scale
and magnitude of the problem and also an attempt on the part of
the U.S. Fish and Wildlife Service to work with us to mitigate
those challenges.
Now, what has thrown a wedge into that is this lawsuit in
Arizona, which would put us back to ground zero in a sense. It
would force Fort Bragg to be declared a critical habitat, and
no longer managed using INRMP, which would mean a less
restrictive policy. That is the concern that we have, because
the current law does not protect us from that assault that was
just made and the judicial finding that occurred, so that is
our challenge.
There are other places where we have a critical habitat
designated and there is no management policy for the U.S. Fish
and Wildlife Service that we are able to use as an effective
tool, and when we have something like that we have huge
restrictions. For example, the Pohakuloa training area in
Hawaii, we have a critical habitat that was declared there for
a plant. We built a $25 million range that we have yet to use
because it was set aside for a critical habitat for the plant
that is there. Given the prevalence of the plant, we are not
able to use the range and also maintain the plant, and so there
is a $25 million range going unused.
The U.S. Fish and Wildlife Service is proposing in Hawaii
147 different plant life that they want to designate as
critical habitats. If that is designated as a critical habitat,
and we are not able to manage it under the INRMP, which Senator
Akaka referred to, that is going to shut us down. It will shut
us down.
So those are the challenges that we are facing as it
relates to endangered species. The lawsuit that just took place
jeopardizes the flexible approach the U.S. Fish and Wildlife
Service used in working with us for the last 6 or 7 years.
Senator Pryor. I apologize that I am unfamiliar with the
details of the lawsuit, but I will definitely educate myself on
that, but it sounds like that is at the Federal district court
level. Do you know, Mr. Chairman, is that right? Has that been
appealed to the circuit court level yet?
Senator Ensign. We do not believe so.
Senator Pryor. Okay. All right. I can find out about that
and educate myself on that.
I will say this, that I have heard some Senators discuss
privately, without revealing their names, a concern that your
request for exemption may be just a little too broad. That it
may have the unintended consequences of just being too broad
and causing some long-term damage to the environment. I think
Senator Clinton really alluded to that without saying it
exactly that way, that we are trying to find that balance here.
We certainly understand the needs of the military. We also
want to take into consideration the desire to have the best
possible environment here in the United States, and we just
need to try to continue to work on that. I know that is what
you are here doing, presenting your case to the subcommittee
today.
Let me ask just one last question with all that in mind.
Would you all object to, say, a pilot project at Fort Bragg, or
you can pick whatever location you want, allow you to have the
exemption that you are requesting just for the one facility.
Let that run for a couple of years and then come back in, we
can evaluate it, and we can determine lessons learned from that
and possibly extend that to other locations, or would you like
the more global exemptions?
General Keane. My reaction to that as it pertains to the
Endangered Species, the fact that the U.S. Fish and Wildlife
Service entered into an agreement with us that permitted
flexibility and relaxation of some of the critical habitat
designation rules, that has already been in effect for 6 or 7
years. What our concern is, is that because of this lawsuit, we
will lose that flexibility. So that already exists at least at
the six Army installations, and I think we would be more than
happy to show the subcommittee the details of what that
flexibility allowed us to do.
The other threat that we feel is with this lawsuit at Eagle
River Flats up in Alaska. Right now, obviously, we are shooting
our live ammunition on 400 impact areas around the United
States and overseas. If this lawsuit is won, obviously, that
ammunition would be declared a solid waste or hazardous waste
and would have to be managed as such, which would effectively
shut us down.
So yes, in a sense we want to codify that that ammunition
that we are going to shoot in a designated impact area that the
Congress of the United States has provided to us, we want an
exemption that that is not, in fact, solid waste or hazardous
waste. But, that does not mean for a minute that we would not
be liable to be examined in terms of munitions that would harm
an aquifer below it or any water supply of the American people.
There is nobody here, or any representative of the
Department of Defense that would stand for the water supply of
Americans being endangered. We are not going to put up with
that, and we would make dramatic changes to make certain that
does not happen. The exemption that we are seeking would not
preclude us from that oversight, or if the munitions were a
runoff of the reservation itself, which could possibly happen,
and may be part of the concern at Eagle River Flats. We would
still have oversight of that function as well, and if we shut
down a range of our own accord, it would not be in the
exemption status any more.
So I think what I am saying to you is that, yes, there is a
lot to work with here in terms of the Department of Defense and
our attitude toward this, and our desire to work with the
subcommittee to find a way here to keep both of these entities
going the way they should, the national defense and protecting
the environment. We think we can make it work.
Senator Pryor. Mr. Chairman, that is all I have and I look
forward to working with you as we try to resolve this.
Senator Ensign. Thank you, Senator Pryor. We appreciate
having you on the committee, and your participation on this
subcommittee.
We have a vote at 3:45. If we keep it to about 5 minutes
each, we could probably each get another round of questioning,
so I will start.
Admiral Fallon, I want to explore in a little more detail
about the LFA and this term, harassment. Can you give me the
Navy's take on just the whole issue, just describe the issue,
how it is affecting the LFA, but also anything else as far as
the Navy is dealing with?
Admiral Fallon. Yes, sir, Senator. This legislation has
been on the books for quite a few years, not initially
intended, to the best of my knowledge, to have anything to do
with the Navy. But, over the years it has become the stuckee
for this with environmental groups around the world. The issue
we have with this thing is pretty simple, and that is that
there is one word in that legislation, the term ``harassment,''
that appears, that comes up time and time again as the focal
point for all the attraction of regulators, environmental
groups, and the courts, and what we are seeking, quite simply,
is a better definition of this term.
Now, we have sat down and met with scientists and the
regulators and we have informally agreed to a number of
solution sets to this issue.
Senator Ensign. Also, just in your discussion, could you--
because we are going to hear from other sides of this--is there
argument that some of these sonars are hurting breeding? Are
they hurting development? How exactly are they harming the
animals?
Admiral Fallon. The issue is, first of all it is much more
than sonars. It is all kinds of activity, every kind of
activity. Examples--what is harassment? What constitutes
harassment? Is it a change to the places where the animals
live, or migrate, or breed? Is it an acknowledgement of some
activity?
Senator Ensign. No, that is what I am trying to get to.
Admiral Fallon. That is the question.
Senator Ensign. Right, I know you want this defined as
well, and so what I am saying is, what are their arguments?
What are the environmental groups' arguments? Is this,
``harassment''--you know, there is probably some that is
significant, and that is what you want, significant harm or
whatever put in language. But, are some of these other things,
are they pointing to significant biological effects to some of
these marine species?
Admiral Fallon. Well, that term, significant biological
effect, is one that the scientists, I understand, like to use.
That would be one that if we could agree on what constitutes
those effects, we think we would be pretty happy campers, but
left as it is, subject to anyone's interpretation, the most,
least significant--it is tough to put this in appropriate
language, but anything that would cause some kind of
recognition or acknowledgement by the creature of some event
could constitute harassment under the interpretation of some
courts, and it is that very wide range of options that we would
seek to limit so that we could come up with some reasonable
approach.
Again, we have reached agreement in the past with the
regulatory agencies and with many prominent scientists in this
area to come up with an alternative. But, absent some forcing
function, and in this case, we believe legislative relief here,
it is just left to individual people to interpret, and that is
the key issue.
There are some other things that have come out of this LFA
lawsuit, and by the way, this is not just typically somebody
against the Navy. This usually is a triangle, because the
regulatory agencies with which we have to work, and are happy
to work in accordance with the law, are often the people that
bear the heat here. So without specifically identifying one,
they are viewed, I believe, by the public as representing the
protection, for example, of wildlife, or the protection of sea
creatures, and so the attacks will usually come against them
and say, ``hey, you, agency, are not representing the American
people because you are not going after these guys, because the
Navy is obviously doing something to harass these things.''
This is one of the ways this is played, but they end up
bringing the regulatory agencies into court and it ends up in a
three-way battle. At the end of the day, it is pretty simple.
We just need a little bit of relief. We are not looking for a
broad-based solution, just a little specificity, and we think
most of these problems will go away.
This one issue, which is worldwide, that is why Senator
Pryor wanted to know if we could do a trial somewhere. I do not
know how you do a trial. The oceans are worldwide, and we
really need some help on this one.
Senator Ensign. Just something maybe each of you could
address as briefly as possible. I know it is a complex
question, but the administration has proposed a provision that
would make the application of the Clean Air Act conformity
requirements more cooperative and less prohibitory when a
Department of Defense activity is proposed that would exceed
air quality thresholds under a State implementation plan. Can
each of you describe why there is a need for this proposal, and
what would be the impact if this proposal were not enacted?
General Foglesong. I will take that, sir, if I could,
because we are in the clean air business here in the Air Force.
What we are really asking for is just a little relief on the
requirement to conform fully with the Clean Air Act before any
movement can be made. So if we want to move force structure,
for instance, from one base to another base, we have to have
studies done that take months, sometimes years before we can,
in fact, move that force structure there for training reasons,
for actual employment reasons or whatever.
What we are asking for there is just a period of time of 3
years so that we can comply with the State requirements and buy
ourselves a little flexibility and we do not have to wait this
extended period of time, which all the Services face right now.
Senator Ensign. How would you answer to the people who say
you are just trying to get around the clean air laws?
General Foglesong. Sir, my answer to that would be, we
intend to comply with the clean air laws. All we are asking for
is the flexibility to take a little longer to get to the
solution that is going to be legislated to us.
Senator Ensign. Great. Let me go to Senator Inhofe, because
we are trying to keep this under the time, or excuse me,
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
General Keane, 2 years ago General Van Antwerp, the Army's
Assistant Chief of Staff for Installation Management, testified
before this subcommittee that, and I am quoting, ``installation
management, the environmental compliance programs on the ranges
and training land at Fort Hood, Texas are an example of how
such programs have restricted training capabilities.''
General Van Antwerp referenced erosion control practices
designed for compliance with the Clean Water Act, the
designation of core and non-core habitat for the Golden-cheeked
Warbler and the Black-capped Vireo, as well as restrictions
imposed to comply with the Clean Air Act and to protect
archaeologically and culturally significant sites. He concluded
that, ``while some of these restrictions overlap on the same
training areas, only about 17 percent of Fort Hood training
lands are available for training without restrictions.''
Last December, on a bipartisan visit to Fort Hood, the
committee staff was presented with the same map of Fort Hood we
had seen a year and a half earlier, showing encumbrances on 83
percent of the base, only this time the Army restamped the map
in big red capital letters, ``misleading.'' The briefers
explained that the Army had procedures in place that allow it
to do the training it needs, ``virtually everywhere on the base
with a high level of realism.''
My conclusion, General, is that the Army has had to work
hard to get the training that it needs at Fort Hood, but it has
been able to do so, to get that training. Would you agree or
disagree with that?
General Keane. I would agree, and it is an example of what
we are talking about in terms of the flexibility we have been
able to establish with the U.S. Fish and Wildlife Service, and
we are not seeking an exemption from any endangered species
law. What we are seeking is to use the management practices
that the U.S. Fish and Wildlife Service has permitted us to do
over the last 5 or 6 years which gets the result that you are
speaking of.
Going back to belabor the point a little bit, is that the
Arizona lawsuit is jeopardizing the very acts that those
leaders were able to do with the U.S. Fish and Wildlife Service
to mitigate some of those restrictions, and it will put us back
to where we were 6 or 7 years ago, that is the problem we have,
so I would agree with your statement, sir.
Senator Akaka. Admiral Fallon, you have just discussed the
definition of harassment, but there are a number of other
elements of the administration's legislative proposal on marine
mammals. I believe that the cumulative impact of the prepared
changes has raised some real concerns. How would you prioritize
these three legislative initiatives and, in particular, if, at
the end of the day we were able to enact just the first change,
the modified definition of harassment, do you think this would
give the Navy the flexibility to do what it needs to do?
Admiral Fallon. Senator, based on our experience in the
last several years, there is little doubt that the single issue
and the single term that has had the most negative impact on us
is this term, harassment. The fact is that as a result of this
recent lawsuit with the LFA, some other issues have come to the
fore, particularly the issue of small numbers, the definition
of small numbers.
We had not had, to the best of my knowledge, any kind of an
issue with this, or go-around prior to this event in the
courts, but now we have one. I believe that the intent of the
DOD legislation was to do something to address that particular
issue, because if it has come up once, it is probably going to
come up again. But, specifically, for the Navy the harassment
definition fix would be most welcome.
We certainly need some help in other areas, but that is
clearly our top priority, sir.
Senator Akaka. Thank you, Mr. Chairman.
Senator Ensign. Senator Inhofe.
Senator Inhofe. I will not take the full 5 minutes, because
I think we will have our vote coming up. You made the comment
on a couple of occasions now, and so did someone at a previous
hearing, that if the decision is made the way it could turn out
at Richardson it would affect 400 ranges, is that correct?
General Keane. If the judicial decision went against the
Government and were applied to other areas and live-fire
munitions were, in fact, declared solid or hazardous waste, it
would shut down our ranges.
Senator Inhofe. Okay, now, would it not also shut down the
other Services? Would you like to each one comment?
General Foglesong. Yes, sir. We are equally concerned about
that. We have 41 major ranges, and the precedent that is being
set that General Keane talks about has us equally concerned.
General Nyland. Also for us, sir. Certainly we share all
the ranges with my fellow members as well as our own ranges.
The interesting thing to me is that under the EPA the military
munition rule, which is an accommodation similar to the INRMP,
we are all in agreement. We have worked that with that agency,
yet now we have the case if the Eagle River Flats legislation
is approved, we would have a precedent that would potentially
overturn all that, and then lose the ability to use our ranges.
Senator Inhofe. Yes, that is what I wanted to get into the
record, that it is not just the Army ranges.
Let us get back to the LFA again. Now, it is my
understanding that as far as the national security exemption,
that does not apply to the Marine Mammal Protection Act, is
that correct?
Admiral Fallon. Senator, I believe that the Department of
Defense initiative this year, in fact, does request an
exemption.
Senator Inhofe. No, I am talking about as it is today.
Admiral Fallon. No, sir.
Senator Inhofe. Even in times of war, because we have been
talking about training.
Admiral Fallon. To the best of my knowledge there has never
been an exemption clause as part of this, because again, when
this legislation was initially enacted, it was not concerning
our activities. It had to do with others.
Senator Inhofe. All right, would you real quickly run over
what you started out with when you told us about the
circumstances under which you would have to shut down and not
use this particular type of sonar?
Admiral Fallon. This is a new system, a prototype system.
It operates in an area in which we had not used previous
systems to detect submarines. We believe it is of great
importance to our future because of the, as I said earlier,
challenge worldwide of these quiet new submarines.
Senator Inhofe. New, quiet, some diesels, otherwise there
is no way of making that detection?
Admiral Fallon. Yes, sir. The reality today is that after
the end of the Cold War and the demise of the Soviet Union, we
have a different threat than we faced then. In those days, they
were nuclear submarines, large numbers in a blue water
environment, and typically they would be moving somewhere. We
would expect them to move somewhere, and we would be going to
counter them.
In today's reality, we are working in the littorals. We are
not in the blue water, primarily, and we are working against a
threat that is designed to prevent our accessing the near shore
area so that we can project power ashore and do whatever we
have to do to carry out the mission.
Senator Inhofe. But there are some circumstances under
which this sonar is the only way of detecting?
Admiral Fallon. The likelihood of detecting submarines
without this in many circumstances we think is pretty low.
Senator Inhofe. In an actual situation, then, not training,
if you had to shut down, what is the exposure?
Admiral Fallon. We are not going to be able to get it
online, and we will be forced to use what we have, which we do
not think is adequate to meet this emerging threat.
Senator Inhofe. So this is a life and death situation, it
could be, for your sailors.
Admiral Fallon. If we end up in a position where we are
asked to execute a mission with that kind of a threat, and we
cannot detect that threat, then our forces are at risk.
Senator Inhofe. Thank you very much.
Thank you, Mr. Chairman.
Senator Ensign. Senator Pryor.
Senator Pryor. Thank you, Mr. Chairman. Really, I only have
one question, and that is for General Nyland. I know that some
of your written comments related to the Endangered Species Act,
and I know that is a real challenge for your branch to try to
work around and work through all those issues, and it sounds
like you and the DOD have just gone above and beyond in many
cases to try to accommodate and work with that.
As I understand it, and again I am new to this committee,
but as I understand it, there has been a three-factor test that
you have used with regard to endangered species. It may be
slightly or somewhat cumbersome, but it has seemed to work
fairly well, I am sure with a few bumps in the road. There
always seem to be, but would codifying that three-factor test--
it seems like that would give you certainty. It would give you
some familiarity with the process, and it would allow you all
to function and accomplish your mission. Is that something that
you could support?
General Nyland. Yes, sir. In fact, the second phase of that
quantification study at Camp Pendleton, which is designed to
show the ability of the installation to support training, will
end within the next 30 days, or 6 weeks.
We have every intent over the next 2 years to take what we
have learned from that and add it to a new range management
system that we have instituted down at Quantico to be able to
not only identify how our training goes against our individual
skills and our metals, but also to quantify the impact due to
any kind of encroachment. So we certainly hope we will be able
to have that data collected by the end of April and then start
towards probably a 2-year period to implement this, and then
have that available to us at all times.
Senator Pryor. Thank you.
Senator Ensign. Thank all of you for your wonderful
testimony. Obviously, we have some difficult challenges ahead.
This subcommittee looks forward to working with you and the
other committees of jurisdiction on these very important
issues, and you are excused. This hearing is concluded.
[Questions for the record with answers supplied follow:]

Questions Submitted by Senator John Ensign

RANGE PRESERVATION

1. Senator Ensign. General Keane, Admiral Fallon, General Nyland,
and General Foglesong, the Readiness and Range Preservation Initiative
submitted to Congress this year reflects changes when compared to the
proposal submitted last year. What are the differences between the two
versions?
General Keane. The Army believes that the Office of the Secretary
of Defense (OSD) is best equipped to address the detail regarding
specific changes in the Readiness and Range Preservation Initiative
legislative language requested by this question.
However, the Army does feel it important to highlight the following
key general points. Last year, Congress enacted three of eight
Readiness and Range Preservation Initiative proposals submitted by OSD:
Reform of the Migratory Bird Treaty Act and two provisions
strengthening OSD's ability to encourage buffer zones around military
installations. This fiscal year's Readiness and Range Preservation
Initiative proposals include the five remaining elements from last
year, with clarifications and modifications of these five elements to
more sharply define their scope. The Army believes that these
clarifications highlight the modest and necessary nature of the
proposals. We strongly encourage the subcommittee to fully review and
then adopt all five of these Readiness and Range Preservation
Initiatives as part of the National Defense Authorization Act for
Fiscal Year 2004.
Admiral Fallon. Last year, DOD submitted an eight-provision
legislative package, three of which Congress enacted in some form. Two
of the provisions allow DOD to cooperate more effectively with third
parties on land transfers for conservation purposes, and a third
provides a temporary exemption from the Migratory Bird Treaty Act for
the unintentional taking of migratory birds during military readiness
activities.
The five remaining provisions resubmitted this year reaffirm the
principle that military lands, marine areas, and airspace exist to
ensure military preparedness, while also ensuring DOD remains fully
committed to environmental stewardship of the lands under its care.
As the result of discussions with State and Federal agencies,
natural resource trustees, and non-Government organizations over the
past year, the RCRA and CERCLA provisions of this year's legislative
package have been revised to narrow their focus to military readiness
activities on operational ranges. These provisions state that they do
not apply to closed ranges or ranges that close in the future. None of
the provisions apply to the routine operation of installation support
functions or the operation of industrial activities, for which DOD is,
and will remain, subject to the same regulatory requirements as the
private sector.
The Marine Mammal Protection Act (MMPA) provision differs
substantively from last year's provision, which sought only to clarify
the ``harassment'' definition. This year's provision seeks the same
clarification to the ``harassment'' definition for military readiness
activities only, corrects structural deficiencies in application of the
MMPA's permitting provisions to military readiness activities, and
includes a national defense exemption. The structural deficiencies
include elimination of the ``small numbers,'' ``specified geographic
region,'' and ``specific activity'' requirements of the MMPA permitting
process for military readiness activities. The corrections of the
permitting process resulted from the ruling of the Federal court in the
SURTASS FLA litigation, which occurred subsequent to last year's
Readiness and Range Preservation Initiative submission.
There are no changes to the Clean Air Act provision.
General Nyland. Both Readiness and Range Preservation Initiative
submissions retain the goal to prevent further encroachment
restrictions and mitigate others, which restrict access to, and
sustainment of, training and test ranges. The legislative proposal
submitted to the 107th Congress in April 2002 contained eight
provisions. The following three provisions were reflected in the
National Defense Authorization Act for Fiscal Year 2003 of 13 November
2002: (1) Land Conservation Partnerships, (2) Surplus Property
Conveyance, and (3) Migratory Bird Treaty Act (accepted in revised
form). The following five provisions not accepted last year, were
resubmitted before the 108th Congress on 3 March 2003 and are as
follows:
1. Endangered Species Act: We propose that Integrated Natural
Resources Management Plans under the Sikes Act provide the special
management considerations or protection required under the Endangered
Species Act and would obviate the requirement for designation of
critical habitat on military lands for which such plans have been
completed.
2. Marine Mammal Protection Act (MMPA): This proposal clarifies the
definition of ``harassment'' for purposes of military readiness
activities under the MMPA (i.e. any military readiness activity must
injure or have the significant potential to injure a marine mammal;
disturb or likely disturb a marine mammal, causing a disruption of
behavioral patterns to the point of abandonment or significant
alternation; or be directed toward a specific individual, group, or
stock of marine mammals, causing a disruption of natural behavioral
patterns).
3. Clean Air Act (CAA): Our proposal will maintain DOD's commitment
to CAA standards while providing flexibility to meet State air quality
policies by providing DOD and State regulators up to 3 years to ensure
compliance with State Implementation Plans. Under the requirements of
current law, it is becoming increasingly difficult to base military
aircraft near developed areas.
4 and 5. RCRA and CERCLA: Our proposed amendments to RCRA and
CERCLA have been slightly revised to make it absolutely unambiguous
that they do not affect our cleanup obligations on closed ranges. We
included new language in both the legislation and the accompanying
sectional analysis to clarify that our proposals have no affect
whatsoever on our legal obligations with respect to cleanup of closed
bases, or of bases that close in the future.
In addition, we made a technical revision in a provision in last
year's bill designed to ensure that our proposal did not alter EPA's
existing protective authority in section 106 of the Superfund law. As a
result, this year's version is even clearer that notwithstanding
anything in our proposal, EPA retains the authority to take any action
necessary to prevent endangerment of public health or the environment
in the event such risk arose as a result of use of munitions on an
operational range.
General Foglesong. Last year Congress enacted three of the eight
proposals submitted by the Defense Department--reform of the Migratory
Bird Treaty Act and two provisions strengthening DOD's ability to
encourage buffer zones around military installations. This year's
proposal includes the remaining five elements, with some clarifications
and modifications based on events in the previous year.
RCRA and CERCLA. Our proposed amendments to RCRA and CERCLA have
been slightly revised to make it absolutely unambiguous that they do
not affect our cleanup obligations on closed ranges. We included new
language in both the legislation and the accompanying sectional
analysis to clarify that our proposals have no effect whatsoever on our
legal obligations with respect to cleanup of closed bases, or of bases
that close in the future.
In addition, we made a technical revision in a provision in last
year's bill designed to ensure that our proposal did not alter
Environmental Protection Agency's (EPA) existing protective authority
in section 106 of the Superfund law. As a result, this year's version
is even clearer that notwithstanding anything in our proposal, EPA
retains the authority to take any action necessary to prevent
endangerment of public health or the environment in the event such risk
arose as a result of use of munitions on an operational range.
Marine Mammal Protection Act. This year's proposal adds three new
elements to our Marine Mammal Protection Act (MMPA) proposal, all as a
result of events in the last year. As you may know, the Navy and
National Oceanic and Atmospheric Administration (NOAA) lost an
important case last year regarding a vital anti-submarine warfare
sensor--Surveillance Towed Array Sensor System (SURTASS) Low Frequency
Active (LFA), a towed array of sensors emitting low-frequency sonar
that is critical in detecting ultra-quiet diesel-electric submarines
while they are still at a safe distance from our vessels.
The Court's ruling highlighted a number of structural deficiencies
in application of the MMPA to military readiness activities that
require legislative change. First, the Court found fault with NOAA's
regulatory interpretation of the definition of ``harassment,'' clearly
substantiating the need to change the statutory definition of
harassment that we identified in our legislative package last year.
Second, the Court struck down NOAA's longstanding application of the
MMPA's ``small numbers'' requirement. The National Research Council has
recommended that this provision be deleted as not scientifically based.
Elimination of this requirement, which Congress has previously
acknowledged is ``incapable of quantification,'' would instead
appropriately focus impact determinations on the scientifically based
``negligible impacts'' standard. Third, the litigation highlighted the
difficulty in identifying a ``specific geographical region'' for
permits applied to military readiness activities. Given the migratory
nature of marine mammals, varying biological and bathymetric features
in the environment they occupy, and the worldwide nature of naval
operations, this requirement is extremely difficult to define as a
legal matter. Our proposal would have no effect on NOAA's
responsibility to satisfy itself that our activities would have
``negligible impacts''--a finding that necessarily entails full
consideration of the location and timing of our readiness activities.
It would, however, prevent critical readiness activities that have been
validated by such scientific review from being impeded by technical
legal issues of defining ``regions.''
The last change we are proposing, a national security exemption
process, also derives from feedback the Defense Department received
from environmental advocates last year after we submitted our proposal.
With virtual unanimity, these groups argued that DOD should use
emergency exemptions rather than the alternative forms of regulation
that we proposed to Congress. The comments we received last year
highlighted the fact that the MMPA does not currently contain such
emergency authority, so this year's submission does include a waiver
mechanism. Like the Endangered Species Act, our proposal would allow
the Secretary of Defense, after conferring with the Secretary of
Commerce or Secretary of Interior, as appropriate, to waive MMPA
provisions for actions or categories of actions when required by
national security.

2. Senator Ensign. General Keane, Admiral Fallon, General Nyland,
and General Foglesong, the Marine Corps has gone above and beyond to
work with the regulators on the Endangered Species Act and has
developed a three-factor test to address endangered species on Marine
Corps installations. Should the three-factor test be codified to
provide predictability?
General Keane. The Army believes that the Marine Corps and OSD are
best equipped to answer this specific question. The Marine Corps has
specific experience with the benefits and limitations of the three-
factor test, and OSD has a broad view of the potential limitations and
liabilities from generalizing this three-factor test. The Army has not
done the detailed analysis necessary to provide a formal opinion in
these areas.
Having noted the above, the Army believes that the proposed fiscal
year 2004 OSD Readiness and Range Preservation Initiative legislation
with respect to the Endangered Species Act does provide the necessary
legislative codification of procedures that will protect endangered
wildlife without resorting to the designation of a ``critical
habitat''--a designation that can severely curtail vital military
training. The Readiness and Range Preservation Initiative would provide
a basis in law for procedures that are now working well between the
U.S. Fish and Wildlife Service and the military services to protect
endangered wildlife by generation of an Integrated Natural Resources
Management Plan, ``pursuant to the Sikes Act.'' This legislative
initiative--the Sikes Improvement Act--would provide that Integrated
Natural Resource Management Plans must be prepared by the military
services in cooperation with and reflect the ``mutual agreement'' of
the U.S. Fish and Wildlife Service (and the head of each appropriate
State fish and wildlife agency where the installation is located). Once
completed, these management plans would obviate any need for
designation of a ``critical habitat'' [16 U.S.C. Sec. 670a(a)(2)]. The
Army believes that this comprehensive approach to clarifying the
Endangered Species Act is necessary as the first step toward a
sustainable balance between military readiness and protection of
endangered species. We strongly encourage the subcommittee to adopt
this OSD legislative initiative as part of the National Defense
Authorization Act for Fiscal Year 2004.
Admiral Fallon. No. The three-factor test would require that INRMPs
used in lieu of designating critical habitat provide (a) a conservation
benefit to the species; (b) certainty that the management plan will be
implemented; and (c) certainty that the conservation benefit will be
effective. The RRPI provision anticipates these factors and provides
greater flexibility for the protection of military readiness activities
and the stewardship of species by requiring ``mutual agreement''
between the Navy and the U.S. Fish and Wildlife Service regarding the
contents of an INRMP. This flexibility is necessary to ensure that
there is a balance achieved to protect species and to ensure that the
military can execute necessary national security missions. Finally, and
most importantly, inclusion of the three factors would generate
considerable litigation risk as environmental groups attacked the
findings and conclusions of the U.S. Fish and Wildlife Service
regarding the INRMP's compliance with the three factors.
General Nyland. It is not necessary and may not be appropriate to
codify the three-factor test currently employed by the U.S. Fish and
Wildlife Service when reviewing military service Integrated Natural
Resource Management Plans. While the three-factor test currently
employed by the U.S. Fish and Wildlife Service may be sufficient for
purposes of many listed species, situations could arise where different
or additional conditions may be warranted. In other words, species-
specific issues may dictate a change to the three-factor test. The
Readiness and Range Preservation Initiative provision anticipates the
potential need for such changes by requiring approval of Integrated
Natural Resource Management Plans in accordance with the mutual
agreement provision of the Sikes Act Improvement Act. Consequently,
compliance with the three-factor test, or other appropriate species-
specific considerations believed to be necessary by the Secretary of
the Interior, is required under the current language of the Readiness
and Range Preservation Initiative.
All of the military services have worked closely with the U.S. Fish
and Wildlife Service to address the management of threatened and
endangered species habitat extant on military installations. Recent
efforts were energized, however, by U.S. Fish and Wildlife Service
proposals to designate 57 percent of Marine Corps Base Camp Pendleton
and 65 percent of Marine Corps Air Station Miramar as critical habitat.
The Marine Corps offered that Integrated Natural Resource Management
Plans, prepared pursuant to the Sikes Act Improvement Act, 16 U.S.C.
Sec. 670a, provide comprehensive, multi-species management strategies
sufficient to address the conservation needs of listed species so that
the designation of critical habitat is neither necessary nor required.
The U.S. Fish and Wildlife Service accepted this analysis, and
developed a policy wherein critical habitat designation is not required
on military lands subject to a completed Integrated Natural Resource
Management Plan. This policy requires the Integrated Natural Resource
Management Plans provide: (a) a conservation benefit to the species;
(b) certainty that the management plan will be implemented; and (c)
certainty that the conservation benefit will be effective. (The policy
includes more extensive definitions for each of these three
conditions.) Since October 2000, the U.S. Fish and Wildlife Service has
employed this policy to obviate the need to designate critical habitat
at several military installations.
The Readiness and Range Preservation Initiative requires the
completion of Integrated Natural Resources Management Plans pursuant to
the Sikes Act. The Sikes Act Improvement Act provides that Integrated
Natural Resource Management Plans must be prepared in cooperation with
and reflect the ``mutual agreement'' of the U.S. Fish and Wildlife
Service (and the head of each appropriate State fish and wildlife
agency where the installation is located). 16 U.S.C. Sec. 670a(a)(2).
This mutual agreement provision ensures that conditions required by the
U.S. Fish and Wildlife Service (and State fish and wildlife agencies)
for the benefit of listed species will be embedded in the completed
Integrated Natural Resource Management Plan. It is appropriate to
ensure that regulatory agencies can require conditions necessary to
benefit the listed species (via the mutual agreement requirement), but
it is not necessary to codify the exact conditions.
General Foglesong. It is not necessary--and may not be appropriate
to codify the ``three-factor test'' currently employed by the U.S. Fish
and Wildlife Service when reviewing military service Integrated Natural
Resource Management Plans. While the ``three-factor test'' currently
employed by the U.S. Fish and Wildlife Service may be sufficient for
purposes of many listed species, situations could arise where different
or additional conditions may be warranted. In other words, species-
specific issues may dictate a change to the ``three-factor test.'' The
Readiness and Range Preservation Initiative provision anticipates the
potential need for such changes by requiring approval of Integrated
Natural Resource Management Plans in accordance with the ``mutual
agreement'' provision of the Sikes Act Improvement Act. Consequently,
compliance with the ``three-factor test,'' or other appropriate
species-specific considerations believed to be necessary by the
Secretary of the Interior, is required under the current language of
the Readiness and Range Preservation Initiative.
All of the military services have worked closely with the U.S. Fish
and Wildlife Service to address the management of threatened and
endangered species habitat on military installations. Recent efforts
were energized, however, by U.S. Fish and Wildlife Service proposals to
designate 57 percent of Marine Corps Base Camp Pendleton and 65 percent
of Marine Corps Air Station Miramar as critical habitat. The Marine
Corps offered that Integrated Natural Resource Management Plans,
prepared pursuant to the Sikes Act Improvement Act, 16 U.S.C.
Sec. 670a, provide comprehensive, multi-species management strategies
sufficient to address the conservation needs of listed species so the
designation of critical habitat is neither necessary nor required. The
U.S. Fish and Wildlife Service accepted this analysis, and developed a
policy wherein critical habitat designation is not required on military
lands subject to a completed Integrated Natural Resource Management
Plan. This policy requires the Integrated Natural Resource Management
Plans provide: (a) a conservation benefit to the species; (b) certainty
that the management plan will be implemented; and (c) certainty that
the conservation benefit will be effective. (The policy includes more
extensive definitions for each of these three conditions.) Since
October 2000, the U.S. Fish and Wildlife Service has employed this
policy to obviate the need to designate critical habitat at several
military installations.
The Readiness and Range Preservation Initiative requires the
completion of Integrated Natural Resources Management Plans ``pursuant
to the Sikes Act.'' The Sikes Act Improvement Act provides that
Integrated Natural Resource Management Plans must be prepared in
cooperation with and reflect the ``mutual agreement'' of the U.S. Fish
and Wildlife Service (and the head of each appropriate State fish and
wildlife agency where the installation is located). 16 U.S.C.
Sec. 670a(a)(2). This ``mutual agreement'' provision ensures conditions
required by the U.S. Fish and Wildlife Service (and State fish and
wildlife agencies) for the benefit of listed species will be embedded
in the completed Integrated Natural Resource Management Plan. It is
appropriate to ensure that regulatory agencies can require conditions
necessary to benefit the listed species (via the ``mutual agreement''
requirement), but it is not necessary to codify the exact conditions.

3. Senator Ensign. General Keane, Fort Hood, Texas, has been
confronted with challenges related to the Endangered Species Act. There
are indications that there may have been ``misleading'' information
provided on the training restrictions at Fort Hood. Can you explain
this?
General Keane. There are many constraints on the use of the
training areas at Fort Hood. Some are based on external legal or
regulatory requirements. Others are self-imposed policies implemented
to respond to concerns from neighboring communities or based on a
variety of internal land management objectives. The information the
Army has used to articulate the training constraints at Fort Hood,
primarily maps developed by Fort Hood staff from the installation's
geographic information system (GIS), was accurate. In total,
approximately 154,000 acres (77 percent) of the training area at Fort
Hood are subject to some type of training restriction. About 66,000
acres (33 percent) of the training area are restricted due to
management of endangered species and their habitat. These facts could
be misleading without further explanation. The command group at Fort
Hood has done a tremendous job of getting every bit of training value
they can from the land. They find creative ways of working around the
environmental constraints and training their soldiers to standard. The
readiness of the Army's III Corps reflects that. However, training on
Fort Hood is constrained and the realism of the training at Fort Hood
is negatively affected by these constraints.
Even relatively minor constraints on the use of training land, such
as restricting the use of camouflage netting or digging foxholes,
incrementally diminishes the realism of training events. When several
minor restrictions apply to a training event, the cumulative impact can
and has significantly degraded training realism. At a minimum, these
restrictions tend to concentrate training in less constrained areas of
the installation. Repeated use of a relatively small number of training
areas concentrates training damage on those areas, driving up land
maintenance costs and creating additional issues (e.g., erosion). More
importantly, repetitive use of training areas by units reduces
realistic assessment and consideration of terrain when making tactical
decisions and encourages habitual occupation of the same terrain and
defensive positions. It causes unrealistic scenarios, and soldier
unfamiliarity with the most likely military courses of action, the most
challenging forms of enemy positioning, and the most dangerous types of
enemy ambush points. Each of these shortfalls places at risk the type
of high-quality training necessary to sustain force readiness and our
warfighting edge.

4. Senator Ensign. General Keane, what is the Army's position on
the training restrictions at Fort Hood?
General Keane. Training on Fort Hood is constrained and the realism
of the training at Fort Hood is negatively affected by these
constraints. The command group at Fort Hood has done a tremendous job
getting every bit of training value they can from the land. They find
creative ways of working around the constraints and training their
soldiers to standard. The readiness of the Army's III Corps reflects
that. However, these ``work-arounds'' do not come without cost. For
example, concentrating maneuver training to only certain parts of Fort
Hood in order to preserve ``core habitat'' has contributed to
significant erosion problems in the maneuver area that are not only
expensive to manage, but detrimental to the environment. The quality
and quantity of our unit training--and associated force readiness--at
Fort Hood will continue to decline if steps are not taken now to
reverse these trends.
______

Questions Submitted by Senator Daniel K. Akaka

RANGE PRESERVATION

5. Senator Akaka. General Keane, Admiral Fallon, General Nyland,
and General Foglesong, earlier this year, EPA Administrator Christine
Todd Whitman testified before the Senate Environment and Public Works
Committee, ``I don't believe there is a training mission anywhere in
the country that is being held up or not taking place because of
environmental protection regulation.'' I am aware of a number of cases
in which training and readiness activities have been impeded by the
Endangered Species Act and the Marine Mammal Protection Act (neither of
which is implemented by EPA), so I would like to focus on the other
aspects of the administration's legislative proposal. Are any of you
aware of any case in which a military training mission anywhere in the
country is being held up or not taking place as a result of hazardous
waste statutes?
General Keane. I am aware of no Army range or training area where
the application of the Federal hazardous waste statute, the RCRA,
prohibits training. However, RCRA is one of the laws cited by
plaintiffs in a lawsuit against the Army at Fort Richardson, Alaska.
Also cited in the case are the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA or Superfund) and the Clean
Water Act. Plaintiffs claim that firing munitions during training
violates all of these laws. Plaintiffs are seeking to halt live-fire
training and require remediation of the Eagle River Flats impact area.
This would dramatically impact the training of the 172nd Infantry
Brigade, the largest infantry brigade in the U.S. Army. If the suit is
successful, it would set a precedent that could subject live-fire
training and testing at every Army operational range (400+) to
permitting and remediation actions under these laws.
It is interesting to note that the expanded application of
environmental laws to military ranges is not coming from regulatory
agencies, but from citizens' suits seeking novel interpretations of
these laws. In fact, DOD's legislative proposals in the areas of RCRA
and CERCLA seek to codify the longstanding EPA policy, established by
former President Clinton's administration, that firing ammunition on an
operational range is not a trigger for cleanup requirements. DOD has
developed these legislative proposals in close coordination with EPA.
Admiral Fallon. Navy is not aware of any instances in which
training has been lost due to the administration of the hazardous waste
statutes. However, administration of hazardous waste statutes is
usually under the authority of State regulatory officials, who vary in
their interpretation of Federal hazardous waste laws and who have the
ability to enforce stricter standards than existing Federal hazardous
waste laws. Thus, there is the potential for negative impacts to
military readiness activities. More importantly, hazardous waste laws
have been used in litigation by environmental groups seeking to halt
military training. The Readiness and Range Preservation Initiative
proposed legislative clarification for the Resource Conservation and
Recovery Act. It comports with the existing EPA Military Munitions Rule
while providing a statutory definition for ``solid waste'' that
standardized application of hazardous waste laws and ensures continued
access to our operational ranges now and into the future.
General Nyland. Administrator Whitman's oversight role does not
include natural resources. The Marine Corps needs solutions as outlined
in the RRPI, embedded in law, that requires consideration,
accommodation, and protection of lands used for military training and
operations. RRPI passage, including the provision that addresses
critical habitat designation, has direct national security
implications, and is a Marine Corps priority.
Regarding your question on hazardous waste, I am aware of the U.S.
Army's involvement in a citizen's suit involving Fort Richardson,
Alaska. The coalition of plaintiffs is challenging the Army's live-fire
operations at Eagle River Flats. The suit alleges that munitions are:

Solid/hazardous waste subject to the RCRA;
Release of a hazardous substance subject to the CERCLA; and
Pollutant discharge subject to the Clean Water Act (CWA).

If successful, plaintiffs could force remediation of the Eagle
River Flats impact area, precluding live-fire training at the only
mortar and artillery impact area at Fort Richardson and dramatically
degrading readiness of the 172nd Infantry Brigade, the largest infantry
brigade in the Army. The Fort Richardson litigation could set a
precedent fundamentally affecting military training and testing at
virtually every test and training range.
RCRA and CERCLA are Federal laws designed to regulate the cleanup
of solid hazardous wastes on land. RRPI intends to clarify the
application of RCRA and CERCLA to operational ranges. This
clarification is in accordance with the EPA's Military Munitions Rule.
Explosives, munitions, munitions fragments, or constituents thereof
would be excluded from the definition of ``solid waste'' under RCRA
when military services ``deposit'' the items on an operational military
range incident to normal use, and the items remain thereon. If the
operational range ceases to be operational (is closed), CERCLA would
then apply to the cleanup. Similarly, under CERCLA, explosives and
munitions deposited on operational ranges during normal use would not
qualify as a ``release''--otherwise, under CERCLA, a ``release'' would
require a cleanup. The provision explicitly preserves the President's
and DOD's authority to address an imminent and substantial endangerment
to the public health, welfare, or the environment.
Fort Richardson is a prime example of Federal agencies (DOD and
EPA) working together to arrive at an environmentally acceptable
solution, only to be sued by private party plaintiffs who interpret the
law differently. This legislative clarification/codification of EPA's
Military Munitions Rule is intended to forestall litigation such as
what the Army is currently facing at Fort Richardson, Alaska.
General Foglesong. Although I am not aware of any case in which a
military mission is currently being held up or not taking place as a
result of restoration statutes, environmental plaintiffs have filed
suit at Fort Richardson, Alaska, alleging violations of the CERCLA and
Alaska anti-pollution law applicable under the RCRA. If successful,
they could potentially force remediation of the Eagle River Flats
impact area and prevent all future live-fire training at the only
mortar and artillery impact area at Fort Richardson, thereby
dramatically degrading readiness of the 172nd Infantry Brigade, the
largest infantry brigade in the Army. It could also set a precedent
fundamentally affecting military training and testing at virtually
every test and training range.
In only one instance has the U.S. Environmental Protection Agency
(EPA) taken an enforcement action resulting in the cessation of live-
fire training at a military base, the Massachusetts Military
Reservation (MMR) on Cape Cod, Massachusetts. As John Peter Suarez,
Assistant Administrator, Office of Enforcement and Compliance
Assurance, U.S. Environmental Protection Agency, testified before the
Subcommittee on Readiness and Management Support of the Senate Armed
Services Committee on April 1, 2003:

``We note, for the record, that in its history, EPA has in only
one instance taken an enforcement action that resulted in the
cessation of live-fire training at a military base--namely, at
the MMR on Cape Cod, Massachusetts. There, EPA took action
under the Safe Drinking Water Act only after determining that
the groundwater aquifer underlying MMR, the sole source of
drinking water for hundreds of thousands of Cape Cod residents,
was threatened with contamination--and only after efforts to
support voluntary action failed to stop the spread of
contamination. Today at MMR, EPA is overseeing cleanup work to
ensure that Cape Cod residents have an adequate supply of
drinking water now and in the future. The Defense Department
shifted some of this training to another facility and has
continued to conduct training at MMR using small arms, as well
as other training without using explosives, propellants, and
pyrotechnics.''

6. Senator Akaka. General Keane, Admiral Fallon, General Nyland,
and General Foglesong, setting aside smoke and dust restrictions, which
I understand are not addressed in the administration's legislative
proposal, are any of you aware of any case in which a military training
mission anywhere in the country is being held up or not taking place as
a result of the Clean Air Act?
General Keane. Restrictions on training with smoke or other
obscurants and restrictions on mechanized maneuver that generates
airborne dust are addressed by the administration's legislative
package. Like any other air emission, new or modified training
activities would have 3 years to demonstrate conformity with State
Implementation Plans Under the Clean Air Act. The legislation would
provide more flexibility for the Defense Department in ensuring that
emissions from its military training and testing are consistent with
State Implementation Plans under the Clean Air Act by allowing DOD and
the State a slightly longer period to accommodate or offset emissions
from military readiness activities.
At Fort Leonard Wood, Missouri, the home of the Army's Chemical
School, Military Police School, and Engineer School, there are four
training areas designed for training soldiers in the generation of
obscurants (fog oil). Due to constraints contained in the
installation's air permit, the Army is restricted to using only one of
these training areas. Meteorological conditions are seldom favorable
enough to allow use of the other three. These restrictions severely
limit the areas where soldiers can conduct smoke field training
exercises. Because only one training area is available on a regular
basis, students tend to see the same targets and terrain over and over
again in training. The realism of the training is diminished, and the
capability of our soldiers in this critical area of military operations
is reduced.
Admiral Fallon. No. The Navy has not suffered any training losses
associated with the conformity provisions of the Clean Air Act.
However, there have been several near misses that threatened delay in
introduction of new weapons systems or the movement of aircraft and
ships. The Readiness and Range Preservation Initiative to extend the
deadline for conformity is meant to alleviate the future impacts
associated conformity requirements for the basing of ships and
aircraft, and the introduction of new weapons systems. Navy homeports a
large number of our ships and aircraft in areas of the country
designated as non-attainment or maintenance areas under the Clean Air
Act.
General Nyland. It is likely that the fielding of future weapons
systems and the conduct of contingency operations will be negatively
impacted by Clean Air Act requirements. Our proposal will maintain
DOD's commitment to CAA standards while providing flexibility to meet
State air quality policies by providing DOD and State regulators up to
3 years to ensure full compliance with State implementation plans. If
RRPI were passed, the CAA provision would allow limited flexibility
when complying with the conformity requirement. The CAA's ``general
conformity'' requirement, applicable only to Federal agencies,
threatens deployment of new weapons systems and base closure/
realignment despite the fact that relatively minor levels of emissions
are involved. For example, the realignment of F/A-18 C/Ds from Cecil
Field, Florida to Naval Air Station (NAS) Oceana in Virginia was made
possible only by the fortuity that Virginia was in the midst of
revising its implementation plan and was able to accommodate the new
emissions. Under the existing requirement, there is limited flexibility
to accommodate readiness needs, and DOD is barred from even beginning
to take readiness actions until the requirement is satisfied. The
legislation would provide more flexibility for the DOD in ensuring that
emissions from its military training and testing are consistent with
State implementation plans under the Clean Air Act by allowing DOD and
the State a 3-year period to accommodate or offset emissions from
military readiness activities.
Federal facilities located in non-attainment areas must comply with
the Clean Air Act General Conformity regulations, which prohibit
Federal agencies from supporting or taking any action that does not
conform with the State's plan to bring air quality into compliance.
This can have significant impacts on the military's ability to change
operations or field new weapon systems. We believe DOD actions should
conform with State Implementation Plans; in recognition of the national
security implications, however, military readiness activities should be
given a 3-year window to demonstrate conformity.
Future Weapons Systems: Across the board all new weapons systems
(JSF, F-22, F/A-18E/F, V-22, and AAAV) will emit more nitrogen oxides
(NOx) than the legacy systems they are replacing. Basic combustion
processes mean that the more efficient higher power engines burn
hotter, emitting more NOx. For areas designated nonattainment for ozone
(including most of Southern California--the location of multiple
military installations) NOx is a pollutant of concern. Historically,
the military services have been able to work with States to demonstrate
conformity--these good relations will continue. The immediate nature of
the conformity requirement, however, is burdensome. A 3-year window to
demonstrate conformity would maintain the conformity requirement, and
allow for smoother transitions to new weapons systems.
Contingency Operations: Conformity is triggered whenever there is a
major Federal action. Major increases or a change in the type of
operations in a non-attainment area can trigger conformity
requirements. For example, homeland security activities, especially the
round-the-clock air surveillance of the major cities, can--depending
upon flight tempo level, constitute a new mission for some airfields
and thereby raise conformity issues. A 3-year window to demonstrate
conformity would maintain the requirement, and allow for immediate
ramp-up of military operations in support of unanticipated
contingencies.
General Foglesong. There are currently no places where Air Force
training missions are being held up or are not taking place as a result
of the Clean Air Act. The Air Force does regularly relocate forces
among installations throughout the U.S. and the world, in order to best
position them for potential use and to optimize training opportunities.
However, the Clean Air Act's ``general conformity'' requirement
applicable to Federal agencies restricts the Air Force's ability to
immediately deploy personnel or relocate weapons systems, despite the
fact that only minor levels of emissions may be involved. The proposed
Readiness and Range Preservation Initiative would provide more
flexibility for the Air Force in ensuring emissions from its military
training are consistent with State Implementation Plans under the Clean
Air Act by allowing the Air Force and the States a 3-year period to
accommodate or offset emissions from military readiness activities.
This would greatly facilitate the movement of military units among
installations in order to best position them for potential use.

encroachment issues
7. Senator Akaka. General Foglesong, earlier this week, the Under
Secretary of Defense for Personnel and Readiness testified before
another subcommittee that military faces a number of encroachment
issues. He specifically listed ``Urban sprawl, loss of frequency
spectrum, restrictions on air space, and endangered species-related
restrictions on training lands.'' Yet the administration's legislative
proposal focuses exclusively on encroachment issues arising out of
environmental law and regulation. In the case of the Air Force, how
would you rank the impact of the encroachment issues we have been
discussing in this hearing against the impact of encroachment issues we
have not focused on, such as airspace management, the availability of
spectrum, and noise restrictions?
General Foglesong. Frequency spectrum, urban sprawl, noise
concerns, and the utilization of the national airspace system pose just
as significant concerns to the Air Force as the encroachment issues
based on environmental provisions. Each of these types of encroachment
is being addressed but do not require changes to specific statutes at
this time.
The authority to guide civilian growth and development of land
rests exclusively with State and local governments. The Air Force has
been proactive in this arena for over 25 years by participating in the
local land use planning process. Provisions in last year's passage of
some elements of the RRPI provide another tool for use by the Air Force
to address urban sprawl around our ranges and installations, and we
thank Congress for this needed relief.
Noise concerns are primarily local issues and our military
professionals are actively interacting with their local communities to
address noise concerns, educate populations, and provide public record
documents giving future property owners disclosure on the military
noise in their region. Additionally, the Services are working to
develop better noise modeling programs to ensure the best possible data
is available to military planners and the public.
Likewise, the shared use of our National Airspace System is very
important to the Air Force and we are actively working, through the DOD
Executive Director of the Policy Board on Federal Aviation, to ensure
all civil and military needs for airspace are accommodated in the
future.
Frequency spectrum encroachment occur when the Air Force loses
spectrum as greater demands are placed on spectrum for commercial and
international uses. The Air Force is actively developing methods to
more efficiently use the spectrum we currently have, and to work within
the National Telecommunications and Information Administration, Federal
Communications Commission, and the International Telecommunications
Union processes to protect or provide for Air Force frequency spectrum
needs.

8. Senator Akaka. General Foglesong, can you explain why the
administration has chosen to offer legislation that focuses exclusively
on the environmental laws, and neglects to address other encroachment
issues identified by the military services?
General Foglesong. The Department of Defense's efforts to address
encroachment are broadly focused, encompassing a wide range of issues
and actions. As your question recognizes, not all encroachment issues
are ``environmental'' issues per se. Urban growth and development at
the fence line, commercial competition for vital radio spectrum,
airspace restrictions, increasing pressure for recreation or commercial
uses on military land, and other such factors come into play. DOD is
actively addressing these problems on many fronts. Legislation is only
one possible solution, and has been sparingly employed. We are working
to resolve many of these concerns by working with the regulatory
agencies and other parties to mitigate existing or potential
encroachments. If and when appropriate, we will consider legislative
clarification on non-environmental encroachment concerns, but we do not
believe that is necessary at this time.
However, while encroachment is broad-based, a large number of our
most pressing encroachment issues are associated with the readiness
impacts of environmental legislation or regulation. Each of the five
legislative proposals offered this year is the result of lengthy
deliberation within the Department and the administration, to include
Office of Management and Budget and the Federal agencies. DOD has taken
a very conservative approach in deciding which specific encroachment
concerns justify a request for legislative clarification. No
legislation is proposed that has not met three basic tests:

- Is the proposed legislation the only realistic option to
address the readiness issue? In other words, can the problem be
solved through regulatory or administrative means, or by
internal DOD action short of legislative clarification? In
these five cases, we have concluded that other options are not
available, for the most part due to lawsuits and court
decisions that have removed other recourse. Legislative action
is the only reasonable alternative.
- Will the legislation produce significant readiness benefits?
Of the many potential encroachment issues we face, the five we
are seeking to address in our RRPI provision are truly
potential showstoppers. Our range commanders have told us, and
have repeatedly testified before Congress, that their
management flexibility and the realism of their testing and
training are being severely constrained due to these precise
issues. DOD believes these are the most important issues to
address, and that the resolutions we have proposed are the best
way to resolve the concern.
- Will the legislation have neutral or positive environment
effects? DOD is fully committed to superior natural resource
stewardship. None of our five legislative proposals would
significantly affect the quality of the environment on or
around our ranges, except perhaps in a positive manner. For
example, the use of INRMP holistically protects not just
individual endangered species, but their ecosystems, in ways
critical habitat designations cannot.

In summary, the Department hopes to resolve many of our
encroachment issues through broad-based, long-term range sustainment
efforts, without resorting to legislative action. We are pursuing a
number of policy, organizational, programmatic, regulatory/
administrative, and stakeholder involvement solutions to the broad
range of encroachment issues we face. It is only where other solutions
are unavailable that legislation is being pursued, and even then, only
when such clarifications will truly improve our ability to fulfill both
our readiness and stewardship missions.
______

Questions Submitted by Senator Bill Nelson

TRAINING IMPACT OF ENVIRONMENTAL REGULATIONS

9. Senator Bill Nelson. General Keane, Admiral Fallon, General
Nyland, and General Foglesong, in a report released in June 2002, the
General Accounting Office (GAO) reported that the military services
have demonstrated no significant reduction in readiness as a result of
encroachment (the term encroachment refers to the impairment of
training capabilities due to the growth of civilian populations near
military installations and involve regulatory compliance with
environmental regulations). Data for this report was gathered by
surveying military installations and conduction interviews with base
commanders. What are your reactions to the GAO's conclusions?
General Keane. The Army believes that this reading of the GAO
report misses the key finding of the report: as a result of
encroachment, the Services have incrementally lost training
capabilities at each of the installations the GAO reviewed. In this
finding, the GAO reinforced our position that encroachment diminishes
training realism and restricts the types, locations, and times of
training events.
We acknowledge that the GAO study also found that DOD has not
documented the overall impact of encroachment on training. The Army
recognizes that our readiness reports have not reflected encroachment
impacts. We are taking steps to address the issue. However, the
readiness reporting steps we are taking in no way offset the fact that
a negative and growing impact from environmental encroachment exists,
and that the GAO was able to document this impact upon Army training in
its June 2002 report.
The impacts of training strategy deviations resulting from
environmental requirements at Army installations are difficult to
identify and measure. These environmental training constraints result
in incremental reductions in training capabilities that have long-term
cumulative impacts on unit readiness. Individual commanders may not
recognize these cumulative adverse effects during their command tours.
The current Army Unit Status Report system has not been sensitive
enough to identify these cumulative effects as significant contributors
to training status. One aspect of the Army culture is to find a way to
make things work while avoiding complaint. Therefore, training
constraints are often charitably characterized as necessary ``control
measures'' to avoid environmental violations. As a result, commanders
routinely implement training work-arounds. Over time, these work-
arounds are accepted as ``business as usual.''
The Army is improving the tools with which garrison and mission
commanders evaluate the cumulative impacts on live training resulting
from incrementally more stringent environmental management
requirements. The Army has modified its Installation Status Report
(ISR) to better quantify encroachment and training restrictions. These
measures will be directly incorporated into the Strategic Readiness
System and should more accurately reflect the impacts of encroachment.
We anticipate compiling a first year of encroachment data from the ISR
by the summer of 2003.
Admiral Fallon. The GAO report expressly concluded that DOD and the
military services have lost training range capabilities and can be
expected to experience increased losses in the future absent efforts to
mitigate encroachment. The GAO report further concluded that
encroachment had limited the extent to which training ranges are
available or the types of training that can be conducted. Additionally,
the GAO report indicated that constraints on the availability and type
of training affected the ability of units to train as they would expect
to fight or required workarounds--or adjustments in training events--
that can create bad habits and affect performance in combat or, in some
instances prevent training from being accomplished.
The impacts of encroachment on training and testing are sometimes
readily apparent, such as the loss of training areas due to the impacts
of training and testing on endangered species that are present in the
area. More often than not, the impacts are incremental. A slow but
steady increase in encroachment problems has constrained the use of
training and testing facilities and forced the Services to work around
the constraints by modifying the timing, tempo, and location of
training and testing, as well as the equipment used. These workarounds
are becoming increasingly difficult and costly and compromise the
realism of training and testing. Constraints on training and testing,
as well as the compromise of realism, threaten military readiness and
the development of new weapon systems. These in turn increasingly put
U.S. forces at risk when called upon to conduct combat operations.
The GAO report noted that there are limitations in the DOD
readiness reporting system. These limitations include the fact that the
readiness reporting system does not differentiate between minimum
skills necessary to perform military operations and the higher-level
skills necessary to conduct those military operations in combat
conditions. Thus, although military readiness reporting has generally
not noted impacts from encroachment, this failure to note impacts from
encroachment does not mean that the impacts of encroachment are not
affecting combat capability, the ultimate form of readiness. Likewise,
this failure to note deficiencies does not imply that workarounds are
not affecting combat capability. More importantly, the GAO report
acknowledged that a mechanism for determining the impacts of
encroachment on training capabilities and readiness is only being
developed. Since the methodology does not exist, it would be difficult
to report deficiencies on readiness reports. However, anecdotal
evidence of the impacts of encroachment on readiness does exist and can
be documented.
Since the impacts of encroachment are slowly eroding the combat
capability of the military services, steps must be taken now to arrest
the erosion and to ensure that U.S. military forces are fully prepared
for combat. Failure to do so will result in an increased probability of
casualties in combat situations as inadequately trained military forces
struggle to learn lessons for the first time under hostile fire.
General Nyland. GAO-02-614, ``Military Training: DOD Lacks a
Comprehensive Plan to Manage Encroachment on Training Ranges'' (GAO
review code 350075), had three findings:

That encroachment has diminished military service training
range capabilities;
That the impact of encroachment on readiness and training
costs is not well-reflected in DOD's reported data; and
That a comprehensive plan for addressing encroachment has not
been finalized.

The first finding is significant: encroachment has diminished our
military service training range capabilities. Second, the Pendleton
Quantification Study is a direct response to the criticism that we
cannot quantify the impacts of encroachment. Moreover, we are working
to quantify encroachment impacts nationwide. At Headquarters Marine
Corps, a Range Management System (RMS) has been funded including monies
programmed through fiscal year 2004, to build an institutional-wide
ability to relate training standards to ranges using the Pendleton
study as a proof of principle, if not an exact model. Intent is to have
the RMS in place within the next 18 months.
We are taking a multi-layered approach towards the problem; the
legislative package is one very important step in this approach that
will include administrative and regulatory proposals in the near
future. Where we can take action that reduces the known impact of
encroachment at no (or at least very little) cost, we would be remiss
in not taking that action immediately.
General Foglesong. The GAO report confirmed encroachment is a
recognized problem for military readiness activities. However, the
report did note quantification of this problem must be better. The Air
Force substantially concurs with the report's conclusions. The Air
Force has recognized the need for better supporting data to
substantiate our request for encroachment relief. To accomplish this,
the Air Force is developing and testing the Resource Capability Model.
It will capture the qualitative and quantitative information on the
availability of air, land, water, and spectrum resources required to
support operations at our installations and ranges. It is designed to
define what resource requirements are associated with a defined unit of
operation, whether these resources are adequate to support the
requirements (quantify), what kinds of encroachment are denying or
degrading resource availability or capability, and what are those
impacts to operations. Overall, this model will provide information on
what operations are curtailed or modified due to resource denial or
restraint.

10. Senator Bill Nelson. General Keane, Admiral Fallon, General
Nyland, and General Foglesong, does the military agree with the data
gathered for the study?
General Keane. We strongly agree with the GAO finding that the
military services have lost training range capabilities and can expect
to experience increased losses in the future. We also agree with the
GAO finding that there is not adequate data to quantify the impacts of
encroachment on our ability to train and the readiness of our units.
However, the lack of quantification does not make the impacts on
training any less real. To rectify the situation the Army has modified
the ISR to better quantify encroachment and training restrictions.
These measures will be directly incorporated into our Strategic
Readiness System and should more accurately reflect the impacts of
encroachment.
Admiral Fallon. Yes. The data was accurate, but the report did not
take into account the impact of workarounds on tests and training, nor
their overall impacts on readiness.
General Nyland. Although the report credits the Marine Corps
process of quantifying the impacts of encroachment on the capability of
Marine Corps Base, Camp Pendleton to support unit operational readiness
requirements for assigned marines and units, the study fails to
reinforce the notion that prior to deployment, unit training readiness
should be 100 percent. Attaining those levels requires alternative
training venues at additional expense and operational time; for
example, marines at Camp Pendleton, CA, are forced to train at
Twentynine Palms, CA, to achieve their full readiness levels.
Restrictions at Camp Pendleton caused by the presence of endangered
species, recreational areas, and topographic and access limitations,
prevent training to doctrinal standards (e.g., digging of fighting
positions and vehicle off-road travel).
General Foglesong. Yes, with the understanding the General
Accounting Office was only able to examine a small portion of military
installations which face potential adverse impacts from encroachment.
The Air Force substantially concurs with the contents of the report.

11. Senator Bill Nelson. General Keane, Admiral Fallon, General
Nyland, and General Foglesong, has the military conducted its own study
and how does it differ?
General Keane. Recognizing the need to fully quantify readiness
impacts from environmental encroachment (as stated in the June 2002 GAO
report), and acknowledging the fact that contemporary Army readiness
reports do not reflect encroachment impacts, the Army has modified its
ISR to better quantify encroachment and training restrictions. These
measures will be directly incorporated into the Strategic Readiness
System and should more accurately reflect the impacts of encroachment.
We anticipate compiling the first year of encroachment data from the
ISR by the summer of 2003. In the 2003 National Defense Authorization
Act, Congress directed DOD to develop a comprehensive plan to address
training constraints caused by limitations on the use of ranges and
training land. The Office of the Secretary of Defense (OSD) has, in
turn, requested that the military services conduct extensive
assessments of range requirements, range capabilities, and constraints
on the use of ranges and training areas and provide a report by
November 2003. The Army is compiling the necessary data and will
provide the required report to OSD in November 2003.
Admiral Fallon. Navy's Federally Funded Research and Development
Center, the Center for Naval Analyses (CNA) performed three studies to
help us quantify encroachment impacts.
In the first study, CNA looked at encroachment impacts at the unit
level. They found that on the Navy-wide level, SORTS scores (Status of
Readiness and Training--the standard readiness measuring system used
throughout the Department of Defense) do not have the fidelity to
capture the effects of the occasional degradation in training due to
encroachments. Simply put, in light of the myriad parameters and
training events that go into Fleet SORTS scores, the occasional
encroachment on a training event simply doesn't show up. However, when
they looked at individual units performing training on installations
faced with environmental restrictions, CNA found training readiness
scores of these units were indeed significantly degraded in particular
mission areas.
Following this look at unit-level impacts, CNA looked at effects of
encroachments on Battle Group level exercises; specifically, the
impacts of encroachment on the major Fleet exercises known as Fleetex
and JTFEX. They found that encroachments on these exercises are
somewhat insidious; that is, encroachment is not immediately apparent
upon observing an exercise because the workaround for a specific
restriction is built into the exercise during the planning process. By
following a Fleet exercise from its early development stages through
actual execution, they found several events altered or eliminated
during the planning cycle as a result of environmental restrictions.
CNA also found examples due to airspace restrictions along the U.S.
east coast of weapons employment during the exercise not being
consistent with how they have been employed in wartime.
In the third study, CNA, in conjunction with the Office of the
Deputy Under Secretary of Defense (Readiness), approached the
encroachment issue from the installation (range) perspective. That is,
they focused on a particular training range and developed a methodology
to characterize the physical assets. For example, they focused on the
airspace and groundspace the range needs in order to fulfill its
training mission; how we can objectively assess the degree to which
these assets are restricted; the reasons for these restrictions; and
their ultimate impact on the training of combat forces. We feel this is
an important step in addressing the overall issue of range management,
of which encroachment is one component. That is, there are many
reasons, in addition to encroachment, for shortcomings in the training
resources that our ranges are able to provide. The methodology
developed helps us characterize encroachment in a general perspective,
and shows how we can look at it in the context of other types of
restrictions and focus our efforts accordingly.
General Nyland. The Commanding General, Marine Corps Base, Camp
Pendleton, California sponsored a study to establish quantitative data
that examined encroachment impacts on the capability of the
installation to support Marine Air Ground Task Force operational
readiness requirements.
The first phase of study results revealed that an artillery
battery, light armored reconnaissance platoon, and mortar man Military
Occupational Specialty (MOS) were able to accomplish specified tasks to
only 69 percent of established standards for non-firing field training
while conducting an amphibious operation at Camp Pendleton. The Combat
Engineer MOS was able to accomplish only 77 percent of established
standards for non-firing field training.
The second phase of study examined a Battalion Landing Team,
Infantry Company, Cobra Attack Helicopter Crewman MOS, and an Assault
Amphibian Vehicle Crewman MOS.
The study examined 760 total tasks for both phases of the study.
The final report's findings are consistent with those of the
preliminary assessment. On average, the units assessed were able to
complete their required tasks to just below 70 percent of the
established standard while conducting an amphibious operation at Camp
Pendleton.
In comparison to the GAO report, our study reflected the impacts of
encroachment within a notional, realistic exercise scenario. The
scenario included an amphibious landing at Red Beach; tactical
displacement of the force 6 miles through a maneuver corridor from Red
Beach to an objective in the vicinity of the live-fire impact areas; a
deliberate assault of an objective; and sustainment of the force. One
of the hundreds of tasks examined in the Pendleton Quantification Study
was simple digging. Digging fighting holes is a core competency for
Marine infantrymen, and one that is severely constrained at Camp
Pendleton due to the presence of endangered species and habitat,
cultural resources, or wetlands. To the layman, it may sound strange to
suggest that digging is a technique that must be practiced; however,
digging must be second nature in combat. The conduct of battle
currently underway in Operation Iraqi Freedom is a testament to this
necessity.
General Foglesong. The Air Force has extensive efforts underway to
better characterize encroachment and its effect on our ability to meet
current and future training requirements. We are currently developing
the Air Force Resource Capability Model that captures qualitative and
quantitative information on the availability of air, land, water, and
spectrum resources required to support operations at an Air Force
installation and associated training areas (e.g., range and airspace).
Additionally, in satisfying the requirement of Section 366 of the
National Defense Authorization Act for Fiscal Year 2003, the Air Force
is preparing a comprehensive report that will address encroachment on
our installations and ranges.

[Whereupon, at 3:54 p.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

----------

WEDNESDAY, MARCH 19, 2003

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

ACQUISITION POLICY AND OUTSOURCING ISSUES

The subcommittee met, pursuant to notice, at 9:33 a.m., in
room SR-222, Russell Senate Office Building, Senator John
Ensign (chairman of the subcommittee) presiding.
Committee members present: Senators McCain, Allard, Ensign,
Chambliss, Levin, Akaka, E. Benjamin Nelson, Clinton, and
Pryor.
Committee staff member present: Cindy Pearson, assistant
chief clerk and security manager.
Majority staff members present: William C. Greenwalt,
professional staff member; Gregory T. Kiley, professional staff
member; and Ann M. Mittermeyer, counsel.
Minority staff members present: Richard D. DeBobes,
Democratic staff director; Maren R. Leed, professional staff
member; and Peter K. Levine, minority counsel.
Staff assistants present: Andrew W. Florell and Nicholas W.
West.
Committee members' assistants present: Christopher J. Paul,
assistant to Senator McCain; John A. Bonsell, assistant to
Senator Inhofe; Arch Galloway II, assistant to Senator
Sessions; D'Arcy Grisier, assistant to Senator Ensign; Clyde A.
Taylor IV, assistant to Senator Chambliss; Davelyn Noelani
Kalipi, assistant to Senator Akaka; William K. Sutey, assistant
to Senator Bill Nelson; Eric Pierce, assistant to Senator Ben
Nelson; Andrew Shapiro, assistant to Senator Clinton; and Terri
Glaze, assistant to Senator Pryor.

OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

Senator Ensign. This morning, the Subcommittee on Readiness
and Management Support meets to receive testimony on
acquisition policy and outsourcing issues in review of the
National Defense Authorization Request for Fiscal Year 2004.
I am pleased to welcome today's witnesses on the first
panel, Under Secretary of Defense for Acquisition, Technology,
and Logistics, Pete Aldridge; the Comptroller General of the
United States General Accounting Office, David Walker; and the
Director of the Office of Federal Procurement Policy, Angela
Styles.
This hearing will address a full range of acquisition
related issues. I look forward to hearing from Secretary
Aldridge on how the Department is transforming its acquisition
process through the use of spiral development and other
reforms.
The acquisition challenges facing the Department of Defense
as it seeks to acquire weapons and other systems critical to
its mission are potentially overwhelming. I am most interested
in any observations on how the Department might improve its
acquisition practices and how Congress can help in that
endeavor.
The General Accounting Office has played a critical role in
identifying for the committee various best practices in
purchasing weapons systems, information technology and
services. Many of these findings and recommendations are being
implemented by the Department of Defense (DOD).
Mr. Walker, as Chairman of the Commercial Activities Panel
(CAP), you took on another critical acquisition challenge,
improving the process for public/private competitions. This
subcommittee is particularly interested in your perspective on
that panel's report findings and recommendations, as well as
subsequent developments.
Ms. Styles, as the administration's senior procurement
official, you have been tasked with the job of implementing
many of the CAP's recommendations. I hope you will be able to
share with the subcommittee where you are in the process of
reforming the Office of Management and Budget's (OMB) Circular
A-76 that governs public/private competitions.
A critical component of successful acquisition reform is
DOD's acquisition workforce. This workforce, however, has been
significantly downsized. Many in the workforce are eligible to
retire in the next few years.
DOD's budget has risen significantly, and contracting
actions have increased. While workload has increased, there are
fewer acquisition personnel around to do the work. What is the
impact of this situation? How can we strengthen this workforce?
Improving how the Department of Defense buys goods and
services is critical to our national security. We need to
ensure that the money spent on defense acquisition is spent
wisely.
I look forward to hearing from our witnesses on DOD's
efforts to address these challenges.
Senator Akaka.

STATEMENT OF SENATOR DANIEL K. AKAKA

Senator Akaka. Thank you very much, Mr. Chairman. I thank
you for calling this hearing today. This committee has a long
tradition of holding an annual oversight hearing on acquisition
policy. This morning we will focus on the significant changes
in outsourcing policy currently under consideration in the
Department of Defense and elsewhere in the executive branch.
Late last year, the administration proposed a revised
version of OMB Circular A-76, to authorize a streamlined ``best
value'' type of competition. The administration's legislative
package contains a provision that would amend Title 10 to
enable the Department of Defense to fully implement this
change. I believe that decisions to contract out government
functions should be based on fair and objective competition. In
my view, true competition must be cost-effective, fair, and
must promote trust through transparency and public
accountability.
I do not automatically rule out the use of best value
competitions, which appear to have worked well in the
acquisition of products and services from the private sector.
However, the subjective quality of best value decisionmaking
requires a great deal of trust in the impartiality of the
decisionmaker. As the General Accounting Office (GAO) CAP noted
in its final report, ``Because the sourcing decision under
Circular A-76 is based on a cost comparison, some view it as
objective and therefore less open to an abuse of discretion by
management. In the context of the distrust that often permeates
the sourcing process, participants, particularly Federal
employees, often prefer a cost-only basis for a decision,
rather than one that permits the exercise of discretion based
on subjective factors.''
The GAO Commercial Activities Panel concluded that Federal
employees' trust in a streamlined best value process would be
measured, in part, on the extent to which the process provides
the Federal workforce appropriate rights and protections.
I am concerned that the proposed revision to the A-76
public/private competition process falls short of providing
those rights and protections in several important areas. For
example, the proposal would not eliminate arbitrary numerical
goals for conducting public/private competitions, as
recommended by the GAO panel. The proposal would not give
unions the same right to file bid protests to the private
sector, which the private sector already has, as proposed by
the GAO panel.
The proposal contains unrealistic timelines for conducting
public/private competitions that appear designed to push work
out the door to the private sector as fast as possible. The
Comptroller General has stated that these timelines are
``unrealistic.''
The proposal would provide expanded authority to conduct
direct conversions to private sector performance without any
competition at all. The Comptroller General has noted that this
approach ``sends an unfortunate signal'' to Federal employees.
The proposal would unduly burden Federal managers, and we must
ensure that they have the resources, training, and people
needed to meet competition requirements.
Mr. Chairman, I believe that we can design outsourcing
policies that achieve the best deal for the taxpayer without
being unfair to our Federal workforce. The proposed revisions
call for a pilot project that would allow for the use of a best
value standard for information technology (IT) projects. I am
open to a genuine pilot project to test the feasibility of best
value competitions in the Department of Defense, but I hope
that we will also be able to address some of the concerns that
I have raised.
I look forward to working with you on these important
issues, Mr. Chairman. Thank you very much.
Senator Ensign. Thank you, Senator Akaka.
Secretary Aldridge.

STATEMENT OF HON. EDWARD C. ``PETE'' ALDRIDGE, JR., UNDER
SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS

Secretary Aldridge. Thank you, Mr. Chairman, for inviting
me here----
Senator Ensign. All of your statements, by the way, will be
made part of the record.
Secretary Aldridge. Yes, sir. Mr. Chairman, Senator Akaka,
members of the subcommittee, again I thank you for inviting me
here today to talk about our acquisition policy and competitive
sourcing as part of your review of the National Defense
Authorization Request for Fiscal Year 2004.
We have made great progress in addressing barriers to
efficient acquisition, and we thank the subcommittee for its
assistance in the creation of a professional acquisition corps,
as well as for its support for pilot programs and other
transaction authorities to speed the fielding of the state-of-
the-art technology and better equipment to our warfighters.
Our current national security situation once again reveals
a truth often forgotten during these times of peace; that the
most important duty of the government is the protection of its
citizens. The support this subcommittee has demonstrated for
our men and women in uniform honors that covenant.
The successes of my office in our ongoing quest for
excellence in the defense acquisition are a measure of our
attempts to honor the same covenant. For example, in the past
year, we have been quite successful in pursuing the five goals
I established at the beginning of this administration. These
goals were directly derived from those established by Secretary
Rumsfeld for the Department as a whole.
These goals are to improve the credibility and
effectiveness of the acquisition and logistics support process;
to revitalize the quality and morale of the Acquisition,
Technology, and Logistics workforce; to improve the health of
the defense industrial base; to rationalize the weapon systems
and infrastructure with our defense strategy; and initiate high
leverage technologies to create the warfighting capabilities
and strategies of the future.
Toward these goals, I have restructured the Defense
Acquisition Board, and designated evolutionary acquisition and
spiral development as the preferred approach. The opposite side
of that coin must be the proper pricing of programs, which I
have insisted upon.
I have also approved a new process for the acquisition of
services by the Department of Defense; mandated
interoperability at program initiation; institutionalized the
use of Technology Readiness Assessments; consolidated and
improved our acquisition education; developed a comprehensive
Future Logistics Enterprise; made changes to improve the health
of the defense industrial base; instituted a new profit policy;
increased progress payment schedules; developed a process for
sharing of cost savings from excess facilities; eliminated
inappropriate research and development (R&D) cost sharing;
encouraged non-traditional commercial companies to do business
with the Department of Defense; accelerated the close-out of
over-aged contracts; and exploited the enormous potential of
Advanced Concept Technology Demonstrations.
Of course, we have many things still to accomplish: we need
to further eliminate inappropriate management functions and
marginal activities; continue to devolve functions that can be
better accomplished elsewhere; further reduce acquisition cycle
times; continue to minimize program risks; enhance program
stability; continue to stress keeping costs under control; and
further establish a clear vision by which our logistics will
better support our operational requirements. We must accelerate
the flow of technology to the warfighter with a vibrant and
robust research program.
I would now like to discuss the issues you identified as
being of particular interest to the subcommittee. I believe
that increased use of evolutionary acquisition and spiral
development is the key to reducing the acquisition cycle time.
I have designated evolutionary acquisition and spiral
development as our preferred strategy for fielding
operationally useful and supportable military capabilities.
They deliver advanced technology to the warfighter as rapidly
as possible, with the explicit intent of delivering improved or
updated capability in the future.
Evolutionary acquisition success depends on the consistent
and continuous definition of requirements; the maturation of
technologies that lead to disciplined development; and
production of systems that provide increasing capability to the
right materiel solution. Achieving the optimum benefit from
evolutionary acquisition and spiral development requires early
and frequent collaboration between the user, the tester, and
the developer.
We have been implementing evolutionary acquisition and
spiral development over the past years and have instituted it
in some of our major programs. Several examples of our
evolutionary programs that will transform the battlefield are
the Joint Strike Fighter; the Navy's DD(X); unmanned aerial
vehicles, such as Global Hawk; the new aircraft carrier, CVN-
21; and the Army's Future Combat System.
Proper pricing of programs is the predicate required for
successful evolutionary acquisition and spiral development.
Without it, program managers tend to exhaust their funding,
scavenge funding from other sources, and slip their schedules.
Without the proper pricing of programs, the advantages
conferred by evolutionary acquisition and spiral development
are eliminated before they can be brought to bear.
The acquisition policy improvement initiatives we are
pursuing internally will make a tremendous difference in the
future. The first of these is the complete rewrite of the DOD
5000 series of documents. Over the last year, we have been
taking a hard look at our acquisition policies, and we
determined last fall that the old policies were much too
prescriptive.
We concluded that they required revision to create an
acquisition policy environment that fosters efficiency,
flexibility, creativity, and innovation. Consequently, we
cancelled those policies and issued interim guidance while we
completed the final policies. I have also worked with the Joint
Staff as they revised the policies concerning the requirements
definition process.
The flexibility that we have built into these streamlined
policies reflect the confidence that I have in our highly
talented workforce and in the dramatic improvements we have
made to our acquisition education system.
I do not want to leave you with the impression that we are
done. I will continue to aggressively pursue the development
and implementation of new policies that will ease the burdens
on our managers while producing stable, affordable, and well-
managed programs that serve the needs of our warfighters.
The acquisition workforce initiatives must be focused, as
President Bush stated in a speech to Government employees on
July 10, 2002, ``We must be able to get the right people in the
right place at the right time with the right pay. We need to be
able to reward excellence and ensure accountability for
individual performance.''
The Acquisition Workforce Demonstration also helps us get
the right people at the right place at the right time, through
its flexible personnel practices, but it also adds the element
of ``right pay'' by linking pay to contribution to mission. In
the National Defense Authorization Act for Fiscal Year 2003,
you provided us an extension of the Acquisition Workforce
Demonstration project until 2012. We appreciate that support.
I would emphasize one more element of the President's
direction. We need to have the workforce with the right skills.
The Defense Acquisition University (DAU) has been in the
forefront of providing certification training for our
acquisition, technology, and logistics (AT&L) workforce. But we
have also recognized the need to move beyond certification
training.
DAU has embraced a new performance learning model for
training; upgrading their certification courses to include
critical thinking and case studies; adding web-based continuous
learning; providing onsite support to our workforce from
regional campuses; and offering web-based practitioner sharing
of best practices and lessons learned.
No discussion of the workforce would be complete without
addressing workforce size. Since the mid-1990s, DOD has defined
our AT&L workforce to include all people who are doing AT&L
work, regardless of their organization. That workforce now
numbers a little over 132,000 people, down from almost 146,000
people we counted in 1998.
Today, the workforce is managing over $1,700,000 per person
in total acquisition dollars. That is up over 40 percent since
1998. That means the productivity of the workforce has
increased by 40 percent in 4 years.
As we discussed, we are using human capital strategic
planning and the acquisition workforce demonstration to get the
right people at the right place at the right time with the
right skills and the right pay. We are in direct competition
with the private sector, seeking talent for many of the same
skills in a shrinking demographic pool.
While we are continuing to use these to examine our
workforce needs of the future, we believe that our workforce is
where it should be today to manage our workload. We will
continue to make adjustments as they become necessary, but
adjustments should be left to the Department, not enshrined in
statute.
This leads us to the last area you asked me to focus on:
competitive sourcing. The Department must continue to do
business better, faster, and at a reduced cost to maintain our
focus on readiness. In order to focus on what we do best, our
core mission activities, we must become more efficient in our
support, or non-core services. When subjected to competition,
our workforce, as dedicated as they are, as well as other
service providers, can and do provide support services not only
at a lower cost, but with greater speed and efficiency.
The public/private competition process is not easy. In
fact, it is often lengthy, complex, and frustrating for all
involved. That very frustration is, in part, an outgrowth of
the A-76 process, which has evolved over time to address the
legitimate concerns for establishing a level playing field to
protect the interests of all participants; Government
employees, private sector competitors, Federal managers, and
taxpayers.
But the old A-76 process has become too lengthy,
adversarial, and distrusted by all participants. The Office of
Management and Budget has now issued a revised, or a proposed
revision to the OMB Circular 76 to address recommendations made
by the Commercial Activities Panel. We believe the proposed
mission--or proposed revision offers promising and overdue
improvements to the A-76 process, especially with respect to
aligning it more closely with procedures already used under the
Federal Acquisition Regulations.
The proposed revisions were published in November for
review, and we have supplied comments, as have all interested
parties. We have continued our dialogue with OMB as they work
to finalize the circular.
I have talked about some of the things we could do on our
own to transform this department, to eliminate waste and
duplication, and to demonstrate greater respect for the
taxpayers' dollars. In the past several years, we have made
significant progress. However, in some cases we need your help
to make needed changes.
As the Secretary of Defense has said in his town hall
meeting on March 6, ``To truly bring the Department of Defense
into the 21st century, we need legislative help. We are now
working with Congress to fashion proposals that will help
transform the Department, how we move money, how we manage
people, how we buy weapons. Final decisions on this package of
legislative authorities have not been made. We are currently in
discussions with the Office of Management and Budget about them
and we are still in a consultation process trying to make sure
that we get it right.''
Thank you, Mr. Chairman, for the opportunity to testify
before the subcommittee. I would be happy to answer any
questions from you or any members. Thank you.
Senator Ensign. Thank you, Secretary.
[The prepared statement of Secretary Aldridge follows:]

Prepared Statement by Hon. Edward C. ``Pete'' Aldridge, Jr.

Chairman Ensign, Senator Akaka, and members of the subcommittee:
thank you for inviting me here today to talk with you about acquisition
policy and competitive sourcing as part of your review of the National
Defense Authorization Request for Fiscal Year 2004. We have made great
progress in addressing barriers to efficient acquisition, and we thank
the subcommittee for its assistance in the creation of a professional
acquisition corps, as well as for its support for pilot programs and
other transaction authorities to speed the fielding of state-of-the-art
technology and better equipment to our warfighters.
Our current national security situation once again reveals a truth
often forgotten during times of peace--that the most important duty of
Government is the protection of its citizens. The support this
subcommittee has demonstrated for our men and women in uniform honors
that covenant. The successes of my office in our ongoing quest for
excellence in defense acquisition are a measure of our attempts to
honor the same covenant.
For example, in the past year, we have been quite successful in
pursuing the five goals I established at the beginning of this
administration. These goals were directly derived from those
established by Secretary Rumsfeld for the Department as a whole. These
goals are: improve the credibility and effectiveness of the acquisition
and logistics support process; revitalize the quality and morale of the
AT&L workforce, improve the health of the defense industrial base;
rationalize the weapon systems and infrastructure with our defense
strategy; and initiate high leverage technologies to create warfighting
capabilities and strategies of the future.
Toward these goals, I've restructured the Defense Acquisition
Board, and designated evolutionary acquisition and spiral development
as the preferred approach. The opposite side of that coin must be the
proper pricing of programs, which I have insisted upon. I have also
approved a new process for the acquisition of services by DOD, mandated
interoperability at program initiation, institutionalized the use of
``Technology Readiness Assessments'', consolidated and improved our
acquisition education (``Electronic Distance Learning''), developed a
comprehensive Future Logistics Enterprise, made changes to improve the
health of the defense industrial base, instituted a new profit policy,
increased progress payment schedules, developed a process for sharing
of cost savings from excess facilities, eliminated inappropriate R&D
cost sharing, encouraged non-traditional commercial companies to do
business with DOD, accelerated the close-out of overaged contracts, and
exploited the enormous potential of Advanced Concept Technology
Demonstrations (ACTDs).
Of course, we still have many things to accomplish. We need to
further eliminate inappropriate ``management'' functions and marginal
activities, continue to devolve functions that can be better
accomplished elsewhere, further reduce acquisition cycle times,
continue to minimize program risks, enhance program stability, continue
to stress keeping costs under control, further establish a clear vision
by which our logistics will better support our operational
requirements, and accelerate the flow of technology to the warfighter
with a vibrant and robust research program.
I would now like to discuss in some detail the issues you
identified as being of particular interest to you at this time.
I believe that increased use of evolutionary acquisition and spiral
development is the key to reducing the acquisition cycle time. I have
designated Evolutionary Acquisition and spiral development as our
preferred strategy for fielding operationally useful and supportable
military capabilities. They deliver advanced technology to the
warfighter as rapidly as possible--with the explicit intent of
delivering improved or updated capability in the future. Evolutionary
Acquisition success depends on the consistent and continuous definition
of requirements, and the maturation of technologies that lead to
disciplined development and production of systems that provide
increasing capability to the right materiel solution. Achieving the
optimum benefit from Evolutionary Acquisition and spiral development
requires early and frequent collaboration between the user, tester, and
developer. We have been implementing evolutionary acquisition and
spiral development over the past year and have instituted it in some of
our major programs. Several examples of our evolutionary programs that
will transform the battlefield are:

The Joint Strike Fighter (JSF) program will develop a
family of strike aircraft, capitalizing on commonality and
modularity to maximize affordability while addressing the needs
of the Air Force, Navy, Marine Corps, and United Kingdom Royal
Navy and Royal Air Force, in addition to those of numerous
other international partners.
The DD(X) program will continue development of a suite
of technologies to be applied to the whole family of 21st
century surface combatants, including: littoral combat ship,
DD(X) destroyer, CGX cruiser, and maritime pre-positioning
ship;
Unmanned Aerial Vehicles, such as Global Hawk, where
we continue to add new and upgraded capabilities;
The new aircraft carrier, CVN-21, whose evolutionary
strategy and innovations include an enhanced flight deck, a new
nuclear power plant, allowance for future technologies, and
reduced manning; and
The Future Combat System (a system-of-systems of
aerial and ground, manned and unmanned combat vehicles linked
via a command and control network).

Proper pricing of programs is the predicate required for successful
evolutionary acquisition and spiral development. Without it, program
managers tend to exhaust their funding, scavenge funding from other
sources, and slip their schedules. Without the proper pricing of
programs, the advantages conferred by evolutionary acquisition and
spiral development are eliminated before they can be brought to bear.
On a similar note, more realistic funding and costing are important
to establishing and maintaining the credibility of our acquisition
process. The fiscal year 2004 budget request continues the process we
began in fiscal year 2003 of funding many of our major programs to more
realistic cost estimates. I generally require the Services to meet the
Department's full-funding guidelines, and to budget to what I believe
are realistic and executable cost estimates, based on a variety of
inputs including the OSD Cost Analysis Improvement Group (CAIG)
independent cost estimate. For example, on the F/A-22 program we have
essentially capped the total program cost. Recent cost increases in the
Engineering and Manufacturing Development (EMD) phase have been funded
from within the total program budget through tradeoffs between the pace
of modernization efforts, the procurement rate, and total quantity. We
reduced production in fiscal year 2004 by five aircraft while
increasing the budget by $89 million and adjusted the overall
production profile consistent with a ``buy to budget philosophy.''
These were hard decisions made necessary by escalating costs within the
program.
The Acquisition Policy improvement initiatives we are pursuing
internally will make a tremendous difference. The first of these is the
complete rewrite of the DOD 5000 series of documents. Over the last
year, we have been taking a hard look at our acquisition policies and
we determined last fall that the old policies were much too
prescriptive. We concluded that they required revision to create an
acquisition policy environment that fosters efficiency, flexibility,
creativity, and innovation. Consequently, we cancelled those policies
and issued interim guidance while we completed the final policies. I
have also worked with the Joint Staff as they revise the policies
concerning the requirements definition process. Our goal is to
harmonize these processes and reduce the friction associated with
unrealistic requirements or processes previously geared to produce the
``100 percent solution'', when an 85 percent solution could be achieved
much faster without significant risk to the customer--the warfighter.
The final policies will shortly be published. They will take a long
step toward achieving my objective by giving our senior acquisition
decisionmakers much greater authority to tailor program strategies to
fit the needs of their program; by placing greater emphasis on
evolutionary acquisition as the preferred strategy for rapidly
acquiring advanced warfighting capability; and by giving program
managers the flexibility to be creative and efficient in the way they
apply policy to their programs.
The flexibility that we have built in to these streamlined policies
reflects the confidence I have in our highly talented workforce and in
the dramatic improvements we have made to our acquisition education
system.
I don't want to leave you with the impression that we are done. For
as long as I hold this office, I will continue to aggressively pursue
the development and implementation of new policies that will ease the
burdens on our managers while producing stabile, affordable, and well
managed programs that serve the needs of our warfighters.
The Department recently started another major transformation
initiative to improve the acquisition process by dramatically changing
the Defense Federal Acquisition Regulation Supplement (DFARS) and the
processes we use to create and maintain it. The DFARS is nearly 20
years old and is about 1,400 pages long. The last major review of this
regulation was done in the late 1980s. We've already determined that
about 60 percent of the DFARS is driven by internal policies and
procedures and not by statute or Federal policies. Our regulatory
processes have been in place since the early 1950s and take far too
long to implement needed changes to policy and guidance. As part of the
Department's overall transformation goals, we are taking a hard, new
look at the purpose and content of the DFARS.
We chartered a task force under the direction of the Director of
Defense Procurement and Acquisition Policy to identify changes to
procurement policies, procedures, processes, and authorities and submit
proposals to me by early May. The task force will also identify
opportunities for legislative change for possible consideration by
Congress in the fiscal year 2005 legislative cycle. We will remove or
dramatically change parts of the regulation if we determined that doing
so would improve and strengthen the efficiency and effectiveness of
acquisition processes, reduce unnecessary costs and administrative
burdens for Government and industry, and create an environment that
fosters creative solutions to the unique challenges that face our
acquisition workforce. Similarly we will retain those policies and
processes that today, ensure adequate internal controls, implement our
stewardship responsibilities to the taxpayer or maintain fundamental
principles of integrity and fairness in our business relationships with
industry.
We are aggressively challenging the acquisition community,
including industry and the general public, to participate by proposing
opportunities for change. We have contacted a broad range of industry
associations that are already considering how they can provide input to
the task force efforts. There is significant potential benefit to
reducing regulatory burdens. While many policies and procedures in the
DFARS are sound, they may not always be the most effective approach for
every situation and certainly do not require restrictive regulations in
every case. Our main focus is to improve our processes and add value.
However, we are on a clear path to reduce regulatory burdens under this
initiative.
The Acquisition Workforce initiatives must be focused, as President
Bush stated in a speech to Government employees on July 10, 2002:

``We must be able to get the right people, in the right place,
at the right time, with the right pay. We need to be able to
reward excellence and ensure accountability for individual
performance.''

In order to get the right people in the right place at the right
time, we have been conducting human capital strategic planning and are
using the authorities in the Acquisition Workforce Demonstration.
We began the human capital strategic planning effort 2 years ago,
concentrating on developing a process and methodology. We are beginning
to see the Services embrace that process and use it. So, this year we
are concentrating on two key functional components of our workforce--
systems engineers and logisticians. We are working with the functional
leads for those two career fields to describe a desired future end
state. We are also working with the workforce managers in each Service
and the key defense agencies to look at current manpower, projected
into the future, and how to move from where we are today to where we
need to be. We are also identifying the actions we need to close those
gaps. Human capital strategic planning is hard work, and we won't be
where we want to be for another few years, but we've begun that process
and it will pay dividends for us.
The Acquisition Workforce Demonstration also helps us get the right
people at the right place at the right time, through its flexible
personnel practices, but it also adds the element of right pay by
linking pay to contribution to mission. In the National Defense
Authorization Act for Fiscal Year 2003, you provided us an extension of
the Acquisition Workforce Demonstration project until 2012. We
appreciate that support.
I would emphasize one more element of the President's direction. We
need to have a workforce with the right skills. The Defense Acquisition
University (DAU) has been in the forefront of providing certification
training to our AT&L workforce. But, we have also recognized the need
to move beyond certification training. DAU has embraced a new
performance learning model for training, upgrading their certification
courses to include critical thinking and case studies, adding web-based
continuous learning, providing on site support to our workforce from
regional campuses, and offering web-based practitioner sharing of best
practices and lessons learned. DAU has done so well implementing their
performance learning model that they have been accredited by the
Council on Occupational Education and recognized by their peers by
winning a Corporate University Best in Class (CUBIC) award for the Best
Over All Corporate University in 2002. DAU is now turning their
attention to developing rapid training for emerging policies as a
result of requests from the front-line. You have been supporters of
DAU, and we thank you for that.
No discussion of the workforce would be complete without addressing
workforce size. Since the mid-1990s, DOD has defined our AT&L workforce
to include all people who are doing AT&L work, regardless of their
organization. That workforce now numbers a little over 132,000 people
(as of September 30, 2002), down from the almost 146,000 people we
counted in 1998. That workforce today is managing over $1,700,000 per
person in total acquisition dollars, up over 40 percent from 1998. As
we discussed, we are using human capital strategic planning and the
acquisition workforce demonstration to get the right people at the
right place at the right time with the right skills and the right pay.
We are in direct competition with the private sector seeking talent for
many of the same skills in a shrinking demographic pool. While we are
continuing to use these to examine our workforce needs of the future,
we believe that our workforce is where it should be today to manage our
workload. We will continue to make adjustments as they become
necessary, but adjustments should be left to the Department, not
enshrined in statute. We can reduce the size of the support structure
surrounding our AT&L workforce. We will do that by using the tools you
have given us--BRAC and competitive sourcing. Providing relief from our
statutory reporting burden and flexibility in our personnel process
will help with that effort.
This leads us to the last area you asked me to focus on:
competitive sourcing. The Department must continue to do business
better, faster, and at reduced cost to maintain our focus on readiness.
In order to focus on what we do best--our core mission activities--we
must become more efficient in our support, or non core, services. When
subjected to competition, our workforce, as dedicated as they are, as
well as other service providers, can and do provide support services at
not only a lower cost, but with greater speed and efficiency.
The Department of Defense has, by far, the most experience in the
Federal Government in competing its support services using the public-
private competition process defined by OMB Circular A-76. During the
fiscal years 2001 through 2002, we completed over 330 A-76 competitions
with about 42,000 positions, and we are scheduled to complete A-76
competitions on an additional 15,000 positions by the end of fiscal
year 2003. The 330 completed A-76 competitions have resulted in either
a contract or in-house decision that will generate about $3.6 billion
in savings (cost avoidance) over the life of the contracts, normally
about 5 years. This demonstrates the power of competition. Our studies
verify these savings are real and persist over the entire performance
period.
The public-private competitive process is not easy. In fact, it is
often lengthy, complex, and frustrating for all involved. That very
frustration is, in part, an outgrowth of the A-76 process, which has
evolved over time to address legitimate concerns for establishing a
level playing field to protect the interests of all participants:
Government employees, private sector competitors, Federal managers, and
taxpayers. But the old A-76 process has become too lengthy,
adversarial, and distrusted by all participants.
The OMB has now issued a proposed revision to OMB Circular A-76 to
address recommendations made by the Commercial Activities Panel. We
believe the proposed revision offers promising and overdue improvements
to the A-76 process, especially with respect to aligning it more
closely with procedures already used under the Federal Acquisition
Regulations. The proposed revisions were published in November for
review, and we have supplied comments as have all interested parties.
We have continued our dialog with OMB as they work to finalize the
circular.
The Department has long been the leader in the Federal Government
in competing commercial functions with the private sector under OMB
Circular A-76 and fully supports the President's management agenda for
competitive sourcing. OMB identified for DOD a long-term competition
goal for 226,000 positions (50 percent of the fiscal year 2000 Federal
Activities Inventory Reform (FAIR) inventory of 452,000 positions). DOD
is on track to meet our interim 15 percent goal of completing A-76
competitions on 67,800 positions by the end of fiscal year 2003. The
remaining 35 percent will be met using both A-76 competitions and
``Alternatives to A-76''. While the Department continues to conduct A-
76 competitions, we believe the Department and taxpayers are best
served by employing a wide range of business tools designed to make our
operations more efficient. The respective Military Departments are
developing plans for submission with the fiscal year 2005 program to
meet the President's long term management agenda targets.
I've talked about some of the things we could do on our own to
transform this department--to eliminate waste and duplication and to
demonstrate greater respect for the taxpayer's dollars. In the past
several years, we have made significant progress. We've reduced
management headquarters staffs in the department by about 11 percent.
We have streamlined the acquisition process by getting rid of hundreds
of pages of prescriptive rules and regulations, and allowing program
managers--we hope--to be more innovative, flexible, and creative. We
have eliminated onerous regulations that make it impossible or
unattractive to do business with the Department of Defense, and to
expand authority for competitive outsourcing so we can get military
personnel out of non-military tasks and back into the field. There is
really no reason, for example, that the Department of Defense should be
in the business, as we are, of making eyeglasses. The private sector, I
suspect, makes them better and faster and possibly even cheaper. These
types of things need to change.
However, in some cases we need your help to make needed changes.
This year we are proposing a series of changes to the acquisition
statutes, some bolder than others. These proposals address several
kinds of problems. Some address burdensome requirements, such as relief
on contracting out expansion and contracting of support services for
security and firefighting beyond that allowed in prior years. They also
attempt to better clarify the Buy American definitions such that we
don't cause excessive record keeping to gain diminimus compliance, or
inadvertently benefit foreign suppliers. Finally, we're proposing
several flexibility changes, starting with seeking management relief
from moving funds within a program to provide management margin where
it is needed. We recognize the significance of some of the changes
requested, but again seek a dialog to make the business of defense more
efficient.
As the Secretary of Defense has said in his Town Hall meeting on
March 6, ``To truly bring DOD into the 21st century we need legislative
help. We are now working with Congress to fashion proposals that will
help transform the department: how we move money, how we manage people,
how we buy weapons. Final decisions on this package of legislative
authorities have not been made. We are currently in discussions with
the Office of Management and Budget about them and we are still in a
consultation process trying to make sure that we get it right.''
Thank you, Mr. Chairman for the opportunity to testify before the
subcommittee. I would be happy to answer any questions you and the
members of the subcommittee may have.

Senator Ensign. Mr. Walker.

STATEMENT OF HON. DAVID M. WALKER, COMPTROLLER GENERAL OF THE
UNITED STATES, UNITED STATES GENERAL ACCOUNTING OFFICE

Mr. Walker. Thank you, Mr. Chairman, Senators. It is a
pleasure to be here. Since my entire statement has been entered
into the record, I will summarize the key points for you.
I would like to focus on two key aspects. The first is
implementation of sound policies for making decisions, with
emphasis on the Commercial Activities Panel, which I had the
privilege to chair; and second, DOD's efforts to adopt best
practices.
I would like to acknowledge at the outset, Mr. Chairman,
that this subcommittee has been instrumental in sponsoring
GAO's work dealing with commercial best practices and other
best practices. They are making a difference at DOD and
elsewhere throughout the government.
With regard to the Commercial Activities Panel, the
National Defense Authorization Act for Fiscal Year 2001
mandated that the Comptroller General create a panel of experts
where certain specific parties had to be represented and others
at the discretion of the Comptroller General, in order to
address the issue of competitive sourcing. Given the complexity
and controversy associated with this topic, I decided to
personally chair the panel, and to comprise it with a group of
highly qualified and empowered representatives from various
groups in order to maximize the chance for success.
The Commercial Activities Panel conducted a year-long
study. We had 11 meetings and 3 public hearings, 2 of which
were outside of Washington, DC, and therefore in the real
world.
The panel's staff conducted an extensive amount of
additional research, review, and analysis in order to
supplement these public hearings and considered other
information that each panel member brought to our combined
deliberations.
It was clearly a very challenging, complex, and
controversial assignment. As a result, we decided to adopt a
super majority vote requirement in order for any findings or
recommendations to be adopted by the panel. I am pleased to say
that despite the significant differences in perspective and
historical position with regard to competitive sourcing, the
panel was able to unanimously agree on a set of 10 principles
that should guide all sourcing decisions. These principles are
outlined on page three of my testimony, and I will not repeat
them at the present time.
Furthermore, a super majority of the panel agreed on a
number of other supplemental recommendations, the chief among
them being a movement to a supplemental alternative for
conducting these public/private competitions that would be
based on the Federal Acquisition Regulation (FAR). That is, at
least initially, a supplement to, not a substitute for, the
historical A-76 process.
While a minority of the panel did not support these
supplemental recommendations, it is important to note, as our
panel report makes clear, that they did support certain
elements of the supplemental recommendations, but we voted on
them as a package. Yet as I said, a super majority did support
these supplemental recommendations. We made a good faith effort
until the very end to try to seek consensus and to achieve as
many votes as we could on the panel's report.
I would say, from my standpoint, since I was heavily
involved in both face-to-face as well as telephonic
conversations to the very end with the panel members, that in
the final analysis, I think it is a minor miracle that we
achieved unanimous agreement on the 10 principles. I think it
is a big plus that we achieved a super majority recommendation
for these additional recommendations, but I think it is
important to note that the differences of opinion in the final
analysis on these supplemental recommendations were really few
in number and philosophical in nature. Namely, the two primary
differences were whether and to what extent to allow the new
FAR type process; and second, how many times that Congress
should be required to act in connection therewith.
The minority felt Congress should authorize a specific
pilot program before providing broad-based authority and,
therefore, Congress would be required to act twice; whereas a
super majority felt that it was important to design a program
that could be implemented that would not require Congress to
act twice. Obviously Congress reserves the right to act at any
time if for some reason things are not going the way that it
feels is appropriate.
With regard to the administration's proposed changes,
Angela Styles has taken charge of trying to adopt these
recommendations administratively. Some of the panel's
recommendations would, however, require legislative action. She
has, I think, done an excellent job over a very short period of
time of trying to come up with a good faith effort to adopt the
panel's recommendations administratively to the extent that
that can be done.
In many ways, the administration's proposal is consistent
with the panel's recommendations, but not in all ways. A couple
of examples--I expressed concern as to the timeframes that are
outlined in the proposed recommendations. They are very
aggressive.
While clearly I totally agree with Secretary Aldridge that
we need to do things a lot quicker than we have in the past, I
think we have to be realistic as to what is attainable. In my
opinion, the timeframes that were outlined in the initial
proposal are not realistic. I believe that if we are going to
expedite this, it is critically important that there be an
adequate amount of financial and technical resources available
to hit these expedited timeframes in order to maximize the
chance for success.
Furthermore, we expressed concern that there was not
sufficient guidance on calculating savings, and we also noted
the fact that, under the recommendation, one could make a
business case to outsource up to 50 full-time equivalents (FTE)
without going through a public/private competition, whereas the
recommendation of the panel was to limit direct conversions to
10 FTEs.
But, again, I think it is a positive, good faith step. They
are considering the comments that we and others made, and I am
looking forward to seeing what their final recommendations are.
Last, just a few comments on the adoption of commercial
best practices. As I mentioned, this subcommittee has been
instrumental in requesting and sponsoring GAO's work dealing
with commercial best practices. It is making a difference, not
only within DOD, but also elsewhere throughout the Government.
Our work historically shows that DOD's implementation of
these have been uneven. I will commend Secretary Aldridge for
his personal commitment at the top, along with Secretary
Rumsfeld, to changing how the Department of Defense does
business. They are clearly committed. They are clearly
providing persistent attention and leadership in this area.
I would also like to note for the record that there is no
question that the Department has made great progress in
adopting, in its policies, a vast majority of GAO's best
practices recommendations. So in form, they have generally
adopted commercial best practices.
However, as we all know, whether it be in the Government,
the private sector, or the not-for-profit sector, sometimes
there can be a difference between form and substance. In other
words, the policy could say ``X,'' but in practice, ``Y'' is
done.
We believe that more needs to be done in order to assure
that, in fact, people are conducting their activities in
accordance with policy. I know that Secretary Aldridge is
committed to this concept as well. We met as recently as last
week for over an hour to discuss a variety of issues, including
some of these issues.
The absence of following commercial best practices,
especially with regard to the development of new technologies,
results in extensive delays, higher costs, compromised
performance, and a ripple effect, in that it affects our
ability to improve readiness and to be able to fund other
critical needs within the Department, whether they be
acquisitions or otherwise.
I think it is important to note that one key aspect has to
do with the people element, which Secretary Aldridge mentioned.
I would like to turn over now, if I can, and refresh the
Senators' memory of something that I covered last year; that
is, the typical number of persons who are responsible for a
weapons system during an 11-year cycle.
During 11 years, you typically will have four program
managers, three presidents, seven secretaries of defense, five
program executive officers, eight service acquisition
executives--defense acquisition executives--and five chairmen
of the Joint Chiefs of Staff. My point is: How can you assure
effective responsibility and accountability for results with
that type of turnover?

Now, we know we are going to have turnover at the
presidential level. We know we are going to have turnover at
the secretarial level. That is part of our constitutional
framework. But below that, where we are dealing with either
uniformed or career officials, we need to provide more
stability in order to assure that these individuals have both
the responsibility and accountability for results over a
reasonable period of time. This type of turnover is not going
to be conducive towards trying to get the type of outcomes that
we all desire. Obviously, additional training is going to be
necessary as well.
So in summary, I was pleased to chair the Commercial
Activities Panel. I was pleased to serve along with Secretary
Aldridge and Director Styles on the panel. I think we made a
meaningful contribution. But the panel is a beginning, not an
end. OMB has to implement it administratively. In the different
departments and agencies, including DOD, implementation is key.
Congress will have to act in order for certain of our
recommendations to become the law of the land.
Finally, I think that much progress has been made on
adopting commercial best practices. I think more needs to be
done, but I know that leadership at the Department is committed
to doing everything that they can to try to make that happen.
Thank you.
Senator Ensign. Thank you.
[The prepared statement of Mr. Walker follows:]

Prepared Statement by David M. Walker

Chairman Ensign, Ranking Member Akaka, and members of the
subcommittee: I am pleased to be here today to participate in the
subcommittee's hearing on the acquisition and sourcing practices of the
Department of Defense (DOD). Today's hearing occurs at a critical
time--with DOD on the brink of operations in Iraq while seeking to
respond to changes in security threats and still meeting the challenge
of transforming the military.
DOD spends an average of $150 billion annually on acquisitions that
support these and other missions. Moreover, this investment is expected
to grow considerably in the future as DOD works to keep legacy systems
while investing in future capabilities such as unmanned aircraft,
satellite networks, and information and communications systems.
Such demands clearly require DOD to be as efficient and effective
as possible in obtaining the systems, services, and equipment it needs
to carry out its mission. But our reviews continue to show that DOD is
not carrying out acquisitions cost-effectively and that the
acquisitions themselves are not always achieving DOD's objectives.
Pervasive problems persist regarding high-risk acquisition strategies
and unrealistic cost, schedule, and performance estimates.
My testimony today will focus on two aspects fundamental to
successful acquisitions in DOD.

The first is the implementation of sound policies for
making sourcing decisions. Last April, the congressionally
chartered Commercial Activities Panel, which I chaired, and on
which I was privileged to serve along with my fellow panelists
here today, Angela Styles and Pete Aldridge, made a number of
recommendations for improving the policies and procedures
governing the competitive sourcing of commercial activities. I
welcome this opportunity to discuss the work of the panel and
the progress to date in implementing its recommendations. These
recommendations should lay a good foundation for improving
sourcing decisions within DOD.
The second is the adoption of best practices. DOD
itself recognizes the need to ensure that it can match its
needs to its resources and to follow a knowledge-based
acquisition process. It is seeking to adopt practices that have
proven successful in the commercial sector in the procurement
of both systems and services. It also recognizes the need to
reshape its acquisition workforce to meet growing demands. Yet
it still faces a considerable challenge in putting these
practices to work and instituting the cultural changes needed
for their success. I would like to recognize the subcommittee's
leadership in sponsoring the work on the best practices used by
leading commercial firms in acquiring services, information
technology, and major systems, and in working to get them
accepted within DOD.

Before I begin my testimony, I would like to note that the
environment in which these changes must be made is a challenging one--
not just for DOD, but for other agencies as well. It consists of new
and changing security threats, the public's growing expectations for
demonstrable results, demographic changes, rapidly evolving science and
technology, and serious and growing fiscal constraints. All of these
challenges demand that the Federal Government engage in a fundamental
review of its mission and priorities and to consider the long-term
impact of the decisions it makes today. The recommendations and
practices I will be discussing today, however, should position DOD to
meet these broader challenges since they focus on taking a more
knowledge-based, and longer-term approach to acquisitions. They have
proved successful in reducing costs.

IMPROVING SOURCING DECISIONS

Government agencies increasingly are relying on services to
accomplish their missions. The DOD now spends more than half its
contracting dollars acquiring services, about $77 billion in fiscal
year 2001, the latest year for which complete data are available. In
addition, the Department reports that it has over 400,000 employees
performing commercial-type services. Determining whether to obtain
required services using Federal employees or through contracts with the
private sector is an important economic and strategic decision. In
fact, competitive sourcing is a key component of the President's
management agenda. But historically, the process for determining
whether the public or the private sector should perform services needed
by Federal agencies--set forth in Office of Management and Budget (OMB)
Circular A-76--has been difficult to implement. The impact such
decisions have on the Federal workforce has been profound, and there
have been concerns in both the public and private sectors concerning
the fairness of the process and the extent to which there is a ``level
playing field'' for conducting public-private competitions.
Recommendations of the Commercial Activities Panel
It was against this backdrop that Congress enacted Section 832 of
the National Defense Authorization Act for Fiscal Year 2001, which
mandated that I establish a panel of experts to study the process used
by the Government to make sourcing decisions. Given the importance of
this issue, I elected to chair this panel myself and ensured that it
was comprised of highly qualified and empowered representatives from
the groups specified in the act and other knowledgeable individuals.
The Commercial Activities Panel conducted a year long study, and
heard repeatedly about the importance of competition and its central
role in fostering economy, efficiency, and continuous performance
improvement. The panel held 11 meetings, including 3 public hearings in
Washington, DC; Indianapolis, Indiana; and San Antonio, Texas. In these
hearings, panelists heard first-hand both about the current process,
primarily the cost comparison process conducted under Circular A-76, as
well as alternatives to that process. Panel staff conducted an
extensive amount of additional research, review, and analysis in order
to supplement and evaluate the public testimony. Recognizing that our
mission was a challenging, complex, and controversial one, the panel
agreed that a superiority of two-thirds of the panel members would have
to vote for any finding or proposal in order for it to be adopted by
the panel. Importantly, the panel unanimously agreed upon a set of
principles to guide all sourcing decisions:

In addition, a super majority of the panel agreed on a package of
additional recommendations. Chief among these was a recommendation that
public-private competitions be conducted using the framework of the
Federal Acquisition Regulation (FAR). Although a minority of the panel
did not support the package of additional recommendations, some of
these panelists indicated that they supported one or more elements of
the package, such as the recommendation to encourage high-performing
organizations throughout the Government. Importantly, there was a good
faith effort to maximize agreement and minimize differences among
panelists. In fact, changes were made even when it was clear that some
panelists seeking changes were highly unlikely to vote for the
supplemental package of recommendations. As a result, on the basis of
panel meetings and my personal discussions with panel members at the
end of our deliberative process, the major differences among panelists
were few in number and philosophical in nature. Specifically,
disagreement centered primarily on: (1) the recommendation related to
the role of cost in the new FAR-type process; and (2) the number of
times Congress should be required to act on the new integrated process,
including whether Congress should specifically authorize a pilot
program that tests that process for a specific time period.
The Administration's Proposed Changes
As part of the administration's efforts to implement the
recommendations of the Commercial Activities Panel, OMB published
proposed changes to Circular A-76 for public comment in November 2002.
The administration is now considering the comments received as it
finalizes the revisions to the circular.
I provided comments on the proposal to the Director of OMB this
past January. My assessment of the proposed revision concluded that in
many ways it is consistent with the sourcing principles and
recommendations adopted by the Commercial Activities Panel. In
particular, the proposal stresses the use of competition in making
sourcing decisions and, through reliance on procedures contained in the
FAR, should result in a more transparent, expeditious, and consistently
applied competitive process. The proposal should promote sourcing
decisions that reflect the best overall value to the agencies, rather
than just the lowest cost. Importantly, the proposed revision also
should result in greater accountability for performance, regardless of
the service provider selected. Of course, successful implementation
will require that adequate resources and technical support be made
available to Federal employees.
There are several areas, however, where the proposed revisions to
the circular are not consistent with the principles or recommendations
of the Commercial Activities Panel. Specifically, these include the
absence of a link between sourcing policy and agency missions,
unnecessarily complicated source selection procedures, certain
unrealistic timeframes, and insufficient guidance on calculating
savings. I am confident that the administration is carefully
considering these and other comments on the proposal, and look forward
to reviewing the final product.
One area of particular importance for all affected parties is how
the Government's sourcing policies are implemented. In this regard, one
of the panel's sourcing principles was that the Government should avoid
arbitrary numerical or full-time equivalent (FTE) goals. This principle
is based on the concept that the success of government programs should
be measured by the results achieved in terms of providing value to the
taxpayer, not the size of the in-house or contractor workforce.
Although the proposed revision of the circular contains no numerical
targets or goals for competitive sourcing, this has been a
controversial area in the past. It has been our view that the
administration needs to avoid arbitrary targets or quotas, or any goal
that is not based on considered research and analysis. Congress
recently put this principle into legislation; a provision in the recent
consolidated appropriations legislation requires sourcing goals and
targets to be based on considered research and sound analysis of past
activities''.\1\
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\1\ Consolidated Appropriations Resolution, 2003, P.L. 108-7.
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DOD's Competitive Sourcing Agenda
DOD has been at the forefront of Federal agencies in using the A-76
process in recent years. After several years of limited use of Circular
A-76, the Deputy Secretary of Defense gave renewed emphasis to the A-76
program in August 1995 when he directed the services to make
outsourcing of support activities a priority in an effort to reduce
operating costs and free up funds to meet other priority needs. This
effort was subsequently incorporated as a major component of the
Defense Reform Initiative, and the program became known as competitive
sourcing--in recognition of the fact that either the public or the
private sector could win the competitions.
Recently, DOD's A-76 study goals have increased because of the
President's management agenda, which includes competitive sourcing as
one of its five key government-wide initiatives.\2\ Under that program,
OMB directed agencies to directly convert or complete A-76 competitions
on 15 percent of their 2000 Federal Activities Inventory Reform (FAIR)
Act inventories by the end of fiscal year 2003, with the ultimate goal
of competing 50 percent of the FAIR Act positions. However, we
understand that this broader goal may be subject to negotiations
between DOD and OMB. DOD's ongoing A-76 efforts should permit it to
meet OMB's goal for 2003. However, a greater challenge remains for DOD
to complete studies on an additional 158,000 positions in the outyears
(fiscal year 2004 through fiscal year 2009). This is double what DOD
has been able to accomplish in the past over a similar timeframe. For
example, DOD completed studies on 71,000 positions between fiscal years
1997 and 2002, and found it increasingly difficult to identify study
candidates over time. DOD hopes to be able to meet this larger goal
through a combination of A-76 competitions and other alternatives.
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\2\ In addition to competitive sourcing, the other initiatives are
strategic management of human capital, improved financial performance,
expanded electronic government, and budget and performance integration.
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DOD's experience with competitive sourcing since 1996 contains
important lessons for civilian agencies as they implement their own
sourcing initiatives. As we have tracked DOD's progress in implementing
its A-76 program since the mid- to late-1990s, we have identified a
number of challenges and concerns with the program. They include: (1)
the time required to complete the studies, (2) the resources required
to conduct and implement the studies, (3) selecting and grouping
positions to compete, and (4) developing and maintaining reliable
estimates of projected savings expected from the competitions.

THE DEPARTMENT CAN BENEFIT FROM ADOPTING BEST PRACTICES

At the request of this subcommittee, GAO has conducted a number of
engagements to identify best practices in the commercial sector for
addressing the sourcing and acquisition challenges facing the
Department. We believe the Department could significantly improve its
performance in a number of areas by adopting some of the best practices
we have identified.
Information Technology Outsourcing
For example, we reviewed the practices used by leading companies
involved in outsourcing certain information technology (IT) functions.
In November 2001, we issued a guide on outsourcing IT services that
provides a generic framework of practices from leading commercial
organizations that can improve purchasing decisions and manage the
resulting government/provider relationship.\3\
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\3\ U.S. General Accounting Office, Information Technology; Leading
Commercial Practices for Outsourcing of Services, GA0-02-214
(Washington, DC: Nov. 30, 2001).
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At the further request of this subcommittee, we have been reviewing
the extent to which selected DOD projects are using leading commercial
practices laid out in our November 2001 guide. We have shared our draft
report with this subcommittee, which is currently with DOD for comment.
In brief, we found that the five projects in our review were generally
implementing these practices. This is a positive sign because although
implementing these practices does not guarantee the success of an
outsourcing project, our November 2001 study reflected a consensus view
that these practices were the most critical to success.\4\ Accordingly,
application of these practices increases the probability of a
successful outsourcing project.
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\4\ This consensus view was based on interviews with managers in
leading commercial organizations, discussions with academic and
professional authorities, and extensive research on IT acquisition
practices.
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Acquiring Information Technology Systems
Since the 1990s, DOD has spent billions of dollars each year
attempting to leverage the vast power of modern technology to replace
outdated ways of doing business. However, the Department has had
limited success in modernizing its information technology environment,
and we have designated DOD's systems modernization as high risk since
1995.\5\ A major reason for this designation is DOD's inconsistent use
of best practices for acquiring IT systems.
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\5\ See U.S. General Accounting Office, High-Risk Series: An Update
GAO-03-119 (Washington, DC: January 2003) for our most recent high-risk
report.
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We have categorized IT system acquisition practices into three
groups and apply leading practices, as appropriate, in our evaluations
of systems acquisitions within DOD. A brief description of the three
categories and what we have found at DOD follows:
Aquisition of systems in accordance with mature processes. Our work
shows that DOD's implementation of mature acquisition management
processes is uneven, as are its proactive efforts to improve these
processes. For example, our review of the Defense Logistics Agency's
system acquisition processes showed that one major system was following
mature processes, while another was not.\6\ We made recommendations to
correct these weaknesses, and DOD has generally concurred.
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\6\ U.S. General Accounting Office, Information Technology:
Inconsistent Software Acquisition Processes at the Defense Logistics
Agency Increase Project Risks (GAO-O2-9, Jan. 10, 2002).
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There are also published best practices for acquiring systems that
are built from commercial components. Generally, these practices
advocate an acquisition approach that is not driven primarily by system
requirements, but rather an approach that proactively manages the
tradeoff among various acquisition issues, such as the organization's
system requirements and the commercially available system components.
Accordingly, we have ongoing and planned work at a number of Federal
agencies, including DOD, which includes determining whether these
practices are being employed.
Use of an enterprise architecture to guide and constrain system
acquisitions. Effectively managing a large and complex endeavor
requires, among other things, a well-defined and enforced blueprint for
operational and other technological change, commonly referred to as an
enterprise architecture. In May 2001, we reported that DOD had neither
an enterprise architecture for its financial and financial-related
business operations, nor the management structure, processes, and
controls in place to effectively develop and implement one.\7\ In
addition, the National Defense Authorization Act for Fiscal Year 2003
required DOD to develop such an architecture by May 1, 2003, along with
a transition plan for its implementation. At the request of this
subcommittee, we reported last month that DOD had taken a number of
steps to address this issue, such as establishing a program office
responsible for managing the enterprise architecture effort.\8\
However, the Department had yet to implement some of the
recommendations from our May 2001 report and commercial leading
practices for developing and implementing architectures. Accordingly,
we made additional recommendations related to DOD's architecture
effort, with which DOD concurred.
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\7\ U.S. General Accounting Office, Information Technology:
Architecture Needed to Guide Modernization of DOD's Financial
Operations, GAO-01-525 (Washington, DC: May 17, 2001).
\8\ U.S. General Accounting Office, DOD Business Systems
Modernization: Improvements to Enterprise Architecture Development and
Implementation Efforts Needed, GAO-03-458 (Washington, DC: Feb. 28,
2003).
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Acquiring systems in a series of economically justified incremental
builds. Both Federal law and guidance advocate the use of incremental
investment management \9\ when acquiring or developing large
systems.\10\ Using these system investment practices helps to prevent
discovering too late that a given acquisition/development effort is not
cost beneficial. We have previously reported that certain DOD system
acquisitions were not utilizing incremental management best practices
or were just beginning to do so. For example, in July 2001 we reported
that although DOD had divided its multi-year, billion-dollar Standard
Procurement System into a series of incremental releases, it had not
treated each of these increments as a separate investment decision.\11\
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\9\ Incremental management involves three fundamental components:
(1) acquiring a large system in a series of smaller increments; (2)
individually justifying investment in each separate increment on the
basis of cost, benefits, and risks; and (3) monitoring actual benefits
achieved and costs incurred on ongoing increments and applying lessons
learned to future increments.
\10\ Clinger-Cohen Act of 1996, P.L. 104-106, and Office of
Management and Budget Circular A-130 (Nov. 30, 2000).
\11\ U.S. General Accounting Office, DOD Systems Modernization:
Continued Investment in Standard Procurement System Has Not Been
Justified; GAO-01-682 (Washington, DC: July 31, 2001).
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Acquiring Services
With respect to services acquisitions generally, we found that the
experiences of leading private-sector companies to reengineer their
approach to acquiring services offer DOD both valuable insights and a
general framework that could serve to guide DOD's efforts. In January
2002, we reported that our work at six leading companies found that
each had reengineered its approach to acquiring services to stay
competitive, reduce costs, and improve service levels. These changes
generally began with a corporate decision to pursue a strategic
approach to acquiring services. Taking a strategic approach involves a
range of activities from developing a better picture of what a company
was spending on services to taking an enterprise-wide approach to
procuring services and developing new ways of doing business. Pursuing
such an approach clearly paid off, as the companies found that they
could save millions of dollars and improve the quality of services
received.
DOD already has in place certain elements critical to taking a
strategic approach, such as the commitment by senior DOD leadership to
improve practices for acquiring services and to adopt best commercial
practices. Moreover, the fiscal year 2002 national defense
authorization legislation directs DOD to improve its management and
oversight of services acquisitions. To implement these requirements,
DOD issued new policy in May 2002 that was intended to elevate major
purchases of services to the same level of importance as purchases of
major defense systems. The Department still faces a long journey,
however, as it begins to take on the more difficult tasks of developing
a reliable and accurate picture of service spending across DOD.
Major Weapon Systems Acquisitions
DOD relies heavily on its major weapons acquisitions to modernize
its forces and expects to spend on average about $150 billion annually
over the next 5 years for the research, development, and procurement of
weapon systems. However, its history of acquiring major weapon systems
all too frequently has been characterized by poor cost, schedule, and
performance outcomes that have delayed delivery of new capabilities to
the warfighter and created significant opportunity costs that have
slowed the Department's overall modernization efforts.
Because of the pressures in DOD's acquisition environment to get
new acquisition programs approved and funded, many programs are
initiated with requirements that make a proposed weapon system stand
out from others. The systems engineering necessary to identify gaps
between requirements and resources is often not accomplished until
after the program is started. In these cases, performance requirements
can outstrip the resources--technologies, funding, time, and
expertise--available to meet them. This creates a need for immature,
fledgling technologies that are difficult to develop and usually
results in unstable and incomplete a product design for which there is
insufficient time to mature before starting production. Sufficient time
or effort may not be available during product development to understand
the product's critical characteristics or to bring key manufacturing
processes in control to meet cost, schedule, and quality targets. In
addition, there is not enough emphasis on building in reliability and
reducing total ownership cost.
Typically, the results of this process are weapons that have
superior performance, but that create longer-term collateral
consequences such as:

Higher acquisition costs that reduce buying power and
force tradeoffs in other acquisitions;
Increased costs to operate and support weapon systems
at required readiness rates;
Significant delays in getting weapon systems to
warfighters;
Reduced quantities;
Early obsolescence; and
A diminishing supply base for critical parts and
components.

DOD understands that it must get better outcomes from its
acquisition process if it is to modernize its forces quickly within
projected resources. To that end, it is currently revising acquisition
policies to emphasize an evolutionary, knowledge-based process that
incorporates best practices proven by successful companies in
developing complex new products. We believe the policy changes, while
not yet finalized, promise to be a good first step in changing DOD's
acquisition outcomes. If implemented properly, programs would face less
pressure to deliver all of the ultimate capabilities of a weapon system
in one ``big bang.'' The new policy has many positive features. For
example, it:

Separates technology development, which is
unpredictable by nature, from product development, which
requires major investments and is delivery-oriented;
Articulates the concept of a knowledge-based approach,
providing guidelines for achieving knowledge of technologies
prior to beginning product development, stability of the
system's design by about midway through product development,
and control over critical manufacturing processes for building
a weapon system prior to a production decision;
Places a greater emphasis on evolutionary product
development, which provides a more manageable environment for
achieving knowledge; and
Recognizes the benefits of best practices for product
development from leading companies in capturing knowledge at
critical junctures during product development.

While these policy changes represent tangible leadership action for
getting better weapon system acquisition outcomes, unless the policies
are implemented through decisions on individual programs, outcomes are
not likely to change. Both form and substance are essential to getting
desired outcomes. At a tactical level, we believe the policies could be
made more explicit in several areas to facilitate such decisions.
First, the regulations provide little or no controls at key decision
points of an acquisition program that force a program manager to report
progress against knowledge-based metrics. Second, the new regulations,
once approved, may be too general and may no longer provide mandatory
procedures. Third, the new regulations may not provide adequate
accountability because they may not require knowledge-based
deliverables containing evidence of knowledge at key decision points.
At a strategic level, some cultural changes will be necessary to
translate policy into action. At the very top level, this means DOD
leadership will have to take control of the investment dollars and to
say ``no'' in some circumstances, if programs are inappropriately
deviating from sound acquisition policy. In my opinion, programs should
follow a knowledge-based acquisition policy--one that embraces best
practices--unless there is a clear and compelling national security
reason not to. Other cultural changes instrumental to implementing
change include:

Keeping key people in place long enough that they can
affect decisions and be held accountable;
Providing program offices with the skilled people
needed to craft acquisition approaches that implement policy
and to effectively oversee the execution of programs by
contractors;
Realigning responsibilities and funding between
science and technology organizations and acquisition
organizations to enable the separation of technology
development from product development;
Bringing discipline to the requirements-setting
process by demanding a match between requirements and
resources;
Requiring readiness and operating cost as key
performance parameters prior to beginning an acquisition; and
Demanding reliability testing early in design.

Ultimately, the success of the new acquisition policy will be seen
in individual program and resource decisions. Programs that are
implementing knowledge-based policies in their acquisition approaches
should be supported and resourced, assuming they are still critical to
national needs. Conversely, if programs that repeat the approaches of
the past are approved and funded, past policies--and their outcomes--
will be reinforced.
Acquisition Workforce Challenges
To effectively implement best practices and properly manage the
goods and services it purchases each year requires that DOD have the
right skills and capabilities in its acquisition workforce. This is a
challenge given decreased staffing levels, increased workloads, and the
need for new skill sets. Procurement reforms and the ongoing
technological revolution have placed unprecedented demands on the
workforce, and contracting personnel are now expected to have a much
greater knowledge of market conditions, industry trends, and technical
details of the commodities and services they procure.
In response to these challenges, DOD has made progress in laying a
foundation for reshaping its acquisition workforce. The agency has
initiated a substantial long-term strategic planning effort to identify
the competencies needed for the future and to address what reshaping of
the workforce will be needed to achieve the desired mix. DOD is
continuing with an effort to test various human capital innovations and
has begun making significant changes to its acquisition workforce-
training program. Part of this long-term effort will involve making a
cultural shift as well as developing better data to manage risk by
spotlighting areas for attention before crises develop and to identify
opportunities for improving results.

CONCLUSION

The continuing war on terrorism, regional instability, demographic
and technological changes, as well as the Federal Government's short-
and long-term budget pressures have created a challenging environment
for the Department of Defense. It faces a number of difficult missions
that will put its strategies, personnel, and resources under enormous
strains. Consequently, it is important for the Department to adopt
business practices that will enable it to acquire the systems and
services to allow it to operate effectively in this environment. Doing
so will help ensure that its resources are used in the most efficient
manner possible. I am confident that the leadership of the Department
is committed to that objective. Success over the long term will depend
on the leadership sustaining its commitment to improving business
practices through a strategic, integrated, and DOD-wide approach to
ensure that these efforts achieve their intended results.
Mr. Chairman, this concludes my statement. I will be pleased to
respond to questions from the subcommittee.

Senator Ensign. Ms. Styles.

STATEMENT OF HON. ANGELA STYLES, ADMINISTRATOR, OFFICE OF
FEDERAL PROCUREMENT POLICY

Ms. Styles. Mr. Chairman, Senator Akaka, and members of the
subcommittee, I am pleased to have this opportunity to update
you on efforts of this administration to address many
procurement challenges.
While our efforts are government-wide in nature, the
decisions are often shaped by the critical mission needs of the
Department of Defense. You will find our activities guided by
two principles: Making the Federal marketplace more
competitive, and preserving acquisition flexibilities through
more accountable and strategic management.
With these principles in mind, there are several important
initiatives we are pursuing: Creating a viable infrastructure
for public/private competition; strengthening the use of
competition in our everyday acquisitions, particularly for
services; expanding our small business supplier base; reducing
transaction costs and increasing transparency through
technology advances; and improving purchase card practices.
I will briefly discuss a few of these efforts, but the
focus will be on competitive sourcing. Competitive sourcing--
the use of competition for selecting sources to perform
government activities that are commercial in nature--is a key
component of the President's management agenda and this
administration's vision for a market-based government.
After nearly 2 years of hard work, agencies are, for the
first time, institutionalizing public/private competition. DOD
has the largest and most experienced infrastructure in the
Federal Government for conducting competitive sourcing. The
Center for Naval Analysis, the GAO, and other evaluators have
reviewed the results of DOD's competitions and found two
important things. The net long-term savings are significant and
permanent; and few Federal employees are worse off after
competition.
DOD has committed to reviewing half of its 452,000
commercial positions. DOD estimates that announcements of new
A-76 competitions will be around 10,000 positions in fiscal
year 2003 and at least 10,000 in fiscal year 2004.
In spite of DOD's many successes, the process has faced
significant and valid criticisms. As a result, last November,
we proposed major revisions to OMB Circular A-76.
I want to highlight a few of the points in the revisions.
We want to help agencies easily distinguish inherently
governmental from commercial activities. We have made a more
concise definition of what is an inherently governmental
activity.
We want to integrate the processes for private/private
competition on the one hand with public/private competition on
the other hand, so we have one force, one workforce that
understands competition, and competition whether it is private/
private or public/private.
We want to fully accommodate a program's need for best
value and innovation, while still requiring cost to remain a
factor in every competition. This is a misunderstood point. In
every single competition, cost will continue to be a factor.
But very importantly, cost will be a deciding factor in most
public/private competitions.
We also want to ensure that sourcing deadlines are made in
real time; and, yes, we are going to impose some very
aggressive deadlines. It is unacceptable from our perspective
for the private sector or public sector employees to be
committed to a public/private competition for an average of 3
years. Sometimes, these exceed 3 years, going into 4 years for
a public/private competition.
We have been working aggressively to consider the more than
700 comments we have received. In analyzing these public
comments, we have been keeping an especially watchful eye out
for areas where processes may cause results that fall short of
expectations, instances where the processes unnecessarily
constrains management's ability to fully consider and compare
the options.
In this regard, a number of commenters have pointed out
that administrative convenience may drive agencies to pursue
direct conversions even where in-house providers may be the
better and the cheaper alternative.
Senator Akaka pointed out that these changes must promote
trust. As we look at these comments that we have received, we
are being very careful to take into consideration how we can
create a fair process that is easy to understand, and we
realize that we must promote trust in what we write in the
circular as well as how we implement this.
I would also like to add that we are adding several points
on the appropriate allocation of resources for the public
sector entity to be able to compete and to be able to provide a
competitive bid in this area.
Public/private competition will not work and we will not
achieve the best value for the taxpayer unless we have a
competitive process that allows the public sector to provide
the best bid that they possibly can.
The theme of competition continues through a host of other
acquisition-related initiatives including one to strengthen the
use of competition on multiple award contracts, such as the
Multiple Award Schedules; and also initiatives to create a
level playing field between Federal Prison Industries and the
private sector, thereby increasing opportunities for small
businesses and giving agencies greater flexibility to obtain
best value when spending the taxpayers' money.
In conclusion, this administration remains committed to
promoting access to the Federal marketplace and ensuring
competition is effectively used at every level of purchasing
throughout the Federal Government. This will enhance
opportunities for all businesses, small and large, spur
creativity in the marketplace, and provide the framework for
the delivery of better value for our agencies, but ultimately
for our taxpayers. There is more to be done, but I am confident
that these steps are laying the foundation for an acquisition
process that is considerably more market-driven and results-
oriented than the one we inherited.
This concludes my prepared comments, but I am happy to
answer any questions.
[The prepared statement of Ms. Styles follows:]

Prepared Statement by Angela B. Styles

Chairman Ensign, Senator Akaka, and members of the subcommittee, I
am pleased to have this opportunity to update you on efforts the Office
of Federal Procurement Policy (OFPP) is taking to address the
challenges facing our procurement community. My comments, reflective of
OFPP's activities, are Government-wide in scope, but are shaped in many
important ways by the critical mission needs of the DOD.
Broadly speaking, the majority of OFPP's current activities are
intended to: (1) make the Federal marketplace more competitive in order
to lower costs for taxpayers and improve program performance to
citizens, and (2) preserve acquisition flexibilities through more
accountable and strategic management. As you know from prior
statements, my primary mission since assuming the responsibilities of
Administrator of OFPP in May 2001 has been to renew our acquisition
workforce's focus on the fundamental building blocks of procurement:
sound planning, consistent use of competition--applied in a fair,
transparent, and ethical manner--well structured contracts, and solid
contract administration. While these principles are hardly strangers to
our workforce, we often find ourselves struggling to apply them
consistently in a world of rapidly changing needs and ever-evolving
technologies. My hope is that clearer emphasis on acquisition basics
will better position us as a community to ensure that taxpayer
resources are managed well and used more effectively.
There are several important initiatives OFPP is pursuing, in close
coordination with other offices within OMB, to pave the way to a
performance-based environment--in terms of both fostering effective use
of competition and instilling greater accountability for our actions.
These initiatives include:

creating a viable infrastructure for public-private
competition;
strengthening the use of competition in our everyday
acquisitions for services;
expanding the small business supplier base;
reducing transaction costs and increasing transparency
through technological advances; and
improving purchase card practices.

Let me now briefly discuss each of these efforts with you.
creating a viable infrastructure for public-private competition
As you know well, competitive sourcing--i.e., using competition for
selecting sources to perform Government activities that are commercial
in nature--is a key component of the President's management agenda and
the administration's vision for a market-based government. After nearly
2 years of hard work with the agencies, I am pleased to see a large
number of our Federal managers accepting the difficult challenge of
building an infrastructure to identify commercial activities, planning
for their performance, and, for the first time, institutionalizing
public-private competition to address those needs.
While creation of an infrastructure is just one step, it is a
critical step. Many of the processes relied upon until now are rooted
in long-outdated management ideals that have permitted vast numbers of
our commercial activities to remain insulated from competition. As our
mindset transforms from one that resists competition to one that
embraces the value competition generates, agencies should find
themselves well-positioned to achieve a mix of Government and contract
support that is optimal for mission success.
Progress is proceeding according to plans at many of the agencies
we are tracking in the budget (i.e., the ``scorecard agencies''). We
are starting to see real management advances in a few instances. DOD
has the largest and most experienced infrastructure in the Federal
Government for conducting competitive sourcing, which is governed by
OMB Circular A-76. The Center for Naval Analysis and other evaluators
have reviewed the results of DOD's competitions and found that: (1) the
net long-term savings are significant and permanent; and (2) few
Federal employees are worse off after competition, and many are hired
by contractors who win competitions.
DOD is increasing the ``tooth-to-tail'' ratio through competition
of military members and civilians in commercial activities to less
support-oriented activities, particularly warfighting. DOD is committed
to reviewing half of the 452,000 positions in commercially available
activities. DOD estimates that announcement of new A-76 competitions
will be around 10,000 positions in fiscal year 2003 and at least 10,000
in fiscal year 2004. A major DOD review of A-76 and other competitions
by each Military Service and Defense Agency is scheduled this year so
that the President's fiscal year 2005 budget can present how DOD will
achieve this Presidential Management Initiative.
Action is occurring at other agencies as well. For example, the
Department of Veterans Affairs is opening up the activities of 52,000
employees (primarily ancillary support functions) to competition over
the next 5 years--initiating studies of 25,000 of them in 2003 alone.
At the Federal Aviation Administration, 2,700 Federal flight services
personnel are participating in a public-private competition. These
Federal personnel currently provide weather reports to private pilots,
a function that is currently outsourced by every major airline.
Similarly, the Department of Energy has started public-private
competition for a variety of functions (such as computer personnel,
graphic designers, and financial services personnel) and locations
nationwide.
Despite progress, overall use of competitive sourcing remains weak.
This is not surprising when considering that the current processes
governing sourcing decisions are time consuming and unnecessarily
complicated. Therefore, OMB is committed to significantly improving how
agencies determine whether commercial activities will be performed by
public or private sources.
Last November, OMB proposed major revisions to OMB Circular A-76.
The proposed changes would provide for processes that are more
manageable, more competitive, more even-handed, and more results-
driven. These objectives would be accomplished by:

helping agencies more easily distinguish between
commercial and inherently governmental activities by offering a
more concise definition of ``inherently governmental'' and
rescinding the more complex description currently relied on;
making processes simpler and easier to understand,
including appropriate use of certain well-tested practices in
the Federal Acquisition Regulation (FAR);
more fully accommodating a program's need for best
value and innovation, while still requiring cost to remain a
factor in all competitions and the deciding factor in many
competitions;
incorporating appropriate mechanisms of transparency,
fairness, and integrity (e.g., by separating the team that is
formed to write the solicitation from the one established to
develop the agency tender) so that competitions occur on a
level playing field that results in performance by the best
source;
ensuring that sourcing decisions are made in real time
by imposing deadlines that would reduce the cycle time from the
current delay-plagued 3 years (on average) to 1 year; and
improving post-competition oversight so that selected
sources, whether from the public or private sectors, make good
on their promises to the taxpayer.

With regard to the first element, in particular, which involves
distinguishing the universe of activities that may be eligible for
competition from those that would not, I would emphasize that
competitive sourcing is not, and has never been, about outsourcing
inherently governmental activities. We are focused strictly on
commercial functions, whether they be specialized functions or more
routine functions such as hanging dry wall or mowing the lawn. I am
puzzled to hear statements that the administration is planning to
contract functions intimately related to the public interest, such as
determinations on the content and application of regulations. These
types of functions must be performed by public employees and we will
continue to depend on our able workforce to execute these important
responsibilities on behalf of our citizenry. This notwithstanding, we
will still require agencies to identify their inherently governmental
functions to ensure activities are properly characterized. By doing so,
commercial functions that should be considered for competition will not
remain insulated from the savings that a fair competition can yield. At
the same time, we will not force agencies to pursue competitive
sourcing for competition's sake. We appreciate that each agency has a
unique mission and workforce mix and will continue to work with
agencies in tailoring competition plans accordingly.
We have been working aggressively to consider the more than 700
comments that were submitted on the proposed rule. These comments are
posted on the Internet at http://www.omb.gov and a discussion of their
general disposition will be provided in the preamble to the final
circular.
In analyzing the public comments, we have been keeping an
especially watchful eye out for areas where processes may cause results
that fall short of expectations--e.g., instances where the process
unnecessarily constrains management's ability to fully consider and
compare options. In this regard, a number of commenters pointed out
that administrative convenience may drive agencies to pursue direct
conversions even where in-house providers may be the better
alternative. We are examining the viability and fairness of a process
that would allow for a highly simplified and streamlined consideration
of public and private sector sources.
We are aiming to complete our review of public comments shortly so
that agencies may soon take advantage of our transformed processes.
While final decisions have not yet been made, you should anticipate
that the major elements I described a moment ago will be incorporated,
in appropriate fashion, in the final revisions to the circular.
Of course, our commitment doesn't end with publication of the
circular. This is just a beginning. We will continue to work with
agencies in crafting appropriate competition plans. Equally important,
we will track results through our scorecard so that successes are
promoted and shortfalls corrected.

STRENGTHENING AND IMPROVING THE USE OF COMPETITION IN OUR EVERYDAY
ACQUISITIONS FOR SERVICES

As agencies look to the marketplace for ``managed solutions,'' we
must continually strive to make sure that the vehicles and strategies
we use for these purposes are shaped to achieve good results. For this
reason, we have been paying increasing attention to the popular
Multiple Award Schedules (MAS) program and looking for ways to
encourage greater use of performance-based services acquisitions.
MAS Purchases. OFPP recognizes that agencies have been inconsistent
in adhering to certain basic acquisition requirements in their MAS
purchases, such as in their use of statements of work, pricing of
orders, application of competition, and documentation of award
decisions. The issuance last fall of a final rule in the DOD FAR
Supplement (DFARS) implementing section 803 of the National Defense
Authorization Act for Fiscal Year 2002 will significantly assist in
strengthening the Department's use of competition in its schedule
purchases for services over $100,000. But additional steps must be
taken. I, and the other members of the FAR Council, seek to
significantly improve the application of acquisition basics on MAS
purchases for services and reinforce sound MAS practices generally at
all agencies.
Within the next several weeks, I anticipate issuance of a proposed
FAR that will:

add new coverage on use of statements of work when
acquiring services from the MAS;
reinforce documentation requirements generally and
address the documentation of sole-source orders and price-
reasonableness determinations in particular; and
clarify and strengthen the procedures for establishing
blanket purchase agreements against the MAS.

In developing these changes, we gave careful consideration to the
findings and recommendations made by the General Accounting Office as
part of its study of DOD's large MAS buys for services.
Performance-based services acquisitions (PBSA). OFPP is taking
steps to reinvigorate the use of PBSA and capitalize on the
competitiveness and innovativeness that is generated when contractors
are given the freedom to figure out the best solution to meet the
Government's needs. Specifically, an OFPP-sponsored inter-agency
working group has developed a set of recommendations for making PBSA
policies and procedures more flexible and easier to apply. The working
group's recommendations will form the basis for proposed amendments to
the FAR's coverage on service contracting. The recommendations also
will be used to develop new practical guidance, such as sample
performance-based statements of work that OFPP plans to post on the
Internet for easy access and application to appropriate agency services
acquisitions. This new guidance may replace OFPP's current best
practices guide, which was last updated in 1998.
OFPP intends to review data collected by the Federal Procurement
Data System (FPDS) to measure PBSA usage. FPDS began collecting data in
fiscal year 2001 on whether service contracts are performance-based.
This measure will not, by itself, indicate the effectiveness of PBSA.
However, the measure will serve as a useful gauge of whether agencies
are making PBSA a priority.

EXPANDING THE SMALL BUSINESS SUPPLIER BASE

The administration seeks to create a dynamic atmosphere where
competitive and innovative small businesses can flourish and apply
their talents to the many pressing needs facing our Government. Over
the past 10 years, we have seen a significant increase in contract
bundling--i.e., where agency procurement requirements are consolidated
into contracts that are unlikely to be suitable for performance by a
small business because of the size or performance requirements of the
contract. As we have broadened the scope of contract requirements and
awarded fewer contract vehicles over the past decade, the pool of small
business contractors receiving new contract awards declined from 26,000
in 1991 to about 11,600 in 2000.
We cannot afford to revert back to the paperwork and labor-
intensive acquisition system of the past; nor can we pursue operational
efficiencies at the expense of reducing small business opportunities.
We must find an appropriate balance between operational efficiency,
opportunity, and fairness. We must also recognize that bundling
decisions should not be an ``either or'' decision, i.e., a decision to
either bundle or not bundle acquisitions. Like any acquisition
strategy, analysis of bundling should account for how it would help or
hinder the operation of programs within and across agencies. For
example, the administration's e-Government initiatives often require
integration that may be facilitated by bundling if the agency
demonstrates substantial benefits. However, even in instances where
bundling is found to be necessary and justified, agencies should seek
alternative acquisition strategies that have less negative impact on
small businesses.
Today, there are certain conditions under which an agency may be
able to bundle contracts without analyzing the benefits or considering
alternatives that may produce similar positive results with fewer
negative effects on small businesses. Without this analysis, we put
ourselves at risk of a shrinking contractor base and fewer products and
services from which to choose.
Last October, OFPP submitted a nine-point strategy to the President
for eliminating unnecessary contract bundling and mitigating the
effects of bundling that agencies find to be necessary and justified.
The strategy is designed to: (1) promote leadership and accountability;
(2) close regulatory loopholes; and (3) mitigate the effects of
necessary and justified contract bundling. With successful
implementation of this strategy, we believe that we will have reduced a
significant barrier to entry and, in doing so, allowed small businesses
to bring their innovation, creativity, and lower costs to the Federal
marketplace.
With this result in mind, OFPP established and heads an interagency
task force to bring the bundling strategy to fruition. The task force's
primary task has been to develop regulations that implement the new
bundling strategy in the FAR and SBA's regulations. Proposed
regulations, which were published in the Federal Register at the end of
January, would:

provide more effective agency small business
contracting review procedures;
require agencies to identify alternative strategies
that reduce bundling and justify decisions not to use those
alternatives; and
make clear that multiple award contracts and orders
under those contracts are not exempt from regulatory
requirements and procedures designed to eliminate unnecessary
contract bundling and mitigate the effects of bundling.

Comments on the proposed rules are due by April 1, 2003.
We have also asked agencies to report quarterly to OMB on the
status of their efforts to address contract bundling issues. OFPP will
be monitoring agency actions and will develop additional guidance as
necessary.

REDUCING TRANSACTION COSTS AND INCREASING TRANSPARENCY THROUGH
TECHNOLOGICAL ADVANCES

The President's management agenda calls on Federal agencies to
champion a citizen-centered electronic government that consistently
delivers high quality service at lower cost. The appeal of ``e-
Government'' for procurement is easy to see. The efficiency,
transparency, and administrative simplification that technology enables
can stimulate the type of robust participation that makes for a
successful virtual marketplace. Consider ``e-Buy''--i.e., a new
electronic quote system for MAS purchases. As a convenient and easy
medium for transmitting notices, e-Buy can be a catalyst to further
increase MAS competition without hampering the efficiencies that draw
buyers to the MAS program.
The introduction of e-Buy is particularly timely in light of the
recent and pending regulatory changes that seek to strengthen MAS
purchasing. I commend both the Federal Supply Service (which operates
the MAS) for making this infrastructure available to MAS customers and
DOD for highlighting the availability of e-Buy in the DFARS as part of
its coverage on schedule purchases.
The ``inter-agency contract directory'' (ICD) offers another good
example of how we are using the powers of the Internet to improve our
buying practices. While agencies have become increasingly interested in
inter-agency contracting, there are few, if any, places, they can turn
to see the range of contracts across Government that may be suitable
for their use. The ICD is designed to overcome this shortcoming and
facilitate more informed decisionmaking. Later this year, the ICD will
provide general information about contracts available for inter-agency
use, including information about: the scope of the contract, socio-
economic considerations, ordering procedures, and fees. Agencies will
be able to use this information as one data point in deciding whether
they are better served by placing an order under an existing contract
or pursuing a new open market contract action. The ICD will also help
senior managers to get a better picture of the number of inter-agency
contracts that their agencies are operating.
GSA, which manages this project in consultation with my office, has
been working for a number of months to address configuration issues. In
addition, the FAR regulatory councils have evaluated public comments on
proposed FAR changes that will provide the regulatory underpinning for
the ICD. Population of the directory is expected to begin after
validation testing is completed this spring. FAR changes will be
finalized at that time to encourage consideration of the ICD during
acquisition planning and market research as well as to ensure agencies
regularly input information on new inter-agency vehicles in a timely
fashion.
Of course, ``e-Buy'' and the ICD are just two components of our
efforts to reshape information technology (IT) investments in ways that
mirror the integrated nature of acquisition. Our ``integrated
acquisition environment'' (IAE) initiative seeks to facilitate the
migration and leveraging of IT investments to modernized, technology-
based infrastructures that harmonize the varying functions that support
the acquisition process. GSA serves as managing partner of the IAE
initiative, working closely with OMB's Office of Information Technology
and Electronic Government, and OFPP.
IAE projects have been placed into one of three broad functional
areas that collectively encompass the acquisition process, namely,
functions that: (1) promote access to business opportunities, (2)
manage information about the Government's business partners, or (3)
capture information on acquisition activities. For instance, ``e-Buy''
and the ICD are part of a larger ``business opportunities network''
that also includes:

``FedBizOpps,'' our Government-wide point of entry for
information on actions over $25,000, and
``SUBNet,'' a one-stop resource for information on
subcontracting opportunities.

The functional groupings are helping managers across agencies to
more easily identify and avoid redundant IT investments. This saves
money for the Government and can reduce burdens on contractors as well.
An integrated ``business partners network,'' for example, means that
contractors may register once and avoid the effort of submitting
redundant data each time they seek to do business with the Government.
Accurate and up-to-date registration information also facilitates
timely payment to contractors.
In short, the IAE is laying the foundation for lasting change. As
we work our way closer to a technology-based infrastructure, we greatly
increase the odds of achieving major improvements in how agencies carry
out their missions.

IMPROVING PURCHASE CARD PRACTICES

It is no secret that purchase cards have evolved quickly into a
major institution in our procurement system, with expenditures
increasing more than eight-fold since the mid-1990s. The reason for the
purchase card's popularity is not difficult to understand: purchase
cards eliminate many of the impediments of traditional procurement.
Unfortunately, the efficiency of the card program has increasingly
become overshadowed by waste, abuse, and even fraud, with little or no
corrective action taken by the agency. While some members of our
procurement community appear concerned that corrective action will
unnecessarily erode flexibility, I believe that failure to act is much
more likely to put this flexibility at risk.
To help preserve public confidence in our workforce's ability to be
effective stewards with purchase cards, we have taken several important
actions. In January, OMB began requiring agencies to report quarterly
on certain aspects of their purchase card programs to ensure that
agencies are implementing strong internal controls. Agencies will
provide information regarding the number of cards, span of control,
spending limits, rebates, delinquency rates, fraud and misuse
investigations, disciplinary actions taken, and other agency
information related to the management of these programs.
In addition, the President's budget for fiscal year 2004 proposes a
statutory amendment that would require departments and agencies to
evaluate the creditworthiness of individual employees before issuing a
Government purchase charge card (or Government travel charge card).
Agencies would not be allowed to issue charge cards to those without a
credit history or with an unsatisfactory credit history. Agencies would
be required to develop guidelines and procedures for disciplinary
actions to be taken against agency personnel for improper or fraudulent
use, or abuse of charge cards. Better management over card activities,
as reinforced by this provision, will help agencies capture cost-saving
efficiencies in acquisition and finance operations without wasting
hard-earned taxpayer dollars.
I would emphasize that our efforts are focused not just on
protecting against waste. We are also seeking to capitalize on the
value that cards offer in furthering strategic decisionmaking. Cards
give agencies the ability to gain much better insight into buying
behaviors of their employees. Agencies must actively use this
information to identify opportunities for smarter purchasing and we
plan to work with agencies to find appropriate ways to make this
happen.

IMPLEMENTING A BALANCED REFORM OF FEDERAL PRISON INDUSTRIES

Before concluding, I would like to draw your attention to promising
developments regarding the reform of Federal Prison Industries (FPI).
The administration strongly supports a balanced reform of FPI that
would level the playing field between the private sector and FPI,
increase opportunities for small businesses, give agencies greater
flexibility to obtain best value when spending taxpayer money, and
ensure continued work opportunities for Federal inmates. As the Armed
Services Committee has recognized, the products that agencies have been
required to buy from FPI may be ones that many of our Nation's private
sector contractors are able and willing to provide at better prices and
at a level of quality that FPI, as a Federal correctional program, is
not always in a position to match.
Over the last several months, FPI's Board of Directors has taken
several administrative steps that will benefit all agencies. I
suggested many of these actions to the Board and strongly commend them
for recognizing the need for reform and taking timely action. Let me
briefly describe these actions for you.
In January, the FPI Board of Directors raised the waiver threshold
for application of the mandatory source requirement from $250 to
$2,500. This change, which will apply to all Federal agencies and
become effective when implemented in the FAR, will give buyers across
the Government the opportunity to carefully consider the wide array of
products offered in the marketplace, as well as by FPI, and make buying
decisions free from the management restraints associated with mandatory
sourcing.
Agencies will further benefit from additional business reforms the
Board announced earlier this month. The Board resolved that:

FPI will immediately begin granting waivers in all
cases where the private sector provides a lower price for a
comparable product that FPI does not meet.
The FPI Chief Operating Officer will prepare and
present to the Board by March 31 a plan to end the application
of mandatory source for products for which FPI's share of the
Federal market exceeds 20 percent.
Inmates will be denied access to personal information
of any kind, including credit card numbers, medical records,
social security numbers, credit records, and other personal
information.

In addition, the Board agreed to consider ending the practice of
selling products for which prison labor does not have a substantial
portion of the value (at least 20 percent) of the product. OFPP's
intent in offering this proposal to the Board is to help ensure that
all of FPI's activities further the goal of providing work
opportunities for Federal inmates. We think such an action would be
consistent with the Board's announcement made at the end of last year
to eliminate the practice of ``pass through'' sales, in which FPI
purchases products directly from commercial manufacturers and resells
them to a Federal agency to meet delivery deadlines. The Board has
tabled action until it can obtain more information. We look forward to
a continued collaborative effort with the Board as it pursues reform
efforts.

CONCLUSION

As this year's budget again illustrates, the administration remains
firm in its resolve to improve the performance of Government and the
culture that drives our investment decisions. For the acquisition
community, this means that we must continue our efforts to promote
access to the Federal marketplace, and ensure competition is used
effectively at every level of purchasing throughout the Government.
This will enhance opportunities for all businesses--small and large--
spur creativity in the marketplace, and provide the framework for the
delivery of better value for agencies and the taxpayer.
There is more to be done. But I am confident that the steps we are
taking are laying the foundation for an acquisition process that is
considerably more market-driven and results-oriented than that which
this administration inherited.
This concludes my prepared remarks. I am happy to answer any
questions you might have.

Senator Ensign. I thank each of you for your excellent
testimony. I think this is a very important hearing, bringing
out some of the things that have been done and some of the huge
challenges that are ahead of us. There is no question that all
of us recognize that we cannot have 20 years to bring a new
weapons system on board. Some of the practices of the past
cannot continue, especially with how quickly technology is
changing. Those kinds of practices will leave the United States
behind in the future.
Secretary Aldridge, I am not sure if you will be able to
address this because I do not know exactly when the
evolutionary spiral-type development was applied to the Joint
Strike Fighter, but if it was, first of all, when was it? But
also, if it was applied from the beginning, do we have any idea
how much time, how much cost, theoretically, at least, could
have been saved in development of the Joint Strike Fighter?
Secretary Aldridge. Well, let us see. The Joint Strike
Fighter from its evolution when we entered into this phase had
a spiral development plan in place. We made the decision back
in October to enter into the system development in
demonstration phase. We knew we were going to have blocks, and
what is different is that we have planned blocks, and we have a
technology plan that goes with it. When the technology is
developed, it can be phased into those specific blocks; and
that is the plan. That was the way it was set up from the
beginning.
I think what you are getting to is that we did not do that
for the F-22. The F-22 was designed to go to the ultimate
configuration from the beginning. I was involved in the source
selection process of that airplane back in the early 1980s, so
it has been around for 20 years and it has not yet entered its
operational test phase. But it is because we wanted to get the
ultimate configuration.
We know there will be upgrades to it, but they are not
planned upgrades that the Joint Strike Fighter has in place, so
we know the first block of the Joint Strike Fighter will not be
the full-up configuration. It will be about 80 percent. We will
have a block B that will have an improved capability for air-
to-air, and some additional air-to-ground. We know we have
those planned.
How much we could have saved on the F-22 is kind of
speculation if we went to a block design there. But I think it
would have been significant, because we would have had fielded
the airplane sooner. We would have gotten rid of some of the
older F-15s that are really costing a lot of money to maintain.
We would have gotten rid of them earlier. We would have done so
with a lot less risk, and I think with a lot less cost. How
much that would have been saved is speculation, but
significant.
Senator Ensign. Have we done a lot in the private sector? I
know that there are models out there that hopefully we are
looking at in the private sector. There are inherent
differences between the private sector, obviously, and the
public sector. But, I think that there are a lot of principles
that can be applied from the private sector to the public
sector. One of those principles, the whole idea of quality
management.
Now, depending on whose definition of quality management,
there are many different practices that lead us to that. But,
certainly the private sector in the United States has had to
learn some from the Japanese, some from the Germans, and now
the Americans are being very innovative in their management
practices.
One of the things that they do is they benchmark each
other. They look for what is working out there. How much of
your workforce is benchmarking the private sector and trying to
figure out how they are doing it, and how can those private
sector practices be brought into the public sector?
Secretary Aldridge. I do not think we are doing enough of
it. I will start off by saying----
Senator Ensign. By the way, when you were mentioning
training earlier--and I think, Mr. Walker, you mentioned that a
lot as well--that bringing part of the training needs to be
that benchmarking. I mean, that is a big part of showing people
how to even benchmark.
Secretary Aldridge. One of the areas that I find we have to
get into, this gets into the benchmarking idea, is that the
Government has to be the smart buyer. We cannot pass off that
responsibility to the commercial sector or the contracting
sector.
So we, as Government officials in trying to determine what
we are buying for the taxpayer, and the best thing we can get
for quality and cost, we have to be smart. So inside the
Government, we need to have smart program managers that stay
for a period of time to apply their skills overall, rather than
every 2 years. Also, program managers that understand what is
benchmarked in the commercial sector, so they can measure the
performance of the contractor against some quality standard. I
do not believe we do enough of that, quite honestly.
I am worried about making sure that the workforce that we
have in the Government, the AT&L workforce, is qualified with
the right skills as I have mentioned. We are putting a lot of
emphasis at the Defense Acquisition University on training
these people, bringing in case studies, which is also part of
benchmarking, to see how we did things right and wrong, and
applying that to our people.
I am very worried about that, and you mentioned it in your
opening statement that we have 50 percent of our acquisition
workforce eligible to retire in the next 5 years. Unless we do
something to encourage them to stay, I think we are going to
end up with the workforce not having the skills to be the smart
buyer. That, I worry about.
Senator Ensign. Mr. Walker.
Mr. Walker. Can I comment on the two points real quickly?
First, you mentioned spiral development, and clearly that is
something that is being used for JSF, and has been contemplated
from the very beginning.
I would assert that the F-22 and certain other platforms
may be an example of the old ``I have a dream'' mentality. ``I
have a dream. Why can we not have X that is perfect and has all
these different capabilities.'' Whereas now with spiral
development we have an idea of what we are looking for, but we
recognize that we need to try to go for an 80-percent solution
and that it needs to evolve over time.
Where I think there is a direct correlation with the
private sector based upon GAO's work that was commissioned by
this subcommittee, is ``What is the level of maturity of any
new technology before you move into the next level of the
acquisition process?'' That is where there has been the biggest
problem in the past. There has been a drive to try to hit the
dates, no matter what the maturity of the technology is, and to
move into the next stage.
The later that you solve your technology problem, the more
it is going to cost, the more it is going to be delayed, the
more you are going to have to compromise. They, I think, are
realizing that. Spiral development is an effort to try to
address that, and I think it is something that clearly has to
be promoted and expanded within the Department.
Senator Ensign. Well, I have many other questions, but my
time is up. If we have a second round, I may get into some
others further; otherwise, I have some questions that I will
submit for the record.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Walker, you and I have discussed the human capital
problems facing the Federal Government on a number of
occasions. I am concerned that we lack a coherent focus on
these issues.
The different parts of the executive branch propose
policies on outsourcing civil service reform and civilian pay.
Different committees of Congress considered these proposals,
even in our own committee. Different subcommittees are
responsible for outsourcing and for civilian personnel policy.
Yet, these policies all impact the same civilian workforce.
We are telling this workforce that we want to reform the
civil service system to make it more flexible by eliminating
some of the protections now available to Federal employees.
But, at the same time, we are telling these same employees that
we want to outsource their jobs and that they do not deserve
the same pay increase as we provide to the military.
Mr. Walker, would you agree that even if the right hand
does not know what the left hand is doing, this combination of
policies is likely to have an adverse effect on employee
morale? Should we not make a greater effort to take a
coordinated approach to these human capital issues?
Mr. Walker. I think it is critical that we continue to
devote more time and attention to modernizing our human capital
strategies, policies, and practices. The fact of the matter is
that the Federal Government needs a number of different types
of capabilities in order to deliver on its promises and to
achieve its many missions. It needs dedicated and capable
Federal workers. It needs contractors. It needs effective
partnerships involving both.
I think that we have made a tremendous amount of progress
in the last 2 years in the human capital area, in part due to
your efforts and others. GAO put the lack of a strategic
approach to human capital strategy on its high-risk list about
2 years ago. There has been more activity in that area in the
last 2 years than the last 25, both on the administrative side
as well as legislative. I am hopeful that we are going to have
more progress in the next 2 years than the last 2.
I do think it is critically important that we have a well-
conceived and executed process for competitive sourcing, not
outsourcing. I do not use the word ``outsourcing.'' I think it
is a loaded term. I think what we are talking about is
strategic sourcing strategies. It could be insourcing,
outsourcing, or co-sourcing. In most cases, co-sourcing is what
it is going to be, because you may want to have an internal
capability as a Reserve, and even if you outsource something,
you have to have an adequate number of qualified, dedicated
Federal employees to manage cost, quality, and performance,
because if you do not, you are going to get in trouble.
By the way, if you look at our high-risk list, we have a
lot of areas on our high-risk list, NASA, IRS, DOD, DOE, that
are on high risk for contract management because they do not
have an adequate number of skilled, knowledgeable people to
manage cost, quality, and performance from contractors.
So I think it is important that the principles of the
Commercial Activities Panel be adopted by the administration. I
am hopeful that Congress will consider any related legislation
that will help make them a reality. It is important that we
continue to make progress on the broader human capital
challenge to meet the needs and address our challenges going
forward.
Ms. Styles. Senator Akaka, can I add a point about morale
and competitive sourcing?
Senator Akaka. Of course.
Ms. Styles. I think it is a very important issue as we move
forward with these changes. Competitive sourcing can really
increase morale when it is done right. The President just gave
an award to Offutt Air Force Base, where the in-house
organization actually won. It increased morale. They learned
how to do things more efficiently and cheaper, and they beat
the private sector.
The problem we face is morale issues when the public sector
does not have the resources or the commitment from management
to really be able to prepare a competitive bid. We are working
to make sure that in implementation and in our circular that we
give the public sector entities the resources, the training,
and the ability to be competitive and bid against the private
sector when it is appropriate.
Senator Akaka. Mr. Secretary, 647 of the Treasury
Appropriations bill, as enacted through the Omnibus
Appropriations Act earlier this year, contains a provision
which prohibits the use of any goal, target, or quota for
outsourcing, ``Unless the goal, target, or quota is based on
considered research and sound analysis of past activities and
is consistent with the stated mission of the executive
agency.''
The administration has established a goal of considering
425,000 jobs or 50 percent of the eligible workforce for
conversion to private sector performance. Although no timetable
has been set for the achievement of this long-term goal, OMB
has established a 2-year goal of considering 127,500 jobs,
fully 15 percent of the eligible workforce for conversion to
private sector performance by the end of fiscal year 2003. To
reach this goal, each Federal agency has been asked to submit a
plan to compete 5 percent in fiscal year 2002 and 10 percent in
fiscal year 2003.
Ms. Styles, is it your view that the 50-percent goal and
15-percent goal are based on, ``considered research and sound
analysis of past activities of each Federal agency''? If not,
what action does the administration plan to take to comply with
this new statutory requirement?
Ms. Styles. Well, I think I would like to clarify that
these are and have been Government-wide goals. In application,
we have worked over 2 years with each department and agency to
develop a plan that was appropriate for that agency.
We have agencies that are competing as few as 7 percent of
their workforce because they have had historic contract
management problems. We were concerned that competition as high
as 15 percent would simply be inappropriate under the current
circumstances. We have agencies that are up around 20 percent.
My boss, Mitch Daniels, has asked me to make sure that we
clarify that none of these goals will be going forward, agency
specific or arbitrary. Our management scorecard will reflect
that as well.
We have worked so hard to make sure that the plans are
appropriate for the mission of each agency, that they are
carefully considered, that they are based on sound analysis and
research, that we have that available for almost every
department in the agency of the 26 major departments in the
agency right now. I think we are concerned that the original
goals that were put in place are distracting from the
significant efforts that have gone into the plans of the
different departments and agencies.
Senator Akaka. My time has expired. Mr. Chairman, I
understand that the standard in the legislation was drawn from
the report of the GAO's Commercial Activities Panel. I wonder
if we could take advantage of the presence of Comptroller
General Walker to jointly request that GAO review the
implementation of this new statutory requirement.
Senator Ensign. Senator McCain.
Senator McCain. Thank you, Senator.
Secretary Aldridge, I would like to discuss with you the
issue of providing sufficient assets to the United States Air
Force and military for refueling capability. I am told that the
Institute for Defense Analyses (IDA) just completed a study
regarding this issue. Is that true?
Secretary Aldridge. Yes, sir.
Senator McCain. Will you share that?
Secretary Aldridge. Well, I would say--let me clarify. They
did phase one of a study. We have asked them to go back with
some more data from the Air Force, to take another look at
their results to try to resolve some differences that have been
identified between the Air Force estimate of cost and the IDA
estimate of cost.
Senator McCain. Will you share that analysis with the
committee?
Secretary Aldridge. Sir, that was done for internal
purposes. It was done using certain proprietary data from
Boeing, and I think the judgment of the general counsel is that
it was for internal decisionmaking.
Senator McCain. So the answer is no?
Secretary Aldridge. Yes, sir.
Senator McCain. Have you or the Air Force done an analysis
of alternatives on tanker replacements?
Secretary Aldridge. The Air Force did an analysis looking
at two different configurations that would be a suitable tanker
using commercial aircraft assets. They did not want to go into
a development program for a new airplane, for tankers, so they
looked at two different versions.
The Air Force did the analysis, looking at a 767 and a
European version. They concluded that the U.S. version was
preferable for that purpose and would satisfy their needs.
Senator McCain. I will repeat my question. Have you or the
Air Force done an analysis of alternatives?
Secretary Aldridge. The Air Force did the analysis of the
two alternatives. I have not.
Senator McCain. Has there been a complete analysis of
alternatives done, which is a standard procedure, which is
bringing into play all options, or was there just one done as
you have said about two alternatives?
Secretary Aldridge. There were two alternatives, one of
which was rejected.
Senator McCain. In other words, the answer then is no.
Mr. Walker, can you give us some of your preliminary
findings about this issue?
Mr. Walker. Senator, we did some work on this at your
request, and we are also doing some additional work at the
request of the Senate Armed Services Committee (SASC) on this
issue. We have reported on your work, and we expect to report
on this SASC work within the next 2 to 3 months.
My understanding is, as Secretary Aldridge said, that they
looked at two alternatives for leasing. I am not aware that
there has been any analysis of looking at a purchase versus
lease. And it----
Senator McCain. That is--thank you.
Mr. Walker. Right.
Senator McCain. Because that was the question I was trying
to get from Mr. Aldridge, who did not choose to answer. Go
ahead, please.
Mr. Walker. One of the concerns that we have is: There is a
tradeoff here. On one hand, there is absolutely no question
that the Defense Department has certain requirements that need
to be met. The question is how best to meet those requirements.
Should you buy? Should you lease? Should it be a combination
thereof?
Senator, one of the concerns that I have is: The way the
budget rules work, if you end up leasing, you get more
favorable treatment for budgetary purposes than you do if you
purchase. Therefore, that can drive certain decisions whereby
people might do something using one method which may or may not
make economic sense in the broader scheme.
I personally believe that it is important to consider buy
versus lease in any related decisions, because I would hope
that our final desire is to do what is in the best long-term,
not only based on our national security interest, but also the
economic interest of the country and the taxpayers. But part of
this problem, quite frankly, Senator, is the budget rules.
Senator McCain. Secretary Aldridge, according to a story by
Tony Capaccio that Air Force Colonel Frantz DeWillis, Deputy
Director for--with programs, says that the Boeing company wants
to sell bonds to a special purpose entity to finance
construction of 100 Boeing 767 aircraft that would be leased to
the Air Force as refueling tankers.
Colonel DeWillis said, ``There will be a three-way
contract.'' It says, ``Boeing will build the planes. They will
be sold to a special purpose entity that leases them to us
after it gets financing to pay Boeing for the airplanes.'' Are
Colonel DeWillis' comments accurate?
Secretary Aldridge. Yes, sir. From what I understand of the
lease arrangement, which there are a lot of details, is that
that is--the special purpose entity would be the financier of
the lease.
Senator McCain. Do you have anybody in the Air Force that
has any training, experience, or knowledge of special purpose
entities?
Secretary Aldridge. You would have to ask the Air Force
that. I am not aware of any.
Senator McCain. Nor am I. It was the special purpose
entities that the Enron accounting practices were all about,
Mr. Secretary. Some of us are a little skeptical that the Air
Force would do such a thing.
Perhaps you can explain to me, Mr. Secretary, the logic of
leasing an aircraft for 10 years that has a life of 35, 45, 40,
depending on which expert you talk about, and then giving those
aircraft back to the manufacturer as opposed to an outright
purchase of those aircraft. Perhaps you can explain to me the
logic of that? Besides, as Mr. Walker said, getting around the
budgetary constraints.
Secretary Aldridge. It starts with the need to begin the
recapitalization of the tanker fleet. There are some 500 KC-
135s that are over 40 years old. There are about 130 of them,
which are the older E models. With recent depot maintenance,
they are beginning to see a significant increase in corrosion
and some structural problems. The time it takes in the depot is
getting longer, and the cost to maintain the aircraft is
increasing year by year at a faster rate than was previously
planned.
So the Air Force has identified the need to begin the
recapitalization of these, some 500 aircraft. It takes a long
time to recapitalize that number of aircraft. They want to
begin as fast as they can.
In looking at their budget process, however, and in their
program plan that they submitted to the Department of Defense,
they began the replacement of the tankers starting in fiscal
year 2006. Because of affordability, they could not start any
sooner than that, given the other priorities that existed in
the Air Force.
The proposal came to the Air Force from Boeing as to
starting that program earlier by leasing the aircraft and
getting someone to finance that leasing arrangement. They could
begin delivering aircraft much sooner in the future years
defense plan than the Air Force proposal.
The identification was that if they began leasing with
someone financing the upfront costs, they could get 67 tankers
delivered in the fiscal year 2006--versus one if they purchased
this under the Air Force plan.
Senator McCain. But the----
Secretary Aldridge. The Air Force thought that that was a
preferred solution to begin the recapitalization sooner and not
requiring the upfront costs that would be in the Air Force
budget. For example, if the Air Force bought the same number of
aircraft on the same schedule as the lease, we would have to
add over $10 billion to that, or take out some other $10
billion worth of other programs. The Air Force recommended that
we start the lease for the purpose of getting tankers sooner.
Senator McCain. Well, my time has expired.
I have been briefed that the Institute for Defense Analyses
has given a very negative view of this cockamamie proposal. I
am sure that is why you sent it back for further study.
I will continue, Mr. Chairman, to do everything I can to
see that the taxpayers of America are protected from this
military industrial rip off, which has been contemplated.
Secretary Aldridge. Can I respond to that----
Senator McCain. Certainly.
Secretary Aldridge. --the question or assertion?
Senator McCain. However you would like, Mr. Secretary.
Secretary Aldridge. The Air Force estimate of the cost, the
unit cost of the tanker if they bought it was $146 million. The
IDA estimate of the unit cost was $125 million.
Senator McCain. Well, I guess I would have to respond by
saying: On their website, they list the--Boeing themselves
lists the cost between $95 and $125 million. So----
Secretary Aldridge. Which does not include the tanker
modifications.
Senator McCain. It does not include the $1.7 billion which
would be required to modify the hangers, Mr. Secretary.
Thank you very much, Mr. Chairman.
Senator Ensign. Senator Nelson.
Senator Ben Nelson. Thank you very much, Mr. Chairman.
In looking at the forming of the acquisition process,
clearly as a former governor I know how--and I have experience
with wanting to streamline the process to make things work
faster, work better, and better serve taxpayers. Ultimately,
you also want to make sure that those who are the users of the
product, the services, are going to benefit from any
streamlining of the process as well. So I commend the effort to
try to do that.
I am also encouraged by the discussion that cost will
always be part of it. As I say this, I am not going to use any
eraser words, but--in connection with that suggestion that it
is important. In the process also, though, you have to think
not simply of cost, but you have to think of whether or not
there truly is an increased quality, increased serviceability,
increase in availability, a number of other considerations.
``Getting the best value,'' I think, was the word or words that
I heard being expressed.
I also spent time debating between privatization,
challenging for public/private competition, or private/private
competition. I hope that the effort toward improving quality,
best quality, is not just simply a drive toward the road of
total privatization.
I hope that there is a retention of the goal of getting the
best quality, whether it comes from the public or the private
side. I also hope that in any effort to create competition
between private and private, or private and public every effort
is made to be sure that it is fair with respect to the rules
and the opportunities. Because that is the only way that you
can get, I think, the best deal for taxpayers, as well as the
best available services or serviceability of products for the
users, in this case, the military.
No one wants to think about the possibility of lowest
price, lowest cost, least value being achieved favoring either
the public or the private side.
I will ask this to the three of you. Are you convinced that
the efforts that you have made thus far truly push for best
value, not weighing the balance in favor of one group versus
the other, private or public?
Secretary Aldridge. Senator Nelson, let me begin by
describing a little bit of the process by which the number of
positions are available for the competition. The Department of
Defense goes through a process in asking each of the military
departments and the commanders of the various facilities what
jobs here could be done by the private sector, and what jobs
could not be done by the private sector. In other words, those
core functions that he, as a military commander with a mission
to perform, believes has to be inherently governmental jobs.
Then he looks at those, and he then provides a list of
those which could be privately competed for the purpose--and
not part of the core function necessarily of his mission. Then
those are identified. That is the number we have heard about,
452,000 jobs have been identified within the Department of
Defense for the private sector for competition, for sourcing
competition.
We then identified it through OMB, said, ``Look, let us
make a plan to compete for 50 percent of those,'' which comes
out to be the 226,000 that will be open for competition, and we
will phase that over time, because it takes an enormous amount
of time. Then those are competed in a plan.
It so happens about 60 percent of the time, the Government
wins the competition, but in every case, 25 to 30 percent
savings for doing the function that was previously being
performed by the Government. So competition, in fact, works
by----
Senator Ben Nelson. That is the cost factor. What about the
best value?
Secretary Aldridge. The process is that up until now it has
been a cost process, and that is what the OMB's new circular is
all about. It is, ``Let us change that from a cost only
competition to a best value competition.'' We have not
exercised that yet because the process will not permit us to do
so.
Senator Ben Nelson. Mr. Walker.
Mr. Walker. My answer would be: It is too early to tell. I
think that their intention is to do that. There are two aspects
of it. One is design. What is the design of the new process?
Director Styles has not yet finalized what that final process
is going to be, so I think we have to see what the final design
is going to be.
As we all know, implementation is key. You can have a
design that looks good on paper, but the real key is ``How does
it actually get implemented in the real world?'' So I think it
is too early to tell.
Clearly, I think the intent is to do that. I expect that we
will be involved in trying to look at the actual application
over time.
Ms. Styles. We have tried to be very clear from the
beginning that this initiative is about bringing value to the
taxpayer. We have said from day one that we do not care who
wins. We care about competition. We are so committed to that
fundamental principle that we have actually changed a policy--
or we have proposed to change a policy for the Federal
Government that has been in place for 50 years that says, ``If
it is commercial, the private sector can do it better.''
We have said, ``No. If it is commercial, let us determine
which sector can do it better, which sector can do it for a
better value, and oftentimes for a lower cost.''
When I talk about best value and services, there are many
services that you do not want to be based on a low-cost
determination, which is why we are trying to make these changes
to the circular. There are, however, a lot of things that you
do want based on low cost.
We want grass mowing to be determined based on low cost, so
we do not want to preclude that by changing the circular in
saying everything is going to be a tradeoff between cost and
technical reasons.
Senator Ben Nelson. My time has expired. Thank you very
much.
Thank you, Mr. Chairman.
Senator Ensign. Senator Allard.
Senator Allard. Thank you, Mr. Chairman.
Secretary Aldridge, good to see you again.
In your written statement, you discussed the acquisition
cadre. We have been waiting on the space cadre strategy from
the Air Force. I understand it is just about ready. Part of the
space cadre focuses on the acquisition core of space programs.
Did you confer with the Air Force space commander to ensure
both sets of acquisition professionals meet consistent
expectations?
Secretary Aldridge. Yes, sir. I have been intimately
involved with that, the whole Space Commission and the
implementation of which this cadre is part of. In fact, I am
getting a briefing on that early next week.
Senator Allard. Okay. Thank you for your response.
Also, Secretary Aldridge, you talk of the acquisition
reform initiative or initiatives, and address numerous programs
that will transform the battlefield, and I applaud you for
looking at ways to improve the efficiencies and time to task
these programs.
What, if any, military space programs do you envision will
be developed as transformational or spiral programs?
Secretary Aldridge. Space-based radar. We--in fact, the new
program that we call now the Space Tracking and Surveillance
System (STSS) that used to be called Space Based Infrared Radar
System (SBIRS)-Low is now called STSS. It has a spiral
development. In fact, the first two satellites will be a
scaled-down version of that capability, and we will improve it
with time. The transformational communication system, which is
the equivalent of putting fiber optics into space, we will be
using a laser communications system, that will obviously be
evolved with time. Some of its earlier satellites will need to
have certain capabilities, and we will grow it. As I mentioned,
space-based radar is certainly one of those. So those are three
examples that we have underway.
Senator Allard. Thank you. Are there any others that you
did not mention?
Secretary Aldridge. In transformational activities, the
whole UAV/UCAV program will be spiraled. We mentioned the Joint
Strike Fighter already. When we restructured the Comanche, the
Army's Comanche helicopter program, we scaled it back, and now
that is or has spirals in it, which would give us a little bit
lower risk, and I think more of a credibility of bringing the
program in on schedule.
Senator Allard. Secretary Teets has testified recently
about his priorities, the programs he viewed as
transformational. Did Secretary Teets confer with you about--or
before development, those priorities, and do you agree with his
assessment?
Secretary Aldridge. There was not a formal process by which
we debated this process. He has shown those to me, and I agree
with those.
Senator Allard. I see. Now, to move on, we have been
utilizing A-76 studies for more than 10 years now. Apparently,
there are accomplishments--or there are indications that these
studies have shown results favoring both privatization as well
as, in some cases, Government participation in the program. Do
you think that this is an effective and fair way of analyzing
your acquisitions?
Secretary Aldridge. It is a fair way. A-76 permits
competition for functions that can be performed either by the
public or private sector. There are some problems in the
conduct of those competitions. It takes too long. They tend to
be too burdensome.
Because it takes so long, it tends to drive out small
businesses from being able to compete, because they cannot
stand around for the 3 years or so that it takes to conduct the
competition waiting to get the business. So it discourages
people.
What the Commercial Activities Panel is trying to do in
their recommendations is to clean up the process to make it
easier to compete, hopefully quicker and encourage more
competition. Because every time we compete, as I mentioned
before, it seems like we always find a way to save 25 to 30
percent of the cost from performing that function before.
Competition does, in fact, save money and improves quality
and performance. That is what we are trying to get from the
revision of A-76 and get rid of most of the barriers and
burdens that it has.
Senator Allard. When we have Government agencies competing
against private sector, for example--and maybe Ms. Styles, you
would like to respond to this. For example, the Federal
Government does not pay property taxes in Colorado. So how do
you assess this as fair competition when the private sector has
this tax burden that they pay but the Federal Government does
not? Sometimes it is rather substantial.
Ms. Styles. We actually adjust the Government cost and we
take out the private sector taxes, so we make adjustments on
both sides. The most difficult part of public/private
competition in many respects is that a Federal manager only
sees his budget costs. So if he makes a decision about a
particular activity and whether he would like that to be
performed by the private or public sector, without the A-76
costing mechanism we have right now, he has no idea what
performing that function with Federal employees actually costs
the taxpayers.
So what has been created in A-76 and is actually applicable
right now, which we will be maintaining in the final circular,
is a mechanism to pretty closely approximate what the
Government cost to the taxpayer is as opposed to the
appropriated or budgeted cost.
Senator Allard. Thank you.
Thank you, Mr. Chairman.
Senator Ensign. Senator Pryor has yielded to Senator Levin.
Senator Levin. Thank you, Mr. Chairman.
Thank you very much, Senator Pryor. I appreciate your
courtesy.
The importance of competition is 1 of the 10 core sourcing
principles adopted by the Commercial Activities Panel of the
GAO in its report last year.
A few years ago, Secretary Cohen said that competition is
the driving force of the American economy. As a matter of fact,
Secretary, and before that Senator Cohen and I authored the
Competition in Contracting Act.
Ms. Styles, I know that you share my commitment to
competition for a number of reasons. You participated in the
Commercial Activities Panel and endorsed its statements about
competition. You have also taken strong actions to enhance
competition throughout the Federal procurement system. I
particularly appreciated the steps that you took to strengthen
competition in the acquisition of services, and to implement
the legislative changes that we have now made to permit private
companies to compete with Federal Prison Industries.
However, I am troubled by the administration's proposed
revision to OMB's Circular A-76, which governs the outsourcing
policy of the Department of Defense and other Federal agencies.
The proposed revision does not appear to reflect that
commitment to competition.
The current version of Circular A-76 states right up front
that it is the policy of the United States Government to
achieve economy and enhance productivity, and the competition
is the means that we use to achieve that objective. That
statement of competition is our core policy. But that has been
replaced now in the proposed revision of Circular A-76 with a
statement that it is our policy ``to rely on the private sector
for needed commercial services.''
Far from endorsing competition, the proposed policy directs
agencies to ``use Competition or Direct Conversion process to
determine the providers of commercial activities.'' So we now
have an equivalence between competition and direct conversion,
whereas before we had the core policy of competition being
emphasized.
The Comptroller General stated in a January 16, 2003,
letter to OMB Director Mitch Daniels, relative to the proposed
revisions, the following, ``The Commercial Activities Panel
strongly supported continued emphasis on competition in
determining whether the public or the private sector should
perform commercial services. . . [The proposed change] sends an
unfortunate signal that the administration is attempting to
increase the number of direct conversions. This is a
particularly sensitive matter for Federal employees, whose
trust in the objectivity and fairness of the system will be
critical to the success of the administration's competitive
sourcing initiative.''
Competition is essential, not only to protect the taxpayer,
which it clearly is, but also to provide fairness to our
Federal employees. We need to recognize that these public
servants are a valuable asset and that it is in the public
interest for us to treat them as a valuable asset. Surely they
should have a right to compete for their own jobs. It seems to
me that should be a core principle too, which is an inherent
part of competition, that you should be able to compete for
your own job before it is outsourced.
Let me start with the question to you, Ms. Styles. As I
understand it, the administration proposes to authorize the use
of direct conversions based on a ``business case analysis,''
for outsourcing of functions currently performed by as many as
50 Federal employees, without providing Federal employees an
opportunity to compete for their own jobs.
The cost of a function performed by 50 employees is
probably somewhere in the order of $5 million a year, or $25
million over 5 years. This is my first question: Would we
encourage agencies to transfer work away from one private
sector company to another private sector company with contracts
of that size on the basis of a business analysis without
competition?
Ms. Styles. No, we would not. Let me address your first
comment. While our decisions are not final at this point, we
have taken into consideration many concerns that the direct
conversion process and the streamlining process that are in the
draft are not competitive. I believe based on recommendations
that I am making that that will significantly change.
I do not anticipate a reference to direct conversions in
the circular itself. We are even in the process of discussing--
and I will emphasize again that we have not made any final
decisions about eliminating direct conversions altogether. Our
concern certainly has been over the past 2 years that agencies
have made decisions to directly convert that may not be in the
best interest of the taxpayer. We do not want that to continue.
We are trying to create a mechanism that is streamlined for
under 50 or under 65 that would allow, in appropriate
instances, the public sector to compete but would also require
the agency to make a cost-effective determination, that any
determination to go to the private sector would be cost
effective.
What we are looking at right now is a structure for full
public/private competition and then a smaller cadre under
either 65 or 50 that would be more streamlined and flexible for
the agencies, but would have an element of competition and a
strong element of competition for any decision to send work to
the private sector and to allow, where appropriate, Federal
employees to compete.
I think we have understood the concerns expressed by many
Members of Congress, by many employees and, I think, by the
General Accounting Office. We are working hard to take those
into consideration.
Many people have said for a long time, even in the
Commercial Activities Panel, that under 10 is a de minimis
number. You should be able to send those directly out to the
private sector and have flexibility.
Our concern--and again I am going to emphasize, it is not a
final decision--is that those decisions have been made without
regard to cost, or without regard to the best value or
effectiveness for the taxpayer.
Senator Levin. Thank you.
My time is up. Thank you, Mr. Chairman.
Senator Ensign. The way we run this committee is just--some
people run it alternately based on the early bird. I just like
to run it based on who showed up first. So, Senator Pryor, you
will be next, and then Senator Chambliss.
Senator Pryor.
Senator Pryor. Thank you. Mr. Chairman, I appreciate that.
Let me just ask generally about sourcing and let me tell
you my philosophy, the way I look at it. I want you to tell me
if you agree or disagree, and educate me on why you might
disagree.
When it comes to the Department of Defense, it seems to me
that you have three factors that you consider. One, and the
first factor should always be: Does it make military sense?
Does it make military sense on where we are getting--what our
sources are? Second, does it make fiscal sense? Third, does it
make philosophical sense?
The reason I say that is because I think there is a
temptation for people who want to see more privatization, and
people who want to see no privatization almost, is that the
philosophical sometimes overrides the fiscal considerations and
also overrides the military considerations. But it seems to me
that those should be our priorities in that order: Does it make
military sense? Does it make fiscal sense? Third, should it
make philosophical sense? Can I hear what you all think about
that?
Secretary Aldridge. Well, let me start off and maybe weigh
in later. The process, as I described before, is for the
military commander at a facility to look at his workforce. He
or she understands the mission they have to perform, be it a
depot or a maintenance facility, anywhere that has a
significant number of in-house employees, ``What is my mission?
What is--what am I here to do?''
In some cases, it is warfighting. You look at the
individual job and say, ``Does this job--is it essential for
this job to be performed to contribute to my warfighting
ability or to my maintenance ability, or so forth? Do I need
this job inside the Government or can that job be performed
outside the Government? Whether or not it is performed at the
facility or not, can it be done?''
Then they go look at it job by job and they identify what
those functions are--and I believe, if I was a commander, I
would take all these factors into account.
Now, you do not know the fiscal answer until you compete,
because normally what happens is the Government function that
is being performed, they think of new and better ways to
perform that function at less cost than they are performing it
now. We find that to be, as I mentioned before, almost a truism
for every competition. It gets performed at lesser cost, a
significantly lesser amount.
Senator Pryor. Within the Government?
Secretary Aldridge. Within the Government, even when the
Government wins. Or if the contractor wins, it also gets
performed at lesser cost, so the--you will not know that answer
until you have kind of gone through ``Is this job essential?
Does it make sense to compete this job?'' Maybe a little
philosophical factors go in. But you do not know the answer
until later, until you compete it, but in most cases, it is
pretty obvious to the commanders. Knowing they have done this
before, they will get a better product out of this competition.
Senator Pryor. Mr. Walker.
Mr. Walker. First, let me acknowledge for the record that
your father, the former senior Senator from Arkansas, was a
member of the panel and very ably contributed to our efforts.
Please pass on my regards to him.
Senator Pryor. I will. Thank you. Yes. He worked on that.
Thank you so much.
Mr. Walker. There is a strong resemblance, I might add.
[Laughter.]
But I would say on all decisionmaking, I look at it from
two primary factors: One, value and two, risk. What is the
value that is added, and how do you manage the risk?
Commenting on your specific criteria, mission is number
one. In other words, what are we all about? What are we trying
to achieve? How does this fit into that? I would say fiscal
would come after that, but equal to that, I would say, would be
the people dimension.
I think you have to consider the people dimension. I think
that is critically important. I would say that that is equal to
the fiscal dimension.
I would not say philosophical, because I would hope that
this would not be philosophical.
The last thing that I would say is feasibility. Because
there are certain things that we might like to be able to
perform certain functions or have certain capabilities in the
Federal Government, but if our compensation policies are such
that we cannot attract and retain an adequate number of people
to do that, then the market may force us to look to a private
sector alternative. Or if we are looking for certain types of
technologies that, quite frankly, the Federal Government does
not have or has not had the ability to develop and sustain over
time, then we may have to look to the private sector.
But I also believe that we need to keep in mind that this
is sourcing strategy, where it is not just outsourcing. It
could be insourcing when contractors fail to perform in
appropriate circumstances. More likely than not, we are going
to be co-sourcing of a lot of things. There has to be adequate
oversight and management even if you do outsourcing. So that is
what I would say.
Senator Pryor. Thank you.
Ms. Styles.
Ms. Styles. I would like to emphasize that there is nothing
that is critical to the mission of any agency that would ever
even be contemplated for public/private competition. I mean, we
are at a point where we are simply asking agencies to compete
some pretty obvious things.
I will give you a couple of examples, just so you know how
far we are from mission critical requirements. The Department
of Navy has 500 people that make eyeglasses. We have thousands
of people at the Veterans Administration (VA) that do laundry,
serve food, hang drywall. We have lifeguards at the Department
of Interior. These are very basic commercial services that we
are simply asking to be competed and to figure out if we can
perform it cheaper with the private sector or with the public
sector, or we can get better value from one sector or the
other.
Without the pressure of competition, we are going to
continue not knowing. We are going to continue not managing
these functions as well.
Senator Pryor. Yes. Actually, I think that there are a
whole range of things that are good candidates to be
outsourced. Let me give you one example of that and--I am about
out of time here, so we can talk through it very briefly.
A friend of mine was in the Gulf War 12 years ago. When he
gets to Kuwait, he finds the food service has been contracted
with some locals there. The U.S. Army, the GIs did not feel
that comfortable with a bunch of Kuwaitis, et cetera, serving
the food. You get into that, is that mission critical?
Certainly if the food supply is tainted and if we do not have
the proper safeguards built in, then that certainly is mission
critical.
But they are in Kuwait. Apparently, the safeguards were
there, and the contracts were done, and everything was fine.
There was no problem at all whatsoever. So we have to balance
that. Again, it has to make good military sense to do it.
I will note this, Mr. Chairman, before I step aside here,
is that Fortune Magazine, in this most recent issue, had a
story about sourcing--I know we do not want to use the word
``outsourcing''--but about sourcing and contracting. It said
that in the Gulf War, for every 100 soldiers, there was 1
contractor. Today for every 100 soldiers, there are 10
contractors.
I would just ask you all to help us work through evaluating
whether we are being most efficient with our dollars and
evaluating the effectiveness of what we are trying to do here.
Mr. Walker. Senator Pryor, I think part of that has to do--
and I would ask Secretary Aldridge if he wanted to comment on
it--with the sophistication of our weapons systems and our
technologies. It goes back to what I said before, when you look
at the people dimension, and when you look at the market
dimension, being able to have the type of skills and knowledge
in the requisite numbers to be able to deliver on mission and
to achieve the objective. So I think there is an
interrelationship.
Senator Pryor. No, and I agree with that. I think things
have become so high-tech, so advanced, so technically critical
that obviously our needs on that will grow. Again, we are
contracting out more laundry services, more grass cutting, more
things like that. A lot of that makes sense.
But at the end of the day, we need to look at it, in my
view, of: Is the military purpose being served? Second,
fiscally, does it make sense? Does it make sense to have all
these contracts--all these contractors do this?
Senator Ensign. Senator Chambliss.
Senator Chambliss. Thank you, Mr. Chairman.
Mr. Secretary, it is always good to see you. Very glad to
have you back with us.
Secretary Aldridge. Thank you.
Senator Chambliss. I cannot help but put it in--as I am
listening to this discussion, as we are sitting here on the
brink of war, one of my projects over the last 8\1/2\ years now
has been to get a definition of ``core.'' You all know what we
went through last year with our National Defense Authorization
Bill. I was finally willing to concede at the end of the day
because of the right concessions being made.
But I do not see any contractors jumping up and down today
volunteering to go to the Middle East. I know that there are
any number of civilians at Robins Air Force Base who are
prepared to go, not because they want to go, but because that
is part of their job. So I am always reminded of the fact that
there is core work out there and that the public depot system
is an absolute necessity, and I hope we never lose sight of
that.
I say that leading in, Mr. Secretary and Ms. Styles, to my
comment and my question on A-76. I do not like A-76, and I do
not like it because I do not think it is fair. There is nobody
who believes in competition more than I do. I think competition
does wind up giving you the best bang for the buck.
But what has happened with A-76 is: It is a one-way street.
Every A-76 contract that I am familiar with is a project that
is being done within the depot that all of a sudden we decide
we want to A-76 it and see whether or not we can do it cheaper
on the outside.
I am familiar with only one project that has ever been A-
76'd from the outside to decide whether or not we can do it
cheaper within the depot.
Now, I beat up on the last administration every time I had
the opportunity over this issue. I was willing to give you all
some time to try to straighten that out, because I asked this
question for the last 2 years on the House side. I do not see
any movement in that direction now, so I would like the benefit
of your thinking with respect to contracts that have been
awarded or outsourced, because--I am marking it like you. I do
not like that word, but it is a fact. We have outsourced
contracts, both under A-76 and otherwise.
What are we doing with respect to those contracts that have
been outsourced regarding the possibility of being able to do
that work more cheaply within the depots?
Ms. Styles. If I can start by addressing what we are doing
in the draft, the revisions that we have of the A-76: When I
first confronted this question with the current A-76 that is
now in force--that has been in force for quite a while, it
appears to me that there are barriers in the circular and in
the policy to bringing work back in.
I have made changes to eliminate all barriers to bringing
work back in-house, to holding a competition for bringing work
back in-house. Those will remain in the final circular without
any question in my mind. There is----
Senator Chambliss. The changes are going to remain, not the
barriers; am I understanding you?
Ms. Styles. The barriers will be removed.
There is no question that the barriers that I perceive to
be in the current process to bringing work back in-house will
be removed. There are specific instances in this administration
where we have been encouraging agencies that are clearly having
contract management issues, that have sent more than an
appropriate amount of work out the door without having the
capacity to manage that work from a contract perspective to
look at bringing work back in-house through competition. That
would be the Department of Housing and Urban Development (HUD)
and that would be the Department of Energy, both.
However, I will be frank with you: Our focus has been on
work that is in-house that is performed by Government employees
that is commercial in nature and has never been subject to the
pressures of competition. I think we made that decision because
we have 850,000 jobs that have never been subject to the
pressure of competition. At least when work goes out to a
contractor, it is subject to competition every 3 to 5 years.
Secretary Aldridge. Senator, I have--just a comment on a
couple of things. One, the concern I think we all have is that
if a Government agency wants to re-enter and compete for
something that has gone private, it implies there is excess
capacity to do so, which may or may not be the true case, but--
--
Senator Chambliss. I never have been able to get a good
definition of what ``excess capacity'' is.
Secretary Aldridge. That is right. But I do remember
visiting Robins, as a matter of fact, right shortly after I was
confirmed and went through the depot, and clearly they showed
me one case where we have some problems on some C-5s, the
engines themselves. The work could not be defined well enough
to go out for contract, because you have to write down the
specifications. The only people who could have done that were
Government employees who could react immediately to the
demanding requirement to replace those themselves on C-5s as
rapidly as possible.
That is clearly one of those cases where we would not have
been able to contract out that kind of work. The way we are
heading is looking at making sure the functions are well-
performed. For us to create partnerships, I believe, with the
industry is probably the best long-term solution to these
problems.
Senator Chambliss. I agree with that. Partnering is the
long-term answer. It has worked well.
Secretary Aldridge. Yes.
Senator Chambliss. But you all will be asked that question
by me the next time you come as to what progress we have made
on reviewing contracts that have been outsourced to see whether
or not we ought to bring them back in.
Thank you, Mr. Chairman.
Senator Ensign. Senator Clinton.
Senator Clinton. Thank you, Mr. Chairman.
I want to just add a word to Senator Chambliss' questions
because I share his concern about this. I think there is also a
growing question about the impact and implication with respect
to national security. You may not be able to put that in a
circular, but I think it is something we have to take into
account. I know that after the U.S.S. Cole was bombed by the
terrorists, there was only one place left in our country where
you could procure armored steel for the repair work. Frankly, I
do not want to be dependent on a Chinese steel company to
determine whether or not we get the armored steel that we need.
I do not want to be dependent, whether it is a depot or an
arsenal or any other manufacturing facility, on contractors in
an uncertain economy under these very challenging
circumstances. So I, too, am very concerned about some of these
ongoing issues and what it means to subject national security
concerns to competition.
But I have a different set of questions that I would like
to explore with Secretary Aldridge. They arise out of the
recent news articles in this Monday's Wall Street Journal.
Oops. Did we outsource this or what? [Laughter.]
Senator Ensign. No. That was strictly a Government
contract. [Laughter.]
Senator Clinton. In those Wall Street Journal articles,
sources have indicated that multi-million dollar contracts are
being let for rebuilding Iraq and according to the Journal,
``The Bush plan as detailed in more than 100 pages of
confidential contract documents would sideline United Nations
development agencies and other multi-lateral organizations that
have long directed reconstruction efforts in places such as
Afghanistan and Kosovo. The plan also would leave big non-
governmental organizations largely in the lurch, with more than
$1.5 billion in Iraq work being offered to private U.S.
companies under the plan. Just $50 million is so far earmarked
for a small number of groups, such as CARE and Save the
Children.''
These articles raise a lot of questions. Let me just run
through my concerns and then ask Secretary Aldridge to respond.
The article also points out that U.S. Agency for International
Development (USAID) is expected this week to pick the prime
contractor for a $900 million job rebuilding Iraq's
infrastructure, including highways, bridges, airports, and
government buildings.
Now, first, Secretary Aldridge, has this USAID contract for
$900 million been awarded yet? If so, who received the
contract?
Secretary Aldridge. I am not aware that it has been
awarded. I am not that familiar with the contract itself. I am
familiar with the activity that has to be done in preparation
because the people who go there also must be prepared to react
because they have to get vaccinations and things of that
nature. But I do not have the specifics. I will get back to you
with an answer to that.
[The information referred to follows:]

These questions deal with contracting done by the USAID. I am not
in a position to answer the questions since they do not involve
Department of Defense contracting actions. General information about
the contracting being done by USAID to support Iraq reconstruction is
available at http://www.usaid.gov/iraq/about--reconstruction.html.

Senator Clinton. Mr. Walker, do you know if the contract
has been let, and who received it?
Mr. Walker. I do not know, Senator, but I will tell you
that I have already let the Defense Department know last week
that they can expect that we are going to be involved in trying
to understand where the money went and who the money went to
with regard to both conflict and post-conflict operations.
Senator Clinton. Ms. Styles, do you know anything about the
awarding of the contract?
Ms. Styles. No, I do not.
Senator Clinton. With respect to this contracting process--
and I appreciate Mr. Walker's comment--Secretary Aldridge, what
steps are being taken to avoid conflicts of interest? We all
have become aware of the article in the New Yorker magazine
with respect to the role that a company that Mr. Perle
apparently has a financial interest in, might be involved in
both devising the criteria for the granting of contracts and
then possibly being a recipient of such a contract. Are there
conflict of interest rules in effect?
Secretary Aldridge. Conflict of interest rules are
definitely in effect. We follow them precisely. I am not aware
of what Mr. Perle's relationship with this company is, but we
have very strict conflict of interest rules and regulations
that we must follow and we are very serious when we find that
someone has violated those laws.
Senator Clinton. Well, one of the things that concerns this
member of the committee is sitting in those chairs a few weeks
ago, we heard some rather vague testimony from Secretary Feith
and others about post-Iraq, post-Saddam planning. Every
question we asked about ``How long is it going to take? How
much is it going to cost? How many people are going to be
involved,'' the answer we got was, ``We cannot tell you. That
is unknowable.''
Now all of a sudden, we have private companies being given
hundreds of pages of information about potential contracts,
which I assume have details in them in order to be able to bid,
information that has not been given to this committee.
Now, I would also want to know, and we will give you, all
three of you, follow-up questions and specifics about this,
because I assume that these firms were given estimates as to
how long their services might be necessary, how long they might
be expected to have employees in the area. That is information
that I think the public is entitled to as well as potential
private bidders.
Now, with respect to the non-governmental organizations,
have any discussions gone on in DOD with respect to the role of
non-governmental organizations that have a history and also a
reputation of being non-political, uninvolved in the conflict,
such as Save the Children or CARE, on the role they could play?
Secretary Aldridge. I am not aware of any discussions in
that regard.
Senator Clinton. Thank you, Mr. Chairman.
Senator Ensign. All of us have a lot more questions.
Unfortunately, we do not have time for a second round.
I want to thank the witnesses for your excellent testimony,
and we will be submitting other questions for the record.
One of the questions I had--would request a fairly prompt
response on would be with regards to the level of the conflict,
as you all are aware, between the House and the Senate and the
mandatory cuts in personnel, and how that is affecting you. I
am very curious to get that, especially before we do committee
markups and I know sometimes the written questions take a lot
longer. So I would like to get that from you all as----
Secretary Aldridge. This is the size of the acquisition
workforce?
Senator Ensign. Yes. As soon as possible.
[The information referred to follows:]

Certainly, the conflict regarding the Defense Acquisition and
Support Workforce between the United States House and the United States
Senate is disconcerting to us in the DOD. The Department does not
support the reductions being proposed by the House. Reductions in the
acquisition workforce are not driven by our strategic planning and
efficiency improvements have the potential for exposing the Department
to significant risk. The DOD Inspector General (``DOD Acquisition
Workforce Reduction Trends and Impacts'') and the General Accounting
Office (``Acquisition Workforce: Department of Defense's Plans to
Address Workforce Size and Structure Challenges'') have already
suggested that DOD is experiencing risk in contracting and program
management as a result of past workforce reductions. DOD needs
sufficient people in the workforce to allow us to be smart buyers,
provide enough people to both accomplish the Department's mission and
train our workforce simultaneously, and continue to decrease
acquisition cycle time. I appreciate your willingness in the past to
support DOD's workforce management and request your continuing support.

Senator Ensign. So I would excuse this panel.
I welcome our second panel. This panel will focus on
specifics of the outsourcing debate.
Both of our witnesses were members of the Commercial
Activities Panel and have very different views on this issue.
Stan Soloway is President of the Professional Services
Council, an association of services contractors. Prior to his
current position, he was Deputy Under Secretary for Acquisition
Reform in the previous administration.
Bobby Harnage is President of the American Federation of
Government Employees, a union that represents 600,000 Federal
employees, of which almost 200,000 come from the Department of
Defense.
I would request this panel, just due to the shortness of
time, if you could summarize your remarks in under 5 minutes,
we would appreciate that.
We will hear from Mr. Soloway first.

STATEMENT OF STAN Z. SOLOWAY, PRESIDENT, PROFESSIONAL SERVICES
COUNCIL

Mr. Soloway. Mr. Chairman, members of the subcommittee,
thank you very much for this opportunity to share the
perspectives of the Professional Services Council (PSC) on the
critical issues associated with the Commercial Activities Panel
report, and the administration's proposed revisions to A-76.
As some of you have already noted, this is, of course, a
time when all of our thoughts and prayers are with our men and
women in uniform, a time that serves to remind us again of the
unique responsibility that we have of providing them the best
possible support.
Moreover, at times like this, we are, again, reminded of
the importance and value of a robust partnership between the
public and private sectors. For it is only through such a
partnership that we can truly meet our responsibilities to the
troops, responsibilities that include large numbers of
contractor employees that are today on board ships and at base
camps and throughout the theater of operations helping to
ensure mission success.
Senator Clinton, your interesting questions regarding the
AID contract, which I cannot comment on because none of the
companies involved are companies I am involved with, it is not
an assistance contract. It is actually a contract to do
physical reconstruction, the kind of building, clearing, and so
forth that is traditionally done through USAID, through
companies.
But Mr. Harnage and I were both privileged to serve on the
Commercial Activities Panel, which was led so ably by the
Comptroller General. Today, I will very quickly review the
recommendations and some of our perspectives on it, and the
administration's proposed revisions to A-76.
I have also attached to my written statement PSC's detailed
comments on those proposed revisions, as well as a companion
statement from the industry-wide coalition on outsourcing and
privatization. I would ask that they both be made a part of the
permanent record.
Senator Ensign. They will be.
Mr. Soloway. The Commercial Activities Panel, as the
Comptroller General said, unanimously agreed to a set of 10
overarching principles to guide Federal sourcing. They call for
a sourcing policy that treats all offers fairly; that is, based
on a strategic assessment of agency mission needs and
capabilities, and that is transparent and accountable.
All told, the principles represent a common sense approach
to sourcing. The current A-76 process, which applies to only
about 1 percent of all Government procurement, fails to align
with these principles. However, the Federal Acquisition
Regulation, which is proven, well understood, and guides
virtually all other Government procurements, aligns very well
with the principles the panel unanimously adopted. Hence, our
recommendation to conduct public/private competition under the
auspices of the FAR was a purely logical extension of those
principles.
The principles also make clear that mandating public/
private competitions across the board is inappropriate and
helps neither the Government nor its workforce. Recognizing
that competition is the key to driving performance and
efficiency, and that competition is typically already robust,
even when the Government is not a bidder. The principles state,
``The Government should not be required to conduct a
competition open to both sectors merely because a service could
be provided by either. Such decisions must involve a range of
strategic and other considerations, including agency
capabilities, human capital realities, technology, budgets and
more.''
Where the Government is not particularly competitive or
need not continue to perform a given function, there are recent
examples of strategies that both avail the Government of
cutting edge solutions while also ensuring the protection of
the interests of the affected employees, often greatly
benefitting those employees. This kind of strategy serves
everyone's best interest, but is not possible under A-76 or any
other form of public/private competition.
The panel also strongly recommended that sourcing include
the assessment of both cost and non-cost factors, a so-called
best value approach. Now, some have interpreted best value to
be akin to a kind of unconstrained bazaar. In reality, it is a
flexible but objective and reasonably constrained approach that
enables the full assessment of appropriate cost and quality
factors.
In a recent letter to the Director of OMB, some of you
stated your concern that public/private competitions must be
based on cost and quality. In fact, it is under best value, not
under the A-76 process, where cost and quality come together.
Best value is also an objective process and an accountable
one. If I could digress, under a best value process, all
offerers are told the relevant weights of each of the factors
to be considered, but the Government within its own acquisition
plan must have absolute numerics assigned to each of those
weights and follow those numerics in scoring the respective
proposals. It is an accountable process, one that treats
everybody the same and fairly, but also gives you the
opportunity to consider the kinds of factors that Senator
Nelson and others have spoken to this morning.
The administration's proposed revisions to A-76 and its
efforts to more closely align the process with the unanimously
approved principles of the panel contain a number of key
improvements. At the same time, there are a few critical and
fundamental issues that need to be addressed.
The proposed revisions include two primary methodologies
for the conduct of these competitions, the so-called integrated
process and the phased process. The integrated process comes
very close to aligning with the principles contained in the CAP
report, while the phased process remains highly problematic.
The principal problem with the integrated process is that
its use is limited to information technology only. It,
therefore, excludes a wide range of other sophisticated
Government requirements one would never want to buy on cost
alone. As such, the integrated process must be made available
to a much wider array of requirements and in a wider array of
circumstances.
As well, the very definition of ``information technology''
contained in the revision is so narrow that it also excludes
many other solutions for which IT is a driving force, but not
the only element.
On the positive side--and I speak here to the comment
Senator Akaka made earlier this morning--two benefits of the
integrated process that would accrue would be, number one, it
is fully accountable; and number two, it is the process under
which one could justify providing the public bidder the
opportunity to protest source selection decisions.
Throughout the last number of years, the General Accounting
Office has routinely found that public employees do not have
standing to protest, the principal reason being that they are
not considered or treated as bidders in the process. In a
process that provides both equal responsibilities to all
offerers, equal rights then flow. It is our belief that under
the integrated process, protest rights would be available to
all participants.
That is not true of the phased process that Ms. Styles
referred to as dominating the majority of the A-76
competitions. The phased process is more problematic than the
integrated process. In the interest of time, let me just focus
on one overarching concern.
Under the phased process, all bidders compete in a
technical evaluation, and only those deemed minimally
technically acceptable move to the second round, a cost
shootout. Cost shootouts by their very nature tend to
perpetuate a kind of low-bid mentality that many, including the
General Counsel of the America Federation of Government
Employees and other members of this subcommittee, have
appropriately lambasted.
Moreover, under the phased process, the competition cannot
move to the cost round unless and until the Government is
deemed to be technically acceptable. Thus in those cases, where
the Government's capabilities are simply not up to the par with
that which is available in the marketplace, the performance
requirements will be driven by the Government's existing
capabilities, not by agency needs or the art of the possible.
That violates the principles of sound management, is completely
inconsistent with the unanimous recommendations of the CAP, and
is a disservice to the agencies and the people they serve.
As is true under the current A-76, such a strategy also
lays waste to performance-based contracting, which this
committee has long advocated become the norm and not the
exception in Government procurement and, of course, inhibits
the consideration of best value.
Mr. Chairman, the current A-76 process is, as the CAP
stated, fatally flawed. The CAP recognized that it makes no
sense to have one small subset of Government procurement not
governed by an ethic of equal rights and equal
responsibilities.
The CAP recognized that the Government disadvantages itself
by limiting sourcing decisions to cost factors only, and not
fully assessing all of the elements that make for a true
quality decision.
I urge this committee to support the full implementation of
the CAP's recommendations, including revisions to current Title
10 restrictions on the issue of best value, decisionmaking for
public/private competitions at DOD.
Finally, we fully support aggressive initiatives to provide
more training and resources to the acquisition workforce. We
proposed the creation of a Federal acquisition workforce
training fund 2 years ago to help accomplish this vital goal,
because training funds are amongst those that are first to be
cut in constrained budget environments.
We were also deeply concerned about the ongoing debate over
the size of the acquisition workforce, an issue I had the
privilege--or not so much ``privilege''--to deal with when I
was at the Department of Defense, and suggestions that we
should mandate arbitrary cuts to that workforce. This is a
critical workforce for the Government. More resources and
training for that workforce are absolutely critical.
Thank you, again, for the opportunity to appear today. I
certainly look forward to answering any questions you might
have.
Senator Ensign. Thank you.
[The prepared statement of Mr. Soloway follows:]

Prepared Statement by Stan Soloway

Mr. Chairman and members of the subcommittee: thank you for the
opportunity to testify today on behalf of the PSC on the important
issues associated with competitive sourcing. PSC is the principal
national trade association of the Government professional and technical
services industry. Our membership includes more than 140 companies of
all sizes providing services of every type to virtually every agency of
the Federal Government, prominently including the Department of
Defense. We have long believed that a robust partnership between the
public and private sectors is essential to ensuring the optimal
performance and delivery of Government services and to ensuring the
highest quality of support to our men and women in uniform. We
appreciate the committee holding this hearing and advancing the
dialogue on this very important issue.
In the main, PSC does not believe it is appropriate, nor in the
Nation's best interests, for the Government to compete with the private
sector for work that is commercial in nature. We believe the
Government's and the Nation's best interests are served when the
Government focuses its energies on its core competencies. Core
competencies are those things a company or Government agency does best.
The term has a different meaning than ``core requirements'', which, of
course, refers to those things that must be done to execute a mission
effectively. They are very different terms but unfortunately are often
used interchangeably. In simple terms, there are many core requirements
that can, and probably should be competed or outsourced, unless they
are also core competencies of the organization. This is certainly the
norm in the private sector and is a key strategy to achieving optimal
performance and efficiency.
Clearly, the private sector is market driven, and interested in
expanding opportunities to support the Government's mission. In other
words, no one denies the private sector's market interests. The Federal
employee unions have similar self-interests. The coming Federal
employee retirement wave, the Government's continued problems
attracting and retaining people, and the enormous budgetary pressures
facing every agency of Government present the unions with business
challenges of historic proportions.
In the final analysis, however, Federal sourcing policies must be
based solely on the best interests of the Government and the taxpayer
and should not be driven by the market interests of either the private
sector or the Federal unions.
While there are many issues involved in competitive sourcing, and
time does not allow us to examine all of them, I would like to address
two principal questions. First, when and where should the Government
compete its commercial functions, either through a competition among
private sector providers only or through the process prescribed under
OMB Circular A-76? Second, what rules should govern the sourcing
process itself to ensure accountability, the best possible outcomes,
and fairness?
In order to answer those questions, I call the subcommittee's
attention to the April 2002 report of the Commercial Activities Panel,
which was created at the direction of Congress and was chaired by the
Comptroller General. I was pleased to serve on that panel with Mr.
Harnage, two other union representatives, administration officials, and
outside experts.
The Commercial Activities Panel agreed unanimously to a set of 10
overarching principles to govern Federal sourcing policy and
procedures. Those principles were specifically crafted to be taken as a
whole and not broken into pieces; and taken as that whole, they provide
the answers to the two aforementioned critical questions. Moreover, the
panel clearly recognized that competition is a positive force and is
the key to driving efficiency, innovation, and performance. At the same
time, the panel clearly recognized as well that the mere existence of a
Government bidder does not create, nor is it essential to, ensuring
competition. Competition, after all, is the norm in Government
procurement. Thus, it is wholly inappropriate to assume that public/
private competitions are the only true competitions. As such, the real
questions before us relate to how to determine when and where the
Government should be a participant, and then, how to conduct the
competitions in a fair, transparent, and accountable manner.
The CAP report is clear in its endorsement of a Government sourcing
policy based on a strategic process. It also identifies the
inextricable link between a strategic approach to sourcing and key
related factors such as human capital capabilities; obtaining
contemporary and effective solutions for the Government; providing all
offerors the same rights and same responsibilities; and more. This is
both sound management practice and in the best interests of the
taxpayer.
The panel recognized that to mandate public-private competitions
for all work, regardless of whether it is currently being performed by
Federal employees, is inconsistent with smart, performance-based
management, and with the sourcing principles the panel unanimously
agreed upon. There are numerous circumstances involving work currently
being performed by Federal employees in which the Government might
appropriately opt not to compete, particularly when the activities
involved require skill sets, resources, or technology that the
Government simply does not have and would not reasonably be expected to
acquire.
Similarly, for new work or already-contracted work, the panel
recognized that the Government should compete for such work only if
there is a compelling strategic reason to do so, and if the Government
has the existing capacity, resources, skills, and performance history
to justify doing so. To do otherwise would be a waste of taxpayer
dollars. That recognition is contained in the language regarding
principle number seven of the panel's report, which states: ``. . . the
Government should not be required to conduct a competition open to both
sectors (public and private) merely because a service could be
performed by either.'' The report then states that the circumstances
under which a public-private competition is conducted should be
``consistent with these principles'', prominently including the
strategic decisionmaking process.
I might add that, in addition to being contrary to the unanimously
adopted principles of the CAP, the unions' continued demand that
public/private competitions be mandated across the board is also at
odds with the best interests of its own members. After all, the
membership's interest, like that of any employee group, lies in job
satisfaction, opportunities to grow and develop professionally, rewards
for performance, and more. In those cases where the Government is not
particularly competitive and lags behind the capabilities available in
the competitive private sector, it is often in the best interests of
the Government, and the employees as well, to avoid a public/private
competition and to instead compete the work solely among private
offerors in a manner that treats the affected Federal employees as real
assets in the transaction, and rewards them accordingly.
We have seen this model work in several recent cases where the
Government activity recognized that resource realities, human capital
challenges, and other factors rendered them relatively non-competitive
with the private sector, and where the agency determined it no longer
needed to perform the functions in-house. The agencies also recognized,
however, that their workforce was one of quality and commitment that
deserved to be treated as such.
Thus, in conducting the competitions, the agencies placed the best
interests of their workforce near the top of the list of source
selection evaluation criteria. As a result, in each of these cases, the
affected workforces benefited more from the outsourcing than could have
been the case through a complex, lengthy, and contentious public/
private competition in which they would have been competing against
these very same firms, or if the work had simply been retained in-
house.
The reality is that the Government is not, cannot, and need not be
competitive with the private sector in many areas. Moreover, there is
no inherent benefit to having the Government perform numerous
commercial functions. Consistent with the CAP report's unanimously
approved emphasis on approaching sourcing from a strategic perspective,
agency managers ought to be given the flexibility to make these kinds
of strategic decisions. When they conclude that a public/private
competition is not consistent with their mission needs or resources,
they should conduct private sector competitions in a manner that offers
the affected workforce real benefits, such as we have seen in other
similar cases.
Unfortunately, however, the competitive sourcing debate is
dominated by histrionics and mythology intended to create palpable fear
among the Federal workforce and that makes it virtually impossible to
explore, and pursue, such innovative approaches. The results of an
agency outsourcing initiative, we are told, have been and will continue
to be massive Federal unemployment, scandalously low wages, and
horrendous private sector working conditions.
Never mind that to buttress their campaign for higher civil service
pay, Federal union leaders correctly point to the ``pay gap'' between
the public and private sectors. Never mind that for wage-grade
positions, wages on Government contracts are often determined by the
Government, not the contractor. Never mind that the data show that
outsourcing has had a negligible impact on employment for Federal
workers. Never mind that many private sector unions have noted that
private sector employers often offer much more to their employees than
the Government can offer its own employees. These are inconvenient
realities. But to paraphrase one former Senator, while everyone is
entitled to his or her own opinion, they are not entitled to their own
set of facts. Facts should underpin policy.
The Commercial Activities Panel also unanimously provided important
guidance on how to conduct public/private competitions when they are
appropriate. Simply put, the panel's overarching principles state
unequivocally that such competitions should treat all offerors the same
and fairly, should be transparent, and should take into account both
cost and non-cost factors. This common-sense approach is reflected in
several of the principles as well as the panel's recommendation that
such competitions be conducted under the tenets of the Federal
Acquisition Regulation (FAR).
On the other hand, the existing A-76 by design does not treat all
offerors the same. The panel quite simply would not accept that a small
subset of Federal procurement--less than 1 percent of all Federal
procurement--should be handled in such a manner, while the FAR and its
principles of fairness, equality, and transparency govern the remaining
98 percent. This is why the panel was inexorably led to its second
primary recommendation: that public/private competitions, like
virtually all other Federal procurements, be governed by the FAR. In
addition, because the FAR is the common language of Government
procurement, the panel believed that the competitions would be better
conducted and more consistently applied than is currently the case
under A-76.
The panel also could not accept that all competitions must be
determined on a low-bid basis, the essence of A-76, when common sense
dictates that many decisions must involve an array of factors in
addition to price, including past performance, technical excellence,
management experience, and more. We hear repeatedly that best value
contracting is akin to some kind of unconstrained bazaar. In truth, it
is nothing of the sort. Rather, it is a process that affords important
flexibility to the agencies to meet their specific mission needs within
the construct of clearly defined and accountable boundaries. It is a
far more rational and appropriate means by which to procure goods and
services than the low bid processes of old.
Throughout the Government procurement environment, the low-bid,
cost-only mentality of the past has been supplanted by a recognition
that smart business and smart procurement requires that many factors be
considered in any decision. That is what best value is all about, and
nothing more. Under the rules of the FAR, best value enables a
Government acquisition professional to match an acquisition strategy
and the relative weights of all factors to the requirement at hand.
Moreover, all offerors are told in advance of those relative weights
and the contracting officer must have, and follow, specific numeric
scores for each criteria involved. It is a process that offers
important flexibility but is also carefully bound. It is time to bring
this proven, common sense strategy to public/private competitions as
well.
Thus, I prefer to associate myself with the comments made by the
General Counsel of the American Federation of Government Employees,
who, in congressional testimony, decried the ``low bid'' mentality that
led to the problems with the airlines' contracts for baggage screening.
He is correct. I also agree with Senator Kennedy and others who signed
a recent letter to the Director of OMB calling for a sourcing process
based on ``cost and quality.'' Cost and quality is what best value is
all about. A-76, on the other hand, minimizes, and in many ways
prohibits, the Government's ability to appropriately and fully assess
all of the elements that make up a proper definition of the word
``quality''.
It is also time for Congress to replace the current provision in
Title 10 that limits decisions on public/private competitions at DOD to
a cost comparison with specific authority for DOD to utilize best value
strategies in its public/private competitions just as DOD, and every
other agency, does with the remainder of its procurements.
Finally, the FAR embodies a full array of acquisition strategies
and options that enable smart acquisition strategies tied to agency
requirements. It is the antithesis of a ``one size fits all'' approach
to sourcing. Unfortunately, A-76 is, again by design, a one size fits
all process that limits smart acquisition planning and alternative
implementation strategies. It also inhibits performance-based
contracting, which this committee, and Congress have long urged become
the norm in Government procurement.
I have devoted much of my testimony today to the findings of the
Commercial Activities Panel because it represents an important and
largely successful effort to deal with the real issues associated with
competitive sourcing and outsourcing.
Since the CAP issued its report last year, much of the ensuing
debate has focused on the President's management agenda's (PMA)
emphasis on competitive sourcing, as well as the administration's
recently proposed revisions to A-76.
With regard to the President's Competitive Sourcing agenda, it is
important to bear in mind that the President's agenda is specifically
not an outsourcing agenda. It is, rather, a competition agenda.
Moreover, it no longer includes specific numeric competitive sourcing
targets that each agency must achieve, thus addressing one of the
principal concerns expressed by some in both Houses of Congress. The
PMA makes no assumptions as to the outcomes of the competitions and
virtually ensures that incumbent Federal employees will participate in
competitions that involve their work. For the reasons I mentioned
earlier, PSC is concerned that the Competitive Sourcing agenda actually
goes too far in guaranteeing that incumbent Federal activities will
have a chance to compete, even when sound strategic analyses make clear
that such competitions do not serve the Government's best interests.
Attached to my statement are PSC's detailed comments on the
November 2002 proposed changes to Circular A-76. We are all now waiting
for the administration to release its final revisions to A-76.
I would, however, like to highlight a couple of key issues
associated with the proposed revisions.
It is clear that the administration has made a serious effort to
improve an A-76 process that is hopelessly broken. There are many
elements of the revisions that represent real improvements. There are,
however, a set of continuing problems that must be addressed if the
process is to meet the challenge set forth by the Commercial Activities
Panel and, in so doing, generate optimal outcomes for the Government.
The revisions provide two principal methodologies for the conduct
of public/private competitions. The so-called ``Integrated Process''
comes closest to reflecting the principles unanimously supported by the
CAP. Yet, within that process, there are two main areas that need
further improvement.
First, its use is limited to information technology requirements.
But throughout Government, there are many requirements that are
sophisticated and complex and which should never be procured in a cost
only, low-bid process. In order to utilize the integrated process for
those requirements, Government activities will have to go through a
convoluted and time-consuming approval process all the way to OMB.
Further, even the definition of information technology contained in the
revisions is too limiting and ignores the fact that there are many
solutions that are IT-driven but which would not be classified as
information technology procurements under the proposed framework.
Second, the integrated process does appropriately open the door to
the use of best value contracting. However, one of the most important
criteria in source selection is past performance and, under the
integrated process, no past performance assessment of the Government is
permitted. Thus the revisions create both a problem of bidder equity as
well as an enormous evaluation headache for the Government.
To address these issues, PSC has made several recommendations.
Either the integrated process needs to be made more broadly available
or the approval for its use should be devolved to the agency
leadership. OMB is a policy organization and should not micromanage
individual acquisitions. Nor does OMB have the manpower to do so in an
efficient manner. Likewise, the definition of IT must be broadened to
include the full array of complex solutions being sought by the
Government. Until such time as the Government creates the kind of
internal performance tracking system that it has for contractors, the
source selection teams should be encouraged to substitute for past
performance information a risk analysis that includes realistic
assessments of a variety of performance risk factors. This can be done
fairly and openly and would help ensure not only a more level playing
field, but also a better outcome for the Government, whether the work
goes to contract or stays in house.
The phased-process presents a whole different set of problems.
Although the revisions refer to it as a ``FAR-based'' process, in too
many critical ways it is not, and it continues to reflect some of the
real weaknesses of the current A-76 process that the Commercial
Activities Panel decided was fatally flawed. One glaring problem with
the phased process if not addressed, will perpetuate a wider range of
problems.
Under the phased process, there are two steps to a procurement. In
the first phase, all bidders, including the Government, undergo a
technical evaluation to determine their ability to meet the minimum
performance standards called for in the request for proposals. All
bidders respond to the same request for proposal, must submit their
bids on the same timeline, and are evaluated at the same time. All of
these represent significant improvements over the current A-76.
The second phase of the competition involves only bidders that have
been deemed to be technically acceptable in the first phase. These
bidders then move into a cost shootout where the low bid wins. It is
here that the process falls apart.
The competition is prohibited from moving into the second phase
until the Government is deemed to be technically acceptable. In other
words, regardless of the Government's technical competency in any given
area, it must be made technically acceptable and thus included in the
cost shootout. In cases where the Government's capabilities are on par
with or even greater than the private sector's, this is not a big
problem. But in those cases where the Government's capabilities do not
match up, it is an enormous problem. The end result will be a lowering
of the performance requirements to whatever level the Government can
achieve. Whether or not that level represents an optimal performance,
the performance requirements will be determined by the Government's
capabilities. Of course, since the second phase is a cost-only
shootout, no other bidder can or will bid beyond the stated minimum
performance requirement, since doing so guarantees one will lose.
Further, the very use of cost shootouts inhibits innovation and
creativity and limits the Government only to those solutions that meet
minimum, rather than optimum, performance standards. Ironically and
unfortunately the phased A-76, like the current A-76, will make
performance based contracting impossible.
Thus, our recommendation is to eliminate the phased approach
altogether. The Integrated Process, with its true reliance on the
principles and tenets of the FAR, offers the complete suite of
acquisition strategy options, including a low price/technically
acceptable approach for those activities for which a procurement might
appropriately focus almost solely on cost. It is thus more than
adequate to enable the Government to match its acquisition strategy to
the requirement and to ensure a fair, balanced, and accountable
process.
Mr. Chairman, this is a difficult and highly contentious issue. I
urge this committee to continue to assess the substance and not be
swayed by the rhetoric. The imperative to greatly optimize the
efficiency and performance of our Government has never been greater. It
is our collective responsibility to the taxpayer, to our men and women
in uniform, and to the millions of citizens who rely on the Government
for a wide array of services, to ensure that the Government is taking
full advantage of the many innovations available today in the
competitive private sector.
Moreover, sourcing decisions are not judgments on the quality of
the people involved. Rather, they are strategic decisions designed to
not just improve, but to optimize performance through real competition,
and to thus better serve the customer. It is patently clear that the
Government can do all of that, and, at the same time, not only protect,
but also improve, the status of the affected Government workforce. I
urge this committee to support such initiatives and to support
conducting public/private competitions under the proven and well
established procedures of the Federal Acquisition Regulation.
I thank you again for the opportunity to appear here today and for
the committee's continued interest in and leadership on this very
important issue.

Senator Ensign. Mr. Harnage.

STATEMENT OF BOBBY L. HARNAGE, SR., NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. Harnage. On behalf of the American Federation of
Government Employees, which represents more than 600,000
Federal employees, including 200,000 in DOD, I thank you,
Chairman Ensign, for this opportunity to testify this morning
before this Subcommittee on Readiness and Management Support.
As always, I appreciate the opportunity to testify before the
ranking member, Senator Akaka, because of his expertise over
all issues of concern for Federal employees.
Mr. Chairman, my written statement is quite detailed, and I
know it is being entered in the record, so this morning, I will
limit my whole statement to a discussion of OMB's rewrite of A-
76.
In the past, when I mentioned OMB Circular A-76, people's
eyes glazed over, but not any more. OMB's controversial rewrite
of the A-76 process has subjected this obscure directive to a
much-needed glare of publicity. In fact, 170 House and Senate
lawmakers have already signed on to a joint letter of
opposition to OMB about its rewrite; and others have sent their
own individual letters. I am not surprised.
The November draft is so one-sidedly pro-contractor, it
defies belief. The Army's controversial ``Third Wave''
privatization initiative, which was designed to review the
privatization without any public/private competition of at
least 210,000 Federal and military positions, is widely viewed
as being beyond the public policy pale.
But the A-76 rewrite, in some ways, is even more extreme,
and could even be used by the Army or other services to
implement the ``Third Wave.'' The A-76 rewrite might actually
be called the ``Fourth Wave,'' and, if allowed to go forward,
it would certainly constitute a ``Final Wave'' for Federal
employees, effectively wiping out what is left of the in-house
workforce.
Triumphant contractors are delighted by the rewrite,
salivating in fact, according to The Washington Post. In fact,
some contractors insist that under the rewrite, they will win
90 percent of all A-76 competitions, instead of the 40 to 50
percent they are winning now.
Like the ``Third Wave,'' the A-76 rewrite would emphasize
privatization to the exclusion of all other methods of making
the provision of Federal services less costly, more effective,
more efficient, and more reliable. Also like the ``Third
Wave,'' the A-76 rewrite would require agencies to treat 100
percent of their so-called commercial jobs as fair game for
contractors.
Unlike even the ``Third Wave,'' the A-76 rewrite would
include an explicit bias towards privatization. Unlike even the
``Third Wave,'' the A-76 rewrite would make it easier to
privatize inherently governmental work.
Unlike the ``Third Wave,'' which ostensibly calls for
reviewing work performed by contractors, the A-76 rewrite will
focus almost exclusively on the job of Federal employees. While
DOD has scheduled to review for outsourcing hundreds of
thousands of Federal employee jobs, not a single contractor job
is scheduled to be reviewed for insourcing.
The A-76 rewrite overtly encourages agencies to directly
convert work performed by Federal employees to contractors
without any public/private competition, a la the ``Third
Wave.''
However, the A-76 rewrite also covertly encourages agencies
to directly convert work performed by Federal employees to
contractor performance without any competition. For example, if
competitions were not concluded within arbitrary deadlines or
if managers do not submit the tenders on time, innocent rank-
and-file Federal employees could pay the price with their jobs.
Whether it is incompetence, negligence, or on purpose, the
punishment is for innocent Federal employees to lose their job.
It has nothing to do with saving money or efficiency. It is
arbitrary. It is capricious, and it is dumb.
Under the A-76 rewrite, Federal employees, but not
contractors, must compete to perform new work. Under the A-76
rewrite, Federal employees, but not contractors, must compete
when they are doing exactly the same work as before, but the
value of that work increases by as little as 30 percent.
Under the A-76 rewrite, Federal employees, but not
contractors, must compete to continue to perform work when
their contracts expire; or agencies may simply give such work
away to contractors through direct conversions.
Federal employees are also held more accountable for
failure than contractors. For example, when Federal employees
are found in default, the work must automatically be converted
or competed. For contractors, however, it could be business as
usual. Agencies must provide many more justifications under the
A-76 rewrite before canceling an award to a contractor than
when the work has been won by Federal employees.
Under the A-76 rewrite, contractors, but not rank-and-file
Federal employees directly affected by privatization or their
union representatives, can participate in all appellate
processes to the Administrative Appeal Authority, the GAO, or
the Court of Federal Claims.
Under the A-76 rewrite, only the confidential nature of
proprietary information of the contractors' bids is protected.
The only conflicts of interest addressed by the A-76
rewrite are those that might conceivably benefit Federal
employees in the privatization process. The longstanding
conflicts of interest which demonstrably benefit contractors
will continue to undermine the integrity of the privatization
process.
Under the A-76 rewrite, tenders submitted by Federal
employees must include all costs, even when they are irrelevant
or have already been counted, while contractors would be
allowed to exclude significant costs from their own proposals.
Even worse, the new A-76 would allow agencies without the
statutory safeguards possessed by DOD to use a best value
process that would allow contractors to win contracts even when
they submit more expensive and less responsive bids than
Federal employees.
Although today they cannot prove that privatization has
saved one dime, they claim it does, but under the rewrite they
do not have to save anything. Under the rewrite, privatization
can even cost more every time. This is not about saving money.
It is about moving money to the private sector contractors,
taxpayers be damned.
It is a sham, smoke and mirrors, and tap-dancing all rolled
into one. It is legalizing gouging. The Enron-style shenanigan
is an insult to this Congress. This Congress should stop it
dead in its tracks.
AFGE urges lawmakers on this subcommittee to take action to
prevent this manifestly pro-contractor, anti-taxpayer, A-76
rewrite from being implemented and enforced.
Again, Chairman Ensign, I thank you for the opportunity to
testify, and I look forward to answering your questions and
your colleagues' questions.
[The prepared statement of Mr. Harnage follows:]

Prepared Statement by Bobby L. Harnage, Sr.

INTRODUCTION

On behalf of the American Federation of Government Employees, AFL-
CIO, which represents more than 600,000 Federal employees, including
200,000 in the Department of Defense (DOD), who serve the American
people across the Nation and around the world, I thank you, Chairman
Ensign, for this opportunity to testify this morning before the Senate
Armed Services Subcommittee on Readiness and Management Support. I
always appreciate the opportunity to testify before Ranking Member
Akaka, who takes such great interest in Federal employees issues as a
member of the Armed Services Committee as well as of the Governmental
Affairs Committee.
Over the last several years, AFGE has striven to reform Federal
privatization policy and thus promote the interests of warfighters and
taxpayers as well as Federal employees. In fact, last year, an
amendment offered on the floor to the defense authorization by Senator
Edward Kennedy (D-MA), which came within one vote of passing and was
strongly supported by AFGE, would have ensured real and equitable
public-private competition under an objective, cost-based process for
work performed by DOD civilian employees, DOD contractors, as well as
at least small fractions of work not yet performed by either workforce.
The Kennedy Amendment would have also ensured greater accountability
through the establishment of an inventory to track the cost and size of
DOD's contractor workforce.
AFGE will continue to work with other unions and public interest
organizations as well as our Republican and Democratic friends in both
chambers of Congress to enact the significant changes in law necessary
to improve the delivery of services for warfighters and reduce expenses
for taxpayers, including those called for in the Truthfulness,
Responsibility, and Accountability in Contracting (TRAC) Act, which
claimed the cosponsorships of 215 House and Senate lawmakers in the
107th Congress.
Today, however, I will limit my written testimony to seven main
topics:

1. the Office of Management and Budget's (OMB) privatization
quotas,
2. the rewrite of the OMB Circular A-76 privatization process,
3. the threat to use ``best value'' in DOD's public-private
competitions,
4. the threat of the Army's ``Third Wave'' privatization
initiative,
5. the threat to eliminate in-house depots and arsenals,
6. the threatened introduction of the Service Acquisition
Reform Act, and
7. the report filed last May by the Commercial Activities
Panel.

1. OMB PRIVATIZATION QUOTAS

Although well over one-half of all congressional lawmakers have
emphatically repudiated the essence of the administration's
privatization policy--261 in the House of Representatives and another
48 in the Senate--the infamous OMB privatization quotas are still with
us. Regardless of their needs or missions, agencies are being forced by
OMB to review for privatization, either with or without public-private
competition, at least 15 percent of the positions listed on agencies'
Federal Activities Inventory Reform (FAIR) Act inventories. According
to the November 14, 2002, draft proposal to rewrite the A-76 process,
it is ultimately the administration's goal to review every single
position on every single agency's inventory, which works out to at
least 850,000 positions.
I would like to make these points about the OMB privatization
quotas:

A. The use of the term ``competitive sourcing'' to describe the OMB
privatization quotas betrays either bias or ignorance. OMB explicitly
encourages agencies, including DOD, to give work performed by Federal
employees to contractors without public-private competition, either
through direct conversions or privatizations. According to the
administration's fiscal year 2004 budget proposal, some agencies,
including the General Services Administration and the National
Aeronautics and Space Administration, are using direct conversions
exclusively to hit their OMB privatization quotas. Other agencies are
using direct conversions extensively to hit their OMB privatization
quotas. There is nothing ``competitive'' about this corporate welfare-
style privatization.
The ``competitive sourcing'' (sic) initiative is not about saving
money for the taxpayers; it is about replacing Federal employees with
contractors and shifting money to the private sector. The
administration's refusal to help already overwhelmed agencies do a
better job of conducting competitions fairly and administering their
contracts satisfactorily is highly illustrative of this point. The
threatened shift to a loosey-goosey ``best value'' competition process
in which contractors can submit bids that are less responsive to the
terms of the solicitation and more expensive than bids submitted by
Federal employees and still win contracts is also illustrative.
Office of Federal Procurement Policy (OFPP) Administrator Angela
Styles, who is responsible for the implementation and enforcement of
the OMB privatization quotas, now, according to Government Executive,
must ``caution against judging the (privatization quotas) program on
savings alone.'' (Emphasis added.) According to the March 2003 edition,
Ms. Styles insists that threatening to privatize the jobs of 850,000
Federal employees, either with competition under a privatization
process that is being rewritten so that it becomes more pro-contractor,
or without any competition whatsoever, ``can have a positive effect on
morale, and could even help attract young people to Government
service.'' Defending the indefensible can often require intelligent
people to say the most preposterous things. However, as savings from
the ``competitive sourcing'' (sic) initiative fail to materialize, we
can expect other highly subjective, to say the least, and conveniently
unquantifiable rationales to be served up for our consumption in the
months ahead.
Ms. Styles apparently considers public-private competitions to be
intrinsically virtuous, whether or not money is actually saved--but
only when the work in question is being performed by Federal employees.
While OMB is forcing agencies to review for privatization 850,000
Federal employee positions, only a tiny handful of contractor positions
will be reviewed for possible insourcing, even though contractors
acquire and retain almost all of their contracts without ever having to
compete against Federal employees.
The Department of Housing and Urban Development (HUD) is one of
only two agencies that will be reviewing work performed by contractors
for possible insourcing. In fact, HUD will get credit towards its
privatization quotas by reviewing work performed by contractors in the
area of home loan programs. DOD, however, is not reviewing a single
contractor job for insourcing, despite a much larger and more
unaccountable contractor workforce. This dereliction becomes even more
difficult to comprehend when we remember that 10 U.S.C. 129a requires
DOD ``to consider particularly the advantages of converting from one
form of personnel (military, civilian, or private contract) to another
for the performance of a specified job'' and DOD, in the person of
Under Secretary of Defense for Acquisition, Technology, and Logistics
E.G. ``Pete'' Aldrige, said in 2001, that ``we (may) have already
contracted out capabilities to the private sector that are essential to
our mission. . .''

B. As implemented, the OMB privatization quotas have profoundly
ugly class, race, and gender biases, and are systematically encouraging
agencies to place target signs on the backs of employees who are lower-
ranking, female, and members of minority groups.
For example, in the Department of Veterans Affairs (DVA), it is the
employees in building maintenance, food services, and laundries who
will be reviewed for privatization, rather than health care
professionals. In fact, OMB has directed that all agencies aggressively
review for privatization the jobs of blue-collar, clerical, and
maintenance workers. In the Department of Labor's Employment Standards
Administration's Office of Federal Compliance Programs, all but 2 of
the 72 employees categorized as candidates for privatization are GS-9
or lower. All of the employees categorized as inherently governmental
are GS-10 or above.
DVA managers have publicly expressed concern about the impact of
the OMB privatization quotas on the hard-won diversity of the agency's
workforce. According to a DVA manager quoted in Federal Times, ``(A)ny
significant effort to outsource jobs (in the functions listed above)
will have huge diversity implications.'' Moreover, the Department of
Transportation, in its comments on OMB's A-76 rewrite, reported the
disproportionate impact of the privatization quotas' direct conversions
on women and minorities. A consultant who has run Federal public-
private competitions for more than 20 years told Government Executive
that, ``(I)n looking at the affected workforce it is disproportionately
minority and female.''
Whether or not it is one of the intentions of those who designed
the administration's policy, it cannot be denied that the consequences
of the OMB privatization quotas will ultimately have the effect of
turning back the clock to the days when Federal agencies were managed
and staffed primarily by white males. This is a concern that has drawn
too little attention. Thanks to the hearing you are conducting here
today, Chairman Ensign, perhaps we can rectify this oversight.

C. Although there was an attempt to portray the final result of the
fiscal year 2003 effort to free agencies from the OMB numerical
privatization quotas as a compromise, such is not the case. The
administration agreed that numerical privatization quotas are bad
public policy--except when they are based on the administration's own
research and analysis. Report language requires OMB to submit a report
that provides such research and analysis.
The role of the General Accounting Office (GAO) in the defeat of
what began as a bipartisan effort to end the use of numerical
privatization quotas is disappointing. On the very day, July 24, 2002,
that the House of Representatives passed an anti-numerical
privatization quotas amendment, by a vote of 261-166, the Comptroller
General went out of his way to criticize the effort in the media.
Later, he elaborated on his criticism in an August 9, 2002, letter
to a Senate lawmaker, in which he insisted that the amendment would be
a ``blanket prohibition on the use of goals.'' As even the most cursory
reading of the language would have revealed, the amendment was in no
way a ``blanket prohibition.'' Rather, it would have prevented only the
use of numerical privatization quotas. Agencies could have used
research and analysis to establish non-numerical goals if the amendment
had been enacted. In fact, by preventing political appointees from
plucking numbers out of thin air and then imposing them on helpless
agencies, the amendment would have promoted the use of research and
analysis in the establishment of goals.
Moreover, it is well understood by any observer of the Federal
privatization scene that the OMB privatization quotas are not based on
``research and analysis.'' Representatives from GAO were in attendance,
and one even testified, at the March 6, 2002, hearing of the Senate
Governmental Affairs Committee hearing in which Ms. Styles said that
the privatization quotas had been established by the President
himself--who is unlikely to have had the time to perform any ``research
and analysis.'' Indeed, the Comptroller General, in his August 9
letter, correctly asserted that he had ``seen no evidence to indicate
that its numerical FTE goals were based on considered research and
sound analysis.'' Unfortunately, the inclusion of a vague ``research
and analysis'' requirement gives the administration an obvious out and
renders the amendment unenforceable.
Finally, the GAO's recommendation that any prohibition on the use
of numerical privatization quotas include an ``escape clause'' for
those quotas that are based on ``research and analysis'' was strangely
incomplete. The elaboration provided in the letter was vague
management-speak: ``a review of historical data and sourcing activity
in the public and private sector combined with an analysis of current
and emerging market trends. . .'' However, the GAO's recommendation did
imply that the OMB privatization quotas should take ``into account the
capacity of agencies . . . to conduct public-private competitions.''
Unfortunately, some Senators accepted the GAO's fundamentally
flawed criticism as a rationale for voting against the anti-numerical
privatization quotas amendment. Consequently, agencies are still being
forced to review for privatization, regardless of their needs and
missions, tens of thousands of Federal employee jobs, either with or
without public-private competition.

D. I will conclude this section of my testimony by providing you
with my own thoughts on how to reform the OMB numerical privatization
quotas so that agencies can, if appropriate, establish non-numerical,
agency-specific, equitable sourcing goals:

1. Don't use numbers. Numbers are a lazy person's short-cut,
an unworthy alternative to conducting the ``research and
analysis'' necessary to establish goals that promote good
public policy, as opposed to narrow private interests. AFGE
criticized the disastrous use of numbers to manage the DOD
civilian workforce during the Clinton administration. We'll
criticize the Bush administration when it perpetrates the same
blunder in the context of DOD privatization.
I would ask the Comptroller General to review a key passage
in his own August 9 letter in which he implies that the desired
``result (of a goal-setting process) would be the
identification of specific functions or activities that should
be subject to public-private competition.'' In other words,
sourcing goals, he believes, should be function- or activity-
based; and, of course, I would add, no numbers are needed to
establish such sourcing goals.
2. Take politics out of the process. Any non-numerical
sourcing goals should be designed by managers in the individual
agencies, not the politicals over at OMB. Since they are closer
to the action and have an institutional investment in seeing
that their customers are well-served, agency managers, although
far from perfect, are in a better position to establish
appropriate goals that complement agencies' actual needs and
missions. OMB politicals have no business in imposing
privatization quotas on agencies, let alone telling managers
exactly which jobs to review, as occurs regularly today. We
would do well to remember that OMB's expertise is limited to
the indelicate art of telling people what to do, not in
actually doing something.
3. Get rid of the corporate welfare. Direct conversions and
privatizations have no place in any sourcing goals. With all
respect to the Comptroller General, no amount of ``research and
analysis'' can justify taking jobs away from Federal employees
and giving them to contractors without public-private
competition. That does a disservice to Federal employees,
taxpayers, and customers.
4. Look beyond the usual suspects so that agencies can
establish non-numerical, equitable sourcing goals. DOD has
three different workforces: civilian, military, and contractor.
However, only the civilian and military workforces have been
looked to for savings. As Army Secretary Thomas E. White, of
all people, has acknowledged, ``In the past 11 years, the Army
has significantly reduced its civilian and military workforces.
These reductions were accompanied by an expanded reliance on
contractor support without a comparable analysis of whether
contractor support services should also be downsized.'' The
same is true for the rest of DOD. If HUD and the Department of
Energy can review contractor work for insourcing, there is no
reason DOD cannot do the same.
Just as it's important to track the work performed by Federal
employees, it is also important to track the work performed by
contractors. This means that agencies must have contractor
inventories analogous to the FAIR Act, so that managers can
determine, as Army managers are currently attempting to do so,
what work has been privatized already, particularly with
respect to whether it is actually inherently governmental work.
5. Any non-numerical, agency-specific, equitable sourcing
goals must take into account the need for a diverse Federal
workforce. Federal agencies should be model employers, rather
than reactionary employers who use, purposefully or not,
privatization quotas to roll back all of the progress made in
creating a Federal civil service as diverse and inclusive as
the American people.
6. Non-numerical, agency-specific, equitable sourcing goals
should also peacefully coexist with other, more proven
techniques--from labor-management partnerships to demonstration
projects to reorganizations and consolidations--to make
agencies' operations more efficient. The administration has
broken with bipartisan precedent and emphasized the OMB
Circular A-76 privatization process to the exclusion of all
other techniques.
7. Non-numerical, agency-specific sourcing goals that are
truly equitable cannot possibly be created unless both
contractors and Federal employees have the same rights to
challenge agencies' sourcing decisions. Currently, only
contractors have legal standing to take agencies to GAO and the
Court of Federal Claims--and not Federal employees and their
union representatives. It is manifestly unfair that the
administration has unleashed a tidal wave of privatization on
Federal employees without making sure that Federal employees as
well as contractors can both have their day in court.
8. Agencies should establish non-numerical, equitable
sourcing goals for one reason only: so that customers can
receive better services at the lowest possible costs.
Competitions are a means to an end; they are not an end in
themselves. As the costs and consequences of the privatization
quotas become more clear, and the resulting savings fail to
materialize, OMB officials are, as noted earlier, inventing
rationales for their failed policy that have nothing to do with
promoting the interests of customers or taxpayers. Well,
conducting competitions for the sake of conducting competitions
is not acceptable public policy. As OMB officials should know,
the adverse impact on workforce morale of a privatization
review, as well as the commensurate adverse impact on
productivity, is significant.
9. Agencies should also be required to conduct and make
public ``research and analysis'' before establishing any non-
numerical, agency-specific, equitable sourcing goals,
including:

a. whether the agency has the in-house capability to
satisfactorily perform these inherently governmental
functions: conducting the competitions,\1\ crafting the
most efficient organization plans, and administering
any resulting contracts;
---------------------------------------------------------------------------
\1\ According to the March edition of Government Executive, ``No
agency is implementing competitive sourcing without contractor support.
`There is no expertise left in government to do these competitions,' ''
says one agency official. (Emphasis added.) ``For niche contractors
that specialize in A-76, the initiative is big business,'' according to
one consultant. `` `The demand for consultant support is so great that
industry is strapped to meet it,' '' according to the consultant. ``
`The biggest problem is finding qualified people to do the work. . .'
'' Perhaps Ms. Styles meant that her privatization quotas would
encourage young people to grow up and become the A-76 consultants
necessary to implement her controversial initiative, rather than the
Federal employees who are needlessly subjected to it.
---------------------------------------------------------------------------
b. what experiences the agency, other Federal
agencies, or State and local governments have had in
the past with public sector and I or contractor
performance of the work in question particularly with
respect to costs; \2\
---------------------------------------------------------------------------
\2\ Obviously, the less experience with or information about an
agency has in relation to the work in question, the more cautious an
agency should be in shifting that work from one workforce to another.
---------------------------------------------------------------------------
c. to what extent the work has already been
privatized; \3\
---------------------------------------------------------------------------
\3\ As the Department of the Army has concluded, it is necessary to
determine whether commercial functions, ``when contracted out beyond a
certain level of reliance, increase overall risk to mission
capabilities and readiness.''
---------------------------------------------------------------------------
d. whether the agency can easily reconstitute an in-
house capability if the work is privatized;
e. whether the private sector market can provide
sufficient competition to avoid sole-source contracting
if the work is privatized;
f. what impact, if any, there would be on service if
the contractor were to provide its workforce with
inferior compensation; \4\ and
---------------------------------------------------------------------------
\4\ It is commonly acknowledged that the historic and systematic
failure of contractors to provide airport security screener workers
with adequate compensation jeopardized passenger safety and played a
significant role in the decision of Congress to contract in the
screening function.
---------------------------------------------------------------------------
g. what alternatives to privatization exist to make
the delivery of services more efficient and what are
the costs of those alternatives in relation to the cost
of conducting a competition and perhaps privatizing the
work.\5\
---------------------------------------------------------------------------
\5\ The consideration of alternatives to public-private competition
is imperative when we remember that it can cost taxpayers as much as
$8,000 to review just a single job for privatization.

Not a single agency has conducted that basic ``research and
analysis.'' Nor is there any indication that OMB or the agencies
feverishly implementing the privatization quotas will rectify that
dereliction, although the Army deserves some credit for thinking about
these issues, albeit in the service of the indefensible ``Third Wave''
initiative.
2. the rewrite of the omb circular a-76 privatization process
In the past, when I mentioned ``OMB Circular A-76,'' people's eyes
glazed over. Not any more, though. OMB's controversial rewrite of the
A-76 process has subjected this obscure directive to the much-needed
glare of publicity. In fact, 170 House and Senate lawmakers have
already signed on to a joint letter of objection to OMB about its
November 14, 2002, A-76 rewrite proposal; and others have sent their
own individual letters. I'm not surprised. The November draft is so
one-sidedly pro-contractor, it defies belief.
The Army's controversial ``Third Wave'' privatization initiative,
which was designed to review for privatization without any public-
private competition at least 210,000 Federal and military positions, is
widely viewed as being beyond the public policy pale. In fact, at least
publicly, it has even been implicitly repudiated by the Army.
In summarizing the comments I submitted to OMB last December, I
will argue that the A-76 rewrite has many similarities to the ``Third
Wave,'' is in some ways even more extreme, and could be used by the
Army or other services to implement the ``Third Wave.''
In other words, the A-76 rewrite is in many ways a stealthy
continuation of the discredited ``Third Wave'' by other means. It might
actually be called the ``Fourth Wave''--and, if implemented, it could
constitute the ``final wave'' for Federal employees, effectively wiping
out what's left of the in-house workforce. Triumphant contractors are
naturally exultant about the rewrite. In fact, as a result of the
changes proposed by OMB, contractors insist that they will win 90
percent of all A-76 competitions, instead of the 40-50 percent they are
winning now.\6\
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\6\ For example, James C. Fonta, Senior Vice President, Geotonics
Government Solutions, told contractors gathered at a Contract Services
Association of America event that merely switching A-76 to a ``best
value'' process and ``forc(ing) agencies to measure the true costs of
their work'' (i.e., double charging in-house bids for indirect
personnel costs, while not charging contractor bids for the same costs)
would ``dramatically decrease number of Gov't `wins' perhaps to 10
percent.''

A. Like the ``Third Wave,'' the A-76 rewrite would emphasize
privatization to the exclusion of all other methods of making the
provision of Federal services more effective, more efficient, and
reliable.\7\ Also like the ``Third Wave,'' the A-76 rewrite would
require agencies to review 100 percent of their in-house inventories
for privatization.
---------------------------------------------------------------------------
\7\ Actual Text (Daniels Memorandum, 4., page 1): ``. . . (A)ll
commercial activities performed by Government personnel should be
subject to the force of competition, as provided by this circular.''
---------------------------------------------------------------------------
This represents a radical shift in philosophy. The current circular
places the privatization process in its proper context, as just one
tool in a manager's toolbox. The process of improving service delivery,
according to the current introduction, page 1, ``must consider a wide
range of options, including: the consolidation, restructuring or
reengineering of activities, privatization options, make or buy
decisions, the adoption of better business practices. . .'' Even DOD
employs a ``strategic sourcing'' approach that involves a range of
options similar to those recommended in the introduction to the current
circular.

B. Unlike even the ``Third Wave,'' the A-76 rewrite would include
an explicit bias towards privatization.\8\
---------------------------------------------------------------------------
\8\ Actual Text (Daniels Memorandum, 4.b., page 1): ``Presume all
activities are commercial in nature unless an activity is justified as
inherently governmental.'' (Emphasis added.)
---------------------------------------------------------------------------
Per the A-76 rewrite, all work performed by Federal employees would
be considered appropriate for privatization.

C. Unlike even the ``Third Wave,'' the A-76 rewrite would
``rewrite'' through a mere circular the law that defines ``inherently
governmental'' in order to make it easier to contract out inherently
governmental work.\9\
---------------------------------------------------------------------------
\9\ Actual Text (Attachment A, E.I., page A-3): ``These activities
require the exercise of substantial official discretion in the
application of Government authority and/or in making decisions for the
Government.'' (Emphasis added) The addition of the word ``substantial''
rewrites the language in the FAIR Act that defines ``inherently
governmental.''

D. Unlike even the ``Third Wave,'' the A-76 rewrite does not
include an inventory to track the work performed by contractors, making
it impossible for agencies to determine which inherently governmental
work has been wrongly privatized, even though key figures in the
administration's privatization effort concede that this has already
---------------------------------------------------------------------------
happened.

E. Unlike even the ``Third Wave,'' which ostensibly calls for
reviewing work performed by contractors, the A-76 rewrite would subject
almost exclusively activities performed by Federal employees to
review.\10\
---------------------------------------------------------------------------
\10\ Actual Text (Daniels Memorandum, 4., page 1): ``. . . (A)ll
commercial activities performed by Government personnel should be
subject to the forces of competition.'' (Emphasis added.)
---------------------------------------------------------------------------
Despite the fact that contractors acquire and retain almost all of
their work without public-private competition and precious little
private-private competition, OMB has never applied such quotas to the
Federal Government's massive contractor workforce. For those keeping
score, at least 850,000 Federal employee jobs would be subjected to
privatization under the rewritten A-76. At the same time, only a tiny
handful of contractor workers would be reviewed. In DOD, not a single
contractor job is scheduled to be reviewed for insourcing.

F. Unlike even the ``Third Wave,'' the A-76 rewrite would not
establish a reliable and comprehensive inventory to track work
performed by contractors, although the new process combined with the
OMB privatization quotas will drastically increase the number of
taxpayer dollars given to contractors.
I will now discuss how the A-76 overtly encourages agencies to
directly convert work performed by Federal employees to contractors
without any public-private competition, a la the ``Third Wave.''

G. The rewritten circular retains various direct conversion methods
of giving work to contractors without public-private competition that
are included in the current circular, including special authorities for
smaller functions, whenever it can be claimed not to adversely impact
Federal employees, waivers, and business case analyses.\11\ Because of
the OMB privatization quotas, agencies would be encouraged to make use
of all of these explicit direct conversion methods.
---------------------------------------------------------------------------
\11\ For the actual text, please see Attachment C, A.1., 2., 8.,
and 9, pages C-1, C-2.
---------------------------------------------------------------------------
With respect to the authority for direct conversion of smaller
functions, OMB has failed to require agencies to employ the Department
of the Interior model that first performs a bare-bones cost comparison
between the existing in-house workforce and private sector firms
performing similar work before shifting any work to contractors.\12\
---------------------------------------------------------------------------
\12\ According to an April 8, 2002, GovExec.com article, ``The
Interior plan gives agencies a new option for holding public-private
competitions on functions involving 10 or fewer employees. Currently,
agencies may directly convert such small functions to the private
sector without giving civil servants a chance to compete for their
jobs. Interior's plan, by contrast, would allow Federal employees to
keep their jobs if they could perform the work at a lower cost than
private firms.'' While less than the ideal of allowing Federal
employees to put their best bid forward as a real Most Efficient
Organization, it's surely better than the wholly noncompetitive process
mandated by the rewritten circular.

The direct conversion authority where there is ostensibly no impact
on Federal employees has been significantly expanded so that it applies
without numerical limitation on the number of Federal employees
involved and could now also be used when ``all directly affected
Federal civilian employees within the agency . . . voluntarily
retire.'' This is surely smart politics, encouraging agencies to give
work to contractors when there might be no opposition from an in-house
workforce, but is it good for Government? Of course not. Divesting an
agency of a function through privatization without making a formal
make-or-buy decision simply because of its political expediency is
clearly bad for Government.\13\
---------------------------------------------------------------------------
\13\ This is the sort of loophole that caused the ``human capital
crisis,'' and the rewritten circular's expansion of that loophole would
only exacerbate that crisis. For a precedent, we need look no further
than the ruinous downsizing that has taken place in the Defense
Department's acquisition workforce; as the Inspector General reported
in 2000, DOD hired contractors to replace the civilian employees in the
acquisition workforce who ``voluntarily retired''--at higher costs.
Among the adverse consequences reported by multiple acquisition
organizations from the downsizing: insufficient staff to manage
requirements efficiently, reduced scrutiny and timeliness in reviewing
acquisition actions, increased backlog in closing out completed
contracts, and lost opportunities to develop cost savings initiatives.
The IG also reported that seven different acquisition organizations
experienced ``increased program costs resulting from contracting for
technical support versus using in-house technical support.'' All such
privatization occurred through direct conversions, the rationale being
that the Federal workforce had (been) retired. The results: inherently
governmental work was privatized and taxpayers paid more than before.
---------------------------------------------------------------------------
I will now discuss how the A-76 covertly encourages agencies to
directly convert work performed by Federal employees to contractors
without any public-private competition, a la the ``Third Wave.''

H. If managers responsible for conducting competitions for work
performed by Federal employees are unable to complete those
competitions within 12 months, the work can simply be given to
contractors.
``If you can't complete the (competition within 12 months) then you
are not prepared to do the work, so we will outsource it,'' thundered
OMB's David Childs, according to the November 18, 2002, edition of
Federal Times.
In response to intense criticism, Ms. Styles, in a January 28,
2003, article in The Washington Post, spun OMB's position, ``saying it
was `absolutely not' true that agencies who exceed the 12-month
timeframe would automatically lose the competitions to a private-sector
bidder. `Could one of the alternatives be that this work goes to the
private sector? Yes, it is,' she said. `But that's not the favored
alternative. It's not the presumed alternative.' ''
The ability of rank-and-file Federal employees to perform a service
and the ability of management elsewhere in the agency to conduct a
competition for that service are obviously apples and oranges. To say
that Federal employees should be converted without competition because
the agency didn't finish its competition on time is like saying that
all OMB staff should be fired because the Director didn't submit his
testimony on entitlement spending to the Senate Budget Committee on
time. No arbitrary deadline for the completion of a competition,
particularly one that involves a direct conversion of jobs to
contractors as a penalty, is ever appropriate, period.

I. Agencies should be able to convert work performed by Federal
employees to contractor performance without competition when management
does not punctually submit in-house tenders; \14\ however, instead of
canceling solicitations when contractors submit bad proposals or don't
submit their proposals on time, agencies are expected to rewrite their
solicitations to address the complaints of contractors.\15\
---------------------------------------------------------------------------
\14\ Actual Text [Attachment B, C.3.(9), page B-9]: ``When the in-
house bid is not submitted; the agency's privatization czar ``may: (1)
instruct the Contracting Officer to return received offers and tenders
and amend the solicitation allowing additional time for resubmission of
all offers and tenders, or (2) instruct the Contracting Officer to
proceed with source selection without the Agency Tender. ``
\15\ Actual Text: [Attachment B, C.3.(9)d, on page B-10]: ``When a
Standard Competition is attempted but private sector offers or public
reimbursable tenders are either not received; or those received are
found to be non-responsive or not responsible . . . the contracting
officer shall document, in writing, the following: (1) restrictive,
vague, confusing, or misleading portions of the solicitation; (b)
possible revisions to the solicitation to encourage participation; (2)
the reasons provided by sources for not submitting responses; and (3)
the reasons offers or tenders were either not responsive or not
responsible. The contracting officer and the source selection authority
shall evaluate the results of these discussions and propose a course of
action in a written document to the (agency's privatization czar). The
contracting officer shall provide a copy of this written document to
the Performance Work Statement Team, Agency Tender Official, and to the
public, upon request. . . (The agency's privatization czar) shall
evaluate the contracting officer's written recommendation and make a
written determination to either (a) revise solicitation or (2)
implement the (in-house bid).''
---------------------------------------------------------------------------
If the Agency Tender Official, a management official, fails to
submit the in-house tender by the deadline, the jobs of innocent rank-
and-file Federal employees, who are in no way responsible for the
mechanics of the privatization process, could be given to contractors
without any public-private competition. This is obviously unfair to the
affected workforce and to the taxpayers.
Because the OMB privatization quotas give agencies full credit for
completing direct conversions pursuant to OMB Circular A-76, the same
as if the jobs had been subjected to real public-private competitions,
agencies will have little incentive to submit thoughtful in-house
tenders in timely fashion. Why bother taking the time to craft the best
possible in-house tender when the agency can do no work at all and get
the same amount of credit, because OMB doesn't care whether the work is
competed or converted, as long as any work performed by Federal
employees is ultimately privatized?
I will now discuss how the A-76 rewrite requires Federal
employees--but not contractors--to undergo public-private competition
in order to perform or retain new work, segregable work, and existing
work.

J. Federal employees--but not contractors--must compete to perform
new work.\16\
---------------------------------------------------------------------------
\16\ Actual Text [Attachment A, A.2.b.(3), page B-2]: ``Agencies
shall use Standard Competitions to justify . . . (a)gency . . .
performance of a new requirement. A Standard Competition is not
required for private sector performance of a new requirement competed
(sic) in accordance with the Federal Acquisition Regulation.''

K. Federal employees--but not contractors--must compete when they
are doing exactly the same work as before, but the value of that work
increases by as little as 30 percent.\17\
---------------------------------------------------------------------------
\17\ Actual Text: [Attachment A, A.2.b.(4), page B-2]: ``Agencies
shall use Standard Competitions to justify . . . (a)gency . . .
performance of an expansion of existing commercial activities. An
expansion is the modernization, replacement, upgrade, or increased
workload of an existing agency performed commercial activity that
increases the operating cost of the activity by 30 percent or more . .
. A Standard Competition is not required for private sector expansion
competed (sic) in accordance with the FAR.''

L. Federal employees--but not contractors--must compete to continue
to perform work when their contracts expire; or agencies may simply
give such work away to contractors through direct conversions.\18\
---------------------------------------------------------------------------
\18\ Actual Text [Attachment B, C.5.b.(2), page B-16]: ``By the end
of the last performance period stated on the Standard Competition Form,
another public-private competition or Direct Conversion shall be
completed in accordance with this Circular.''
---------------------------------------------------------------------------
At the outset of this discussion, one point needs to be fully
understood. The rewrite of the circular applies only to the circular,
not the Federal Acquisition Regulation (FAR). However, the rewrite of
the circular inserts the FAR into the circular. Consequently, to the
extent the FAR itself has problems with respect to many issues
involving competition between and among private contractors to perform
the Federal Government's work--and it does--public-private competition
will now be burdened with those problems.
As Ms. Styles remarked at a House Armed Services Readiness
Subcommittee hearing last year,

``There needs to be some recognition that there are problems in
the private-private system for competition and FAR based
competitions. It's not a perfect system and we may be
exacerbating some of the problems when we try to apply the FAR
based system private-private competitions to public-private
competition.''

Although ``full and open competition'' is technically still the law
of the land, recent ``acquisition reform'' (sic) law (e.g., the Federal
Acquisition Streamlining Act and the Clinger-Cohen Act) has virtually
made ``full and open competition'' the exception rather than the rule
in awarding contracts, particularly with respect to service contracts.
There are so many exceptions to the rule that are technically
deemed to involve competitive procedures [e.g., use of Government-Wide
Acquisition Contracts (GWACs), multiple and single agency indefinite
delivery/indefinite quantity (ID/IQ) contracts, General Service
Administration (GSA) schedules, the higher dollar threshold and other
requirements for ``commercial requirements,'' etc.] that the ``full and
open competition'' standard is essentially dead. (Of course, it's
getting worse. The streamlined acquisition authority under Section 833
of the new Homeland Security Act allows any service to be deemed a
commercial item for purposes of Federal procurement laws.) Moreover,
many of these ``competitive alternatives'' are protest proof, meaning
that they are not even subject to administrative or judicial review.
Agency Inspectors General, the GAO, respected procurement judges,
and even OMB officials have bemoaned the largely non-competitive state
of Government contract awards.\19\ Here are some examples:
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\19\ Contractors still try to insist that there is competition
between contractors, albeit unpersuasively. At a March 6, 2002, hearing
of the Senate Governmental Affairs Committee, a contractor
representative insisted that ``Contractors, for instance, are subject
to a range of checks and balances, including continual competitive
pressures. In fact, some 75 percent of all services contracting
actions, and more than 90 percent of all information technology
services contracting actions, are competitively awarded. . .'' As AFGE
pointed out subsequently, this is a very misleading use of statistics
from the Federal Procurement Data System. Although the contract vehicle
(a.k.a., ``hunting license'') in a multiple award scenario may be
considered to be competitively awarded, funding is provided through
task orders. Such task orders through September 30, 2001, were
automatically classified as competitively awarded, regardless of the
circumstances. Although it is not possible to recreate the records to
determine whether task orders to multiple award service contracts were
competitively awarded, a DOD IG review indicated that an astounding 72
percent of 423 multiple-award task orders awarded in fiscal years 2000
and 2001 were awarded on a sole-source or directed-source basis.
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According to a 2000 report of the DOD Inspector General,
``(I)nadequate competition occurred for 63 of the 105 contract
actions'' surveyed.
Later that year, the GAO reported that most information technology
orders were sole-sourced. In fact, ``only one proposal was received in
16 of the 22 cases'' (or about $444 million of the total $553 million).
The Associated Press reported last year that the Federal
Government,

``bought more than half its products and services (in 2001)
without bidding or through practices that auditors say do not
fully take advantage of the marketplace. . . Concerns about the
Government's new (i.e., post-acquisition reform) style of
shopping are simply put: Buying without competition often means
the public treasury gets overcharged.''

Judge Stephen M. Daniels, Chairman of the General Services Board of
Contract Appeals, has declared that,

``Although some parts of the (1984 Competition in Contracting
Act) remain on the statute books, the guts have been ripped out
of it. Openness, fairness, economy, and accountability have
been replaced as guiding principles by speed and ease of
contracting. Where the interests of the taxpayers were once
supreme, now the convenience of agency program managers is most
important. Full and open competition has become a slogan, not a
standard; agencies have to implement it only in a manner that
is consistent with the need to efficiently fulfill the
Government's requirements.' It is now much easier to acquire
goods and services without competition. Notice requirements
have been reduced, particularly as the Government increasingly
fulfills its needs without conducting formal procurements. The
drive to have the Government present a single face to industry
has been sent into retreat: agencies have been given greater
discretion to procure in their own idiosyncratic ways,
Government-wide regulations have been discarded or diminished
in importance, and programs and whole agencies (the Federal
Aviation Administration being just the first) are being allowed
to procure under unique and sometimes vague rules and
procedures.''

Ms. Styles herself has also said that,

``Since the beginning of the (acquisition) reform movement,
over a decade ago, I have not seen a serious examination of the
effects of reform on competition, fairness, integrity, or
transparency. As a result, I think we are seeing some serious
competitive problems surface with the proliferation of
Government-wide contracting vehicles and service contracting.
``

Clearly, contractors are not always required under the FAR to
compete against one another to win or retain service contracts.
Consequently, while the rewritten circular will require Federal
employees to compete to perform new work and segregable work as well as
retain existing work, contractors will be able to acquire and keep such
work without ever having to compete against Federal employees or even
one another.
Let's look in particular at segregable work. Under the rewritten
circular, an automatic competition requirement kicks in for Federal
employees when the value of work that they are already performing
merely increases in value by 30 percent. What happens to contractors in
such circumstances? The FAR does not use the concept of percentage
increases in scope of work in order to determine whether a new
competition is required. Rather, the FAR and Government contract case
law use the concept of ``scope.''
For example, if operating a telephone servicing center is expected
to cost $10,000,000 but ultimately costs $15,000,000, this does not
necessarily mean that new work has been added. It could just be that
the original cost estimates were low, that the winning offeror low-
balled his bid, or that more effort was required than originally
anticipated. The general test of whether new work has been added is
whether the added work is within the original ``scope'' of anticipated
effort that the contractor was supposed to provide. Mere dollar value
increases in the work under contract does not constitute expanded scope
requiring a new competition. In practice, however, even if new scope is
added to a contract, this is almost always performed by the original
contractor. That's just a way of life in Government procurement. If the
contract is a high visibility contract, typically a sole source
justification will be written, with the justification stating that
``given the experience of the contractor in the work already performed,
it is the only source that can continue to `practicably' complete the
work in process.''
I will now discuss how the A-76 rewrite would hold Federal
employees far more accountable for failure than contractors.

M. When Federal employees are found in default, the work must
automatically be converted or competed; for contractors, however, it
could be business as usual.\20\
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\20\ Actual Text [Attachment B, C.5.c.(2), page B-16]: ``If an
agency, private sector, or public reimbursable provider fails to
perform to the extent a termination for default is justified; agencies
shall comply with the following: (a) for a private sector provider, the
Contracting Officer complies with the FAR Part 49; (b) for an agency or
public reimbursable provider, the head of the requiring organization
shall issue a notice to terminate and shall recommend; in writing, that
the (agency's privatization czar) approve either (1) a Direct
Conversion based upon a Standard Competition Waiver or (2) a Standard
Competition.''
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What happens to Federal employees under the rewrite is clear.
However, the consequences for defaulting contractors aren't quite so
dire. Per FAR Part 49, ``The following courses of action, among others,
are available to the contracting officer in lieu of termination (of a
contract) for default when in the Government's interest: (a) Permit the
contractor, the surety, or the guarantor to continue performance of the
contract under a revised delivery schedule. (b) Permit the contractor
to continue performance of the contract by means of a subcontract or
other business arrangement with an acceptable third party, provided the
rights of the Government are adequately preserved. . .''
Moreover, contractors can and do vigorously litigate to avoid
default.\21\ Federal employees and their union representatives, on the
other hand, have no such recourse.
---------------------------------------------------------------------------
\21\ ``How To Avoid & Overturn Terminations for Default,'' a
veritable Bible for contractors who have strayed from the path of
compliance, lists a variety of aggressive defenses that have been used
successfully by contractors to avoid default determinations, including
excusable delay, defective specification and impossibility, waiver of
contract due date, contracting officer's failure to follow procedural
requirements, contracting officer's failure to exercise discretion, and
contracting officer's abuse of discretion; and there are many more
defenses for specific types of contracts.
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I will now discuss six different ways the A-76 rewrite favors
contractors over Federal employees.

N. Agencies should provide much more justification under the A-76
rewrite before canceling an award to a contractor than when the work
has been won by Federal employees.\22\
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\22\ When Federal employees win the work but the agency wants to
cancel the solicitation, the contracting officer is merely required to
cancel in accordance with the FAR. However, when a contractor wins, the
agency's privatization czar must personally certify the cancellation.
But wait--there's more. The agency's most senior official must then
submit a detailed report to the OMB Deputy Director for Management, the
agency's third most senior official, that states the contracting
officer's cancellation decision was in accordance with the FAR. But
wait--there's still more. The agency's most senior official must also
justify to one of the most important officials in the Federal
Government's most powerful agency that the cancellation ``was clearly
in the public interest,'' ``provide the agency's rationale for
canceling the solicitation,'' and then state the ``approximate date for
reissuance of the solicitation. . .'' For the actual text, please see
Attachment B, C.2.a.(14), page B-7.

O. Under the A-76 rewrite, contractors--but not rank-and-file
Federal employees directly affected by privatization or their union
representatives--can participate in all appellate processes, to the
Administrative Appeal Authority, the GAO, or the Court of Federal
Claims.\23\
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\23\ Actual Text [Attachment B, C.6.a.( I), page B-17]: ``The
Administrative Appeal Process provides directly interested parties an
opportunity to have an independent agency official review the
Performance Decision. ``
``Directly interested parties'' is not defined in the Definition
of Terms. With respect to the in-house workforce, only the Agency
Tender Official is identified in the rewritten circular as a ``directly
interested party.'' Actual Text [Attachment B, B.1., page B-3]: ``The
ATO shall be considered a directly interested party.''
Directly affected Federal employees and their union
representatives would not be allowed to participate in this process.
Moreover, as the Agency Tender Official is a management official, it is
manifestly unreasonable to expect that he could act independently on
behalf of directly affected Federal employees in appealing to another
management official who would serve as the Administrative Appeal
Authority. Finally, it should be noted that the internal appellate
process applies only after the Performance Decision. There is no
provision for appeal of such important pre-performance questions as the
decision whether to use sealed bidding or negotiation, the choice of
evaluation factors and their weights, or an allegedly defective
performance work statement. How can an internal appellate process be
fair if it is forbidden to challenge the very ``ground rules'' of the
competition?
While directly affected Federal employees will be allowed only
representation by a management official who will determine entirely on
his own whether to appeal to another management official who is
forbidden to review most questions raised by the privatization process,
contractors, on the other hand, will still be allowed to appeal all
pre-Performance Decision and post-Performance Decision questions to the
GAO and the Court of Federal Claims. Moreover, per Attachment B,
C.6.a.(1), page B-17, contractors will still be able to participate in
the internal appellate process with respect to ``questions regarding a
private sector offeror's compliance with the scope and technical
performance requirements of the solicitation.''
The rewritten circular is needlessly punitive with respect to the
involvement of Federal employees in the appellate process. The current
circular allows employees 20 calendar days during which to file an
appeal. Per Attachment B, C.6.a.(2), page B-17, the submission period
is reduced to 10 working days. Given that Federal employees, whether or
not represented by unions, are less likely to have legal
representation, this change will have a disproportionately adverse
effect on the in-house workforce.

P. Under the A-76 rewrite, only the confidential nature of
proprietary information of the contractors' bids is protected.\24\
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\24\ Actual Text [Attachment B, C.6.a.(2), page B-17]: ``Where
private sector proprietary information is involved a redacted copy of
the appeal and decision documentation will be made available.''

Q. The only conflicts of interest addressed by the A-76 rewrite are
those that might conceivably benefit Federal employees in the
privatization process; the longstanding conflicts of interest which
demonstrably benefit contractors will continue to undermine the
integrity of the privatization process.\25\
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\25\ Excerpted Actual Text [Attachment B, D.2.a.(1), D.2.b.(1),
D.2.c.l., pages B-19-20]: ``To avoid any appearance of a conflict of
interest, members of the Performance Work Statement Team shall not be
members of the (In-House Bid) Team. Members of the (In-House Bid) Team
shall not be members of the Source Selection Executive Board''
As OMB officials know very well, the reason managers experienced
with privatization often had to play multiple roles in the process is
precisely because agencies employ so few of them. Because the rewritten
circular means more competitions and conversions but no more staff or
training, agencies will be forced to rely even more on contractors to
conduct the competitions, particularly with respect to writing
performance work statements and in-house bids.
Again, because the radical overhaul of the privatization process
is being accomplished only through a rewrite of the circular,
contractors emerge completely unscathed. As anybody with even a modicum
of experience with procurement understands, the privatization process
is rife with conflicts of interest that benefit contractors. FAR
Subpart 9.5, for example, purports to be designed to minimize
contractor conflicts of interest. However, it is largely full of empty
exhortations. Conflicts of interest arise when contractors recommend or
otherwise advise buying agencies to make additional purchases from the
contractors with whom the recommending contractors have business
interests. While the FAR tries to address blatant conflicts (e.g.,
contractors recommending themselves for jobs), the nature of modern day
government contracting is replete with contractor ``partnerships,''
``strategic relationships,'' and other arrangements in which various
contractors agree to help one another out--usually through various
subcontracting relationships. The rewrite of the circular raises the
very real prospect that contractors will be increasingly responsible
for evaluating the work of other contractors--contractors with whom
they have business interests at many levels. The inevitable conflicts
of interest and the resulting corruption have the potential to make
recent accounting and auditing scandals pale in comparison.

R. Under existing law and regulation, Federal employees--but not
contractors--would continue to be subject to a myriad of requirements
and obligations under the A-76 rewrite.\26\
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\26\ As the independent scholar Dan Guttman has written, Federal
employees, but not contractors, are subject to a variety of rules
``that address conflict of interest (e.g., 18 U.S.C. 208), assure that
Government activities are (with limits) `open' to the public (e.g.,
Freedom of Information Act), limit the pay for official service, and
limit the participation of officials in political activities.''
Despite this extraordinary effort to massively increase the
number of politically well-connected contractors on the Federal payroll
and so completely blur the appropriate and vital distinction between
public and private, OMB will make no effort to ensure that contractors
are as accountable to the American people as Federal employees already
are.

S. Under the A-76 rewrite, tenders submitted by Federal employees
must include ``all'' costs, even when they are irrelevant or have
already been counted, while contractors should be allowed to exclude
significant costs from their own proposals.
The calculation of costs has been an extraordinary obsession for
contractors through the years. They know that if they could ever
artificially inflate the cost of in-house tenders, they would win the
vast majority of competitions. In OMB, contractors have an ally which
is eager to help contractors finally fulfill this long-sought dream.
OMB has made much ado about ensuring that in-house tenders account
for all of their ``indirect costs.'' The existing circular already
requires in-house tenders to include such overhead costs. The rewritten
circular would require that in-house tenders be charged twice for the
same overhead costs.\27\
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\27\ Actual Text [Definition of Terms, page F-7]: ``Overhead is a
cost that is included in all cost proposals. The overhead used in cost
estimates submitted by agency or reimbursable sources is the OMB
required standard cost factor identified in Attachment E. This
standardized cost factor accounts for indirect costs that are
comparable to those included in private sector offers, represent costs
to the taxpayer that are not necessarily visible at the installation,
headquarters level or Department level, but are provided by the
Government's budget at an expense to the taxpayer. . .''
---------------------------------------------------------------------------
The 12 percent ``standardized cost factor'' for indirect costs in
the existing circular would be retained in the rewritten A-76.\28\
However, the rewritten circular would allow agencies to charge in-house
tenders for indirect costs a second time, under ``personnel costs.''
\29\
---------------------------------------------------------------------------
\28\ Actual Text [Attachment E, B.4.b., page E-11]: ``The 12
percent overhead factor is a rate established by OMB to represent an
overhead cost factor for all Federal agencies when performing Standard
Competitions . . . This overhead factor represents costs that are not
visible, allocable, or quantifiable to the agency, activity, or the
Most Efficient Organization (MEO, or in-house bid). Use of the rate
accounts for all management and support costs internal and external to
the agency not required on Line 1.''
A 1998 GAO report (NSIAD-98-62) provides information on the
origins of the 12 percent overhead that is charged to all in-house
tenders: ``Absent (actual cost data about in-house overhead), OMB
selected a single overhead rate of 12 percent, a rate that was near the
midpoint of overhead rates suggested by Government agencies and private
sector groups. Most Government and private sector groups (GAO)
contacted agreed that reasonable levels of overhead should be included
in A-76 cost estimates and, absent anything better, the 12 percent rate
is acceptable at this time.'' The report noted that the 12 percent rate
for ``(o)verhead was supposed to include two types of costs on a
marginal or proportional basis: (1) operations overhead, which includes
the costs of managing an organization that are not 100 percent
attributable to the activity under study, and (2) general and
administrative costs, which include the salaries and equipment, and
work space related to headquarters management, accounting and finance
support, personnel support, legal support, data processing support, and
other common support activities such as facilities maintenance.''
\29\ Actual Text [Attachment E, B.1.b.(2), page E-4]: ``Personnel
costs for labor that is not dedicated to the MEO but clearly have
responsibilities to the MEO are considered `indirect labor.' Indirect
labor includes, but is not limited to, personnel costs for MEO
management and oversight activities, such as managers and supervisors
above the first line of MEO supervision who are essential to the
performance of the MEO. Indirect labor also includes the labor of
individuals who are responsible for oversight and compliance actions
implicitly required by the MEO in order to comply with the solicitation
(e.g., supervision, human resources, comptroller, general counsel,
environmental, OSHA Act compliance management).''
---------------------------------------------------------------------------
Not only would the rewritten circular charge the in-house tender
twice for the same costs, but the definition of in-house indirect labor
costs is so broad as to ensure that any time an agency wanted to ensure
the privatization of a function under competition management could
easily manufacture the additional superfluous overhead costs.\30\
---------------------------------------------------------------------------
\30\ Actual Text [Attachment E, B.1.b.(2), page E-4]: ``The agency
shall include in the Agency Cost Estimate the cost of indirect labor to
reflect personnel who are responsible to manage, control, regulate,
preside over, oversee, or supervise MEO related activities but are not
dedicated to the MEO as a direct labor cost.'' With such a broad
definition, the in-house tender could be charged for the cost of
maintaining Air Force One because, of course, the President is
ultimately charged with the responsibility for ``managing, controlling,
presiding over, overseeing, and supervising'' the MEO. To belabor the
obvious, the functions in the agency that are being charged twice
against the MEO would in almost all cases need to exist, and thus
require the same resources, regardless of the MEO. Moreover, it must be
noted that the rewritten circular actually exacerbates the perverse
incentive to privatize work in order to reduce the pay and benefits of
those who perform work for the Federal Government by imposing redundant
and irrelevant indirect personnel costs on in-house tenders.
---------------------------------------------------------------------------
But it gets worse. Not only would the rewritten circular charge the
in-house tender twice for indirect labor costs, some of them wholly
irrelevant to the MEO, contractors would not even be charged for their
indirect labor costs.\31\
---------------------------------------------------------------------------
\31\ While contractors are charged with the cost of contract
administration, they are not charged with the indirect labor costs of
contract administration. For example, the costs associated with the
personnel responsible for paying the contract administrators, or the
cost of the human resources staff who hire the payroll staff, or the
security guards who keep safe the building in which the contract
administrators work, or the cost of the maintenance staff who keep
clean the facility in which contract administrators work, or the
managers of the contract administrators, or, in the words of the
rewritten circular with respect to in-house bids, all of the other
``personnel who are responsible to manage, control, regulate, preside
over, oversee, or supervise (contract administration-) related
activities but are not dedicated to the (contract administration
workforce) as a direct labor cost.''
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While the rewritten circular would charge in-house tenders with
costs not once but twice and even when such costs are irrelevant, OMB
is increasingly unwilling to charge contractors for their most basic
costs. This raises serious equity and efficiency issues in the context
of the circular and privatization generally.\32\
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\32\ One major factor in properly administering service contracts
is cost control. Without adequate cost control mechanisms in place,
ultimate contract costs, and consequently prices paid by the taxpayers,
can rapidly spiral upward. Although, much has been said about
performance-based service contracting, the facts reveal that
contractors continue to press Government agencies to award contract
types that minimize contractor risk and cost control.
With the exception of common commercially available off the shelf
services, cost evaluations and/or determinations play a significant
role in Government contract pricing and/or reimbursement decisions. The
simplest scenario is for cost-reimbursement contracts. For that
contract type, actual reimbursement of the contractor is made on the
basis of costs that have been determined to be allowable, allocable,
and reasonable in accordance with specific accounting conventions,
policy, and procurement regulations.
However, even for so-called fixed-price contracts, many times
initial cost evaluations and/or determinations are required when
estimating what a fair and reasonable price should be. In other cases,
cost evaluations and/or determinations are required to estimate the
pricing of ``changed'' or added work that occurs during contract
performance. In still other cases, cost evaluations and/or
determinations are required under fixed-price contracts in order to
effect profit and/or fee adjustments, make progress (i.e., financing)
payments, etc.
Traditionally, when cost evaluations were made, contractors were
required to submit cost or pricing data (i.e., certified pricing data).
Under the various acquisition reform (sic) laws, the need for formal
cost evaluations has not been reduced, but the form in which
submissions are made has been. Frequently, contractors are now
permitted to submit ``information other than cost or pricing data''
which is the same thing as cost or pricing data; it's just that the
cost data is no longer certified, which legally relieves contractors
from all manner of oversight. A contractor's certification must be that
the cost data submitted are current, accurate, and complete. If it is
later determined to be untrue, the Government can make a claim against
the contractor for defective pricing under the Truth in Negotiations
Act (TINA).
The latest incarnation of the phenomenon of contractors running
away from their costs is the rapidly increasing use of time and
material (T&M) and labor hour (LH) contracts. These contracts place
nearly all risk of cost control on the taxpayers, and substantially
reduce cost visibility. T&M/LH contracts are frequently touted by
contractors as an alternative to cost-reimbursement contracts.
Unfortunately, T&M/LH contracts are prone to even less cost control
than cost-type vehicles.
T&M/LH contracts are contracts in which hourly rates are paid by
the Government as services are rendered (e.g., $75 hour for IT
services). Added to these rates are any additional costs of material.
Contractors claim that T&M/LH contracts are frequently used in the
``commercial sector,'' thus, they should be used by the agencies.
However, the increasing use of T&M/LH contracts has nothing to do with
``commercial practice,'' rather it has to do with shifting performance
risk to the Government, and increasing profits for contractors. Under a
T&M/LH contract, a contractor only promises to use its ``best efforts''
to accomplish the work. Performance is not guaranteed. For example, if
a computer programming job is budgeted at 500 hours x $75/hour, and the
contractor does not complete the job within the hours specified, the
Government's only real recourse is to pay for more hours. Worse yet,
because contractors are asking that T&M/LH contracts be recognized as
``commercial''--a euphemism for no price protections, oversight or
auditing--the Government has tremendously reduced its ability to ensure
that taxpayers are getting a good deal. As FAR 16.601 has long stated''
A time-and-materials contract provides no positive profit incentive to
the contractor for cost control or labor efficiency.''
Recently, as a part of a rule ostensibly designed to increase
competition and accountability in DOD service contracting, OMB
initially tried to specifically require that use of T&M/LH contracts be
accompanied by audit and pricing protection clauses in order to ensure
that the Government was getting a good deal. In doing so, OMB was only
trying enforce an existing FAR provision (FAR 12.207) that restricted
use of T&M/LH contracts to circumstances in which audit and TINA
clauses are included in the contract award vehicle. Ultimately, in the
face of ferocious opposition, from information technology contractors
and their congressional supporters, particularly Representative Tom
Davis (R-VA), Chair of the House Government Reform Subcommittee on
Technology and Procurement Policy, OMB backed off its stance. It now
appears reasonably likely that OMB will support allowing use of T&M/LH
contracts without the safeguard provided by audit, TINA and Cost
Accounting Standards contract clauses--while at the same time insisting
the in-house tenders be charged twice for indirect labor costs, no
matter how irrelevant.
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The A-76 rewrite changes how costs are calculated to benefit
contractors in other ways as well:

Exclusion of the cost of a performance bond, which is
executed in connection with a contract in order to ensure
performance so as to protect taxpayer and agencies' customers
from the consequences of default, would give contractors an
unfair advantage.\33\
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\33\ Actual Text [Attachment E, C.1.d., page E-12] ``When a
solicitation requires the private sector offer to provide a performance
bond; the cost of the performance bond is excluded from the private
sector offer when entered on Line 7.''
---------------------------------------------------------------------------
Security clearances are another example.\34\ With respect to
security clearances for the Federal employee workforce, that is
a sunk cost, one that has already been amortized, which is not
the case with contractors.
---------------------------------------------------------------------------
\34\ Actual Text: [Attachment B, C.2.a.(12), page B-7]: ``The costs
associated with security clearance requirements shall not be included
on the Standard Competition Form for an agency tender, private sector
offer, or public reimbursable tender.''
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Phase-out costs are yet another example.\35\ The term
``phase-out plans'' does not appear in the rewritten circular's
``Definition of Terms.'' However, phase-out costs are
considered to include such significant one-time costs resulting
from the transfer or disposal of employees, equipment, and
facilities.\36\
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\35\ [Actual Text, Attachment B, C.2.a.(6), page B-6]: ``For a
Standard Competition, the Contracting Officer shall include in the
solicitation a requirement for private sector offers, public
reimbursable tenders and the agency tender to propose a phase-in plan
to replace the existing incumbent service provider. Phase-in plans
shall include details to minimize disruption, adverse personnel
impacts, and startup requirements. The length and requirements of the
phase-in must consider hiring, training, recruiting, security
limitations, and any other special considerations to reflect a
realistic phase-in plan. The costs associated with phase-out plans
shall not be required by the solicitation or calculated on the Standard
Competition Form.'' (Emphasis added)
\36\ For example, equipment that might have been used by the MEO
could become surplus and then be made available for transfer to another
in-house activity or to the contractor. In the event of transferring
material to a contractor, it may be appropriate to do a special joint
physical inventory, which would be a phase-out cost. Personnel, or
labor-related costs, would include certain one-time labor-related
expenses such as health benefit costs, severance pay, homeowner
assistance, and relocation and training expenses.
A conversion to contract may also require an agency to take
certain actions that would not be necessary if the activity had
continued to be performed by Federal employees. For example, it may not
be possible to terminate a rent or lease agreement without a penalty
fee, or it may be necessary to move materials that are not associated
with the activity under study to another location in order to complete
the transition. Moreover, there are costs of labor associated with the
transfer or disposal of equipment, property, or facilities. The
rewritten circular should clearly define the many costs associated with
phase-out and then count those costs against the proposals of the
challenging offerors.
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3. THE THREAT TO USE ``BEST VALUE'' IN DOD'S PUBLIC-PRIVATE
COMPETITIONS

Section 824 of the legislative recommendations submitted by DOD for
the fiscal year 2004 defense authorization bill calls for the end of an
objective, cost-based competition process. It would be replaced by the
controversial ``best value'' competition process, which allows
contractors to submit more expensive and less responsive bids and still
win contracts.
Contractors are not happy about losing almost three-fifths of the
public-private competitions conducted under OMB Circular A-76. Rather
than cut their costs and provide taxpayers with a better deal,
contractors want to junk the existing ultimately cost-based process and
replace it with a pro-contractor ``best value''. Process.
Instead of making the best decision for taxpayers, i.e., what costs
less, acquisition officers would be encouraged to use all manner of
subjective criteria to determine the winner of a public-private
competition process, including such whimsical notions as a contractor's
ability to respond ``flexibly'' to changing circumstances or the
contractor's use of ``innovative'' approaches.
``Best value'' would tilt the field of play even farther in
contractors' direction by allowing acquisition officials to ignore the
standards established in the solicitation in favor of the ``bells and
whistles'' included in the contractor's offer.
``Best value'' would also deny Federal employees the opportunity to
reformulate their offer in response to a contractor offer that exceeds
the standards in the solicitation. If a contractor includes a feature
in its bid that DOD thinks should be included in the solicitation, DOD
should be allowed to go back and revise that solicitation--and allow
Federal employees to reformulate their bid so that it includes that
feature.
Contractors note that ``best value'' has been used in private-
private competition. However, its use has been accompanied by
extraordinary controversy and litigation because of its intrinsic
subjectivity. Some of its most fervent critics are small business
contractors. It is precisely that subjectivity that makes a ``best
value'' process so dangerous in the context of public-private
competition. While it is not possible to systematically discriminate
against one group of contractors in favor of another group of
contractors, ``best value'' could be used systematically to
discriminate against Federal employees in favor of contractors,
especially when wielded by an avowedly pro-contractor administration
that is rushing to review for privatization 850,000 Federal employee
jobs.
Contractors know that, historically, ``best value'' competitions
between contractors have cost taxpayers more and taken longer to
complete. However, they try to justify the use of ``best value'' by
falsely asserting that A-76 currently doesn't allow for qualitative
improvements in service. Wrong. As currently written, A-76 allows
agencies, under a highly objective process, to establish the standards
they want met by Federal employees or a contractor, whether they are
the same as before or more exacting, and then choose the provider with
the lower cost. That's what's best for warfighters and taxpayers.
Unlike other agencies, DOD is protected from a ``best value''
process by 10 U.S.C. 2462 and 10 U.S.C. 129a. OMB is breaking with
bipartisan tradition and encouraging non-DOD agencies to use a pro-
contractor ``best value'' in public-private competitions. However, even
OMB acknowledges that there are ``special considerations'' that must be
taken into account with the use of ``best value'' in public-private
competitions and that its use in non-DOD agencies should be limited to
a pilot project and that there should be testing before wider
application is authorized. There is no reason for DOD to be the guinea
pig. If ``best value'' boosters are so sure their much-criticized
process is superior to objective, cost-based competitions, then let
them prove it through the experience of non-DOD agencies participating
in the OMB pilot project.
In the A-76 rewrite, OMB has created the worst possible ``best
value'' pilot project process, one that would maximize the possibility
of bias against Federal employees:

A. No guidelines regarding the use of subjective competition
processes, even though OMB acknowledges the need for caution.

B. No traditional preference for sealed bidding, which would
minimize management bias against in the in-house workforce.

C. No preference for the use of a lowest price technically
acceptable process in the event it can be shown why sealed bidding
absolutely cannot be used.

D. No limitation on the use of evaluation factors and subfactors,
both objective and subjective, in the ``best value'' process.

E. No requirement that the weights given to evaluation factors and
subfactors, both objective and subjective, be revealed before proposals
are submitted.

F. No requirement that Federal employees be given a chance to
reformulate their proposal if the contracting officer changes the
solicitation in the ``best value'' process.

G. No requirement that cost be emphasized in the weighting of
evaluation factors and subfactors.

H. The use of ``past performance'' is intrinsically biased against
in-house proposals.

Actual Text [Attachment B, C.2.a.(13), page B-7]: ``Solicitation
requirements for the following shall not apply to an Agency Tender: . .
. (6) past performance criteria.''
FAR 15.304 requires evaluation of ``past performance'' in all
competitions, although it provides an out if a contracting officer
``documents the reason `past performance' is not an appropriate
evaluation factor for the acquisition.'' The FAR also provides that if
an offeror has no record of ``past performance,'' the offeror ``may not
be evaluated favorably or unfavorably'' on this factor. Historically,
GAO has allowed agencies broad discretion in determining how to
proceed. GAO has held that a Source Selection Authority, in making a
trade-off decision, can weigh the value of a good (or poor) ``past
performance'' rating against a neutral rating and conclude that the
proposal with a good ``past performance'' rating offers better value
than the offeror with a neutral rating. If this rule applies here, in
competitions where cost and other technical factors are close, a
contractor's good ``past performance'' rating can make the difference
and result in a decision in favor of the contractor on the basis of a
factor not applicable to the agency. In other words, the approach to
``past performance'' could skew the evaluation results against the in-
house bidder.
4. the army's ``third wave'' privatization initiative
In his October 4, 2003, memorandum, Secretary White set in motion a
process he called ``Third Wave,'' by which the agency would review for
privatization, without any public-private competition, as many as
210,000 Federal and military positions. Some of the non-competitive
privatization mechanisms endorsed by Secretary White, such as employee
stock ownership plans and transition benefit corporations, were even
criticized by OMB officials. Other options mentioned by the Secretary
were quasi-governmental corporations and the ever-popular ``negotiate
with private sector.'' The one thing all of these options have in
common is that they are not provided for in law. Even the Secretary
acknowledged that ``Most of these alternatives to A-76 will require
enabling legislation that does not exist yet.''
What a difference 3 months make. Come January 2003, the Army's
privatization-related congressional correspondence included this
paragraph:

``The implementation of competitive sourcing will adhere to
congressionally approved process, e.g., A-76. The only known
exceptions to the requirement for public-private competition
are where 10 or fewer civilian employees perform the function
where preferential procurement programs are used, and where
legal restrictions against using the A-76 process apply to the
function.''

Whether the Army will keep this assurance obviously remains to be
seen. However, there are several disturbing questions that need to be
answered:

A. Is the Army out there all by itself?
Some would write off the Army's preference for corporate welfare-
style privatization as anomalous. However, senior DOD officials have
expressed similar preferences. For example, on March 3, 2002, Michael
Wynne, the Principal Deputy Under Secretary of Defense for Acquisition,
Technology, and Logistics, wrote in his written testimony, that the
department intended to ``divest'' itself of ``non-core'' work. When
asked what he meant, Mr. Wynne said that ``divestiture means that you
transfer assets to the private sector, and, actually, they absorb the
assets in line and the employees as well, as is different, if you will,
than competitive outsourcing where you only compete the positions. You
might want to just transfer the assets and essentially convert that
activity to the private sector.''

B. Where does OMB stand on ``Third Wave''-style privatization?
While offering criticisms of parts of the ``Third Wave,'' OMB
officials refused to repudiate the initiative, notwithstanding that it
was completely contrary to the administration's ostensible emphasis on
``competitive sourcing.'' In fact, when I challenged Ms. Styles to
condemn the wholly anti-competitive nature of the ``Third Wave,'' she,
according to GovExec.com, ``refused. `It's quite an exaggeration to say
it's a privatization effort,'' she said. . . Styles had no reservations
about the size of the Army plan. `It certainly is up to the departments
and agencies to determine how they want to do it,' she said.'' \6\
---------------------------------------------------------------------------
\6\ One can only assume Ms. Styles means that it ``is certainly up
to agencies to determine how they want to do it'' when agencies want to
do even more privatization than OMB has directed. Agencies that do less
have had, according to Coast Guard memoranda, their in-house workforces
slashed in retaliation by vengeful OMB privateers.
---------------------------------------------------------------------------
Moreover, at the 2002 hearing in which Mr. Wynne extolled the
benefits of divestiture, Ms. Styles did not rebuke him. When the
discussion turned to how DOD would hit its 50 percent privatization
quota after achieving its 15 percent privatization quota, Ms. Styles
said purposefully, ``there will be appropriate elements of competition
for the next 35 percent.'' (Emphasis added.) What does that mean?

C. What changes might OMB and DOD seek that would allow the Army to
pursue the ``Third Wave'' and still keep its pledge?
For example, it is rumored that DOD will submit in its next fiscal
year 2004 legislative package a proposal to gut or even eliminate 10
U.S.C. 2461, which, however inadequate, does ensure that Pentagon
privateers cannot simply give away the department to contractors.
Moreover, OMB has never repudiated its September 2001 proposal to
drastically expand the preferential procurement program to allow small
businesses to receive contracts of any size to perform work that is
currently performed by Federal employees without any public-private
competition.
However, it is actually OMB's ongoing rewrite of the A-76 process
that will allow the Army--and the other Services as well--to ride the
anti-public-private competition ``Third Wave.'' The rewrite expands on
the already-existing direct conversion authorities to give work
performed by Federal employees to contractors without public-private
competition. More importantly, as noted earlier in my testimony, the
rewrite creates hidden direct conversion authorities particularly if
competitions are not concluded within arbitrary deadlines. A DOD
official, who appeared at a recent American Bar Association event in
Annapolis, MD, confirmed during a question-and-answer session that all
of the Services are interested in the direct conversion possibilities
of the arbitrary competition deadline. In other words, the A-76 rewrite
is in many ways a stealthy continuation of the discredited ``Third
Wave'' by other means.

5. THE THREAT TO ELIMINATE IN-HOUSE DEPOT MAINTENANCE AND ARSENAL
CAPABILITIES

Section 324 of the defense authorization bill would lead to the
destruction of any in-house depot maintenance capacity by radically
changing the 50/50 rule governing the split of depot maintenance
workload between Federal employees and contractors. Under the
Pentagon's proposal, contractors would keep their 50 percent of the
depot maintenance workload and then be given a chance to gradually take
away the 50 percent of the work performed by Federal employees.
Without that safeguard DOD would have privatized all public sector
depot maintenance workload long ago. Although chronically underfunded,
the depots are the one part of DOD that has managed to escape the
devastating consequences of DOD's self-inflicted ``human capital
crisis,'' precisely because of rules like 50/50, that ensure a strong
in-house capability.
It is important to note that even with the necessary statutory
safeguards, depot employees are still better service providers than
their contractor counterparts. According to GAO, depot prices are lower
for 62 percent of items repaired by both depots and contractors.
The Pentagon's recommendation ignores the reason for having public
sector depots--so the warfighters always have a reliable capability to
maintain national security-critical hardware that can respond instantly
to ever-changing geopolitical conditions.
Some may try to sell this unwise proposal by arguing that the only
way depots will be able to bring more work on site, and thus make the
installations less vulnerable to the next round of base closure, will
be through public-private partnerships, and that the only way to
establish such partnerships is by gutting the 50/50 rule. Wrong. Per 10
U.S.C. 2474, work performed by contractors at depots with Centers of
Industrial and Technical Excellence, which were established by Congress
precisely to encourage public-private partnerships, doesn't count
towards the 50/50 rule. Consequently, there is no rationale for gutting
the 50/50 rule other than destroying the in-house depot maintenance
capacity.
AFGE is also concerned about the privatization threat faced by the
Army's arsenals. Per 10 U.S.C. 4532, Secretary White could ``abolish
any United States arsenal that he considers unnecessary'' without any
congressional input. Given the Army's ``Third Wave'' privatization
bias, it is imperative that such unfettered discretion be restricted,
perhaps in the same fashion as Congress restricted Secretary White's
discretion to privatize, divest, or transfer the Corps of Engineers in
the Fiscal Year 2003 Omnibus Appropriations Bill.

6. THE THREATENED INTRODUCTION OF THE SERVICE ACQUISITION REFORM ACT

Perhaps the most anti-taxpayer bill to be considered in the House
of Representatives during the last Congress was the Service Acquisition
Reform Act (SARA, H.R. 3832). The legislation was strongly criticized
by agencies' inspectors general; public interest groups such as the
Project on Government Oversight; and several unions, including the
American Federation of Government Employees, American Federation of
State, County, and Municipal Employees, International Association of
Machinists, National Association of Air Traffic Controllers, National
Treasury Employees Union, Professional Airways Systems Specialists, and
AFL-CIO Professional Employees Department.
Last year's SARA was a lengthy service contractor wish-list that
would have, among other things, drastically reduced Government
oversight of service contractors, created many additional possibilities
for service contractor conflicts of interest, substantially reduced
competition between service contractors, and significantly increased
the losses to taxpayers from service contractor waste, fraud, and
abuse. SARA is being redrafted, and it is rumored that the legislation
may have found something it didn't have in the 107th Congress: a Senate
sponsor. If the SARA to be introduced in the 108th Congress is anything
like its predecessors, keep your hands on your purses and wallets at
all times.
Among other things, the SARA legislation would have encouraged the
use of risky share-in-savings contracts, which are proven losers and
completely antithetical to public-private competition. Share-in-savings
contracts are grievously mislabeled since they require agencies to
borrow from contractors at high interest rates in exchange for
services. This form of contracting has been criticized for locking
agencies into long-term contracts that prevent shifting to superior
contract or in-house options. Moreover, according to Ms. Styles' own
testimony, although in existence for more than 25 years, share-in-
savings contracts have not produced any savings.
A contractor lobbyist, who is close to the bill's House sponsor,
had touted the bill in testimony on the basis of a share-in-savings
contract at the Department of Education (DoEd). It wasn't until
recently that an Inspector General (IG) investigation determined that
DoEd's experience with share-in-savings was actually disastrous.
According to the IG, ``Performance measures were so inadequate that it
could not be determined if the contractor was in compliance with the
terms of the contract. There was no annual comparison of costs under
the agreement to an outside market to determine whether the agreement
actually provided the ``best value''. Even more alarming, an overstated
baseline ``create(d) a larger contractor payment than is actually
earned.''
Finally, the use of share-in-savings is indisputably anti-public-
private competition and clearly promotes privatizing the jobs of
Federal employees without giving them a chance to compete. At the last
moment, as an amendment to a popular piece of E-Government legislation,
a controversial pilot program was established late in 2002 allowing
agencies to undertake a handful of share-in-savings contracts. These
experiments will surely be the subject of very thorough scrutiny
because of the serious threat each and every one of them poses to the
interests of taxpayers.

7. THE RELEVANCE OF THE REPORT FILED LAST MAY BY THE COMMERCIAL
ACTIVITIES PANEL

A. Introduction
I found the Commercial Activities Panel (CAP) experience to be
perhaps my biggest professional disappointment. I was naturally
apprehensive about serving on a 12-member panel that was dominated by
pro-contractor interests, including 4 administration representatives
and 3 representatives from the contractor community. However, I chose
to serve because of the assurance from Senator Carl Levin (D-MI), one
of the co-creators of the panel, that the Senate Armed Services
Committee would not take up a CAP recommendation that did not represent
a consensus.
I could have used that assurance as an excuse to take a never-give-
an-inch, hard-line approach in the panel's deliberations, but I did
not. As Ms. Styles noted in her additional comments to the CAP report,
``I commend the willingness of the four panel members that did not vote
in favor of the final report to seriously and thoughtfully consider
significant changes to the process for public-private competition.
Indeed, I agreed with several elements of the counter proposals
initiated by these panel members.''
You read that last sentence right. There were actually several
important points, at least at that point in time, on which AFGE and OMB
might have been able to establish a basic consensus. (Please see
Appendix I for one consensus proposal discussed by AFGE and OMB.)
Unfortunately, Ms. Styles' willingness to look for common ground was,
alas, not shared by the other seven members of the majority, and the
final result was a harshly polarized panel that could agree on only 10,
vague and often vapid principles and disagree sharply on the actual
recommendation.
I found the experience so professionally disappointing because the
panel constituted a wasted opportunity. If both sides to this important
public policy question had been more equitably represented, I believe
the outcome could have been different. Similarly, even with a pro-
contractor majority, I think a more satisfactory outcome might have
been achieved if there had been a realization that a recommendation
providing for incremental change with broad support was better than a
recommendation for radical change with the support of only the
majority.
I understand that there will be an effort to reassemble the panel
in May to examine what it has wrought. Unfortunately, for those who wax
nostalgic, there is far less to the CAP's legacy than meets the eye.
The panel's report has faded into irrelevancy, with OMB officials using
the parts in the A-76 rewrite they like and coldly discarding the parts
they don't like. To be perfectly honest, had there never been a CAP,
OMB's A-76 rewrite wouldn't look any different. It was clear from the
start that OMB officials knew what they wanted to do; they didn't look
to a panel of outsiders for direction.
That being so, I commend the chairman for doing the best he could
with a very difficult assignment. I also appreciated the opportunity to
discuss important public policy issues with such a distinguished group
of Americans. While we were unable to agree on a recommendation, nobody
can say we didn't try to work together in an ultimately unsuccessful
attempt to reconcile our very serious differences.
In any event, would anyone be surprised if a bunch of contractors
and their friends in an avowedly pro-contractor administration got
together and came up with a recommendation for making the service
contracting process even more biased in favor of contractors? Of course
not.
That's exactly what happened. The CAP, with a solid majority of
pro-contractor representatives, quite naturally served up a
recommendation that would benefit contractors, switching from an
objective, cost-based public-private competition process to an
explicitly subjective one based on the FAR, known as ``best value''.
The members of the pro-contractor majority were unable to change the
mind of any panelist that did not join the CAP sharing their point of
view. Of course, that won't stop some from touting the pro-contractor
panel's pro-contractor recommendation as one that would, in the words
of one contractor panelist, ``offer a path to the development of sound
sourcing policies for the Federal Government.''
Well, they have their work cut out for them. After all of that time
and all of that money, the panel did little more than dust off a FAR-
based ``best value'' proposal that has been on contractor wish-lists
for years, one which had even been categorically rejected by the
Clinton administration just 4 years ago when contractors strove,
unsuccessfully, to attach it to the defense authorization bill. Anyone
who has watched the crisis in Federal service contracting grow over the
last 10 years knows that the Clinton administration was aggressively
pro-contractor, and that its officials were completely possessed by the
spirit of ``acquisition reform.'' However, even Clinton administration
officials, as eager as they were to cater to contractors and experiment
with procurement procedures, wanted nothing, absolutely nothing, to do
with FAR-based public-private competitions, and FAR-based ``best
value'' public-private competitions in particular.
I was quite surprised by the contention made in last year's House
Readiness Subcommittee hearing on the CAP report that the panel did not
disproportionately represent pro-contractor interests. Only three
members of the panel were specifically dictated for membership by the
statute which established the CAP: the Comptroller General or his
designee, a DOD official, and an OMB official. The other nine panelists
were chosen at the discretion of the Chair.

Panelists from the Bush administration (4)
E.C. Pete Aldridge, DOD (required appointment)
Kay Coles James, Office of Personnel Management (discretionary
appointment)
Angela Styles, OMB (required appointment)
Stephen Goldsmith (discretionary appointment)

Stephen Goldsmith, a discretionary appointment, is identified on
the CAP report's inside cover as being the Senior Vice President of
Affiliated Computer Services. Not until the Appendix J is it revealed
that Mr. Goldsmith ``served as chief domestic policy advisor to the
George W. Bush presidential campaign.'' The truth is, actually, a
little more interesting. Mr. Goldsmith has been frequently mentioned as
an appointee to a senior position in the Bush administration, often the
Deputy Director for Management at OMB, which is responsible for
outsourcing policy. In fact, Mr. Goldsmith, as a Bush campaign
official, was the principle designer of the outsourcing policy
currently being pursued by the Bush administration. Moreover, as the
Mayor of Indianapolis, Mr. Goldsmith privatized nearly 70 public
services, and was a fervent supporter of the anti-taxpayer policy of
privatization-in-place, which has even been criticized by the GAO.
While still mayor, Mr. Goldsmith testified in favor of the Freedom From
Government Competition Act, a measure so replete with pro-contractor
pork-barrel that it was eventually emphatically rejected by Republicans
and Democrats alike. Therefore, it can be said that Mr. Walker actually
picked four representatives from the pro-contractor Bush
administration, only two of them required by statute.

Panelists from the Contractors (2)
Stan Soloway, Professional Services Council
Marc Filteau, Johnson Controls
Additional Pro-Contractor Panelist (1)
Frank Camm, Rand Corporation

Mr. Camm, as discussed in his own biography in Appendix J, is an
employee of the Rand Corporation, known informally as ``DOD's Think
Tank,'' and has advised DOD for most of the last quarter-century about
how ``to improve services acquisition policy.'' For example, in his
Rand monograph ``Expanding Private Production of Defense Services,''
Camm opines that ``Current DOD contracting practice severely limits
DOD's ability to follow the commercial move toward increased
outsourcing. Contracting reform could help DOD overcome a number of
important barriers to expanded outsourcing.'' Interestingly, in the
comprehensive 55-page pro-contractor paper, Camm wrote virtually
nothing at all about public-private competition. When he did mention
the prospect of allowing DOD civilian employees to compete in defense
of their jobs, however briefly, he quickly dismissed public-private
competition as ``a tricky game (which) often fails.''
Mr. Chairman, AFGE has never contended that the 7 pro-contractor
panelists appointed by Mr. Walker to the 12 member-CAP, only 2 of whom
were specifically required by statute, were unqualified, failed to
conduct themselves honorably, or neglected to aggressively represent
pro-contractor interests. Nor has AFGE contended that Mr. Walker was
prevented by statute from exercising his discretion to impose a pro-
contractor majority on the panel. Reasonable people can disagree about
whether the use of discretion was consistent with the statute's
requirement to ensure ``fair representation.'' There is, however, one
point on which reasonable people absolutely cannot disagree: that
discretion was used to impose a pro-contractor majority on the panel.
Consequently, nobody should be surprised that the CAP produced a pro-
contractor recommendation.

B. How the CAP report should be characterized
At a House hearing last year, the CAP Chairman said that there were
only two ``primary differences'' between the panel's majority and
minority. However, of the two differences mentioned, one is misstated
and the other is minimized. As for all of the differences omitted, more
later.
1st ``Primary Difference'': ``. . . the recommendation as to
whether or not cost should be the driver for all competitive sourcing
decisions. The cost is important, but cost is not everything.''
This is not now nor has it ever been the position of the minority.
Any well managed cost-based competitive process, including OMB Circular
A-76, explicitly takes into account quality and reliability. AFGE has
contended that agencies should be able to decide what services they
want, determine whether the offerors can provide the services they
want, and then decide in favor of the offeror who can do that work for
the least cost to the taxpayers. This allows agencies to secure the
highest quality services at the lowest possible prices. It is not
making ``cost everything.''
2nd ``Primary Difference'': ``Second, the number of times that
Congress should be required to act in order to deal with this issue.''
This is a misleading reference to the fact that the minority
insisted that any alternatives to the traditional public-private
competition process be tested and evaluated before being implemented,
preferably with the involvement of Congress. The majority demanded that
the controversial and unprecedented FAR-based ``best value'' process be
implemented ``immediately'' for every single agency other than DOD--
without any involvement on the part of Congress--and that Congress
``immediately'' pass legislation for DOD to implement a FAR-based
``best value'' process, which has been repeatedly rejected by
Republican and Democratic administrations as well as Republicans and
Democratic Congresses. Well, that's a rather significant difference.
We would also like to take the opportunity to review the proposals
formally submitted by AFGE during the panel's deliberations.

1. Ensure the rigorous application of cost accounting standards.
Result: Included in Principles, but not the Recommendation.
2. Allow agencies to use capital budgeting, like businesses and
many state governments. Result: Rejected.
3. Forbid the use of privatization-in-place, a controversial
mechanism that has even been criticized by GAO. Result: Rejected.
4. Expand the Army contractor inventory to include all of DOD,
given the principle ostensibly designed to ensure that inherently
governmental work is performed by Federal employees. Result: Rejected.
5. Ensure the viability of an effective in-house workforce, using
the 50/50 depot maintenance safeguard as a precedent, given the failure
to prevent DOD from managing its workforce with arbitrary personnel
ceilings, which has resulted in what GAO calls a ``human capital
crisis.'' Result: Rejected.
6. End the abuse of arbitrary personnel ceilings. Result: Included
in Principles, but not the Recommendation.
7. End the Native American direct conversion authority, given the
majority's ostensible opposition to contracting out without
competition. Result: Rejected.
8. Actually treat agencies like businesses and allow Federal
employees to bargain over wages and benefits. Result: Rejected.
9. Strengthen the requirement to consult with bargaining unit
employees during a competition, conversion, or privatization situation.
Result: Accepted, but only in the context of a competition, despite the
fact that much contracting out occurs without the work actually being
competed.
10. Enforce the law requiring DOD to consider bringing work back
in-house. Result: Rejected.
11. Repudiate the use of the OMB outsourcing quotas. Result:
Accepted in Principles, but not the Recommendation; already repudiated
by the administration and its contractor allies.
12. Eliminate the use of direct conversions. Result: Rejected,
notwithstanding much rhetoric about the importance of public-private
competition.
13. Strengthen the civilian acquisition workforce. Result:
Rejected.
14. Ensure that contractors are as accountable to the American
people as Federal employees (e.g., Freedom of Information Act). Result:
Rejected.
15. Borrow the TRAC Act's comprehensive and reliable cost-tracking
processes, given GAO's assertion, as part of its ``high risk'' series,
that ``DOD continues to experience significant challenges relating to
contract management, including improving oversight and accountability
in the acquisition of services. . .'' Result: Rejected.
16. Fix the holes in the Service Contract Act, which have nothing
to do with its enforcement, that leave more than two-thirds of the
Federal contractor workforce unprotected. Result: Rejected.
17. Provide Federal employees and their unions with standing, just
like contractors. Result: Explicitly accepted only for Federal
employees, not their unions.
18. Exclude wages and benefits from the competition process so that
it concentrates on staffing levels and delivery methods. Result:
Rejected.
In summary, 13 of AFGE's common-sense recommendations were
rejected, period. Two AFGE recommendations were accepted, albeit very
incompletely. Two other recommendations were included only in the
principles, but not the report's all-important recommendation. One
recommendation was included in the principles, but not the report's
recommendation, and has already been repudiated by the administration
and the contractors.

It was said by the chairman at last year's House Readiness
Subcommittee hearing that ``the one thing I can tell you for sure is
that the A-76 process does not meet the principles agreed to by the
panel. It does not meet it.''
While AFGE's testimony deals with this in much greater detail later
on, we are compelled to correct this contention in an abbreviated
fashion at this point of our testimony. First, the majority claimed
that A-76 was too complicated. However, as proof, they could only point
to a higher sustain rate for A-76 proposal protest decisions than for
proposal protests generally. Unfortunately, that conveniently ignores
the fact that the circular, as an objective process, is eminently
easier to litigate against than the FAR because the latter process'
subjectivity places most agencies' decisionmaking beyond judicial
review.
Then the majority contended that A-76 was unequal and unfair.
Again, however, they could only point to one example of the circular
being inequitable and then admitted that the problem, to the extent it
actually was one, could easily be corrected, and, indeed, included such
a fix in the report's recommendation.
Finally, they turned their attention to A-76's ``best value''
process. Unable to produce even a single example of how the circular's
``best value'' process had kept an agency from improving the quality of
its services, the majority nonetheless insisted that the process was an
abomination because it had been litigated--even though the replacement
process it was recommending had also been litigated. So, after giving
the majority its best shot and making the one minor change included in
the report, A-76 does in fact meet the principles because it easily
qualifies as a ``clear, transparent, and consistently applied
process.''
During the House Readiness hearing, the argument in favor of a FAR-
based ``best value'' process was summed up as follows: ``You've got to
have a process that everybody knows what the rules of the ballgame are
before you get started, including what the weighting is going to be on
various factors. You need to have appropriate appeals processes to
qualified, independent third parties who don't have a vested interest
in the result. Now, the panel recommendation, in conjunction with the
integrated FAR-based process, among other things, would say that since
Federal employees would be competing heads up with private sector
entities that they should have, not only know what the rules are up-
front, know what the criteria up-front, they should have the right to
appeal the GAO if for some reason they believe they have been harmed.
Now, we are a qualified independent third party. They don't have that
right now.''
Although the problems with the FAR-based ``best value'' process are
dealt with later in AFGE's testimony, we are compelled to offer several
corrections to the contentions made in those remarks. Offerors do not
in fact ``know the rules of the ballgame'' when the offers are
submitted. That's not the way the FAR-based ``best value'' process
works. Moreover, litigation cannot control the subjectivity inherent in
the FAR-based ``best value'' process.

1. By its very nature, the FAR-based ``best value'' is an
improvisational process. Judges need not decide on the specific
weights of the technical/cost factors until after the offerors
have submitted their proposals. That is, while they do have to
reveal whether cost or technical factors will predominate, they
do not have to reveal how much more important technical (or
cost) factors will count, or how much specific technical (or
cost) factors will count until after proposals have been
submitted. Moreover, the judges are not obligated to reveal all
subfactors related to the solicitation if they can argue that
the offerors should have known of their existence.
2. By its very nature, the FAR-based ``best value'' process
is a subjective process and judges include explicitly
subjective and even unnecessary factors. Moreover, the FAR-
based ``best value'' process includes no rules, standards, or
guidelines for the use of subjective factors.
3. By its very nature, the FAR-based ``best value'' process
encourages doubt and uncertainty as to what the agency is
attempting to buy until after the offers have been submitted.
In fact, judges actually award points to offerors for exceeding
the requirements set forth in the solicitation, which is why a
FAR-based ``best value'' process has historically been a burden
on taxpayers.
4. By its very nature, the FAR-based ``best value'' process
gives judges extensive discretion over the process, from
beginning to end, and the standards of review established by
the Comptroller General are difficult to overcome. That's the
principle reason why the GAO's docket has been more than halved
in less than a decade. Consequently, litigation cannot control
the subjectivity in the FAR-based ``best value'' process.
Moreover, the CAP report explicitly endorsed standing only for
Federal employees, not their unions. It is unrealistic to think
that the working and middle class Americans who make up the
Federal employee workforce could pool sufficient resources to
take on the corporate contractors, without the coordination of
their unions.
C. The case made by the CAP's majority
The essence of the CAP report is the recommendation that OMB
Circular A-76 be replaced by an unprecedented FAR-based ``best value''
public-private competition process. Rather than make an enthusiastic
case for a FAR-based ``best value'' process, or to address the
multitude of criticisms that have been leveled against the FAR-based
``best value'' process (because of how it has been used and abused in
private-private competitions), the panel's majority contented itself
with merely bashing A-76.
As the OMB witness noted at the House Readiness hearing, ``There
needs to be some recognition that there are problems in the private-
private system for competition and FAR based competitions. It's not a
perfect system and we may be exacerbating some of the problems when we
try to apply the FAR based system private-private competitions to
public-private competition.''
This blinkered approach was obviously to the advantage of the
majority. Although the essentially unchecked subjectivity that is
intrinsic to the FAR-based ``best value'' process has been as
documented as it has been criticized, that process has not been used
for public-private competitions. Such cannot be said of OMB Circular A-
76. Of course, any public-private competition process would be a
lightning rod for criticism because so much is at stake with respect to
Federal employee jobs and contractor profits, whether it is called A-
76, Z-67, or ``best value''.
Let us examine the criticisms, one by one, leveled against OMB
Circular A-76 by the panel's majority.

1. ``Complicated Process''
The majority insists that A-76 is an unduly complicated process.
Only one ``fact'' is offered in support of this assertion: although the
vast majority of A-76 decisions are not protested, the GAO's sustain
rate for the handful of A-76 decisions that are actually contested is
higher than the GAO's sustain rate for protests overall.
However, that is an apples-to-oranges comparison. Because it is an
intrinsically subjective process, it is difficult to successfully
challenge agencies' decisions in the context of the FAR. As noted by
Mr. Marshall Doke, Jr., the distinguished conservative legal scholar,

``The discretion granted to agencies in the selection process
precludes an effective policing system. The Comptroller
General, for example, generally reviews agency decisions in the
source selection process only to see if they have any
reasonable basis and are consistent with the solicitation. This
standard of review applies to determining requirements, minimum
needs, evaluation of proposals, cost/technical tradeoffs, the
source selection decision, and conflicts of interest. The
Comptroller General's standards of review are even more
difficult to overcome in decisions involving other issues. .
.''

GAO has a higher sustain rate for A-76 proposal protests because it
is a more objective process, and, thus more accountable to offerors--as
long as you're a contractor, of course.
After offering that misleading comparison, the majority insists
that the FAR would be an improvement on A-76 because the former
constitutes a ``common language.'' But then the majority acknowledges
that several significant chunks of A-76 would have to be added to the
FAR in order to allow this unprecedented regulatory hybrid to actually
work. That must mean that the FAR is not such a ``common language''
after all, or that A-76 is more of a ``common language'' than the
majority is willing to admit. Either way, the majority's argument
clearly cannot withstand scrutiny.
There is, however, no question that agencies need to do a better
job of conducting public-private competitions. There are two ways to
make sure that happens: a) ensure that public-private competition
before work is given to contractors actually occurs, instead of leaving
it as an option, so that agencies have an institutional investment in
developing the capacities to conduct efficient, effective, and
expeditious competitions; and b) provide agencies' acquisition
workforces with sufficient staff and training to better manage their
competitions.
Unfortunately, the majority refused to close loopholes allowing
work to be contracted out without any public-private competition, even
the notorious loophole that allows for the direct conversions of
hundreds of jobs at a time without public-private competition to any
firm claiming to be 51 percent Native American owned. Moreover, the
majority stubbornly opposed efforts to strengthen the Federal
Government's acquisition workforce. That is, when presented with
opportunities to undertake measures that would actually improve
sourcing practices, the majority ran in the other direction.

2. ``Inconsistent Application''
This is nothing more than a shorter version of the first point. In
fact, the first sentence in the first point asks whether A-76 is a
``consistently applied process.'' Owing to the flimsiness of its
arguments, perhaps the majority felt the need to pad its case by making
some of its points more than once.

3. ``Unequal and Unfair''
After acknowledging that differences are not necessarily
inequities, the majority insists that in some A-76 competitions one set
of evaluators reviews the private-sector offerors while another set of
evaluators reviews the in-house proposal, and that this might result in
the inequitable application of standards.
The majority offers no evidence to suggest that a protest is more
likely to be sustained when two different sets of evaluators are used
on an A-76 competition. Therefore, it cannot even be said that this
difference is actually an inequity. Moreover, GAO has not required
agencies to use the same evaluators to review both proposals and on
more than one occasion specifically upheld the use of different
evaluators (in the absence of a showing that any of the evaluators'
conclusions were unreasonable or inconsistent with the solicitation).
Among the majority's recommendations for reforming A-76 is one that
calls for ensuring that ``at least one individual'' review ``both the
MEO (Most Efficient Organization) and private-sector proposals.'' That
is, correcting the single example identified by the panel's majority of
how A-76 is ``unfair and unequal''--although in truth it can't be said
that it is an inequity at all--is that simple.

4. ``Inadequate Support for Employees''
That DOD civilians feel beleaguered has nothing to do with the
circular and everything to do with the Pentagon being staffed by
officials who are determined to divest hundreds of thousands of their
jobs, regardless of the cost and regardless of the impact on military
readiness. Even worse, the majority's sympathy for Federal employees is
being used to justify replacing A-76 with an even more pro-contractor
process.

5. ``Conflicts of Interest''
This point is almost as disingenuous as the previous point. Here's
a news flash for our friends who make up the panel's majority: conflict
of interest is a part of Federal service contracting, period. To single
out OMB Circular A-76 for criticism because there is a possibility for
conflicts of interest is like saying that only politicians from Idaho
like to hear the sound of their own voices, or that only journalists
from the print media prefer colorful controversy to complicated
substance.
GAO attorneys know this very well, as the Comptroller General has
had to adjudicate conflict of interest cases in the FAR involving,
among other issues, the composition of evaluation boards, bias, and bad
faith. To his credit, even Mr. Mark Filteau, a member of the majority,
acknowledged, in his additional remarks, that ``Public-private
competitions under a FAR-type process, that allow for negotiated ``best
value'' decisions open new dangers for conflicts of interest for source
selection personnel.''
In contrast, the only conflict of interest scenario cited by the
majority in the panel's report specific to OMB Circular A-76, where
employees whose positions were under study were also participating in
the evaluation process, has, according to the majority, already been
corrected.
If only it were so easy to fix the conflict of interest problems
that are intrinsic to the FAR. Because Government agencies enjoy broad
discretion in the selection of evaluation factors and in the
determination of the relative weight of those evaluation factors and in
the use of subjective and unnecessary evaluation factors, and because,
as noted earlier, the intrinsic subjectivity of the FAR leaves
agencies' broad discretion beyond judicial review, the possibility for
conflicts of interest are dramatically multiplied.

6. Cost/Technical Tradeoffs
The majority insists, repeatedly and stridently, that agencies
cannot make qualitative improvements in services without resorting to a
FAR-based ``best value'' process. Interestingly, in the report itself
and in the additional remarks of all eight members of the majority, no
instances were cited where an agency was deprived of the opportunity to
make the qualitative improvements it sought--as opposed to those being
touted by contractors' salespersons--because of OMB Circular A-76.
Even in the absence of a reliable and comprehensive system to track
the cost and quality of individual contracting efforts, we all know of
service contracts that have gone horribly wrong, through poor
performance or increased costs. The absence of even a single A-76
quality ``horror story,'' despite the combined resources of OMB, DOD,
and the contractors leaves the objective reader to draw just one
conclusion: the shift to a FAR-based ``best value'' process is based on
the majority's determination to impose a more pro-contractor process,
rather than an effort to improve the quality of Government services.
The only documented objection to the A-76 ``best value'' process
included in the report by the majority was that ``GAO has sustained
protests where it was alleged that an agency failed to implement it
fairly (or at all).'' (Indeed, in Appendix D, a review of recent A-76
litigation, a handful of cases were identified in which GAO sustained a
protest against the use of the A-76 ``best value'' process. In other
words, the errors were rectified in the few instances when the A-76
``best value'' process was used incorrectly.) This is a particularly
weak and unenlightening criticism. Unlike in the first point, the
majority is not contending that the sustain rate for A-76 ``best
value'' proposal protests is higher than the GAO's sustain rate for
proposal protests overall. For all we know, the use of A-76 ``best
value'' may better withstand appellate scrutiny than the FAR, which
would be quite an accomplishment considering that the subjectivity in
the FAR leaves most agency decisionmaking beyond judicial review.
AFGE would like to single this point out as a particularly
unfortunate example of the ``Alice in Wonderland'' reasoning employed
so often in the report by the majority. As mentioned earlier, the A-76
``best value'' process is portrayed as vaguely suspect because the GAO
has sustained protests related to its use. In the preceding paragraph,
the majority blithely asserts that protests related to the use of the
FAR which had been sustained are testimony to the strength of the FAR.
In other words, when the FAR is found by GAO to have been used in error
it is good; but when the A-76 ``best value'' process is found by GAO to
have been used in error it is bad. Curiouser and curiouser, indeed.
The majority writes that ``Tradeoffs are widely credited with
getting the Federal Government past the `low proposal' mentality of the
past, and with increasing consideration of factors such as quality and
past performance.''
AFGE cannot let this canard pass without comment, especially given
the inability of the majority to provide a single example of an agency
being denied an opportunity to improve the quality of its service
through an OMB Circular A-76 ``best value'' competition. Under any
well-managed cost-based process, any agency can conduct a competition
that leads to qualitative improvements while still being decided on the
basis of costs--without opening up the process to the corrupting
subjectivity of FAR-based ``best value''. An agency can simply identify
the standards it needs by including them in the solicitation. If the
offerors can realistically perform the work, then they are allowed to
compete on the basis of costs. This is an objective process that is
driven by agencies' actual needs, not whatever gold-plated bells and
whistles are being touted that day by contractors' sales staff.
Mr. Doke puts it far more pithily and pungently:

``It is a popular misconception that a low price means low
quality. If you are buying or selling gold and specify 98
percent purity, the price is irrelevant to quality if you
specify the purity required, inspect to assure the product
conforms, and reject any nonconforming products.'' (Emphasis
original)

What Mr. Doke says about products is equally true of services.

7. ``Protest Rights''
This is yet another disingenuous gripe about the circular,
particularly so in that it uses the obvious inequity of Federal
employees and their unions being denied the same legal standing enjoyed
by contractors as an excuse to recommend replacing A-76 with a more
pro-contractor public-private competition process. There is nothing in
OMB Circular A-76 that would prevent Congress from taking action that
would give Federal employees and their unions legal standing. That
Federal employees and their unions don't have such standing cannot be
attributed to the circular itself.

8. ``Time and Money''
The panel's majority criticizes the circular because the
competitions conducted under its rules take too long. Only after a
protracted behind-the-scenes struggle did the majority relent and
reluctantly, very reluctantly, agree to include this admission in its
report: ``Whether and to what extent FAR-based public-private
competitions would be faster than A-76 cost comparisons is unknown.''
(Historically, FAR-based ``best value'' competitions take longer,
sometimes significantly so, than FAR cost-based competitions.)
In other words, after all of this effort, the majority has served
up a recommendation that is not an improvement--indeed, it may well be
a step backwards--on the one widely-acknowledged flaw in OMB Circular
A-76. Even at its debut when its advocates are in full flack mode and
it is unsullied by experience, the majority cannot deny that the FAR-
based ``best value'' competition process may take longer and thus cost
more than competitions currently conducted under the circular.
As discussed earlier, the key to conducting more expeditious
public-private competitions, regardless of what process is used, is by
making competition prior to conversion to contractor performance a sure
thing instead of an option, as it is today, and by strengthening the
acquisition workforce through increased staffing and the provision of
training.
The majority makes two points here that deserve responses.
Concern is expressed over the money required to complete an A-76
competition. What the majority does not address here or elsewhere in
the report is that contracts entered into under a FAR-based ``best
value'' competition process historically cost more for the taxpayers
than if the contracts had been undertaken as part of a FAR-based cost
competition process. I know I wasn't asked, but I have, all modesty
aside, crafted the perfect advertising slogan for the introduction of a
new competition process:

FAR-BASED ``BEST VALUE''--COSTS MORE/TAKES LONGER

No wonder the majority didn't want to see their controversial
recommendation tested before it was implemented!
The majority also expressed concern about the impact of A-76 on
small businesses. What the majority does not address here or elsewhere
in the report is that small businesses have historically had very
strong objections to the use of the FAR. As Mr. Doke writes:

``One of the most serious erosions of competition (and perhaps
the most subtle) has been the adverse impact of current
procurement practices on small business concerns and minority
enterprises. . . It is relatively easy to eliminate small
business concerns from competition merely by including
responsibility-type evaluation factors in the solicitation and
then comparing the small business concern's capabilities with
much larger, more experienced companies (even if the greater
capabilities or resources of the large businesses exceed the
Government's actual needs). . . The effective elimination of
small business concerns from competition excludes numerous
qualified competitors and creates a subtle restriction on
competition to larger, over-qualified competitors without
justifying that such a restriction is necessary to meet the
Government's actual needs. . .''

That is, the majority's recommendation would disadvantage both
Federal employees and small contractors in order to advance the already
considerable interests of the large contractors.

``Other Concerns''
It is difficult to know what to make of this section, an unfocused
stream-of-consciousness-style discussion by the majority of issues and
concerns that are actually unrelated to OMB Circular A-76.
``. . . (O)ne concern raised by several witnesses before the panel,
as well as by a number of panelists, was that an agency should always
strive to be the most efficient organization possible, and not wait
until an A-76 cost comparison to begin those efforts.'' AFGE would
heartily agree that agencies should strive every day to hit their
MEOs--without having to wait for an A-76 competition. That some don't
because they lack enlightened management or sufficient resources cannot
be blamed on the circular.
The majority asserts that the Federal Government should employ
human capital strategies necessary to recruit and retain a ``high-
performing workforce.'' Of course, the imposition of a subjective FAR-
based public-private competition process that makes it easier to
contract out work for reasons other than merit will only make it harder
for the Government to recruit and retain a qualified workforce.
The only work done by the majority in relation to ``human capital''
is the High Performing Organization (HPO) concept, which was reportedly
important to the panel's chairman. Of course, the HPO part of the
recommendation had to be scaled back significantly in the face of
strong opposition from the contractor and the OMB panelists. As
mentioned earlier, the administration has expressed no interest in
following up on the part of the majority's recommendation to establish
HPOs, even on the very ``limited'' basis called for in the report.
Therefore, it can be said that the CAP report does next to nothing to
improve the Government's ability to recruit and retain a capable
workforce; and in exacerbating the crisis in Federal contracting by
recommending the imposition of a more pro-contractor public-private
competition process, the panel will only worsen the related ``human
capital crisis.''
The section ends with a wordy tribute to the ``innovative (human
capital) initiatives that are common today in the commercial sector.''
Unfortunately, the very last time sustained attention was paid to the
status of the contractor workforce in a particular industry Congress
and the President found the situation so abhorrent and contrary to the
public interest that they effectively nationalized the industry. I am
referring, of course, to the federalization of airport screening.
Virtually all participants in that debate, regardless of their
political affiliation or position on the ideological spectrum, agreed
that the failure of contractors to provide workers with decent pay,
benefits, protections, and advancement opportunities constituted an
intolerable contractor ``human capital crisis.'' It is highly unlikely
that the ``human capital crisis'' in the contractor workforce is
limited to airport screening. Unfortunately, the extent of the ``human
capital crisis'' in the contractor workforce is shrouded in secrecy
because of poor contract administration and contractors' opposition to
even the most basic efforts to determine what work contractors are
performing and how much they cost. It should be noted that the majority
opposed any effort to document the ``human capital crisis'' in the
contractor workforce and take remedial measures to correct this crisis.
Summary: As the foregoing made clear, the majority was unable to
make a case for junking OMB Circular A-76, let alone for replacing it
with a controversial, unproven, and subjective FAR-based ``best value''
public-private competition process.

1. ``Complicated Process'': This argument is flawed in that it
relies on a misleading apples-to-oranges comparison.
2. ``Inconsistent Application'': This redundant argument is merely
a restatement of the flawed first argument.
3. ``Unequal and Unfair'': The majority identified only one
concern, although no documentation was provided to show that it
actually is a problem. To the extent it is a problem, the majority
acknowledged elsewhere in the report that it could easily be corrected.
4. ``Inadequate Support for Employees'': This is indeed a problem,
but it has everything to do with the service contracting process being
stacked against Federal employees, rather than a flaw intrinsic to A-
76.
5. ``Conflicts of Interest'': This is a problem for the entire
Federal service contracting process. Singling A-76 out for criticism on
this score is manifestly mindless. Indeed, the majority acknowledged
that the one identified conflict of interest problem related to A-76
has already been corrected.
6. ``Cost/Technical Tradeoffs'': The majority never bothered to
demonstrate how the A-76 ``best value'' process had denied agencies
opportunities to improve the quality of their services. The majority
could identify only one concern with the A-76 ``best value'' process:
that the GAO had sustained protests against its use. However, the
majority could not say that the sustain rate for A-76 ``best value''
protests is higher than the sustain rate for protests generally, i.e.,
that it actually is a problem. Moreover, the majority used disingenuous
reasoning in insisting that sustained protests against the FAR were a
sign of strength whereas sustained protests against A-76s ``best
value'' process were a sign of weakness.
7. ``Protest Rights'': There is nothing in OMB Circular A-76 that
would prevent Congress from providing Federal employees with the same
legal standing that is possessed by contractors. The problem is that
Congress has not passed the necessary legislation.
8. ``Time and Money'': The majority acknowledged that its
recommended alternative may be slower and thus cost more than A-76.

It must also be noted that in most cases the imposition of a FAR-
based public-private competition process would exacerbate most of the
concerns identified by the majority, particularly with respect to
conflicts of interest. Moreover, with respect to efforts to address
concerns identified by the majority that were actually common to
Federal service contracting generally, instead of A-76 specifically,
the majority ignored efforts by the minority to recommend genuinely
remedial measures, even including such seemingly non-controversial
recommendations as improving the acquisition workforce, strengthening
conflict of interest rules, and ensuring that public-private
competitions are always conducted before work is given to contractors.
D. The CAPs 10 sourcing principles
Much is made by the panel's majority of the fact that one part of
the CAP report--indeed, the only part of the CAP report--received
unanimous support from the panel: the so-called sourcing principles.
Unfortunately, there is much less to this unanimity than meets the eye.
In some instances, the principles are so bland and soporific as to be
almost meaningless. In other instances, the principles were not
incorporated into the recommendations. That is, the majority played a
classic game of bait-and-switch, asking the minority to support certain
principles in order to provide the panel with a respectable air of
unanimity while crafting a narrow and parochial recommendation that
failed to pay even lip service to the principles. In still other
instances, the majority's recommendation flatly contradicts the
principles. In several cases, the administration has already indicated
that it will defy the principles that its representatives on the panel
supposedly supported.

1.``Support agency missions, goals, and objectives.''
This is almost too bland to bother discussing. How a narrowly-
focused recommendation to replace OMB Circular A-76 with a subjective
FAR-based ``best value'' process can even be remotely construed to
``support agency missions, goals, and objectives'' is unclear.
For example, does a recommendation that would greatly increase
contracting out of services without in any way enhancing agencies'
abilities to track the cost and quality of the services performed by
the Federal Government's ever-increasing contractor workforce ``support
agency missions, goals, and objectives?'' Does a recommendation that
does nothing to keep agencies from managing their in-house workforces
by arbitrary personnel ceilings ``support agency missions, goals, and
objectives?'' Does a recommendation that does nothing to ensure that
Federal employees will actually be allowed to compete for new work or
contractor work ``support agency missions, goals, and objectives?'' Of
course not. Those are just three examples.

2. ``Be consistent with human capital practices designed to
attract, motivate, retain a high-performing Federal workforce.''
A small part of this principle was actually incorporated into the
report's recommendation, specifically the call for agencies to provide
Federal employees with assistance from and access to management during
the competition process. Of course, 10 U.S.C. 2467 already deals with
such matters in large part, and, unlike the panel's approach,
explicitly allows for the involvement of the employees' union
representatives.
For the most part, however, this principle was not incorporated by
the majority into the report's recommendation. The commentary to this
principle insists that agencies should consider the impact of
outsourcing on recruitment and retention and that the workforce should
be treated as ``valuable assets.'' In light of the Pentagon's adoption
of a policy of divestiture of non-core work, i.e., giving it to
contractors without any consideration of the impact on cost or
readiness, can it be said that DOD civilian employees are viewed as
``valuable assets?'' Clearly, the Pentagon's acquisition executives,
the vast majority of whom come from the contractor community, view the
department's civilian employees as thoroughly dispensable and couldn't
care less about the impact of wholesale privatization on the
department's ability to recruit and retain employees. In fact, the
department has no interest in recruiting and retaining civilian
employees, period. Mr. Ray Dubois, the Deputy Defense Under Secretary,
in an article in the March 4, 2002, edition of Federal Times, said that
``When public employees retire, they're [going to be] replaced with
private sector employees. . .'' DOD has no intention of even replacing
the part of the workforce that leaves through normal attrition, let
alone recruiting new employees.
While the policies of divestiture and no additional in-house hiring
are too outrageous to even be endorsed in the CAP report, the panel's
majority knows that DOD is pursuing these policies--and refused any
effort to use the report to address them, let alone call unambiguously
for their reversal. In fact, the majority refused to include in the
panel's recommendation any reference to ending the use of the arbitrary
personnel ceilings that were so instrumental in bringing on the ``human
capital crisis'' although a foundation for such easy and obvious
language was provided by Principle #6.
It is surely self-evident that enlightened human capital practices
are fundamentally in conflict with the widespread practice of
privatizing work performed by Federal employees in order to lower
workers' wages and reduce their benefits.
It is well-established that contracting out has been used in the
private sector and in the non-Federal public sector to shortchange
workers on their pay and benefits. It is likely that this pernicious
practice exists at the Federal level as well. In 1998, at the request
of AFGE, Representatives Steve Horn (R-CA) and Dennis Kucinich (D-OH)
asked the GAO to examine the pay and benefits of the Federal service
contractor workforce. Congressional auditors, however, came back empty-
handed: agencies couldn't be helpful because they did not keep the
relevant information and contractors did not respond to surveys. A
survey conducted by GAO in 1985 of Federal employees who were
involuntarily separated after their jobs were contracted out revealed
that over half ``said that they had received lower wages, and most
reported that contractor benefits were not as good as their Government
benefits.''
The Economic Policy Institute (EPI), in a ground-breaking 2000
study, has determined that more than 1 in 10 Federal contractor
employees earn less than the ``living wage'' of $17,000 per annum,
i.e., the amount of money necessary to keep a family of four out of
poverty.

``The Federal Government saves money by contracting work to
employers who pay less than a living wage ($8.20 per hour).
Even the Federal Government jobs at the low end of the pay
scale have historically paid better and have had more generous
benefits than comparable private sector jobs. As a result,
workers who work indirectly for the Federal Government through
contracts with private industry are not likely to receive wages
and benefits comparable to Federal workers. . .''

Contractors ritualistically invoke the Service Contract Act
whenever the human toll from service contracting is raised. However,
EPI's research reveals the very limited reach of prevailing wage laws.

``In 1999, only 32 percent of Federal contract workers were
covered by some sort of law requiring that they be paid at
least a prevailing wage. . . But even this minority of covered
workers is not guaranteed a living wage under current laws. For
example, the Department of Labor has set its minimum pay rate
at a level below $8.20 an hour for the workers covered by the
Service Contract Act in 201 job classifications.''

GAO has been unable to determine the extent to which contracting
out undercuts workers on their wages and benefits. Despite its
pioneering work in this area, EPI acknowledges that:

``Further research, such as a survey of contracting firms, is
needed in order to know more about these workers and their
economic circumstances.''

The majority refused to address this issue in any meaningful way,
whether conducting a study to determine the extent to which contractors
provided their workers with inferior compensation or removing wages and
benefits from the competition process so that the Federal and private
sectors could compete on the basis of staffing levels and service
delivery techniques, instead of how fast the contractors could
transform the working and middle-class Americans in the Federal
workforce into a poorly-paid contingent workforce with few if any
benefits or protections. The majority never challenged the reliability
of the EPI report. However, the only concession the majority would make
is to call on agencies, in Principle #10, to make sure that the Service
Contract Act is enforced. Of course, as the EPI report made clear, that
law is irrelevant to the vast majority of contract workers.

3. ``Recognize that inherently governmental and certain other
functions should be performed by Federal workers.''
So what? It is commonly acknowledged by even senior administration
officials that inherently governmental work has been privatized. In a
December 26, 2001, memo to OMB asking for relief from the onerous
outsourcing quotas, Under Secretary for Acquisition, Technology, and
Logistics Pete Aldridge, also a CAP member, wrote that ``a reassessment
may very well show we have already contracted out capabilities to the
private sector that are essential to our mission. . .''
It was reported in a November 5, 2001, posting on GovExec.com that
``certain agencies have outsourced too many jobs and should consider
bringing work currently done by contractors back in-house, the Bush
administration's top procurement official said last week. Angela
Styles, Administrator of the Office of Federal Procurement Policy in
the Office of Management and Budget, (also a CAP member,) said that
some agencies have sent so much work to the private sector that they
are unable to provide effective oversight of the contracted work.''
Of course, Federal agencies don't know how much they spend on
service contracting, how many service contractor employees are
indirectly on their payrolls, or even what work these contractors are
actually performing. What we do know is that agencies have contracted
out inherently governmental work. The absence of a reliable and
comprehensive tracking process prevents us from knowing which
inherently governmental work has been contracted out.
Moreover, as times change, so do perspectives. Just as work that
had once been considered inherently governmental can become commercial,
work that had once been considered commercial can become inherently
governmental. Indeed, airport screening is an excellent example of work
that had once been considered commercial but has since become
inherently governmental. Again, however, there is no comprehensive and
reliable process--indeed, there is no process at all, let alone one
that is comprehensive and reliable--to track work performed by
contractors to determine whether changing times demand that it be
redesignated as inherently governmental so that it can be performed by
reliable and experienced Federal employees.
In the panel's commentary for this principle, it is said that
``(c)ertain other capabilities . . . or other competencies such as
those directly linked to national security, also must be retained in-
house to help ensure effective mission execution.'' Although far too
narrowly stated, this is an excellent point. That is, commercial
functions can be contracted out to such an excessive extent that it
undermines the Government's ability to perform its work. However, if
agencies aren't tracking contractors' work, how do they know when too
much commercial work has been contracted out?
Therefore, it is meaningless to say that Federal employees ought to
be performing inherently governmental work and certain other work if
there is no mechanism for determining whether inherently governmental
work is being performed by contractors or whether commercial functions
have been given to contractors to an excessive extent.
AFGE and other members of the minority repeatedly recommended
borrowing the methodology perfected by the Army to track the cost and
size of its workforce, both specifically and globally. As the panel
noted, ``the FAIR Act has helped to identify commercial work being
performed by the Government.'' Surely, any panelist who was motivated
by a determination to actually fulfill the promise of this principle
would have supported our efforts to provide for a comparable inventory
of work performed by contractors.
In fact, the only actual contractor in the panel's majority, in an
article posted on the GovExec.com website, on April 5, 2002, said that
the Army inventory was both manageable and valuable. According to:

``Mark Filteau, president of Johnson Controls, a Florida-based
contractor, the changes should make it fairly easy for
contractors to comply with the study. `So long as the Army
doesn't invent new categories or require cross-correlation from
old contract categories to some new set of definitions, then
there won't be a significant cost impact on new bids or current
contracts,' he said. While noting that contractors already
report on a variety of topics to the Government, Filteau
praised the concept behind the study. `Frankly, the Army ought
to know what it is paying for contract labor,' he said. `As a
citizen, a taxpayer, and an all-around fan of good management
practice, I support what the Army is trying to do here.' ''

However, the majority not only rejected any attempt to track the
cost and size of the Federal Government's massive contractor workforce,
it also refused to address the important principle of what's inherently
governmental, period.
But aren't inherently governmental issues the sort that a panel
chaired by the Comptroller General should be considering, especially
given the comments made to GovExec.com before the panel began its work?
According to a June 8, 2001, posting:

``A high-level panel reviewing Federal outsourcing policy is
working to better define when and why Federal jobs can be
considered inherently governmental, Comptroller General David
Walker said this week.
``Walker is chair of the Commercial Activities Panel, a 12-
member working group that is reviewing Federal outsourcing
issues. In an interview with GovExec.com, he addressed one of
the most difficult aspects of outsourcing decisions: how to
determine what functions must remain in-house to provide
effective government. . . `One question that has to be on the
table is what is a reasonable way to go about defining
inherently governmental,' he said. `It's not well-defined
today, and arguably not being consistently applied [by
agencies] today.' ''

On May 1, 2002, less than a year later, the GovExec.com reporter
followed up on this issue, and the situation had changed:

``Some observers were disappointed that the panel did not
spend more time studying broader contracting issues, such as
the rules that govern what Federal jobs are eligible for
outsourcing. `The hope is that with this process issue now out
of the way we can get to the big picture,' said Dan Guttman, a
fellow with the National Academy of Public Administration. `The
[panel report] looks more like an interest group battle than a
discussion of issues of great public consequence.'
``But most panel members weren't interested in studying the
definition of `inherently governmental' work, which by law is
off-limits to outsourcing, according to Walker. `That was not
something that people felt we needed to spend a lot of time
on,' he said.''

Actually, members of the minority repeatedly pressed the panel to
consider this issue, but met with failure. Of course, it would be
foolish to expect otherwise.
With a panel overwhelmingly comprised of representatives that are
either part of, or beholden to, a special interest group that is
dedicated to substituting its own interest for the public interest, why
would there be any interest in dealing with important questions, such
as what work is inherently governmental and should always be performed
by reliable and experienced Federal employees? Contrary to a contention
made at a hearing last year, this dereliction was not a result of too
little time; rather it was because there was no interest on the part of
the majority.

4. ``Create incentives to foster high-performing, efficient, and
effective organizations throughout the Federal Government.''
As discussed earlier, the Comptroller General attempted to
incorporate this principle into the recommendation with his HPO
proposal. However, due to strong opposition from other members of the
majority, this proposal was significantly watered down. Moreover, the
administration has no interest in HPOs. Neither the DOD nor the OPM
panelists mentioned HPOs in their additional remarks. The OMB panelist
did--but only to denounce them. Consequently, it can be written that
although this principle was incorporated into the recommendation to a
very limited extent, that part of the recommendation is already being
ignored by the administration.
That's being polite, however. Actually, the majority refused
efforts that would have created real ``incentives for its employees,
its managers, and its contractors to seek constantly to improve the
economy, efficiency, and effectiveness of the delivery of Government
services through a variety of means. . .'' The only way to ensure that
agencies actually have such incentives is by eliminating the easy out
of privatization. Rather than take the time and expend the effort to
reform and streamline operations internally, it's all too easy for
agencies to contract out that work (along with the inefficiencies)
without public-private competition, which ill serves taxpayer interests
in the short-term as well as the long-term. The panel refused to
eliminate the easy out of noncompetitive outsourcing, even to the
point, as discussed earlier, of staunchly defending the ridiculous yet
notorious direct conversion loophole for large contractors who claim to
be 51 percent Native American-owned.

5. ``Be based on a clear, transparent, and consistently applied
process.''
As we discussed earlier, the majority, in its lengthy attack on OMB
Circular A-76, was unable to land even a single punch.
The majority claimed that it was too complicated. However, as
proof, it could only point to a higher sustain rate for A-76 proposal
protest decisions than for proposal protests generally. Unfortunately,
that conveniently ignores the fact that the circular, as an objective
process, is eminently easier to litigate against than the FAR because
the latter process' subjectivity places most agencies' decisionmaking
beyond judicial review.
Then the majority said that A-76 was unequal and unfair. Again,
however, it could only point to one example of the circular being
inequitable and then admitted that the problem could be easily
corrected, and, indeed, included that fix in its recommendation.
Finally, the majority turned its attention to A-76's ``best value''
process. Unable to produce even a single example of how the circular's
``best value'' process had kept an agency from improving the quality of
its services, the majority nonetheless insisted that the process was an
utter abomination because it had been litigated--even though the
replacement process it was recommending had also been litigated.
However, the majority could not say if the number of sustained A-76
``best value'' process protests was proportionately greater than the
number of protests sustained generally or under a FAR-based ``best
value'' process.
So, after giving the majority its best shot and making the one
minor change included in the report, A-76 easily qualifies as a
``clear, transparent, and consistently applied process.''
Is that true of a FAR-based ``best value'' process? As discussed
earlier, agencies have extensive discretion over that process, from
beginning to end, and the standards of review established by the
Comptroller General are difficult to overcome. The subjective scoring
that is intrinsic to FAR-based ``best value'', as Mr. Doke notes,
``permits the judges to postpone deciding what they want until after
the competitors have completed their participation.'' For example, a
solicitation might indicate that the award was going to be based on
technical and cost factors, and that technical factors would be more
important than cost factors. However, judges are permitted to wait
until after the proposals are submitted to decide how much more
important technical factors will be. That is, they decide after
submission of proposals to assign the specific relative weights of the
technical/cost split, be they 55/45, 70/30, or some other subjectively
determined ratio. That's hardly a ``clear, transparent, and
consistently applied process.'' Moreover, while agencies are required
to identify all ``significant'' evaluation factors and subfactors in a
solicitation, they are not required to identify all ``areas of each
factor'' which may be taken into account, provided that the agency can
contend that the unidentified areas are reasonably related to or
encompassed by the stated criteria.
In his comments at the House Readiness hearing, the Comptroller
General said, ``(F)irst, if you look at the recommendations that we're
talking about and come back and say that transparency is the key. I
mean if you want to minimize the possibility of abuse you've got to
have clearly defined criteria that are set out front. . . You've got to
have a process that everybody knows what the rules of the ball game are
before you get started, included what the weighting is going to be on
various factors.'' (Emphasis added.) However, as the foregoing makes
abundantly clear, the actual weighting is not made known in advance;
nor are all of the subfactors which will be assigned weight identified
in advance.
As Mr. Doke reports, the use of subjective or even unnecessary
factors in the FAR-based ``best value'' process has been extensively
litigated. Eyebrow-arching examples include: ``creative or innovative
thoughts'', ``visionary'' approaches, the importance of the contract to
the offeror, ``aesthetics'', ``employee appearance,'' and the deeply
strange ``availability of pop-up dispensers for paper towels.''
Moreover, the FAR includes no rules, standards, or guidelines for the
use of subjective standards. Consequently, how can the majority contend
that its FAR-based ``best value'' recommendation would ensure that
agencies use a ``clear, transparent, and consistently applied
process?''
Similarly, small businesses have pointed out repeatedly that
competition under a FAR-based ``best value'' process is, reports Mr.
Doke, ``prejudiced because there is no statutory or regulatory guidance
to limit the evaluation of responsibility factors (e.g., corporate
experience, risk) to the level that is adequate for the performance of
the contract.'' (Emphasis original.) Is that what we should expect of a
``clear, transparent, and consistently applied process?''
Under a FAR-based ``best value'' process, agencies never actually
decide what they want until after the proposals have been submitted. In
fact, agencies actually award points to offerors who exceed the
requirements set forth in the solicitation. This is why a FAR-based
``best value'' process has historically been a burden on taxpayers.
Instead of agencies telling contractors what they want, a FAR-based
``best value'' process has contractors telling agencies what they need.
With the tail wagging the dog, is it any wonder contract administration
is such a mess? Mr. Chairman, if you're at all like me, I doubt you've
ever walked into an automobile dealer's showroom, walked up to the
salesperson with the predatory smile, and blurted out: ``Tell me
everything you think I need--and I mean everything! Don't scrimp on
those expensive optional extras!''
Should acquisition personnel follow developments in the private
sector so they can take advantage of those elusive opportunities to
improve the quality of their services? Of course. That's why AFGE and
other members of the minority strongly urged the panel to recommend
bolstering the acquisition workforce with additional staff and
training, so that agencies can decide what they need, based on what's
best for the taxpayers, as opposed to what's best for the commissions
of contractors' sales staff. However, even with sufficient staff and
training, there will, of course, be times when an offeror will include
in its proposal additional services or features that, although not
required in the solicitation, are desirable to the agency. Under the A-
76 ``best value'' process, the agency allows the other offeror an
opportunity to match the competitor's proposal, ensuring that the
agency secures all of the quality it needs at the lowest possible
prices. Under the FAR-based ``best value'' process, however, taxpayers
are out of luck--as is that other offeror, even if it had submitted the
lower-cost, more responsive proposal. . .
As Mr. Doke writes:

``Competitive evaluations that award points for exceeding the
Government's requirements raise real questions as to whether
there is genuine competition at all. It is difficult to compete
to meet the requirements, but with undisclosed evaluation
plans, undisclosed and subjective evaluation factors, etc., how
can there be any meaningful competition to exceed the
requirements? How much more than the requirements is desired
(and will be awarded points)? In what areas are additional
performance or capabilities desired? What will you be competing
against? Finally, how can the Government justify paying a
higher price for something that exceeds its actual needs as
reflected by the specification requirements?'' (Emphasis
original.)

Moreover, agencies need not identify the ``price premiums'' that
are paid for contracts awarded to other than the low offeror and the
specific factors for which those premiums are paid. Although the
agency's negotiating memorandum normally will discuss the relative
position of the proposals with respect to various factors, there is no
requirement specifically to identify the reasons the evaluators
considered that the higher priced proposal should be accepted.
Frequently, the documentation merely reflects that the higher priced
offer was rated more highly. How much of a price premium (as a
percentage over the low offer) should be permitted? Similarly, there is
no government reporting requirement to disclose such information under
any of the many contract reports required by law and regulation.
Therefore, there is no way that anyone knows how much money the agency
is spending under FAR-based ``best value'' procurements for contracts
awarded to offerors that do not have the lowest price proposal.
Clearly, the FAR-based ``best value'' process is not more ``clear,
transparent, and consistently applied process'' than A-76. In his
remarks at the House Readiness hearing, the Comptroller General
conceded that ``there's discretion in every process.'' Of course, the
problem is that the majority recommends replacing an objective
competition process that minimizes the role of discretion with an
explicitly subjective process that maximizes the role of discretion.

6. ``Avoid arbitrary full-time equivalent (FTE) or other arbitrary
numerical goals.''
This principle was never incorporated by the majority into the
report's recommendation. For example, the recommendation includes no
provision to abolish the infamous OMB outsourcing quotas. In fact,
there is not even a reference in the recommendation to elimination of
the pernicious practice of managing the in-house workforce by personnel
ceilings. Although illegal in DOD the practice persists, both in DOD
and in most other agencies. In fact, as discussed earlier, senior DOD
officials are openly acknowledging their intention to let attrition
take its inexorable toll by refusing to hire any additional staff. In
other words, the backwards personnel policy of arbitrary personnel
ceilings that did so much to bring about the ``human capital crisis''
will now be pursued with an unchecked vengeance. As mentioned earlier,
the panel's majority knows of DOD's policy, but refused to use the
report to draw attention to this outrage or call for its repudiation.
Moreover, OMB did not even wait until the ink was dry before defying
this principle. Although the OMB panelist said in her additional
remarks that the agency was ``revising (its) criteria for success,''
agencies are still being directed to convert and compete the jobs of at
least 425,000 Federal employees by the end of 2004.

7. ``Establish a process that, for activities that may be performed
by either the public or the private sector, would permit public and
private sources to participate in competitions for work currently
performed in-house, work currently contracted to the private sector,
and new work, consistent with these guiding principles.''
This is another principle that the majority didn't incorporate into
the report's recommendation. For example, that DOD civilian employees
should be allowed to compete for new work and contractor work is not an
option; it's the law. 10 U.S.C. 129a requires DOD to shift work between
its civilian, military, and contractor workforces, depending on what's
best for the taxpayers. Nevertheless, DOD almost never reviews work
performed by contractors to see if the public sector performance is
appropriate and continues to systematically starve the civilian
workforce of opportunities to take on new work.
This principle is also an example of the majority's bait-and-switch
tactics. In the commentary for Principle #7, it was written that
``Criteria would need to be developed, consistent with these
principles, to determine when sources in either sector will participate
in competitions.'' (Emphasis added.) However, the only reference in the
recommendation to the development of participation ``criteria'' related
to instances in which Federal employees would be competing for work.
Why should such criteria only apply ``where there is no in-house
workforce currently performing the work?'' (Emphasis added.) It is
well-known that contractors, usually the smaller ones but often the
larger ones as well, regularly bid on work for which they have no
``excess capacity.''
Why shouldn't agencies be allowed to undertake the same ``make-or-
buy'' decisions that are made every day by firms, including
contractors, in the private sector, without having to jump through
arbitrary hoops established by the panel's majority? Sometimes the
agency will have excess capacity, sometimes the agency will be
performing similar work, sometimes the agency will be able to make
arrangements for performance by employees in another agency, and
sometimes the agency will start from scratch as the Transportation
Security Administration is doing right now with airport security
screening. Agencies should vigorously consider all such options because
that's what would best serve taxpayers and the people who depend on
agencies for important services.
However, while the majority talks the talk of competition, it could
never walk the walk, and the report's recommendation preserves new work
and contractor work as no competition zones.

8. ``Ensure that, when competitions are held, they are conducted as
fairly, effectively, and efficiently as possible.'' .
This principle raises essentially the same issues as Principle #6;
and my concerns over the failure of the majority to actually
incorporate this principle in the recommendation are essentially the
same.
I would like to address one point. The commentary for this point
insists that ``Fairness requires that competing parties, both public
and private, or their representatives, receive comparable treatment
throughout the competition regarding, for example, access to relevant
information and legal standing to challenge the way a competition has
been conducted at all appropriate forums, including the General
Accounting Office and the United States Court of Federal Claims.''
(Emphasis added.) Because of the nature of discussions surrounding what
should have been an open-and-shut issue, we had asked that the word
``union'' be inserted before the word ``representative.'' Even this
ambiguous language was not incorporated into the majority's
recommendation, which gave standing only to offerors.
In comments at the House Readiness hearing the importance of
litigation in keeping decisionmakers in a FAR-based ``best value''
process on the straight and narrow path was emphasized: ``(Y)ou need to
have appropriate appeals processes to qualified, independent third
parties who don't have a vested interest in the result.'' We find this
invocation of litigation to be puzzling.
First of all, an emphasis on litigation as a policing mechanism is
wholly contrary to the most fundamental precepts of the acquisition
reform movement, for which GAO has been a consistent advocate. More
importantly, the onset of acquisition reform has resulted in a drastic
decrease in the use of procurement litigation, both protests and
disputes, as Professor Steven Schooner demonstrated in a ground-
breaking article in the American University Law Review. Professor
Schooner points out that the GAO's docket has been more than halved in
less than a decade.
As discussed earlier, giving agencies much greater discretion is
the principal cause in the reduction of procurement litigation. In
light of that important piece of information, the litigation argument
can be scrutinized more carefully. GAO is arguing that the ill effects
of shifting to a more subjective process can be made accountable by
increased litigation when, in fact, litigation in the increasingly
subjective private-private competition process has already decreased
significantly precisely because the increased use of subjectivity
undermines the threat of litigation.

9. ``Ensure that competitions involve a process that considers both
quality and cost factors.''
That's obvious. Of course, the Federal Government already has such
a process that considers both quality and cost factors. It is called
OMB Circular A-76, which allows agencies to secure the highest quality
services at the lowest possible prices, i.e., the best of both worlds
for taxpayers and agencies. That is, the circular or any other well-
managed cost-based process allows agencies ``to take into account the
Government's need for high-quality, reliable, and sustained
performance, as well as cost efficiencies.''
No panelist, whether part of the majority or the pro-taxpayer
faction, ever recommended that the Government ``buy whatever services
are least expensive, regardless of quality.'' That is clearly not the
way Federal sourcing should work and it is clearly not the way Federal
sourcing under the circular works.
As Mr. Doke reminds us, ``It is a popular misconception that a low
price means low quality.'' Agencies should decide what services they
want with the features they want, determine that the offerors can
provide the services they want with the features they want, and then
decide in favor of the offeror who can do that work for the least cost
to the taxpayers. That's how it works under OMB Circular A-76 or any
other well-managed cost-based competition process.
Unfortunately, that common sense isn't part of the majority's
recommendation. Although unwilling or unable to make the case that
agencies have been deprived of opportunities to improve the quality of
their services because of OMB Circular A-76, except for a tiny handful
of cases that were rectified on appeal, the majority recommends that A-
76 be junked in favor of an explicitly subjective process that
historically has cost taxpayers more for the same services than if they
had been acquired under a cost-based process. A FAR-based ``best
value'' process is not needed to take into account quality, undermines
the integrity of the sourcing process by introducing bias and
subjectivity in a way that cannot be corrected by the appellate
process, and undermines taxpayer interests.

10. ``Provide for accountability in connection with all sourcing
decisions.''
This is another occasion when the majority was all talk and no
action. The commentary for this point insists that ``accountability
requires that all service providers, irrespective of whether functions
are performed by Federal workers or by contractors, adhere to
procedures designed to track and control costs. . .'' Yet, the part of
the majority's recommendation dealing with the FAR-based ``best value''
process does not address the tracking of costs, period. Not one word.
With respect to the part of the report's recommendation relating to
OMB Circular A-76, the majority offered four specific proposals dealing
with tracking costs--all of them dealing with in-house costs. The only
time the majority addressed the tracking of contractor costs was at the
very end of the A-76 section when it included vague and meaningless
boilerplate language that called on agencies to ensure ``that all
contracts are properly administered.''
It would be instructive to review what the Comptroller General's
own staff had written just last year about the ability of DOD, the
agency with the most experience with service contracting, to track its
service contracting costs. They reported that DOD has chosen not to
keep its commitment to Congress to improve its system for reporting the
costs of contract services:

``The Department of Defense (DOD) spends tens of billions
annually on contract services--ranging from services for
repairing and maintaining equipment; to services for medical
care; to advisory and assistance services such as providing
management and technical support, performing studies, and
providing technical assistance. In fiscal year 1999, DOD
reportedly spent $96.5 billion for contract services--more than
it spent on supplies and equipment. Nevertheless there have
been longstanding concerns regarding the accuracy and
reliability of DOD's reporting on the costs related to contract
services--particularly that expenditures were being improperly
justified and classified and accounting systems used to track
expenditures were inadequate. . .
``. . . DOD has not developed a proposal to revise and
improve the accuracy of the reporting of contract service
costs. DOD officials told us that various internal options were
under consideration; however, these officials did not provide
any details on these options. DOD officials stated that the
momentum to develop a proposal to improve the reporting of
contract services costs had subsided. Without improving this
situation, DOD's report on the costs of contract services will
still be inaccurate and likely understate what DOD is paying
for certain types of services.'' (Emphasis added.)

But that's only the beginning. The majority has insisted that the
replacement of A-76 with a FAR-based ``best value'' public-private
competition process was necessary to improve the quality of Government
services. However, not only does the majority's recommendation include
no specific provisions to track contractor costs, the majority's
recommendation includes no specific provisions to track the quality of
services performed by contractors. Apparently, actually reducing costs
and actually improving quality is not what's really important to the
majority.
E. The CAP's recommendation
Let's not be distracted from the real reason the majority rammed
through its FAR-based ``best value'' recommendation: pro-contractors
can't compete on the basis of costs. Contractors are confounded that,
despite all of their advantages, they lose almost 60 percent of all
public-private competitions. Contractors simply can't win regularly
enough when they compete on the basis of costs, the standard that is
best for taxpayers. Rather than improve their efficiency, contractors
have decided to change the rules of the game. They want to replace the
current system with one that increases the role of bias and politics.
This effort has been rejected repeatedly by both Republican and
Democratic administrations over the last 50 years. Indeed, thanks to
the vigilance of successive Congresses, Title 10 is replete with
requirements that ensures the Government's service decisions are cost-
based.
The majority often reminds us that the FAR-based ``best value''
process is used by agencies for conducting competitions between
contractors. As discussed, the subjectivity of the FAR-based ``best
value'' process often benefits one contractor at the expense of another
contractor. Indeed, contractors are not reluctant to litigate when they
think agencies are showing favoritism towards their competitors.
However, the subjectivity in a FAR-based ``best value'' process can
not be used systematically to favor one group of contractors over
another because private-private competition is non-ideological. As we
know, that is not the case with public-private competition, which is
essentially politics by other means. When agency officials are
indisputably predisposed towards the private sector, increasing the
subjectivity of the service contracting process will provide those
agency officials with opportunities to show their favoritism by skewing
the outcomes of competitions in favor of contractors. As stacked as the
deck is against Federal employees, the situation could become even
worse by allowing agency officials already predisposed towards
outsourcing to employ an openly subjective public-private competition
process that permits them even more opportunities to favor the private
sector.
The four members of the pro-taxpayer faction crafted an alternative
proposal to that offered by the majority that would have allowed for
alternatives to OMB Circular A-76 to be thoroughly tested, including
FAR-based, ``best value'' and FAR-based low-cost/technically
acceptable. Given that the majority acknowledges that competitions
conducted under FAR-based ``best value'' could take longer than those
conducted under the circular, no time would be lost by continuing to
use the circular or a reformed version thereof until the desirability
of the alternatives had been determined. Given that the majority is
unable to show that agencies are being deprived of opportunities to
improve the quality of their services because of A-76, nothing
substantive would be lost. Given that the history of acquisition,
particularly during the last 10 years, is littered with serious
mistakes, it is just common sense to look before we leap.
The majority was uninterested in this more thoughtful approach.
While acknowledging that its untested and unproven FAR-based ``best
value'' process should be evaluated, an evaluation under its
recommendation would not occur until after the recommendation had been
implemented and widely used. At a time when the administration has
unleashed a tidal wave of outsourcing, demanding that agencies compete
or convert at least 425,000 Federal employee jobs by the end of 2004,
now is clearly not the time to be making radical, unprecedented, and
highly controversial changes to the public-private competition process.
That is surely self-evident. However, the members of the faction
understand that their recommendation cannot stand scrutiny, and
therefore insist on its immediate implementation.
The changes recommended by the majority to OMB Circular A-76 are
typically one-sided. Four changes are recommended to the circular to
improve tracking of in-house costs. No specific changes are proposed
dealing with tracking contractor costs. In fact, tracking contractor
costs goes unmentioned, except for a throw-away line at the end about
``ensuring that all contracts are properly administered.'' There is no
mention of providing legal standing for Federal employees and their
union representatives. OMB has said that there are ``obstacles'' to
using the circular to contract in work in non-DOD agencies. No proposal
is offered to surmount those alleged obstacles.
The HPO part of the recommendation has been discussed earlier. In
light of the administration's, at best, ambivalent attitude towards
labor-management cooperation and investments in the workforce, even for
purposes of training, the future for HPOs is not bright. Because of the
subjectivity intrinsic to the process--with respect to determining the
performance benchmarks and then determining compliance with those
benchmarks--HPOs should first be tested and evaluated.

CONCLUSION

Chairman Ensign, I thank you again for holding this morning's
hearing and inviting AFGE to testify about the important issues raised
in your invitation letter as well as those important to rank-and-file
DOD employees. Please let me know if AFGE can be of any service as you
prepare your subcommittee's portion of this year's defense
authorization bill. I look forward to attempting to answer any
questions that you and your colleagues might ask.
______

APPENDIX I--Competition with Oversight, Responsibility, and Equity
(CORE) Proposal

The authors of the CORE Proposal have attempted to draft a set of
proposals that supports the mission statement and the ten principles of
the Commercial Activities Panel (CAP). We believe that the CORE
Proposal makes improvements in the current system to better serve the
taxpayers, while satisfying the needs of agencies, employees, and
contractors.

COMPETITION

1. Proposal:
Absent compelling national security rationales, Federal employees
should be allowed to compete in defense of their jobs before their work
is transferred to contractors.
2. Proposal:
A limited pilot project should be developed to experiment with new
procedures for carrying out public-private cost comparisons as a means
of assessing the viability of alternatives to the current OMB Circular
A-76 system.
Details:
Any public-private competition process is bound to generate
controversy because Federal employee jobs and contractor profits are at
stake. However, A-76 circular remains the only tested and proven
competition process. While agencies should always strive to reform and
improve the process, it would be ill advised to abolish OMB Circular A-
76, or even relegate it to a secondary role, in favor of an untried and
untested replacement.
Consequently, before instituting untested Government-wide changes,
OMB should establish a limited pilot project to examine the various
alternatives to OMB Circular A-76, including dollarization, ``best
value,'' and low-cost/technical tradeoff on work performed by Federal
employees, new work, and work performed by contractors. Alternatives to
OMB Circular A-76 should include requirements to evaluate bids on the
basis of cost, allow a cost differential for an incumbent service
provider, ensure that an incumbent has the opportunity to reformulate
its bid in response to a challenger's submission, allow Federal
employees to compete as part of a most efficient organization, and
utilize OMB Circular A-76 Handbook guidance with respect to the
calculation of in-house personnel costs, in-house non-personnel costs,
and in-house overhead costs.
The alternatives explored in the pilot project should be evaluated
by OMB, GAO, as well as an impartial independent review panel. Should
any of these variations or alternatives prove to be consistently more
efficient, expeditious, and equitable, consideration should be given to
using these alternatives in more situations. Given that the proposal
endorsed by GAO and private contractors is no more expeditious than OMB
Circular A-76, time will not be lost waiting for the impartial review
of the results from a ``limited pilot project.''
3. Proposal:
Federal employees should be allowed opportunities to compete for
new work as well as work performed by contractors.

OVERSIGHT

1. Proposal:
Agencies should implement reliable systems to track the costs and
quality of services provided to the Government by contractors.
Details:
Agency managers and policymakers alike need reliable and
comprehensive methods for tracking the cost and size of the contractor
workforce and the quality of the work they perform.
2. Proposal:
Strengthen the civilian acquisition workforce.
Details:
The size of the acquisition workforce should be increased, the
acquisition workforce should receive increased training, agencies
should avoid contracting out work related to contract administration,
and agencies should determine the appropriateness of returning to in-
house performance any contract administration work currently performed
in the private sector.
3. Proposal:
Establish an equitable appeals process.
Details:
Federal employees and their union representatives should be given
rights to appeal service contracting decisions to the Court of Federal
Claims and to the General Accounting Office.

RESPONSIBILITY

1. Proposal:
Agencies should not use arbitrary personnel ceilings.
Details:
Agencies should be allowed to manage their workforce by budgets and
workloads. Like contractors, agencies should be allowed to ``staff up''
when appropriate to assume additional responsibilities, whether that is
new work or work that had previously been performed by contractors.
Agencies should be allowed to engage in make-or-buy decisionmaking
processes similar to those undertaken by private sector firms.

EQUITY

1. Proposal:
Agencies should avoid undertaking service contracting that
undercuts the pay and benefits of workers, whether in the public sector
or the private sector.

NOTE

Signatories to the CORE Proposal agree to disagree among ourselves
about the appropriateness of using conversion, competition, and
privatization goals.
Details:
Please see the Appendix to the CORE Proposal for brief, 100-word
summaries of the two competing perspectives held by the CORE Proposal
signatories on the use of conversion, competition, and privatization
goals.

Senator Ensign. I thank both of you for your testimony.
I think it is interesting when you are trying to figure out
sometimes what the best policies are as lawmakers, and you hear
testimony from people, sometimes the more objective that they
sound, the more credibility that they have, at least with this
lawmaker, in their testimony. I think that it is obvious that
sometimes there are things that the private sector can do, and
sometimes it is obvious that there are things that only the
Government can do.
Striking that balance, having come from the private sector,
there are times when lowest cost, which is what the A-76 does
today, that lowest cost is not lowest cost. Lowest cost is, as
a matter of fact, what Ms. Styles said about cutting lawns is
cutting lawns. If anybody has ever had a business where you
hire out your landscaping, the lowest cost on cutting lawns
sometimes is not lowest cost because they end up not taking
care of things and you end up paying a lot more in the long run
to have somebody else come in and clean it up.
I think that is the idea of the new process, is to make
sure that the value is there. It is never going to be a perfect
process. I think that is something we all have to realize. It
is difficult to measure, but you have to try to measure it. You
have to have as objective of measures as possible.
What the administration is attempting to do, I am sure is
not going to be perfect. Nothing ever is when we do this, but
we have to work together as Republicans, Democrats, as
Americans basically, to try to get the best value for the
taxpayer. To make sure our military has what they need, the
best resources, and to use those resources in the best way to
provide our men and women with the absolute finest technologies
and finest services that they can have so they can continue to
be the most dominant military in the world.
Having said that, I want to start with a question for you,
Mr. Soloway, about this. It has to do with contracting out a
lot more overseas, especially at this time. There are questions
about what protections that those or what some of those
contractors need to maintain that.
First is that some of them, I guess, are having problems.
Their insurance companies are dropping them. It is difficult
for some of those employees to get the insurance. I do not know
if you are aware of some of these things.
Maybe getting to, Mr. Harnage, some of your concerns, all
those kinds of costs should be taken into account. In other
words, if the Federal Government ends up holding the bag for
some of those insurance costs in the bidding process or
whatever, those kinds of things would seem to me to be very
fair to take into account, because the indemnification if that
comes to the Federal Government, then that is, obviously, a
very or could be a very significant cost.
So what other kinds of help do some of those people need
when they are in danger zones, like what they are in over there
right now in the Middle East. How does that affect basically
the new integrated process?
Mr. Soloway. Well, most of the work you are talking about
is not related to the A-76, because this was work that was
principally done by the military that the military is now no
longer doing, has brought in contractor support to fulfill
those roles.
I went to the Balkans after the Kosovo conflict, when I was
at the Department of Defense, to do an assessment of the
contractor support. This issue that you raise about the costs
of--the surge cost, if you will--and there are a number of
issues associated with surge. Some of it had to do with the
protection of the combatants and non-combatants. Some of it has
to do with the numbers of people you suddenly need in theater
and so forth.
One point that was made to me by the warfighting side, as
opposed to the business side, was that the alternative to them
was going to be additional Reserve call ups, because there
simply are not enough soldiers in uniform to do all of that
day-to-day work. You do not get soldiers 24/7. You get them for
a few hours. They have other duties as assigned.
That is, we have to, if we are going to really do the
assessment you are talking about, which DOD I believe has done
periodically over the last several years as more contractor
support has been used, you have to look not just at the
immediate costs, but also all of the trailing costs associated
with it, whether it is Reserve call ups and the economic impact
of that, whether it is maintaining a permanent force of either
civil service or uniformed personnel to do work that is
temporary by nature in a conflict and so on.
So those issues are appropriate. DOD has continued to look
at them, and continued to conclude, as I believe the Fortune
article that Senator Pryor mentioned earlier, that it has
become part of that partnership.
In terms of liability and indemnification insurance, any
time there is a conflict when you have civilians in harm's way,
there are issues associated with that. There are a number of
provisions in the Defense Base Act that are designed to help
deal with those issues.
These are not all--to be very clear, these are not all
contractors who have been deployed to support the fight. We
have people working overseas for the U.S. Agency for
International Development, whether they are NGOs or contractor
employees who are also covered by the Defense Base Act.
We have contractor workers at bases around the world
providing critical technology support that are not there
directly related to the operation in Iraq, but are there on an
ongoing basis. As where they become encompassed by a zone of
risk, if you will, these issues begin to arise, and they have
to be dealt with.
There may well be some costs. There always are some costs
associated with it. But if you go back to the Gulf War, while
the numbers may have been slightly lower, there were all kinds
of commercial tankers being used to provide and move material
into the Gulf. There were lots of contractors in the zone of
conflict or in the theater of operations.
This is an issue. It is something that continually has to
be looked at. For the commercial insurance industry that you
mentioned, it becomes a question of risk analysis, and you have
to assess that.
But, again, when you do that, it has to be balanced against
the full set of costs, and the full set of challenges, and the
full set of realities in terms of human capital, military
manpower, and so forth.
As we have talked with the Joint Staff and others over the
last several months and the build up of the current conflict,
and as I experienced it through the Balkans conflicts, there is
a balancing and a constant thinking in the military about how
to do this best and how to do it right.
Senator Ensign. Well, thank you. I wish we had more time.
Unfortunately, my time has expired, and I want to give Senator
Akaka time for questions.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Soloway, you were a member, as you stated, of the GAO
Commercial Activities Panel and endorsed the panel's
recommendations. I would like to explore your council's or
organization's, which is PSC, position on three aspects of the
panel's recommendations.
One is the bid protests. First, the CAP report recommended
that both the public and private sectors have equal access to
the bid protest process. You have testified that PSC agreed
with this recommendation. Would you support legislation to
provide employee unions and other representatives of Federal
employees the same protest rights that the private sector has?
Mr. Soloway. Senator Akaka, the Commercial Activities Panel
recommendations relative to the rights to be accrued to any
individual parties involved in a competition are tied directly
to the full set of 10 principles that we were unanimously
agreed to.
Those are my views and, I believe, in the view of the
majority of the panel, those recommendations amount to a FAR-
based process. Then, in the revisions that the administration
has proposed, the piece that most closely aligns with that
recommendation is what is called the integrated process that I
mentioned in my testimony.
I am speaking for myself here, because we were all members
of the panel as individuals under that process. I believe under
that process that it is likely that the public sector would
have the same rights to protest that are currently available to
the private sector.
Two caveats to that statement, though, that I think are
very important: From a strictly legal perspective, moving the
same rights to the public sector does not, in my view,
appropriately or legally allow the movement of those rights to
a labor union or to an individual. Those rights do not exist
for individuals or labor unions in the private sector.
They are based on the Competition in Contracting Act. They
are given to the parties legally responsible for the
performance. In the case of a private sector bidder, it is the
company, because the company is the signer of the contract, or
the signer or certifier of the bid.
In the case of the Government, what the administration has
tried to do by creating what they call an agency tender
official, and by creating in the Government side the same kind
of contractual framework that they now have on the contractor
side--as Ms. Styles said, contractors typically recompete every
3 to 5 years.
Building that same structure on the public side, you now
have an official called the agency tender official, who I
believe, under the integrated process, would likely have the
ability to protest a decision. But it would not, for both legal
and other reasons, ever, I believe, nor should it, accrue to a
union or an individual. That right does not exist in the
private sector either.
Senator Akaka. Mr. Harnage, do you have any comment on Mr.
Soloway's answer?
Mr. Harnage. The reason for it is pretty obvious. If you
put responsibility for the protest on an individual with
limited resources it is not likely to happen. There is no
justification for placing this responsibility solely on a
tender who placed the bid, made the mistake to start with, and
is now going to appeal their own decision.
I believe that for this to be a fair competition a lot of
things have to be changed, including that the same appellate
process rights that the contractors enjoy be provided to
Federal employees or their representatives.
Senator Akaka. Mr. Harnage, like Mr. Soloway, you
participated in the Commercial Activities Panel. You did not
support the panel's final report and recommendations. I
understand that AFGE has filed extensive comments on the
administration's proposed revisions to OMB's Circular A-76. Are
you concerned about the proposed revisions to OMB Circular A-76
because these revisions would implement recommendations of the
CAP report with which you disagree, or because these revisions
are inconsistent with their recommendations of the CAP report,
or both?
Mr. Harnage. Let me say if it was wrong in the CAP, it is
certainly wrong in the revision of A-76. The fact that the two
might be related is simply recognizing a mistake of both
entities.
I did participate in the A-76, and there is a lot to be or
is being said about this super majority. When you stack the
deck eight to four, and in the end the vote comes out eight to
four, there are no surprises there. The super majority was
designed at the beginning of the process to achieve this biased
conclusion.
Now, I was encouraged during the process that we might be
making some headway. I found it very educational. But though we
moved in what I considered a more positive way, in the final
debates everything reverted back to the initial debates. Things
turned out as predicted at the beginning.
Mr. Soloway. Senator, may I make a brief comment?
Senator Akaka. In a moment. Mr. Harnage, can you point to
any specific areas in which the proposed revision to OMB's
Circular A-76 are inconsistent with the recommendations of the
CAP report?
Mr. Harnage. I believe the CAP report recommended that
Federal employees have the right to appeal. I believe the CAP
report also provided a much stronger language on insourcing.
You noticed a while ago in Comptroller Walker's comments in
response to a question was that insourcing is when things fail.
Now, if he had thought a little bit longer about that, he
probably would not have said that.
But that is the mentality of this administration and many
people in the contractor communities. I believe that when the
contractor fails there is an opportunity to consider bringing
work back in-house.
But it is not a failure of the Federal employees that
prompted the competition to start with. So why does a
contractor have to fail for there to be recompetition? Why is
that the only time private sector functions can be competed?
But the Federal employee's job can always be competed. If
competition provides savings, then why do we not have
competitions to bring work back in-house?
Pete Aldridge, the Under Secretary of Defense for
Acquisition, Technology, and Logistics, who also served on that
panel, came in late on a conversation we were having about
bringing work back in-house if it saves money. Compete it, if
it saves money. In a vast majority of the contracts that are
already let to the private sector (you notice Ms. Styles said
``subject to competition,'' she did not say ``competition.'')
There is no competition. The contracts are subject to
competition, but there is no initial competition on recompeting
of that contract.
So if the Federal workforce is included in that
competition, it may drive the same savings that you had in the
beginning. So it is not a matter of the contractor failing. It
ought to be a matter of policy that competition is where the
savings are, not privatization, but competition. Therefore we
ought to be able to compete work to bring it back in-house.
What Pete Aldridge said was, ``Why in the world would you
do that?'' To save money. The question was obvious, but the
fact that he could not even think of an appropriate response
was alarming.
Then he said, ``You cannot do that. We do not have the
capability of hiring the workforce.'' Well, Transportation
Security Administration (TSA) just proved him wrong on that.
They hired over 60,000 people in less than a year. Surely, DOD
can hire 200 or 300 in less than a year.
Senator Akaka. Mr. Chairman, my time has expired, but let
me ask Mr. Soloway for his comment.
Mr. Soloway. Thank you, Senator. I appreciate it. I just
wanted to make a couple of brief comments to clarify a few
points. As we parse through this--and, Senator Ensign, you made
the point that there are widely divergent points of view when
you hear this, knowledgeable people saying exactly different
things, but exactly the same subject. Just to be clear about
what we are talking about private sector employees are
competing every day for their work, because if their company
does not perform, and the contract is recompeted, as it
routinely is, their company loses the work and they have
absolutely no follow-on rights to go with that work.
Under A-76, we do have public/private competitions, but
from a management standpoint, if the decision is made to
outsource something, you cannot afford to retain all of that
infrastructure internally, once you have made a decision to
move out to contract. So it is easy enough to say we should
always have Federal employees competing for their jobs later
on, but, in fact, the infrastructure has been moved. Usually
most of those employees have gone with the work.
But if we are really concerned about Federal employees--and
I think we should be, because somebody made a comment earlier
on--it may have been Senator Chambliss--about Federal employees
being an asset. A-76 does not treat either private or public
sector employees as assets. It is really a numbers game. It is
a low-bid, how-cheap-can-I-do-this kind of process.
There are numerous cases that I would encourage you to look
at where agencies have made smart strategic decisions that they
cannot compete well for the work because they are way behind in
terms of technology, and we know that is a problem across the
Government, that they do not have the skill set. They do not
have the budgetary resources. So they have avoided a public/
private competition.
But in doing that, they have treated the employees, the
incumbent employees, as major assets in the process. In those
cases, they have required the bidders in the private sector to
compete to do better by the employees.
There are great opportunities to do more of that, where it
clearly makes no sense for the Government to continue to
perform the work. Unfortunately, by mandating public/private
competitions in every circumstance, you make that impossible.
Finally, you made the point earlier about concerns relative
to whether or not the administration's competitive sourcing
agenda actually is going to inhibit the ability of the
Government to attract and retain people in light of the
retirement wave that is coming. Clearly in any organization and
in the private sector, outsourcing or competitive sourcing or
whatever term you want to use, is a constant. It is always
going on. It always creates a certain degree of turbulence.
But if we look across the board today, it is very clear
that the Government is not competing effectively for a lot of
the critical skill sets we need. Those skills are going to the
private sector.
As Mr. Harnage has testified on many occasions, there is a
pay gap between the public and private sector that is part of
the reason for that. But there is also a whole set of other
issues in terms of development and support of the workforce and
so forth. The Government does not match up well.
But if the Government is today losing the people to the
private sector, where competition is a day-to-day experience,
why do we think that competition in Government is an inhibitor
to people coming into Government? Because people are already
voting with their feet, to go to an environment where fierce
competition is part of the day-to-day process.
Clearly, there are other human resource strategies and
capabilities in the private sector from which the Government
can learn, but that are driving the balance of employment. I
think that is a very important factor to keep in mind, so we do
not assume that the existence of competition is somehow an
inhibitor or discouragement to people to coming to work in an
organization.
Senator Ensign. I thank both of you. We have a briefing
over in the Capitol so, unfortunately, we are going to have to
cut this short.
This subcommittee stands in adjournment.
[Questions for the record with answers supplied follow:]

Questions Submitted by Senator Daniel K. Akaka

GOVERNMENT CONTRACTS

1. Senator Akaka. Ms. Styles, I agree with your statement that
morale will be affected unless there are adequate resources for
training and hiring when it comes to outsourcing. You also mentioned
that the proposed changes to A-76 acknowledge this need. However, given
the deficit and the impact of the war on the budget, how is the
administration ensuring that adequate funding is made available?
Ms. Styles. I did not make a statement about ``outsourcing'', which
presumes an outcome. OMB is committed to seeing that progress is made
with each of the five initiatives contained in the President's
management agenda including competitive sourcing. Where an agency makes
a compelling case for resources to achieve those goals, OMB will
discuss and consider the appropriate level of resource allocation.

2. Senator Akaka. Secretary Aldridge, I am concerned about the
continued rise in operation and maintenance costs for many of our
existing weapon systems. While these may be costs we are forced to bear
until we can bring replacements on line, I worry that we may not be
paying enough attention to total life-cycle costs as part of the
acquisition process of these replacement systems. If we focus on the
issue early in the acquisition process, there is a lot we can do to
minimize long-term logistics and maintenance costs, build training
enablers into new weapon systems, and include instrumentation that
allows for more effective testing. I am also concerned about reports
that DOD fails to consider spectrum supportability until late in the
development and fielding cycle, when problems are more difficult to
address. I believe that the ongoing revision of DOD Directive 5000,
governing the acquisition of major systems, provides an opportunity to
address these issues. Do you agree that life-cycle costs and spectrum
supportability are key issues that must be addressed early in the
acquisition process?
Secretary Aldridge. I agree that total life-cycle cost and spectrum
supportability are important issues that must be addressed early in the
acquisition process. Our new DOD acquisition policies require life-
cycle cost and, where feasible, total ownership cost to be addressed
during the requirements generation process, even before we initiate an
acquisition program. Spectrum supportability is also considered during
the requirements process, and staff activities to meet certification
requirements must be in progress before a program can be initiated. At
program initiation, our acquisition policies require a detailed and
comprehensive review of the entire planned program. This review
includes specific consideration of both total life-cycle cost and
spectrum supportability.

3. Senator Akaka. Secretary Aldridge, will you ensure that the
revised Directive 5000 addresses these issues and includes some kind of
enforcement mechanism to ensure that they are fully considered?
Secretary Aldridge. Yes, the discussion centers on total life-cycle
cost and spectrum supportability. Both issues are tracked closely, and
our new acquisition policies include the necessary enforcement
mechanisms.

4. Senator Akaka. Ms. Styles, the GAO CAP recommended that Federal
outsourcing policy be fair to both the public and private sectors,
allowing comparable appeal rights to both sides. The panel stated,
``Fairness is critical to protecting the integrity of the process and
to creating and maintaining the trust of those most affected. Fairness
requires that competing parties, both public and private, or their
representatives, receive comparable treatment throughout the
competition regarding, for example, access to relevant information and
legal standing to challenge the way a competition has been conducted at
all appropriate forums, including the GAO and the United States Court
of Federal Claims.'' The administration proposes to amend Title 10 to
allow DOD to implement ``best value'' competitions--implementing one of
the CAP report's recommendations. However, we have not received any
proposal from the administration to implement the report's
recommendation on bid protests, which would also require legislation.
You approved the CAP report on behalf of the administration. Do you
agree that fairness dictates that the public and private sectors
receive comparable treatment in the bid protest process?
Ms. Styles. We are addressing appeal rights in the new circular
with the goal of treating directly interested parties with fairness
allowing them right to contest an agency's performance decision. GAO
will determine whether a directly interested party has standing to
protest.

5. Senator Akaka. Mr. Walker, do you view the CAP recommendations
as the menu from which it is appropriate to pick and choose
recommendations to implement on a piecemeal basis, or as a cohesive set
of principles, which should be considered on a comprehensive basis?
Mr. Walker. The 12-member CAP produced two sets of recommendations
for improving the way Federal agencies make sourcing decisions. The
first set, which the panel unanimously agreed to, consisted of a set of
principles to guide sourcing policy for the Federal Government. The
panel specifically noted that while each principle is important, no
single principle stands alone and that the principles were adopted as a
package. The second set of recommendations was adopted by a two-thirds
super majority of the panel. These recommendations involved use of the
Federal Acquisition Regulation to conduct public-private competitions,
limited changes to Circular A-76, and the promotion of high-performing
organizations across the Federal Government. This set of
recommendations was also intended to be adopted as a package, rather
than on a piecemeal basis.

6. Senator Akaka. Secretary Aldridge, I have a copy of a memorandum
to the Secretary of Defense from Joseph E. Schmitz, the Inspector
General of the Department of Defense, in which Mr. Schmitz states that
his office has determined that a ``consultant's error in a public/
private competition . . . resulted in the award of an A-76 contract
with potential 10 year value of $346 million to the contractor rather
than to the lower in-house bid.'' The memorandum indicates that the
error inflated the in-house cost estimate by $31.8 million, resulting
in an incorrect conclusion that it would cost $1.9 million more to keep
the work in-house (when it would actually have cost almost $30 million
less). Can you tell me what steps the Department has taken to address
this problem?
Secretary Aldridge. Your question is in reference to an Office of
Management and Budget (OMB) Circular A-76 study conducted by the
Defense Finance and Accounting Service (DFAS) in 2001. The error
occurred because the anticipated annual salary increases in the
Government bid were not correctly computed. The computation was
performed by a DFAS contractor, and the certification of the
computation by Government officials overlooked the erroneous
computation. The Government certifications of the computation were
performed by DFAS and the Department of Defense (DOD) Inspector General
(the Independent Review Official under Circular A-76). The directly
affected Government employees (and their representatives) were offered
an opportunity to appeal the decision under the A-76 administrative
appeal process but they did not identify the error. DOD is taking the
following actions to address this problem:

1. The Deputy Under Secretary of Defense (Installations and
Environment) has updated the DOD A-76 costing software
(win.COMPARE\2\) to include four separate features, or
checkpoints, for flagging, or assisting a user in avoiding,
errors of this type. In response to recommendations from DOD,
OMB has clarified its guidance on this subject in the proposed
revision to Circular A-76.
2. DFAS reviewed its entire competitive sourcing process,
and, specifically, how the error occurred. DFAS is upgrading A-
76 training to ensure that future proposals undergo a rigorous
quality check.
3. DFAS will put more emphasis on the A-76 independent review
process and use a new Independent Review Official.

7. Senator Akaka. Secretary Aldridge, what has happened to the
Federal employees who lost their jobs to a higher bidder because of
this ``consultant's error''?
Secretary Aldridge. No permanent Federal employees lost their jobs.
All of the affected permanent Federal employees had the option of
accepting another position within DFAS, taking advantage of retirement
or separation incentives, and/or accepting a position with the
contractor. Everyone who wanted employment was given that opportunity.
Twenty-nine employees were asked to accept jobs at a lower grade. None
of those placed in lower graded positions suffered any loss of pay.
Twenty-six of the employees have been placed in new positions, which
will lead to re-promotion when the employees are fully qualified. The
remaining three employees have been afforded grade retention and
priority consideration for re-promotion through the DOD Priority
Placement Program. They will become eligible for indefinite pay
retention in January 2004. DFAS will continue to extend priority re-
promotion consideration to these employees indefinitely, and will
consider seeking legislative relief to extend grade retention beyond
the legally permitted 2 years if necessary.

8. Senator Akaka. Mr. Walker, doesn't this episode reinforce the
recommendation of the CAP that all parties to a public-private
competition, including representatives of Federal employees, should
have the same access to the bid protest process to challenge the way a
competition has been conducted?
Mr. Walker. It is quite appropriate for both sides to be able to
challenge the results of public-private competitions. In fact, public
employees, like private-sector vendors, have long had the right under
Circular A-76 to file an appeal at their agency challenging the results
of a public-private cost comparison. It is true, though, that only
private-sector vendors can go on--if they lose an agency-level appeal--
to file a bid protest at GAO or in court. As your question notes, the
Commercial Activities Panel recommended that all parties to a public-
private competition should have rights as nearly equal as possible to
challenge the way the competition was conducted, including protest
rights. The panel noted, however, that granting protest rights should
be part of an effort to address the full range of issues related to
competing for and performing Government contracts. The panel also
recognized that, if a decision were made to permit public-sector bid
protests of the results of public-private competitions, the question of
who would have representational capacity to file such a protest would
have to be carefully considered.

9. Senator Akaka. Secretary Aldridge, over the last 2 years, this
committee has enacted a series of provisions directed at improving the
management of the Department's $66 billion per year in contracts for
services. Section 801 of the National Defense Authorization Act for
Fiscal Year 2002 required the Department to establish a management
structure for services contracts. Under this section, each of the
military departments was required to designate an official responsible
for managing the service contracts of that department; DOD was
responsible for designating a responsible senior official for the
defense agencies. These officials, and subordinate officials in the
management structure, were to be responsible for implementing
requirements for performance-based service contracting, compliance with
competition requirements, and the appropriate use of inter-agency
contracts. As far as I am aware, the Air Force is the only one of the
three military departments that has taken specific steps to comply with
this requirement. Will you take steps to ensure that the other two
military departments comply?
Secretary Aldridge. On May 31, 2002, I issued policy to all of the
military components, which implemented the requirements of Section 801
of the National Defense Authorization Act for Fiscal Year 2002. This
policy required that each component develop and institutionalize a
process for the management and oversight of the acquisition of
services. In October 2002, all three of the military departments
provided their processes to me for my review and approval. Working with
each of their designated acquisition officials, we refined their
processes, and on February 7, 2003, I approved each of the three
military department's Management and Oversight of Acquisition of
Services processes. My staff has also been working with representatives
from the General Accounting Office (GAO), who are currently auditing
our compliance with the provisions of Section 801.

10. Senator Akaka. Secretary Aldridge, I do not believe that DOD
has yet taken the action required to designate a single official
responsible for managing the service contracts of the defense agencies.
Can you tell us when the Department will comply with this requirement?
Secretary Aldridge. As I have stated, I issued policy on May 31,
2002 that implemented the provisions of Section 801 of the National
Defense Authorization Act of Fiscal Year 2002 across the Department.
That policy was addressed to all military components, including all
defense agencies and DOD field activities. To date, in addition to
approving the management and oversight processes of the three military
departments, I have received certification memorandums from over 20
combatant commands, defense agencies, and DOD field activities. These
memorandums certify to me that they have designated a responsible
management and oversight official, and have developed and put in place
adequate processes that comply with the May 31 policy for the
management and oversight of acquisition of services.

11. Senator Akaka. Mr. Walker, in your January 16, 2003, letter to
OMB Director Mitch Daniels, you characterized the required timeframes
in the proposed revision to OMB Circular A-76 as ``unrealistic'' and
questioned whether aggressive, fixed deadlines were the right approach
to expedite the process. You stated that ``additional training,
technical resources, or other support for agency officials in preparing
for and participating in public-private competitions may be needed''
and recommended that ``OMB ensure that agencies provide sufficient
resources to comply with the new A-76 requirements.'' I said much the
same in my comments of December 19, 2002 in response to OMB's proposed
revisions to A-76. GAO's ``high risk'' report on DOD programs notes
that the Department has downsized its acquisition workforce by almost
half over the last decade. This subcommittee has been concerned for
several years now that this downsizing process may have gone too far.
Would you agree that the challenges of meeting the administration's
goals for public-private competition, and of managing services
contracts that result from such competition, are more likely to require
an increase in acquisition resources than a decrease?
Mr. Walker. The administration's goals for conducting public-
private competitions could have a significant impact on the acquisition
workforce in a number of ways. First, as noted by the Commercial
Activities Panel, the current process for conducting these competitions
is complicated, and therefore requires a skilled acquisition workforce
to support the studies. Any changes to the process will require
additional resources for training and perhaps additional personnel.
Second, the number of positions proposed for study in the coming years
is significantly higher than in the past, greatly increasing the
competitive sourcing workload at many agencies. At DOD, for example,
the number of positions proposed for study during the next 5 years is
double what the department has been able to review between fiscal years
1997 and 2002. Civilian agencies, which have not conducted nearly as
many public-private competitions as DOD, will face even greater
challenges in building the necessary infrastructure to conduct these
competitions.\1\ Finally, to the extent that an increase in competitive
sourcing studies results in an increase in the award of service
contracts to the private sector, agencies will need to ensure that they
have a sufficient acquisition workforce in numbers and abilities to
administer those contracts effectively. In this regard, the private
sector historically has won half the public-private competitions.
---------------------------------------------------------------------------
\1\ The costs for additional training or personnel needed to
conduct public-private competitions could be offset, of course, through
the savings realized from conducting the competitions.

12. Senator Akaka. Secretary Aldridge, your predecessor wrote a
memorandum in August 2000, in which he said that the acquisition
workforce had been reduced far enough and that further reductions were
likely to have ``significant adverse impacts on the DOD acquisition
system.'' Your prepared statement indicates you agree. Will you work
with us to oppose legislation that would mandate such reductions?
Secretary Aldridge. We are eager to work with you to oppose
legislated reductions that are not carefully synchronized with DOD's
management streamlining efforts. In my letter dated March 27, 2003 to
Senator Ensign on this matter, I emphasized that workforce reductions
not driven by our strategic planning and efficiency improvements have
the potential for exposing the Department to significant risk. I also
referred to the DOD Inspector General (``DOD Acquisition Workforce
Reduction Trends and Impacts'') and the General Accounting Office
(``Acquisition Workforce: Department of Defense's Plans to Address
Workforce Size and Structure Challenges'') warnings that DOD is
experiencing risk in contracting and program management as a result of
past workforce reductions.
We are continuing to examine opportunities to gain further
efficiencies and will adjust our workforce to reflect the results of
our human capital strategic planning and those efficiencies.

13. Senator Akaka. Ms. Styles, what is your reaction to my
recommendation, and that of the Comptroller General's, that you
lengthen the periods provided for competition and provide agencies with
additional resources to run these competitions?
Ms. Styles. We believe that one of the biggest problems with the
implementation of the old circular was that it often took agencies many
years to complete the process. A 3- to 4-year process benefits no one.
We plan to include timeframes with sufficient flexibility where
appropriate.

14. Senator Akaka. Secretary Aldridge, please provide information
on the assumptions made in the fiscal year 2004 budget request for each
of the military services and defense agencies (through fiscal year
2009) for savings as a result of outsourcing and competitions. Please
include the percentage of jobs expected to be competed, as well as the
total dollar amount of savings expected to be realized.
Secretary Aldridge. The assumptions made in DOD's fiscal year 2004
budget request (through fiscal year 2009) for savings attributed to A-
76 competitions are as follows:

Projected savings are a function of number of
positions saved and average burden cost per position.
The average ``burden'' cost (i.e. total cost to the
Government including salary and benefits) is $65,000 per
position.
A minimum of 20 percent of the positions are
eliminated beginning the second year following the completion
of the A-76 initiative. The first year after the study is
completed reflects a half-year of savings, or 10 percent (note:
the actual budget-assumption varies by military service).
Completion of initiatives occurs 2 to 3 years after
initiatives are announced (depending on the complexity of the
study).
Any anticipated savings are realigned to meet other
Service requirements.

Within the Future Years Defense Program (fiscal year 2004-2009),
the Department plans to initiate competitions under Circular A-76 with
respect to 84,590 positions. Assuming that all positions are competed,
total cumulative savings are estimated at $3 billion, offset by $500
million in cost to conduct the initiatives.
The estimated savings attributed to ``alternatives to A-76'' will
vary and be unique to the business tool used. The Department is in the
process of developing plans for these alternatives, for submission in
the fiscal year 2005 President's budget.

15. Senator Akaka. Mr. Soloway, the CAP report endorsed competition
as the mechanism for determining whether to outsource work currently
performed by Federal employees. The report states: ``Competitions,
including public-private competitions, have been shown to produce
significant cost savings for the Government, regardless of whether a
public or private entity is selected. Competition also may encourage
innovation and is key to continuously improving the quality of service
delivery.'' Does the Professional Services Council (PSC) endorse
competition as the appropriate mechanism for determining whether to
outsource work currently performed by Federal employees, or does PSC
believe that it is appropriate to use ``direct conversions'' in which
work is transferred to the private sector without even giving Federal
employees an opportunity to compete for their own jobs?
Mr. Soloway. The PSC believes strongly in the use of competition to
drive higher efficiency and performance in the provision of Government
services. Indeed, competition is a constant in the Government
procurement arena and contractors not only compete for new work but
also must continually compete for work they currently have. As such, as
acknowledged in the CAP report, the advent of a Government ``bidder''
does not create competition--competition is already robust.
In terms of determining whether to outsource work currently being
performed by Federal employees, PSC believes that the extent to which
public-private competitions are held should not be dictated by law or
regulation but by the mission needs and strategic goals of the agency
involved. The first principle of the 10 overarching principles to guide
sourcing policy agreed to unanimously by the CAP states that sourcing
must be viewed and approached as a strategic exercise which focuses
first and foremost on agency mission execution. Thus, in cases where
the agency management believes its incumbent activities have the
appropriate mix of skills, resources, management innovation, and
technology, a competition involving the incumbent Federal workforce may
well be appropriate.
Consistent with Principle One of the CAP report, in cases where the
agency is performing commercial activities that it determines are not
core to its mission, or for which the agency does not have the
requisite mix of skills, technology, resources, and management
innovation with which to ensure optimal performance, it is entirely
appropriate for an agency to decide not to conduct a public-private
competition and to instead compete the work among private offerors
only.
Finally, it is PSC's position that in cases where a strategic
decision is made not to conduct a public-private competition, the
interests and importance of the incumbent Federal workforce must be an
essential element of the process. Indeed, there are a number of
examples of Government agencies making the decision to not conduct a
public-private competition while also ensuring that the incumbent
workforce is actually advantaged in the process. In those cases, the
offerors commitments to the incumbent workforce were a significant
evaluation criteria, thus creating a significant incentive for
companies to provide benefits and opportunities for that workforce that
far exceed anything that could have been offered by the Government or
under a competition in which the incumbent workforce was a participant.
This focus on the Federal workforce and recognition that they are a
major asset is impossible under the construct of OMB Circular A-76 but
is possible in those cases where a thoughtful management decision has
been made to not conduct a public-private competition.
In summary, public-private competitions have their place but they
should not be mandated by laws or regulations; rather, their role is an
outgrowth of strategic and performance-driven management decisions, as
the very first principle of the CAP report clearly suggests. To mandate
them across the board would be to create far less effective
competitions, waste significant amounts of precious resources, and
create unnecessary chaos and turbulence among the workforce.
Outsourcing need not and should not be viewed as a ``life or death''
decision. Unfortunately, those who continue to battle against
strategic, performance-focused management, and outsourcing, refuse to
acknowledge this reality and instead continue to sow fear and
trepidation among the affected Federal workforce.

16. Senator Akaka. Mr. Soloway, the CAP report endorsed competition
giving Federal employees an opportunity to compete for work that is not
currently performed in the public sector. The report states that both
public and private sectors should have an opportunity to compete ``for
work that is currently performed in-house, work currently contracted to
the private sector, and new work.'' Does PSC support public-private
competition as a two-way street, or does PSC believe that only work
currently performed by Federal employees should be subject to public-
private competition?
Mr. Soloway. The CAP report endorses giving Federal employees an
opportunity to compete for some new work and/or work currently
contracted to the private sector. But the unanimously agreed to
principle under which that statement is made also intentionally
includes the phrase ``consistent with these principles'', and it is
within that phrase that the real meaning of the recommendation is
found. As with the answer to Question 15 above, one must return to the
remaining principles unanimously adopted by the CAP (since those
principles were explicitly designed to be taken as a single, integrated
recommendation), the first one of which states that sourcing is a
strategic, not arbitrary process. As such, the answer to this question
is, in part, very similar to the answer to the above Question 15.
Further, the question of whether the Federal Government should
expend resources competing for work currently contracted to the private
sector implies that only by doing so does competition remain vibrant.
This is not the case. The vast majority of service contracts entered
into by the government are subject to constant competitive pressures.
The existence, or lack thereof, of a Government bidder is rarely, if
ever, the determinant of whether meaningful competition already exists.
As such, the very premise of the question, that ``competition is a two-
way street'' must be changed. Competition is a constant in the
marketplace; it is only with the vast bulk of commercial activities
currently performed by the Government that competition remains a
rarity. Thus, if a decision has been made previously that the work
involved is: (1) commercial in nature; and (2) suitable for performance
by the private sector, then the ongoing competitions that take place in
the government marketplace are more than adequate to ensure continued
performance and efficiency by contractors.
In addition, for work already contracted to the private sector,
there is no incumbent Federal workforce affected by the continuing
outsourcing of that work. Thus, not only is competition already
present, but the question of ``fairness'' for Federal employees is not
in play either.
Public-private competitions for work currently contracted to the
private sector should, therefore, be very limited to circumstances in
which the competitive marketplace for the work being performed no
longer exists and where the Government has such significant excess
capacity it can legitimately afford to dedicate resources to the
requirements involved. Otherwise, there is no justification for
conducting public-private competitions for already contracted work. The
continued presence of ongoing competition is the best guarantor that
performance and efficiency will continue to be improved and there is no
issue of ``fairness'' for Federal employees since there are no
incumbent, affected Federal employees. This is entirely consistent with
the CAP report, and its focus on the strategic nature of sourcing.
______

Questions Submitted by Senator Hillary Rodham Clinton

GOVERNMENT CONTRACTS

17. Senator Clinton. Secretary Aldridge, I have a few questions
regarding recent news articles, including a recent article in the Wall
Street Journal, indicating that multimillion dollar contracts for
rebuilding Iraq are in the process of being awarded. According to the
Wall Street Journal, ``the Bush plan, as detailed in more than 100
pages of confidential contract documents, would sideline United Nations
development agencies and other multilateral organizations that have
long directed reconstruction efforts in places such as Afghanistan and
Kosovo. The plan also would leave big nongovernmental organizations
largely in the lurch: With more than $1.5 billion in Iraq work being
offered to private U.S. companies under the plan, just $50 million is
so far earmarked for a small number of groups such as CARE and Save the
Children.'' Can you tell me what, if any, firms have already been
awarded reconstruction contracts and how were these contracts
solicited?
Secretary Aldridge. These questions deal with contracting done by
the U.S. Agency for International Development (USAID). I am not in a
position to answer the questions since they do not involve Department
of Defense contracting actions. General information about the
contracting being done by USAID to support Iraq reconstruction is
available at http://www.usaid.gov/iraq/about--reconstruction.html.

18. Senator Clinton. Secretary Aldridge, the Wall Street Journal
article states that ``a 10-page USAID contract proposal went out to
companies last month.'' How were firms identified to receive the USAID
contract proposal?
Secretary Aldridge. Please see question #17.

19. Senator Clinton. Secretary Aldridge, will you be making these
contract documents publicly available?
Secretary Aldridge. Please see question #17.

20. Senator Clinton. Secretary Aldridge, according to the Wall
Street Journal article, ``USAID is expected this week to pick the prime
contractor for a $900 million job rebuilding Iraq's infrastructure,
including highways, bridges, airports, and Government buildings.'' Has
that contract been awarded yet? If so, who received the contract?
Secretary Aldridge. Please see question #17.

21. Senator Clinton. Secretary Aldridge, can you tell me what steps
are being taken to avoid any conflicts of interest when these contracts
are awarded?
Secretary Aldridge. Please see question #17.

22. Senator Clinton. Secretary Aldridge, what type of data is
provided to the firms to enable them to bid on the reconstruction work?
Secretary Aldridge. Please see question #17.

23. Senator Clinton. Secretary Aldridge, were any estimates given
to these firms as to how long their services might be necessary?
Secretary Aldridge. Please see question #17.

24. Senator Clinton. Secretary Aldridge, will non-governmental
organizations be allowed to bid on contracts regarding Iraq's
reconstruction? If not, why not?
Secretary Aldridge. Please see question #17.

[Whereupon, at 11:56 a.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

----------

TUESDAY, APRIL 1, 2003

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

IMPACTS OF ENVIRONMENTAL LAWS ON READINESS AND THE RELATED
ADMINISTRATION LEGISLATIVE PROPOSAL

The subcommittee met, pursuant to notice, at 9:04 a.m., in
room SD-106, Dirksen Senate Office Building, Senator John
Ensign (chairman of the subcommittee) presiding.
Committee members present: Senators Ensign, Warner, McCain,
Inhofe, Akaka, and Pryor.
Committee staff members present: Judith A. Ansley, staff
director; and Cindy Pearson, assistant chief clerk and security
manager.
Majority staff members present: William C. Greenwalt,
professional staff member; and Ann M. Mittermeyer, counsel.
Minority staff member present: Peter K. Levine, minority
counsel.
Staff assistants present: Leah C. Brewer, Andrew W.
Florell, and Sara R. Mareno.
Committee members' assistants present: Christopher J. Paul
and Dan Twining, assistants to Senator McCain; John A. Bonsell,
assistant to Senator Inhofe; Douglas Flanders, assistant to
Senator Allard; Arch Galloway II, assistant to Senator
Sessions; D'Arcy Grisier, assistant to Senator Ensign; James W.
Irwin and Clyde A. Taylor IV, assistants to Senator Chambliss;
Russell J. Thomasson, assistant to Senator Cornyn; Davelyn
Noelani Kalipi, assistant to Senator Akaka; William K. Sutey,
assistant to Senator Bill Nelson; Mark Phillip Jones, assistant
to Senator Dayton; and Terri Glaze, assistant to Senator Pryor.

OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

Senator Ensign. The Subcommittee on Readiness and
Management Support is meeting to review the administration's
fiscal year 2004 Readiness Range Preservation Initiative, which
addresses legislation clarifications on the management of
endangered species, marine mammals, air pollution, and
munitions on active ranges.
In this subcommittee's March 13 hearing on this subject,
the Vice Chiefs testified about the cumulative adverse impacts
of urban sprawl and environmental regulation. Their testimony
highlighted the fact that efforts to provide training
flexibility have been curtailed by litigation. This
subcommittee meets again on this subject to hear testimony from
the regulatory agencies and various public policy and State
witnesses.
This is not a new issue. In a series of hearings held in
the House and the Senate over the last 3 years, senior military
witnesses alerted Congress to diminishing training and
increased risk to readiness due to pressures from urban
encroachment and environmental restrictions. The military
departments have endeavored to ease the pressure by working
with the regulators and communities. Unfortunately, efforts to
ensure military testing and training flexibility have been
successfully challenged in court.
With the ongoing war in Iraq, I am very concerned about how
the pressures of urban encroachment and environmental
restrictions may continuously diminish the quality of military
testing and training. Diminished training will eventually erode
readiness and that is unacceptable.
The Department of Defense (DOD) maintains that the
administration's legislative proposal strikes a balance between
environmental protection and the readiness of our men and women
in uniform. I believe some of the witnesses who will appear
before the subcommittee today will agree that that balance has
been achieved, while others will disagree.
I want to know how we solve the problem. That is our goal
here. I also want to know if there are concerns related to the
administration's proposals. For example, perchlorate is present
in the public drinking water supply in several areas in
California and in my own State in Lake Mead. I want to ensure
that the administration's proposals do not affect cleanup
efforts related to drinking water sources such as Lake Mead.
Conversely, I am aware that some opponents of these
proposals assert that under current law, national security
exemptions and exclusions are available to address any threat
to the military testing and training. I question whether these
claimed mechanisms for relief could serve to comprehensively
preserve ongoing military training regimens or to safeguard the
environment. Where is the balance?
If there are concerns or issues related to the legislative
proposals, please raise them and explain your position. Then I
would like to hear productive and meaningful testimony about
the proposed compromises and creative solutions. Congress
cannot afford to embrace the notion that the administration's
proposals roll back environmental laws and respond by doing
nothing for fear of controversy.
I believe we are beyond that point. Based on the testimony
of the Vice Chiefs, it is evident that the status quo is no
longer the answer. I fundamentally believe that finding this
balance is both necessary and possible here. That said, I hope
that Congress, the administration, and other stakeholders will
work together to address these issues in a responsible,
meaningful way.
Senator Akaka, who is not here today, and I believe we
share particular interest in the valuable perspectives of the
environmental interest groups and States represented here
today. I also believe that the hearings held by our
subcommittee and other committees of jurisdiction will
facilitate meaningful Senate review and action on the
administration's legislative proposals.
As soon as Senator Akaka gets here, we will have him make
an opening statement. We do have a long hearing today and I
would ask that each of the witnesses summarize their testimony,
try to keep it under 5 minutes, and your full statements will
be made part of the record.
I would like to welcome our first panel: John Peter Suarez,
Assistant Administrator, Office of Enforcement and Compliance
Assurance, U.S. Environmental Protection Agency; Julie
MacDonald, Special Assistant to the Assistant Secretary for
Fish and Wildlife and Parks, Department of the Interior; and
Dr. Rebecca Lent, Deputy Assistant Administrator for Fisheries,
National Oceanic and Atmospheric Administration.
Senator Inhofe. Mr. Chairman?
Senator Ensign. Yes. Senator Inhofe has done yeoman's work
and we welcome any opening statement.
Senator Inhofe. Having chaired this subcommittee for a
number of years and gone down this road before, I am quite sure
now that we are in the middle of a war people are going to look
at this a little differently than they have in the past. It is
not that we do not have the very finest men and women out there
fighting and the very best-trained right now, but certainly
that training is in jeopardy.
I can remember going over a very serious thing that you
were interested in at one time, Mr. Chairman, on Vieques. We
have lost a range there, a live range. That loss has directly
contributed to the loss of four American lives on the Dara
Range in Kuwait. So we are talking about something very
serious, life and death matters. We look at Camp Pendleton that
has some 17 miles of shoreline; they are down to about 2,000
yards of the beach that are available for amphibious landings.
The gnatcatcher could cause us to lose about 57 percent of the
base as critical habitat.
I think it is important to realize that some of the things
that we are trying to do actually started in a Democratic
administration, in the Clinton administration. I think we have
to keep saying that, because allowing the military to use the
integrated natural resource management plans (INRMP) in place
of critical habitat, that was a key component of the Pentagon's
proposal during the Clinton administration.
So these things that we are dealing with are very serious,
Mr. Chairman. I believe we should get all four of these
legislative proposals passed and it is the very least we can do
for our fighting troops over there now and those who will be
going over there.
Now, Mr. Chairman, I chair the Environment and Public Works
Committee. I have to go up for a nomination hearing at 9:30.
Then I am going to come right back down, because I plan to stay
here all the way through this hearing.
Thank you.
Senator Ensign. We welcome your participation, especially
with all of your experience on this issue.
Mr. Suarez.

STATEMENT OF HON. JOHN PETER SUAREZ, ASSISTANT ADMINISTRATOR,
OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE, U.S.
ENVIRONMENTAL PROTECTION AGENCY

Mr. Suarez. Thank you, Mr. Chairman, members of the
subcommittee, Senator Inhofe. Thank you for inviting me here to
speak to you today on behalf of the United States Environmental
Protection Agency (EPA) about the administration's proposed
National Defense Authorization Act for Fiscal Year 2004.
We believe the administration's proposal appropriately
addresses two equally compelling national priorities, military
readiness and the protection of human health and the
environment. These priorities can both be achieved at the same
time, and we appreciate the DOD's willingness to work with us
to craft the proposals before you today.
The administration's proposal would make changes to certain
pollution control laws that EPA administers and to laws
concerning wildlife protection and habitat preservation, which
are the province of other Federal agencies. I will confine my
remarks here today to the laws under EPA's jurisdiction.
EPA and the DOD share an important mission, especially in
light of September 11, and that is the protection of both our
national and environmental security. One holds little value
without the other, and we believe neither mission should be
sacrificed at the other's expense. Toward that end, EPA and DOD
have for years worked cooperatively towards achieving these
goals with tangible benefits to the American people.
The bill before this committee is the result of just such
collaboration. I would like to highlight for the subcommittee
some of the proposed statutory changes that the agencies have
developed to facilitate our twin missions that are vital to the
health and security of our Nation. First, EPA recognizes that
military readiness depends on DOD's ability to move assets and
material around the Nation, perhaps on short notice. Such
large-scale movements of people and machines may have impacts
on State implementation plans, or SIPs, for air quality.
Accordingly, EPA and DOD developed proposed changes to the
Clean Air Act to allow the Armed Forces to engage in such
activities while working toward ensuring that its actions are
consistent with the plan's air quality standards. Under the
administration's proposal, the military would still be
obligated to quantify and report its impacts on air quality
prior to initiating the readiness activity, but would be given
3 years to comply.
Second, the administration's bill proposes two changes to
the Resource Conservation and Recovery Act (RCRA), the Nation's
solid and hazardous waste law. The bill contains language that
would change the statutory definition of solid waste under RCRA
to provide flexibility from DOD regarding the firing of
munitions on operational ranges, while clarifying that the
definitional changes are not applicable once the range ceases
to be operational.
This change is compatible with existing EPA policy and the
military missions rule that has defined EPA's oversight of
fired munitions at operational ranges since 1997. The bill
specifically maintains the ability of EPA, the States, and
citizens to take actions against the Government in the event
that munitions or their constituents migrate off-range and may
pose an imminent and substantial endangerment to human health
or the environment.
The agencies also worked together to craft a clear common
sense definition of range. Under the revised definitions of
solid waste and range, the military will have statutory
assurance that EPA will not intervene in the firing or training
with munitions while the public may rest secure in the
knowledge that EPA, States, and citizens have authority to take
action against the U.S. Government if munitions pose a threat
off-range or after a range is closed.
Third, the administration's bill proposes analogous changes
to the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) also known as the Superfund law. It
would exempt from the definition of release under CERCLA
explosives and munitions deposited during normal use while on
an operational range. It is important to note that EPA would
retain authority to take action to abate an imminent and
substantial endangerment to public health and the environment
due to the deposit or presence of munitions on an operational
range while still affording the military the flexibility they
need in handling munitions at these ranges.
Indeed, the administration has recently developed language
clarifying that the proposed changes to solid waste and
Superfund laws apply only to operational ranges under the
jurisdiction and control of military services.
In conclusion, we believe that the administration's
proposed bill accommodates the concerns of the military, the
EPA, and the public. I want to assure the subcommittee that
both Administrator Whitman and I support this bill and believe
that the bill's provisions will ensure that America's Armed
Forces are able to carry out their national security mission
and to train the way they fight, and that the agency is able to
carry out its mission of protecting human health and the
environment at the same time.
This concludes my prepared remarks and I will be happy to
answer any questions that the subcommittee may have.
[The prepared statement of Mr. Suarez follows:]

Prepared Statement by John Peter Suarez

Mr. Chairman and members of the subcommittee: Thank you for
inviting me to speak with you today on behalf of the U.S. Environmental
Protection Agency (EPA) about the administration's proposed National
Defense Authorization Act of Fiscal Year 2004. We believe the proposed
bill appropriately addresses two important national priorities:
military readiness and the protection of human health and the
environment. These priorities can both be achieved at the same time,
and we appreciate the Defense Department's willingness to work with us
to craft the proposals before you today.
The proposed bill would make changes to certain pollution control
laws that EPA administers and to laws concerning wildlife protection
and habitat preservation, which are the province of other Federal
agencies. I'll confine my remarks here today to the laws under EPA's
jurisdiction.
In the wake of September 11, we understand more than ever the
importance of military readiness in combating traditional and emerging
foes. Both EPA and DOD leadership recognize the vital importance of
both the mission of protecting human health and the environment and the
mission of protecting national security. Both believe that neither
mission should be sacrificed at the expense of the other. Toward that
end, EPA and DOD have for years worked cooperatively toward achieving
these goals, with tangible benefits to the American people. The bill
before this subcommittee is the result of just such collaboration.
Together, the two agencies resolved key issues in a way that allows the
Services to continue to ``train the way they fight,'' while protecting
the health of our citizens and safeguarding our natural resources.
Indeed, we have recently reached agreement with DOD on language
clarifying that the proposed changes to solid waste and Superfund laws
apply only to operational ranges under the jurisdiction and control of
the military services. The administration has cleared this language and
intends to send it to Congress in the near future. This action
underscores the administration's interest in keeping any changes
limited and sharply focused.
Today, I would like to highlight for the subcommittee several of
these proposed statutory changes the two agencies developed to
facilitate our twin missions.

PROPOSED CHANGES TO THE CLEAN AIR ACT PROVIDE THE ARMED FORCES WITH
NEEDED FLEXIBILITY, WHILE PROTECTING AIR QUALITY

EPA recognizes that military readiness depends on DOD's ability to
move assets and materiel around the Nation--perhaps on short notice.
Such large-scale movements of people and machines may have impacts on
State Implementation Plans (SIPs) for air quality.
Accordingly, EPA and DOD developed proposed changes to the Clean
Air Act's SIP provisions to allow the Armed Forces to engage in such
activities while working toward ensuring that its actions are
consistent with a SIP's air quality standards. Under the proposed bill,
the Armed Forces would still be obliged to quantify and report their
impacts on air quality prior to initiating the readiness activity, but
would be given 3 years to ensure that their actions are consistent with
a given State's SIP. We believe this compromise effectively addresses
military readiness concerns, while ensuring timely compliance with air
quality standards.

PROPOSED CHANGES TO RCRA WILL ALLOW FLEXIBLE AND APPROPRIATE MUNITIONS
OVERSIGHT

The administration's bill also proposes two changes to the Resource
Conservation and Recovery Act (RCRA), the Nation's solid and hazardous
waste law. First, the bill contains language that would change the
statutory definition of ``solid waste'' under RCRA to provide
flexibility for DOD regarding the firing of munitions on operational
ranges, while clarifying that the definitional exemptions are not
applicable once the range ceases to be operational. This change
comports with existing EPA policy and the Military Munitions Rule that
have defined EPA's oversight of fired munitions at operational ranges
since 1997. The bill specifically maintains the ability of EPA, the
States, and citizens to take actions against the U.S. Government in
accordance with the law in the event that munitions or their
constituents migrate off-range and may pose an imminent and substantial
endangerment to human health or the environment, if such materials are
not addressed under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA).
Second, the agencies worked together to craft a clear, common-sense
definition of ``range.'' Under the revised definitions of ``solid
waste'' and ``range,'' the Armed Forces will have statutory assurance
that EPA will not intervene in the firing of or training with
munitions, while the public may rest secure in the knowledge that EPA,
States, and citizens have authority to take action against the U.S.
Government in accordance with the law if munitions pose a threat off-
range or after a range is closed.
The history of interaction between EPA and DOD demonstrates that
the two can work together effectively to achieve their respective
missions, and this should instill confidence that the two agencies will
continue to work together well to carry out those missions under the
proposed legislation. EPA has in only one instance found it necessary
to take an enforcement action that resulted in the cessation of live-
fire training at a military base--namely, at the Massachusetts Military
Reservation (MMR) on Cape Cod, Massachusetts. There, EPA took action
under the Safe Drinking Water Act when it determined that the
groundwater aquifer underlying MMR, the sole source of drinking water
for hundreds of thousands of Cape Cod residents, was threatened with
contamination--and only after efforts to support voluntary action
failed to stop the spread of contamination. Today at MMR, EPA is
overseeing cleanup work to ensure that the drinking water supply for
Cape Cod residents meets all relevant standards now and in the future.
In response to EPA's decisions, the Defense Department shifted some of
this training to another facility and limited its training at MMR to
using small arms, as well as other training without using explosives,
propellants, and pyrotechnics.

ANALOGOUS CHANGES TO CERCLA WILL PRESERVE THE AGENCY'S SUPERFUND
AUTHORITY TO ADDRESS CONTAMINATION WHICH PRESENTS AN IMMINENT AND
SUBSTANTIAL ENDANGERMENT

The administration's bill proposes analogous changes to the CERCLA,
also known as the Superfund law. It would exempt from the definition of
``release'' under CERCLA explosives and munitions deposited during
normal use while on an operational range. It is important to note that
EPA would retain authority to take action to abate an imminent and
substantial endangerment to public health and the environment due to
the deposit or presence of explosives and munitions on an operational
range. As with the proposed changes to RCRA, the change to CERCLA
affords flexibility to the Armed Forces in handling munitions at
operational ranges, but ensures that EPA has the ability to act when
necessary to address the most important public health and environmental
concerns.

ONGOING COLLABORATION ON MUNITIONS

Meanwhile, EPA continues to collaborate with DOD and State and
tribal regulators to develop a new approach to cleaning up ordnance,
explosives, and munitions at nonoperational ranges throughout the
United States. This new approach, an expected product of the Munitions
Response Committee (MRC), is designed to work within the framework of
existing Federal and State authorities. Under the new process, military
departments, EPA, Federal Land Managers, and the States and tribes will
coordinate, where appropriate, and integrate their respective statutory
and administrative authorities under Federal and State environmental
laws. The development of Federal, State, and tribal partnerships and
public participation will be key characteristics of the new process. We
believe that the proposed bill complements the partnerships we are
building through the MRC and will help the Agency ensure that munitions
at both operational and nonoperational ranges are subject to sound
environmental management.

THE NEW PROPOSAL WOULD AUTHORIZE THE TRANSFER OF OBSOLETE VESSELS FOR
USE AS ARTIFICIAL REEFS

The bill would also authorize the Secretary of the Navy to transfer
certain vessels for use as artificial reefs, but retain key
environmental safeguards under CERCLA, RCRA, and the Toxic Substances
Control Act (TSCA). These ships are often contaminated with asbestos
and polychlorinated biphenyls (PCBs). EPA is working closely with the
Maritime Administration to determine if and when reefing is
appropriate, and to find suitable ship-scrapping facilities at home or
abroad to dispose of obsolete ships in a safe and environmentally sound
manner.

PROPOSED CHANGES IN WETLANDS MITIGATION BANKING

One other environmental provision of the bill deserves mention
here. It would allow military departments to use military construction
funds to make payments to wetlands mitigation banking programs and
consolidated user sites when the Department is engaged in an activity
that may adversely affect a wetland. A wetlands mitigation bank is
typically a privately-owned site--in many instances, prior converted
crop land--where wetlands are restored. Wetlands mitigation banks have
enjoyed increasing acceptance and success since the mid-1990s, and the
new bill would simply clarify that military funds could be used for
this purpose.

CONCLUSION

Working together, EPA and DOD have developed a legislative proposal
that addresses the concerns of the Armed Forces about future
applications of EPA's statutes and regulations, while at the same time
preserving the Agency's ability to protect public health and the
environment. In the context of MMR, for example, EPA would still have
the authority to protect the drinking water from imminent and
substantial endangerment under the provisions of the proposed bill.
Similarly, the proposed legislation would codify the so-called
``munitions rule'' under RCRA--an existing EPA regulation that sets
forth the conditions under which EPA and the States can respond under
RCRA to environmental threats at both operating and closed military
ranges. The proposed legislation also states clearly that EPA is
authorized under CERCLA section 106 to address imminent and substantial
environmental threats at both operating and closed ranges.
In conclusion, both the Administrator and I support this bill. We
believe that it appropriately takes account of the interests of the
American people in military readiness and in environmental protection.
I am confident that DOD and EPA can work together within the framework
of the proposed law to ensure that America's Armed Forces are able to
train to carry out their national security mission and that the Agency
is able to carry out its mission of protecting human health and the
environment.
This concludes my prepared remarks. Thank you for the opportunity
to present EPA's views. At this time, I would be happy to answer any
questions you may have.

Senator Ensign. Ms. MacDonald.

STATEMENT OF JULIE A. MacDONALD, SPECIAL ASSISTANT TO THE
ASSISTANT SECRETARY FOR FISH, WILDLIFE, AND PARKS, DEPARTMENT
OF THE INTERIOR

Ms. MacDonald. Good morning, Mr. Chairman and members of
the subcommittee. I appreciate the opportunity to testify on
the role of the Department of the Interior on this important
subject.
Secretary Norton and Assistant Secretary Manson understand
the unique nature of the duties and missions of the military
and the need to train effectively for military activities. This
is particularly true for Assistant Secretary Manson, who is a
graduate of the Air Force Academy and a colonel in the Air
National Guard. The Fish and Wildlife Service (FWS) has
actively sought to work with the DOD to achieve a balance
between meeting the requirements of the various natural
resource laws without impacting the military's ability to
train.
I would like to focus my testimony on the proposals set
forth by the DOD with regard to the Endangered Species Act
(ESA) and the creation of INRMP. At least 300 listed species
occur on the DOD managed lands and access limitations due to
increased security, the necessity for buffer zones, and good
military stewardship has resulted in some of the finest
remaining habitats occurring on military land.
The ESA requires the FWS to designate critical habitat for
listed species if it is prudent and determinable. We recognize
that critical habitat designations on DOD lands can impact the
ability of the military to prepare and train. INRMPs serve as
an effective vehicle through which the DOD can comprehensively
plan for the conservation of fish and wildlife species. This
planning can address important needs for endangered and other
species of fish and wildlife, including the protection of
habitat.
The Department of the Interior's policy is to exclude
military facilities from critical habitat designations if the
facility has an approved INRMP which addresses the species in
question. We support the efforts of the administration to
codify this policy in the Range Readiness and Preservation
Initiative.
The ability of the Department of the Interior to exclude
areas covered by an INRMP has allowed us to address a number of
the DOD concerns over critical habitat designations. For
example, critical habitat proposed for the purple amole, a
plant in California, included significant portions of Camp
Roberts and Fort Hunter Ligett. We excluded Fort Roberts from
the final designation because it had a completed INRMP which
addressed conservation of the plant. Working with the DOD, we
were also able to remove Fort Hunter Ligett from the
designation, although the INRMP to address the protection of
the plant had not yet been approved. The DOD was able to
provide us detailed information on the impact of the proposed
designation on the military readiness activities. The benefits
of those military readiness activities to our national defense
exceeded the benefit of including the area in a designation and
we therefore excluded the property.
I have included additional examples of the excellent
cooperation between the FWS and the DOD in my written
testimony. However, a recent court case in the district of
Arizona has cast doubts on our ability to continue to exclude
military lands from critical habitat based on an INRMP which
addresses the needs of the species in question. The FWS
excluded lands covered by a national forest management plan
from critical habitat proposed for the Mexican spotted owl and
the court ruled that the FWS could not exclude lands from
critical habitat designations based on the existence of a
management plan.
We felt it important to advise the committee of the
decision and the cloud it casts over our continued ability to
exclude military lands with approved INRMPs from critical
habitat. The decision adds additional weight to the
administration's proposal for statutory exclusion. Codifying
the Department of the Interior's policy on excluding military
lands from critical habitat based on the existence of INRMPs
would likely reduce future litigation and challenges and
provide more certainty to the DOD that their lands will
continue to be excluded from designation if they have an
approved INRMP which provides for the conservation of the
species in question.
In closing, Mr. Chairman and subcommittee members, I
believe both the Interior Department and the DOD have acted
cooperatively to implement the natural resource conservation
laws passed by Congress. We are aware of the challenges that
have arisen during this endeavor. The Interior Department is
prepared to explore and craft creative solutions to balance our
conservation mandates with military readiness. We look forward
to continued work with the DOD on this vitally important
matter.
This concludes my testimony. I appreciate the opportunity
to appear today and I would be pleased to answer any questions
you may have.
[The prepared statement of Ms. MacDonald follows:]

Prepared Statement by Julie MacDonald

Mr. Chairman and members of the subcommittee, I am Julie MacDonald,
Special Assistant to the Assistant Secretary for Fish and Wildlife and
Parks in the Department of the Interior. I am pleased to appear before
you today to discuss the role of the Department of the Interior in
implementing Federal natural resource laws and our continuing working
relationship with the Department of Defense (DOD) on natural resource
issues. My statement will address the Fish and Wildlife Service's
responsibilities and authorities under the Endangered Species Act
(ESA), the Sikes Act, and the Marine Mammal Protection Act (MMPA).
These laws reflect our Nation's long-standing commitment to the
conservation of our natural resources for the benefit of future
generations.
The Department interacts with DOD activities through its bureaus,
including the U.S. Fish and Wildlife Service, the Bureau of Land
Management, and the National Park Service. The Fish and Wildlife
Service strives to ensure flexibility in meeting our joint
responsibilities under the various natural resource laws without
impacting the military's ability to train its personnel. I believe that
the Fish and Wildlife Service and the military have done a commendable
job at working together to strike a balance between our legal
responsibilities and the Armed Forces' duty to be both protectors of
our national security and stewards of our natural heritage. I also
acknowledge that more can be done. I will address both our successes
and challenges as I discuss issues associated with the applicable laws.

ENDANGERED SPECIES ACT

The ESA was passed in 1973 to conserve vulnerable plant and animal
species that, despite other conservation laws, were in danger of
extinction.
DOD has a critically important role to play in the conservation of
many rare plants and animals. At least 300 species listed as threatened
or endangered occur on DOD-managed lands. DOD manages approximately 25
million acres on more than 425 major military installations throughout
the United States. Access limitations due to security considerations
and the need for safety buffer zones have sheltered many military lands
from development pressures and large-scale habitat loss. As a result,
some of the finest remaining examples of rare wildlife habitats exist
on military lands.
The Fish and Wildlife Service has strived to establish good
relationships with DOD that enable the military to carry out its
mission of protecting our country while also ensuring the conservation
of ESA-listed species on land it manages. Some outstanding examples of
these partnerships are included at the end of my testimony.
Candidate Conservation
Conserving species before they need protection under the ESA is
easier, more efficient, and poses fewer challenges to Federal agencies,
including the military. In partnership with DOD and NatureServe, the
Fish and Wildlife Service is developing a list of all at risk, non-
federally listed species that may be found on or near military lands.
This partnership project was developed by the military agencies, and
demonstrates their interest in working with the Fish and Wildlife
Service to benefit species.
The term ``species at risk'' is a term used by NatureServe for a
native species that is either a candidate for listing or is considered
by NatureServe and the Network of Natural Heritage Programs to be
``imperiled'' or ``critically imperiled.'' In NatureServe's use of the
term, ``species at risk'' refers to species that are presumed extinct,
historical, critically imperiled, imperiled, and vulnerable (GX, GH,
G1, G2, G3 ranks, respectively). Although the Fish and Wildlife Service
generally means the same thing when we use the term ``species at
risk,'' we use the term as a descriptive, illustrative term for those
species that may warrant conservation to prevent the need to list under
the ESA. A ranking of G1, G2, or G3 indicates those kind of species.
``Imperiled'' and ``critically imperiled'' are defined by NatureServe
as terms referring to G1 and G2 ranked species.
Once a species at risk is identified based on a mutual priority
between the DOD installation and the FWS office, the Fish and Wildlife
Service works with DOD to develop and implement conservation
recommendations for the relevant activity. DOD working on a particular
``species at risk'' is based on a mutual priority between the DOD
installation and FWS office.
In addition to this local and regional cooperation, Fish and
Wildlife Service and DOD personnel have been meeting quarterly for
several years in an ``Endangered Species Roundtable.'' This informal
session allows for open discussion and can lead to the referral of
particularly difficult issues to headquarters for guidance or
resolution. The group also reviews the Sikes Act and Integrated Natural
Resource Management Plan (INRMP) development and implementation as they
pertain to endangered species management.
Challenges
Even with these successful partnerships, we acknowledge that there
have been challenges in resolving endangered species conservation and
the military mission at some DOD bases and facilities. For example, 18
threatened or endangered species occur on Camp Pendleton, a Marine
Corps Base in California. For some of these species, like the tidewater
goby, the base harbors the only known remaining populations. Preventing
potential conflicts between endangered species conservation and Camp
Pendleton's primary military mission continually challenges the
creativity of both the Fish and Wildlife Service and the base
leadership.
Section 7(j) of the ESA provides a national security exemption that
DOD can invoke in cases where national security would be unacceptably
compromised by conservation responsibilities. This exemption has never
been invoked by DOD, a fact that speaks very well to the creativity of
our military and natural resource professionals. However, it is
apparent that we must avoid penalizing the military for having done
positive things for conservation of species and we must not unfairly
shift the burden of species protection to the military. Additionally,
in some cases, issues arise because of differing perceptions between
our respective agencies about the effects of the provisions of the ESA.
Finally, I must note that many of the challenges presented to the
military under the ESA are similarly faced by other Federal agencies
and private landowners. We look forward to continuing to work with the
DOD to clarify these issues and build upon the relationship we have
established.

RECENT COURT DECISION ON DEFINITIONAL EXCLUSIONS FROM CRITICAL HABITAT

Integrated Natural Resource Management Plans (INRMPs) are planning
documents that allow the military to implement landscape-level
management of its natural resources while coordinating with various
stakeholders. The Department of the Interior initiated a policy in the
previous administration, which we have continued, to exclude military
facilities from critical habitat if there was an approved INRMP for
that facility which addressed the species in question. However, a
recent court case has cast doubt on our ability to continue this
practice.
The policy is based on the definition of critical habitat which
states, in part:

. . . the specific areas within the geographical area occupied
by the species . . . on which are found those physical or
biological features--(I) essential to the conservation of the
species and (II) which may require special management
considerations or protection;

The exclusion policy was based on a decision that military lands
with an approved INRMP, and other types of land with approved
management policies, did not require special management consideration
because they already had adequate management and, thus, by definition
would not be considered critical habitat.
However, the U.S. District Court in Arizona has ruled, in a case
relating to Forest Service lands (Center for Biological Diversity v
Norton), that this interpretation is wrong, and the fact that lands
require special management necessitates their inclusion in, not
exclusion from, critical habitat. The Court went on to say that the
Government's interpretation amounted to our inserting the word
``additional'' into the statute (between ``require'' and
``management''), and that only Congress can so revise the definition.
While the implications of this decision go far beyond military
lands, we felt it important to advise the committee of it and the cloud
it casts over our continued ability to exclude military lands with
approved INRMPs from critical habitat. We believe this adds additional
weight to the administration's proposal for a statutory exclusion.
To avoid possible confusion in light of the Court's ruling, we
would suggest striking the words ``provides the `special management
considerations or protection' required under the Endangered Species Act
(16 U.S.C. 1532(5)(A)) and'' from the proposed new section 2017(a).
While that phrase is consistent with our interpretation of the law, it
could cause future litigation problems due to the Court's ruling that
the necessity for ``special management considerations or protection''
requires that land to be included, not excluded, from critical habitat.
This change would leave the section with an unambiguous statement that
completion of an INRMP for the species in question precludes
designation of critical habitat at that facility.

RECENT CRITICAL HABITAT ACTIONS

The ESA portion of the administration's proposal addresses critical
habitat designations. The Department has been able to address a number
of DOD concerns over critical habitat designations.
Critical habitat proposed for the purple amole, a plant, in
California included significant portions of Camp Roberts and Fort
Hunter Liggett. Camp Roberts had a completed INRMP which addressed
conservation of this plant, and we excluded it from the critical
habitat designation on this basis.
While Fort Hunter Liggett was developing an INRMP to address the
plant, it did not have the plan completed at the time we had to make
the decision on the critical habitat designation. However, the DOD had
provided us with detailed comments on the adverse impacts to military
readiness that would result from the proposed designation, and these
justified removing the fort from the critical habitat under section
4(b)(2) of the ESA. We determined that the benefits of excluding the
area exceeded the benefits of inclusion, in that the adverse impacts to
national defense exceeded the benefits that would result from
designating the area as critical habitat.
Although not the basis for our decision, the fact that Fort Hunter
Liggett had a statutory obligation to complete its INRMP, and to
include the plant within that plan, provided us with an additional
comfort level for that exclusion.

SIKES ACT AND INTEGRATED NATURAL RESOURCE MANAGEMENT PLANS

In fiscal year 2002, the Fish and Wildlife Service and State fish
and wildlife agencies assisted in development, review, and/or
implementation of INRMPs for 225 military installations in the United
States.
INRMPs serve as an effective vehicle through which DOD and the
Military Services can comprehensively plan for conservation of fish and
wildlife species. This planning has the potential to address important
needs for resident endangered species, including the protection of
habitat.
We are committed to improving and expanding our existing
partnerships with DOD, the Army, the Navy, the Air Force, and the
Marine Corps. We look forward to opportunities to increase the utility
of INRMPs as tools to maximize the potential benefits of DOD lands to
fish and wildlife conservation while ensuring effective training of our
troops.

MARINE MAMMAL PROTECTION ACT

The Marine Mammal Protection Act of 1972 established a Federal
responsibility, shared by the Secretaries of the Interior and Commerce,
for the management and conservation of marine mammals. The Department
of the Interior is responsible for sea otters, walrus, polar bears,
dugongs, and manatees, while the Department of Commerce is responsible
for cetaceans and pinnipeds, other than walrus, including seals,
whales, and dolphins. In 1994, Congress enacted a number of amendments
to the statute. One of the provisions, with broad applicability
throughout the act, added the definition of ``harassment'' as an
element of the act's take provisions.
Over the last several years, the Fish and Wildlife Service has
worked diligently with the National Marine Fisheries Service (NMFS),
the Marine Mammal Commission (MMC), the United States Navy, and Alaska
Natives to develop proposals that enhance marine mammal conservation,
and provide greater certainty to the regulated public regarding certain
areas of the existing law. During this process, revisions to the
definition of harassment were considered to address a number of
concerns, including those expressed by the Navy. The text of this
proposed amendment to the definition of harassment is contained in
administration's Range Readiness and Preservation Initiative in a way
that only applies to DOD military readiness activities. We note that
this same language applying to all entities, in addition to other
important proposals related to the MMPA, are contained in the
administration's comprehensive legislative proposal to reauthorize and
amend the MMPA. This MMPA reauthorization proposal was transmitted to
Congress at the end of last month. The Department strongly supports
enacting this comprehensive legislative proposal, which will address
the concerns of the Navy regarding harassment.
The administration's Range Readiness and Preservation Initiative
contains two other provisions related to the MMPA--an incidental take
provision related to military readiness activities, and a national
defense exemption. Because the Department of Commerce has the most
interaction with DOD regarding these particular MMPA issues, we will
defer to their comments on these provisions.

CONCLUSION

In closing, Mr. Chairman, I believe both the Department of the
Interior and DOD have acted cooperatively to implement natural resource
conservation laws passed by Congress. We are aware of the challenges
that have arisen during this endeavor. The Department is prepared to
explore and craft creative solutions to balance our conservation
mandates with military readiness. We look forward to continue work with
the DOD on this vitally important matter.
This concludes my testimony. I appreciate the opportunity to appear
today before the subcommittee, and I would be pleased to answer any
questions you have.
Examples: FWS-DOI Cooperation in Endangered Species Conservation
United States Air Force Academy, Colorado. The U.S. Air Force
Academy recognized the value of long-range planning when it
commissioned a baseline study of small mammals in 1994. The survey
aided the Air Force in identifying the presence of the Preble's meadow
jumping mouse, which at the time was a candidate for listing. A species
receives protection under the ESA when it is listed as endangered or
threatened. In order to help DOD agencies plan their activities, the
Fish and Wildlife Service shares information on listing candidates and
upcoming listing actions. As a result, the Academy entered into a
partnership with the Colorado Natural Heritage Program to study the
mouse and provide information for management and conservation
strategies.
When the jumping mouse was listed as threatened in 1998, the Fish
and Wildlife Service took steps to ensure that the Academy would be a
full partner in the species' management and recovery. The Academy's
natural resources manager is a member of the Science Advisory Team, a
group of scientists and managers dedicated to compiling the best
science available to support the conservation of the mouse throughout
its range. An Academy representative also holds a position on the
executive committee for a habitat conservation plan (HCP) under
development for El Paso County, Colorado. Through the HCP process, the
Academy will coordinate with non-Federal entities in the development of
regional conservation strategies for the mouse. In addition, at the
request of the Fish and Wildlife Service, the Academy's natural
resources manager is representing the Air Force on the Preble's Meadow
Jumping Mouse Recovery Team, which is charged with developing a plan to
restore the species to a secure status. The Air Force also initiated a
programmatic formal consultation under section 7 of the ESA for its
Preble's meadow jumping mouse conservation management plan and
conservation agreement. The biological opinion provided by the Fish and
Wildlife Service on the Academy's conservation management plan
significantly reduced the regulatory burden on both the Academy and the
Fish and Wildlife Service by removing the need for section 7
consultations for each instance of regular maintenance.
Camp Pendleton, California. In 1999, substantial areas of Camp
Pendleton were included in proposed designations of critical habitat
for 5 of the 18 listed species that are present on the base. The Fish
and Wildlife Service was able to work within the provisions of the ESA
to avoid designating critical habitat on the training areas within Camp
Pendleton.
The ESA requires the Fish and Wildlife Service to determine whether
designation of critical habitat is prudent and determinable. Under
sections 4(b)(2) of the ESA, the Secretary of the Interior can exclude
areas from critical habitat designations when economic or policy
interests outweigh the expected benefits of designation. The Fish and
Wildlife Service has used military readiness as a reason to exclude
training areas from critical habitat designations many times now.
For example, the 1999 proposals for critical habitat on Camp
Pendleton would have designated over 50 percent of the base as critical
habitat for listed species, including the California gnatcatcher, the
Tidewater goby, the Riverside fairy shrimp, the San Diego fairy shrimp,
and the arroyo toad. As a result of the exclusion process discussed
above, the Fish and Wildlife Service was able to exclude most of Camp
Pendleton from the designated critical habitat due to Marine Corps
concerns about the effects the designations could have on military
training critical to national security. The land area currently
designated as critical habitat on Camp Pendleton encompasses less than
4 percent of the 125,000 acre, over half of which is located on land
leased by the State, rather than the base proper.
Fort Hood, Texas. Under the section 7(a)(2) of the ESA, Federal
agencies are required to consult with the Fish and Wildlife Service to
ensure that actions they authorize, fund, or carry out are not likely
to jeopardize the continued existence of listed species or adversely
modify designated critical habitats. A good example of this process
occurred recently at Fort Hood. As one of the largest heavy artillery
training sites in the country, it conducts live-weapons fire and
aviation training and houses more than 500 tanks. Much of the 220,000-
acre base resembles barren, scorched battlefields with ruts as deep as
trenches. However, it also contains essential nesting habitat for two
endangered songbirds, the golden-cheeked warbler and black-capped
vireo. Fort Hood is balancing its military mission with environmental
stewardship.
As part of its responsibility under the ESA, the post manages
66,000 acres, more than 25 percent of the land on base, for the
recovery of these two endangered species. The post also provides a
haven to wintering bald eagles, occasional visiting whooping cranes,
peregrine falcons, and other rare plant and animal species.
The Army entered into an interagency consultation with the Fish and
Wildlife Service under section 7 of the ESA. In 1993, the Fish and
Wildlife Service issued a ``no jeopardy'' biological opinion (BO).
Following the issuance of the BO, Fort Hood contracted with the Nature
Conservancy of Texas for further research and monitoring of the birds.
In conjunction with Fish and Wildlife Service and Army biologists,
conservancy researchers are compiling the most comprehensive body of
information on the birds to date. Fort Hood has followed the
requirements of the 1993 BO (including a version amended in 2000) and
has funded valuable research and management strategies that can be
applied to warbler and vireo issues range-wide. The birds are
benefiting from our partnership with the Garrison Commander and base
natural resources staff.
Fort Bragg, North Carolina. For listed species, recovery is the
ultimate goal. Section 7(a)(1) of the ESA directs Federal agencies to
use their statutory authorities to fulfill this goal. The Sandhills
region of North and South Carolina supports the largest population of
red-cockaded woodpeckers (RCW) in the United States. Fort Bragg is the
only Federal authority managing lands in that region for the recovery
of RCWs. The area around Fort Bragg is being rapidly developed, and if
critical tracts are not protected soon, they will be lost to the
woodpecker. Loss of these lands due to development also would limit
Fort Bragg's ability to sustain current and future military training.
In response, the Army launched a Private Lands Initiative with The
Nature Conservancy and other partners to purchase land or conservation
easements from willing sellers. The lands will not only become
available for red-cockaded woodpecker recovery, but also for compatible
military training activities and recreation.
Fort McCoy, Wisconsin. Fort McCoy encompasses 59,750 acres and is
home to a diversity of vegetation, including wild lupine, which is the
only known food plant for larvae of the endangered Karner blue
butterfly. Since 1990, when the installation discovered Karner blues on
its land, military training and the butterflies have coexisted and
thrived. Fort McCoy officials began coordinating with the Fish and
Wildlife Service on the impact of both military and non-military
activities affecting the Karner blue butterfly in 1992. In early 1994,
the Fish and Wildlife Service issued Fort McCoy a no-jeopardy BO that
included ``reasonable and prudent measures'' and ``terms and
conditions,'' both as provided under the ESA. As part of an effort to
fulfill those terms, Fort McCoy submitted a draft Karner Blue Butterfly
Conservation Plan to the Fish and Wildlife Service in 1995. The plan
outlined the direction Fort McCoy would take to manage its lands for
the butterfly while allowing for the successful completion of the
installation's military training mission. The final conservation plan
was completed in 1997. Fort McCoy has been able to comply with the ESA
while having only minimal impact on military training.
Pearl Harbor, Hawaii. A Navy team recently created some critical
mudflat habitats for endangered waterbirds on the shores of Pearl
Harbor. These mudflats are home to a number of Hawaiian waterbirds,
including four endangered species and a variety of migratory birds. The
site is a small pond within a unit of the Pearl Harbor National
Wildlife Refuge. While the underlying land and water is owned by the
Navy, the refuge is managed by the Fish and Wildlife Service. Over the
years, the pond has provided decreasing value to waterbirds because of
the increasing growth of invasive plants and weeds. Fish and Wildlife
Service staff had attempted to create clear spaces by changing the
water levels, but it wasn't enough to make the area suitable habitat
for waterbirds. Additional work with heavy equipment was needed to
create conditions favorable for wildlife.
In August 2000, a Navy Seabee unit answered the Refuge Manager's
request for help and at the same time benefited from some real-life
training. Two Seabee heavy equipment operators maneuvered a bulldozer
and grader to sculpt the bottom of the pond. Putting their Navy
engineering skills to work in this training exercise, they reshaped
mudflats for endangered Hawaiian stilts and constructed a drainage
system according to a refuge restoration plan. This project was just
one example of the Navy's strong partnership with the Fish and Wildlife
Service's national wildlife refuge in Pearl Harbor. For years, sailors
and their families also have volunteered numerous weekend hours
creating new habitats and clearing away trash and excess vegetation at
the refuge.
Air Force in Alaska and Peregrine Falcon Recovery. Since the early
1980s, the Air Force has worked with the Fish and Wildlife Service to
minimize or eliminate impacts of Air Force activities on peregrine
falcons in Alaska. Through the section 7 consultation process, the Air
Force and the Fish and Wildlife Service identified major peregrine
nesting areas in proposed Air Force training locations. Much of this
training involves very low-level and high-speed flights, a combination
with the potential to disturb many wildlife species, including nesting
peregrine falcons. The Air Force agreed to a protective ``no-fly'' zone
of 2 miles horizontal distance and 2,000 feet above the nest level in
these dense nesting areas. Additionally, the Air Force is monitoring
several nearby peregrine populations that fall outside the protected
areas. This monitoring effort, which has continued since 1995, shows
that the protective zones appear to provide adequate protection in the
densest nesting areas and that the incidental loss of nestlings outside
these zones is below the levels originally anticipated. Rather than
making a minimal effort to comply with the ESA, the Air Force actively
pursued programs to promote peregrine recovery, which helped make it
possible to remove this magnificent bird from the threatened and
endangered species list in 1999.

Senator Ensign. Thank you.
Dr. Lent.

STATEMENT OF DR. REBECCA LENT, DEPUTY ASSISTANT ADMINISTRATOR
FOR FISHERIES, NATIONAL MARINE FISHERIES SERVICE, NATIONAL
OCEANIC AND ATMOSPHERIC ADMINISTRATION

Dr. Lent. Thank you, Mr. Chair. I appreciate this
opportunity to address issues of environmental protection in
the context of military operations and readiness. National
Oceanic and Atmospheric Administration (NOAA) fisheries is
responsible for the management of nearly 150 stocks of marine
mammals under the Marine Mammal Protection Act (MMPA).
I am happy to report that over the past few years NOAA has
been working very closely with our partners at the DOD,
particularly the Navy since we have a shared responsibility for
the oceans. We have developed a productive relationship. We
have worked on efforts to improve coordination between agencies
working on the process, research coordination, and strategic
planning.
The DOD bill proposes changes to three areas of the MMPA.
First of all, the definition of harassment; second, the
incidental take authorization language; and third, a national
defense exemption to the MMPA.
The change in the definition of harassment, not a surprise,
it is the same as the definition that we have proposed. That is
because we have been working closely with our partners at the
DOD. This change in the case of the DOD bill is only for
military operations. In our bill that we sent to Congress in
February of this year, it would be for all activities.
The purpose of the change in the definition is to focus on
those activities that truly have an impact on the marine
mammals and not insignificant impacts. The proposed change is
also consistent with the National Research Council
recommendations.
Also included in the DOD bill, the second area are changes
to permitting legislative requirements. These are for
incidental take permits, takes that happen that are
unintentional, but not unexpected, during activities that are
otherwise lawful. NOAA Fisheries can authorize such takes as
long as the takings have no more than a negligible impact on
the stocks and will not have an unmitigable impact on the
subsistence harvest of these species.
A couple points about these changes to the permitting
process. First of all, in order to get this permit, the DOD
will still have to show that these activities are having a
negligible impact on the marine mammals species. Also, military
readiness activities small take authorizations will still have
to abide by the processes under the ESA, the National
Environmental Policy Act, the Administrative Procedures Act, et
cetera, these acts which provide for analyses of options,
public hearings, public comment, and input.
Also, in terms of these changes in permits, it would be
necessary for us to know in order to make this negligible
impact determination what activities are taking place by the
military as well as when and where. So the changes in the
legislation do not change the type of analyses that we will
have to do to authorize the activities.
Finally, the third area of change to the MMPA is an
exemption clause for actions necessary for national defense.
This exemption clause already exists in the ESA. It does
require or recommend a consultation with the Secretaries of
Commerce and Interior and this exemption can last for up to 2
years.
In conclusion, NOAA and the Department of Commerce support
the DOD authorization bill. We are confident that DOD and NOAA
can continue to work together within the framework of the
proposed law to ensure that our Armed Forces are able to train
to carry out their national security mission while we can carry
out our mission of marine conservation. We will continue to
work with the Navy to make sure this happens.
Thank you very much.
[The prepared statement of Dr. Lent follows:]

Prepared Statement by Rebecca Lent, Ph.D.

Mr. Chairman and members of the subcommittee, thank you for
inviting me to testify today regarding the fiscal year 2004 Department
of Defense Readiness and Range Preservation Initiative (RRPI). I am Dr.
Rebecca Lent, Deputy Assistant Administrator for Fisheries at the
National Oceanic and Atmospheric Administration (NOAA).
I appreciate the opportunity to address issues of environmental
protection in the context of military operations and readiness. NOAA
Fisheries' strategic goals regarding environmental stewardship are to
build sustainable fisheries, recover protected species, and sustain
healthy coastal ecosystems. Our stewardship of living marine resources
is conducted for the benefit of the Nation through science-based
conservation and management. NOAA Fisheries' role in environmental
stewardship is defined legislatively through the Marine Mammal
Protection Act (MMPA), the Endangered Species Act (ESA), the Magnuson-
Stevens Fishery Conservation and Management Act, and other statutes.

MARINE MAMMALS

With regard to marine mammals, NOAA Fisheries is responsible for
the conservation and management of 147 marine mammal stocks of
cetaceans and pinnipeds under the MMPA. NOAA cannot fulfill this
mission by itself. We must work with our constituents, other resource
management agencies, such as the Fish and Wildlife Service and the
Environmental Protection Agency, and agencies such as the Department of
Defense (DOD) to help us fulfill these stewardship responsibilities.
Over the last few years, NOAA has been working more closely with
our Federal partners at DOD, particularly the Navy, due to our shared
responsibilities for the oceans. We have developed a productive working
relationship. NOAA Fisheries and the Navy have undertaken a number of
efforts to improve coordination between the two agencies, including
research coordination and strategic planning opportunities. Discussions
have focused on the integration of agency processes under the ESA and
the MMPA, as well as the concerns raised by the military in achieving
its mission responsibilities.
To build on efforts at the staff level, NOAA Fisheries has been
meeting with H.T. Johnson, Acting Secretary of the Navy, on ways to
expand our partnership in achieving our distinct yet complementary
missions. These meetings have focused on opportunities to expand
coordination efforts for complying with applicable resource laws, and
ways to continue to increase cooperative research and outreach on
complex scientific issues.
Additionally, NOAA Fisheries is working hard to meet the increasing
demands being placed on our regulatory program to process applications
and authorizations under MMPA. The phenomenon of sound in the ocean has
grown tremendously and, as with many scientific issues, the more
questions you ask about its impacts on marine mammals, the more you
find that are yet to be answered. Not only has the complexity of the
analyses increased, but public scrutiny as well.

MMPA REAUTHORIZATION

In February of this year, the administration transmitted its
proposed MMPA Amendments of 2003 to Congress. One important provision
contained in the administration's MMPA bill relative to RRPI is a
change to the definition of harassment. Although the existing regime
under the MMPA and ESA is fairly flexible, the administration
recognizes that the definition of harassment under the MMPA needs
clarification. As a result, NOAA Fisheries worked closely with the DOD,
the Department of the Interior, the Marine Mammal Commission, and
others to develop a revised definition as part of the administration's
MMPA reauthorization package. We believe that a clearer definition of
harassment would be beneficial to the regulated community as a whole.
We look forward to working with congressional members and staff to
help provide any necessary information or assistance that will aid in
the reauthorization of the MMPA in the current Congress.

DOD AUTHORIZATION: THE READINESS AND RANGE PRESERVATION INITIATIVE OF
2003

The National Defense Authorization Act for Fiscal Year 2004
contains a number of provisions that are relevant to NOAA Fisheries and
the MMPA. The RRPI would make a number of amendments to the MMPA
specifically for military readiness activities. These amendments would
apply to both the DOD and the U.S. Coast Guard. NOAA Fisheries
understands the timing issues relative to military readiness. Because
these proposed amendments deal solely with military readiness
activities and national security, they have been included in the draft
National Defense Authorization Act for Fiscal Year 2004 and not the
draft Marine Mammal Protection Act Amendments of 2003 that the
administration transmitted to Congress on February 21, 2003.
The key points noted in the ``Purposes'' section of the RRPI
legislation are: ``To ensure military readiness by addressing problems
created by encroachment on military readiness activities, marine areas,
and airspace reserved, withdrawn, or designated for military use;
reaffirm the principle that such lands, marine areas, and airspace
exist to ensure military preparedness; shield military readiness
activities and lands, marine areas . . . from encroachment, while
ensuring that the DOD fulfills its environmental stewardship
responsibilities . . . re-establish the appropriate balance between
military readiness and environmental stewardship. . . .'' The term
``military readiness activities'' is broadly defined and would include
any training and operations that could be related to combat readiness.
Definition of Harassment: The RRPI includes a change to the
definition of `harassment' in section 3 of the MMPA. This definition is
the same as the one contained in the administration's proposed MMPA
Amendments; however, the RRPI definition only applies to military
readiness activities, rather than all regulated activities.
Incidental Take Permits: Additional amendments to the MMPA that are
contained in the RRPI include a group of changes to the current
legislative requirements that govern applications for incidental take
permits (section 101(a)(5)(A) in the MMPA). Incidental takes are those
that are unintentional, but not unexpected. These takes occur during
otherwise lawful activities. The MMPA established a moratorium on the
taking of marine mammals in U.S. waters by any person, as well as by
U.S. citizens in international waters.
In 1981, Congress amended the MMPA to provide for `small take'
authorizations for otherwise lawful activities. Under the present
scheme, NOAA Fisheries will authorize the takes of small numbers of
marine mammals if the takings will have no more than a negligible
impact on those marine mammal species or stocks, and not have an
unmitigable adverse impact on subsistence harvests of these species.
Through regulation, NOAA Fisheries has defined ``negligible impact'' to
be an impact resulting from the specified activity that cannot be
reasonably expected to, and is not reasonably likely to, adversely
affect the species or stock through effects on annual rates of
recruitment or survival.
These small take authorization regulations are implemented through
letters of authorization (LOAs), can last for up to 5 years, and
require notice and comment rulemaking. Navy and other DOD activities
sometimes need authorization for the incidental take of marine mammals.
In 1986, Congress amended both the MMPA, under the small take
program, and the Endangered Species Act, to authorize takings of
depleted (and endangered or threatened) marine mammals, again provided
that the taking (lethal, injurious, or harassment) was small in number
and had a negligible impact on marine mammals.
In 1994, MMPA section 101(a)(5) was amended to establish an
expedited process by which U.S. citizens can apply for authorization to
incidentally take small numbers of marine mammals by harassment,
referred to as Incidental Harassment Authorizations (IHAs). IHAs may
only last up to 1 year in duration. However, this program allows
authorizations to be issued within 120 days, instead of the 6-8 months
required for LOAs issued under ``small take'' regulations. Most LOAs
and IHAs to date have authorized the incidental harassment of marine
mammals by noise.
The RRPI makes a number of changes to section 101(a)(5) of the
MMPA, as it applies to military readiness activities. The RRPI would
add the words ``military readiness activities'' after ``other than
commercial fishing'' and adds a new paragraph 7(A) to this section.
This new paragraph, is similar to the current paragraph 5(A), with the
following exceptions:

(7)(A) does not contain the terms ``specified
activity,'' ``specified geographical region,'' and ``small
numbers.''
(7)(A) does not contain (5)(A) language that requires
publication of the proposed authorization in the Federal
Register, public media, etc., to provide opportunity for public
comment. This was inadvertently omitted in the drafting and
there was no intention to limit the opportunity for public
comment.

The important point in evaluating the impact of these proposed
amendments to the MMPA small take program provisions on NOAA's trust
resources and the MMPA is that DOD will still have to show that its
activities are having a negligible impact on the marine mammal species
and populations. Additionally, it will have to demonstrate that its
activities will not have an unmitigable adverse impact on the
availability of such species or stocks for taking for subsistence uses
pursuant to the MMPA. These are the key elements to maintaining the
health of marine mammal species and are the premise for the integrity
of the incidental take authorization section of the MMPA. Additionally,
military readiness activity small take authorizations will have to
abide by all ESA, National Environmental Policy Act, and Administrative
Procedure Act requirements where they apply.
To make the requisite negligible impact determination and to comply
with these other environmental laws, NOAA Fisheries would have to know
what activities would be taking place--also, when and where they would
occur. A substantive effect on more than a small proportion of a
population would likely have more than a negligible impact; therefore,
numbers are taken into account, based upon biological significance,
which is how NOAA Fisheries has been implementing the program.
Consequently, I predict that the proposed amendments to the MMPA would
have no adverse impact on the protection of marine mammals.
Exemption Clause:
With regard to the exemptions clause for actions necessary for
national defense, the language would allow the Secretary of Defense,
after consulting with the Secretary of Commerce and the Secretary of
the Interior, to exempt any action or category of actions undertaken by
the DOD from compliance with any requirement of the MMPA. These
exemptions may be granted for 2 years, with additional 2 year
exemptions possible after further consultation between the Secretaries.
This exemption is similar to the one found in the ESA.

CONCLUSION

We support the fiscal year 2004 DOD RRPI and believe that it takes
account of the interests of the American people in military readiness
and in environmental protection. I am confident that DOD and NOAA can
work together within the framework of the proposed law to ensure that
America's Armed Forces are able to train to carry out their national
security mission and that the Agency is able to carry out its marine
conservation responsibilities. NOAA will also continue to work with the
Navy and the rest of the DOD to improve coordination between our
programs. We look forward to continuing our partnership.

Senator Ensign. I want to thank all of the witnesses who
are appearing before the subcommittee today.
I will start with my line of questioning. I offered Senator
Akaka to do his opening statement and he would rather do that
at the start of his questions, so we will have that occur at
that time.
I want to start with Mr. Suarez. There were some reports in
the news that we are all aware of about the Administrator's
supposed comments and some controversy about those comments.
Can you clarify for this subcommittee today what the
Administrator's position is on these proposals that are before
us today?
Mr. Suarez. Yes, I can, and thank you for that opportunity,
Mr. Chairman. The Administrator wants to make it perfectly
clear that she supports the bill. She believes the bill is a
reasonable compromise to allow the military the flexibility
that they need to conduct their readiness and training
activities while at the same time remaining protective of
public health and the environment.
We believe, and the Administrator believes, that the public
will be sufficiently protected given these modest requested
changes that the Defense Department has requested and she fully
supports the bill.
Senator Ensign. I am glad you clarified that. I actually
spoke to the Administrator last night just so I would hear with
my own ears. Not that we did not trust you, Mr. Suarez.
Mr. Suarez. I had to hear it for my own ears, too.
Senator Ensign. Yes, I wanted to make sure that there was
no question in case anybody brought something up or whatever
today. It was fairly clear, it was actually abundantly clear,
from her comments to me last night that she felt--and correct
me if I am wrong in any of this statement--that she felt that
with the administration's proposal that EPA had all the
authority that they needed to enforce and protect the
environmental laws and the environment for this country.
Mr. Suarez. Mr. Chairman, I think that exactly
characterizes her position.
Senator Ensign. Very good.
I have another question, dealing with perchlorate. There
have been some reports in my State that this proposal would
somehow affect the cleanup of perchlorate in southern Nevada. I
spoke to the Administrator last night, but I would like to hear
it on the record from you. Would this proposal from the
administration today, any of the proposals, affect any of the
cleanup going on as far as perchlorate going into the Colorado
River from southern Nevada?
Mr. Suarez. Mr. Chairman, it would not. A couple of things
to keep in mind as to the proposal. First, the proposal does
not affect at all any of our authorities under the Safe
Drinking Water Act. The Safe Drinking Water Act remains
untouched and any action that we would need to take to protect
any threats or imminent threats to safe drinking water remains
unaffected.
Second, we still retain the authority to take action on an
operational range under the jurisdiction and control of the
military if a release of a hazardous substance on that range
poses an imminent and substantial endangerment to public health
or the environment.
Third, we are working with DOD to clarify language to make
perfectly clear that the proposed changes apply only to
operational ranges in the jurisdiction and control of the DOD.
So I think across the board, we are comfortable that there
is nothing that would change our ability and our efforts to
address perchlorate contamination in drinking water supplies.
Senator Ensign. Thank you very much. That is obviously very
important to the constituents of my State, as well as downriver
in the State of California, and we appreciate that because I
think it is very important for us to be able to clean that up
in the future. As many people have said, we do not want to let
the DOD off if they are indeed responsible, that they should be
part of that cleanup.
Let me address Ms. MacDonald. Fish and Wildlife on these
proposals going forward, if we did nothing, Fish and Wildlife,
the proposals that have been put in place, you feel that they
have been adequately protecting endangered species and plants,
correct?
Ms. MacDonald. Yes. The INRMPs are developed with the
consultation of the FWS and they are not complete until the FWS
has signed them as well as the DOD.
Senator Ensign. Some have said that if we go forward we are
rolling back protections for these plants and animal species.
What is your opinion and the Department's opinion on that type
of a statement?
Ms. MacDonald. Well, that is inaccurate because the FWS
again participates in developing these plans, and does not sign
off on them if they think they are inadequate.
Senator Ensign. In general, would you say that the people
that work at the FWS are the kind of people that care or do
not? In other words, do the kind of people that go to work for
you, are they the kind of people that want to take care of the
environment or are they the kind of people that just do not
care about the environment?
Ms. MacDonald. In my opinion, I have not met a group of
people that care more for the environment than the FWS
employees.
Senator Ensign. So you feel very comfortable speaking for
the FWS and those employees at the FWS, that you are concerned
and that you think that there is a balance here that can be
maintained in the future, that can work well for the military
and for the protection of those species covered under the ESA?
Ms. MacDonald. Yes.
Senator Ensign. Thank you very much.
My time has expired, so I have to turn it over. I do have
more questions and we may have to submit some of those
questions for the record. But I would like to turn it over now
to Senator Akaka for an opening statement, and that will not go
against your questioning time, so make your opening statement
and then you can start with your questions.

STATEMENT OF SENATOR DANIEL K. AKAKA

Senator Akaka. Thank you very much, Mr. Chairman. You are
very kind and it is good to be here this morning. I want to add
my welcome to the panel.
In a sense, this is an unusual hearing because we are going
to be hearing from the Government sector as well as the private
sector and those who have interests. So we will be trying to
bring together all of these views.
We began our review of the impacts of environmental laws on
military readiness about 2 weeks ago with a hearing at which we
heard the representatives from the four military services.
Today we will be hearing from you and from outside experts and
organizations as well as local and State governments.
Our subcommittee does not usually hear from witnesses like
you because we do not have jurisdiction over the environmental
laws or other statutes that impact the general public. This is
a very difficult issue that we have before us, not only because
of the competing interests of military readiness and
environmental protection, but because of the complexity of some
of the statutes and regulations involved. That is why I
appreciate, Mr. Chairman, your decision to schedule this second
hearing.
I believe that the members of the subcommittee will greatly
benefit from hearing the diverse views and perspectives
presented by the range of witnesses you have assembled for us
today. I hope we will be able to hear the views and
perspectives and work together to develop a common
understanding and constructive approach to this difficult
issue. So I look forward to the discussions, the testimonies,
and the responses to the questions.
My first question, Mr. Chairman, is to Mr. Suarez. During
the interagency coordination process last year, EPA was asked
for its comments on the proposal to exempt certain DOD
activities from the Clean Air Act (CAA). I have here a
memorandum in which EPA senior staff recommends that the agency
oppose the proposal and I will read the memorandum in part:
``This proposal should have negative impact on the air
quality''--let me read that again: ``This proposal could have
negative impact on the air quality in communities surrounding
the military facility conducting the readiness activities and
on the States' ability to attain and maintain the ambient air
quality standards. Individuals living near the facilities could
potentially be exposed to higher and more frequent pollutant
concentrations which exceed the national ambient air quality
standards.
``Since EPA's general conformity regulations already
include exemptions for emergencies and for routine military
activities that do not require the construction of new support
facilities, the proposal legislation would basically affect
only routine activities that require the construction of
additional support facilities. Such activities could have
significant adverse air quality impacts.''
Now, my question to you is, do you either agree or disagree
with the views presented by EPA's senior staff in this
memorandum and why do you feel that way?
Mr. Suarez. Senator, I am not familiar with that particular
memo or the opinion expressed therein. I can tell you that,
much like Ms. MacDonald, my staff and our staff in our agency
have a number of different views on environmental issues and we
enjoy a fairly healthy dialogue about those views among our
staff. It is without doubt, though, that we support the
administration's bill and we believe that in the context of the
CAA proposal the military is still required to report and
quantify the impacts on air quality and their impacts on a
State's ability to achieve the national ambient air quality
standards and must come into compliance, but in a slightly
extended period of 3 years rather than right away.
We believe that is an appropriate balance. Again, the view
that is expressed there perhaps expresses a different view. I
can tell you that we support, and the EPA supports, the
administration's proposal as to this provision.
Senator Akaka. Thank you for your response.
This legislation has been characterized as allowing DOD to
construct facilities first and identify the necessary emissions
reductions or offsets later. Do you believe that it is a sound
compliance strategy to build first and address regulatory
issues later?
Mr. Suarez. Senator, I believe that the provisions of the
bill under the CAA actually exclude specifically those routine
types of activities such as construction and transportation of,
let us say, a power plant and relate only to military readiness
activities and combat activities that are necessary to support
our fighting troops. We believe that exempting those activities
and allowing the military 3 years to demonstrate compliance is
an appropriate balance.
Senator Akaka. Mr. Suarez, the EPA senior staff memorandum
also recommends that the agency oppose DOD proposals to exempt
certain activities from the requirements of RCRA and CERCLA.
The memorandum notes that the provision would limit cleanup
requirements under these statutes to munitions and munitions
constituents that migrate off of an operational range.
It then raises a series of questions, and I am quoting:
``What constitutes migration for the purposes of determining
whether or not an imminent and substantial endangerment is
posed by contamination from spent munitions on an operational
range? Assuming DOD was unwilling to take action to start
removing a plume of contaminated ground water, could EPA use
its imminent hazard authority under CERCLA to address moving
ground water contamination on an operational range, or would
EPA be required to wait until an adjoining municipality's water
supply indicated the presence of contamination originating from
the range?''
Do you agree or disagree with the view that the legislation
leaves these questions unanswered, as stated in the memorandum?
Mr. Suarez. Flatly disagree. It is clear that the
legislation provides for the authority under section 106 of
CERCLA for EPA to take action to abate an imminent and
substantial endangerment on an operational range. The
legislation also makes clear, Senator, that once a pollutant or
contaminant migrates off-range that the regular authorities
available to EPA become active. In other words, we can take
action under CERCLA or RCRA.
Third, no authority is affected under the Safe Drinking
Water Act, so that if a contaminant poses a threat or may pose
a threat to drinking water, EPA retains the authority under the
legislation to take action to prevent an imminent and
substantial endangerment under the Safe Drinking Water Act.
Senator Akaka. Thank you very much for your response.
Thank you, Mr. Chairman.
Senator Ensign. Thank you, Senator Akaka, and we will go
for another round of questions. It sounds like you have more
and I certainly do.
Dr. Lent, I would like to explore the term harassment when
we are dealing with marine mammals. It is a big issue,
obviously, for the Navy and I think it is an important issue
all the way around for a lot of different purposes. People in
your Department are very familiar, I know, with that term. You
mention in your opening statement, some of the words that I
heard you talk about, about the need for significant affect, or
I do not remember exactly how you put it. But it seems to me to
be very important that we--because harassment itself can mean
almost anything, and because a fish or a dolphin had to turn
because of something does that mean harassment, or are we
talking about reproductive effects, are we talking about
species decline, or what are we talking about here?
Because I think it is very important that those type of
things be put where we can measure, and so it is not just some
subjective thing that somebody is saying, well, I think that it
may affect some kind of species down the line.
Can you just address the whole issue?
Dr. Lent. Thank you, Senator. Yes, indeed, this is
something we have been struggling with ever since the term was
in the act. The way we are struggling with it now, the way it
is written, is that you have to go through a two-tier process
to prove that someone is harassing. First you have to prove
that someone is doing pursuit, torment, or annoyance, and then
they have to prove that it has the potential to injure or
disturb.
The way it is written now--and again I emphasize it is the
same in our bill as it is in the DOD bill, only for DOD it is
only for military activities--is that it is two levels. First
of all, it injures or has a significant potential to injure a
marine mammal. That is level A. Then level B is disturbing or
is likely to disturb.
Now again, these are not words that provide numbers, but
they clearly set a threshold that is higher, in the sense of
what we want to focus on, those activities that can really make
a difference. The way it is written now, you could argue that
just someone out in their boat and if a dolphin rides in the
ripples around the boat for easier swimming that that would be
harassment, or if you are walking down a beach and a dolphin
lifts its head to look at you, or a marine mammal, that that
could be harassment.
We do not think we should be focusing on activities like
that. We should be focusing on the activities that truly can
affect the marine mammals. In particular, as you mentioned,
affect their migration, their surfing behavior, breeding,
feeding, or sheltering, to the point where these behavioral
patterns are abandoned or significantly altered.
So again, we are trying to focus on where there is really
an impact.
Senator Ensign. The basis for the change? In other words,
can you just address, is it somebody's just willy-nilly opinion
or how are we going to--how are we making this basis for
change? Is it based on opinion or is it based on, I guess,
studies, science?
Dr. Lent. It will be based on science, as we do base our
decisions now. But we feel it is easier to address something
like significant impact and particular behaviors of the animals
rather than the vague and broad definition that is currently in
place. It will allow us to focus our limited resources on where
we can really make a difference in marine mammals.
Senator Ensign. Ms. MacDonald, on February 27, 2003, the
FWS designated 177 acres--and this gets to your State, so I do
not know if this is a question that you have, but I want to try
to clear this up--on the Pacific Missile Range Facility in
Hawaii critical habitat for an endangered dune grass. The Navy
is concerned that this designation will adversely impact an
irreplaceable training asset, particularly troubling given the
fact that the grass, from what we have learned, has not been
found anywhere on the range.
How might this problem be resolved through the
administration's proposed legislative clarification?
Ms. MacDonald. In this particular case, had there been an
INRMP that addressed that particular grass, the administration
would have been able to, and presuming the INRMP had been
signed by both the DOD and the FWS, the administration would
have been able to exclude the military base from the critical
habitat designation.
Senator Ensign. Going further on this particular, how does
this range get designated like that without the grass being
there?
Ms. MacDonald. Critical habitat designations typically
consist of those areas that are actually populated by the
species of concern, in this case the grass. But we are allowed,
where it is necessary, to include areas that are not inhabited.
In this particular case, I think that grass only exists in one
place. It lives on hillsides and the only appropriate hillside
that it could ever grow in--and this is based on the
information we get from our biologists--existed on this 177
acres, which is why it was designated.
Senator Ensign. So even though it was not there----
Ms. MacDonald. Yes.
Senator Ensign.--it potentially could----
Ms. MacDonald. Could have been there.
Senator Ensign.--have been there, because----
Ms. MacDonald. It is a very specialized--it has very
specialized growing requirements and those particular
requirements only existed in that particular area.
Senator Ensign. Wow.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman. Thank you
for your interest about an issue in Hawaii.
At our previous hearing we were told that the Navy talked
to the FWS and offered to amend their INRMP to address the
grass in question. It is my understanding that FWS officials in
Hawaii worked closely with the Navy region Hawaii officials on
this matter and discussed two opinions regarding critical
habitat exclusion.
One option was for the Navy to support the State and
Service in planting the species on nearby State-owned lands off
the base to reduce extinction risk. Another option was to
develop a viable INRMP amendment that included consideration of
the potential reintroduction of some plants to the dune areas
at the Pacific Missile Range Facility (PMRF).
It is my understanding that the field staff for the Service
and the Navy tentatively agreed to reintroduce panasom into--
panasom is the grass--into several areas on the base that would
have a very low likelihood of ever encumbering Navy operations.
It is my understanding that when officials in Washington
refused to adhere to this agreement the area was designated as
critical habitat. That is my understanding.
This seems to be a breakdown in what is an otherwise, I
thought, reasonable process. Can you explain, Ms. MacDonald,
what is an otherwise reasonable process?
Ms. MacDonald. I think I would not want to presume to
second-guess. I have no information on the process that
occurred. I am assuming your information is accurate. I would
not want to presume on the process, commenting on the process
the Navy went through to make whatever determination they made.
For our part, we worked with the Navy to identify those
acres that we did designate as critical habitat did not
conflict with any existing or planned testing and training. So
from our perspective, we designated those areas that we felt
were necessary for the conservation of the plant and would not
impede the Navy's ability to perform their training.
Senator Akaka. Thank you.
Dr. Lent, two of the three administration proposals for
changes to the Marine Mammal Protection Act appear to have a
potential application outside the DOD: one, the change to the
definition of, as was mentioned, of harassment; and two, the
elimination of the requirement that small take permits be
limited to small numbers and specific geographic regions.
Does NOAA believe that these changes should be limited to
the DOD, or would you like to see them adopted across the
board?
Dr. Lent. Thank you, Senator. As I mentioned, the change in
the definition of harassment, our bill that went to the Hill in
February of this year does propose that same definition for all
potential harassment. So we have that in for all potential
cases, not just Defense. The DOD bill has it just for Defense.
In the case of eliminating the requirement for small
numbers and the specific geographical areas, that is in the DOD
bill just for the military case. We have not evaluated the
potential impact of that, of expanding that to all possible
permittees. As I noted, even without those requirements on the
small takes, small numbers, and specific geographical areas, in
order to do the adequate National Environment Policy Act (NEPA)
analyses and Administrative Procedures Act and public hearing
and comment, we would still need to know what numbers of
animals are involved so that we would know whether or not there
is a negligible impact and we would need to know the specific
geographical area so we could know which stocks or sub-stocks
are affected.
So we do not believe it would change the type of analyses
and science that underpin our decision on the permit.
Senator Akaka. My time is expired, Mr. Chairman. I want to
thank the witnesses for your responses. Thank you.
Senator Ensign. Senator Pryor.
Senator Pryor. I do not have any questions right now. Thank
you.
Senator Ensign. I want to address before we excuse the
panel--if you have any other single questions, we could allow
that as well. Just to the witnesses, because, Dr. Lent, you do
not have an exemption, but the whole exemption issue is, some
opponents of this legislation have said that the exemptions are
there, you do not need this legislation. Could both of you just
address that, the exemption issue and why that is or is not
adequate?
Mr. Suarez. I would be happy to, Mr. Chairman. First, I
would suspect that our colleagues at the DOD would probably be
much better able to articulate exactly their difficulties that
they have.
Senator Ensign. We have had their response on the record. I
was just curious on yours.
Mr. Suarez. The difficulties I would imagine are, first,
the statutory standard is it must be in the paramount interest
of the United States, which I would imagine is a fairly high
standard to need to be met. The second concern is getting to
the President. I do not imagine that it is easy to get to the
President on a regular basis to address these exemptions as
they come up on a case-by-case basis in the various
circumstances, and I imagine there is some difficulty in
getting to him regularly to try to pursue these exemptions.
So it is my understanding that it is the cumbersome nature
of the national security exemption that troubles DOD.
Senator Ensign. Ms. MacDonald?
Ms. MacDonald. I think, as I noted in my testimony--it has
been our policy to exclude the INRMPs under the section 3
exclusion of the ESA, which we have said that section 3
requires special management. So we say that these INRMPs are
special management, therefore we are going to exclude these
areas.
The recent court case has called that into question, our
ability to do that, and while we will continue to exclude under
the definitional exclusion, we think codifying our ability to
do so would be a good thing.
Senator Ensign. Mr. Suarez, just a quick follow-up on that
with the munitions rule and the RCRA exemption. Ms. MacDonald,
what you just said about--the court case we are afraid is
changing current law, and so under the old the exemptions as
far as the FWS were considered adequate, but under the way that
the courts are now changing law that does not seem to be
adequate. Is that a fair characterization?
Ms. MacDonald. We had an adverse decision on that and so,
while we still have a 3(b), a 4(b)(2) exclusion, it requires
more work without any additional benefit to the species. It is
more a matter of creating a record that there is a benefit to
exclusion that outweighs the benefit of including.
Senator Ensign. Mr. Suarez?
Mr. Suarez. I think that is right. I do not mean to be
glib, but I think that the concern is the prospective
application of the law and its prospective application by
courts that maybe reach conclusions that would impair the
military's ability to train and to prepare for actions,
because, as I understand the military's concern, they are
largely concerned about the direction in which it may go.
Senator Ensign. Does anybody else have anything for this
panel?
Senator Akaka. No.
Senator Ensign. I would once again like to thank you very
much for your excellent testimony. We will proceed with this
hearing by calling the second panel of witnesses: Dr. Robert
Pirie, Senior Fellow, Center for Naval Analysis; Dr. Darlene
Ketten, Senior Scientist, Department of Biology, Woods Hole
Oceanographic Institution; Nina Young, Director of Marine
Wildlife Conservation, the Ocean Conservancy; Jamie Rappaport
Clark, Senior Vice President for Conservation Programs,
National Wildlife Foundation; and Lenny Siegel, Executive
Director, Center for Public Environmental Oversight. [Pause.]
I once again remind the panel that your entire testimony
will be made part of the record and if you could try to
summarize in under about 5 minutes we would sure appreciate
that, so we can have plenty of time for questions. We will
start with you, Doctor Pirie.

STATEMENT OF DR. ROBERT B. PIRIE, JR., SENIOR FELLOW, CENTER
FOR NAVAL ANALYSIS

Dr. Pirie. That is right, Mr. Chairman.
Senator Ensign. Very good. It was a complete guess, so I am
glad it was right.
Dr. Pirie. Thank you, Mr. Chairman, Senator Akaka, Senator
Pryor. I am really honored to be called back to life to address
the subcommittee on these issues.
I did not come easily to the decision to support the
Defense Department's legislative initiatives. While I had
responsibility for these matters in the Navy Department, we
worked extremely hard with our fellow stakeholders in the
regulatory agencies to hammer out agreements that would allow
military training to go forward while still protecting the
environment. So long as there was a hope that we could proceed
in accordance with these agreements, I did not believe that
asking for special legislative relief for the Defense
Department was wise.
Developments in the past several years, however, have
persuaded me that our attempts to achieve a balance between
military needs and environmental protection under the existing
legislation and regulatory system have failed. The reason is
not lack of goodwill and effort by the Department or the
regulators. It is the persistent drumfire of litigation from
environmental activists.
When DOD is able to accommodate the concerns of and reach
agreement with regulators, the regulators are in turn sued by
nongovernment organizations (NGOs) alleging failure to enforce
the statutes. Where the statutes are loosely drawn or
ambiguous, the courts often find for the litigants, resulting
in delays, uncertainty, and diversion of attention of military
leaders from training to fighting legal battles.
I do not fault the NGOs or the courts in all this. They are
doing what they should in a democratic society. What is needed
is for Congress to clarify its intent in the specific cases in
which DOD has asked for relief. Hence the proposed legislative
fixes.
I would urge two more points for your consideration. First,
the proposed changes are not broad and sweeping rollbacks. They
are, rather, specific and limited measures that amount to
clarification of congressional intent rather than major
modification of important environmental laws.
Second, I have seen frequent allusions to the failure of
DOD to document the interference with training caused by
environmental regulation. There is, it is said, no smoking gun.
With all respect, ``smoking gun'' is not the right metaphor.
Rather, it is the death of a thousand cuts. It was not by a
single stroke that the available beach front for amphibious
landings at Camp Pendleton was cut from 17 miles to 500 yards.
It was a long accretion of agreements, accommodations, and
compromises. We see similar situations everywhere. They have
come to be called encroachment.
The DOD needs some help in bounding this process so that it
can continue to prepare its forces to fight for our country.
Thanks, Mr. Chairman.
[The prepared statement of Dr. Pirie follows:]

Prepared Statement by Dr. Robert B. Pirie, Jr.

Mr. Chairman and members of the subcommittee, I am Robert B. Pirie,
Jr. I am grateful to the subcommittee for this opportunity to testify.
I have been deeply involved in national defense issues for many years.
During that time I have seen at close range the interaction between
national defense needs and environmental protection. I served on active
duty in the Navy for 20 years, and was privileged to command U.S.S.
Skipjack, a nuclear attack submarine, for 3 years. I served in the
Carter administration as the Assistant Secretary of Defense for
Manpower, Reserve Affairs, and Logistics--the senior official in the
Department of Defense with environmental protection as a primary duty.
I served as a consultant and analyst on defense issues during the
intervening years between the Carter and Clinton administrations. More
recently, I was Assistant Secretary of the Navy (Installations and
Environment) and Under Secretary of the Navy in the last
administration, and am currently a Senior Fellow at the Center for
Naval Analyses. The views reflected in my testimony today, however, are
entirely my own, and are not associated with any organization of which
I am now or have ever been a member.
My testimony today concerns proposals by the Department of Defense
to modify certain provisions of environmental statutes to reconcile
some specific differences between the need to pursue protection of the
environment and the need to preserve military readiness. When I was in
office in the last administration, I took the view that it was better
policy, so long as it offered some prospect of success, to avoid having
the Department of Defense ask for direct legislative relief, but rather
to try to reach consensus and accommodation with regulators and
environmental advocacy groups that permitted our operations and
training to go forward with agreed modifications to meet environmental
goals. This was desirable, I believed, since asking for DOD exclusions
tended to unite environmental groups against the request and offer them
the opportunity to paint DOD as anti-environmental in the press.
Serving in two different administrations spanning 26 years, start
to finish, I have had the opportunity to observe the transformation of
the environmental programs of the military services from nearly the
dawn of the modern era of environmental protection to the present.
Although no program is perfect, the military services have made
tremendous strides in environmental protection, so much so that in some
cases, their very stewardship has made military bases and ranges
islands of biological diversity in a sea of urban sprawl. In the last
decade, the military services have poured even more scarce resources
into environmental protection and conservation. For example, this
included funding millions of dollars of research to protect marine
mammals at sea and creation of integrated natural resource management
plans (INRMPs) to manage natural resources on our bases, including
endangered species, as holistic ecological systems instead of species
by species. For another example, the Navy spent $10 million on an
unprecedented, independent, scientific research program to determine
the effect of the Navy's new Low Frequency Active, Surface Towed Array
Sonar System (SURTASS LFA) on marine mammals and another $10 million on
further environmental analyses of that system.
Recent developments have led me to reconsider my position on
legislative relief. It appears that some environmental advocacy groups
will not be satisfied with any agreement worked out between the
Department and the regulators accountable to Congress for ensuring that
the environment is protected. These groups stake out categorical and
ideological positions that hold in essence that no risk to the
environment is permissible, even to support national security. These
groups challenge the interpretations of statutes that allow regulators
to meet defense requirements halfway, balancing two ``public goods.''
Over time they have found some courts that agree with them. The result
has been that the Department of Defense has been restricted in its
training activities and prevented from deploying an important new sonar
system. Some of our environmental laws permit private groups or
individuals, often with the best of intentions to protect the
environment, but without any expertise in defense matters or
accountability to the American people, to obstruct military operations
and training, forcing American servicemen to assume greater risk. I
treasure the environment and have worked hard to protect it, but I also
treasure the young men and women that the people of America ask to
defend them. I therefore believe that consensus building and
accommodation have failed, at least at present and in particular cases,
and that Congress should step in to redress the balance.
At least some of the difficulty with the enforcement of
environmental statutes that affect DOD is vagueness and ambiguity in
the legislation. A case in point is the definition of harassment in the
Marine Mammal Protection Act. The statute defines harassment in terms
of ``annoyance'' and ``potential to disturb''. A court has determined
that the National Marine Fisheries Service, the principal regulatory
agency, must interpret this as virtually anything that would cause even
one marine mammal to react to sounds or visual cues. An interpretation
this broad, however, would mean that any ship, boat, or aircraft
operating in the neighborhood of marine mammals would require a permit
covering the incidental harassment. I do not believe that this is what
Congress intended.
The designation of critical habitat provides another example.
Endangered species are already provided with two levels of protection
at a military base like United States Marine Corps Base Camp Pendleton,
California. Although Congress has established military bases and ranges
primarily for national defense purposes, military commanders must
already consult with the U.S. Fish and Wildlife Service or the National
Marine Fisheries Service if military actions, including training, may
affect endangered species and must avoid jeopardizing them. In
addition, under the Sikes Act, military commanders must consider how to
manage endangered species on their bases along with all the other
natural resources in the base's INRMP--which is reviewed by the U.S.
Fish and Wildlife Service. At Camp Pendleton, measures to protect
endangered species restrict amphibious landings to a tiny fraction of
the beach and limit realistic training in many respects. Despite this,
some environmental advocacy groups have tried to add a third layer of
regulation, going to court to force the U.S. Fish and Wildlife Service
to designate well over half of Camp Pendleton, most of which is not
even occupied by endangered species, as critical habitat. Once
designated as critical habitat, this land would have to be managed
primarily to foster the recovery of endangered species. Military
training on this critical base would become a secondary priority. I do
not believe that this is what Congress intended.
The Migratory Bird Treaty Act presented a similar example of
expansive application of a statute to the detriment of national defense
and also shows what can be done to protect military readiness and the
environment. This statute was enacted in 1918 to stop the
indiscriminate slaughter of migratory birds to supply the restaurants
of the east and the millinery industry. The Act makes it unlawful ``at
any time, by any means, or in any manner to pursue, hunt, take, capture
[or] kill . . . any migratory bird [or] any part, egg, or nest of such
bird. . .'' The Act allows enforcement only against persons,
associations, partnerships, or corporations, so its applicability to
Federal agencies was vague until a court decision in 2000--82 years
after it was passed, found that the statute applied to Federal
agencies. Although this statute has never been enforced against the
lumber industry, which arguably destroys large numbers of birds, nests,
and eggs in the process of logging tracts of land, in 2001 an
environmental group sued to stop critical military training. The suit
asked the court to halt Navy, Marine Corps, and Air Force training
activities at Farallon de Medinilla without a permit from U.S. Fish and
Wildlife Service for incidental take of migratory birds. Training at
Farallon de Medinilla provides the last training opportunity for many
pilots to refresh perishable skills before dropping live ordnance in
Afghanistan. Even the trial judge, who felt obliged to issue the
injunction, raised the question whether Congress should consider
amending the statute. Last year Congress wisely solved this problem by
making the Migratory Bird Treaty Act inapplicable to the incidental
taking of birds during military readiness activities, but leaving
application of the act to the rest of DOD's activities in place.
It is clear from these and other similar cases that there is a need
for clarification of congressional intent with respect to a number of
environmental statutes as they affect the operations of the Department
of Defense. What the Department has proposed is not a program of
sweeping exemptions but a discreet number of limited fixes and
clarifications in specific problem areas. They all preserve the role of
regulators as participants and in fact strengthen the position of
regulators by providing clearer guidelines. Thus I believe the
Department's proposals should be adopted.

Senator Ensign. Dr. Ketten.

STATEMENT OF DR. DARLENE R. KETTEN, SENIOR SCIENTIST,
DEPARTMENT OF BIOLOGY, WOODS HOLE OCEANOGRAPHIC INSTITUTION

Dr. Ketten. Good morning, Mr. Chairman. Thank you very much
for the opportunity to testify before this subcommittee. As you
have stated, I am a Senior Scientist at Woods Hole
Oceanographic Institution. I also have a joint appointment and
responsibilities in the Department of Otolaryngology, that is
ear, nose, and throat, at Harvard Medical School.
I am not here to represent my institutions' views
officially. I am here to represent my views as a scientist, as
an individual scientist. I want to underscore that point.
However, these views have been arrived at based on
approximately 15 years of experience working on hearing in
general, on head and neck trauma, on acoustic trauma, and on
modeling to understand endangered species hearing abilities.
Also, most recently I have served on two panels relevant
for this hearing; that is, the National Academy of Sciences
National Resources Council Panel on Ocean Noise and Assessing
Ocean Noise and Its Effects on Marine Mammals and on NOAA
Fisheries Advisory Panel for Determining Safe Underwater Noise
Exposures.
Now, having said all of that, again, it is an individual
scientist's views. My concerns are based largely on discussions
with my colleagues and many of the difficulties that they are
facing as well as concerns for the military and their ability
to carry out their requirements for readiness.
There is no human activity in the oceans that does not add
noise, whether it be industrial, military, research, or
recreation. We add noise to the oceans. The National Academy of
Sciences panel was able to determine that we are adding about 3
decibels per decade. That is, the noise budget of the oceans is
doubling every 10 years mostly based on human activity.
Of that human activity, the military component is less than
5 percent. However, as Secretary Pirie was stating there is no
smoking gun, the question ``Is there a smoking sonar?'' which
has brought a lot of public attention to military activity in
particular.
For marine mammals, hearing is arguably their primary
sense. Therefore, it is appropriate that we be concerned about
noise effects.
The precautionary principle is a reasonable metric to
apply. However, one of the reasons for this hearing is that
many of our guidelines have been based on opinion, on
extrapolation from science. My statement will be mercifully
short because Dr. Lent has already very eloquently outlined
many of the positions that I advocate. I need not go over those
again, but I do need to emphasize that there is no safe sound
byte that I can give you. I would love to give you a number
that is safe for any type of noise exposure. We do not have
that number.
What has happened recently that has led us to a highly
polarized and litigious climate is that relatively few but very
dramatic stranding events have led to an overly broad
interpretation and concern for protection of marine mammals.
Consequently, guidelines are being extrapolated and the
precautionary principle is being applied, in my opinion, in the
extreme and has the risk of leading to stagnation. Activities
that are critical not only to our Nation's defense, but also,
ironically, for obtaining the data that are needed to provide
useful guidelines are being stymied.
It is imperative that we start looking at impacts with
balance and perspective. Our focus has shifted away from the
original MMPA guideline, which was for population level
concerns--that is the fundamental meaning of ``biological
significance``--to instead individual significance. We are
looking at individual impacts on relatively few animals from
relatively rare events and broadening those to essentially a
global level concern, which has led to a great many lawsuits.
I underscore that it is timely and appropriate that we look
at noise impacts, but I do not think we need to be in a
stagnant pool of concern for ocean noise. What we need to do is
to begin to look at biological significance. Significance is a
timely, appropriate, and reasonable element that is proposed in
this bill, particularly biological significance for the
population level locally and globally.
If we start looking, as Dr. Lent has suggested, at that
type of harassment, at that type of impact, then we can go
forward not only militarily, but also with research, to provide
the critical information we need for responsible stewardship of
the ocean.
Thank you.
[The prepared statement of Dr. Ketten follows:]

Prepared Statement by Darlene R. Ketten, Ph.D.

This testimony is being submitted to the subcommittee to represent
my views as an individual scientist. It does not represent those of
either institution with which I am affiliated. I have arrived at my
position stated below based primarily upon my experience as a
researcher with over 15 years experience in the combined fields of
mammalian hearing, ear disease, and head and neck trauma. My work
focuses on understanding marine mammal hearing mechanisms and modeling
the hearing of endangered species. My comments are also based on my
experience as a member of the recent National Research Council panel on
Ocean Noise and as a member of NOAA Fisheries advisory board on noise
exposure.
Concomitant with man's increasing use of the oceans is an increase
in the ocean's acoustic budget. As indicated in the current NRC report
on Ocean Noise, noise from human related activity is increasing on
average throughout the oceans at 3 dB per decade; i.e., potentially
doubling every 10 years. Given our ever-increasing activity in all seas
and at all depths, this figure is not surprising. Anthropogenic noise
is an important component of virtually every human endeavor in the
oceans, whether it is shipping, transport, exploration, research,
military activities, construction, or recreation. For some activities,
such as military exercises and oil exploration, impulsive and explosive
devices are fundamental tools that are relatively short-term but
locally intense; for others, such as shipping, the source levels may on
average be lower, but the sounds are constant and cumulatively dominate
the noise fields in high traffic areas of the oceans.
Because there is no human activity in the oceans that does not add
noise and because our activities span the globe and produce sounds over
the entire audible range of most animals, it is reasonable to assume
that any manmade noise in the oceans may have a significant and adverse
impact on marine animals. Because marine mammals are especially
dependent upon hearing and in many cases are endangered, the concern
over noise impacts on these animals is particularly acute. These
concerns are both logical and appropriate, but it is also important to
note that at this time, there is no data that gives us a firm answer on
what will be the extent of impact from any one sound source. We simply
do not have sufficient data to put accurate boundaries on our concerns.
This lack of discrete knowledge on impacts of underwater sound,
coupled with the relatively open wording of the original Marine Mammals
Protection Act (MMPA) and with recent dramatic stranding events, has
led to a heated, highly polarized, litigious climate. An example of
broad extrapolation from one event to another, which has military
relevance, is a suit brought to halt LFA use based on the fact that
beaked whale mass strandings have been shown to correlate with naval
exercises involving mid-range sonars. Whales that stranded in three
such cases, the Bahamas, Madeira, and Canary Islands, have been found
to have an unusual suite of traumas, the mechanisms for which are still
under investigation. However, there are substantial differences between
LFA and mid-range tactical sonars, and, to date, there is no evidence
of physical harm from LFA.
Nevertheless, this suit, which adduced as part of its concerns the
Bahamian findings, was successful. Recently, other cases have been
brought to halt physical oceanographic and behavioural research as
well, admittedly motivated in part by very sincere but broad,
undocumented concerns for the use of these unrelated sound sources.
Clearly, the issue of restrictions of sound sources is not simply a
military concern; decisions that are made here may impact indirectly
the permitting and use of many forms of sound in our seas.
As noted above, virtually every human activity in the oceans
involves sound either intentionally or as a by-product. For responsible
use of the seas, it is imperative to consider to the best of our
ability the probable impact of each sound we add and to determine
whether that impact is worth its inherent risk. At some level, some
individuals may be impacted by any sound beyond the natural, average
ambient. We must consider for any effort introducing sound use in the
oceans whether and to what extent the projection and repetition of the
signals employed will adversely impact significantly or negligibly any
species within the ``acoustic reach'' of the source. Realistically,
because of the diversity of hearing characteristics among marine
animals, it is virtually impossible to eliminate all acoustic impacts
from any endeavor, therefore the key issues that must be assessed are:
(1) what combination of frequencies and sound pressure levels are
proposed to fit each anthropogenic task; (2) what species are present
in the area the device will ensonify at levels exceeding ambient; (3)
what is the probable severity of any potential impacts to the exposed
animals from the combined frequency-intensity-temporal characteristics
of the source.
The important point is to know whether these factors produce any
biologically significant impact to a species. Of course sound operates
at the individual level, but the fundamental concern is for the well
being of populations. All data to date have been gathered on individual
or local populations. As the NRC report on Ocean Noise and Marine
Mammals emphasized, our major concern is for population level impacts
and consequently a major recommendation was to structure all research
on marine mammals to allow predictions of population-level
consequences. Individual effects are inputs to our database, but the
true metric to apply is biological significance.
The original MMPA noted a concern for impact on marine mammal
populations. Yet, much of the debate and contention that we see today
over the issues of sound in the oceans derives from and focuses on
relatively few impacted individuals. For example, in the case of the
Bahamian stranding, seven animals died under circumstances clearly
correlated with the use of military sonars. Reviews of past strandings
suggest that there have been 8 to 10 similar events within the last 40
years, all involving only beaked whales. Clearly there should be
concern; there is substantial reason to believe that sonars are at
least a contributory cause of strandings under certain circumstances.
The mechanisms involved are extremely important to determine, and there
is now considerable research effort being devoted to this problem.
Nonetheless, the strandings must be kept in perspective. The total
mortality of suspected military related strandings in 40 years is fewer
than 350, all involving two genera of beaked whales. We do not have
evidence that a population level much less multi-species threat exists
from those strandings. At this time we do not have any evidence to
suggest that sonars in general use have a similar effect. NOAA
Fisheries in a review of stranding and necropsy records for the same
species did not find any evidence of similar traumas in single beaked
whale strandings nor were these traumas found in any species other than
beaked whales.
Precaution is appropriate; however, currently, extraordinarily
precautionary positions are holding sway in which very broad and
scientifically unfounded extrapolations are being made. We are losing
sight of the need for balance and for perspective. High profile events,
like the dramatic strandings in the Bahamas and Canaries, are being
construed as virtually global, both in terms of species and sound
source types. This is a potentially hazardous position since,
ironically, this type of over-interpretation is actually preventing
research that could provide precisely the answers that are needed to
protect and conserve marine species. In a sense, precaution, in the
extreme, may lead us to stagnation, and worse, because it is a position
founded on assumed rather than known effects, it may prevent us from
determining the true sources of greatest potential harm.
For responsible stewardship of our oceans, it is imperative that we
understand our impacts and that we proceed with a balanced and informed
view. Therefore, it is equally important that views of all parties with
legitimate interests be considered. Risk assessment must be a part of
that debate. There is undeniably some risk to some individuals from any
underwater sound, but individual risk must be balanced by potential
gain to the species. The addition of significant to the proposed
revisions is a conceptual step forward worthy of consideration. It
implies that our focus be shifted from the impossible goal of avoiding
any possible individual impact to biologically significant, population
level concerns. Such a shift, implemented with caution and judicious
oversight, will not only reduce litigation for military operations, but
also provide opportunities for education and understanding by the
public of the appropriate scope for our concerns and of the critical
need for research that will provide data to finally allow us to place
clear and valid limits on sound use in our seas.

Senator Ensign. Ms. Young.

STATEMENT OF NINA M. YOUNG, DIRECTOR OF MARINE WILDLIFE
CONSERVATION, THE OCEAN CONSERVANCY

Ms. Young. Mr. Chairman, members of the subcommittee, thank
you for the opportunity to present our views on the National
Defense Authorization Act that would amend the Marine Mammal
Protection Act (MMPA).
The MMPA is our Nation's leading instrument to conserve
marine mammals. For more than 30 years the protections afforded
by Congress have been critical to the recovery of vulnerable
species of marine mammals, such as the great whales that were
nearly decimated by whaling. Although we are extremely
sensitive to the issue of military readiness, we do not believe
that the DOD has demonstrated that the proposed changes to the
MMPA within the National Defense Authorization Act are
necessary or even that it has exhausted all administrative
remedies available under existing law.
The DOD proposes to modify the MMPA's definition of
harassment, amend its incidental take authorization process,
and create a separate broad exemption for national defense. The
proposed changes in the definition of harassment would severely
undermine the precautionary nature of the act. The definitional
changes would significantly raise the threshold that would
trigger the DOD's obligation to secure an authorization to
conduct activities that have the potential to harm marine
mammals.
Federal agencies would be required to make difficult, if
not impossible, judgments about whether a given activity is
subject to the act's permitting and mitigation requirements. As
a result, many military activities that would either be exempt
outright or could obey the act's requirement by relying upon
the uncertainty and the ambiguity created by this new language.
Overall, the result would be greater controversy and
debate, diminished transparency, loss of scientific research
and mitigation measures, impaired enforcement of the act, and
increased numbers of marine mammals that would be harmed by
military activities.
The proposed changes to the incidental take authorization
process would remove key conservation elements that restrict
the scope of the incidental take to small numbers of marine
mammals within a specified geographic region. These existing
provisions provide an effective conservation and management
strategy for restricting take geographically and numerically to
prevent any further depletion of marine mammals and to aid
their recovery. The DOD has failed to show that the existing
incidental take process is overly burdensome, let alone that
the proposed statutory changes are needed.
Since 1994 when the MMPA was last amended, the DOD has
applied for over 28 incidental take and harassment
authorizations. None of the applications have been denied and
in general they have been issued within the required time
frames. Rather than amend the statute, we believe that improved
coordination and advance planning may be the most expedient way
to achieve both marine mammal conservation and improve
efficiency in the issuance of permits for military readiness.
The third major amendment to the MMPA is the Defense
Department's proposed exemption for national defense, which
effectively creates an escape clause to allow the Defense
Department to bypass incidental take permitting process
altogether. This exemption is not limited to the incidental
take permitting process and as written it authorizes the
Secretary of Defense to exempt any action or category of
actions undertaken by the Defense Department or its components
from compliance with any requirement of the MMPA for reasons of
national defense and for a potentially unlimited number of
successive 2-year periods.
Again, the Defense Department has failed to demonstrate
that irreconcilable conflicts exist within the MMPA or that the
flexibility currently afforded under the Armed Forces code is
insufficient to merit such a comprehensive and wide-ranging
exemption, one that would render the MMPA's conservation goals
and mandates virtually meaningless.
Given the significant risk of changing these keystone
provisions in the MMPA, the Ocean Conservancy and other
interest groups should be given the opportunity to work
constructively with the committees of jurisdiction, the DOD,
the other agencies that appeared before you earlier, to address
the concerns of all parties. Adopting these changes to the
definition of harassment and to the incidental take
authorization process in the National Defense Authorization Act
could be disastrous for marine mammals. Instead, the issues
raised by the DOD as well as those by Dr. Ketten pertaining to
the pursuit and permitting of scientific research should be
considered by the House and Senate committees of jurisdiction
after we have significant discussions with other Federal
agencies, scientists, and conservation groups in the context of
an overall MMPA reauthorization.
Mr. Chairman, members of the subcommittee, thank you for
the opportunity to comment on the Defense Department's
proposal. I will be happy to answer any questions.
[The prepared statement of Ms. Young follows:]

Prepared Statement by Nina M. Young

Mr. Chairman and members of the subcommittee, thank you for the
opportunity to present our views on provisions in the National Defense
Authorization Act for Fiscal Year 2004 that would amend the Marine
Mammal Protection Act (MMPA). My name is Nina M. Young; I am the
Director of Marine Wildlife Conservation for The Ocean Conservancy.
The Ocean Conservancy (TOC) strives to be the world's foremost
advocate for the oceans. Through science-based advocacy, research, and
public education, we inform, inspire, and empower people to speak and
act for the oceans. TOC is the largest and oldest nonprofit
conservation organization dedicated solely to protecting the marine
environment. Headquartered in Washington, DC, TOC has regional offices
in Alaska, California, Florida, and Maine.

I. SUMMARY STATEMENT

The MMPA is our Nation's leading instrument for the conservation of
whales, dolphins, sea otters, seals, sea lions, polar bears, and
walrus. Although we are sensitive to the issue of military readiness;
we do not believe that the Department of Defense has demonstrated that
the proposed changes to the MMPA within the National Defense
Authorization Act for Fiscal Year 2004 are necessary or even that the
Defense Department has exhausted all administrative remedies available
to it under existing law.
The Department of Defense proposes to modify the MMPA's definition
of harassment, amend its incidental take authorization process, and
create a separate broad categorical exemption for military readiness
activities. The proposed changes in the definition of harassment and
changes in the incidental take authorization process for military
readiness would severely undermine the precautionary nature of the act,
remove key conservation elements that restrict the scope of the
incidental take to small numbers of marine mammals within a geographic
region, and significantly raise the threshold that triggers the
Department of Defense's obligation to secure authorization to conduct
activities that have the potential to harass marine mammals. The
proposed definition and incidental take authorization would not only
increase injuries and deaths of marine mammals, but also diminish
transparency, result in a loss of scientific research and mitigation
measures, require Federal agencies to make difficult, if not
impossible, scientific judgments about whether a given activity is
subject to the act's permitting and mitigation requirements, and impair
enforcement of the act. The end result would be that many military
readiness activities would either be exempt outright or could evade the
act's requirements by relying upon the uncertainty and ambiguity
created by this new language.
Since 1994, when the MMPA was last amended, the Department of
Defense has applied for over 20 incidental take and harassment
authorizations. None of these applications has been denied, and in
general they have been issued within the expected or required
timeframes. The Department of Defense has failed to show that the
existing incidental take process is overly burdensome, let alone that
the proposed statutory changes are needed. To the contrary, it appears
that the program is functioning much as Congress intended. Rather than
amend the statute, we believe that improved coordination and advanced
planning may be the most expedient way to achieve both marine mammal
conservation and improve efficiency in the issuance of permits for
military readiness activities.
To add insult to injury, the proposed exemption for national
defense effectively creates an escape clause which allows the Defense
Department to bypass the incidental take permitting process altogether.
Moreover, this exemption is not even limited to the incidental take
permitting process. As written, it authorizes the Secretary of Defense
to exempt ``any action or category of actions undertaken by the
Department of Defense or its components from compliance with any
requirement'' of the MMPA for reasons of national defense for a
potentially unlimited number of successive 2-year periods. The
Department of Defense has failed to demonstrate that an irreconcilable
conflict exists within the incidental take authorization or other
provisions of the MMPA or that the flexibility currently provided under
the Armed Forces Code is insufficient to merit such a comprehensive and
wide-ranging exemption--one that could render the MMPA's conservation
goals and mandates virtually meaningless.
Given the significant risks of changing these provisions in the
MMPA, The Ocean Conservancy and other interest groups should be given
the opportunity to work constructively with the committees of
jurisdiction and the agencies to address the concerns of all parties.
Adopting significantly flawed changes to the harassment definition and
incidental take authorizations in the National Defense Authorization
Act, coupled with the proposed virtually unfettered exemption for
national defense, would not only be disastrous for marine mammals, but
would set a double standard by significantly limiting, or exempting
altogether, the military from MMPA requirements that all other Federal,
State, and private actors must follow. We strongly recommend that
Congress refrain from amending some of the most important provisions of
the MMPA through this bill. We believe that the issues raised by the
Department of Defense should be considered by the House and Senate
committees of jurisdiction, after significant discussions with other
Federal agencies, scientists, and conservation groups, in the context
of an overall MMPA reauthorization package.
Our more detailed comments are organized as follows. First, we
provide background on the MMPA and its incidental take provisions.
Second, we address the problems with the Defense Department's proposed
changes to the definition of ``harassment.'' Third, we address the
proposed amendments to create an incidental take authorization process
specific to military readiness activities. Fourth, we explain why the
proposed statutory changes to the incidental take authorization process
are not necessary. Finally, our testimony will address the proposed
MMPA broad categorical exemption for purposes of national defense.

II. BACKGROUND ON THE MARINE MAMMAL PROTECTION ACT

A. Moratorium on Taking
The MMPA is the most comprehensive marine mammal conservation and
management legislation in the world. Passed to rectify the consequences
of ``man's impact upon marine mammals, which has ranged from what might
be termed malign neglect to virtual genocide,'' H.R. Rep. No. 707, 92d
Cong., 1st Sess. 11 (1971) the MMPA, enforced by the U.S. Departments
of Commerce and the Interior, governs every interaction within U.S.
jurisdiction between an individual and a marine mammal. Its purpose is
to protect marine mammal species of ``great international significance,
aesthetic and recreational as well as economic.'' Among the species
protected under the act are whales, dolphins, porpoises, seals,
walruses, sea otters, manatees, and polar bears.
It is the goal of the MMPA that these species be ``protected and
encouraged to develop to the greatest extent feasible commensurate with
sound policies of resource management . . . [in order to] maintain the
health and stability of the marine ecosystem.'' 16 U.S.C. Sec. 1361(6).
Congress also mandated marine mammals are to be protected and managed
so that they do not ``cease to be a significant functioning element in
the ecosystem of which they are a part'' or be allowed to ``diminish
below their optimum sustainable population'' (OSP). 16 U.S.C. 1361(2)
(1994). A species or population stock that is determined to be below
its OSP level, or is listed as endangered or threatened under the ESA,
is designated as ``depleted'' under the MMPA.
Congress sought to achieve broad protection for marine mammals by
establishing a moratorium on their importation and ``take.'' The term
``take'' means ``to harass, hunt, capture, or kill or attempt to
harass, hunt, capture, or kill any marine mammal.'' 16 U.S.C. 1362(13).
However, certain activities may be exempted from this moratorium, such
as: scientific research; activities designed to enhance the survival or
recovery of a marine mammal species or stock; commercial and
educational photography; first-time import for public display; capture
of wild marine mammals for public display; incidental take during
commercial fisheries; and incidental take during non-fishery
activities.
B. Exemptions for Incidental Take
Under sections 101(a)(5)(A) and 101(a)(5) (D) of the MMPA, the
Secretary of Commerce or Interior may waive the moratorium and issue a
permit or letter of authorization for taking small numbers of marine
mammals, provided he or she determines, using the best available
scientific evidence, that such take would have only a negligible impact
on the marine mammal species or stocks.
Under section 101(a)(5)(A) of the MMPA, the Secretaries of Commerce
or Interior may authorize the taking of small numbers of marine mammals
incidental to activities other than commercial fishing (covered by
other provisions of the act) within a specified geographical region
when, after notice and opportunity for public comment, the responsible
regulatory agency (either the National Marine Fisheries Service (NMFS)
or the Fish and Wildlife Service (FWS)) determines that the taking
would have negligible effects on the affected marine mammal species or
stock, and that the take will not have an unmitigable adverse impact on
subsistence harvests of these species. The act also requires the
Secretary to set forth permissible methods and levels of ``take''
within a specified geographic region as well as requirements for
monitoring and reporting. Issuance of a ``small take'' authorization,
also known as a letter of authorization (LOA), includes two comment
periods, possible public hearings, and consultations prior to the
promulgation and publication of regulations in the Federal Register. It
can take from 6 to 12 months for the agencies to complete this process.
Section 101(a)(5)(D), added to the MMPA in 1994, provides a more
streamlined mechanism for obtaining authorizations when the taking will
be of small numbers of marine mammals by incidental harassment only.
Under this provision, referred to as an Incidental Harassment
Authorization (IHA), the Secretary is required to publish in the
Federal Register a proposed authorization within 45 days after
receiving an application. Following a 30-day public comment period, the
Secretary then has 45 days to either issue or deny the requested
authorization. Because the incidental harassment authorization process
has eliminated the need for promulgating specific regulations on the
incidental taking, IHAs provide individuals who wish to carry out or
undertake relatively short-term activities that might inadvertently
harass marine mammals an expedited means to acquire an incidental take
authorization. By law, the entire process can run no longer than 120
days.
C. Definition of Harassment--The 1994 Amendment
The exemptions for incidental take are wedded to the definition of
``harassment'' since the definition establishes the regulatory
threshold to allow the applicant to make an initial assessment whether
a small take or an incidental harassment authorization is needed. The
definition describes a range of impacts that the regulatory agencies
must assess during the authorization process to determine whether to
authorize the activity. In 1994, Congress amended the MMPA to
differentiate between two general types of harassment: Level A, having
the potential to cause physical injury and Level B, having the
potential to impact behavior of marine mammals in the wild. The
definition is as follows:

(18)(A) The term ``harassment'' means any act of pursuit,
torment, or annoyance which----

(i) has the potential to injure a marine mammal or
marine mammal stock in the wild; or
(ii) has the potential to disturb a marine mammal or
marine mammal stock in the wild by causing disruption
of behavioral patterns, including, but not limited to,
migration, breathing, nursing, breeding, feeding, or
sheltering.

(B) The term ``Level A harassment'' means harassment described
in subparagraph (A)(i).
(C) The term ``Level B harassment'' means harassment described
in subparagraph (A)(ii).

III. PROPOSED CHANGES TO THE DEFINITION OF HARASSMENT

A. Proposed New Definition
The Department of Defense claims that the definitions of Level A
and Level B harassment added to the MMPA in 1994 are overly broad and
somewhat ambiguous. In an attempt to resolve this perceived problem,
the Department of Defense has proposed the following definition:

For purposes of military readiness activities, the term
`harassment' means any act which----
(i) injures or has the significant potential to injure a
marine mammal or marine mammal stock in the wild; or
(ii)(I) disturbs or is likely to disturb a marine mammal or
marine mammal stock in the wild by causing disruption of
natural behavior patterns, including, but not limited to,
migration, surfacing, nursing, breeding, feeding, or sheltering
to a point where such behavioral patterns are abandoned or
significantly altered; or
(II) is directed toward a specific individual, group, or
stock of marine mammals in the wild that is likely to disturb
the individual, group, or stock of marine mammals by disrupting
behavior, including, but not limited to migration, surfacing,
nursing, breeding, feeding, or sheltering.
B. Problems with the Proposed Definition
The most salient effect of this language is to raise the threshold
of regulatory action. For Level A harassment, the proposed definition
would shift from ``has the potential to injure'' to ``injures or has
the significant potential to injure.'' For Level B harassment,
``potential to disturb'' would become ``disturbs or is likely to
disturb;'' and an addition would be made to the language governing
behavioral disruptions, requiring that ``natural'' behaviors be
``abandoned or significantly altered.'' (emphasis added).\1\
---------------------------------------------------------------------------
\1\ The third subparagraph, which establishes a somewhat more
conservative standard for behavioral impacts, would apply only to
activities that are directed toward a specific individual, group, or
stock of marine mammals, not to activities that take marine mammals
incidental to their operation. This provision would not cover any of
the activities for which the DOD has sought small take permits or
incidental harassment authorizations under the MMPA.
---------------------------------------------------------------------------
This new language would also introduce new uncertainty into the
act. Adding the term ``significant'' to the definition would take the
act into a scientific and policy arena that is beset by ambiguity. NMFS
has struggled with this term and has yet to define it with regard to
the ``significant adverse impact'' clause in the act's ``incidental
take'' provisions for commercial fishing (16 U.S.C.
Sec. Sec. 1383(g)(2), 1387(g)(4)). Currently, the state of marine
mammal science will not yield a clear, practical definition of
``significant potential'' or of ``significantly altered''; indeed,
these terms are likely to generate more scientific questions than
answers.
The term ``potential'' is clear and requires no further evaluation
of the significance of an activity's likelihood to injure or disturb.
It is protective of the species, requiring only the disruption of basic
biological functions or behavioral patterns such as migration,
breathing, nursing, breeding, feeding, or sheltering--impacts that are
reasonably verifiable--rather than significant alteration of these
biologically important behaviors, to trigger the act's prohibitions.
Moreover, because the definition references ``disruptions in behavioral
patterns,'' it is clear that it does not encompass any and all
behavioral modifications.
The bill also adds a new requirement to Level B harassment that
natural behavioral patterns be disrupted to the point where such
behavioral patterns are abandoned. Requiring the abandonment of
critical biological behaviors for an action to constitute harassment
violates the precautionary goals of the act and sound scientific
conservation principles. In addition, what constitutes ``abandonment''
of behavioral patterns under the proposed new definition of Level B
harassment will vary according to species, gender, time scale, and the
nature of the behavior itself. The proposed amendment offers no basis
to determine what constitutes abandonment of behavioral patterns. For
example, would abandonment of a nursing bout between an endangered
right whale mother and calf be treated the same as temporary
abandonment of the migratory path of a gray whale? In fact, it is
unclear whether either event would count as ``abandonment'' under the
revised definition.
Taken together, these changes would have a debilitating effect on
enforcement. Under the terms of the act, the Defense Department itself
would have initial authority to decide whether its activities have the
``significant potential to injure'' marine mammals or are likely to
``significantly alter'' marine mammal behavior. A great many activities
could simply evade the act's requirements by the Defense Department's
relying upon the uncertainty and ambiguity in this new language and not
seeking authorization in the first place. For the public or NMFS to
enforce the act in these circumstances would be difficult.
The practical outcome is that many more marine mammals would be
harmed by military activities. Potentially injurious activities that
were once assessed, monitored, and mitigated under the act would no
longer enter the permit process. NMFS could not ensure that the impacts
of such activities on populations or stocks would be negligible. In
addition, small take permit and incidental harassment authorization
mitigation measures and monitoring requirements that have been
effective in protecting marine mammal populations and resulted in
critical information on the impacts of a particular activity would be
lost. Overall, the result of these changes is likely to be more injury
and death of marine mammals, less mitigation and monitoring of impacts,
less transparency for the public and the regulatory agencies, and even
more controversy and debate.
C. Mischaracterizations of Issues Related to the Definition of
Harassment
In his written testimony before the Subcommittee on Readiness of
the House Armed Services Committee, Deputy Under Secretary of Defense,
Raymond F. Dubois, Jr. stated that: ``The new definition, as we
requested last year, reflects the position of the National Research
Council (NRC) and focuses on minimizing injury and biologically
significant disruptions to behavior critical to survival and
reproduction.''
The NRC convened a panel on marine mammals and low frequency sound
that, among other things, looked at the MMPA's definition of harassment
(National Research Council 2000). However, the NRC recommendations
differ substantially from the Defense Department's proposed amendment.
First, the NRC panel proposed no modifications to the definition of
``Level A'' or injurious harassment. Second, the NRC retained the
current standard of probability in the definition for ``Level B''
harassment, by including the phrase ``has the potential to disturb a
marine mammal.'' Third, the NRC did not raise the threshold for the
disruption of natural behaviors in Level B harassment to the Department
of Defense's level of ``abandonment or significantly altered.'' \2\
---------------------------------------------------------------------------
\2\ The definition proposed by the NRC, while more conservative
than that proposed by the Department of Defense, introduces two new
subjective and ambiguous terms--``meaningful'' and ``biologically
significant.'' The Marine Mammal Commission (MMC) noted in its
testimony before the House Resources Committee in 2001 that:
``Even were there a common understanding of these terms, their
inclusion appears to be premised on an unrealistically high assessment
of our ability to differentiate between biologically significant and
insignificant responses. However, when assessing activities that cause
behavioral modification, we often cannot distinguish between those
activities that will have significant, long-term effects and those that
will not. Until we have the capability to distinguish reliably between
what is and is not significant, or what will or will not have long-term
consequences, the commission believes that it would be ill-advised to
adopt a definition that excludes consideration of short-term impacts
entirely.''
---------------------------------------------------------------------------
In its testimony, the Defense Department, to bolster its assertion
that the definition of harassment is flawed and must be changed, cites
two examples of recent Federal district court cases where scientific
research was stopped due to concerns about acoustic impacts to marine
mammals. Deputy Assistant Secretary of the Navy, Wayne Arny, before the
Subcommittee on Readiness of the House Armed Services Committee,
stated:

``In one case, the court enjoined seismic airgun research on
geological fault lines conducted by the National Science
Foundation off the coast of Mexico based on the court's concern
that the research may be harming marine mammals in violation of
the ESA and NEPA. In another case a court enjoined a Navy
funded research project by the Woods Hole Oceanographic
Institute designed to study the effectiveness of a high
frequency detection sonar (similar to a commercial fish finder)
in detecting migrating Grey Whales off the coast of California.
The court's order stopped research on the development of a
promising mitigation measure to avoid harming marine mammals
from acoustic sources.''

In the case of the National Science Foundation's (NSF) use of
seismic airguns to undertake geological research, NSF never even
applied for an incidental take authorization under the MMPA. In
addition, the project was funded and implemented without completing an
Environmental Assessment or Environmental Impact Statement under the
National Environmental Policy Act (NEPA). The Woods Hole case involved
a series of permits issued by NMFS for scientific research pursuant to
section 104 of the MMPA. Moreover, the challenge to these permits was
brought under NEPA for failure to perform the required analysis of
environmental impacts, not the MMPA. Although we understand the adverse
reactions that these decisions have engendered within the scientific
community, these cases have little or no bearing on the sweeping
statutory changes to the MMPA sought by the Department of Defense.

IV. PROPOSED CHANGES TO THE MMPA'S SMALL TAKE AND THE INCIDENTAL
HARASSMENT PROVISIONS

The Department of Defense proposes to create a separate incidental
take authorization process for military readiness activities. While
similar to the existing small take and incidental harassment
authorizations in sections 101(a)(5)(A) and 101(a)(5)(D) of the MMPA
respectively, the proposed process eliminates key conservation elements
that restrict the scope of the incidental take to small numbers of
marine mammals while engaging in a specified activity within a
specified geographic region.
A. Deletion of Requirement That Incidental Take Authorization Be
Limited to Small Numbers of Marine Mammals of a Species or
Population Stock
Sections 101(a)(5)(A) and 101(a)(5)(D) of the MMPA allow the
Secretary to authorize the incidental take of only ``small numbers of
marine mammals of a species or population.'' Although in restricting
the take to ``small numbers'' of marine mammals the committee
acknowledged that it was unable to offer a more precise formulation
because the concept was not capable of being expressed in absolute
numerical limits; it made clear its intent that the taking should be
infrequent, unavoidable, or accidental. H.R. Rep. No. 228, 97th Cong.,
1st Sess. 19 (1981). Therefore, it is obvious that the incidental take
authorization is not intended to provide the Department of Defense with
the ability to take unlimited numbers of marine mammals. In addition,
the committee noted that this requirement is separate and distinct from
the required finding that the taking of small numbers of marine mammals
will have a negligible impact on such species or stock. Id.
The requirement that incidental take under these provisions be
limited to ``small numbers of marine mammals of a species or population
stock'' is an important and independent requirement that should
continue to apply to all persons, including the Department of Defense.
Deleting this requirement would allow increased and potentially
unsustainable levels of injury or harassment. Although it is true that
the bill retains the requirement that the Secretary find that the
incidental taking have a negligible impact on the species or stock,
these impacts are difficult to analyze, especially for marine mammal
stocks for which little is known about their abundance or biology.
Without the ``small number'' limitation, it may be difficult to
evaluate the effects of injury or harassment on annual rates of
recruitment and thereby establish sufficiently stringent quantitative
standards for negligible impact, this creates the risk that adverse,
possibly irreversible impacts will occur before they can be assessed.
The additional requirement in the existing law, that the take be
restricted to small numbers of marine mammals, ensures that the
biological consequence of that take will not hinder a marine mammal
population's ability to grow or recover.
B. Deletion of Requirement That Activities Take Place Within a
Specified Geographical Region
Congress amended the MMPA in order to ensure that the specified
activity and the specified region are narrowly identified so that the
anticipated effect would be substantially similar. H.R. Rep. No. 228,
97th Cong., 1st Sess. 19 (1981). NMFS defines specified geographical
region as ``an area within which a specified activity is conducted and
that has certain bio-geographic characteristics.'' C.F.R. Sec. 216.103.
The Defense Department's proposal would strike this requirement--
despite its importance to environmental assessment under the act, and
its consonance with sound management of marine mammals.
Restricting the activities to a specified region is in keeping with
the requirements that the incidental taking must have a negligible
impact on a stock of marine mammals and ensure that the taking has the
least practicable adverse impact on its habitat. NMFS criteria for
stocks states that stocks should be defined on the smallest divisible
unit approaching that of the area of take unless there exists evidence
of smaller subdivisions provided by ecology, life-history, morphology,
and genetics data. (NMFS 1995 and 1997). In combination with the
``small numbers'' limitation discussed previously, this fine-scale
approach to defining stocks provides an effective conservation and
management strategy for restricting take geographically and numerically
to prevent depletion of marine mammal populations and for prescribing
mitigation that is appropriately tailored and scaled.
In addition, geographic regions themselves serve different
biological purposes for marine mammal stocks. Some areas are vital to
foraging, others are migratory corridors, and still others are vital to
breeding, calving, and reproduction. The biological significance of a
particular habitat or region is critical for determining whether the
taking will have a negligible impact on the population of marine
mammals and result in the least practicable adverse impact on its
habitat.
Removing the requirement that the incidental take be restricted to
a specified geographic region is contrary to effective conservation and
management practices that limit take to narrowly defined marine mammal
stocks on a restricted geographic basis to avoid depletion. It also
jeopardizes the MMPA's goals of habitat conservation as it undermines
effective consideration of the biological role or significance of the
habitat to that marine mammal stock.
C. Other Proposed Changes to the Incidental Take Provisions
The Defense Department has proposed a number of additional changes
to the incidental take authorization that could impair the process of
environmental review.
First, under current law, both the incidental take and incidental
harassment authorizations must prescribe ``permissible methods of
taking by harassment pursuant to such military readiness activity, and
other means of affecting the least practicable impact upon such species
or stock and its habitat, paying particular attention to rookeries and
mating grounds and areas of similar significance. . .'' The Department
of Defense proposes to remove the phrase ``and areas of similar
significance.'' This amendment is scientifically indefensible and could
significantly limit the types of habitats to be considered, further
eroding the conservation goals of this provision.
Second, the law currently provides for public notice and comment on
small take authorizations. The bill, however, would limit that
requirement to decisions to withdraw or suspend an already existing
authorization (except, as under current law, when the Secretary
determines that an emergency exists and therefore the notice and
comment provisions do not apply). Perhaps this is an oversight, but
there is no logical reason to provide notice and comment only on
decisions to withdraw or suspend an existing small take authorization
and not on the decision whether to issue such an authorization in the
first instance.
Third, the incidental harassment authorization currently requires
the applicant to apply and for NMFS to solicit public comments on that
application through a notice in the Federal Register, ``newspapers of
general circulation, and appropriate electronic media and to all
locally affected communities.'' In comparison, the bill requires only
that the Secretary receive a ``request'' to trigger the public notice
and comment requirement and limits notification to the Federal
Register. This change could be interpreted to eliminate the application
requirement thus reducing the ability for the public to effectively
evaluate the proposed incidental harassment. By restricting
notification to the Federal Register, this provision of the bill would
also significantly curtail public notice, thereby limiting meaningful
public participation on proposals that could have serious implications
for private citizens.
Finally, the bill would add a provision stating, ``Nothing in this
chapter shall require disclosure of information classified in the
interest of national defense.'' We are concerned that specifically
protecting classified documents from disclosure for purposes of
environmental review will further undermine NMFS's ability to do an
effective environmental analysis and prescribe mitigation measures.

V. THE DEPARTMENT OF DEFENSE HAS NOT MADE A COMPELLING CASE THAT THESE
STATUTORY CHANGES ARE NEEDED

A. Incidental Take Permits Are Routinely Granted on a Timely Basis
Since 1994, when the current definition of ``harassment'' was
adopted, the Department of Defense has submitted 6 applications for
small take authorizations and 16 under its ``incidental harassment
authorizations,'' one of which was subsequently withdrawn. As Assistant
Administrator William Hogarth noted in his testimony before the
Committee on Armed Services in March 2002, no application for either a
small take or incidental harassment authorization submitted by the
Defense Department has ever been denied.
From the period 1994 to present, the Defense Department sought six
small take authorizations. For four of these applications, it took an
average of just over 15 months from application date to the effective
date of authorization. As noted above, decisions on small take
applications can take from 6-12 months to promulgate regulations and
issue the LOA. Fifteen months barely falls outside of that range.
In only two cases, applications to take marine mammals incidental
to shock testing of the U.S.S. Seawolf and the deployment of the
Surtass LFA, the decision process took approximately 3 years. This was
due to a myriad of factors, unique to these applications, including
their scope, complexity, number of public comments received, and time
required to comply with the National Environmental Policy Act.
Similarly, the incidental harassment authorizations averaged just
over 4 months from application to effective date of authorization. Most
of these fell within the statutory mandate of 120 days. In light of
this information, the Department of Defense has not shown either that
it is unable to comply with the existing permitting requirements or
that the length of the existing incidental take process is burdensome.
To the contrary, it appears that the program is functioning much as
Congress intended.
B. Results of a GAO Study Support This Conclusion
The conclusion that the Defense Department has not demonstrated the
need for major changes in the MMPA is consistent with a recent study,
released last June, by the General Accounting Office (GAO). The GAO
concluded that commanders throughout the Armed Forces continue to
report a high level of combat readiness, and that the Defense
Department has failed to document either the adverse impacts on
training or the increased costs associated with meeting its stewardship
responsibilities.\3\
---------------------------------------------------------------------------
\3\ General Accounting Office, Military Training: DOD Lacks a
Comprehensive Plan to Manage Encroachment on Training Ranges (June
2000) (GAO-02-614).
---------------------------------------------------------------------------
C. Opportunities Exist to Improve Implementation of the Act
Administratively
The Defense Department's proposal to create a separate incidental
take exemption process for military readiness activities would
introduce substantial ambiguity and would eliminate critical elements
from the authorization process. Rather than pursue dramatic legislative
change, the need for which has not been demonstrated, we believe that
the Department should look to non-legislative alternatives to further
streamline the administrative process. In this context, Assistant
Administrator Hogarth, in his March 2002 testimony, stated:

Our ability to be efficient stems in large part from our
ability to discuss activities with our Navy counterparts in
advance, and with an understanding of the overall activities
and needs of the program. With respect to our regulatory
program, our limited staff is directly related to our ability
to meet the increasing demands by Navy and other agencies.
However, to the extent the Navy and other action agencies can
plan sufficiently far in advance of activities and provide us
with adequate time to work with them at the earliest possible
stages, the implications of the permit process should be
minor.\4\
---------------------------------------------------------------------------
\4\ Available at this time in transcript form from www.house.gov/
hasc/openingstatementsandpressreleases/107thcongress/02-03-
14hogarth.html.

The Department of Defense and NMFS are about to sign a memorandum
of understanding that would further improve the authorization process.
Based on these statements, and our own knowledge of how the current
program functions, we believe there are a number of ways to
administratively improve its implementation to address the concerns of
the Department of Defense, without amending the statute or undermining
its conservation objectives. We believe that this approach is the most
expedient way to achieve both marine mammal conservation and to improve
efficiency in the issuance of permits for military readiness
activities. As a first step, we urge NMFS to undertake a programmatic
review of the incidental take authorization program as a means to
improve efficiency and meet the goals and mandates of the MMPA.
vi. proposed exemptions of actions necessary for national defense
Under subsection (e), Exemptions of Action Necessary for National
Defense, the Secretary of Defense may exempt any action or category of
actions undertaken by the Department of Defense from compliance with
any requirement of the MMPA if the Secretary determines it is necessary
for national defense. The exemption is for a period of 2 years with the
possibility of unlimited additional exemptions, each 2 years in
duration. The effect of this provision is to create an escape clause
that allows the Defense Department to bypass the incidental take
permitting process entirely. Moreover, this exemption would apply
broadly to any requirement of the MMPA for any action or category of
actions undertaken by the Defense Department which the Secretary
determines are necessary for national defense.
We believe this exemption is excessively broad for four reasons.
First, it would vest authority to grant an exemption entirely in the
Secretary of Defense. Second, the exemption applies to ``any action or
category of actions undertaken by the Department of Defense or its
components''--and so is not limited to individual activities,
technologies, or exercises, allowing in theory for a sweeping
application of this provision. Third, the exemption confers immunity
from ``compliance with any requirement'' of the MMPA. Fourth, the
Secretary of Defense can avail himself/herself of endless renewals of
the exemption. Even more fundamentally, we believe the Department of
Defense has failed to demonstrate an irreconcilable conflict exists
within the incidental take authorization or any other provision of the
MMPA that would merit such an exemption--one that would render the
MMPA's conservation goals and mandates virtually meaningless.
The Department of Defense has flexibility under the Armed Forces
Code, 10 U.S.C. Sec. 2014, to seek special accommodation and relief
from any agency action that, in its determination, would have a
``significant adverse effect on the military readiness of any of the
Armed Forces or a critical component thereof.'' If the accommodations
it seeks are not forthcoming and an agreement is not reached directly
with the head of the executive agency concerned, it may take its case
directly to the President. These provisions have never been invoked
with regard to the MMPA, presumably because the Department's requests
for authorization under the act have never been denied and because any
mitigation required by the agency was judged not to have a significant
adverse effect on readiness. The Department of Defense has not
demonstrated that either the flexibility to seek special accommodation
and relief under the Armed Forces Code is insufficient or that the
broad exemptions it now seeks are warranted.

VII. CONCLUSION

Our groups support the military's efforts to protect national
security and are sensitive to the issue of military readiness. We do
not believe, however, that the Defense Department has demonstrated that
the dramatic changes proposed are necessary or that it has utilized the
administrative remedies available to it under existing law. The
Department of Defense's proposals to modify the MMPA's definition of
harassment, create a separate incidental take authorization process for
military readiness activities, and create a broad exemption to the
MMPA, threaten to severely undermine the precautionary nature of the
act and lead to significantly increased harm to marine mammal
populations.
We support a process, in the context of MMPA reauthorization, in
which all stakeholders can work together to develop creative and
collaborative approaches to demonstrated problems. We hope this
subcommittee will allow us the opportunity to work constructively on
alternative approaches with all of the affected agencies and
organizations to try and address the Department's concerns before any
fundamental changes are made to this keystone conservation law.

Senator Ensign. Thank you.
Ms. Clark.

STATEMENT OF JAMIE RAPPAPORT CLARK, SENIOR VICE PRESIDENT FOR
CONSERVATION PROGRAMS, NATIONAL WILDLIFE FEDERATION

Ms. Clark. Good morning, Mr. Chairman and members of the
subcommittee. I am here this morning on behalf of the 10
national conservation organizations identified in my written
submission to testify on why exempting the Defense Department
from key provisions of the ESA would be a serious mistake.
Prior to arriving at the National Wildlife Federation in
2001, I served for 13 years at the U.S. FWS, with the last 4
years as Director of the Agency. Before my time with the
Service, I held a variety of positions with the military,
including the FWS Administrator for the Department of the Army.
I am the daughter of an Army officer and grew up on military
installations across the country throughout my childhood.
During my tenures at the FWS and the Defense Department,
DOD routinely worked with wildlife agency experts to comply
with environmental laws and to conserve imperiled wildlife
while achieving military readiness. This approach of working
through compliance issues on an installation-by-installation
basis really works. As DOD themselves have acknowledged, our
Armed Forces are as prepared today as they have ever been in
their history and their state of readiness has been achieved
without broad, sweeping exemptions from environmental laws.
The Defense Department's proposed ESA exemption suffers
from three basic flaws. First, DOD's exemption would eliminate
a key tool for conserving endangered species. Their proposal
would effectively eliminate the potential for critical habitat
designations on DOD lands, thus eliminating many of the ESA
consultations that have enabled DOD to look before they leap
into a potentially harmful training exercise. This could mean
significant losses for our Nation's rich natural heritage and
potential negative effects to the long-term land sustainability
needed for readiness training.
DOD manages approximately 25 million acres of land across
the country, home to at least 300 federally-listed species.
Without the refuge provided by these bases, many of these
species could rapidly slide towards extinction.
Second, an exemption from the ESA is truly unnecessary.
Three provisions of the current law already provide the
flexibility needed to balance military readiness and species
conservation. Section 7(a)(2) of the act provides Defense with
an opportunity to negotiate locally tailored solutions in
consultation with the Service's wildlife experts. Section
4(b)(2) of the ESA obliges the Services to, and they do,
exclude any area from a critical designation if they determine
that the benefits of exclusion outweigh the benefits of
specifying the area.
The court case, Mr. Chairman, referred to in the earlier
panel has no effect on the ability of the Services to balance
out critical habitat. It dealt with a definitional issue, and
so no flexibility has been taken from the Services as a result
of the spotted owl court case.
Section 7(j) of the ESA says that an exemption must be
granted for an activity if the Secretary of Defense finds the
exemption is needed for reasons of national security. He does
not need to go to the President. The Secretary of Defense
declares the exemption is there.
It is really unfortunate, Mr. Chairman, that this debate
has relied so heavily on anecdotes in an attempt to show that
Defense agencies have not been able to balance military
readiness and conservation objectives. Some of the anecdotes
are just unpersuasive on their face, such as the assertion that
environmental laws have prevented the armed services from
learning how to dig foxholes.
Others are frustrating or misleading. For example, there
has been repeated discussions that 57 percent of Camp Pendleton
is subject to restrictions on training due to proposed critical
habitat designations. Well, I was there. Those proposed
designations are now final designations that cover less than 1
percent of Pendleton's training lands, not 57 percent.
In a June 2002 report on encroachment, the GAO looked into
many of the anecdotes. It found that DOD agencies have never
inventoried their training resources, planned for their
training needs, or performed any in-depth analysis of civilian
encroachment on readiness activities. Without any real evidence
that environmental laws are at fault for any presumed readiness
gaps and many conflicting facts, DOD has no basis for
requesting wholesale exemptions from these important statutes.
The third reason why enacting DOD's proposed ESA changes
would be a huge mistake is because the current approach,
developing solutions at the local level rather than relying on
broad national exemptions, has really worked. There are plenty
of examples of Defense working with Federal wildlife agencies
to develop win-win solutions at the local level, but today I
will just focus on one, the protection of red-cockaded
woodpeckers amidst intense training activities at Camp Lejeune
Marine Corps Base in North Carolina.
Rather than characterizing the experience myself, I will
rely on the words of Major General Mize from Camp Lejeune, who
stated the following at a recent national symposium: ``I can
say with confidence that the efforts of our natural resources
managers and the training community have produced an
environment in which endangered species management and military
training are no longer considered mutually exclusive, but are
compatible.''
With the ongoing war in Iraq and continuing threats of
terrorism, no one can dismiss the importance of military
readiness. However, there is no justification for Defense to
retreat from their environmental stewardship commitments at
home. I know that there is concern and even conflicts between
military training needs and sustainable natural resources
conservation at times, but Congress should pay close attention
to the words of Major General Mize and the many others who are
continually crafting solutions at the installation level and
reject the Pentagon's effort to undermine those solutions with
broad-based exemptions to the ESA.
Thank you, Mr. Chairman.
[The prepared statement of Ms. Clark follows:]

Prepared Statement by Jamie Rappaport Clark

Good morning, Chairman Ensign, Senator Akaka, and members of the
subcommittee. My name is Jamie Rappaport Clark, Senior Vice President
for Conservation Programs at the National Wildlife Federation, the
Nation's largest conservation education and advocacy organization. I am
here to testify on behalf of National Wildlife Federation, as well as
Defenders of Wildlife, the Endangered Species Coalition, Fund for
Animals, Humane Society of the United States, Military Toxics Project,
Public Employees for Environmental Responsibility, Public Interest
Research Group, Natural Resources Defense Council, and World Wildlife
Fund. I thank the subcommittee for this opportunity to testify on the
administration's Readiness and Range Preservation Initiative.
Prior to arriving at the National Wildlife Federation in 2001, I
served for 13 years at the U.S. Fish and Wildlife Service, with the
last 4 years as the director of the agency. Prior to that, I served as
Fish and Wildlife Administrator for the Department of the Army, Natural
and Cultural Resources Program Manager for the National Guard Bureau,
and Research Biologist for U.S. Army Medical Research Institute. I am
the daughter of a U.S. Army colonel, and lived on or near military
bases throughout my entire childhood.
Based on this experience, I am very familiar with the Defense
Department's long history of leadership in wildlife conservation. On
many occasions during my tenures at FWS and the Defense Department, DOD
rolled up its sleeves and worked with wildlife agency experts to find a
way to comply with environmental laws and conserve imperiled wildlife
while achieving military preparedness objectives.
The administration now proposes in its Readiness and Range
Preservation Initiative that Congress scale back DOD's responsibilities
to conserve wildlife and to protect people from the hazardous pollution
that DOD generates. This proposal is both unjustified and dangerous. It
is unjustified because DOD's longstanding approach of working through
compliance issues on an installation-by-installation basis works. As
DOD itself has acknowledged, our Armed Forces are as prepared today as
they ever have been in their history, and this has been achieved
without broad exemptions from environmental laws.
The DOD proposal is dangerous because, if Congress were to broadly
exempt DOD from its environmental protection responsibilities, both
people and wildlife would be threatened with serious, irreversible, and
unnecessary harm. Moreover, other Federal agencies and industry sectors
with important missions, using the same logic as used here by DOD,
would line up for their own exemptions from environmental laws.
My expertise is in the Endangered Species Act (ESA), so I would
like to focus my testimony on why exempting the Defense Department from
key provisions of the ESA would be a serious mistake. I will rely on my
fellow witnesses to explain why the proposed exemptions from other
environmental and public health and safety laws is similarly unwise.

CONCERNS WITH THE ESA EXEMPTION

The Defense Department's proposed ESA exemption suffers from three
basic flaws: it would severely weaken this Nation's efforts to conserve
imperiled species and the ecosystems on which all of us depend; it is
unnecessary for maintaining military readiness; and it ignores the
Defense Department's own record of success in balancing readiness and
conservation objectives under existing law.
1. Section 2017 Removes a Key Species Conservation Tool
Section 2017 of the administration's Readiness and Range
Preservation Initiative would preclude designations of critical habitat
on any lands owned or controlled by DOD if DOD has prepared an
Integrated Natural Resources Management Plan (INRMP) pursuant to the
Sikes Act and has provided ``special management consideration or
protection'' of listed species pursuant to section 3(5)(A) of the ESA.
This proposal would effectively eliminate critical habitat
designations on DOD lands, thereby removing an essential tool for
protecting and recovering species listed under the ESA. Of the various
ESA protections, the critical habitat provision is the only one that
specifically calls for protection of habitat needed for recovery of
listed species. It is a fundamental tenet of biology that habitat must
be protected if we ever hope to achieve the recovery of imperiled fish,
wildlife, and plant species.
Section 2017 would replace this crucial habitat protection with
management plans developed pursuant to the Sikes Act. The Sikes Act
does not require the protection of listed species or their habitats; it
simply directs DOD to prepare INRMPs that protect wildlife ``to the
extent appropriate.'' Moreover, the Sikes Act provides no guaranteed
funding for INRMPs and the annual appropriations process is highly
uncertain. Even the best-laid management plans can go awry when the
anticipated funding fails to come through. Yet, under section 2017,
even poorly designed INRMPs that allow destruction of essential habitat
and put fish, wildlife, or plant species at serious risk of extinction
would be substituted for critical habitat protections.
Section 2017 contains one minor limitation on the substitution of
INRMPs for critical habitat designations: such a substitution is
allowed only where the INRMP provides ``special management
consideration or protection'' within the meaning of section 3(5)(A) of
the ESA. Unfortunately, this limitation does nothing to ensure that
INRMPs truly conserve listed species.
The term ``special management consideration or protection'' was
never intended to provide a biological threshold that land managers
must achieve in order to satisfy the ESA. The term is found in section
3(5) of the ESA, which sets forth a two-part definition of critical
habitat. Section 3(5)(A) states that critical habitat includes areas
occupied by a listed species that are ``essential for the conservation
of the species'' and ``which may require special management
consideration or protection.'' Section 3(5)(B) states that critical
habitat also includes areas not currently occupied by a listed species
that are simply ``essential for the conservation of the species.''
As this language makes clear, an ESA Sec. 3(5) finding by the U.S.
Fish and Wildlife Service or National Marine Fisheries Service
(Services) that a parcel of land ``may require special management
consideration or protection'' is not the same as finding that it is
already receiving adequate protection. Such a finding simply highlights
the importance of a parcel of land to a species, and it should lead to
designation of that land as critical habitat. See Center for Biological
Diversity v. Norton, 240 F. Supp. 2d 1090 (D. Ariz. 2003) (rejecting,
as contrary to plain meaning of ESA, defendant's interpretation of
``special management consideration or protection'' as providing a basis
for substituting a U.S. Forest Service management plan for critical
habitat protection). By allowing DOD to substitute INRMPs for critical
habitat designations whenever it unilaterally makes a finding of
``special management consideration or protection,'' section 2017
significantly weakens the ESA.
Section 2017 is also problematic because it would eliminate many of
the ESA section 7 consultations that have stimulated DOD to ``look
before it leaps'' into a potentially harmful training exercise. As a
result of section 7 consultations, DOD and the Services have routinely
developed what is known as ``work-arounds,'' strategies for avoiding or
minimizing harm to listed species and their habitats while still
providing a rigorous training regimen.
Section 2017 purports to retain section 7 consultations. However,
the duty to consult only arises when a proposed Federal action would
potentially jeopardize a listed species or adversely modify or destroy
its critical habitat. By removing critical habitat designations on
lands owned or controlled by DOD, section 2017 would eliminate one of
the two possible justifications for initiating a consultation, reducing
the likelihood that consultations will take place. This would mean that
DOD and the Services would pay less attention to species concerns and
would be less effective in conserving imperiled species and maintaining
the sustainability of the land.
The reductions in species protection proposed by DOD would have
major implications for our Nation's rich natural heritage. DOD manages
approximately 25 million acres of land on more than 425 major military
installations. These lands are home to at least 300 federally-listed
species. Without the refuge provided by these bases, many of these
species would slide rapidly toward extinction. These installations have
played a crucial role in species conservation and must continue to do
so.
2. The ESA Exemption is Not Necessary to Maintain Military Readiness
The ESA already has the flexibility needed for the Defense
Department to balance military readiness and species conservation
objectives. Three key provisions provide this flexibility. First, under
the consultation provision of section 7(a)(2) of the act, DOD is
provided with the opportunity to develop solutions in tandem with the
Services to avoid unnecessary harm to listed species from military
activities. Typically, the Services conclude, after informal
consultation, that the proposed action will not adversely affect a
listed species or its designated critical habitat or, after formal
consultation, that it will not likely jeopardize a listed species or
destroy or adversely modify its critical habitat. See, e.g., U.S. Army
Environmental Center, Installation Summaries from the fiscal year 2001
Survey of Threatened and Endangered Species on Army Lands (August 2002)
at 9 (noting successful conclusion of 282 informal consultations and 36
formal consultations, with no ``jeopardy'' biological opinions). In
both informal and formal consultations, the Services either will
recommend that the action go forward without changes, or it will work
with DOD to design ``work arounds'' for avoiding and minimizing harm to
the species and its habitat. In either case, DOD accomplishes its
readiness objectives while achieving ESA compliance.
Second, under section 4(b)(2) of the ESA, the Services are
authorized to exclude any area from critical habitat designation if
they determine that the benefits of exclusion outweigh the benefits of
specifying the area. (An exception is made for when the Services find
that failure to designate an area as critical habitat will result in
the extinction of a species--a finding that the Services have never
made.) In making this decision, the Services must consider ``the
economic impact, and any other relevant impact'' of the critical
habitat designation. DOD has recently availed itself of this provision
to convince the U.S. Fish and Wildlife Service to exclude virtually all
of the habitat at Camp Pendleton--habitat deemed critical to five
listed species in proposed rulemakings--from final critical habitat
designations. Thus, for situations where the section 7(a)(2)
consultation procedures place undue burdens on readiness activities,
DOD already has a tool for working with the Services on excluding land
from critical habitat designation. Attached to my testimony is a
factsheet that shows how the Services have worked cooperatively with
DOD on these exclusions, and another factsheet showing the importance
of maintaining the Services' role in evaluating proposed exclusions.
Third, under section 7(j) of the ESA an exemption ``shall'' be
granted for an activity if the Secretary of Defense finds the exemption
is necessary for reasons of national security. To this date, DOD has
never sought an exemption under section 7(j)--highlighting the fact
that other provisions of the ESA have provided DOD with all the
flexibility it needs to reconcile training needs with species
conservation objectives.
Where there are site-specific conflicts between training needs and
species conservation needs, the ESA provides these three mechanisms for
resolving them in a manner that allows DOD to achieve its readiness
objectives. Granting DOD a nationwide ESA exemption, which would apply
in many places where no irreconcilable conflicts between training needs
and conservation needs have arisen, would be harmful to imperiled
species and totally unnecessary to achieve readiness objectives.
a. DOD Has Misstated the Law Regarding Its Ability to Continue with
a Cooperative, Case-by-Case Approach to Critical Habitat
Designations
DOD has stated that the ESA exemption is necessary because a recent
court ruling in Arizona would prevent DOD from taking the cooperative,
case-by-case approach to critical habitat designations that was
developed when I served as Director of the Fish and Wildlife Service
(FWS). This description of the court ruling is inaccurate--the ruling
clearly allows DOD to continue the cooperative, case-by-case approach
if it wishes.
The court ruling at issue is entitled Center for Biological
Diversity v. Norton, 240 F. Supp. 2d 1090 (D. Ariz. 2003). In this
case, FWS excluded San Carlos Apache tribal lands from a critical
habitat designation pursuant to ESA Sec. 4(b)(2) because the tribal
land management plan was adequate and the benefits of exclusion
outweighed the benefits of inclusion. The Federal district court upheld
the exclusion as within FWS's broad authority under ESA Sec. 4(b)(2).
At the same time, the court held that lands could not legitimately be
excluded from a critical habitat designation on the basis of the
``special management'' language in ESA Sec. 3(5).
Under the court's reasoning, FWS continues to have the broad
flexibility to exclude DOD lands from a critical habitat designation on
the basis of a satisfactory INRMP and the benefits to military training
that the exclusion would provide. The ruling simply clarifies that such
exclusions must be carried out pursuant to ESA Sec. 4(b)(2) rather than
ESA Sec. 3(5). Thus, DOD's assertion that the Center for Biological
Diversity ruling prevents it from working with FWS to secure exclusions
of DOD lands from critical habitat designations is inaccurate.
b. DOD's Anecdotes Do Not Demonstrate That the ESA Has Reduced
Readiness
The DOD has offered a series of misleading anecdotes describing
difficulties it has encountered in balancing military readiness and
conservation objectives. Before Congress moves forward with any
exemption legislation, the appropriate congressional committees should
get a more complete picture of what is really happening at DOD
installations.
Some of DOD's anecdotes are simply unpersuasive on their face, such
as DOD's repeated assertion that environmental laws have prevented the
armed services from learning how to dig foxholes and that troops abroad
have been put at greater risk as a result. There is simply no evidence
that environmental laws have ever prevented foxhole digging. Moreover,
given its vast and varied landholdings and the many management options
available, the Defense Department certainly can find places on which
troops can learn to dig foxholes without encountering endangered
species or other environmental issues.
Other anecdotes have simply disregarded the truth. For example, DOD
and its allies have repeatedly argued that more than 50 percent of Camp
Pendleton may not be available for training due to critical habitat
designations. In fact, only five species have been proposed for
critical habitat designations at Camp Pendleton. In each of these five
instances, DOD raised concerns about impacts to military readiness, and
in each instance, FWS worked closely with DOD to craft a solution. FWS
ultimately excluded virtually all of the habitats for the five listed
species on Camp Pendleton from critical habitat designations--even
though FWS had earlier found that these habitats were essential to the
conservation of the species. As a result of FWS's exclusion decisions,
less than 1 percent of the training land at Camp Pendleton, and less
than 4 percent of all of Camp Pendleton, is designated critical
habitat. (Most of the critical habitat designated at Camp Pendleton is
non-training land leased to San Onofre State Park, agricultural
operations, and others. DOD's repeated suggestion that more than 50
percent of Camp Pendleton is at risk of being rendered off-limits to
training due to critical habitat is simply inaccurate.
DOD also has argued that training opportunities and expansion plans
at Fort Irwin have been thwarted by the desert tortoise. Yet just 2
weeks ago this official line was contradicted by the reality on the
ground. In an article dated March 21, 2003, Fort Irwin spokesman Army
Maj. Michael Lawhorn told the Barstow Desert Dispatch that he is
unaware of any environmental regulations that interfere with troops'
ability to train there. He also said there isn't any environmental law
that hinders the expansion.
Attached to my testimony is a factsheet outlining a series of
additional misleading anecdotes used by DOD and the additional facts
that must be considered before drawing any conclusions about the impact
of the ESA on military readiness.
These examples of misleading anecdotes highlight the need for
Congress to look behind the reasons that are being put forward by DOD
as the basis for weakening environmental laws. DOD uses the anecdotes
in an attempt to demonstrate that conflicts between military readiness
and species conservation objectives are irreconcilable. However,
solutions to these conflicts are within reach if DOD is willing to
invest sufficient time and energy into finding them. DOD has vast acres
of land on which to train and vast stores of creativity and expertise
among its land managers. With careful inventorying and planning, DOD
can find a proper balance.
Has DOD made the necessary effort to inventory and plan for its
training needs? In June 2002, the General Accounting Office issued a
report entitled ``Military Training: DOD Lacks a Comprehensive Plan to
Manage Encroachment on Training Ranges,'' suggesting that the answer is
no. The GAO found:

DOD has not fully defined its training range
requirements and lacks information on training resources
available to the Services to meet those requirements, and that
problems at individual installations may therefore be
overstated.
The armed services have never assessed the overall
impacts of encroachment on training.
DOD's readiness reports show high levels of training
readiness for most units. In those few instances of when units
reported lower training readiness, DOD officials rarely cited
lack of adequate training ranges, areas, or airspace as the
cause.
DOD officials themselves admit that population growth
around military installations is responsible for past and
present encroachment problems.
The armed services' own readiness data do not show
that environmental laws have significantly affected training
readiness.

Ten months after the issuance of the GAO report, DOD still has not
produced evidence that environmental laws are at fault for any of the
minor gaps in readiness that may exist. EPA Administrator Whitman
confirmed this much at a recent hearing. At a February 26, 2003, Senate
Environment and Public Works Committee hearing on EPA's budget, EPA
Administrator Whitman stated that she was ``not aware of any particular
area where environmental protection regulations are preventing the
desired training.''
To this date, DOD has not provided Congress with the most basic
facts about the impacts of ESA critical habitat requirements on its
readiness activities. Out of DOD's 25 million acres of training land,
how many acres are designated critical habitat? At which installations?
Which species? In what ways have the critical habitat designations
limited readiness activities? What efforts did DOD make to alert FWS to
these problems and to negotiate resolutions? Without answers to these
most basic questions, Congress cannot fairly conclude that the ESA is
at fault for any readiness gaps or that a sweeping ESA exemption is
warranted.
3. DOD has Worked Successfully with the Services to Balance
Readiness and Species Conservation Objectives
The third reason why enacting DOD's proposed ESA changes would be a
mistake is because the current approach--developing solutions at the
local level, rather than relying on broad, national exemptions--has
worked. My experience at both FWS and DOD has shown me that solutions
developed at the local level are sometimes difficult to arrive at, but
they are almost always more intelligent and long-lasting than one-size-
fits-all solutions developed at the national level.
Allow me to provide a few brief examples. At the Marine Corps Base
at Camp Lejeune in North Carolina, every colony tree of the endangered
red-cockaded woodpecker is marked on a map, and marines are trained to
operate their vehicles as if those mapped locations are land mines.
Here is the lesson that Major General David M. Mize, the Commanding
General at Camp Lejeune, has drawn from this experience:

``Returning to the old myth that military training and
conservation are mutually exclusive; this notion has been
repeatedly and demonstrably debunked. In the overwhelming
majority of cases, with a good plan along with common sense and
flexibility, military training and the conservation and
recovery of endangered species can very successfully coexist.''
``Military installations in the southeast are contributing to
red-cockaded woodpecker recovery while sustaining our primary
mission of national military readiness.''
``I can say with confidence that the efforts of our natural
resource managers and the training community have produced an
environment in which endangered species management and military
training are no longer considered mutually exclusive, but are
compatible.''

These sentiments, which I share, were relayed by Major General Mize
just 8 weeks ago at a National Defense University symposium sponsored
by the U.S. Army Forces Command (FORSCOM) and others. At that
symposium, representatives of Camp Lejeune Marine Corps Base, Eglin Air
Force Base, Fort Bragg Army Base, Fort Stewart Army Base, Camp Blanding
Training Center in Florida, the U.S. Army Environmental Center, and
other Defense facilities--some of the most heavily utilized training
bases in the country--heralded the success that Defense Department
installations have had in furthering endangered species conservation
while maintaining military readiness.
On the Mokapu Peninsula of Marine Corps Base Hawaii, the growth of
non-native plants, which can decrease the reproductive success of
endangered waterbirds, is controlled through annual ``mud-ops''
maneuvers by Marine Corps Assault Vehicles. Just before the onset of
nesting season, these 26 ton vehicles are deployed in plow-like
maneuvers that break the thick mats of invasive plants, improving
nesting and feeding opportunities while also giving drivers valuable
practice in unusual terrain.
Attached to my testimony is a factsheet with additional examples of
successful efforts by DOD installations across the country to balance
military readiness and species conservation.
These success stories highlight a major trend that I believe has
been missed by those promoting the DOD exemptions. In recent years, DOD
has increasingly recognized the importance of sustainability because it
meets several importance objectives at once. Sustainable use of the
land helps DOD achieve not only compliance with environmental laws, but
also long-term military readiness and cost-effectiveness goals. For
example, by operating tanks so that they avoid the threatened desert
tortoise, DOD prevents erosion, a problem that is extremely difficult
and costly to remedy. If DOD abandons its commitment to environmental
compliance, it will incur greater long-term costs for environmental
remediation and will sacrifice land health and military readiness.
A November 2002 policy guidance issued by the then-Secretary of the
Navy to the Chief of Naval Operations and the Commandant of the Marine
Corps suggests that certain members of DOD's leadership are indeed
willing to abandon the sustainability goal. The policy guidance on its
face seems fairly innocuous--it purports to centralize at the Pentagon
all decisionmaking on proposed critical habitat designations and other
ESA actions. However, the Navy Secretary's cover memo makes clear that
its purpose is also to discourage any negotiation of solutions to
species conservation challenges by Marines or Navy personnel in the
field, lest these locally-developed ``win-win'' solutions undercut
DOD's arguments on Capitol Hill that the ESA is broken. According to
paragraph 2 of the cover memo, ``concessions . . . could run counter to
the legislative relief that we are continuing to pursue with
Congress.''
Similar sentiments were voiced by Deputy Defense Secretary Paul
Wolfowitz in his March 7, 2003, memo to the chiefs of the Army, Navy,
and Air Force. Deputy Secretary Wolfowitz argued that ``it is time for
us to give greater consideration to requesting exemptions'' from
environmental laws and pleaded for specific examples of instances in
which environmental regulations hamper training. The implicit message
is that efforts at the installation level to resolve conflicts between
conservation and training objectives should be suspended, and that such
conflicts instead should be reported to the Pentagon, where
environmental protections will simply be overridden.
These messages to military personnel in the field mark a very
unfortunate abdication of DOD's leadership in wildlife conservation. To
maintain its leadership role as steward of this Nation's endangered
wildlife, DOD must encourage its personnel to continue developing
innovative solutions and not thwart those efforts.
conclusion
With the Iraq war ongoing and terrorism threats always present, no
one can dismiss the importance of military readiness. However, there is
no justification for the Defense Department to retreat from its
environmental stewardship commitments at home. As base commanders have
been telling us, protecting endangered species and other important
natural resources is compatible with maintaining military readiness.
Surveys show that the American people today want environmental
protection from the Federal Government, including the Defense
Department, as much as ever. According to an April 2002 Zogby Poll, 85
percent of registered voters believe that the Defense Department should
be required to follow America's environmental and public health laws
and not be exempt. Americans believe that no one, including the Defense
Department, should be above the law.
Congress should reject the proposed environmental exemptions in the
administration's defense authorization package. This proposal, along
with the parallel proposal in the administration's fiscal year 2004
budget request that Congress cut spending on DOD's environmental
programs by $400 million, are a step in the wrong direction.
DOD has a long and impressive record of balancing readiness
activities with wildlife conservation. The high quality of wildlife
habitats at many DOD installations provides tangible evidence of DOD's
positive contribution to the Nation's conservation goals. At a time
when environmental challenges are growing, DOD should be challenged to
move forward with this successful model and not to sacrifice any of the
progress that has been made.

Senator Ensign. Mr. Siegel.

STATEMENT OF LENNY SIEGEL, EXECUTIVE DIRECTOR, CENTER FOR
PUBLIC ENVIRONMENTAL OVERSIGHT

Mr. Siegel. Good morning, Mr. Chairman, members of the
subcommittee. Thank you for the opportunity to address the
challenge of balancing the competing yet compatible objectives
of military readiness, environmental protection, and community
development. My organization, the Center for Public
Environmental Oversight, works with community groups across the
country.
I have six main points to make today. The first is that the
Readiness and Range Preservation Initiative purports to resolve
problems that really have not been documented. In the cases of
the CAA, RCRA, and CERCLA, there are no documented examples of
those laws ever interfering with training or other military
readiness activities. In fact, people do not even realize it,
but the CAA does not even directly apply to the flight of
military airplanes. There is no direct regulation. They are
only subject through the conformity plans. In addition to
presidential exemptions, the CAA has a series of stepping
stones through which military readiness activities may be
exempted from the CAA if indeed there ever were a situation
where those were proposed to get in the way.
In the case of RCRA and CERCLA, the military has pointed to
a case in Fort Richardson in Alaska. If you look carefully at
the case, there is nothing in RCRA or CERCLA in that lawsuit
which would prevent the military from continuing training at
the Eagle River Flats Training Area.
The second point is that the military's initiative appears
to be designed to do other things than the protect readiness.
In the case of RCRA and CERCLA, they appear to be limiting the
military's obligation to conduct and pay for the cleanup of
contamination. If you compare the Readiness and Range
Preservation Initiative language with the military munitions
rule, you see there is a big difference. It has to do with
munitions constituents such as perchlorate and Royal Demolition
Explosive (RDX). That is what the issue is, not readiness.
In the case of the CAA, the military itself has said it is
about the basing of aircraft. To me that is an issue for base
realignment and closure; it is not an issue of readiness. Those
are important issues. They need to be discussed, but I think
they are not part of the readiness debate. These laws that I am
addressing today--RCRA, CERCLA, and the CAA--are not
interfering with readiness.
The Pentagon's language would endanger public health and
the environment. Even if the language were narrowed to exclude
the Las Vegas Wash and to exclude the chemical weapons
facilities in places like Arkansas and Colorado, you still have
operational ranges, which include inactive as well as active
ranges, where contaminants such as perchlorate have been found
to be migrating off the ranges and contaminating our water
supplies at places like the Aberdeen Proving Ground and the
Massachusetts Military Reservation.
Changing these laws would severely handicap the ability of
regulatory agencies using the statutes that they normally use
to oversee the characterization of those sites and for the
military to fund the cleanup through the processes that they
normally use. So it is not--while the threat to readiness as
far as I am concerned is purely theoretical or hypothetical,
the threat to public health and the environment which would be
caused by changing these laws is real, it is happening now.
The next point is that the language is poorly drafted. I
have read testimony by attorney generals from eight States
suggesting that the language could apply to the Las Vegas Wash,
it could apply to Arrow Jet in Sacramento, it could apply to
any facility where any research, development, test, and
evaluation is being carried on. The language needs to be
cleaned up. The Defense Department says it is their intent to
confine it to operational ranges. I would like to see them
change the language, put it in plain English so everybody can
understand.
The fifth point, many of you Senators may be aware of what
I consider to be the real threat to military readiness
activities, and that is urban sprawl. You can see it at the
proposal to build the North Hills Development in the pathway
for the planes from Nellis Air Force Base. You can see it in
the subdivisions that have been creeping up against Luke Air
Force Base in Arizona. You can see it in development which has
occurred near Fort Sill in Oklahoma.
This is a problem that I agree--when I go around the
country and talk to community groups, I say, environmentalists,
neighbors of military bases, and the military can all attack a
common enemy, and that is urban sprawl. There are steps that
you could take to support State initiatives in Arizona,
California, Oklahoma, to deal with sprawl that interferes with
readiness. That would go a lot further than any of these
changes in the environmental laws to allow our troops to train
and fly and conduct other activities.
There are specific things you can do. The States are doing
it. The local installations are trying to do it. Help them out.
The final point I have to make, I have taken part in a
series of dialogues with the military where you bring together
regulators, the military, community groups, and other
stakeholders from around the country to try to solve problems.
The national dialogue on military munitions came up with a set
of principles from outside the military that the military
brought into two directives even before we finished our work as
a dialogue. I think a lot of the issues that we are seeing here
today, things which are not even covered by the Pentagon's
legislative language, could be resolved by the establishment of
a national commission on sustainability and readiness.
Those of us on the outside want to work with the military
to solve these problems. We are nervous about rolling back the
environmental laws, but we agree that there are problems that
need to be resolved. Encourage the military to continue the
small steps that it has made to establish that dialogue.
Again, we all agree that there are threats to military
readiness. We just do not believe that this legislation that
the Pentagon has put forward is the way to go. Thank you.
[The prepared statement of Mr. Siegel follows:]

Prepared Statement by Lenny Siegel

SUMMARY

``Defense and the environment'' is not an either-or
proposition. To choose between them is impossible in this real
world of serious defense threats and genuine environmental
concerns. The real choice is whether we are going to build a
new environmental ethic into the daily business of defense. .
.''--Dick Cheney, 1990 \1\
---------------------------------------------------------------------------
\1\ Dr. James Arnold Miller, ``Moving Toward a Comprehensive and
Long-Term Department of Defense Environmental Strategy: The Report of
the Forum on Our Nation's Defense and the Environment,'' Department of
Defense, Office of the Deputy Assistant Secretary of Defense
(Environment), September 6-7, 1990, p. 8.

Mr. Chairman, members of the subcommittee, thank you for the
opportunity to address the challenge of balancing the competing, yet
compatible, objectives of military readiness, environmental protection,
and community development. My organization, the Center for Public
Environmental Oversight, works with the people who live and work on or
near current and former military bases and ranges throughout the U.S.,
from Puerto Rico to Alaska, from Maine to Hawaii.
Secretary Cheney's vision is realistic, but the Department of
Defense's new Readiness and Range Preservation Initiative (RRPI),
proposed as section 316 of the National Defense Authorization Act for
Fiscal Year 2004, is a giant step in the wrong direction. Instead of
making the Defense Department a leader in ``environmental compliance
and protection,'' the RRPI would give the military special treatment
that is not necessary for it to fulfill its mission.

The RRPI purports to resolve problems that have not
been documented.
The RRPI appears designed to limit the Defense
Department's obligations in areas unrelated to readiness.
The RRPI would endanger public health and the
environment.
The RRPI is poorly drafted.
The RRPI fails to support cooperative efforts of
military officials, environmental organizations, and State,
tribal, and local governments to address a common enemy, urban
sprawl.
The environmental challenges to military readiness
would be best addressed by one or more continuing, multi-
stakeholder dialogues.

I have been asked today to address the proposed changes to the
Clean Air Act (CAA), as it applies to State Implementation Plans, and
the Resource Conservation and Recovery Act (RCRA) and Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), as
they apply to munitions and explosive constituents. I have seen no
evidence that these three laws have ever interfered with readiness. The
impact of these laws on training and other readiness activities is
purely hypothetical. In fact, even if regulatory agencies or third
parties were to challenge training or other readiness activities using
these statutes, they already provide the flexibility to balance
environmental and military requirements on a site-by-site basis.
Furthermore, these proposals appear to address Defense Department
objectives other than readiness. The language dealing with munitions
response seems designed to minimize the Department's responsibility for
cleaning up not only unexploded ordnance, but explosive constituents
such as perchlorate. Even if the language is modified to clearly apply
only to active munitions ranges, it would prevent regulatory agencies
from addressing contamination that threatens public health and the
environment--until it's too late--and it would undermine incentives for
pollution prevention on ranges.
Similarly, the language exempting military pollution from
conformity requirements under the CAA seems more related to the
military's plans for base closure and realignment than to readiness.
Our population's right to breathe clean air should be a factor in
decisions where to base or fly aircraft, and current law provides more
than enough flexibility to accommodate public health concerns with
military readiness activity.
The subsection of the proposal dealing with munitions and explosive
constituents--what the military not so long ago called ordnance and
explosive wastes--continues an inglorious Pentagon tradition of
addressing a significant, complex problem through convoluted
definitions that invite litigation while failing to resolve genuine,
significant issues. It doesn't help resolve disputes over whether an
inactive range is closed. It opens up a loophole in the oversight of
open burning/open detonation (OB/OD) facilities on operational ranges.
It appears to ignore ordnance and explosive wastes that were never used
on operational ranges. According to some legal experts, it still
doesn't definitively exclude former ranges from the exemptions the
Department says it is seeking only for operational ranges.
While the threat of these laws to military readiness is purely
theoretical, the risk to public health and the environment at
operational ranges is real. For example, a dozen years ago, Army
researchers at Fort Richardson's Eagle River Flats range in Alaska,
concluded that military munitions containing white phosphorous caused
high waterfowl mortality. At the Massachusetts Military Reservation,
Royal Demolition Explosive (RDX) and perchlorate are poisoning an
aquifer that is the sole source of drinking water for hundreds of
thousands of people. At the Aberdeen Proving Ground, the public water
supply comes, in part, from on-base wells, and those wells are also
contaminated with perchlorate. These are hazards that should be
addressed at the source, not when they cross arbitrary boundary lines.
Section 2018 of the Defense Department initiative would make air
pollution from certain military activities invisible to the agencies
responsible for protecting our air. Four of the five exemptions in the
proposed law would be permanent. It could potentially expose tens of
millions of Americans to unhealthy levels of air pollution. State and
local air quality officials would be forced to allow ongoing exposure
to dirty air or to restrict private economic activity to compensate for
unchecked military pollution. Furthermore, because the list of routine
activities excluded from ``military readiness activities'' does not
include power plants, it's conceivable that the Defense Department
expects to shoehorn these polluting activities into the proposed
readiness exemptions.
Despite the military's sweeping efforts to rewrite the Nation's
foundational environmental laws to suit its convenience, environmental
and community groups, as well as State and local governments, are
willing to work with Congress, the military, and other Government
agencies to counter ``encroachment''--that is, the impact of community
development on military readiness activities. I believe that
encroachment is interfering with the armed services' ability to train,
test, fly aircraft patrols, and conduct other readiness activities.
Contrary to the official Pentagon message, military officers and
officials in the field suggest that the threat comes from urban sprawl,
not laws designed to protect human health. In my home State of
California, a wide range of stakeholder groups supported legislation,
proposed by the Navy on behalf of the armed services, to require local
jurisdictions to consider military readiness in their planning
activities. That law, S.B. 1468, is now on the books, but it is not
being implemented yet, because the Pentagon has not yet figured out how
to provide a small amount of funding. I've heard estimates that it
would cost only $500,000 a year.
Environmental groups, community organizations, and others in
California and many other States stand ready to implement cooperative
initiatives that promote smart growth, to create or sustain livable
communities, to protect the environment, and to enhance the
sustainability of military operations. I call upon the Defense
Department to focus on the real problem, development that encroaches
upon military bases and ranges, rather than use readiness concerns to
undermine the health of the people and natural resources that it is
sworn to protect. Furthermore, I call on the military to work with
other stakeholders, in a continuing dialogue, to resolve conflicts
among readiness, community development, and the environment.
I. The Readiness and Range Preservation Initiative Purports to Resolve
Problems That Have Not Been Documented.
In my visits to military facilities across the country, I have been
convinced that encroachment is hampering, and is likely to further
restrict, the U.S. Armed Forces' ability to train, test, and fly
aircraft. But I have never seen, nor have I heard of any limitations on
military readiness activities caused by the CAA, the RCRA, or the
CERCLA.
RCRA/CERCLA
Department of Defense officials warn that a lawsuit brought by
Alaska Community Action on Toxics and others against the Army, at Fort
Richardson, Alaska, could set a precedent constraining munitions
training throughout the United States. I've read that complaint, and
I've consulted legal experts and Alaska regulators. The only element of
that lawsuit that in any way might impact training is a plea that the
Army seek a permit, not under RCRA but the Clean Water Act.
I am familiar with one location where environmental regulators have
issued a cease-fire order, Camp Edwards on the Massachusetts Military
Reservation (MMR). When it was shown that explosive constituents were
poisoning the sole-source aquifer that provides drinking water to
hundreds of thousands of Cape Cod residents and visitors, U.S. EPA
issued an order halting the use of high-explosive weapons on that
range. Though RCRA has played a small role at MMR, the order
restricting training invokes the Safe Drinking Water Act.
Even if, through some unprecedented regulatory action or third-
party litigation, these laws were to threaten military readiness
activities, the President has the clear authority to issue an
exemption. In fact, Presidents Clinton and George W. Bush have
repeatedly invoked the RCRA section 6961(a) exemption at Nevada's Groom
Lake range. There wasn't a threat to readiness at Groom Lake. The
proposed application of RCRA at this site dealt with the management of
toxic wastes, not military munitions.
Finally, some might argue that the requirement to conduct cleanup
on operational military ranges in itself might, in some unprecedented
circumstances, threaten readiness, if munitions and explosive
constituents are considered a hazardous waste. However, both RCRA
Corrective Action and CERCLA provide decisionmakers with the
flexibility to consider a wide range of factors in setting cleanup
goals and selecting remedies. Dozens of military airfields, for
example, are undergoing remediation with minimal interference to flight
operations. Moreover, the Air Force routinely clears unexploded
ordnance from its ranges, and the Marine Corps does the same at its
Twentynine Palms, California training facility, because they believe
ordnance clearance actually supports readiness by sustaining and
extending the life of training ranges. Even at Camp Edwards, national
guardsmen continue to train despite the ongoing EPA-directed
environmental response.
Clean Air Act (CAA)
As for the CAA, I've never even heard of inaccurate examples of
that law getting in the way of readiness. Remember, aircraft emissions
are not directly regulated. Unlike power plants, for example, private
and military airfields don't obtain permits for pollution from
aircraft. Still, should the conformity provisions unexpectedly pose a
threat to readiness, section 118 of the CAA provides the President with
the authority to exempt Defense activities from the law upon a finding
of ``paramount national interest.'' But that's not all. The general
conformity regulations allow the Defense Department to override clean
air requirements in national emergencies such as war and terrorists
attacks. On top of that, the Defense Department may conduct ``routine
movement'' of ships and aircraft, activities already exempt from Clean
Air permitting requirements, without regard for their impact on
Implementation Plans under the law.
When the Defense Department proposed these same CAA exemptions last
year, the Nation's non-partisan associations of State and local air
pollution control officials declared the amendments unnecessary. They
pointed out that the CAA already provides the Defense Department ample
flexibility to carry out its mission, and importantly, that ``the
significant adverse air quality impacts that could result from such
exemptions could unnecessarily place the health of our Nation's
citizens at risk.'' (I have attached a copy of that letter.)
II. The Readiness and Range Preservation Initiative Appears Designed to
Limit the Defense Department's Obligations in Areas Unrelated
to Readiness.
So why then, is the Defense Department investing in the passage of
these provisions of the RRPI? I believe it is hoping to use the growing
concern over encroachment to buy relief from some of its more long-term
environmental challenges.
RCRA/CERCLA
As a growing number of Members of Congress are recognizing,
millions of acres of our land are contaminated with ordnance and
explosive wastes. People are finding old bombs and shells in new
subdivisions in Texas and North Carolina. Parklands and wildlife
refuges, from California to Indiana to Maryland and New York, are
literally minefields of unexploded ordnance. Last year the Defense
Department estimated the cost of cleaning up or restricting access to
former ranges--``closed, transferred, and transferring'' ranges in the
regulatory vernacular--at $15 billion. I think we're all hoping that
the inventory of such sites, due for report to Congress this spring,
will provide an accurate accounting of the sites, their acreage, and
their projected response costs.
Legal experts, including a bipartisan group of 33 State Attorneys
General, challenged the Defense Department's 2002 proposal, stating
that the proposed exemption of operational ranges from hazardous waste
laws would carry over to ranges when they were closed. That is, the
RRPI proposal could undermine the already contested oversight authority
of regulators at former ranges.
Defense officials assert otherwise, and this year they added a
clause that seems to restrict the restriction on oversight to responses
on operational ranges only. However, the new language submitted by the
Defense Department does not do the job. It's hard to comprehend the
convoluted language in the Defense proposals, but here's how it falls
short.

The new language refers only to one subparagraph in the
RCRA section of the legislation.
The proposed language still exempts from oversight certain
munitions and explosive constituents--used in research and development,
for example--that were never on operational ranges.
The military can avoid environmental response at closed
ranges on active installations simply by continuing to consider them
``inactive,'' a subset of operational ranges. This is not a
hypothetical suggestion. In 2000, a U.S. EPA survey suggested that many
inactive ranges across the country should be assessed and probably
classified as closed:

The Redstone Arsenal in Huntsville, Alabama, is a facility that
contains 23 ranges, 22 of which are inactive. This facility
provides several good examples of ranges that have been
inactive for years, but which have not been officially closed
by DOD. For example, the Inactive Mustard Gas Demilitarization
Site/Range at the Redstone Arsenal was last used in the mid- to
late-1940s and is currently forested and partially underwater.
Given current environmental conditions, nearby populations, and
today's more stringent regulatory framework, it is highly
unlikely the facility will be used for mustard gas
demilitarization again.\2\
---------------------------------------------------------------------------
\2\ Used or Fired Munitions and Unexploded Ordnance at Closed,
Transferred, and Transferring Military Ranges: Report and Analysis of
EPA Survey Results, U.S. Environmental Protection Agency, Office of
Solid Waste and Emergency Response, EPA-505-R-00-01, September 2000, p.
11.

Even if these loopholes were fixed, the RRPI proposal would still
prevent regulatory agencies from doing their job--protecting public
health and the environment--on operational ranges. Rarely has anyone
proposed requiring the widespread clearance of munitions or explosive
constituents from active ranges. Even at Fort Richardson, the
plaintiffs are merely seeking a remedial investigation and feasibility
study under CERCLA, steps that are unlikely to lead to full-scale
ordnance clearance as long as the range remains active. Yet there are
instances--I provide examples below--where regulators should act.
The key point here, however, is that the Defense Department has
proposed the new, restrictive definition of when munitions and
explosive constituents become hazardous wastes because it is attempting
to eliminate potential cleanup requirements, not to enable our Nation's
Armed Forces to conduct essential readiness activities. This applies
not only to ordnance itself, but to the energetic chemicals known as
``munitions constituents'' in the Defense proposals.
Clean Air Act (CAA)
In the Department of Defense's sectional analysis of section 2018,
it finally provided a clue as to what it felt is ``broke'' and needs
fixing. It wrote, ``Under the requirements of current law, it is
becoming increasingly difficult to base military aircraft near
developed areas.'' That is, as it moves toward a new round of base
realignment and closure (BRAC), the Defense Department doesn't want the
impact of air squadron transfer to be a factor in its decisions. This
was the issue in the mid-1990s, when the Navy shifted attack aircraft
squadrons to the Lemoore Naval Air Station, in California's polluted
Central Valley. Though the aircraft, additional mobile ground
equipment, and increased employee vehicular traffic were not subject to
air permits, they were all evaluated as part of the base's conformity
with the Implementation Plan. The new basing arrangement was approved
only after the Navy obtained emission reduction credits from a nearby,
closing installation, Castle Air Force Base.
Long-term changes in the deployment of military aircraft are an
important issue, but they are not directly a readiness issue. They
should be debated in the context of BRAC or military construction, not
authorized in an initiative that the Pentagon asserts is designed to
shield military readiness activities from encroachment.

III. THE READINESS AND RANGE PRESERVATION INITIATIVE WOULD ENDANGER
PUBLIC HEALTH AND THE ENVIRONMENT.

In RRPI, the Department of Defense proposes to roll back key
statutes that form the foundation of America's bipartisan framework of
environmental protection. The requirements that the Department seeks to
relax are not merely technicalities or check-off boxes. They target
identifiable hazards to public health, public safety, and our natural
ecosystems.
Like many other institutions, the Department of Defense has a
legacy of environmental mismanagement. According to the Defense
Environmental Restoration Program Annual Report to Congress for Fiscal
Year 2001, the military's 126 most costly sites, contaminated with
toxic substances as well as munitions, will cost well over $28 billion
to address. We, as taxpayers, will be paying the bill on that legacy
for decades to come. Over the past two decades, however, it has made
important strides forward. Congress has appropriated funds for
environmental security. Individuals within the Department have shown
genuine leadership. Regulatory oversight has brought along those who
have not seen environmental protection as a priority.
The laws and programs that bring cleanup not only deal with legacy
wastes; they encourage the prevention of future problems. Under
pressure from outside, elements of the military are integrating
pollution prevention and environmental management into their
operations, as Secretary Cheney suggested in 1990.
Environmental regulation is necessary, not only to encourage
reluctant officials to do their jobs properly, but to see that
competent, motivated military leaders can obtain funding for their
projects. Environmental compliance projects at the Defense Department,
such as improvements in RCRA-governed treatment, storage, and disposal,
are funded not simply on need, but according to the level of external
regulatory requirements that they address.
RCRA/CERCLA
While the threat to readiness from these environmental laws is
theoretical, the impact of munitions and explosive constituents on the
environment is real. Under the Defense Department's proposals,
regulatory agencies would be unable to insist on access controls to
keep the public off military ranges--to prevent incidents such as the
death of a Mississippi teenager near Camp Shelby in 2000. Under its
proposal, States would no longer be able to regulate the operation of
open burning/open detonation pits located on operational ranges, such
as Fort Carson in Colorado. It appears that communities would be unable
to question proposed OB/OD permits, as the neighbors of the Makua
Military Reservation, Hawaii did a decade ago.
Pentagon lawyers hypothesize that a Fort Richardson lawsuit could
hamper readiness, but they don't explain why Alaskan communities are
concerned. In the early 1990s, the Army itself concluded that white
phosphorous from munitions on the Fort's Eagle River Flats artillery
range was killing substantial numbers of waterfowl. Though that problem
was successfully addressed, cooperatively by Alaska State regulators
and the Army, under CERCLA, RRPI would remove that regulatory
authority. (I have attached an Army article documenting this history.)
In fact, as a result of that effort, the Army no longer uses munitions
containing white phosphorous at Eagle River Flats, and it limits when
it trains with high explosives to avoid the re-suspension of residual
white phosphorous wastes.
Perhaps the most pernicious aspect of this particular language is
the Defense Department's proposal to exempt contamination from the
Nation's hazardous waste laws until it has migrated across the boundary
line of the range upon which it has been deposited. Please note that
explosives and propellants are toxic chemical compounds. Some of the
Nation's most contaminated public and private properties--on EPA's
``Superfund'' list--are Army Ammunition Plants and facilities that have
produced, tested, and demilitarized military rockets.
There is growing evidence that most current and former military
munitions ranges, not just production sites, are polluted with
explosive chemicals such as trinitrotoluene (TNT), RDX, and
perchlorate. As I mentioned earlier, EPA restricted military exercises
involving the use of high explosives at Camp Edwards, Massachusetts
Military Reservation, under other statutes, because RDX and perchlorate
have poisoned Cape Cod's drinking water supplies. Similarly, two
distinct communities adjacent to the Aberdeen Proving Ground in
Maryland have learned recently that their drinking water is
contaminated with perchlorate emanating from that installation. (I have
attached articles about MMR and Aberdeen.)
Since the military has found perchlorate on typical infantry
ranges, not just rocket and ordnance plants, further investigation may
show some level of contamination at hundreds of locations. The Defense
Department has conducted a nationwide survey that likely shows
widespread use of ordnance containing perchlorate, but it has not
shared the results of that survey with other parties. All those sites
should be investigated and perhaps sampled, but I fear that Defense
Department lawyers will argue, if the proposed RRPI language is
enacted, that there is no legal requirement.
RRPI would prevent State and Federal regulators from using RCRA and
CERCLA--the laws that govern routine characterization and remediation
of contamination--to address such sites until the pollutants have
migrated off base. In fact, even after the plumes have crossed facility
boundary lines, source areas, under RRPI, would remain off limits to
the regulatory agencies. Furthermore, since a Federal health standard
for perchlorate seems years away, it appears that the RRPI proposal
would directly undermine public health by making it difficult, if not
impossible for States to utilize their own, health-based standards on
any property covered by the legislation. Ironically, if this proposal
is enacted, the military might even argue that regulators have no
authority to protect military personnel and their families from
contaminated water supplies that never leave their bases.
Furthermore, it's unlikely that this happened by accident. In
preparing my testimony, I compared the Defense Department's RRPI
language with the EPA's Military Munitions Rule, the current legal
authority on the subject. As you may recall, EPA promulgated the
Munitions Rule in 1997, as directed by Congress in the Federal
Facilities Compliance Act of 1992, to determine when munitions become a
hazardous waste. Defense Department lawyers drew from the Munitions
Rule, which does not cover munitions constituents, in developing the
RRPI language, so they must have made conscious decisions to include
munitions constituents among the classes of items to be excluded from
the hazardous waste laws. It appears that the Department is looking for
one more way to absolve itself of its massive projected liability--
reportedly billions of dollars nationally--for the characterization and
remediation of perchlorate and other energetic contamination, at the
expense of public health.
Clean Air Act (CAA)
The case against the CAA modifications is much more simple.
Emissions from military aircraft and other readiness activities would
be exempt from the most significant regulatory tool for addressing
them, potentially exposing tens of millions of people to dirty air.
That is, military pollutants would infiltrate our lungs and be visible
in our skies, but they would disappear from the bi-partisan regulatory
framework we have built to protect ourselves.
The CAA exemptions in this bill are not simply unjustified, they
represent sweeping and unprecedented permission for military air
pollution--unlike other sources of air pollution from industry,
government, or even the public--to escape regulation under the CAA. Air
pollution from military readiness activities would be allowed to cause
or contribute to violations of health-based air quality standards for
smog, soot, and carbon monoxide; to increase the frequency or severity
of such violations; or to delay timely attainment of the standards or
interim milestones. Worse, to cover up the harm caused by these
exemptions, the bill actually defines dirty air to be clean.
Under this legislation, States and local communities would lose
their ability to influence new military basing plans, such as those
forthcoming under the 2005 BRAC round, based upon their air pollution
impact. Unable to influence the growth of military operations, they
might be forced to restrict private growth--or place the public at risk
of even more exposure to unhealthy air.
While I recognize the military's prerogative to override community
concerns when absolutely necessary for paramount national security
interest or national emergencies, I believe it is imperative that clean
air and other natural resource concerns remain a factor in decisions on
the long-term basing of military aircraft.
IV. The Readiness and Range Preservation Initiative is Poorly Drafted.
Earlier I warned that the proposed RRPI language leaves ambiguous
the Department's intent to restrict the changes in the law to
operational ranges. I challenge any mere mortal--that is, someone who
is not a lawyer specializing in hazardous waste law--to sort through
the maze of paragraphs and clauses in this section.
That language is confusing because a Federal agency has once again
resorted to the modification of definitions instead of directly
addressing a problem. I have repeatedly suggested that the Department,
regulators, and representatives of the affected public cooperatively
describe the unique features of munitions-related waste, and once they
determine what must be done to protect both the public and response
personnel from explosive hazards, that they together propose statutory
or regulatory solutions. This language not only fails to identify and
resolve key issues, but it invites, through its web of interlocking
definitions, years of litigation.
The CAA amendment suffers from its own complexities, but I wish to
call your attention to a simple, fixable problem with the wording. In
defining routine installation support functions not subject to the
proposed statutory changes, the definition of ``military readiness
activities'' excludes schools, housing, recreational facilities, etc.,
but it does not specifically exclude from readiness activities the
installation function that has generated the most heat in interagency
debates over air pollution: electrical power plants. If indeed the
Defense Department is not using readiness to address yet another
problem, it should have no problem adding such facilities to the
exclusion in the definition.
V. The Readiness and Range Preservation Initiative Fails to Support
Cooperative Efforts of Military Officials, Environmental
Organizations, and State, Tribal, and Local Governments to
Address a Common Enemy, Urban Sprawl.
I first learned about encroachment a few years ago when I was
invited to address Air Force Explosive Ordnance Disposal (EOD)
specialists, from throughout the country, at Luke Air Force Base in
Arizona. I had been invited, by the way, to explain the public's
concern about ordnance and explosive wastes on military ranges. My
driver, an EOD Sergeant, pointed out, one-by-one, the new residential
developments that stretched across the desert toward the base. A few
more, he said, and the jets wouldn't be able to fly.
Across the country, from Fort Stewart, Georgia to Nellis Air Force
Base, Nevada, to the Navy SEALS' Camp La Posta mountain training base
in the southern California desert, development or proposals for
development are threatening the Armed Forces ability to fly planes,
maneuver, and conduct other readiness activities. Unchecked urban
growth, not environmental protection, is the problem. At some
locations, such as Beale Air Force Base, community leaders have already
made the link. In February, I took part in a community meeting in
Marysville, California, in which local officials and residents of the
semi-rural communities adjacent to the base opposed the construction of
a new city on the base's fenceline, both because it would undermine
their lifestyles and because it would encroach upon the Air Force's
operations.
Last year environmental and community organizations supported the
buffer zone provisions of RRPI, and they stand prepared to support
additional measures designed to resolve encroachment problems
constructively. Some States have passed, or are considering legislation
designed to integrate readiness into local planning activities. For
example, my own State of California, on the front lines of the
encroachment battle, enacted S.B. 1468 last year. This legislation,
proposed by the armed services, drew widespread support and no visible
opposition.
Admiral J.L. Betancourt, Commander of the Navy Region Southwest,
wrote Governor Gray Davis urging him to sign the bill. He explained,
``We applaud this as an effort to finally recognize that long-term
operations of military installations must involve a partnership between
State and local agencies and the military. In addition to providing
critical protection for military installations at a time of
unprecedented growth in California, S. B. 1468 provides needed
consideration of designated air space and military training routes.''
(I have attached the entire letter.)
This initiative from the field deals not with hypothetical
problems, such as those addressed by the RCRA/CERCLA and Clean Air
language in RRPI, but genuine threats to military operations. For
example, developers are proposing to build 14,000 housing units just
north of Camp Pendleton in southern California. One section of this
proposed development, with 1,400 housing units and over 1.2 million
square feet of commercial space, would border the base's northern
boundary and appears to underlie special use airspace. It is my
understanding that the Marines oppose this development because it
threatens readiness, and environmental groups oppose because it
represents the worst in urban sprawl.
S.B. 1468 would provide the military, environmental organizations,
and local planning agencies with the tools to question the proposed
development, as well as other California development proposals likely
to impact readiness. But S.B. 1468, as designed by its military
proponents, does not come into force unless the Defense Department
provides a small amount of funds to support the additional local
planning required--it's the whole issue of unfunded mandates. As I
understand it, $500,000 this year in Federal funds could leverage
influence over development plans involving investments that are several
orders of magnitude higher!
Similarly, in Nevada, another developer proposes a new city,
including parks, schools, and 30,000 homes in the flight corridor
through which Air Force planes laden with ordnance depart from Nellis
Air Force Base. Again, both the Air Force and environmental groups
oppose the proposal. I believe Defense Department support for
considering readiness in local planning activities would encourage
Nevada to adopt a program of its own, and that would encourage
developers to invest in plans for development in more suitable
locations.
If Congress really wants to fight encroachment where it counts,
legislation and appropriations to support S.B. 1468 and similar
initiatives in other States--already in place or under consideration in
Arizona, Texas, and Florida, for example--would go much further than
RRPI.
VI. The Environmental Challenges to Military Readiness Would be Best
Addressed by One or More Continuing, Multi-Stakeholder
Dialogues.
While I have seen no evidence that the Defense Department's
proposals to modify the CAA, RCRA, and CERCLA would enhance readiness,
I believe that there are numerous existing or potential community
development and environmental protection challenges to training,
aircraft use, and other military readiness activities. Many of these
challenges are beyond the scope of RRPI. But our country will need to
address them, whether or not Congress enacts the proposed legislation.
If you ask the armed services, environmental regulators, land
management agencies, environmental and community organizations, tribes,
and local governments who should design the solutions, you're asking
for a political brawl.
However, if you ask those parties to sit down in the same room to
devise common strategies, everyone will be surprised by the
opportunities for win-win solutions. This is the experience of the
Army-sponsored National Dialogue on Military Munitions, which developed
the Principles for Sustainable Range Use/Management in the late 1990s.
Participants in that dialogue, from the Department of Defense and its
critics, will affirm its success. Even before the dialogue issued its
final report, the Department used its work as the basis for two
directives. I have appended my article on that dialogue, published in
the Winter 2003 Journal of Policy Analysis and Management, to my
testimony.
Congress could help resolve the encroachment debate by asking the
Defense Department to establish a new dialogue or dialogues to
establish constructive communication channels among stakeholder groups.
I envision such a body establishing models for conducting sampling for
explosive contaminants on active military munitions ranges, or it might
develop standard approaches for keeping trespassers out of operational
range areas. Such a group could look into the Army's concerns at Fort
Irwin and perhaps elsewhere, about the impact of new particulate
standards on future training. It could build national models for
evaluating the impact of sprawl on readiness that discourage developers
from investing in unsuitable projects.
In calling for such a dialogue, Congress could establish guidelines
that would make it easier for the Defense Department to create formal
environmental advisory groups, under the Federal Advisory Committee
Act, without triggering some of the burdensome bureaucratic
requirements designed to facilitate advice on acquisition and military
technical issues.
In conclusion, the CAA and munitions sections of RRPI would do
nothing to enhance readiness; they appear designed to deal with the
Pentagon's concerns over cleanup and base realignment; and they would
subject the public and the environment to more unhealthy contamination.
Instead of taking on environmental organizations, the communities who
live near military installations, and State regulatory agencies,
Congress, and the Department of Defense should encourage problem-
solving dialogue and join these groups in fighting a common enemy,
urban sprawl.

Senator Ensign. Well, thank you very much, each one of the
panelists.
I want to start. First of all, Ms. Young, you mentioned
that the Defense Department was looking for an exclusion. I
think Dr. Lent addressed that in your testimony when she talked
about--and Dr. Ketten, you mentioned it as well--that while the
DOD only included defense language, that Dr. Lent was looking
at making this definition continue broadly across so that there
is a good, scientifically sound definition.
I want to start with that for Dr. Ketten and Ms. Young.
First of all, Dr. Ketten, are you aware--I know you are--of the
Surface Towed Array Sonar System (SURTASS) Low Frequency Active
(LFA)? If you are around the military you know you have to have
acronyms. Without acronyms the military cannot operate, or any
of this body around here.
Do you think that there is--or do you know of any credible
scientific evidence of physical harm to marine mammals from
SURTASS LFA?
Dr. Ketten. Yes, I am fully aware of SURTASS LFA. There is,
let me be clear, there is no data that demonstrates any harm
from LFA. There were extensive behavioral experiments carried
out by several of my colleagues. I did not work on those
directly. I do physiology, anatomy, and trauma analyses.
What has happened is that traumas that occurred coincident
with the use of mid-range sonars in two genera of beaked whales
only have been extrapolated. That is a classic example of
overinterpretation or extrapolation from one event to another.
It is worse than mixing apples and oranges. It is one type of
sonar with what appears to be particularly susceptible species,
not for acoustic trauma, but possibly for panic and secondary
effects.
Having moved that effect into the domain of LFA is
inappropriate. For LFA there is no data that demonstrates any
physical harm from its deployment.
Senator Ensign. Ms. Young, just to follow up on that--and
by the way, just so you all know where my--I am a big, strong
supporter of the military, but I am also a veterinarian by
profession and grew up watching Jacques Cousteau and all of
that and thought that that was what I was actually, when I lost
my 1998 Senate race, that was what I was going to do. I was
going down to work with the veterinarians down at Sea World and
I was going to oversee a large aquarium. So this is something
that I have a very strong interest in and I care deeply about
these issues.
But I also come at it from a scientific perspective and I
like science to determine what we are doing here, and because I
also know that emotions can get involved. I mean, everybody,
especially when it comes to marine mammals, everybody, they
just evoke very strong emotions in people.
So along those lines, Ms. Young, are you aware of any peer
reviewed scientific evidence that the LFA causes any problems
amongst marine mammals? I emphasize ``peer reviewed`` because I
know what that means.
Ms. Young. I think Dr. Ketten speaks from an expert point
of view on LFA, and LFA is not really the issue here that is
more important. What we get back to is the definition of
harassment and how that change in the definition of harassment
will significantly raise the threshold to what types of
military activities would be authorized or would require an
authorization for a permit.
With that threshold being raised so significantly, many of
the military activities that normally would be required to get
a permit would no longer be required to do so. They could
simply evade the process. When that happens, we lose important
scientific research, such as the research surrounding LFA that
was undertaken by the military. That research helped us to
understand the impacts to these animals. All of that will be
lost. We will lose the monitoring capability, we will lose the
mitigation capability, and I believe that is what we need to
focus on because we know so little about these animals. We
cannot afford to lose the science that is associated with that
permitting process.
Senator Ensign. Just real briefly, Dr. Ketten, when the
definition--and you mentioned--and I do not know, basically
biological significance, however you want to describe that. Can
you comment on what Ms. Young has just said about the
definition of harassment? Because in your opening statement you
commented on the whole idea of biological significance and why
you think that there needs to be, not a rollback, but something
fairly objective to measure from from a scientific perspective.
That is what I think is important here.
Dr. Ketten. Yes, I would like to make several comments
along those lines. First of all, in terms of harassment,
changing that definition, I would underscore my reasoning of
the bill is that in subsection (2), section (a)(1), it states
explicitly that the Secretary of Defense must have
predetermined that there will be no significant impact or
negligible impact to individuals, no harassment.
That has to have been determined, and my understanding is
that it was explicitly placed in the hands of the Secretary of
Defense so that there was the option for review, that it not be
presidential, which would eliminate review. Therefore I have to
disagree--Nina and I have known each other for a number of
years and I suspect she knows this is coming--I have to
disagree with her interpretation that this eliminates the
oversight element. Oversight is repeatedly stated within this
bill.
Second, the issue of harassment. It has been very broadly--
it is difficult--you know better than I, it is really damned
hard to write legislation clearly enough. The MMPA was written
very broadly and has been interpreted, as we have heard,
literally to be the case of an animal turns its head. We do not
put that in the perspective of how often it turns its head from
its own natural exposure from its con-specifics, that is from
other animals in its own pod or group.
As you have pointed out, we are dealing with charismatic
megafauna. People look at dolphins and think that that
permanent smile they have means that they have a great deal of
intelligence and that they have a great deal of appeal, and we
are making a lot of our decisions based on that notion.
As far as interfering with readiness also, I cannot think
of anything that impacts our readiness more greatly than to
have ship shock trials stopped cold, as in the case of the John
Paul Jones, or the LFA deployment and training that is not
going forward. LFAs--the LFA-dependent research gave us a great
deal of information, but now that information is not being used
to allow training, but rather to stop it.
I think I may have lost one of the points that you wanted
me to address. Sorry.
Senator Ensign. That is fine. My time has expired and I
need to turn it over to Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
My question is to Ms. Clark and Dr. Pirie. The Clinton
administration addressed proposed critical habitat designations
on military lands through case-by-case negotiation between the
military services and the FWS. The FWS would take the existence
of an integrated natural resource management plan for a
military installation into consideration in determining whether
to designate critical habitat, but the existence of such a plan
was not determinative.
In many cases, military lands were excluded from critical
habitat designation only after DOD agreed to revise its INRMP
to ensure adequate protection for endangered species.
Dr. Pirie, do you believe that DOD needs an automatic
exemption for lands covered by INRMPs or would you support
legislation codifying the case-by-case approach taken by the
DOD and the Department of the Interior in the last
administration?
Dr. Pirie. The case-by-case approach has been challenged in
court and may not indeed hold. The integrated natural resource
management plans are just one of the tools which FWS can use to
assure itself that the activities that are going on on a
particular military installation are not adversely affecting
threatened or endangered species.
The ESA applies to the DOD whether or not there is an
integrated natural resource management plan or whether or not
there is critical habitat. So in essence, the regulators have a
first level of defense, that is the act itself; a second level,
the integrated natural resource management plans which the
regulators must approve; and it seems to me that that is a
fairly high level of protection for the species.
Senator Akaka. Ms. Clark, I understand that you oppose the
automatic exemption for military lands covered by INRMPs in the
legislation before us. But would you also oppose codification
of the case-by-case approach taken by the Clinton
administration, Ms. Clark?
Ms. Clark. Yes, I appreciate the opportunity to chat about
this a bit since a lot of the standards and the requirements
and the sideboards by which we would evaluate INRMPs happened
while I was at the FWS working with the DOD.
But if I could, just one more clarifying point about this
lawsuit and this case in the southwest that seems to make
people concerned about constraining the FWS's flexibility. All
interpretations of this law--excuse me--of this court case
suggest that the only thing the FWS did wrong, if in fact there
is a declaration of wrong, is they relied on the wrong piece of
the act to do what they ultimately did and that was upheld.
They took the definition of critical habitat and the notion of
special management area as a rationale when in reality they had
all the flexibility in the world under section 4(b)(2), the
exclusion paragraph, to balance out the lands that they
ultimately balanced out.
So that the notion--the lands that they balanced out
ultimately were upheld and I think, if nothing else, it sent a
message to the FWS and the Department of the Interior is that
they need to clarify in their rulemaking the rationale by which
they balance out. But they have tremendous flexibility under
section 4(b)(2). We had a definitional problem that the judge
brought attention to in the court case.
While I was at the Service, we spent a lot of time working
with the Defense Department, given the sensitivities of the
military mission and the defense readiness needs, and we worked
up an administrative way to evaluate these INRMPs. Now, I think
it is important to note that not all INRMPs are created equal.
There is no such thing as a cookie-cutter integrated natural
resource management plan. While I was director, we signed an
MOU with the Defense Department that laid out the procedural
expectations of collaboration and cooperation in the
development of these integrated plans.
The fact of the matter is, both for Defense and the FWS,
successful implementation of these reviews and development of
these INRMPs were heavily dependent on available funding to
both agencies to be able to conduct and carry out. But
nonetheless, we were very clear from a policy standpoint, and
it radiated throughout the FWS, that if an INRMP that was
developed for a military installation provided a net
conservation benefit to the species and that there were
assurances from the military it would be implemented and
funded, because a plan is only a plan unless it is implemented,
and that there was some scientific recognition or belief that
the conservation strategies that were laid out in the
integrated plans would be effective. So you had to provide
benefit, you had to guarantee implementation of the plan, and
you had to be assured that the conservation benefits would be
effective. Then it was clearly a candidate for exclusion from
critical habitat designation, and I would welcome that
clarification in any way possible.
Senator Ensign. Senator Inhofe.
Senator Inhofe. Mr. Chairman, I would temporarily defer to
Senator McCain, who has some other commitments.
Senator McCain. I thank my colleague from Oklahoma and I
thank Senator Ensign.
I will not try to establish my environmental credentials
here, particularly as far as the State of Arizona is concerned.
Senator Ensign. Senator McCain, if you need a couple extra
minutes go ahead and take them right now.
Senator McCain. Thank you. I will let my record speak for
itself. But I am concerned about our ability to train our men
and women to engage in combat, and as also a former member of
the military, I know the importance of being able to train with
the use of live ordnance.
I note with some interest, Ms. Clark, your ``rest of the
story'' stuff here. Somebody has to get these reconciled. We
have to get some objective person in here or entity, because
they differ wildly. But one that I do not think there is a lot
of difference of concerns the Barry Goldwater Range. The DOD
assertion is that in calendar year 2000 almost 40 percent of
the live-fire missions at the Goldwater Range were cancelled,
and the rest of the story is that we have 99 animals, 99
Sonoran pronghorns, in the United States.
You cannot run a military efficiently, Ms. Clark, by
cancelling 40 percent of the training that is being conducted.
You cannot do that. Now, are we faced here with a choice
between the pronghorn, Sonoran pronghorn, and conducting
realistic training for our men and women who as we speak are in
harm's way? Is that our choice here?
Ms. Clark. No, Senator McCain.
Senator McCain. What are our choices?
Ms. Clark. It is not and it should not. But again, the
facts of this case need to be evaluated. I am painfully aware
of the role that Barry Goldwater Range plays in sustainability
of the Sonoran pronghorn antelope population. But again----
Senator McCain. Are you aware of the importance of the
Barry Goldwater Range in maintaining the readiness of our
military?
Ms. Clark. Yes, sir, I am. But again, the proposal by the
Defense Department does not address the conflict at Barry
Goldwater at all because there is no critical habitat
designated for the Sonoran pronghorn and the Defense proposal
is talking about exempting critical habitat. I believe there is
a lot of work that needs to be done and conflicts to be worked
out.
Senator McCain. Do you think there is a lot of work that
needs to be done so that 40 percent of the training missions do
not have to be cancelled as we speak?
Ms. Clark. Yes, I do.
Senator McCain. Then what is your answer to getting this
issue resolved, Ms. Clark?
Ms. Clark. We need to set aside what the discussion is
today because today's represent does not accomplish anything to
help the Barry Goldwater Range achieve military readiness. I do
believe it is going to require--the military at Barry Goldwater
and the FWS, the State of Arizona, have been working together
on a very significantly comprehensive Sonoran conservation
strategy to try to take pressure off the Barry Goldwater Range
and to radiate out the species conservation needs and the
conservation strategy for that part of Arizona beyond the
military borders.
I believe support of that initiative, with some high-level
expectations of forward movement, would be very well warranted.
Senator McCain. When would we expect this agreement to be
reached, Ms. Clark?
Ms. Clark. I think that is something you will have to
address to the military and the Secretary of the Interior,
Senator. I would gladly work to see that move forward.
Senator McCain. Since the year 2000 they have not been able
to reach any high level agreement and 40 percent of our
training missions are being cancelled. That is not acceptable.
Ms. Clark. I agree.
Senator McCain. Then I hope you would withdraw objections
which are lodged by your organization which would prevent these
training missions from being conducted. Are you ready to do
that?
Ms. Clark. I am ready, on behalf of my organization, to
work on a common sense solution that ensures that the Sonoran
pronghorn do not go extinct while trying to radiate pressure
away from the military installation, Senator.
Senator McCain. So we have pretty well established your
priorities, Ms. Clark.
Dr. Pirie, do you have anything to say about that,
including the allegation that operations, by Ms. Clark's
organization, operations at Camp Pendleton have basically been
unimpeded?
Dr. Pirie. My information is that had critical habitat been
declared at Camp Pendleton, that operations would have been
very significantly reduced there. Critical habitat, after all,
changes the burden, the question of what goes on in these
areas, from military training to protection of species. If a
place is declared critical habitat, its primary purpose is to
protect the endangered and threatened species that are located
on that property, not to do the training.
So it was certainly General Hanlon's take on it when he
negotiated the original agreement to let the INRMP be the
protection for the species at Camp Pendleton. It was his
appreciation of the matter that he would be very substantially
shut down were critical habitat to be declared for numerous
endangered species on Camp Pendleton.
Mr. Siegel. May I add something, Senator?
Senator McCain. In your view, Dr. Pirie, would any cleanups
at any installation--significant cleanups, are going and bases
have been closed--be affected by this legislation, by this
proposed legislation?
Dr. Pirie. Not cleanups, not at all, Senator.
Senator McCain. Thank you.
I really believe that, with Vieques being shut down for
live ordnance training, I am not sure where else there is in
the country besides the Barry Goldwater Range and that area,
and we simply cannot afford to have the delay in our training
where 40 percent of the missions are cancelled. That is not an
acceptable situation.
I want to preserve the Sonoran pronghorn as much as other
living Americans, perhaps more since I am a resident of the
State of Arizona. But I am also interested in winning conflicts
and not sacrificing needlessly young Americans' lives. This
issue of the Goldwater Range needs to be resolved and it needs
to be resolved quickly, and I hope that we will do so, and I
will do whatever is necessary to resolve it as quickly as
possible. My priorities are the safety and efficiency of our
military.
When the Goldwater Ranges was set up, we were fully aware
of where the Goldwater Range was and what the habitat was and
what animals lived there and what did not. We are not going to
shut down the Goldwater Range for any reason that I know of
beyond an issue of national security because of the criticality
that they pose, the criticality of the role that they play in
training the men and women of the United States Navy, Marine
Corps, and Air Force.
I thank you. I thank you, Mr. Chairman.
Senator Ensign. Thank you.
Senator Pryor.
Senator Pryor. Mr. Chairman, I would like to defer to
Senator Warner.
Senator Warner. Mr. Chairman, I thank this gentleman very
much.
I would like to ask one question of Ms. Clark. Ms. Clark,
at one time you were with the Department of the Interior and
the FSW, am I not correct?
Ms. Clark. Yes, Senator, I was Director from 1997 to 2001
and an employee of the FWS from 1988 until that time.
Senator Warner. Did you not work on the formulation of
legislation which is very much like what is before this
committee now?
Ms. Clark. I worked with the late Senator Chafee on an
isolated piece of legislation that dealt with critical habitat,
I did, sir.
Senator Warner. In terms of the military bases and so
forth?
Ms. Clark. We worked on administrative proposals to clarify
how INRMP requirements could be framed in a way to allow for
the balancing out through the relevant provisions of the ESA.
Senator Warner. Mr. Chairman, I am going to go back and
research that period, because it seems to me the current
measures before this subcommittee are not unlike what you
worked on when you were in that position, and yet somehow I
feel today you have come around full circle and are now
opposing it.
Ms. Clark. No, Senator. As I mentioned before you arrived,
what I am opposing is a full-scale, across the board, no holds
barred national exemption, as opposed to specific requirements,
administrative work-arounds, taking advantage of the current
law. I should have responded to Senator McCain, if in fact
there is an irreconcilable conflict at Barry Goldwater, the
Secretary of Defense has all the authority he needs in the ESA
today to declare an exemption, which does not even bring in the
critical habitat issue.
But I would be happy to work that out with you.
Senator Warner. Would you prefer the site-specific
exemption approach rather than the amendment of the law or the
regulation?
Ms. Clark. I do not think either is necessary. I believe
that what is necessary is a clarification of what the
requirements of an appropriate INRMP at each specific
installation should comprise, that would allow the FWS to make
use of current law and exclude military bases from critical
habitat designation.
I do not think you need a national, broad, sweeping
exemption. I do not think you need a site-specific exemption.
The law today allows for the appropriate address of military
needs as long as the administrative sideboards and the
expectations of INRMPs are clear to all the agencies involved.
Senator Warner. I thank my colleague, Senator Pryor, for
your courtesy. I thank the chair.
Senator Ensign. Senator Inhofe. You yielded to Senator
McCain. Pryor yielded to Warner.
Senator Pryor. That is fine, Senator Inhofe.
Senator Inhofe. That is fine.
First of all, let me just ask a general question to Dr.
Pirie. Dr. Pirie, during the Clinton administration you served
as Assistant Secretary of the Navy, Installations and
Environment, in 1994, Under Secretary of the Navy in 2000,
Acting Secretary of the Navy in 2001. Now, the administration's
legislative proposals have been characterized as a rollback of
major environmental laws.
The question, of course, that Senator Warner was getting to
was, these are essentially the same as were proposed during
your service in the Clinton administration. Based on your
experience, is it a fair characterization to say that the
legislative proposals are a rollback of major environmental
laws?
Dr. Pirie. No. No, Senator Inhofe, I would not say that
they are a major rollback. I would say that they are rather
specific and particularly targeted requests for amplification
or clarification of congressional intent in particular
instances.
Senator Inhofe. Do you believe that the DOD commitment to
environmental protection and stewardship will decrease if these
legislative proposals are enacted?
Dr. Pirie. No, I do not believe that at all, sir.
Senator Inhofe. Ms. Clark, you have mentioned Camp Lejeune
and General Mize and I would like to have you repeat what you
have said in your statement about his comments on the red-
cockaded woodpecker at Camp Lejeune. You do not have to have it
exactly, just what do you recall that he said?
Ms. Clark. I have the direct quote. It says: ``I can say
with confidence that the efforts of the natural resource
managers and the training committee have produced an
environment in which endangered species management and the
military training are no longer considered mutually exclusive,
but are compatible.''
Senator Inhofe. That is really interesting because--and I
am going to follow up with him to see when he said this and
what the circumstances were. I chaired this Readiness and
Management Support Subcommittee for a number of years and I
made several trips to Camp Lejeune. Each time I went--I will
say this, that the military have been great stewards of the
environment. In fact, they have done such a good job that they
are their own worst enemy.
Mr. Chairman, I can remember going into the Camp Lejeune
and seeing the areas where, because of suspected critical
habitat, they were not able to train and then go back 2 years
later and they have used up even more of it. So this does
concern me because without exception on the trips that I have
made down there they all say that this is having a very bad
effect on our quality of training and we are not able to do the
things we should be able to do.
This means a lot to me. Senator McCain talked about live-
ordnance training and those of us who have been in the military
understand that it is very significant. In my opening statement
I said that we have a--in the case of Vieques, when we lost the
range there, there was an accident that occurred on the Daru
Range in Kuwait that actually had the effect, it killed five
people, four of whom were Americans. The accident report
specifically said that that was the result of not having live-
range training.
This really concerns me, particularly when you look at one
of the few live ranges left as being the one in Arizona losing
perhaps 40 percent of its capability.
Now, let me just ask you a question. Where are we going to
go and find areas for live training if all these court
decisions go against us and if these current problems that we
have continue?
Ms. Clark. Well, first, Senator--and I am painfully aware
of the amount of litigation surrounding the ESA. It was huge
when I was still with the Department and I suspect it is pretty
high today. But again, the court decision that everyone is
referring to does nothing to constrain the flexibility of the
FWS as it addresses critical habitat.
Another point about Camp Lejeune or Fort Bragg or Fort
Benning or Avon Park, all those installations that have red-
cockaded woodpeckers in the Southeast, is, like Barry Goldwater
and the Sonoran pronghorn, the proposal before this committee
by the Defense Department really does not do anything to
address those conflicts because there is no critical habitat
designated for the red-cockaded woodpecker, though I would
agree with you that there are some pretty significant
challenges at those installations in the southeast that need a
very different kind of work-around solution.
But today's discussion on critical habitat and the outcome
of the deliberations on this will have nothing to do with
solving any of the challenges at Camp Lejeune or any other
installation with red-cockaded woodpeckers.
Senator Inhofe. But you had brought up Camp Lejeune and
General Mize and the statement that he made.
Ms. Clark. Correct.
Senator Inhofe. I wanted to make sure that we pursued that
a little bit.
Ms. Clark. Absolutely.
Senator Inhofe. Because I have spent some time there.
Let us look into a real operational situation. What would
be the result--we were talking about the LFA, Dr. Ketten. What
would be the result if the judge in the final decision rules in
June against the DOD in terms of what our capabilities would
be? First of all, can we utilize the wartime exemption under
the Marine Mammal Protection Act?
Dr. Ketten. Actually, sir, I am not an appropriate person
to address that.
Senator Inhofe. Or Ms. Clark? I think we cannot; is that
correct?
Ms. Clark. Ms. Young.
Ms. Young. I will be happy to respond, Senator. There is an
exemption that is afforded to the Secretary under the Armed
Forces Code that could be utilized in that situation. Also, the
court case is germane to the testing of LFA. It could go
forward during time of war as we are in now. So LFA can and
probably is being used in this instance and is not impeded in
any such way.
Also, I would like to go back to a couple of statements
that were made earlier with regard to the ship shock trials.
The John Paul Jones ship shock trial was not stopped. It was
merely moved out of the Monterey Bay sanctuary.
Senator Inhofe. I am going to interrupt you because that is
not the question I asked you. Now, the MMPA does not have the
national security exemption that the others have; is that
correct?
Ms. Young. That is correct.
Senator Inhofe. All right. So let us look and see what kind
of exposure we would have. If we cannot use the SURTASS LFA
sonar, can our fleet adequately detect a quiet diesel submarine
operating on battery power without using that?
Ms. Young. They can, because they can use the exemption
under the Armed Forces Code.
Senator Inhofe. Dr. Ketten?
Dr. Ketten. Senator, the reason I deferred the question off
of me is that your question was about what would be the
alternatives and I think that is actually an appropriate
question for NOAA Fisheries or for any of the regulatory
agencies, rather than anyone on this immediate panel to answer
in terms of speculations, from the knowledge that we do have.
I would have to disagree that we could effectively detect
diesel subs. They are not detectible by conventional sonars
readily and the advantage to LFA is being able to detect them
long-range.
Senator Inhofe. Detect diesel subs?
Dr. Ketten. Well, to detect all types of subs, but
explicitly diesel, which do not have an acoustic signature that
is readily detectible.
So the issues of what would happen if LFA--I do not think
that anyone here, certainly--well, possibly Dr. Pirie would be,
but--is qualified to say if we would have other adequate
techniques, but my familiarity with subs and their detection
techniques would suggest that we do not.
Senator Inhofe. Maybe I am wrong, but I have been told that
the LFA is the only way you are going to be able to detect a
diesel sub, and if you are not able to use that for any of the
restrictions that we are talking about there is no other way it
can be detected. Am I wrong, Dr. Pirie?
Dr. Pirie. The issue is very quiet submarines, in shallow
waters particularly, Senator Inhofe, and there the LFA is a
major improvement of our capability, I would say an order of
magnitude improvement of our capability. We would really need
that.
Dr. Ketten. If I might interject, it is specifically using
lower frequencies, longer wavelengths, greater distances. While
you can detect it nearby with conventional sonars, it is too
late. Therefore I do not think we have an alternative.
Senator Inhofe. So the lives of sailors on a ship not able
to use this type of sonar could be jeopardized?
Dr. Pirie. I think that is fair, Senator. A wartime
exclusion, while it would be welcome, if you had not been able
to use the equipment and train on it and get the sailors
familiar with it before the war started, you would not have a
very effective organization employing it.
Senator Inhofe. I am sorry, Mr. Chairman. I went way over
my time.
Senator Ensign. Senator Pryor.
Senator Pryor. Yes, thank you, Mr. Chairman.
Ms. Clark, I think you mentioned this in your statement a
few moments ago, but in your opinion what is DOD's track record
when it comes to environmental issues?
Ms. Clark. DOD has been really terrific environmental
stewards over the long haul. They have a very serious
commitment to environmental stewardship, from everything that I
can tell when I was an Army biologist to when I was at the FWS.
I believe that the solutions being worked out at the local
level, at the installation levels with the field offices of the
FWS, demonstrate that track record.
Senator Pryor. But even given that background, you are
still reluctant to agree with what DOD wants at this point?
Ms. Clark. Those are two different issues. I think that the
installation, FWS, field office kind of local, tailored
solutions case by case, species by species, military training
activity, however it works out, you end up with dovetailed
solutions that work for military readiness and species
conservation being worked out among experts in military
training and species conservation, and you have that
appropriate check and balance along the way.
To do a broad-scale national exemption that says, you have
an INRMP you are exempt, does not lend itself to the site-
specific evaluations that are conducted.
The flexibility of the ESA is really unbelievably clear. If
for some reason there was a--you know, you can work it out. You
balance out the critical habitat through the section 4(b)(2)
exclusion, and the Secretary of Defense always has that hole
card. He does not have to go to the President. The Secretary of
Defense always has that trump card of national security
exemption as contained in section 7(j).
So I believe that the appropriate checks and balances are
in the law, the appropriate flexibilities are in the law, and
the ability at the local level to work these issues out has
been demonstrated over and over again.
Senator Pryor. Dr. Ketten, you are a scientist. I was
curious about the science relating to the sonar.
Scientifically, what evidence is there that it is adversely
affecting marine life?
Dr. Ketten. Senator, you are referring to sonar in general,
or mid-range?
Senator Pryor. Well, I am talking about the LFA sonar.
Dr. Ketten. There is no evidence related to LFA of physical
harm to any marine mammal, to the best of my knowledge.
Senator Pryor. Not physical harm. What about changing in
behavioral patterns or mating habits or moving out of waters
where it is being used? Tell the subcommittee about that.
Dr. Ketten. The behavioral studies that were done indicated
that at the anticipated received levels, there were no
significant behavioral changes. Going back to the question of
biological significance as opposed to individual impacts, which
Senator Ensign had asked before, biological significance means
that you impact the population, the ability of the species
locally or more broadly to survive, to grow, or to prosper. It
does not mean that a single individual has a temporary or
permanent effect on it.
The conclusion of the studies from the LFA behavioral
trials where the sources were being used at lower than
operational levels, but still the received level at the animal
is the critical issue, not the source level, was that there
were no indications of significant behavioral effects.
Senator Pryor. So is it your opinion then that it has no
adverse effect on marine life?
Dr. Ketten. It is my opinion that we have no data
indicating there would be an adverse effect if deployed as it
has been described.
Senator Pryor. Okay.
Ms. Young, do you recognize the importance of detecting
this new generation of diesel submarines? Do you recognize that
as an important military purpose?
Ms. Young. Yes, I do. We have not stopped the use of LFA.
We have restricted its use. It is still being used. It is still
being tested in an area that is restricted from what was
originally proposed. So we have not stopped its use. We
recognize its importance.
But I think what we need to focus on here is the changes
that we are talking about in this legislation and the term is
``biological significance'' and I have heard discussions about
animals turning their heads. That is not what this is about. We
are talking about sweeping changes that would modify the
definition of harassment and incidental take to such an extent
that many of these activities would no longer be required to
get a permit.
We are not talking about the agency issuing permits for
animals that have turned their heads. There have been over 20
permits issued to the military. What we are talking about in
terms of permits that have been issued to them are for ship
shock trials where thousands of pounds of explosives have been
used and so we needed to monitor and mitigate that activity.
We are also talking about missile firings where animals
stampede and pups are killed or other animals are killed, when
an entire population is flushed into the sea. What we do not
know scientifically when we are talking about biological
significance or insignificance--people like the Marine Mammal
Commission acknowledge that we can not distinguish between
activities that will have significant long-term effects and
those that will not. We cannot really distinguish between
biological significance and insignificance.
To show you the problems that we have in some areas such as
Hawaii, we have 20 species of animals in Hawaii, 8 of those
have no population estimates whatsoever. We know virtually
nothing about them. We do not even know what the human impacts
or level of harassment are to those animals. So we cannot
assess negligible impact. We cannot even begin to assess what
the military activities, let alone other human activities, will
have to the survival and reproduction and recovery of these
animals.
Senator Pryor. Dr. Pirie, I have one quick question for
you. You mentioned the encroachment on Pendleton and later a
witness--I believe it was Ms. Clark--said that there was
something about the DOD claiming it was 57 percent and then now
it is actually just 1 percent. Could you talk about that?
Dr. Pirie. I am not really current, Senator Pryor, in this
area. I could only repeat what I knew as of the time I left the
Department, and that was that General Hanlon, who was then
commander out there, felt that 57 percent of his available area
would be impacted in one way or another by one or another of
the critical habitat designations for various different
endangered and threatened species.
Mr. Siegel. Senator, may I add something about Camp
Pendleton?
Senator Pryor. Yes.
Mr. Siegel. The major threat to Camp Pendleton today is
urban sprawl. There is a proposed new city at Mission Viejo
just on the northern boundary of the base, underlying
significant military air space. The State of California has
passed legislation which would require the locality to consider
military readiness in evaluating that, but thus far the Defense
Department has not come up with the funds that the Navy had
asked for to implement that.
The facility wants to buy a buffer zone there. There are
solutions to these problems out there, and again they are not
necessarily in the legislation proposed by the Defense
Department. Camp Pendleton is being encroached upon, no doubt
about it.
Senator Pryor. Mr. Chairman, if you will indulge me just
for another 30 seconds just to follow up on that. This is
really for whoever wants to take it or all of you. As I
understand, Camp Pendleton's situation is there is a lot of
urban encroachment, suburban development all around it, but
also there are--and certainly there are environmental issues
related to it. But there are also cultural issues about Native
American remains, and there is a whole range of issues.
So from my perspective--and tell me if I am wrong--the
environmental piece of the puzzle is an important piece to Camp
Pendleton, but it would be misleading to say it is the only
piece. There are a lot of different issues that relate to Camp
Pendleton.
Do you agree with that?
Dr. Pirie. I certainly agree. It is part of the last green
space in southern California and to a large degree a victim of
its own success, because it is the habitat that is left and it
has been very successful in protecting the species that are
there.
Senator Pryor. Do you agree with that?
Ms. Clark. If I could just add one thing, Senator Pryor.
Camp Pendleton has been in neon blinking lights for a number of
years because of its visibility in southern California as being
one of the last green spaces, and lots of credit to the
military for keeping it that way for sure. It is like flying
over the Chesapeake Bay when you see big green spots: Aberdeen
Proving Ground and Fort Mead.
It is just, as Mr. Siegel said, it is what is happening in
this country today. There are two conflicting issues or
competing stories on the Camp Pendleton issue as it relates to
endangered species. One is the critical habitat issue. I think
facts will show, because the final regulation of critical
habitat demonstrates, less than 1 percent balanced out the
military.
The other issue that I think came up earlier had to do with
the amphibious landing and the amount of shoreline that is
compromised allegedly because of endangered species, when in
effect I think Mr. Siegel's comment is really well taken here
and that the impacts to amphibious landings comes from
Interstate 5, they come from a railroad, they come from a
nuclear generation plant. The only ESA conflict comes from a
few months a year--and it does exist--where two endangered
birds are nesting on the beach, and so there is a work-around
for that.
But the significant conflict on the shores of Camp
Pendleton come from urban sprawl, not from ESA.
Senator Ensign. I think we are going to go at least with a
brief round of--it is a very interesting discussion that we are
having here and so if the panel will indulge us to go at least
with a brief round of second questioning by the Senators here.
I want to make a couple of comments. Mr. Siegel--and I
appreciated what you said about working together. I have
certainly found in southern Nevada working first with Senator
Bryan and then second with Senator Reid that we have been able
to put together broad groups between environmentalists, the
multi-use people, developers, everybody together, working
together to come up with legislation that has been very good in
southern Nevada. Nobody ever got totally what they wanted, but
everybody agreed it was very good legislation and took a good
balance.
I think that that is what we are trying to achieve here, is
balance. I think that these issues are some of the most
difficult issues to deal with. Any time you deal with
environmental issues--and I think Senator Inhofe mentioned it--
we have wildly diverse testimony on the same issue. Some of
that just comes from a different perspective that people
address issues with.
But Ms. Clark, when you said that the military has been--
and you pointed out in your last a little bit of testimony with
Senator Pryor about that the military really has done a very
fine job in so many ways protecting the environment, especially
I think in the last 20 years--there were mistakes made before.
The military readily acknowledges that.
The point is, how do we go forward here? The military is
telling us--and they are the experts on readiness. Even Senator
Inhofe and Senator Akaka, they have been on this subcommittee
the longest and have probably the most expertise of any of the
Senators sitting up here. But none of us are experts on
military readiness and, other than Dr. Pirie, none of the rest
of you probably are.
But the military is telling us that there is a serious
problem going forward, that they think that it has worked well
using occasional exemptions, by using the INRMPs, as they call
them. The biggest fear that they have, though, is the
litigation, and there is a difference of opinion, Ms. Clark,
from the current FWS on what some of this litigation has meant
and what potentially--up in Alaska, there are some differences,
Mr. Siegel, on some of your statements versus what the military
is viewing.
So I guess the challenge for us as lawmakers is to filter
through all of what everybody is telling us, to come up with
that delicate balance, understanding, though, that military
readiness cannot be compromised. We are talking about lives.
When we are talking about the low frequency radar, it is
critical to the lives and to the defense of our country. If we
have quiet subs that can come up into the shallow waters along
the United States, that is not acceptable. I mean, there are
rogue regimes out there, that we just cannot have that kind of
thing happening, compromising the defense of the United States
of America.
Because the military I think has earned the respect of what
they have done with the environment, that if they are telling
us that the litigation going forward is going to hurt the
readiness, I think we have to listen to them. At the same time,
I think that the military does have to be willing to sit down
and say: Okay, these are our proposals; are there ways that we
can tweak them?
You mentioned, Mr. Siegel, about the Lake Mead and the Las
Vegas Wash and the perchlorate. The EPA testified today that
they feel that they have all the power--and I talked to
Administrator Whitman last night and she feels that the EPA can
absolutely--this proposal will not affect going forward with
the cleanup of the Las Vegas Wash in any way whatsoever. You
seem to have a little disagreement with that. But just in case
it does, they are going to tighten up the language on that,
just to make sure that it does not.
They also testified, the EPA did, that they do not feel
that this legislation in any way is going to hurt them from
enforcing the environmental regulations in this country
whatsoever, that they will be able to enforce the environmental
laws in this country.
So there is a lot of disagreement, is the point I am
making, between what we are hearing from some people and what
we are hearing from other people, and there is a huge
challenge, I guess, for us to filter through what the truth is
or at least what the supposed truth is. I would invite your
comments. Mr. Siegel?
Mr. Siegel. First on the issue of perchlorate, there are
two things. One is whether the language can be tightened so
that properties other than operational ranges are no longer
covered by this legislation.
Senator Ensign. By the way, operational ranges are still
covered. The Safe Drinking Water Act is not affected by this.
Mr. Siegel. The Safe Drinking Water Act controls water at
the wellhead. It is not always available as a reasonable method
for controlling cleanup going onto ranges, characterizing it
and protecting the ground water.
Senator Ensign. The EPA also testified that if they think
that there is a threat going off base--it does not even have to
be going off base--if they think that there is a threat to
going off base, the EPA felt--that was his testimony this
morning by Mr. Suarez--that they can step in and stop it from
happening.
Mr. Siegel. There are two things. One is, without CERCLA in
the normal way State standards, which California is developing
for perchlorate, would not be Applicable and Appropriate
Relevant Standards (AARS), and it would make it difficult to
enforce State standards. We do not have a Federal standard for
perchlorate. So it would get in the way in that point.
You have to recall Senator, that EPA reports to the
President. EPA officially has taken the position supporting
this legislation. If you want to look at the technicalities,
you are going to have to ask the EPA to supply the critiques
that were supplied by their staff of the various aspects of
this legislation.
My understanding is that the staff at EPA said things very
similar to what the attorneys general who have criticized the
legislation. It is going to make it difficult for the States,
who are usually the bodies who enforce these hazardous waste
laws, to enforce them, to provide a protective standard,
particularly for contaminants like RDX and perchlorate, where
the military says there is no standard that they have to obey
because there is no MCL--that is Maximum Contaminant Level--
under the Safe Drinking Water Act.
Now, I want to add, the question to me is not whether or
not environmental laws--do we have an environment, do we have
readiness? The question is can we find a middle ground between
being allowed to do military activities anywhere, any time, in
any fashion whatsoever, and finding a way to look at them in a
way that still allows the military to do its job, yet protects
the environment.
I think it is probably possible to find a timing to use the
Goldwater Range, yet still protect the antelope. I am not an
expert on that. I think the people who are have to sit down and
get that taken care of right away. But eliminating all
restrictions are going to get us back to the place where we
were, where the military created billions and billions of
dollars in liabilities by messing up our country, not just in
terms of ordnance and contamination by letting goats go wild on
islands like Kahalava and San Clemente.
The military is doing a good job today because we got
together, we passed some laws, and people found solutions. Let
us not abandon that because of the fear that somehow we are
going to totally give up on readiness, when the real threat to
readiness is not from the environmental laws.
Senator Ensign. Dr. Pirie, if you could make a comment
based on some of the things I said, and then I need to turn it
over to Senator Akaka.
Dr. Pirie. I think Mr. Siegel and I simply disagree as a
matter of degree. I do not think what is proposed constitutes
an abandonment of commitment to the protection of endangered
species or protection of the environment. I think it is really
an attempt to find a balance, which we, the DOD, have worked
out with the appropriate regulators, but which keeps being
disturbed by litigation from other parties.
Senator Ensign. Senator Akaka, just one comment.
I would advise this. If people want to work together--and
Mr. Siegel, with all due respect, the last comment that you
made about ``doing away with'' is not helpful, because we are
not doing away with. They are trying to strike a balance here.
I mean, certainly I do not think that anybody would say that
INRMPs are doing away with environmental protection.
Ms. Clark, you were a big supporter of INRMPs. INRMPs have
been one of the hallmarks of how the Defense Department has
protected endangered species. What the military, from what they
are telling me is that it has worked well. What the new
lawsuits threaten--they think that they threaten things like
INRMPs, so that if they have to go with the exemptions,
exemptions provide less protection than INRMPs do. I think
everybody agrees with that.
Everybody says, well, just go with the exemptions. The
military even says the INRMPs provide more protections than
going for the exceptions. The exceptions basically say they do
not have to comply with anything. The INRMPs actually put a
plan in place with a balance that everybody says--everybody on
the panel has talked about balance and the INRMPs seem to be,
at least for the endangered species, one of the places that the
balance has occurred.
The military is saying the courts are going to do
basically--are afraid, and so is Fish and Wildlife. They are
afraid that the INRMPs are going to be done away with or at
least severely hurt as far as putting those in place and have
to go more with the exemptions.
I am sorry, Senator Akaka, if when you are following up
with his, if you have time--I have taken too much time.
Senator Akaka. Dr. Ketten and Ms. Young, 2 years ago I
asked the National Academies to assess the state of science
with regard to marine mammal bio-acoustics. Earlier this year,
the National Academy's Ocean Studies Board concluded its
survey, in which the Navy participated, as follows, and I am
quoting: ``For 119 species of marine mammals, as well as for
other aquatic animals, sound is the primary means of learning
about their environment and of communicating, navigating, and
foraging. The possibility that human-generated noise could harm
marine mammals or significantly interfere with their normal
activities is an issue of increasing concern. Although the
stranding of beaked whales provides a tangible and alarming
picture of the potential effects of high energy mid-range
sonar, there are very limited observations concerning the
effects of most kinds of ocean noise on marine mammals.
``Potential effects include changes in hearing sensitivity and
behavioral patterns, as well as acoustically-induced stress and
effects on other animals, such as fish, in the marine habitat.
Most existing data are limited, short-term, nonrepeatable
observations of marine mammal responses to human activity.''
Would you agree that the science regarding the impact of
ocean noise on marine mammals is still in its infancy and that
we should proceed with caution in this area, going step by step
and carefully monitoring the results of our actions to ensure
that we do not make any serious mistakes, Dr. Ketten?
Dr. Ketten. Yes. Senator, as a member of the panel and as
an individual who assisted specifically in writing that
paragraph, I can address the intent clearly. Further, I am the
person who did the assessments of trauma in the beaked whales.
Yes, I agree with that statement and that we should go
forward with caution. But to go back to the wording, the terms
``balance'' and ``perspective,'' beaked whale issues have two
very relevant cases for this committee. First of all, in terms
of perspective, there have been an estimated 8 to 10 episodes
in the last 60 years of strandings of beaked whales that
involved 350 individuals, of which fewer than half of the
animals died.
So we are talking about approximately 175 animals that may
have died associated with military sonar exposures in 60 years,
compared to thousands of animals, of beaked whales
specifically, that die each year in fisheries. How many others
are impacted acoustically particularly?
One of the things that the National Academy of Scientists
(NAS) panel was concerned about is shipping, especially in our
heaviest lanes, the North Atlantic and the North Pacific. There
is no monitoring of that at the moment. So our perspective is
being drawn, largely by public opinion, from dramatic, single,
intense events.
I would point out as the primary researcher on the beaked
whale issues that we do not yet know the mechanism and there is
every indication it is not a direct acoustic impact. There is
little question, no debate really, that sonars were a
contributory element. But again, they are relatively rare
events involving multiple ships in particular areas with two
species that particularly seem to be hazarded.
The other issue was Vieques. Although Vieques was closed
down for a variety of reasons, very complex ones, beaked whales
entered into that. I examined every beaked whale that stranded
in the area, particularly in the area of Vieques, for the last
2 years and there was no animal with any indication of an
acoustic trauma or physical trauma that could be demonstrated.
Yet that was still brought before the Puerto Rican legislature
as an issue for the ordnance practices in Vieques, completely
inappropriately based on the data.
We need to go forward with caution, but we do not need to
stop cold. We have to look at the possibility of 175 animals
over 60 years stopping LFA, completely inappropriately in my
opinion.
Senator Akaka. Ms. Young.
Ms. Young. Thank you. I think we do need to go forward with
caution. In many cases we have been talking today about beaked
whales, we have been talking about acoustics. We know very
little about beaked whales. Many of these species have not been
described until probably the last 15, 20 years. We know
virtually nothing about their population sizes. We know nothing
about what the impacts of mortality associated with military
activities, fishing activities, any of those activities, have
on these animals.
We are not stopping. We are moving forward. We are moving
forward with the use of LFA, we are moving forward with ship
shock. I think what we have here, especially when it comes to
acoustics, is a boogeyman. We have a fear about acoustics and
what it is going to do, and it is a fear of the unknown. Other
than Dr. Ketten, there are very few people who understand the
acoustic impacts to marine mammals. It has caused a breakdown
in communication between the scientific community and the
conservation community and that is what needs to stop.
What we have before us is a need to distinguish between our
experience to date with the authorization process and the fear
of potential future litigation and what the military believes
that litigation could potentially stop military readiness
activities. We do not want to impede military readiness
activities and we are not in really the position to evaluate
the issue, but the experience that we do know shows that the
military has been applying for permits, they have been
receiving those permits, and that is not the problem.
What we do need to do is enter into a dialogue with the
military, with scientists, to understand better where the
problems exist, to work with them within the permitting
process, to alleviate those problems. But the bill before us
here is not going to do that. It is going to introduce more
interpretation ambiguity that is going to arguably result in
greater lawsuits.
If we just move forward with the definition of harassment
that is before us, we have no guarantee that we are going to
fix the process. Scientists can debate significance forever.
But what we do need to do is get the scientists to sit down
with the DOD and other stakeholders to decide what is the most
sound conservation-minded way to move forward.
Senator Akaka. Mr. Chairman, I know my time has expired.
May I proceed with just one more question?
Senator Ensign. Yes.
Senator Akaka. I would like to get to Mr. Siegel. Mr.
Siegel, when the first panel testified I asked Mr. Suarez for
his reaction to an internal EPA memorandum recommending that
the agency oppose DOD's proposed exemptions from the CAA and
the cleanup statutes on the ground that the proposed exemptions
were unnecessary and would have an adverse impact on the
environment.
My simple question to you is: What is your response to Mr.
Suarez's comments on these two issues?
Mr. Siegel. First, it is fairly clear that none of these
statutes have interfered with military readiness activities.
Second, they would limit the ability of regulators to regulate
military activities as they normally do. In the case of the
CAA, there are five provisions in the proposed legislation.
Only one of them has a 3-year sunset clause. The other are
permanent redefinitions of dirty air as clean air, and really
only to allow the relocation of military air squadrons under
base realignment or the deployment of new weapons systems, not
an immediate readiness issue--an important issue that has to be
addressed.
But there is no need--basically, if the military is going
to consider where to deploy new squadrons, where to relocate
squadrons, I think clean air should be part of the equation
that they look at. It is not the only factor, but it should be
included.
In the case of RCRA or CERCLA, I think the military, if
they correct the language to limit it to operational ranges,
then it appears what they are targeting is the ability of
regulatory agencies using their normal methods, that is using
the normal funding provided through the Defense Department, to
control contaminants such as RDX and perchlorate from those
operational ranges that are contaminating our drinking water
supplies, and I think their hands would be tied.
That is the information I am getting from people within the
EPA at the staff and regional level who work these things on an
ongoing basis. The military is concerned that perchlorate is
going to cost billions and billions of dollars to clean up in
this country, and whether it is at contractor sites or military
sites they are worried that they are going to be footing the
bill. That is an important question for you folks to resolve,
as to how we should spend resources in the defense budget. But
that to me is not a readiness issue.
Senator Ensign. Senator Inhofe.
Senator Inhofe. Mr. Chairman, I know we have a third panel
and I will just make this really brief and summarize a couple
of things.
First of all, Dr. Ketten, I appreciate your comments about
Vieques. Yes, there are a lot of factors that were there and
there are a lot of phoney issues that were used. One was the
issue on the mammals that you described. Another one was
nonsound science having to do with anything to do with
different types of diseases that you could get or cancers, and
all of that has been refuted.
It was a political problem there and we have a political
solution that is just deplorable. As a result, as I mentioned,
we have lost American lives.
So the whole issue here is live-fire training. I would love
to think that I would live long enough to see the day where it
is not going to be necessary to do that. Unfortunately, I do
not think that is going to happen. So right now we are losing
our ranges. The loss of Vieques is having a rippling effect,
not just in the Navy, Dr. Pirie, but also all the Services,
because you go around and you go from Okinawa to Cape Wrath and
the rest of them, we are losing the capability. In Capa de
Lotta, we are restricted as to how we can and how many days a
year that we can train. So it is really critical, and that is
why this is such a significant issue.
Just real briefly, Mr. Chairman. On this idea of using the
national security exemption as a reason not to be doing these
things, first of all, as far as CERCLA and RCRA are concerned,
that takes the presidential action. You are going to have to
have a president, and that is good for 1 year. Now, if you take
all of the training ranges we have and present all these cases,
that is all this guy would be doing, would be signing these
exemptions.
The same thing is true with the ESA. That is the Secretary
of Defense that does that. Then there is none in the MMPA.
Let me just make this one comment. I think it needs to go
into the record. The administrative actions adversely affecting
military training and other readiness activities, I was
chairman of this subcommittee when this went into the statutes
and this is something that is so bogged down in timing that
this does not correct the problem. I am just going to read this
one thing:
``The Secretary shall submit a written notification of the
action and each significant adverse effect to the head of the
executive agency taking or proposing to take the administrative
action. At the same time, the Secretary shall transmit a copy
of the notification to the President, to the Committee on Armed
Services of the Senate and the Committee on Armed Services of
the House of Representatives.``
Now, you can see if you try to exercise that provision as
an exemption it is just not going to work.
Mr. Chairman, I appreciate the time that we have had for
this particular second panel. I know we need to get to the
third panel.
Senator Ensign. Thank you, and I really--I have other
questions we will submit to you, if you could get them back for
the record. But I appreciate the discussion. I think it has
been very healthy, and I want to thank Senator Akaka for
suggesting that we include an airing out, I guess, of the
issues, because they are complex, and we appreciate you, and
excuse this panel of witnesses and call our third panel of
witnesses, to include: Douglas H. Benevento, Executive Director
of Colorado Department of Public Health and the Environment;
Benedict S. Cohen, Deputy General Counsel, Environment and
Installations, DOD; and David Mears, Senior Assistant Attorney
General, State of Washington. [Pause.]
If you could all summarize, once again, in under 5 minutes
and allow some time for questions, is the time we really get
into it. So your full statements will be made part of the
record.
Mr. Benevento.

STATEMENT OF DOUGLAS H. BENEVENTO, EXECUTIVE DIRECTOR, COLORADO
DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT

Mr. Benevento. Thank you very much, Mr. Chairman. My name
is Doug Benevento and I am the Executive Director of the
Colorado Department of Public Health and Environment. In that
position, I am responsible for oversight of the State's air,
water, waste, as well as the bulk of the State's health
programs. Also I am a member of the Environmental Council of
States (ECOS) and serve on that body's executive committee, and
I am chair of the ECOS DOD Forum, which is designed to open
communications with DOD for the purpose of working through
issues such as this one. I do want to make clear today, though,
that I am speaking for the State of Colorado and not ECOS or
the DOD Forum.
I am grateful that the States are being asked by this
subcommittee for their opinions early on. I believe that, based
upon the early outreach and the willingness that DOD and
congressional staff have expressed to me with respect to
working on this issue, we can craft language that meets the
needs of all parties.
I am here today to try and offer some suggestions that
would be helpful in resolving some of the issues surrounding
the proposed amendments to certain environmental laws. The
suggestions that I offer today are based upon the principle
that no harm to the public would be acceptable to the State of
Colorado, DOD, or this subcommittee, and I believe the
suggestions I will offer are consistent with this criterion.
With some changes, in general, I think Colorado would be
comfortable with the goal stated by the Armed Services
Committee staff and DOD of ensuring that essential training
activities can be accomplished and that public health is
protected. My understanding of what DOD is proposing is certain
exemptions and time extensions from portions of the CAA,
exemptions from RCRA on operational ranges, and some
clarification with respect to definition of what is a release
under CERCLA.
First I would like to address RCRA. I want to say at the
outset that I do not know of any State that issues RCRA permits
or attempts to regulate normal training activities of the
military. Colorado has worked well with DOD on training
activities on their sites in our State and I think that the
proposed legislation attempts to codify a generally good
relationship with Colorado and other States on these issues.
I have had several conversations with DOD and Armed
Services Committee staff on this topic and I think that I
understand what they are attempting to accomplish and I think
their goals in RCRA should be supportable by States. What DOD
is seeking are protections for their training activities on a
range. They are not, according to my conversations with them,
seeking to exempt themselves from any impact caused by training
off a range.
At the outset I want to state that, like most environmental
laws, RCRA is relatively old and almost every word in the
statute has a meaning applied to it, either through
adjudication, regulation, or common understanding. The current
proposal before you seeks to change definitions in RCRA to
exempt out certain training activities.
The first issue I would raise with respect to the language
as drafted is that it allows for exemptions at operational
ranges. I cannot find a definition of an operational range in
current law or regulation and therefore do not know to what
ranges this section would apply.
Second, it is also unclear from the drafting whether the
activities exempted must be on operational ranges or whether
certain activities can occur anywhere and still be exempted. My
understanding from talking with DOD is that they are seeking
exemptions from RCRA at operational ranges for legitimate DOD
training activities. If so, this language can be clarified to
meet that goal.
Third, ground and surface water protection are also a
concern in this regard and, depending upon the soil type and
how near the ground water training would occur, there is the
possibility of some contamination by constituents of spent or
live ordnance. Off-site impacts could be created from these
activities and these should be addressed. It is my
understanding that DOD's proposal would not affect their
obligations under the Safe Drinking Water Act and we would just
recommend that this be stated explicitly in any legislation.
I would like to make the following suggestions to DOD's
language with respect to the RCRA portion of it for your
consideration. First, do not change current definitions that
are in current law. Instead, create an exemption under a new
section of RCRA.
Second, limit the exemption to active and inactive ranges
and the munitions on those ranges. My understanding after
talking with DOD is that they are seeking protection on active
ranges and that they are seeking to preserve their ability to
use inactive ranges in the future.
Third, the exemption for inactive ranges may be
controversial. However, the way it was explained to me by DOD
was that these ranges are potentially useful in the future and
the military does not want to give up their potential use
because training sites are often difficult to find. Therefore,
an exemption in both areas makes sense. However, from a State
perspective it would be helpful if every few years the military
was forced to go through a review process on these inactive
ranges and, after seeing public input, determine whether they
should remain inactive, go to active status, or move to cleanup
status.
Fourth, limit the exemption with tight language so that we
know what we are exempting.
Fifth, allow for some additional ground water monitoring to
ensure that if there is some contamination and it is moving off
site we know that and can deal with that before it does.
Sixth, state clearly that in no way does this section
impact cleanup responsibility of DOD once a site no longer
meets the definition of an inactive or an active range.
Seventh, just mandate good recordkeeping. It is much easier
to do a cleanup when there is good recordkeeping as to what was
shot, how many duds were fired. We have had some experience in
Colorado where the records were not as good as we would have
liked and it really causes a lot more expense in the future to
go and do the survey.
I think, with these suggestions, that you would meet the
intent of DOD and would allow the States to be comfortable that
we are working together with them on environmental issues.
The next exemption in the language surrounds an exemption
from the term ``release'' as used in CERCLA. Again, the
suggestion I would make here is that you use active and
inactive ranges as the operational wording, as opposed to
operational range. This is really a limitation on Federal
authority. Therefore, if you were to make the active-inactive
change, it would make--I think the States should be comfortable
with that.
Finally, I would like to address the proposed changes in
the CAA. Now, this is the most difficult issue to work with
because you are dealing with potential offsite impacts. The
legislation would exempt the military from meeting a general
conformity test, that no Federal action will cause or
contribute to the violation of the NACs, and would waive non-
attainment caused by certain military readiness activities.
There are numerous ways to handle this. My initial
suggestion to fix this problem would be to exempt military
readiness activities altogether, instead of for merely 3 years.
However, you should still require that the emissions budgets be
developed as envisioned by this proposal and then require
offsets on other non-military readiness activities in the
impacted areas from DOD sources. If this would not offset the
emissions increase, then they could be required to purchase
emissions credit from other sources in the area.
The downside to this proposal is that it could be expensive
and there is not often a developed trading program in a lot of
areas.
Another alternative would be to direct EPA to expand their
natural events policy to include military activities. This
allows--we use this quite a bit in the State of Colorado. This
allows for a certain--it allows exemptions for certain
activities, mainly natural activities. In Colorado it is a lot
of wind-borne dust, PM-10 exceedances. It does require that
there be some public outreach and that there be some
restrictions on certain activities where applicable, but it
gets you out of a non-attainment status in an area.
The downside of this proposal, of course, would be that
off-site impacts from training would still occur and may raise
the concern of the community.
I would be willing to continue to explore solutions to the
issue brought up by DOD, but at this point I would encourage
the subcommittee to proceed cautiously, at least with the CAA
portion of this. I do think a lot of these issues are
resolvable. We deal with very difficult issues in the State
when we are regulating and this, frankly, is a difficult one,
but it should be resolvable. We should be able to provide the
relief to the military that they seek and we should still be
able to protect public health and the environment.
Thank you for asking me to testify. I will take any
questions.
[The prepared statement of Mr. Benevento follows:]

Prepared Statement by Douglas Benevento

Good morning, my name is Doug Benevento and I am the executive
director of the Colorado Department of Public Health and Environment.
In that position I am responsible for the oversight of the State of
Colorado's air, water, solid waste, and hazardous waste programs as
well as the bulk of the State's health programs. The majority of the
programs that I am responsible for on the environmental side are
programs that are delegated to the State through the CAA, the Clean
Water Act, or the Resource Conservation and Recovery Act. Also, I am a
member of the Environmental Council of States and serve on that body's
executive committee. Also, I am also a co-chair of ECOS' DOD forum,
which is designed to open communications with DOD for the purpose of
working through issues like this one. I do want to make clear though
that today I am speaking for the State of Colorado and not ECOS or the
DOD forum.
It is a great honor for me to be testifying before the United
States Senate. Prior to moving back to Colorado in June of 1999 I had
worked for almost 10 years for Senator Allard in a variety of staff
positions and it is truly a great honor to be testifying before a
subcommittee he serves on. Also, I spent some time in the mid-1990s
working for both Mr. Allard and Mr. Roberts on the House Agriculture
Committee when Mr. Roberts chaired the full committee and Mr. Allard
chaired a subcommittee. I am equally honored to be testifying before a
subcommittee he serves on. Throughout the time I spent working in
Congress I predominately worked on environmental issues and given the
number of active and inactive military sites in Colorado, working on
issues surrounding Federal facilities was a major issue.
Since returning to Colorado to first run the environmental programs
and subsequently to run the entire agency my involvement in Federal
facilities has increased dramatically both from the standpoint of day-
to-day cleanup and oversight of these facilities to such non-routine
matters such as how to handle sarin nerve gas bomblets manufactured
decades ago at the Rocky Mountain Arsenal and found in a junk pile at
the site.
My experience on both Capitol Hill and in State government has
given me a unique perspective on environmental issues as they impact
the military. Those who have a background developing environmental laws
or those who are environmental regulators tend to automatically react
negatively to any change in the laws that could provide more
flexibility to the military. This conclusion is reinforced for me by
reviewing testimony from a hearing on this issue last year where
colleagues of mine in environmental regulation did a superb job of
pointing out every potential and actual shortfall in a similar proposal
without offering any suggestions for making the proposal viable.
On the other hand, the proponents of more flexibility tend to
develop their proposals in isolation and then spring them out at the
last moment, professing surprise that there would be any questions that
would arise. A good example of this was also last year when final
language was proposed and States learned about it at about the time it
was being considered in Congress. Last year we did not feel like our
advice was being seriously sought or considered.
This year is different and I am very grateful that States are being
asked by this committee for their opinions early on. I believe that
based upon the early outreach and the willingness that DOD and
congressional staff have expressed to me with respect to working on
this issue we can craft language that meets the needs of all parties.
Much of the credit for this is due to the outreach that this
committee and other committees are engaging in on this topic. I also
want to thank DOD for spending a lot of time with me over the past week
and walking through the issues they face. My experience is that these
issues are resolvable so long as the lines of communication are open. I
commend the subcommittee for helping open those lines of communication.
I am here today to try and offer some suggestions that would be
helpful in resolving some of the issues surrounding the proposed
amendments to certain environmental laws. These amendments are called
the Readiness and Range Preservation Initiative and seek to provide
greater flexibility for the military so that they ensure that their
training is done in a fashion that is timely and not hindered by
unnecessary environmental requirements. I offer my suggestions today in
the spirit of allowing DOD to reach that goal while at the same time
ensuring that offsite impacts are prevented or mitigated.
The suggestions that I offer today are based upon the principle
that no harm to the public would be acceptable to the State of
Colorado, DOD, or this subcommittee. I believe that the suggestions
that I will offer are consistent with this criterion.
Specifically, I would today like to address the proposal of DOD
with respect to the changes they are seeking to CERCLA, RCRA, and the
Clean Air Act (CAA). These are the environmental laws that my agency is
either responsible for implementing through a delegation or, in the
case of CERCLA, a law which we partner with EPA on implementing.
With some changes in general I think Colorado would be comfortable
with the goals stated by Armed Services Committee staff and DOD of
ensuring essential training activities can be accomplished and that
public health is protected.
I would like to spend the rest of my time defining what I see as
the issues and then offer suggestions on how those issues can be
resolved in a fashion that ensures military training can be done
without unnecessary delay while also ensuring that public health and
the environment is protected. I don't have statutory language to offer
at this time but would be happy to draft something for the subcommittee
if it would be helpful.
After reading the statutory language and prior testimony on this
issue it appears as if DOD is seeking exemptions from certain portions
of environmental laws including: the Resource Conservation and Recovery
Act (RCRA) and the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA) and seeking time extensions from compliance
with portions of the Clean Air Act. My understanding of the intent of
the DOD in seeking these exemptions under RCRA and CERCLA is to allow
for training at specifically identifiable sites. As I understand, DOD
is not seeking to be excused from any cleanup obligations under RCRA or
CERCLA for contamination it causes, nor from any off-site impacts, nor
from obligations under the Safe Drinking Water Act. Finally, DOD is not
seeking a permanent exemption from hazardous waste management
requirements under RCRA at the defined sites. Under the CAA my
understanding of the intent of the DOD is to allow for movement of
planes and other mechanized material between bases without triggering
immediate applicability of portions of the CAA. In short:

1. They are seeking time extensions from portions of the
Clean Air Act.
2. Also, they are seeking exemptions from RCRA on operational
ranges where the military is actively undertaking military
training where, ``explosives, unexploded ordnance, munitions,
munitions fragments, or constituents thereof,'' could be found.
3. Finally, they are seeking a clarification of the
definition of what is a release under CERCLA.

I would like to comment on the proposed changes to RCRA, CERCLA,
and the CAA and to offer some suggestions that from my perspective
would make all three proposals more workable.
First, I would like to address RCRA. I want to state at the outset
that I don't know of any State that issues RCRA permits or attempts to
regulate normal training activities of the military. Colorado has
worked well with DOD on training activities on their sites in our
State. I think the proposed legislation attempts to codify a generally
good relationship with Colorado and other States on these issues.
I have had several conversations with DOD and Armed Services
Committee staff on this topic and I think that I understand what they
are attempting to accomplish and I think their goals in RCRA should be
supportable by States. What DOD is seeking are protections for their
training activities on a range. They are not, according to my
conversations with them, seeking to exempt themselves from any impact
caused by training off of a range.
For example, in conversations with DOD they were clear that under
RCRA they are not seeking a change to permitting of open burning or
open detonation (OB/OD) when used as a disposal activity. Colorado
currently permits such activities and will continue to permit such
activities even under their proposed concept. However, under this law
an OB/OD activity that is a necessary part of training would be exempt.
That is legitimate and currently the practice in Colorado and other
States.
At the outset I want to state that like most environmental laws
RCRA is relatively old and almost every word in the statute has a
meaning applied to it either through adjudication, regulation, or
common understanding. The current proposal before you seeks to change
definitions in RCRA to exempt out certain training activities on
certain DOD sites.
The first issue that I would raise is that the language as drafted
allows for exemptions at operational ranges. I can't find a definition
of an operational range in current law or regulation and therefore
don't know to what ranges this section would apply. There is no
limitation on what is an operational range and that obviously causes
some concern.
Second, it is also unclear from the drafting whether the activities
exempted must be on an operational range or whether certain activities
can occur anywhere and still be exempted. My understanding from talking
with DOD is that they are seeking exemptions from RCRA at operational
ranges for legitimate DOD training activities. If that is correct this
language is too broad and should be narrowed to accomplish the end they
are seeking--assurances that sites they operate on would not be subject
to RCRA permitting that could interfere with their training.
Third, ground water and surface water protection are also of
concern in this regard. Depending upon the soil type and how near the
ground water is to the surface there is the possibility that ground
water could be contaminated by constituents of spent or live ordnance.
Offsite impacts could be created from these activities and these should
be addressed. It is my understanding that DOD's proposal would not
affect their obligations under the Safe Drinking Water Act. It would be
helpful if the legislation stated this explicitly.
Therefore, I would like to suggest the following changes to the
language that has been provided to the subcommittee. First, don't
change current definitions or any current law; instead create an
exemption under a new section of RCRA. Second, limit the exemption to
active ranges and inactive ranges and the munitions on those ranges. My
understanding after talking with DOD is that they are seeking
protection on active ranges and that they are seeking to preserve their
ability to use inactive ranges in the future. I would avoid creating
new terms, such as ``operational range'' because it isn't clear what
that means. Instead, what I would recommend is that you create an
exemption based on current definitions. Third, the exemption for
inactive ranges may be controversial. However, the way it was explained
to me by DOD was that these are ranges that are potentially useful in
the future. The military does not want to give up their potential use
because training sites are becoming difficult to find. Therefore, an
exemption in both these areas makes sense. However, from a State
perspective it would be helpful if every few years the military was
forced to go through a review process of these inactive ranges and,
after seeking public input, determine whether they should remain
inactive, go to active status, or move to cleanup status. Fourth, limit
the exemption with tight language so that we all understand what we are
exempting and what we are not exempting. Fifth, I would recommend that
some kind of additional ground and/or surface water monitoring be
required if conditions dictate that to be appropriate. If the monitors
did catch contamination, then appropriate actions to prevent an
environmental or public health concern could be required by States.
Sixth, state clearly that in no way does this section impact cleanup
responsibilities of DOD once the site no longer meets the definition of
an active range. Seventh, mandate that DOD maintain good records of
activities that take place on the range so that we know what was used
on the site and what will be necessary for cleanup, without an
expensive remedial investigation. Finally, it should be made clear that
the exemptions are available only to DOD and not to contractors or
other private parties.
What this gets you is a solution to the expressed concern that RCRA
could impact military training. What it does not do is expose the
public to contaminants from ordnance. In this regard, I would also
suggest the subcommittee strike the part of proposed
Sec. 2019(a)(1)(A)(i)(III) that allows material that goes off-site to
be addressed under CERCLA before States can take action under their
authorities to protect public health and the environment. There is no
military readiness rationale for DOD to be given this priority for off-
range material, and States need to be able to exercise their authority
to protect the public. We have examples in Colorado from sites like the
Rocky Mountain Arsenal where we have found it important to have the
ability to exercise State authority over potential off-site impacts.
A better approach may be one that several States have already
worked out with DOD in a collaborative effort called the ``Munitions
Response Committee.'' In this subcommittee we have agreed with DOD to
identify key decision points in the clean up process for which we will
seek consensus on decisions. If that can't be achieved, there would be
an expeditious dispute resolution process. If agreement still can't be
achieved, each party would rely on their existing CERCLA and RCRA
authorities for action. This approach preserves both DOD's and States'
existing authorities while making every effort to reach agreement.
Further, since there is some agreement on this issue currently, it
should not require a statutory change to RCRA or CERCLA.
Finally, there has been considerable work and thinking over the
last several years on the role of enforceable land use controls on
sites where contamination remains. One example is Colorado's
environmental covenants law. Mechanisms like Colorado's law give
communities and regulatory agencies comfort that contamination is being
monitored and that controls to protect public health and the
environmental are established and enforced. This kind of approach
should be considered for munitions that remain on DOD ranges.
With the above caveats and changes I don't think that this type of
narrow exemption under RCRA should cause a concern for human health or
the environment. This exemption would meet DOD's need to conduct
readiness activities without regulatory hindrance.
The next exemption in the language that I have seen surrounds an
exemption from the term ``release'' as used in CERCLA for the purposes
of triggering action under that law. The exemption from release would
apply to explosives, ordnance, etc. on operational ranges but would not
apply to releases offsite of an operational range.
As with RCRA conceptually I would agree that there should be some
middle ground that could be reached on a narrow exemption under the
same criteria I outlined above for RCRA.
Again I would encourage the subcommittee to abandon any rewrite of
the body of CERCLA and instead encourage adding on an exemption to
CERCLA.
The change being sought by DOD is really a limitation on Federal
power. Since Superfund is not a delegated law, this limitation would
apply to an action by the Federal Government. The only recommendation
we would have is that the exemption should apply, as with RCRA above,
to active and inactive ranges and not operational ranges because as I
noted above, there is not yet an established definition of operational
range and therefore what that term would apply to is uncertain. There
is a definition of active and inactive range that should have some
common understanding amongst both the military and environmental
regulators that should provide some certainty as to what is being
exempted.
Finally, I would like to address the proposed changes to the CAA.
This portion of the proposal is the most difficult to work with
because it involves offsite releases. As I mentioned earlier in my
testimony the principle that I ran these proposals through was whether
any exemption would allow for an offsite release. Within the borders of
a training area I think that statutory flexibility is appropriate.
However, as Colorado's top public health official I must be concerned
about offsite releases from any activity and then I must try and ensure
that those impacts are minimized.
There are two applicable air quality sections of the proposed
legislation.
The first is conformity. There are two parts to conformity; the
first is the concept of general conformity, and the second is
transportation conformity.
This legislation would exempt the military from meeting the general
conformity test that no Federal action will cause or contribute to the
violation of the National Ambient Air Quality Standards (NAAQS). Under
the proposal within 3 years after starting a military readiness
activity, DOD would have to come into compliance with the requirements
of the applicable law. The general conformity requirements would apply
to any non-attainment or maintenance area of a State. In Colorado for
example, this would most likely apply to the Colorado Springs area and
the Denver area.
The general conformity provisions would most likely apply in
Colorado to fog oil or fire that could lead to particulate non-
attainment situations. An area would have to develop a full SIP showing
that all other measures are being taken to meet attainment including
adoption of any mandatory Federal programs prescribed for that type of
non-attainment area.
My concern with this language is first and foremost the offsite
impacts of the activities and the 3-year exemption from addressing
those offsite impacts. However, I am also slightly confused by how this
section would be implemented. The language says that there is a 3-year
exemption but the administrator must approve the plan. I assume that
the administrator and the States would have to show at some point that
within years some control of the emissions from the military readiness
activity had occurred. Second, I would like further information as to
when the 3-year clock would start running. Section 2018(a)(3) states
that, ``within 3 years of the date new activities begin'' the activity
must conform to the requirements of the CAA. I think it would be
important to have a common understanding on when these activities begin
to avoid confusion. For example, if planes are being brought into an
area is that a military readiness activity that triggers this section
or does the activity begin when the new planes start arriving or when
they are all on site?
Also, I think there may be an important practical problem with this
approach. My responsibility is to protect public health and environment
in Colorado. Therefore, if for example the Denver Metro Area were to
fall into noncompliance with the NAAQS, my goal would be to put
controls in place as quickly as possible to protect air quality in the
area. Therefore, if there were a 3-year restriction on controls at any
military readiness activity we deemed was contributing to the problem
my response would be to make my restrictions on other sources more
stringent to make up for what the military was not contributing. As a
practical matter, what I would want to do in this situation is put
control in place to ensure an area's air quality was safe. Because I
would have to wait 3 years for certain exempted activities it would
make sense for me to merely shift whatever burden turned out to be to
other sources. This you can imagine would not be welcomed by those
sources that felt they were being disproportionately controlled.
I don't want to appear to be hypercritical of this proposal but I
think it is important that it be fully understood prior to
implementation so that States and EPA know fully what to expect. Also,
it is important that DOD understand the potential impact from this
change.
My initial suggestion to fix this problem would be to exempt
military readiness activities altogether instead of for merely 3 years.
However, you should still require that the emissions budgets be
developed as envisioned by this proposal and then require offsets on
other non-military readiness activities in the impacted area from DOD
sources. For example, requiring stricter controls at any power plants
on military bases or require stricter controls for non-exempt vehicle
fleets. If this would not offset the emissions increase then they would
be required to purchase emissions credits from other sources in the
area.
This would meet the intent of DOD. However, this approach also has
its own shortcomings that I want to be certain to point out. First, it
could require the expenditure of significant amounts of money depending
upon the offsets. Second, the offsets may not be available in a given
area or may not be sufficient. Third, purchasing credits is a good
market based approach but in many areas there is not a well-developed
credit-trading program or credits may not be available in a given area.
Another alternative would be to direct EPA to expand their natural
events policy to include military activities. As you may know, EPA has
a policy that allows States to avoid non-attainment due to natural
events. This policy has been used by Colorado to avoid PM-10 non-
attainment in certain areas of the State that experience significant
windborne dust and that result in attainment problems. The purpose of
the policy is to first recognize that there are certain uncontrollable
events that can cause non-attainment that should not lead to non-
attainment designation. However, this policy does have certain
mitigation and notification requirements that could be burdensome.
Further, the policy would likely have to be adjusted so that it would
meet the needs of the military better.
The downside to this proposal of course would be that offsite
impacts from training would still occur and may raise the concern of
the community.
I would be willing to continue to explore solutions to the issues
brought up by DOD but at this point I would encourage the subcommittee
to proceed cautiously with this portion of the proposal.
I understand that one of the motivations behind DOD's present
proposal is concern about citizen suits potentially impacting its
military readiness activities. Consistent with my overall comments, if
this is a concern that Congress wishes to address, I suggest an
exemption from citizen suits for readiness activities on active ranges
rather than the definitional changes to the environmental laws
proposed.
Finally, as you are well aware, the question of sovereign immunity
for DOD's waste management and cleanup obligations has been dealt with
several times over the years by Congress. This has been necessary due
to the narrow interpretation given such waivers by the courts. In the
interest of preserving the current state of the law and just narrowly
addressing DOD's concern, the committee may wish to affirm that any
exemption granted not enlarge the universe of current sovereign
immunity.
Thank you for your time and for asking me to testify. I would like
to finish by re-emphasizing my belief that most of the issues brought
up by DOD are resolvable with appropriate statutory changes. However,
the one difficult area I would encourage some caution is with changes
to the CAA.

Senator Ensign. Thank you.
Mr. Cohen.

STATEMENT OF BENEDICT S. COHEN, DEPUTY GENERAL COUNSEL,
ENVIRONMENT AND INSTALLATIONS, DEPARTMENT OF DEFENSE

Mr. Cohen. Thank you, Mr. Chairman. It is a privilege to be
here to discuss the Readiness and Range Preservation
Initiative.
I would like at the outset to try to define what is and is
not at issue in our legislative package. Press accounts have
suggested that the Defense Department is broadly on the
offensive, seeking sweeping exemptions from the environmental
laws. It has been suggested that we seek such exemptions for
our closed ranges, our contractors, our non-readiness
activities, and our existing cleanup obligations concerning
chemicals like perchlorate.
None of these assertions accurately reflect our actual
intent. We have already revised our proposal to clarify that it
has no effect on closed ranges. Working with EPA, we have
developed further language clarifying that it has no effect on
our contractors, and we stand ready to work with this
subcommittee or anyone else to further clarify the sole focus
of our proposal: the Department's testing, training, and
military operations.
In reality, our proposals are strictly defensive in nature,
designed to shore up existing State and Federal regulatory
policies that are facing courtroom challenges. It is others who
seek a sweeping change in longstanding environmental policies
with respect to the military. They believe that military
readiness activities have been dramatically underregulated and
they seek through litigation to overturn existing State and
Federal regulatory policy and to impose new and unprecedented
burdens on our core military readiness activities.
That, Mr. Chairman, is what is actually at issue in this
debate. That future has arrived for the Navy through private
litigation under the Marine Mammal Protection Act. Despite a
volatile international situation and a serious and growing
submarine threat to the fleet, the Navy's anti-submarine
warfare program is being crippled through litigation.
Last year, in the SURTASS LFA case, a court cast aside the
expert scientific judgment of the regulatory agency. It cast
aside as well that agency's settled interpretations of its own
statute, interpretations validated by the National Academy of
Sciences, and it cast aside a Navy regulatory compliance
program 6 years in the making, based on some $10 million worth
of cutting-edge science.
That future is arriving very rapidly under the ESA. A wave
of critical habitat litigation is rapidly developing. In the
year 2000, critical habitats had been designated for just 120
species, just over 10 percent of all those listed. Recently a
single court order remanded the Interior Department's critical
habitat decision for 245 species in Hawaii alone.
One target of this wave of litigation is the Clinton
administration policy allowing our natural resource management
plans to serve in lieu of critical habitat. If successful, this
challenge would fundamentally alter the way the Interior
Department regulates our operational ranges and the way we test
and train there. In April, just a few weeks from now, the
Interior Department is required by court order to revisit the
Pendleton and Miramar non-designation decisions that Ms. Clark
referred to in her earlier testimony.
That regulatory future is plainly visible in litigation
seeking to reverse longstanding State and Federal regulatory
policies under the Superfund and solid waste management
statutes and to compel unprecedented and far more intrusive
regulation of our test and training on operational ranges.
We face a similar threat to readiness under the CAA.
Although our CAA proposal is not driven by litigation, it is
similar to the rest of our package in that it would give States
and EPA some additional flexibility to pursue their existing
preference to accommodate military readiness activities
wherever possible.
Through luck and hard work, State regulators in the past
have been able to accommodate the basing of a new weapons
system or the redeployment of existing systems. Our proposal
would make it easier for them to do so, and the alternative
could be significant delay in basing critical new weapon
systems.
The proposals we offer have minor environmental impacts,
but significant benefits to readiness. They largely codify
existing bipartisan policies that have served both readiness
and the environment well.
I would be pleased to take your questions.
[The prepared statement of Mr. Cohen follows:]

Prepared Statement by Benedict S. Cohen

INTRODUCTION

Mr. Chairman and distinguished members of this subcommittee, I
appreciate the opportunity to discuss with you the very important issue
of sustaining our test and training capabilities, and the legislative
proposal that the administration has put forward in support of that
objective. In these remarks I would like particularly to address some
of the comments and criticisms offered concerning these legislative
proposals.
Addressing Encroachment
We have only recently begun to realize that a broad array of
encroachment pressures at our operational ranges are increasingly
constraining our ability to conduct the testing and training that we
must do to maintain our technological superiority and combat readiness.
Given world events today, we know that our forces and our weaponry must
be more diverse and flexible than ever before. Unfortunately, this
comes at the same time that our ranges are under escalating demands to
sustain the diverse operations required today, and that will be
increasingly required in the future.
This current predicament has come about as a cumulative result of a
slow but steady process involving many factors. Because external
pressures are increasing, the adverse impacts to readiness are growing.
Yet future testing and training needs will only further exacerbate
these issues, as the speed and range of our weaponry and the number of
training scenarios increase in response to real-world situations our
forces will face when deployed. We must therefore begin to address
these issues in a much more comprehensive and systematic fashion and
understand that they will not be resolved overnight, but will require a
sustained effort.
Environmental Stewardship
Before I address our comprehensive strategy, let me first emphasize
our position concerning environmental stewardship. Congress has set
aside 25 million acres of land--some 1.1 percent of the total land area
in the United States. These lands were entrusted to the Department of
Defense (DOD) to use efficiently and to care for properly. In executing
these responsibilities we are committed to more than just compliance
with the applicable laws and regulations. We are committed to
protecting, preserving, and, when required, restoring, and enhancing
the quality of the environment.

We are investing in pollution prevention technologies
to minimize or reduce pollution in the first place. Cleanup is
far more costly than prevention.
We are managing endangered and threatened species, and
all of our natural resources, through integrated natural
resource planning.
We are cleaning up contamination from past practices
on our installations and are building a whole new program to
address unexploded ordnance on our closed, transferring, and
transferred ranges.
Balance
The American people have entrusted these 25 million acres to our
care. Yet, in many cases, these lands that were once ``in the middle of
nowhere'' are now surrounded by homes, industrial parks, retail malls,
and interstate highways.
On a daily basis our installation and range managers are confronted
with a myriad of challenges--urban sprawl, noise, air quality, air
space, frequency spectrum, endangered species, marine mammals, and
unexploded ordnance. Incompatible development outside our fence-lines
is changing military flight paths for approaches and take-offs to
patterns that are not militarily realistic--results that lead to
negative training and potential harm to our pilots. With over 300
threatened and endangered species on DOD lands, nearly every major
military installation and range has one or more endangered species, and
for many species, these DOD lands are often the last refuge. Critical
habitat designations for an ever increasing number of threatened or
endangered species limit our access to and use of thousands of acres at
many of our training and test ranges. The long-term prognosis is for
this problem to intensify as new species are continually added to the
threatened and endangered list.
Much too often these many encroachment challenges bring about
unintended consequences to our readiness mission. This issue of
encroachment is not going away. Nor is our responsibility to ``train as
we fight.''

2003 READINESS AND RANGE PRESERVATION INITIATIVE (RRPI)

Overview
DOD's primary mission is maintaining our Nation's military
readiness, today and into the future. DOD is also fully committed to
high-quality environmental stewardship and the protection of natural
resources on its lands. However, expanding restrictions on training and
test ranges are limiting realistic preparations for combat and
therefore our ability to maintain the readiness of America's military
forces.
Last year, the administration submitted to Congress an eight-
provision legislative package, the Readiness and Range Preservation
Initiative (RRPI). Congress enacted three of those provisions as part
of the National Defense Authorization Act for Fiscal Year 2003. Two of
the enacted provisions allow us to cooperate more effectively with
local and State governments, as well as private entities, to plan for
growth surrounding our training ranges by allowing us to work toward
preserving habitat for imperiled species and assuring development and
land uses that are compatible with our training and testing activities
on our installations.
Under the third provision, Congress provided the Department a
regulatory exemption under the Migratory Bird Treaty Act (MBTA) for the
incidental taking of migratory birds during military readiness
activities. We are grateful to Congress for these provisions, and
especially for addressing the serious readiness concerns raised by
recent judicial expansion of the prohibitions under the MBTA. I am
pleased to inform this subcommittee that as a direct result of your
legislation, Air Force B-1 and B-52 bombers, forward deployed to
Anderson Air Force Base, Guam, are performing dry run training
exercises over the Navy's Bombing Range at Farallon de Medinilla in the
Commonwealth of the Northern Mariana Islands.
Last year, Congress also began consideration of the other five
elements of our RRPI. These five proposals remain essential to range
sustainment and are as important this year as they were last year--
maybe more so. The five provisions submitted this year reaffirm the
principle that military lands, marine areas, and airspace exist to
ensure military preparedness, while ensuring that the DOD remains fully
committed to its stewardship responsibilities. These five remaining
provisions:

Authorize use of integrated natural resource
management plans in appropriate circumstances as a substitute
for critical habitat designation;
Reform obsolete and unscientific elements of the
Marine Mammal Protection Act, such as the definition of
``harassment,'' and add a national security exemption to that
statute;
Modestly extend the allowable time for military
readiness activities like bed-down of new weapons systems to
comply with Clean Air Act; and
Limit regulation of munitions on operational ranges
under the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA) and Resource Conservation and
Recovery Act (RCRA), if and only if those munitions and their
associated constituents remain there, and only while the range
remains operational.

Before discussing the specific elements of our proposal, I would
like to address some overarching issues. A consistent theme in
criticisms of our proposal is that it would bestow a sweeping or
blanket exemption for the Defense Department from the Nation's
environmental laws.\1\ No element of this allegation is accurate.
---------------------------------------------------------------------------
\1\ See, e.g., The New York Times, March 22, 2003 (``[T]he Defense
Department has asked Congress to approve a program . . . that would
broadly exempt military bases and some operations from environmental
regulation''); statement of Philip Clapp, President, the National
Environmental Trust, March 5, 2003 (``The Bush administration is
blatantly exploiting the war to exempt military bases all over the
country from environmental laws designed to protect public health'');
Julie Cart, Los Angeles Times, ``Military Seeks an Exemption of its
Own'', March 19, 2003 (``[T]he Pentagon is asking Congress to exempt
military installations . . . from environmental laws protecting marine
mammals and endangered species and requiring the cleanup of potentially
toxic weapons sites''); Eric Pianin, The Washington Post,
``Environmental Exemptions Sought'' (``[T]he Bush administration this
week asked Congress to exempt the Defense Department from a broad array
of environmental laws governing air pollution, toxic waste dumps,
endangered species, and marine mammals''); John Stanton, Congress Daily
AM, March 6, 2003 (``The Bush administration's Defense Department
reauthorization proposal includes a raft of exemptions from
environmental laws long sought by the Pentagon, including endangered
species protections and air quality rules''); Natural Resources Defense
Council website, March 12, 2003 (``[t]he Department of Defense (DOD) .
. . seeks immunity from five fundamental Federal laws''); CQ Weekly,
March 8, 2003, ``The Pentagon's Exemption Wish List'' (``The Defense
Department has asked Congress to exempt military activities from a
range of environmental laws'').
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First, our initiative would apply only to military readiness
activities, not to closed ranges or ranges that close in the future,
and not to ``the routine operation of installation operating support
functions, such as administrative offices, military exchanges,
commissaries, water treatment facilities, storage, schools, housing,
motor pools . . . nor the operation of industrial activities, or the
construction or demolition of such facilities.'' Our initiative thus is
not applicable to the Defense Department activities that have
traditionally been of greatest concern to State and Federal regulators.
It does address only uniquely military activities--what DOD does that
is unlike any other governmental or private activity. DOD is, and will
remain, subject to precisely the same regulatory requirements as the
private sector when we perform the same types of activities as the
private sector. We seek alternative forms of regulation only for the
things we do that have no private-sector analogue: military readiness
activities.
Moreover, our initiative largely affects environmental regulations
that don't apply to the private sector or that disproportionately
impact DOD:

Endangered Species Act ``critical habitat''
designation has limited regulatory consequences on private
lands, but can have crippling legal consequences for military
bases.
Under the Marine Mammal Protection Act (MMPA), the
private sector's Incidental Take Reduction Plans give
commercial fisheries the flexibility to take significant
numbers of marine mammals each year, but are unavailable to
DOD--whose critical defense activities are being halted despite
far fewer marine mammal deaths or injuries a year.
The Clean Air Act's ``conformity'' requirement applies
only to Federal agencies, not the private sector.

Our proposals therefore are of the same nature as the relief
Congress afforded us last year under the MBTA, which environmental
groups are unable to enforce against private parties but, as a result
of a 2000 circuit court decision were able and willing to enforce, in
wartime, against vital military readiness activities of the DOD.
Nor does our initiative ``exempt'' even our readiness activities
from the environmental laws; rather, it clarifies and confirms existing
regulatory policies that recognize the unique nature of our activities.
It codifies and extends EPA's existing Military Munitions Rule;
confirms the prior administration's policy on integrated natural
resource management plans and critical habitat; codifies the prior
administration's policy on ``harassment'' under the MMPA; ratifies
longstanding State and Federal policy concerning regulation under RCRA
and CERCLA of our operational ranges; and gives States and DOD
temporary flexibility under the Clean Air Act. Our proposals are,
again, of the same nature as the relief Congress provided us under the
MBTA last year, which codified the prior administration's position on
DOD's obligations under the MBTA.
Ironically, the alternative proposed by many of our critics--
invocation of existing statutory emergency authority--would fully
exempt DOD from the waived statutory requirements for however long the
exemption lasted, a more far-reaching solution than the alternative
forms of regulation we propose.
Accordingly, our proposals are neither sweeping nor exemptive; to
the contrary, it is our critics who urge us to rely on wholesale,
repeated use of emergency exemptions for routine, ongoing readiness
activities that could easily be accommodated by minor clarifications
and changes to existing law.
Existing emergency authorities
As noted above, many of our critics state that existing exemptions
in the environmental laws and the consultative process in 10 USC 2014
render the Defense Department's initiative unnecessary.
Although existing exemptions are a valuable hedge against
unexpected future emergencies, they cannot provide the legal basis for
the Nation's everyday military readiness activities.

The MMPA, like the MBTA, Congress amended last year,
has no national security exemption.
10 USC 2014, which allows a delay of at most 5 days in
regulatory actions significantly affecting military readiness,
is a valuable insurance policy for certain circumstances, but
allows insufficient time to resolve disputes of any complexity.
The Marine Corps' negotiations with the Fish and Wildlife
Service (FWS) over excluding portions of Camp Pendleton from
designation as critical habitat took months. More to the point,
section 2014 merely codifies the inherent ability of cabinet
members to consult with each other and appeal to the President.
Since it does not address the underlying statutes giving rise
to the dispute, it does nothing for readiness in circumstances
where the underlying statute itself--not an agency's exercise
of discretion--is the source of the readiness problem. This is
particularly relevant to our RRPI proposal because none of the
five amendments we propose have been occasioned by the actions
of State or Federal regulators. Four of the five proposed
amendments (RCRA, CERCLA, MMPA, and Endangered Species Act
(ESA)), like the MBTA amendment Congress passed last year, were
occasioned by private litigants seeking to overturn Federal
regulatory policy and compel Federal regulators to impose
crippling restrictions on our readiness activities. The fifth,
our CAA amendment, was proposed because DOD and EPA concluded
that the act's ``general conformity'' provision unnecessarily
restricted the flexibility of DOD, State, and Federal
regulators to accommodate military readiness activities into
applicable air pollution control schemes. Section 2014,
therefore, although useful in some circumstances, would be of
no use in addressing the critical readiness issues that our
five RRPI initiatives address.
Most of the environmental statutes with emergency
exemptions clearly envisage that they will be used in rare
circumstances, as a last resort, and only for brief periods.
Under these statutes, the decision to grant an
exemption is vested in the President, under the highest
possible standard: ``the paramount interest of the United
States,'' a standard understood to involve exceptionally grave
threats to national survival. The exemptions are also usually
limited to renewable periods of a year (or in some cases as
much as 3 years for certain requirements).
The ESA's section 7(j) exemption process, which
differs significantly from typical emergency exemptions, allows
the Secretary of Defense to direct the Endangered Species
Committee to exempt agency actions in the interest of national
security. However, the Endangered Species Committee process has
given rise to procedural litigation in the past, potentially
limiting its usefulness--especially in exigent circumstances.
In addition, because it applies only to agency actions rather
than to ranges themselves, any exemption secured by the
Department would be of limited duration and benefit: because
military testing and training evolve continuously, such an
exemption would lose its usefulness over time as the nature of
DOD actions on the range evolved.
The exemption authorities do not work well in
addressing those degradations in readiness that result from the
cumulative, incremental effects of many different regulatory
requirements and actions over time (as opposed to a single
major action).
Moreover, readiness is maintained by thousands of
discrete test and training activities at hundreds of locations.
Many of these are being adversely affected by environmental
provisions. Maintaining military readiness through use of
emergency exemptions would therefore involve issuing and
renewing scores or even hundreds of presidential certifications
annually.
Although a discrete activity (e.g., a particular
carrier battle group exercise) might only rarely rise to the
extraordinary level of a ``paramount national interest,'' it is
clearly intolerable to allow all activities that do not
individually rise to that level to be compromised or ended by
overregulation.
Finally, to allow continued unchecked degradation of
readiness until an external event like Pearl Harbor or
September 11 caused the President to invoke the exemption would
mean that our military forces would go into battle having
received degraded training, with weapons that had received
degraded testing and evaluation. Only the testing and training
that occurred after the emergency exemption was granted would
be fully realistic and effective.

The Defense Department believes that it is unacceptable as a matter
of public policy for indispensable readiness activities to require
repeated invocation of emergency authority--particularly when narrow
clarifications of the underlying regulatory statutes would enable both
essential readiness activities and the protection of the environment to
continue. Congress would never tolerate a situation in which another
activity vital to the Nation, like the practice of medicine, was only
permitted to go forward through the repeated use of emergency
exemptions.
That having been said, I should make clear that the DOD is in no
way philosophically opposed to the use of national security waivers or
exemptions where necessary. We believe that every environmental statute
should have a well-crafted exemption, as an insurance policy, though we
continue to hope that we will seldom be required to have recourse to
them. In this regard, I would like to address the March 7, 2003
memorandum from Deputy Secretary Wolfowitz to the secretaries of the
military departments concerning the process by which the Department
will evaluate the use of existing exemptions under Federal
environmental laws. As DOD has repeatedly testified, our efforts to
address encroachment are multifaceted, and our RRPI legislative
proposals are only one element of them. Other aspects of encroachment
will be addressed through collaborative efforts with our State and
Federal regulators, such as the drafting of the MBTA regulation
mandated by Congress last year. Still others can be addressed through
improvements in the internal policies and processes of the Defense
Department itself.
The Deputy Secretary's memorandum falls into this last category--
improvements in our own internal processes. It addresses a critical
shortcoming in our ability to efficiently and thoughtfully consider the
use of these existing exemption authorities: the absence of an
articulated process for developing and considering proposed exemptions.
Accordingly, Dr. Wolfowitz directed the military departments to develop
procedures to ensure timely evaluation of the full range of relevant
considerations. Importantly, the Deputy Secretary required that
proposals for exemption include, among other things, specific,
quantified evidence of the impact of the regulation proposed for
exemption on readiness; an explanation of the reason the readiness
activity cannot be modified, relocated, or rescheduled to avoid
conflict with the regulation without compromising readiness; and the
reasonably practical efforts available to mitigate the environmental
consequences of proceeding with the training or testing activity in
question. These substantial evidentiary requirements are hardly an
invitation for extensive use of exemption authority, and they certainly
belie claims that the Defense Department has issued a call to the field
to produce candidates for exemptions. As the memorandum states:

``This memorandum is not intended to signal a diminished
commitment to the environmental programs that ensure that the
natural resources entrusted to our care will remain healthy and
available for use by future generations. Any decision to seek a
statutory exemption will remain a high hurdle.''

The memorandum itself is a direct result of the response to our
legislative initiative last year. The most frequently heard comment on
our RRPI proposal at that time was that the Defense Department was
seeking new legislative flexibility without having explored the
flexibility inherent in existing law.\2\ Although our review of our
proposals has persuaded us that existing emergency exemptions cannot
adequately substitute for them, for the reasons I have outlined
previously, we did take this criticism to heart. We responded not by
seeking a specific test case to provide an easy answer to our critics,
but rather by attempting to articulate both a process and criteria to
guide our use of these authorities. The memorandum has been in
development for almost a year, and was painstakingly reviewed at every
level of the Department. I can assure that no one in the DOD will
lightly pursue or endorse the use of these extraordinary measures.
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\2\ See, e.g., testimony of the Hon. Jamie Rappaport Clark before
the Senate Environment and Public Works Committee hearing on S. 2225
and the Readiness and Range Preservation Initiative, July 9, 2002
(``The environmental laws targeted by this administration already
contain site-specific exemption and permitting procedures that enable
the Defense Department to achieve its readiness objectives while still
taking the environment into account''); Jeffrey Ruch, Public Employees
for Environmental Responsibility, C-SPAN interview, January 16, 2003
(``Virtually all these environmental laws have national security
exemptions. . . These national security exemptions allow the Pentagon
to suspend the application of environmental laws, if they can
articulate a reason. They should actually spend some time using the
leeway that's allowed in existing law, before suspending them.'');
Gordon Lubold, Marine Corps Times, ``Endangered Species vs. Military
Training'' (``National security waivers are the appropriate way for the
Pentagon to get the flexibility it needs to do training, he said
[quoting Michael Jasny, senior policy analyst with the Natural
Resources Defense Council]'').
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Specific Proposals
This year's proposals do include some clarifications and
modifications based on events since last year. Of the five, the
Endangered Species Act (ESA) and CAA provisions are unchanged. Let me
address the changed provisions first.
RCRA and CERCLA
The legislation would codify and confirm the longstanding
regulatory policy of EPA and every State concerning regulation of
munitions use on operational ranges under RCRA and CERCLA. It would
confirm that military munitions are subject to EPA's 1997 Military
Munitions Rule while on range, and that cleanup of operational ranges
is not required so long as material stays on the range. If such
material moves off range, it still must be addressed promptly under
existing environmental laws. Moreover, if munitions constituents cause
an imminent and substantial endangerment on range, EPA will retain its
current authority to address it on range under CERCLA section 106. (Our
legislation explicitly reaffirms EPA's section 106 authority.) The
legislation similarly does not modify the overlapping protections of
the Safe Drinking Water Act, NEPA, and the ESA against environmentally
harmful activities at operational military bases. The legislation has
no effect whatsoever on DOD's cleanup obligations under RCRA or CERCLA
at formerly used defense sites, closed ranges, ranges that close in the
future, or waste management practices involving munitions even on
operational ranges (such as so-called OB/OD activities).\3\
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\3\ In this context I should mention that for those areas, other
than operational ranges, which require action, the Department has
established, with representatives from the U.S. Environmental
Protection Agency, Federal Land Managers, States, and Tribes, a
Munitions Response Committee. The primary goal of the committee is to
define a collaborative decisionmaking process that ensures each party's
rights and respective responsibilities are respected. This approach
will allow coordination and, where appropriate, integration of the
applicable statutory and administrative authorities under Federal and
State environmental laws. This approach ensures that action will be
taken within an agreed upon approach when operational ranges are closed
in the future.
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The core of our concern is to protect against litigation the
longstanding, uniform regulatory policy that: (1) use of munitions for
testing and training on an operational range is not a waste management
activity or the trigger for cleanup requirements, and (2) that the
appropriate trigger for DOD to address the environmental consequences
of such routine test and training uses involving discharge of munitions
is: (a) when the range closes, (b) when munitions or their elements
migrate or threaten to migrate off-range, or (c) when munitions or
their elements create an imminent and substantial endangerment on-
range. The legislation clarifies and confirms the applicability of
EPA's CERCLA section 106 authority to on-range threats to health or the
environment, and likewise clarifies and confirms the applicability of
both RCRA and CERCLA to migration of munitions constituents off-range.
I should note, however, that in one respect, our RCRA and CERCLA
proposals do extend rather than codify existing policy. Under existing
law, in the event of off-range migration, DOD could potentially be
subject to overlapping or even conflicting cleanup directives secured
by different regulators or private parties under RCRA and CERCLA. To
avoid this risk, our proposal integrates and rationalizes the
applicability of the two statutes to off-range migration by providing
that should such migration occur, DOD and EPA will have the opportunity
to address it under CERCLA sections 104 and 106, respectively, but that
should they fail to do so RCRA authorities will apply, including but
not limited to citizen suits under section 7002 and EPA's emergency
authority under section 7003. This provision is analogous to 40 C.F.R.
266.202(d) of the Military Munitions Rule, which provides that a round
that lands off-range is not a solid waste for purposes of RCRA
corrective action or emergency authorities ``if [it] . . . is promptly
rendered safe and/or retrieved,'' but otherwise is subject to such
authorities.
This legislation is needed because of RCRA's broad definition of
``solid waste,'' and because States possess broad authority to adopt
more stringent RCRA regulations than EPA (enforceable both by the
States and by environmental plaintiffs). EPA therefore has quite
limited ability to afford DOD regulatory relief under RCRA. Similarly,
the broad statutory definition of ``release'' under CERCLA may also
limit EPA's ability to afford DOD regulatory relief. The President's
site-specific, annually renewable waiver (under a paramount national
interest standard in RCRA and a national security standard in CERCLA)
is inapt for the reasons discussed above.
Although its environmental impacts are negligible, the effect of
this proposal on readiness could be profound. Environmental plaintiffs
have filed suit at Fort Richardson, Alaska, alleging violations of
CERCLA and Alaska anti-pollution law applicable under RCRA. If
successful, plaintiffs could potentially force remediation of the Eagle
River Flats impact area and preclude live-fire training at the only
mortar and artillery impact area at Fort Richardson and dramatically
degrading readiness of the 172nd Infantry Brigade, the largest infantry
brigade in the Army. If successful, the Fort Richardson litigation
could set a precedent fundamentally affecting military training and
testing at virtually every test and training range.
Our proposed amendments to RCRA and CERCLA have been slightly
revised to make it absolutely unambiguous that they do not affect our
cleanup obligations on closed ranges. Last year some misinterpreted our
proposal to apply to closed ranges. We included new language to clarify
that our proposals have no effect whatsoever on our legal obligations
with respect to cleanup of closed bases, or of bases that close in the
future. If there is a way to make this point even clearer, we would be
delighted to do so.\4\
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\4\ In this regard, EPA and DOD have recently developed a further
language change designed to underscore this point, which we would be
happy to provide to the subcommittee.
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In addition, we have revised a provision in last year's bill
designed to ensure that our proposal did not alter EPA's existing
protective authority in section 106 of the Superfund law. This year's
version is therefore even clearer that, notwithstanding anything in our
proposal, EPA retains the authority to take any action necessary to
prevent endangerment of public health or the environment in the event
such risk arose as a result of use of munitions on an operational
range.
Contractor and Off-Range Liability
Finally, I'm pleased to inform the subcommittee that EPA and DOD
have further changes to suggest to the proposal to address concerns
raised by some earlier testimony and comments on our proposals. The
language DOD submitted to Congress largely tracks existing exclusions
in the Military Munitions Rule, including 40 C.F.R. 266.202(a)(1) (i)
and (ii), which provide that munitions used for training military
personnel or explosives and munitions emergency response specialists,
or for research, development, test, and evaluation (RDT&E) of military
munitions, are not solid waste for purposes of RCRA. In the existing
Military Munitions Rule, these exclusions are not limited to munitions
training or RDT&E activities that occur on operational ranges; in fact,
they apply to such activities anywhere they occur, on or off such
ranges. Some commentators have suggested that DOD, by codifying these
aspects of the Military Munitions Rule, was seeking to exclude itself
and its contractors from RCRA regulation for off-range activities.
As I have mentioned, the Military Munitions Rule adopted by EPA
under the prior administration already fully excludes those activities
(though not the resulting waste stream generated by them) from RCRA
regulation; DOD supported that policy in 1997 and continues to support
it today. Nevertheless, our Readiness and Range Preservation Initiative
is not intended to codify all the circumstances in which munitions use
is properly excluded from RCRA regulation. Rather, it is intended to
address one emerging threat to our operational ranges. Accordingly, EPA
and DOD have identified two language changes that we believe will set
this issue to rest.
First, in section 2019(a)(2) (A) and (B), the two provisions drawn
from the Military Munitions Rule's exemption of munitions training and
RDT&E, we would support the addition of the words ``on an operational
range'' at the end of each section, thereby clarifying that these
provisions, unlike their analogues in the Military Munitions Rule, do
not apply to such activities outside operational ranges.\5\ Second, the
Department submitted as a separate part of our proposed Defense
authorization a number of general definitions, including a definition
of ``operational range.'' In that proposed definition, it was
explicitly stated that inactive operational ranges must be under the
jurisdiction, custody, or control of the Department, but this was not
explicitly stated for active operational ranges. To address any
possible concern that as a result of this definition the Department's
RCRA/CERCLA RRPI provision might be read to apply to ``active ranges''
controlled by our contractors, EPA and DOD would fully support a change
that clarified that the requirement of DOD jurisdiction, custody, or
control applied to both active and inactive ranges.\6\
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\5\ The new provisions would thus read: ``(2) Except as set out in
subparagraph (1), the term `solid waste,' as used in the Solid Waste
Disposal Act, as amended, does not include explosives, unexploded
ordnance, munitions, munitions fragments, or constituents thereof that:
(A) are used in training military personnel or explosives and munitions
emergency response specialists (including training in proper
destruction of unused propellant or other munitions) on an operational
range; (B) are used in research, development, testing, and evaluation
of military munitions, weapons, or weapon systems on an operational
range.''
\6\ The provision would thus read: ``The term `operational range'
means a range that is under the jurisdiction, custody, or control of
the Secretary concerned and (A) is used for range activities, or (B) is
not currently being used for range activities, but that is still
considered by the Secretary concerned to be a range and has not been
put to a new use that is incompatible with range activities.''
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DOD is pleased to have been able to address some of the concerns
that we have heard concerning this proposal and stands ready to clarify
our intent as necessary as Congress continues its consideration of
these proposals.
Perchlorate and RRPI
I would also like to take the opportunity to address some other
concerns about these provisions that in DOD's view do not warrant
revision of the legislation. First, some observers have expressed
concern that our RRPI legislation could intentionally or
unintentionally affect our financial liability or cleanup
responsibilities with respect to perchlorate. Nothing in either RRPI or
our defense authorization as a whole would affect our financial,
cleanup, or operational obligations with respect to perchlorate.

As discussed above, nothing in our legislative program
alters the financial, cleanup, or operational responsibilities
of our contractors, or of DOD with respect to our contractors,
either regarding perchlorate or any other chemical.
Nothing in our legislative program alters our
financial, cleanup, or operational responsibilities with
respect to our closed ranges, formerly used defense sites, or
ranges that may close in the future, either regarding
perchlorate or any other chemical.
Nothing in our legislative program affects the Safe
Drinking Water Act, which provides that EPA ``upon receipt of
information that a contaminant which is present or is likely to
enter a public water system or an underground source of
drinking water may present an imminent and substantial
endangerment to the health of persons . . . may take such
actions as [EPA] may deem necessary to protect the health of
such persons,'' enforceable by civil penalties of up to $15,000
a day. 42 USC 300i(a). EPA used this Safe Drinking Water order
authority to impose a cease-fire on the Massachusetts Military
Reservation to address groundwater contamination from
perchlorate, and nothing in our proposal would alter the events
that have played out there. Because this Safe Drinking Water
Act authority is not limited to CERCLA ``releases'' or off-
range migration, it clearly empowers EPA to issue orders to
address endangerment either on-range or off-range, and to
address possible contamination before it migrates off-range.
DOD is also committed to being proactive in addressing
perchlorate. On November 13, 2002, DOD issued a perchlorate
assessment policy authorizing assessment ``if there is a
reasonable basis to suspect both a potential presence of
perchlorate and a pathway on installation[s] where it could
threaten public health.''
Delayed Response to Spreading Contamination
Some commentators have expressed concern that our RRPI proposal
would create a legal regime that barred regulators from addressing
contamination until it reached the fence lines of our ranges, or that
it at least reflects a DOD policy to defer any action until that point.
As the above discussion makes clear, EPA's continuing authority under
the Safe Drinking Water Act to prevent likely contamination clearly
empowers the Agency to act before contamination leaves DOD ranges. In
addition, nothing in our legislative program affects EPA's authority
under section 106 of CERCLA to ``issu[e] such orders as may be
necessary to protect public health and welfare and the environment''
whenever it ``determines that there may be an imminent and substantial
endangerment to the public health or welfare or the environment because
of an actual or threatened release of a hazardous substance from a
facility.'' Such orders are judicially enforceable. Because EPA's
sweeping section 106 authority covers not only actual but ``threatened
release,'' our proposal would therefore clearly enable EPA to address
groundwater contamination before the contamination leaves DOD land--
which is also the objective of DOD's existing management policies.
Section 106 would also clearly cover on-range threats. Finally, States
and citizens exercising RCRA authority under our RRPI RCRA provision
addressing off-range migration could potentially use that authority to
enforce on-range measures necessary to redress the migration where
appropriate. Under RRPI, our range fence lines would not become Chinese
walls excluding regulatory action either before or after off-range
migration occurred. Finally, it is most definitely not DOD policy to
defer action on groundwater contamination until it reaches the fence
lines of our operational ranges, when it will be far more difficult and
expensive to address.
In addition, I should mention the recently completed DOD Directive
(DODD), ``Sustainment of Ranges and Operating Areas'', which was signed
by the Deputy Secretary of Defense for immediate implementation on
January 10, 2003. This DODD was developed as part of our overall
comprehensive range sustainment strategy.
The Deputy Secretary of Defense tasked the development of this new
directive with this guidance:

``. . . The Directive should assign responsibilities for
range sustainability and require the Services to issue
implementing directives, which specifically focus on long-term
sustainability. Further, it should embrace `working outside the
fence' as an overall management approach, and emphasize the
importance of partnerships with regulators, the public, and
land owners.''

In fulfilling these requirements, this directive provides capstone-
level guidance to DOD and the Services on overall policy for test and
training range sustainment planning, management, coordination, and
outreach. As a capstone, it is intended to serve as a guide in the
development or revision of other directives with applicability to range
sustainment.
Most importantly, the directive provides that range planning and
management will identify range requirements for both training and
testing, identify encroachment concerns and other inhibiting factors to
the ranges, and develop responsive plans to address conflicts. It also
calls for functionally integrated decisionmaking--operator,
environmental, legal and other installation/range offices or staffs.
Coordination and outreach on sustainment issues that include off-range
stakeholders is also directed, with a goal of promoting understanding
of range management and use decisions and working with outside groups
to consider their concerns and work cooperative to address shared
concerns.
Active vs. Inactive Ranges
Some commentators have criticized the application of our RCRA and
CERCLA provisions to both the active and the inactive categories of
operational ranges, suggesting that it will motivate DOD to retain
ranges that are never used and should be closed as nominally
``inactive'' ranges to defer cleanup costs. This policy question was
addressed in section 266.201 of EPA's 1997 Military Munitions Rule,
which established a three-part test designed to prevent such
manipulation: ``inactive ranges'' must be ``still under military
control and considered by the military to be potential range area, and
. . . [must] not [have] been put to a new use that is incompatible with
range activities.'' This test is codified in the definition of
``operational range'' that the Department is proposing, as discussed
above.
We believe that this test will appropriately limit DOD's discretion
in characterizing ranges as ``inactive'' but still ``operational,''
while not providing DOD with excessive incentives to close inactive
ranges. Our range sustainment policy initiative is based on the
recognition that DOD will not easily acquire new range lands in the
future, even though modern precision munitions and weapons systems,
with their longer ranges, require increasing training areas. Existing
range lands must therefore be appropriately but not excessively
husbanded for future needs. DOD believes that the policy embodied in
the Military Munitions Rule and our proposed ``operational range''
definition strikes the correct balance.
I should also mention that DOD is taking action, in response to
congressional direction, to make visible our range inventory. This is
being done in two ways. First, in response to requirements in section
311 of the National Defense Authorization Act for Fiscal Year 2002, DOD
will make publicly available by May 31 of this year an initial
inventory of former ranges and other areas which may require a
munitions response action. We are now working with EPA, the Federal
Land Managers, the States, and affected tribes to ensure this list is
as comprehensive as possible. This list will include formerly used
defense sites, BRAC installations, and also, most important to the
discussion today, a list of closed ranges on active installations.
Second, in response to the requirements of section 366 of the National
Defense Authorization Act for Fiscal Year 2003, DOD is developing a
list of operational ranges--which will include a delineation of active
and inactive ranges. Together, these lists will enable an accounting of
all areas for which we are concerned about in this discussion.
Marine Mammal Protection Act
This year's Marine Mammal Protection Act (MMPA) proposal includes
new provisions as well. This year's proposal, like last year's, would
amend the term ``harassment'' in the MMPA, which currently focuses on
the mere ``potential'' to injure or disturb marine mammals. Our
initiative adopts verbatim a reform proposal developed during the prior
administration by the Commerce, Interior, and Defense Departments and
applies it to military readiness activities. That proposal espoused a
recommendation by the National Research Council (NRC) that the
currently overbroad definition of ``harassment'' of marine mammals--
which includes ``annoyance'' or ``potential to disturb''--be focused on
biologically significant effects. As recently as 1999, the NMFS
asserted that under the sweeping language of the existing statutory
definition harassment ``is presumed to occur when marine mammals react
to the generated sounds or visual cues''--in other words, whenever a
marine mammal notices and reacts to an activity, no matter how
transient or benign the reaction. As the NRC study found, ``If [this]
interpretation of the law for level B harassment (detectable changes in
behavior) were applied to shipping as strenuously as it is applied to
scientific and naval activities, the result would be crippling
regulation of nearly every motorized vessel operating in U.S. waters.''
Under the prior administration, NMFS subsequently began applying
the NRC's more scientific, effects-based definition. But environmental
groups have challenged this regulatory construction as inconsistent
with the statute. The Navy and the National Oceanic and Atmospheric
Administration suffered an important setback last year involving a
vital anti-submarine warfare sensor--SURTASS LFA, a towed array
emitting low-frequency sonar that is critical in detecting ultra-quiet
diesel-electric submarines while they are still at a safe distance from
our vessels. In the SURTASS LFA litigation environmental groups
successfully challenged the new policy as inconsistent with the
sweeping statutory standard, putting at risk NMFS' regulatory policy,
clearly substantiating the need to clarify the existing statutory
definition of harassment that we identified in our legislative package
last year.
Second, this year's language will address new concerns resulting
from the District Court's ruling in the SURTASS LFA case, which
highlighted a number of structural deficiencies in application of the
MMPA to military readiness activities that require legislative change.
In addition to ruling against NOAA's regulatory interpretation of
``harassment,'' the court ruled against NOAA's longstanding application
of the MMPA's ``small numbers'' requirement. The National Research
Council has recommended that this provision be deleted as not
scientifically based. Elimination of this requirement, which Congress
has previously acknowledged is ``incapable of quantification,'' would
instead appropriately focus impact determinations on the scientifically
based ``negligible impacts'' standard. In addition, the litigation
highlighted the difficulty in identifying a ``specific geographical
region'' for permits applied to military readiness activities. Given
the migratory nature of marine mammals, varying biological and
bathymetric features in the environment they occupy, and the worldwide
nature of naval operations, this requirement is extremely difficult to
define as a legal matter. Our proposal would have no effect on NOAA's
responsibility to satisfy itself that our activities would have
``negligible impacts''--a finding that necessarily entails full
consideration of the location and timing of our readiness activities.
It would, however, prevent critical readiness activities that have been
validated by such scientific review from being impeded by technical
legal issues of defining ``regions''.
The last change we are proposing, a national security exemption
process, also derives from feedback the Defense Department received
from environmental advocates last year after we submitted our proposal,
as I discussed above. Although DOD continues to believe that
predicating essential military training, testing, and operations on
repeated invocations of emergency authority is unacceptable as a matter
of public policy, we do believe that every environmental statute should
have such authority as an insurance policy. The comments we received
last year highlighted the fact that the MMPA does not currently contain
such emergency authority, so this year's submission does include a
waiver mechanism. Like the Endangered Species Act, our proposal would
allow the Secretary of Defense, after conferring with the Secretaries
of Commerce or Interior, as appropriate, to waive MMPA provisions for
actions or categories of actions when required by national security.
This provision is not a substitute for the other clarifications we have
proposed to the MMPA, but rather a failsafe mechanism in the event of
emergency.
The only substantive changes are those described above. The reason
that the text is so much more extensive than last year's version is
that last year's version was drafted as a freestanding part of title
10--the Defense Department title--rather than an amendment to the text
of the MMPA itself. This year, because we were making several changes,
we concluded that as a drafting matter we should include our changes in
the MMPA itself. That necessitated a lot more language, largely just
reciting existing MMPA language that we are not otherwise modifying.
The environmental impacts of our proposed reforms would be minimal.
Although our initiative would exclude transient, biologically
insignificant effects from regulation, the MMPA would remain in full
effect for biologically significant effects--not only death or injury
but also disruption of significant activities. The Defense Department
could neither harm marine mammals nor disrupt their biologically
significant activities without obtaining authorization from FWS or
NMFS, as appropriate.
Nor does our initiative depart from the precautionary premise of
the MMPA. The precautionary principle holds that regulators should
proceed conservatively in the face of scientific uncertainty over
environmental effects. But our initiative embodies a conservative,
science-based approach validated by the National Research Council. By
defining as ``harassment'' any readiness activities that ``injure or
have the significant potential to injure,'' or ``disturb or are likely
to disturb,'' our initiative includes a margin of safety fully
consistent with the precautionary principle. The alternative is the
existing grossly overbroad, unscientific definition of harassment,
which sweeps in any activity having the ``potential to disturb.'' As
the National Research Council found, such sweeping overbreadth is
unscientific and not mandated by the precautionary principle.
Enforcement, mitigation, and monitoring, with exactly the same
degree of transparency, will continue unchanged for naval activities
likely to disturb biologically significant activities. Indeed, during
the prior administration's development of our proposed language, both
the Interior Department and the Justice Department expressed the view
that the vagueness of the existing definition of harassment was making
it difficult to enforce, and that the proposed language would
facilitate prosecution of violations. The current enforcement,
mitigation, and monitoring affected by our initiative would be that
directed towards biologically insignificant effects--i.e., that which
by definition does not contribute to marine mammal welfare. Nor will
our initiative engender more debate: it will merely shift debate to
where it should be, over biologically significant activities--not over
the nebulous ``potential to disturb'' standard rejected by the prior
administration, NMFS, and the National Research Council.
The Defense Department already exercises extraordinary care in its
maritime programs: all DOD activities worldwide result in fewer than 10
deaths or injuries annually (as opposed to 4,800 deaths annually from
commercial fishing activities). DOD currently funds much of the most
significant research on marine mammals, and will continue this research
in the future.
Although the environmental effects of our MMPA reforms will be
negligible, their readiness implications are profound. Application of
the current hair-trigger definition of ``harassment'' has profoundly
affected both vital R&D efforts and training. Navy operations are
expeditionary in nature, which means world events often require
planning exercises on short notice. To date, the Navy has been able to
avoid the delay and burden of applying for a take permit only by
curtailing and/or dumbing down training and research/testing. For 6
years, the Navy has been working on research to develop a suite of new
sensors and tactics (the Littoral Advanced Warfare Development Program
(LWAD)) to reduce the threat to the fleet posed by ultraquiet diesel
submarines operating in the littorals and shallow seas like the Persian
Gulf, the Straits of Hormuz, the South China Sea, and the Taiwan
Strait. These submarines are widely distributed in the world's navies,
including ``Axis of Evil'' countries such as Iran and North Korea and
potentially hostile great powers. In the 6 years that the program has
operated, over 75 percent of the tests have been impacted by
environmental considerations. In the last 3 years, 9 of 10 tests have
been affected. One was cancelled entirely, and 17 different projects
have been scaled back.
Endangered Species Act
Our Endangered Species Act provision is unchanged from last year.
The legislation would confirm the prior administration's decision that
an integrated natural resources management plan (INRMP) may in
appropriate circumstances obviate the need to designate critical
habitat on military installations. These plans for conserving natural
resources on military property, required by the Sikes Act, are
developed in cooperation with State wildlife agencies, the FWS, and the
public. In most cases they offer comparable or better protection for
the species because they consider the base's environment holistically,
rather than using a species-by-species analysis. The prior
administration's decision that INRMPs may adequately provide for
appropriate endangered species habitat management is being challenged
in court by environmental groups, who cite Ninth Circuit caselaw
suggesting that other habitat management programs provided an
insufficient basis for the FWS to avoid designating critical habitat.
These groups claim that no INRMP, no matter how protective, can ever
substitute for critical habitat designation. This legislation would
confirm and insulate the Fish and Wildlife Service's policy from such
challenges.
Both the prior and current administrations have affirmed the use of
INRMPs as a basis for possible exclusion from critical habitat. Such
plans are required to provide for fish and wildlife management, land
management, forest management, and fish and wildlife-oriented
recreation; fish and wildlife habitat enhancement; wetland protection,
enhancement, and restoration; establishment of specific natural
resource management goals, objectives, and timeframes; and enforcement
of natural resource laws and regulations. Unlike the process for
designation of critical habitat, INRMPs assure a role for State
regulators. Furthermore, INRMPs must be reviewed by the parties on a
regular basis, but not less than every 5 years, providing a continuing
opportunity for FWS input.
By contrast, in 1999, the FWS stated in a notice of proposed
rulemaking that ``we have long believed that, in most circumstances,
the designation of `official' critical habitat is of little additional
value for most listed species, yet it consumes large amounts of
conservation resources. . . [W]e have long believed that separate
protection of critical habitat is duplicative for most species.''
Our provision does not automatically eliminate critical habitat
designation, precisely because under the Sikes Act, the statute giving
rise to INRMPs, the FWS is given approval authority over those elements
of the INRMP under its jurisdiction. This authority guarantees the FWS
the authority to make a case-by-case determination concerning the
adequacy of our INRMPs as a substitute for critical habitat
designation. If the FWS does not approve the INRMP, our provision will
not apply to protect the base from critical habitat designation.
Our legislation explicitly requires that the Defense Department
continue to consult with the FWS and the National Marine Fisheries
Service under section 7 of the Endangered Species Act (ESA); the other
provisions of the ESA, as well as other environmental statutes such as
the National Environmental Policy Act, would continue to apply, as
well.
The Defense Department's proposal has vital implications for
readiness. Absent this policy, courts, based on complaints filed by
environmental litigants, compelled the FWS to re-evaluate ``not
prudent'' findings for many critical habitat determinations, and as a
result FWS proposed to designate over 50 percent of the 12,000-acre
Marine Corps Air Station (MCAS) Miramar and over 56 percent of the
125,000-acre Marine Corps Base (MCB) Camp Pendleton. Prior to adoption
of this policy, 72 percent of Fort Lewis and 40 percent of the
Chocolate Mountains Aerial Gunnery Range were designated as critical
habitat for various species, and analogous habitat restrictions were
imposed on 33 percent of Fort Hood. These are vital installations.
Unlike Sikes Act INRMPs, critical habitat designation can impose
rigid limitations on military use of bases, denying commanders the
flexibility to manage their lands for the benefit of both readiness and
endangered species.
Clean Air Act General Conformity Amendment
Our CAA amendment is unchanged since last year. The legislation
would provide more flexibility for the Defense Department in ensuring
that emissions from its military training and testing are consistent
with State implementation plans under the CAA by allowing DOD and the
States a slightly longer period to accommodate or offset emissions from
military readiness activities.
The CAA's ``general conformity'' requirement, applicable only to
Federal agencies, has repeatedly threatened deployment of new weapons
systems and base closure/realignment despite the fact that relatively
minor levels of emissions were involved.

The planned realignment of F-14s from NAS Miramar to
NAS Lemoore in California would only have been possible because
of the fortuity that neighboring Castle Air Force Base in the
same airshed had closed, thereby creating offsets.
The same fortuity enabled the homebasing of new F/A-18
E/Fs at NAS Lemoore.
The realignment of F/A-18 C/Ds from Cecil Field,
Florida, to NAS Oceana in Virginia was made possible only by
the fortuity that Virginia was in the midst of revising its
implementation plan and was able to accommodate the new
emissions. The Hampton Roads area in which Oceana is located
will likely impose more stringent limits on ozone in the
future, thus reducing the State's flexibility.

As these near-misses demonstrate, under the existing requirement
there is limited flexibility to accommodate readiness needs, and DOD is
barred from even beginning to take readiness actions until the
requirement is satisfied.
Our proposal does not exempt DOD from conforming to applicable
requirements; it merely allows DOD more time--a 3-year period--to find
offsetting reductions. This period does not apply to ``any
activities,'' but rather to the narrow category of military readiness
activities, which characteristically generate relatively small amounts
of emissions--typically less than 0.5 percent of total emissions in air
regions.
The CAA permits the President to issue renewable 1-year waivers for
individual Federal sources upon a paramount national interest finding,
or to issue renewable 3-year regulations waiving the act's requirements
for weaponry, aircraft, vehicles, or other uniquely military equipment
upon a paramount national interest finding. Use of such time-limited
authorities in the context of activities that are: (a) ongoing
indefinitely, and (b) largely cumulative in effect would be difficult
under a paramount interest standard, and would require needless
revisiting of the issue annually or triennially.
This provision is vitally needed to protect readiness. The more
efficient and powerful engines that are being designed and built for
virtually all new weapons systems will burn hotter and therefore emit
more NOx than the legacy systems they are replacing, even though they
will also typically emit lower levels of volatile organic compounds
(VOCs) and carbon monoxide (CO). Without greater flexibility, the
conformity requirement could be a significant obstacle to basing
military aircraft in any Southern California location, as well as a
potentially serious factor for the siting of the Joint Strike Fighter
and the Marine Corps' Advanced Amphibious Assault Vehicle.

QUANTIFICATION OF ENCROACHMENT

The final issue that I wish to raise as a part of today's hearing
concerns our ability to better quantify how encroachment affects our
test and training mission. This has been an ongoing criticism of our
legislative effort as well as our broader range sustainment strategy--a
concern raised as part of GAO's report on encroachment dated April 25,
2002.\7\ Because of these concerns and as part of the National Defense
Authorization Act for Fiscal Year 2003, Congress directed the Secretary
of Defense to develop a plan to address training constraints caused by
limitations on use of our land, sea, and air resources.
---------------------------------------------------------------------------
\7\ Although some commentators have mischaracterized the GAO report
as stating that encroachment has had no impact on military readiness,
the report itself explicitly states that encroachment is having
demonstrable adverse effects on readiness.
---------------------------------------------------------------------------
As part of this requirement, DOD has recognized the need for better
supporting data to substantiate our requests for encroachment relief.
In response, the Under Secretary for Personnel and Readiness has
recently asked the Secretary of each military department to develop and
submit specific information to include:

An assessment of the current and future training
requirements of their respective Service;
A report on implementation of a Service range
inventory system;
An evaluation of the adequacy of current Service
resources to meet both current and future training requirements
in the United States and overseas;
A comprehensive plan to address operational
constraints resulting in adverse training impacts caused by
limitations on the use of, or access to, land, water, air, and
spectrum that are available or needed in the United States and
overseas for training; and
A report on, or specific plans for, designation of an
office within each of the military departments that will have
lead responsibility for overseeing implementation of the plan.

CONCLUSION

In closing Mr. Chairman, let me emphasize that modern warfare is a
``come as you are'' affair. There is no time to get ready. We must be
prepared to defend our country wherever and whenever necessary. While
we want to train as we fight, in reality our soldiers, sailors, airmen,
and marines fight as they train. The consequences for them, and
therefore for all of us, could not be more momentous.
DOD is committed to sustaining U.S. test and training capabilities
in a manner that fully satisfies that military readiness mission while
also continuing to provide exemplary stewardship of the lands and
natural resources in our trust.
Mr. Chairman, we sincerely appreciate your support on these
important readiness issues. I look forward to working with you on our
Readiness and Range Preservation legislation.
Thank you.

Senator Ensign. Thank you.
Mr. Mears.

STATEMENT OF DAVID K. MEARS, SENIOR ASSISTANT ATTORNEY GENERAL,
OFFICE OF THE ATTORNEY GENERAL, ECOLOGY DIVISION, STATE OF
WASHINGTON

Mr. Mears. Thank you, Mr. Chairman. I am pleased to have
the opportunity to testify today. I appear before you with the
testimony I present that is endorsed by the States of Colorado,
Utah, Idaho, and my own State of Washington. We have worked
together with the attorneys general from those States and
developed the position that I present to you today.
At the outset I would like to make it clear that the
attorneys general are interested only in those statutes in
which the States play a primary role, that is the CAA, RCRA,
and the largely cooperative role that we play with EPA under
CERCLA or Superfund.
First, the attorneys general absolutely support the goal of
maintaining the readiness of our Nation's military. As is
highlighted by the current conflict in Iraq, our young men and
women of our Armed Forces need to have every opportunity to be
appropriately trained. At the same time, we have an absolute
obligation to ensure that the public health and environment are
protected, as is allowed the States to do under these statutes.
We have learned from experience that military activities
can have a significant impact on the environment and public
health. The current statutory framework allows States to work
together with the DOD to harmonize the readiness concerns with
the environmental protection concerns. With that in mind, we
would like to make three points today.
As far as we are aware, the DOD has not identified a single
actual instance in which these three laws that I have mentioned
have adversely impacted readiness.
Second, these statutes already provide sufficient
flexibility to accommodate readiness concerns within the
existing framework in the event that there is such a conflict.
Third, we think that these amendments as proposed, at least
as we have seen them to date, go far beyond the stated concerns
and intent to deal just with readiness and could have far-
reaching impacts beyond that.
As I mentioned, the existing framework strikes the right
balance. Because of the exemptions and the fact that the
Department has never invoked these exemptions, we think that
this aspect of the statute should be explored before making any
changes.
One of the strengths of the current framework is that, in
addition to having the exemptions and the flexibility to deal
with readiness on a site-by-site, case-by-case basis, there
also is a requirement of the assuredness of accountability at
all other sites, and accountability is important because
historically the DOD and Federal agencies generally do not have
a good history of compliance with environmental laws.
Under our current system of governance, under which the
States can play a significant role in ensuring that these laws
are complied with, we are able to work and fashion site-by-
site, case-by-case solutions when issues of readiness arise. I
would suggest it is not luck; it is hard work and it is a high
level of sensitivity by State officials to issues of readiness
that have ensured that the system that exists today works.
We would ask Congress not to turn its back on the existing
framework and on the progress, frankly, that the DOD has made,
significant progress over the past decade. We are making
significant progress towards ensuring that the well-being and
public health of our citizens does not depend on whether or not
they live next to or adjacent to or on a military base.
In conclusion, the States have been and remain committed to
working with the DOD to make progress in this area. There is
simply no evidence that State officials lack sufficient
sensitivity to issues of military readiness. We would ask that
Congress avoid passing any laws that preempt existing State
authority to protect our citizens. We think that we should work
within the current framework.
Finally, we would ask that if this body does endeavor to
consider these amendments, we would ask that you use the normal
legislative process to do so and provide the opportunity for
the committees with jurisdiction over the environmental laws to
have the opportunity to not just hear these statutes, but to
have a hand in crafting them.
Thank you and I am available to answer any questions.
[The prepared statement of Mr. Mears follows:]

Prepared Statement by David K. Mears

Mr. Chairman, I am appearing today on behalf of the attorneys
general of Colorado, Idaho, Utah, and Washington. I am also submitting
a detailed written statement on behalf of these four and other
attorneys general. In addition, these four Attorneys General co-
sponsored a resolution which was passed by the National Association of
Attorneys General at their last meeting. I will address only those
parts of the Department of Defense's legislative proposals that would
amend the Clean Air Act, the Resource Conservation and Recovery Act
(RCRA) or the Comprehensive Environmental, Response, Compensation and
Liability Act (CERCLA). The States are the primary implementers of the
CAA and RCRA and are major partners with EPA under CERCLA.
First, we absolutely support the goal of maintaining the readiness
of our Nation's military. As is highlighted by the current conflict in
Iraq, the men and women of our Armed Forces must have all appropriate
training. At the same time, we strongly support our environmental laws
and, we know that military activities can adversely impact human health
and the environment. Furthering military readiness and ensuring
environmental protection are compatible goals, not mutually exclusive
ones. The current statutory framework allows State regulatory agencies
to work together with the Department of Defense to harmonize military
readiness concerns with environmental concerns.
We would like to make three main points today.

First, as far as we are aware, the Department of
Defense has not identified a single instance in which these
three laws have actually adversely impacted readiness.
Consequently, we do not believe that the proposed amendments
are necessary.
Second, RCRA, CERCLA, and the CAA already provide
sufficient flexibility to accommodate potential conflicts, in
the unlikely event they occur.
Third, we also think that the Department of Defense's
amendments go far beyond its stated concerns with maintaining
military readiness, and would likely be construed by the courts
to provide Defense, other Federal agencies, and even private
contractors, broad exemptions from State and EPA authority
under RCRA, CERCLA, and the CAA.

The existing statutory framework already strikes the right balance
between readiness and environmental protection. The statutes of concern
to the States already allow the President to exempt the Department of
Defense from their requirements on a case-by-case basis. The Department
has never invoked these exemptions for military readiness needs. In the
unlikely event that environmental requirements imposed by States under
these statutes conflict with military readiness, the existing
exemptions allow sufficient flexibility to ensure readiness and still
provide for accountability in every other case.
Accountability is important because Federal agencies, including the
Department of Defense, do not have a good history of compliance with
environmental requirements. Federal agencies have consistently had a
worse compliance record than private industry. There is one exception.
Since 1992, when Congress authorized States to assess penalties against
Federal agencies for hazardous waste violations, Federal agencies'
hazardous waste compliance rates have steadily improved, and now
surpass the private sector. We ask that Congress not turn its back on
this progress but instead that you remain steadfast in your commitment
to holding the Federal agencies to the same standards as everyone else.
The well-being of our citizens should not depend on whether they happen
to live on or near a military base.
As an example of the problems with the Department's proposal, I
will briefly discuss section 2019. This section defines when munitions,
explosives, unexploded ordnance, and their constituents are solid
wastes, and thus subject to State regulation under RCRA as hazardous
wastes. The Department's proposed re-definition of ``solid waste'' is
intended to, and likely does, preempt State and EPA authority over
munitions, explosives, and the like at operational ranges.
We disagree with the Department's position that these amendments
simply codify EPA's existing RCRA regulations, known as the ``munitions
rule.'' Contrary to the Department's assertions, proposed section 2019
reaches far beyond operating ranges. This section likely also preempts
State and EPA authority at former ranges, at Defense sites other than
ranges, Department of Energy sites, and even at private defense
contractor sites. In contrast, nothing in the munitions rule preempts
State authority to require cleanup of munitions-related contamination,
whether it be at an operating range, former range now in private
ownership, or private defense contractor facility.
Under section 2019, the only time munitions that have been used or
fired on an operational range can be a solid waste is if: (1) they are
removed from the range; (2) they are recovered and then buried; or (3)
they migrate off range and are not addressed under CERCLA. This
definition likely eliminates State and EPA authority over cleanup of
munitions that were deposited on an operational range and simply remain
there after the range closes. These residual munitions are precisely
the problem at closed and transferred ranges. The Department of Defense
estimates there are up to 16 million acres of former ranges
contaminated with unexploded ordnance. Many of these ranges are now in
private hands.
In addition to the obvious explosive hazards, the constituents in
many munitions and explosives have toxic or potential carcinogenic
effects, and can contaminate groundwater. The Department of Defense's
proposal would likely preempt or limit State and EPA authority over
these chemical constituents. One of these chemicals is perchlorate, a
constituent of munitions and explosives that has contaminated public
water supply wells near the Massachusetts Military Reservation, the
Aberdeen Proving Grounds in Maryland, and has contaminated surface and
groundwater at hundreds of government and private defense contractor
sites around the country.
The States have been and remain committed to working with the
Department of Defense to resolve issues on a case-by-case, site-by-site
fashion under the existing framework of regulatory authority. In the
decades since the major Federal environmental laws were passed, States
have exercised their regulatory authority over military facilities
responsibly. This fact is supported by the absence of efforts by the
Department to seek exemptions. There is simply no evidence that State
officials lack sensitivity to issues of military readiness. For these
reasons, Congress should avoid passing laws that preempt the States'
ability to protect our citizens. Instead, the Department should work
with the States to develop ways to address its readiness concerns
within the context of the environmental laws as they currently exist.
If the Senate decides to consider these proposed amendments, we
urge you to follow the normal legislative process for this legislation.
The committees with jurisdiction over the environmental statutes should
be provided the opportunity to hold public hearings and craft solutions
to the complex issues raised by proposals to modify our system of
environmental laws.
Thank you and I am available to answer any questions.

Statement by the Attorneys General of: Arizona, California, Colorado,
Delaware, Hawaii, Idaho, Massachusetts, New Hampshire, New Mexico,
Northern Mariana Islands, New York, Oregon, South Dakota, Utah, and
Washington

INTRODUCTION

This statement is submitted on behalf of the attorneys general of
Arizona, California Colorado, Delaware, Hawaii, Idaho, Massachusetts,
New Hampshire, New Mexico, New York, Northern Mariana Islands, Oregon,
South Dakota, Utah, and Washington. Our statement addresses the
Department of Defense's recent proposed legislation to amend the Clean
Air Act (CAA), the Resource Conservation and Recovery Act (RCRA) and
the Comprehensive Environmental, Response, Compensation and Liability
Act (CERCLA). The States are the primary implementers of the Clean Air
Act and RCRA, and are major partners with EPA under CERCLA. As the
chief law enforcement officers of our respective States, it is our duty
to ensure compliance with our environmental laws.
First, let us reiterate that we absolutely support the need to
maintain military readiness, and to provide our Armed Forces with
appropriate realistic training to minimize battlefield casualties and
increase their combat effectiveness. There is no question of the
importance of readiness. Historically, however, military training
activities have caused adverse impacts on human health and the
environment, and resulted in expensive cleanups. For example, there are
129 DOD facilities on the Superfund National Priorities List. The
question is whether the existing environmental laws allow the military
to conduct these activities in a manner that maintains readiness while
ensuring protection of human health and the environment. With respect
to RCRA, CERCLA, and the CAA, we believe that they do. In our view,
furthering military readiness and ensuring environmental protection are
compatible goals, not mutually exclusive.
We are not aware of any instance in which RCRA, CERCLA, or the CAA
has ever caused an adverse impact on military readiness. To our
knowledge, DOD has not cited any examples of any such conflicts. We
note that Christine Whitman, the Administrator of the Environmental
Protection Agency, recently testified before the Senate Environment and
Public Works Committee that she was not aware of any training mission
anywhere in the country that was being held up or not taking place
because of these laws.\1\ We believe that the likelihood of a future
conflict between these laws and military readiness is remote. In the
unlikely event of such a conflict, these laws already provide the
flexibility necessary to harmonize the competing concerns of military
readiness and protection of human health and the environment.
---------------------------------------------------------------------------
\1\ As reflected in the record of the Senate Environment and Public
Works Hearings of February 26, 2003, on the President's 2004 budget for
the Environmental Protection Agency.
---------------------------------------------------------------------------
RCRA, CERCLA, and the CAA provide vital safeguards to protect the
health of our citizens and their environment. As a general matter, we
think that these safeguards should be maintained, not weakened.
Certainly, any amendments that would weaken the protections these laws
provide must be justified by important countervailing considerations
that are supported by facts. While we certainly agree that maintaining
readiness is necessary, the lack of any demonstrated conflict with
RCRA, CERCLA, and CAA requirements and the inherent flexibility of
these laws cause us to conclude that these amendments are unnecessary.
We are concerned that DOD's proposed amendments to RCRA, CERCLA,
and the CAA would undermine State authority and create significant
adverse environmental impacts, with no benefit to military readiness.
These amendments are far-reaching. The amendments to the CAA would
allow continued violations of health-based air quality standards in
cases where there was no impact on readiness. We disagree with DOD's
statements that the amendments to RCRA and CERCLA only apply to
``operational'' ranges. As described more specifically later in this
statement, DOD's proposed amendments to RCRA and CERCLA would likely
have the following results:

Section 2019 will likely be interpreted to preempt or
impair State authority over munitions, explosives, and the like
not only at operational ranges, but--contrary to DOD's
assertions--also at former military ranges now in private
ownership, DOD sites other than ranges, Department of Energy
facilities, and even at private defense contractor sites.
Section 2019 may preempt or impair EPA and State
authority under RCRA and analogous State laws to require
cleanup not only of unexploded ordnance, but also the chemical
constituents of the ordnance such as perchlorate, TNT, or RDX--
that may have leached out and contaminated the soil and
groundwater. Again, this is not limited to operational ranges,
but would likely extend to other Federal facilities, former
military ranges now in private ownership, and defense
contractor sites.
Subsection 2019(a) would likely preempt States and EPA
from using RCRA authorities to regulate the cleanup of
unexploded ordnance and other munitions-related contamination
at 16 million acres of land on closed, transferred, and
transferring ranges that DOD estimates are potentially
contaminated with unexploded ordnance. Much of this land is in
private ownership.
Proposed paragraph 2019(a)(2) appears to provide a
wholesale exemption for munitions and explosives-related
contamination that also likely extends beyond ranges to other
Federal facilities and even to defense contractor sites. This
exemption may encompass waste streams from the manufacture of
explosives and munitions constituents, such as perchlorate
contamination.
Paragraph 2019(b)(2) arguably precludes State
superfund authority over munitions-related contamination on
operational ranges.
Paragraph 2019(b)(2) also likely precludes prevents
States from requiring cleanup of munitions-related
contamination on 16 million acres of closed, transferred, and
transferring ranges under State superfund-type laws.

Finally, we are concerned with the legislative process by which
these proposed amendments have been considered. As we understand it,
DOD has requested that the proposed amendments be included as part of
the Defense Authorization Bill. These amendments affect the Federal
Government's obligations to comply with State and Federal environmental
laws. This is an important matter of public policy, with significant
implications for environmental protection. It deserves full hearings
before the committees of jurisdiction, and the careful deliberation
that regular order provides. Because Federal courts closely scrutinize
waivers of sovereign immunity, and these proposed amendments would
affect the waivers of immunity in RCRA and CERCLA, the need for careful
deliberation of the proposed legislative language is even greater.
These amendments should be subjected to regular order with hearings
before the congressional committees with jurisdiction over the
environmental laws, not proposed as amendments to authorization or
appropriations bills. Last summer, the National Association of
Attorneys General approved a resolution urging Congress to only
consider laws that might impair State authority over Federal facilities
through regular order.\2\
---------------------------------------------------------------------------
\2\ See Exhibit 1.
---------------------------------------------------------------------------
The Clean Air Act, RCRA, and CERCLA have not adversely impacted
military readiness.
As far as we are aware, DOD has not identified any cases in which
RCRA or CERCLA have adversely impacted military readiness. Nor are we
aware of any such instances. Even DOD's own background materials
supporting the ``Readiness and Range Preservation Initiative'' for 2002
downplay the need for amending RCRA and CERCLA, characterizing the
impact on readiness as merely ``potentially significant''.\3\ DOD's
justification for its proposed amendments to RCRA and CERCLA is a
citizen suit filed in Alaska. According to DOD, this suit alleges that
the discharge of ordnance onto an operational military range
constitutes ``disposal'' under RCRA and a ``release'' under CERCLA.\4\
DOD concludes that if munitions used for their intended purpose are
considered to be statutory solid waste, the Army could be forced to
perform corrective action or remediation of Eagle River Flats, and
live-fire training during the remediation would be impossible.
---------------------------------------------------------------------------
\3\ ``Readiness and Range Preservation Initiative Summary,'' dated
April 18, 2002, p. 7 (atttached as Exhibit 2).
\4\ Id.
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We disagree with DOD's conclusion. First, there are no RCRA
imminent and substantial endangerment or illegal disposal allegations
in the Fort Richardson citizen suit. Plaintiffs in that suit did allege
violation of an Alaska statutory provision that prohibits pollution.\5\
The cited provision is not part of Alaska's hazardous waste regulatory
program; indeed, Alaska does not have a State hazardous waste program,
much less an authorized program under RCRA. Plaintiffs in this case
have never even alleged that used or fired munitions are a RCRA
statutory solid waste. Thus, if this case were decided adversely to the
Army, it would not set any precedent regarding RCRA.
---------------------------------------------------------------------------
\5\ Plaintiff's Amended Complaint for Declaratory and Injunctive
Relief, para. 29, Alaska Community Action on Toxics, et al. v. United
States, A02-0083 CV, filed June 26, 2002 (attached as Exhibit 3).
Plaintiffs' complaint never cites RCRA's imminent and substantial
endangerment provision; instead, it cites 42 U.S.C. Sec. 6972(a)(1)(A),
the RCRA citizen suit provisions authorizing suit against any person
``alleged to be in violation of any permit, standard, regulation,
condition, requirement, prohibition, or order which has become
effective pursuant to this chapter'' as a jurisdictional basis for the
suit. See para. 3 of Exhibit 3. In paragraph 29, plaintiffs allege that
the Army's violation of Alaska Statutes Sec. 46.03.710 constitutes a
violation of RCRA's waiver of immunity provision, 42 U.S.C.
Sec. 6961(a). Alaska Statutes Sec. 46.03.710 states: ``A person may not
pollute or add to the pollution of the air land, subsurface land, or
water of the State.''
---------------------------------------------------------------------------
Even if DOD's characterization of the plaintiff's complaint were
correct, the likelihood that cleanup requirements would preclude
training is remote. First, remediation would only be required if the
munitions or munitions constituents posed a risk to human health or the
environment. Generally speaking, this would only occur in situations
where munitions constituents were contaminating environmental media,
such as ground or surface water. Assuming that some remediation were
required, there is no evidence to suggest that remediation of
environmental contamination would impact military readiness. Remedial
approaches to contaminated sites are quite varied, and inevitably site-
specific. Without knowing the specific details of what the problem is,
and what the remedial alternatives are, there is simply no basis for
assessing the impacts, if any, of cleanup on training.
The underlying premise of DOD's position seems to be that if used
or fired military munitions are considered statutory solid wastes under
RCRA, or hazardous substances under CERCLA, the inevitable consequence
will be that States will impose remedial requirements that will
conflict with military readiness. DOD has cited no evidence to support
this premise. States have regulated cleanup of contaminated Department
of Energy nuclear weapons facilities and Department of Defense sites
for decades in a responsible manner. We believe that State and EPA
regulators have demonstrated their consistent willingness to resolve
differences with regulated Federal officials, and to develop creative
approaches that balance defense concerns with environmental protection.
But if there were a case where State or EPA regulators believed that
environmental contamination at an operation range required remediation
to protect human health and the environment, and adverse impacts on
readiness could not be avoided, RCRA and CERCLA already allow DOD to
seek an exemption from such requirements on the basis of national
security.
Similarly, DOD has not identified any instances in which the CAA's
conformity requirements have actually prevented the military from
conducting the activities it believes are necessary to maintain
readiness. Instead, it describes some ``near misses,'' and urges that
the proposed exemption is necessary to facilitate the next round of
base closures in 2005.\6\ These ``near misses'' are cases where, in
fact, potentially conflicting environmental requirements and readiness
concerns were successfully resolved through the regulatory process.
DOD's proposed amendments to the CAA would allow continued violations
of the health-based National Ambient Air Quality Standards without any
demonstration that DOD could not make the necessary emissions offsets.
---------------------------------------------------------------------------
\6\ Exhibit 2, p. 6.
---------------------------------------------------------------------------
The environmental laws provide ample flexibility to accommodate any
conflicts between military readiness and environmental
protection.
It is unlikely the CAA, RCRA, or CERCLA requirements will cause
conflicts with military readiness. Based on experience to date, any
such conflicts would be rare occurrences. Consequently, the case-by-
case exemption provisions that already exist in each of these laws
(described below) are vastly preferable to DOD's proposed across-the-
board statutory exemption from environmental requirements. The case-by-
case approach accommodates readiness concerns where necessary, and
minimizes adverse environmental consequences in the vast majority of
cases where there are no conflicts. Conversely, DOD's approach weakens
environmental protections unnecessarily in the vast majority of cases
where there is no adverse impact on readiness. The CAA, RCRA, and
CERCLA already allow the President to exempt the Department of Defense
from their statutory and regulatory requirements on a case-by-case
basis.\7\ These are not burdensome requirements. All that is required
is a finding that doing so is necessary for national security or is in
the paramount interests of the United States, depending on the
particular statute at issue. For example, President Bush recently made
such a finding under RCRA exempting the Air Force facility ``near Groom
Lake, Nevada, from any Federal, State, interstate, or local provision
respecting the control and abatement of solid waste or hazardous waste
disposal that would require the disclosure of classified information
concerning the operating location to any authorized person.'' \8\ The
entire finding consists of three paragraphs. President Clinton made
similar findings annually from 1996 through 2000 regarding this same
matter. We understand that to date, the exemption provisions of the
CAA, RCRA, and CERCLA have never been invoked because of military
readiness concerns.
---------------------------------------------------------------------------
\7\ 42 U.S.C. Sec. Sec. 6961(a), 7418(b), and 9620(j). The RCRA
exemption, Sec. 6961(a), provides:
The President may exempt any solid waste management facility of
any department, agency, or insturmentality in the executive branch from
compliance with such a requirement if he determines it to be in the
paramount interest of the United States to do so. No such exemption
shall be granted due to lack of appropriation unless the President
shall have specifically requested such appropriation as a part of the
budgetary process and Congress shall have failed to make available such
requested appropriation. Any exemption shall be for a period not in
excess of 1 year, but additional exemptions may be granted for periods
not to execeed 1 year upon the President's making a new determination.
The President shall report each January to Congress all exemptions from
the requirements of this section ganted during the preceding calendar
year, together with his reason for granting each such exemption.''
\8\ 67 Fed. Reg. 78425 (Dec. 24, 2002), attached as Exhibit 4.
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In addition to providing a case-by-case exemption, section 118(b)
of the CAA authorizes the President to ``issue regulations exempting
from compliance with the requirements of this section any weaponry,
equipment, aircraft, vehicles, or other classes or categories of
property which are owned or operated by the Armed Forces of the United
States (including the Coast Guard) or by the National Guard of any
State and which are uniquely military in nature.'' \9\ This provision
allows even greater flexibility than the case-by-case exemptions in
managing any potential conflicts between CAA requirements and readiness
concerns. The CAA's ``general conformity'' regulations that DOD's
amendments would override contain still more flexibility. These
regulations allow DOD to set aside clean air requirements for up to 6
months in response to ``emergencies,'' which, by definition, include
responses to terrorist activities and military mobilizations. This
exemption is renewable every 6 months through a written determination
by DOD.\10\
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\9\ 42 U.S.C. Sec. 7418(b).
\10\ 40 C.F.R. 93.153(e); 40 C.F.R. 152.
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Other provisions of the environmental laws provide further
flexibility to balance environmental protection with other Federal
priorities. For example, in 1992, Congress provided EPA authority to
issue administrative orders under RCRA to other Federal agencies, but
required that such agencies have the opportunity to confer with the EPA
Administrator before any such order becomes final.\11\ Additionally,
Congress has created a procedure that allows the Secretary of Defense
to temporarily suspend any pending administrative action by another
Federal agency that the Secretary determines ``affects training or any
other readiness activity in a manner that has or would have a
significant adverse effect on the military readiness of any of the
Armed Forces or a critical component thereof.'' \12\ During the
suspension, the Secretary and the head of the other Federal agency must
consult and attempt to mitigate or eliminate the adverse impact of the
proposed action on readiness, consistent with the purpose of the
proposed action.\13\ If they are unable to reach agreement, the
Secretary of Defense must notify the President, who shall resolve the
matter.\14\
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\11\ 42 U.S.C. Sec. 6961(b)(2).
\12\ 10 U.S.C. 2014 (a) and (d).
\13\ 10 U.S.C. 2014(c).
\14\ 10 U.S.C. 2014(e).
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DOD's compliance record warrants a regulatory structure that ensures
accountability.
A case-by-case approach to resolving any future potential conflicts
between readiness and the requirements of RCRA, CERCLA, and the CAA is
preferable to sweeping statutory exemptions because the case-by-case
approach provides accountability. Experience since the 1992 Supreme
Court decision in U.S. Department of Energy v. Ohio \15\ demonstrates
that Federal agencies in general, and DOD in particular, are far more
likely to comply with environmental requirements when they can be held
accountable. In that case, the Supreme Court held that Federal agencies
were not subject to penalties for violating State hazardous waste and
water quality laws. In response, Congress swiftly amended RCRA to make
Federal agencies subject to penalties for violating hazardous waste
laws. Once Congress clarified the States' authority to hold Federal
agencies accountable for violating hazardous waste requirements, DOD
and other Federal agencies began steadily improving their RCRA
compliance rates, bringing the percentage of facilities in compliance
from a low of 55.4 percent in fiscal year 1993 to 93.6 percent in
fiscal year 2000.\16\
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\15\ 503 U.S. 607 (1992).
\16\ ``The State of Federal Facilities--An Overview of
Environmental Compliance at Federal Facilities Fiscal Year 1999-2000''
USEPA Office of Enforcement and Compliance Assurance, EPA 300-R-01-004,
September 2001, p. 22.
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This salutary trend stands in stark contrast to Federal agency
performance under the Clean Water Act (CWA). Unlike RCRA, Congress did
not amend the CWA following the Ohio decision to subject Federal
agencies to penalties for violating CWA requirements. Since the Supreme
Court decision removed the threat that States could hold Federal
agencies accountable for violating CWA requirements by assessing
penalties, the percentage of Federal facilities in compliance with the
Clean Water Act has fallen steadily from a high of 94.2 percent in
fiscal year 1993 to a low of 61.5 percent in fiscal year 1998.\17\
DOD's Clean Water Act compliance rates are slightly worse than the
Federal agency totals.\18\
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\17\ Id. While Federal facilities' Clean Water Act compliance rates
as a whole rebounded somewhat in fiscal year 1999 and 2000, the overall
trend is still downward.
\18\ Id. DOD's Clean Water Act compliance rates for fiscal year
1996-2000 were slightly lower than Federal agencies as a whole. Id. at
p. 24; ``The State of Federal Facilities--An Overview of Environmental
Compliance at Federal Facilities, fiscal year 1997-1998,'' USEPA Office
of Enforcement and Compliance Assurance, EPA 300-R-00-002, January
2000, p. 26; ``The State of Federal Facilities--An Overview of
Environmental Compliance at Federal Facilities, fiscal year 1995-1996''
USEPA Office of Enforcement and Compliance Assurance, EPA 300-R-98-
002a, June 1998, pp. ES-11 and ES-12. While the DOD rates also improved
in fiscal year 1999 from fiscal year 1998's nadir, they declined again
in fiscal year 2000.
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Compliance statistics alone, telling as they are, do not paint the
entire picture of Federal agencies' failure to comply with
environmental requirements. Federal agencies in general, and DOD in
particular, have long had a history of resistance to environmental
regulation. The history of the CAA provides a good example. Before
1970, the CAA encouraged, but did not require, Federal agencies to
comply with its mandates. Congress determined that this voluntary
system was not working, and in 1970 amended the act to require Federal
agencies to comply. Specifically, Congress added section 118 to the
CAA. The first sentence of the section provides, in relevant part:

Each department, agency, and instrumentality of . . . the
Federal Government . . . shall comply with Federal, State,
interstate, and local requirements respecting control and
abatement of air pollution to the same extent that any person
is subject to such requirements. 42 U.S.C. Sec. 1857f.

The 1970 amendments also required the Environmental Protection
Agency to establish ambient air quality standards. Each State had to
submit plans describing how the State would meet these standards.
Kentucky, like most States, submitted a plan that relied on permits as
the sole mechanism to establish emissions limitations for air pollution
sources, and to establish schedules for achieving compliance with the
emissions limitations. Kentucky sought to require several Federal
facilities (including the Army's Fort Knox, Fort Campbell, and others)
to obtain permits. The Federal agencies refused, arguing that section
118 of the CAA did not obligate them to comply with ``procedural''
requirements, such as the need to obtain State permits. Without the
permit, there was no way for Kentucky to control air pollution from
these Federal facilities.
The matter went to court, and ultimately, in Hancock v. Train,\19\
the Supreme Court agreed with the Federal agencies. Shortly thereafter,
Congress amended the CAA to require Federal agencies to comply with
procedural requirements, including permit requirements.\20\ While the
challenge to State authority under the CAA was pending, Federal
agencies were also challenging the requirement to obtain State permits
under the CWA's National Pollution Discharge Elimination System
program. Interpreting a similar waiver of immunity, the Supreme Court
again sided with the Federal agencies.\21\ Again, Congress acted
swiftly to amend the CWA to require Federal agencies to obtain
discharge permits.\22\ More recently, DOD spent years challenging State
authority over cleanup of contamination at Federal facilities,
ultimately losing in the Tenth Circuit.\23\
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\19\ 426 U.S. 167 (1976).
\20\ Pub.L. 95-95, Sec. 116(a).
\21\ Environmental Protection Agency v. California, 426 U.S. 200
(1976).
\22\ Pub.L. 95-217, Sec. Sec. 60, 61(a).
\23\ U.S. v. Colorado, 990 F.2d 1565 (10th Cir. 1993).
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Nonetheless, DOD continues to challenge State authority over
cleanup of contamination at its sites, and in particular to resist
State authority over cleanup of munitions-related contamination. In
addition, DOD is challenging a number of other environmental
requirements:

DOD is refusing to pay penalties for violations of
State requirements related to underground petroleum storage
tanks.\24\
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\24\ See exchange of letters between State of Hawaii Department of
Health and U.S. Army Garrison Hawaii, attached hereto as Exhibit 5.
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DOD is appealing a determination by an EPA
Administrative Law Judge that the CAA's command that penalties
for violations of the act be calculated by considering, inter
alia, the economic benefit of the violator's noncompliance
applies to Federal agencies.\25\
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\25\ In the Matter of U.S. Army, Fort Wainwright Central Heating &
Power Plant, Docket No. CAA-10-99-0121. Administrative Law Judge Susan
L. Biro entered the order against the Air Force on April 30, 2002.
Section 113 of the Clean Air Act, 42 U.S.C. Sec. 7413, provides, in
relevant part, that the Administrator may ``issue an administrative
order against any person assessing a civil administrative penalty of up
to $25,000, per day,'' and that in calculating the penalty, the
Administrator ``shall take into consideration . . . the economic
benefit of noncompliance.'' 42 U.S.C. Sec. 7413 (d) and (e). Section
302 of the Clean Air Act, 42 U.S.C. Sec. 7602, defines ``person'' to
include ``any agency, department, or instrumentality of the United
States.'' Finally, the waiver of Federal sovereign immunity in section
118 of the Clean Air Act, 42 U.S.C. Sec. 7418 states that Federal
agencies ``shall be subject to . . . all Federal . . . process and
sanctions . . . in the same manner, and to the same extent as any
nongovernmental entity.''
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DOD is also challenging State and EPA authority to
require compliance with ``institutional controls.''
``Institutional controls'' are legal mechanisms to restrict
land or water use, and are often employed to reduce the cost of
cleaning up contaminated sites. DOD argues, inter alia, that
State institutional controls do not fall within the scope of
RCRA's waiver of Federal sovereign immunity for State
requirements respecting the control and abatement of solid
waste.

The huge extent of DOD's environmental contamination also demands a
regulatory structure that ensures accountability.
Accountability is also important because of the environmental
impact of military activities. DOD is responsible for far more
contaminated sites than any other Federal agency. There are 165 Federal
facilities currently listed on the Superfund National Priorities List;
129 of these are DOD facilities.\26\ All together, DOD is responsible
for addressing over 28,500 potentially contaminated sites across the
country.\27\ Through fiscal year 2001, DOD had spent almost $25 billion
cleaning up sites for which it is responsible.\28\ DOD recently
estimated that it would take another $14 billion to complete the
remediation of environmental contamination at active, realigning, and
closing sites.\29\
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\26\ Information from EPA's Superfund website at http://
www.epa.gov/superfund/sites/query/queryhtm/nplfin1.htm and from
telephone conversation with EPA's Federal Facilities Restoration and
Reuse Office.
\27\ See ``Fiscal Year 2001 Defense Environmental Restoration
Program Annual Report to Congress,'' p. 19. This document is available
at the following DOD website: http://www.dtic.mil/envirodod/DERP/
DERP.htm
\28\ Id., p. 21.
\29\ Id., pp. 27-28, attached as Exhibit 6. The $14 billion figure
combines the total cost-to-complete sums given for active installations
in Figure 8 and Base Realignment and Closure Sites in Figure 10 of
Exhibit 6.
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But the need for cleanup of active and closing bases is only part
of the picture. DOD is also responsible for assessing and cleaning up
thousands of potentially contaminated formerly used defense sites
(FUDS) in the United States and its territories and possessions.\30\
Many FUDS are former bombing or gunnery ranges that contain unexploded
ordnance. The GAO estimated recently that unexploded ordnance
contamination may exist at over 1,600 FUDS.\31\ DOD estimates that
approximately 16 million acres of land on transferred ranges are
potentially contaminated with unexploded ordnance.\32\ There are no
reliable data on the cost of addressing the contamination at these
former ranges and other FUDS. DOD's recent estimates for unexploded
ordnance cleanup vary from $14 billion to over $100 billion.\33\
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\30\ ``Environmental Contamination: Cleanup Actions at Formerly
Used Defense Sites,'' GAO-01-557 (July 2001), p. 1. FUDS are properties
that were formerly owned, leased, possessed, or operated by DOD or its
components.
\31\ Id. at 2.
\32\ ``DOD Training Range Cleanup Cost Estimates Are Likely
Understated,'' GAO-01-479 (April 2001), p. 11.
\33\ Id., pp. 5 and 13.
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Despite this lack of data, we do know that the costs of detecting
and remediating unexploded ordnance contamination are extremely high.
For example, through fiscal year 2001, DOD had spent over $37 million
investigating and remediating the former Lowry Bombing and Gunnery
Range (a/k/a Buckley Field) near Aurora, Colorado, and expected to
spend an additional $71 million to complete cleanup of this site.\34\
At the Spring Valley site in the District of Columbia, DOD had spent
over $24 million through fiscal year 2001, and expected to spend an
additional $73 million.\35\ The costs for cleaning up sites like the
Lowry Range and Spring Valley may be dwarfed by the sheer magnitude of
the remaining FUDS, such as the 288 FUDS projects in California that
DOD estimates may cost $2.6 billion to address.\36\ The bottom line is
that unexploded ordnance contamination at FUDS represents an
environmental problem of huge dimensions. As shown below, DOD's
proposed amendments would likely be read to preempt State authority
over cleanup of these sites. Independent State oversight is needed to
ensure these sites are cleaned up in a manner that protects human
health and the environment.\37\
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\34\ ``Fiscal Year 2001 Defense Environmental Restoration Program
Annual Report to Congress,'' Table C-1, showing status of military
installations and FUDS with estimated cleanup completion cost estimates
exceeding $5 million at p. C-1-22.
\35\ Id. at p. C-1-25.
\36\ Id., pp. C-1-8 to C-1-21.
\37\ For example, many States have found that DOD's determinations
that specific FUDS do not require any cleanup action are frequently
mistaken. In 1998, the Association of State and Territorial Solid Waste
Management Officials (ASTSWMO) conducted a survey of its members
regarding ``no further action'' determinations made by the Army Corps
of Engineers. Nearly half of the responding States (19 out of 39) said
that they had reason to believe that the Corps had not made sound
environmental decisions in making some ``no further action''
determinations. Six States had conducted their own environmental or
health assessments at 66 of the sites the Corps had designated ``no
further action.'' These States determined that 32 of the 66 did require
cleanup. Contamination at the 32 sites included high levels of PCBs,
unexploded ordnance, leaking underground storage tanks, asbestos, and
groundwater contamination. ``No Further Action Survey,'' Association of
State and Territorial Solid Waste Management Officials, December 1998.
Several of the States that responded they did not have any reason to
doubt the Corps' determinations commented that they had not assessed
the sites themselves. The complete survey is available on ASTSWMO's
website at http://www.astswmo.org/Publications/bookshelf.htm by
clicking on ``Federal Facilities'' and then on ``No Further Action
Review Efforts at Formerly Used Defense Sites (NOFA FUDS) December
1998.''
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In addition to the obvious explosive hazards of unexploded
ordnance, some constituents of explosives and munitions contamination
have toxic or potential carcinogenic effects,\38\ and can cause
groundwater contamination. For example, perchlorate is a chemical
widely used in solid rocket fuel and munitions. It interferes with
iodide uptake into the thyroid gland, and disrupts the thyroid
function. The Wall Street Journal has reported that EPA is concerned
that fetuses and newborn babies may be particularly sensitive to
exposure to perchlorate.\39\ Live-fire training at the Massachusetts
Military Reservation (MMR) over several decades has contaminated large
amounts of groundwater in the sole source drinking water aquifer for
the Cape Cod area. Recently, the Town of Bourne closed half of its
drinking water supply wells due to contamination by perchlorate that
migrated from MMR. Subsequently, DOD spent approximately $2 million to
hook the town up to an alternate water supply.\40\ Reportedly,
explosives contaminants have been detected in about 100 groundwater
monitoring wells on MMR, and exceed EPA health advisory limits at 53 of
those wells.\41\ Similarly, military training activities at the
Aberdeen Proving Ground have contaminated groundwater there with
perchlorate, again prompting closure of a municipal water supply well
that had been contaminated.\42\
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\38\ Fact sheets or public health statements, all published by the
Agency for Toxic Substances and Disease Registry, for four common
explosives or munitions constituents (DNT, RDX, TNT, and white
phosphorous), are attached as Exhibit 7. Also included in Exhibit 7 are
two EPA documents regarding perchlorate, another common munitions
constituent.
\39\ ``A Fuel of Cold War Defenses Now Ignites Health
Controversy,'' 12/16/2002 article by Peter Waldman, reported on page 1
of the Wall Street Journal, attached as Exhibit 8.
\40\ ``Military Cash Flows for New Water Supply,'' story by Kevin
Dennehy, Cape Cod Times, April 24, 2002, attached as Exhibit 9.
\41\ ``Work to Clean Cape Cod Continues as Pentagon Seeks
Environmental Exemptions,'' 5/27/2002 story by Melissa Robinson,
reported in Boston Globe Online, 5/29/2002, attached as Exhibit 10.
\42\ ``Group calling for cleanup of perchlorate in Aberdeen,'' 10/
3/2002 article by Lane Harvey Brown in the Baltimore Sun, attached as
Exhibit 11.
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Indeed, perchlorate contamination from military training, research,
and production activities has caused widespread groundwater
contamination in at least 22 States, according to the Wall Street
Journal.\43\ DOD's proposed legislation would likely be read to preempt
or impair State authority to address many of these sites, including
some privately-owned defense contractor sites, under RCRA, CERCLA, and
analogous State laws.
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\43\ See Exhibit 8.
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DOD's proposed amendments to RCRA, CERCLA, and the CAA are far-
reaching, and go far beyond DOD's stated concerns with
readiness.
DOD has repeatedly stated that its proposed amendments are very
narrowly focused.\44\ We disagree. As described above, neither the CAA,
RCRA, nor CERCLA has had any adverse impacts on readiness. All three
laws have provisions allowing for waivers of their requirements
sufficient to address any potential readiness concerns. Considering the
magnitude of the munitions contamination problem at FUDS and other DOD
sites, and the groundwater contamination at sites such as the
Massachusetts Military Reservation and the Aberdeen Proving Grounds,
any change in DOD's obligation to comply with cleanup requirements has
the potential for large impacts. But the bottom line is that DOD's
proposed amendments likely create broad exemptions that jeopardize the
States' ability to protect their citizens' health and environment,
without any corresponding benefit to readiness.
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\44\ See, e.g., Exhibit 2.
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DOD's amendment to RCRA would likely be read to preempt or impair State
and EPA authority over munitions-related and explosives-related
wastes at active military bases, closing bases, FUDS, and
private contractor sites.
Proposed section 2019 would define when munitions, explosives,
unexploded ordnance, and constituents thereof are ``solid wastes''
under RCRA, and thus potentially subject to regulation as hazardous
wastes.\45\ By narrowing this definition, DOD's amendments limit the
scope of EPA's authority under RCRA, as well as State authority under
State hazardous waste laws. The change in the definition of ``solid
waste'' would affect State authority because the term appears in RCRA's
waiver of Federal sovereign immunity--the provision of the law that
makes DOD subject to State hazardous waste laws. The RCRA waiver of
immunity applies to State ``requirements respecting the control and
abatement of solid waste or hazardous waste disposal and management.''
\46\ Thus, the scope of the RCRA sovereign immunity waiver will likely
be affected by amendments to RCRA's definition of solid waste. Because
waivers of immunity are construed extremely narrowly, any ambiguity in
the definition of solid waste will likely be construed in the way that
results in the narrowest waiver.\47\ By re-defining ``solid waste'' in
a very limited fashion, DOD's proposed amendment will likely preempt or
impair State authority over munitions, explosives, and the like not
only at operational ranges, but--contrary to DOD's assertions--also at
FUDS, DOD sites other than ranges, DOE facilities, and even at private
defense contractor sites.
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\45\ See 42 U.S.C. Sec. 6903 (5) and (27). Section 6903(5) defines
``hazardous waste'' as ``a solid waste, or combination of solid
wastes,'' that exhibits certain characteristics. Section 6903(27)
defines ``solid waste.'' Therefore, hazardous wastes are a subset of
solid wastes.
\46\ 42 U.S.C. Sec. 6961(a).
\47\ Department of Energy v. Ohio, 503 U.S. 607 (1992). See also
the discussion of Hancock v. Train, supra.
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DOD's proposed amendment to the definition of solid waste provides:

``2019. RANGE MANAGEMENT AND RESTORATION

``(a) Definition of Solid Waste. (1)(A) The term `solid waste,' as used
in the Solid Waste Disposal Act, as amended (42 U.S.C. 6901 et seq.),
includes explosives, unexploded ordnance, munitions, munition
fragments, or constituents thereof that;
``(i) are or have been deposited, incident to their
normal and expected use, on an operational range, and;
``(I) are removed from the operational range
for reclamation, treatment, disposal, treatment
prior to disposal, or storage prior to or in
lieu of reclamation, treatment, disposal, or
treatment prior to disposal;
``(II) are recovered, collected, and then
disposed of by burial or landfilling; or
``(III) migrate off an operational range and
are not addressed under the Comprehensive
Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C.
9601 et seq.); or
``(ii) are deposited, incident to their normal and
expected use, off an operational range, and are not
promptly rendered safe or retrieved.
``(B) The explosives, unexploded ordnance, munitions,
munitions fragments, or constituents thereof defined as solid
waste in subparagraph (a)(1)(A) shall be subject to the
provisions of the Solid Waste Disposal Act, as amended,
including but not limited to sections 7002 and 7003, where
applicable.
``(2) Except as set out in subparagraph (1), the term `solid
waste,' as used in the Solid Waste Disposal Act, as amended, does not
include explosives, unexploded ordnance, munitions, munitions
fragments, or constituents thereof that:
``(A) are used in training military personnel or explosives and
munitions emergency response specialists (including training in proper
destruction of unused propellant or other munitions);
``(B) are used in research, development, testing, and
evaluation of military munitions, weapons, or weapon systems;
``(C) are or have been deposited, incident to their normal
and expected use, and remain on an operational range, except as
provided in subparagraph (a)(1)(A);
``(D) are deposited, incident to their normal and expected
use, off an operational range, and are promptly rendered safe
or retrieved; or
``(E) are recovered, collected, and destroyed on-range during
range clearance activities at operational ranges, but not
including the on-range burial of unexploded ordnance and
contaminants when the burial is not a result of product use.
``Nothing in subparagraphs (2) (A), (B), (C), (D), or (E) hereof
affects the legal requirements applicable to explosives, unexploded
ordnance, munitions, munitions fragments, or constituents thereof that
have been deposited on an operational range once the range ceases to be
an operational range.''
(Italics indicate substantive changes from the 2002 version of DOD's
proposal.)

As an initial matter, paragraph 2019(a)(1) applies to an extremely
broad range of items. It does not just cover munitions, munitions
fragments, explosives, ordnance, and unexploded ordnance, but also
constituents of any of those items. That means it applies not just to
unexploded ordnance that may contaminate an area, but also to the
chemical constituents of the ordnance such as perchlorate, TNT, or
RDX--that may have leached out and contaminated the soil and
groundwater. For convenience, we will generally refer only to munitions
when describing the scope of section 2019, but it is well to remember
that it actually covers many more items.
Paragraph 2019(a)(1) sets forth the circumstances under which
munitions are solid wastes. Again, because the term ``solid waste'' is
used in RCRA's waiver of immunity, it will be construed narrowly. Thus,
under paragraph 2019(a)(1), the only circumstances under which
munitions will be considered solid wastes are if: (1) they are or have
been deposited, incident to their normal and expected use, on an
operational range, and then one of three things happens: they are
removed from the range; or are recovered and then buried; or migrate
off range and are not addressed under CERCLA; or (2) they are
deposited, incident to their normal and expected use, off an
operational range, and are not promptly rendered safe or retrieved.
Subparagraph 2019(a)(2)(C) compels the same conclusion, because it
expressly limits the instances in which munitions-related materials
that ``are or have been deposited, incident to their normal and
intended use, on operational ranges,'' to the circumstances set forth
in 2019(a)(1). This year, DOD has added a sentence to the end of
section 2019 that it says limits the scope of this section to only
``operational'' ranges.
We disagree that the new language limits the reach of section 2019.
First, it only limits the impact of paragraph 2019(a)(2), not paragraph
2019(a)(1). As noted above, because of the narrow construction courts
placed on waivers of immunity, even absent the language of
2019(a)(2)(C), paragraph 2019(a)(1) likely will be read as defining the
exclusive universe of circumstances under which States may regulate
munitions pursuant to the RCRA waiver. Paragraph 2019(a)(1) excludes
from the definition of solid waste munitions that were deposited on an
operational range while it was operational and remain there after it
closed.
Second, the new language is ambiguous. It can be read to mean that
nothing in paragraph 2019(a)(2) affects the legal requirements
applicable to munitions that were deposited on a range after the range
ceased to be operational. This would result in a narrower waiver of
immunity than the interpretation DOD has proffered, and consequently
would likely be the interpretation a Federal court would adopt.
Third, in 1997, EPA deferred promulgation of a rule that would have
codified EPA's interpretation that munitions left in place at the time
a range closed or was transferred out of military control are solid
wastes as defined in RCRA.\48\ In light of EPA's regulatory inaction,
DOD may argue that there currently are no legal requirements applicable
to munitions that were deposited on a range while it was operational,
and remain there after it has closed.\49\ It could then argue that
subparagraph 2019(a)(2)(C) precludes EPA from promulgating any such
regulation in the future, because the munitions are not a solid waste
as defined in RCRA.
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\48\ ``Military Munitions Rule,'' 62 Fed. Reg. 6622, 6632 (2/12/
97). Under this interpretation, such munitions would have been
statutory solid wastes, but not ``regulatory'' solid wastes. (EPA's
regulatory definition of solid waste is narrower than the statutory
definition. See 40 CFR 261.2.) Both regulatory and statutory solid
wastes may be subject to RCRA's imminent and substantial endangerment
provisions (42 U.S.C. Sec. Sec. 6972 and 6973) and, if located at a
facility subject to RCRA permitting requirements, its corrective action
authorities (see 42 U.S.C. Sec. Sec. 6924 (u) and (v) and 6928(h)).
However, only regulatory solid wastes are subject to the full panoply
of RCRA permit and management requirements. See 42 U.S.C.
Sec. 6903(27); Military Toxics Project v. EPA, 146 F.3d 948, 950-51
(D.C. Cir. 1998).
EPA also proposed that its interpretation of munitions on closed
ranges as solid wastes would ``sunset'' if and when DOD promulgated a
rule allowing for public involvement in the cleanup of closed and
transferred ranges. EPA decided to postpone action on this rule in part
because many commenters argued that DOD had no authority to promulgate
such a rule, and that such deferral would be contrary to the Federal
Facility Compliance Act. When Congress passed the Federal Facility
Compliance Act, it rejected a Senate proposal that would have allowed
DOD to regulate waste munitions, in favor of State and EPA regulation
under RCRA. See House Conf. Rep. No. 102-886 (Sept. 22, 1992), pp. 28-
29.
\49\ EPA's final munitions rule--including its decision to postpone
promulgation of the provision defining certain munitions as statutory
solid wastes--does not mean that discharged munitions on ranges cannot
be statutory solid wastes. Under the Federal Facility Compliance Act,
if such munitions meet the statutory definition of ``discarded,'' they
are statutory solid wastes. The Department of Justice took this
position in recent litigation concerning the Navy's facilities in
Vieques, Puerto Rico. See Water Keeper Alliance v. U.S. Department of
Defense, 152 F. Supp.2d 163, 176, n. 3 (``Defendants [the United
States] point out that they `do not seek dismissal of any claim that
ordnance debris and unexploded ordnance left to accumulate on the [Live
Impact Area] constitute solid waste.' [citation omitted] Consequently,
the Court will not dismiss this claim.'')
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Even with DOD's revision to proposed section 2019, munitions that
were deposited on an operational range and simply remain there after
the range closed or was transferred are not solid wastes under RCRA,
and thus cannot be hazardous wastes. Such residual unexploded ordnance
and explosives contamination is precisely the problem at closed,
transferring, and transferred ranges. Contrary to DOD's assertions that
this amendment only affects operating ranges, this amendment would also
likely be read to preempt States and EPA from regulating the cleanup of
unexploded ordnance and related materials at the 16 million acres of
land on closed, transferred, and transferring ranges (i.e., FUDS) that
are potentially contaminated with unexploded ordnance. In many cases,
this ordnance was deposited on these ranges decades ago.
In addition, paragraph 2019(a)(1) is not limited to ranges on
military bases. Under EPA's ``Military Munitions Rule'' (see
below),\50\ a range may include land owned by an entity under contract
with DOD or DOE that is set aside for researching, developing, testing,
and evaluating military munitions and explosives. In other words, a
military range may include defense contractor facilities.\51\ Paragraph
2019(a)(1) may thus preempt State and EPA authority under RCRA and
analogous State laws to address groundwater contaminated with
perchlorate or other munitions constituents at defense contractor sites
that may be considered ranges, potentially including some of those
described in the Wall Street Journal article.\52\
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\50\ 40 CFR Sec. 266.201.
\51\ We understand that DOD may be offering a similar definition
for codification in Title 10 of the U.S. Code. This proposed definition
would then apply to proposed section 2019.
\52\ See Exhibit 8.
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Proposed subsection 2019(a) may well override State and EPA
authority to address munitions-related environmental contamination that
is not on a range at all. To cite just one example, in the normal
course of maintaining artillery shells, DOD generates a waste stream
from ammunition washout known commonly as ``pink water.'' The water is
pink due to the presence of trinitrotoluene (TNT), a constituent of
both explosives and munitions (and a possible human carcinogen,
according to EPA),\53\ in the water. Ammunition washout is not
conducted on operational ranges, but has in at least one case led to
environmental contamination. At Pueblo Chemical Depot in Colorado,
ammunition washout created a plume of TNT-contaminated groundwater that
has traveled over 2 miles, and has gone off the depot to contaminate
drinking water wells nearby. Under subparagraph 2019(a)(1)(A), this
plume of TNT-contaminated groundwater would not be considered a solid
waste (and thus excluded from the scope of the RCRA waiver of
immunity), because the explosives constituents have not been deposited
on an operational range, nor have they been deposited ``incident to
their normal and expected use,'' off an operational range. A similar
result would obtain at the Los Alamos National Laboratory (a Department
of Energy facility), where explosives constituents have contaminated
groundwater approximately 1,000 feet below the ground surface.
---------------------------------------------------------------------------
\53\ See Exhibit 7.
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Proposed paragraph 2019(a)(2) provides a broad exemption that may
also encompass munitions-related contamination at defense contractor
sites. This paragraph exempts from the definition of solid waste
explosives and munitions that are used in training or in research,
development, testing, and evaluation of military munitions, weapons, or
weapon systems. This provision appears to create a wholesale exemption
for explosives and munitions. It is not limited to ranges at all, but
instead applies to any facility with such wastes, such as facilities
owned and operated by defense contractors who produce munitions
constituents, including perchlorate, TNT, or RDX, or who produce
munitions, weapons, or weapons systems. Because this exemption includes
munitions and explosives constituents, it may extend to waste streams
from the production of munitions or explosives. Thus, under paragraph
2019(a)(2), the perchlorate contamination from the Aerojet-General
corporation's plant near Rancho Cordova, California, or from the Kerr-
McGee ammonium perchlorate production facility in Henderson, Nevada,
that are described in the Wall Street Journal article \54\ likely would
not be subject to regulation as a solid or hazardous waste under RCRA.
---------------------------------------------------------------------------
\54\ See Exhibit 8.
---------------------------------------------------------------------------
Proposed subsection 2019(a)(2) may even extend to the chemical
munitions scheduled for destruction at various military installations
around the country. If DOD conducts or has conducted research or
evaluation of chemical munitions constituents (such as mustard agent)--
even for defensive purposes--under subparagraph 2019(a)(2)(A), these
materials could be considered exempt from the definition of solid
waste. Currently, States have the authority to regulate the scheduled
destruction of chemical agent stockpiles around the United States under
RCRA. For example, Colorado is planning to issue a permit for the
destruction of 780,000 rounds of mustard agent at the Pueblo Chemical
Depot. DOD's proposed amendments may call into question Colorado's and
other States' authority over the destruction of these chemical weapons.
dod's amendments do not simply codify epa's ``military munitions rule''
DOD states that its proposed amendments would ``clarify and
confirm'' EPA's ``Military Munitions Rule.'' We disagree. DOD's
proposal differs from the munitions rule in at least four significant
ways. First, DOD's proposal narrows RCRA's statutory definition of
solid waste, while the munitions rule does not affect RCRA's statutory
definition of solid waste. Thus, unlike the munitions rule, this
statutory change precludes States and EPA from using RCRA's imminent
and substantial endangerment authorities to address most munitions-
related contamination. In addition, changing the statute's definition
of solid waste likely narrows RCRA's waiver of immunity and likely
limits EPA's authority to regulate munitions under RCRA, as described
below.
Second, by narrowing the statutory definition of solid waste, a
term used in RCRA's waiver of sovereign immunity, DOD's amendments
likely narrow the waiver of immunity. The amendments may thus preempt
State authority to require the cleanup of most munitions-related
contamination, including unexploded ordnance and perchlorate
contamination, under RCRA. In contrast, the munitions rule does not
preempt State authority at all. When it first proposed the munitions
rule, EPA solicited comment on a regulatory approach that would preempt
States from enforcing broader or more stringent requirements respecting
military munitions.\55\ In the final rule, EPA determined not to adopt
such an approach, and expressly acknowledged that under RCRA sections
3006 and 3009, ``States may adopt requirements with respect to military
munitions that are more stringent or broader in scope than the Federal
requirements.'' \56\
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\55\ 60 Fed. Reg. 56488 (Nov. 8, 1995).
\56\ 62 Fed. Reg. 6625 (Feb. 12, 1997).
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Third, as described above, DOD's proposal likely prevents EPA from
promulgating additional regulations under RCRA governing the cleanup of
munitions on nonoperational ranges, because they are excluded from the
statute's definition of solid waste. Under the munitions rule, EPA
expressly reserved promulgation of such regulations for future
decision.\57\
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\57\ ``Military Munitions Rule,'' 62 Fed. Reg. 6622, 6632. See note
48, supra.
---------------------------------------------------------------------------
Fourth, by including the phrase ``or constituents thereof,'' in
paragraphs 2019 (a)(1) and (a)(2), DOD's proposal may well preempt
State and EPA authority over munitions-related and explosives-related
constituents that have leached from the munitions and are contaminating
the environment. These include chemicals such as perchlorate, RDX, TNT,
DNT, and white phosphorous. The munitions rule does not address
munitions constituents at all, and does not prevent EPA or the States
from requiring cleanup of these chemicals when they leach from
munitions into the soil or groundwater.\58\
---------------------------------------------------------------------------
\58\ 62 Fed. Reg. 6631.
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DOD's proposed amendments to CERCLA go far beyond DOD's stated concerns
with readiness.
Proposed subsection 2019(b) has similarly broad consequences for
CERCLA. This provision states:

``(b) Definition of Release.
--(1) The term `release,' as used in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. 9601 et seq.), includes the deposit off an
operational range, or the migration off an operational range, of any
explosives, unexploded ordnance, munitions, munitions fragments, or
constituents thereof.
``(2) The term `release,' as used in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. 9601 et seq.), does not include the deposit or
presence on an operational range of any explosives, unexploded
ordnance, munitions, munitions fragments, or constituents thereof that
are or have been deposited thereon incident to their normal and
expected use and remain thereon.
``(3) Notwithstanding the provisions of paragraph (2), the
authority of the President under section 106(a) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. 9606(a)), to take action because there may be an
imminent and substantial endangerment to the public health or welfare
or the environment because of an actual or threatened release of a
hazardous substance includes the authority to take action because of
the deposit or presence on an operational range of any explosives,
unexploded ordnance, munitions, munitions fragments, or constituents
thereof that are or have been deposited thereon incident to their
normal and expected use and remain thereon.
``(4) Nothing in this section affects the authority of the
Department to protect the environment, safety, and health on
operational ranges.''

DOD's proposed change to the definition of ``release'' may narrow
the scope of State authority under State Superfund-type laws, because
it may narrow CERCLA's waiver of immunity. CERCLA's waiver of immunity
includes State laws ``concerning removal and remedial action.'' \59\
CERCLA's definitions of ``removal'' and ``remedial action'' are limited
by the definition of ``release.'' \60\ Thus, by excluding the ``deposit
or presence on an operational range of any explosives, unexploded
ordnance, munitions, munitions fragments, or constituents thereof that
are or have been deposited thereon incident to their normal and
expected use'' from the definition of ``release,'' paragraph 2019(b)(2)
arguably precludes State Superfund authority over munitions-related
contamination on operational ranges.
---------------------------------------------------------------------------
\59\ 42 U.S.C. Sec. 9620(a)(4).
\60\ 42 U.S.C. Sec. 9601 (23) and (24).
---------------------------------------------------------------------------
Read in conjunction with proposed paragraph 2019(b)(1), paragraph
2019(b)(2) also may be read to preclude prevents States from requiring
cleanup of munitions-related contamination on closed, transferred, and
transferring ranges (i.e., FUDS) under State Superfund-type laws. This
statutory construction follows from the fact that paragraph 2019(b)(2)
excludes the both the deposit and the presence of munitions-related
contamination on an operational range from the definition of release.
Consequently, the presence on a closed, transferring, or transferred
range of munitions- or explosives-related contamination that was
deposited when the range was operational could only be considered a
``release'' if paragraph 2019(b)(1) specifically included the presence
of munitions-related contamination on a nonoperational range in its
definition of release.
However, paragraph 2019(b)(1) only says that the deposit or
migration of munitions-related contaminants off an operational range
constitutes a release under CERCLA. Thus, under subsection 2019(b),
munitions-related contamination on a former military range that arises
from the deposit of such materials on the range while it was still
operational may not be considered a ``release'' under CERCLA, and would
not fall within the scope of CERCLA's waiver of immunity. States may
thus be precluded from using their State Superfund-type laws to require
DOD to address munitions-related contamination, including residual
unexploded ordnance or soil or groundwater contaminated with munitions
constituents such as perchlorate, RDX, or TNT at former military
ranges. Additionally, there are several States whose Superfund-type
laws are tied to definitions in CERCLA. Amending CERCLA's definition of
``release'' may limit these States' ability to require parties other
than DOD to clean up such contamination at former ranges.
Subsection 2019(b)'s overall impact on EPA's CERCLA authority to
clean up munitions-related contamination on operational ranges is far
from clear. While preserving the President's authority under CERCLA
section 106, this provision appears to eliminate section 104 removal
and remedial authority for munitions-related and explosives-related
contamination. It also appears to remove the cleanup of such
contamination from the scope of CERCLA section 120 interagency
agreements for sites on the National Priorities List. This means that
EPA will no longer have authority to select (or concur in) remedies for
munitions- and explosives-related contamination at NPL sites. This
provision may also be read to eliminate the requirement that
investigation and cleanup of these contaminants be conducted according
to standards that apply to all other CERCLA cleanups. By removing these
public involvement, procedural, substantive, and technical safeguards,
section 2019(b) may undermine the goal of achieving cleanups that
adequately protect human health and the environment.
Finally, section 2019 may limit State and Federal authority to
pursue natural resource damage actions for contamination caused by
munitions and explosives constituents. Natural resource damages are
only available for releases of hazardous substances that cause injury
to, loss of, or destruction of natural resources.\61\ By restricting
the definition of solid waste to exclude munitions and explosives
constituents, subsection 2019(a) may exclude some such constituents
from being ``hazardous substances'' under CERCLA.\62\ By restricting
the definition of ``release'' under CERCLA, subsection 2019(b)
restricts the number of sites where natural resource damage claims may
be pursued.
---------------------------------------------------------------------------
\61\ 42 U.S.C. Sec. 9607(a)(4)(C).
\62\ See 42 U.S.C. Sec. 9601(14).
---------------------------------------------------------------------------
CONCLUSION

DOD's far-reaching amendments to RCRA, CERCLA, or the CAA are not
warranted. These laws have not impacted readiness, and are not likely
to do so. As shown in the preceding portions of our testimony, DOD's
proposed amendments to RCRA, CERCLA, and the CAA have little to do with
maintaining readiness. They would, however, provide substantial
exemptions from environmental requirements. The activities that DOD
would exempt from the environmental laws can have significant adverse
impacts on human health and the environment. States have historically
worked cooperatively with DOD to find solutions to environmental
problems at military installations that minimize regulatory burdens
while protecting human health and the environment. We would be glad to
continue this work with DOD to develop ways to address its readiness
concerns within the context of the existing environmental laws.
We would also urge that any proposed legislation on this issue go
through a normal legislative process with public hearings before the
committees with jurisdiction over the environmental laws. The normal
legislative process allows interested parties, including the States--
which are the primary implementers and enforcers of the Nation's
environmental laws--an opportunity to present their views on these
matters. Such hearings would allow deliberate consideration of any
proposed amendments. As we have shown above, seemingly small amendments
to the environmental laws can have large effects, particularly when
State authority over Federal agencies is at stake.

Senator Ensign. Thank you for your testimony.
Just very quickly, Mr. Benevento, could you clear up
whether the official position of the State of Colorado and the
Governor of the State of Colorado is to endorse the position
Mr. Mears just took?
Mr. Benevento. The executive branch position is consistent
with my testimony.
Senator Ensign. Thank you.
First I do want to say, Mr. Benevento, it is not like you
came here and just parroted what the military said. I thought
you had some very interesting suggestions and I think that this
subcommittee has to look at that as well as the military and
try to work it with those. That is the kind of what I was
talking to the last panel about, the types of things that we
need to look at. We need to look at--you were not coming here
just attacking. You were not saying that what they are trying
to do is just roll back environmental legislation. You were
trying to say here, we support readiness and here are some
positive suggestions to go forward.
I think that that is what we need to be looking at, and I
know that that is what the DOD is looking for and certainly
what this subcommittee is looking for.
I want to start with Mr. Cohen. The Readiness and Range
Preservation Initiative addresses issues related to endangered
species, marine mammals, cleanup of operational ranges, and air
pollution. Can you briefly describe the rationale and need for
the legislative relief? There has been a lot of back and forth
whether just use exemptions, just current law. Mr. Mears just
talked about it is working, why try to ``roll back''
environmental laws?
Mr. Cohen. Yes, sir. Thanks very much. I would like to
clarify that our essential problem is not with the existing
regulatory policy or existing State regulators or existing
Federal regulators. To the contrary, they have worked hard and
have been very sensitive to the needs of military readiness.
Our basic problem is that these regulatory policies are under
threat from litigation policies and that litigation outcomes
are what would reverse these regulatory policies and produce
unacceptable outcomes for military readiness.
In terms of the exemptions available to us, I would like to
address what the prior panel----
Senator Ensign. Let me just stop you right there.
Mr. Cohen. Yes, sir.
Senator Ensign. Correct this statement if I miss, if I am
stating it wrongly. What the military is looking to do is not
roll back, but to maintain virtually the status quo of what has
been.
Mr. Cohen. Yes, sir.
Senator Ensign. That the courts are, I guess, putting on
extra burdens to stop you from doing the environmental balance
that you have been doing. Is that a correct statement?
Mr. Cohen. Yes, sir.
Senator Ensign. Thank you. Go ahead.
Mr. Cohen. In terms of the availability of exemptions as an
alternative, or the absence of a ``train wreck,'' so to speak,
of a disastrous injunction or a hostile court ruling that would
really stop readiness cold, first with respect to the
exemptions. The exemption that the witness referred to in the
previous panel in the Armed Forces Code, 10 U.S.C. Section
2014, affords us at most a 5-day ability to suspend an activity
by an executive branch regulator. It has no effect with respect
to States. Again to return to the point that I first made, our
problem is not with Federal regulators or State regulators. Our
problem is with litigation and section 2014 does not apply to
court decisions.
Thus, for example, there is no adverse regulatory decision
in the SURTASS LFA case that we could apply section 2014 to.
The adverse problem that we face is a litigation which has
resulted in an injunction. Section 2014 is useless for that.
With respect to using exemptions more generally as a means
of enabling everyday readiness activities, it seems to the
Defense Department unacceptable as a matter of public policy
that a systemic problem, which we believe we have documented
over years of testimony, is affecting across the country.
Basic military activities that have gone on as long as we
have had Armed Forces and will have to go on in the future as
long as we have them as well, should not be forced to proceed
by virtue of emergency exemptions that were intended to be of
short duration and to apply to quite limited geographic
locales.
So we have a philosophical disagreement that we should
proceed by exemptions rather than trying to adjust the
underlying statutory structure in ways that make sense. The
analogy we like to use is that, just as every car ought to have
an emergency road repair kit, every statute ought to have an
emergency exemption (as the MMPA does not). But if the only way
you get to work every morning is by using your emergency repair
kit, there is something wrong with your car and it needs to be
repaired. That is what our proposals seek to do.
With respect to the justification for each of our specific
provisions, I can state that very briefly. With the ESA, what
we are trying to do is reaffirm the legality of what Ms. Clark
did back in the Clinton administration, which was to take a
case-by-case look at our INRMPs, our management plans, at each
installation, and decide which ones were sufficiently
protective of the habitat of endangered or threatened species
to say, ``this is functionally good enough that we do not need
to designate critical habitat at this installation.''
That was a perfectly reasonable decision. It is not a
blanket or sweeping determination that says wherever we have an
INRMP there is no critical habitat designation. It is a case-
by-case, site-specific determination that has been made in the
last two administrations. But that policy is under threat from
litigation.
As I mentioned, in just a few days the Interior Department
will be required to revisit the decisions that Ms. Clark was
referring to in her earlier testimony, and we are quite
concerned, as Interior testified earlier, that a recent
district court decision has placed an even larger cloud over
the legality of that.
Our opponents in that litigation are saying, not that the
specific Miramar and Pendleton INRMPs are bad, but that no
INRMP, no matter how good it is, can ever substitute for
critical habitat designation as a matter of law. All that our
amendment would do is remove that legal argument. They would
still be in a position to say that any particular INRMP is not
good enough to justify nondesignation of critical habitat.
With the Marine Mammal Protection Act, again what we are
trying to do is to safeguard regulatory policies that NOAA has
already in place, but that were significantly destabilized by
the SURTASS LFA decision, among others. In the SURTASS LFA
decision, the regulatory definition of harassment, which
closely tracks the definition that we are trying to propose as
a matter of legislation, was held to be contrary to law by the
district court, and so too was the agency's 20-year-old
regulatory understanding of what was meant by the so-called
``small numbers'' requirement.
Again we are trying to rehabilitate and revive those
regulatory interpretations, which are longstanding. Again, we
think that a regulatory structure which focuses on biologically
significant behaviors is not an exemptive structure at all. To
say that someone is not going to be regulated for biologically
insignificant activities--I do not think that you could find
one person in a hundred who would call that an exemption of any
kind, much less a sweeping one. It is like saying that someone
who rides a bicycle enjoys a sweeping exemption from auto
emissions standards.
With respect to our RCRA and CERCLA provisions, again this
is an attempt to codify the prevailing regulatory policy that
EPA and the States have in force with respect to our
operational ranges since those two statutes were passed. As Mr.
Benevento has testified, no one tries to regulate our
operational ranges on a day-to-day basis under RCRA or CERCLA.
But there is ongoing litigation and the threat of further
litigation.
Senator Ensign. What did you think about his suggestion
about the definitions on operational ranges, active-inactive,
to make the States have more of a comfort level?
Mr. Cohen. Yes, sir. Actually, we are proposing in another
part of our defense authorization a definition of operational
ranges, both active and inactive, which tracks the definition
of active and inactive ranges in the Military Munitions Rule.
We have already agreed with EPA and have language at OMB on
language that would tighten up the definition of operational
ranges to make clear that both active and inactive ranges have
to be under the jurisdiction, custody, or control of the
Defense Department, not operated or owned by a contractor.
I thought many of his suggestions were very well taken.
Senator Ensign. I would like to get some of the suggestions
that he has taken and get us, not only get Mr. Benevento a
response, but also get this subcommittee a response to his
suggestions, because they seemed, at least some of them--if
some of them are not reasonable, then maybe we can get that.
[The information referred to follows:]

The Department has taken very seriously the comments and
suggestions made by Mr. Benevento and we have revised the language for
our RCRA/CERCLA legislative requests accordingly. In that vein we have
been in constant contact, not only with Mr. Benevento, but with a
variety of State representatives. I have personally met with a number
of State Attorneys General, and we have had discussions with the
National Governors Association, the Environmental Council of the
States, the National Conference of State Legislators and the
Association of State and Territorial Solid Waste Management Officials
and numerous States individually. The result of this consultation, I
believe, is new language that clearly addresses the issues raised by
Mr. Benevento, who now strongly supports the proposals as revised with
his input.

I will come back for a second round, but let me turn it
over to Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. Benevento and Mr. Mears, last fall our committee
received a letter signed by 33 State attorneys general opposing
proposals to exempt the DOD from the CAA and the cleanup
statutes. With regard to RCRA and CERCLA, the letter stated,
and I am quoting:

``The amendments to RCRA and CERCLA would preempt State
and EPA authority over munitions-related and
explosives-related wastes at a broad range of sites,
including up to 16 million acres of former ranges that
may be contaminated with unexploded ordnance,
Department of Energy facilities, and even private
sites, as well as current military bases. Ignoring the
environmental consequences of military training will
benefit neither the environment, public health, nor
military readiness, as the experience at the
Massachusetts Military Reservation demonstrates. There,
decades of military activities contaminated a sole
source aquifer with explosives contaminants, causing
closure of several municipal drinking water supply
wells and prompting EPA to order cessation of live-fire
training. While the military environmental regulators
have subsequently reached agreement on how to balance
military training and environmental protection at MMR,
it is certainly not a model for sustainable range
use.''

Mr. Benevento and Mr. Mears, do you agree or, my question
is, why do you agree or disagree with the concerns raised in
the letter from the 33 State attorneys general?
Mr. Benevento. I think the concerns raised by the State
attorney generals were based upon some earlier language that
DOD had proposed. Frankly, I talked with Mr. Cohen and I have
talked with the Armed Services staff about what exactly--what
do you want to do here? What exactly are you trying to get at?
My understanding of what they are trying to get at under RCRA
is not to protect any off-site release. I think we would have
concerns if they did.
Explicitly what they are trying to do is protect the
ability to use active and inactive ranges without any potential
interference from environmental statutes. I think we can craft
something that limits it to a piece of property. I really think
what we are talking about here is looking at a piece of
property and saying, okay, this piece of property is going to
have a limited exemption, limited to the time that they are
using it or potentially could use it, and then afterwards all
of the full force and weight of the laws will come back once it
is taken off of active or inactive status.
A lot of these environmental laws have much more sweeping
exemptions in them already. I think if you look at RCRA, you
can go down a list of everything from in situ mining to
anything you place into a domestic treatment, a domestic waste
water system, is exempt from RCRA.
This is a much more limited exemption. Really what it does
under RCRA--really what it does is it says, okay, you have this
piece of property for the time that they are using it for
military preparedness, military readiness activities--and I am
no expert on what that is, so I have to assume that the experts
know what they need and when they need it--we, the regulators,
are not going to, as long as there is no off-site migration,
are not going to be in there regulating it.
Second, I think that they are willing--it has to be a
readiness activity on an active range, for example, under RCRA.
So in conversations I have had with DOD, if it is an open
burning, open disposal of waste through open burning, open
detonation (OBOD), they would still come to us and seek a RCRA
permit. However, if they are doing OBOD for training purposes
we currently do not permit that, and this would merely codify
what we do not do.
Everybody keeps asking us for specific examples. I think
what we are trying to do here is avoid having a specific
example by codifying what we already do.
Senator Akaka. Mr. Mears?
Mr. Mears. Thank you for the question, Senator. Yes, we do
agree with that letter, had a hand in drafting it. The reasons
why we support it in summary actually have been captured by Mr.
Benevento in his testimony. The way the legislation is
currently crafted, particularly as it relates to RCRA and
CERCLA, it plays with the fundamental waiver of sovereign
immunity. It plays with some very fundamental definitions:
solid waste in the RCRA statute, the definition of ``release''
under Superfund.
Amending these provisions of those statutes has far-
ranging, sweeping effect. Mr. Benevento's suggestions may be
ways to narrow this legislation that get to the DOD's proposal.
However, they are fundamentally different than the legislation
that has been proposed to date.
Senator Akaka. Mr. Benevento and Mr. Mears. Earlier this
year the State and Territorial Air Pollution Program
Administrators (STAPPA) and the Association of Local Air
Pollution Control Officials (ALAPCO) wrote a letter to the
Chairman of the House Armed Services Committee stating their
opposition to proposals to exempt certain DOD activities from
requirements of the CAA. The letter states, and I am quoting:
``STAPPA and ALAPCO believe that the proposed CAA exemptions
are unwarranted and will impede local, State, and Federal
efforts to attain and maintain health-based national ambient
air quality standards and deliver healthful air to our
citizens. Such exemptions would also interfere with our efforts
to protect air quality in national parks and other important
ecosystems.
``The proposed exemptions would allow military readiness
activities, alone among air pollution activities that our
members regulate, to cause or contribute to violations of
health-based NAAQs, increase the frequency or severity of such
violations, or delay timely attainment of the standards or
interim milestones. Moreover, this approach would impose
inequitable burdens on the industries we regulate, as well as
on the public. State and local air pollution control officials
will still feel the responsibility to deliver truly healthful
air to the public we serve and therefore we will have no choice
but to call upon other sectors in order to obtain the emission
reductions we can no longer secure from military facilities.''
Mr. Benevento and Mr. Mears, again, why do you agree or
disagree with the concerns raised by the STAPPA and ALAPCO
letter?
Mr. Benevento. The letter really says two things. It said
it will make air quality worse and it will not make air quality
worse because what will happen is we will go after and get the
emissions reductions from other sectors. I think that this one
requires a lot of thought and a lot of work because you are
dealing with off-site impacts.
In Colorado, if you look at a major metropolitan area,
which is where you are going to have most of your NAAQs
concerns, if you look at Colorado, if you look at Denver and
Colorado Springs, which are really the two areas this would
impact, and you look at the proportion of--you look at the
emissions budget and the military's contribution for the
defined activities, not the entire contribution but really the
readiness activities that are spoken about in the bill, you
would find them to be an extraordinarily small amount.
Now, I am just speaking for Denver and Colorado Springs. I
am not speaking for the Nation, of course. But you would find
they are an extraordinary small amount. They are something that
normally, unless there is going to be a big change at these
bases, that normally we would not even consider. Denver,
Colorado is lucky. We have no areas that are in nonattainment
for any air quality standard.
So I think you have to do a few things with this one. I do
not think it is unresolvable. I think it is resolvable. I think
I disagree with the tone of that letter in that it just points
out every single problem that could potentially arise, some of
which I think are actually contradictory to each other, but it
does not point out any solutions.
I think there are solutions that are possible by requiring
offsets of other base activities that are not military
readiness activities. I mentioned trading programs. I mentioned
something like the natural events policy which we use in
Colorado, which I think you still get into a little bit of off-
site impacts there, but could at least provide part of a
solution to the issue.
Senator Akaka. Mr. Mears?
Mr. Mears. Thank you, Senator. I really have to defer to
those air authorities for their expertise in the area of air
quality. But I can say that the concern about the breadth of
the provisions as they relate to the CAA are significant
concerns, and the language could have broader-reaching impacts
than have been stated the intent of the DOD to achieve.
It creates in a sense a legal fiction, in the sense that it
suggests that a region--a State would not necessarily have to
find that a region was in nonattainment with the air quality
standards by virtue of the fact that there was, even though the
emissions levels might be above the actual standard, if the
reason for that is the emissions from the DOD.
These standards are set based on public health. The public
health, the effects on folks, on kids that get asthma, the
various kinds of public health impacts of air quality, will not
go away as a consequence of this statute. It will put the State
air administrators and folks like Mr. Benevento in the awkward
position of having to find other ways to meet that standard,
because they are accountable to the citizens of their States to
ensure that they do have a regulatory program that achieves
those standards.
Senator Akaka. My time has expired, Mr. Chairman. Thank
you.
Senator Ensign. Mr. Cohen, I had this question briefly for
EPA earlier and I want to ask it to you, about perchlorate,
especially as it relates to Lake Mead. Will the
administration's proposals in any way affect the cleanup
efforts related to drinking water sources such as Lake Mead?
Mr. Cohen. No, sir, not at all, for multiple reasons
actually. The Lake Mead perchlorate situation as I understand
it was largely caused by the residue of industrial processes,
disposal practices from a manufacturing facility, and a
catastrophic accident that occurred in 1988. None of those are
remotely affected by our Readiness and Range Preservation
Initiative, which only affects--certainly is only intended to
affect and we are trying to clarify would only affect--our
operational ranges.
Senator Ensign. We have your commitment that that language
will be clarified so that it does not affect at all in any way
the Defense Department's responsibility in helping the cleanup
with perchlorate going into Lake Mead?
Mr. Cohen. Yes, sir.
Senator Ensign. Thank you.
Also, we were just talking about air impact. How much of an
air impact is involved with the DOD conformity typically? In
other words, I do not know if you can quantify it, and also
maybe relate it to the ability in the future to locate the F-22
and the Joint Strike Fighter.
Mr. Cohen. Sir, you have put your finger exactly on the
concern that we have and what is really motivating us. In the
past we have had a number of near misses where it was only by
fortuitous circumstances that we were able to relocate existing
weapons systems. There was one instance in California, for
example, where we were only able to relocate a weapons system
to the LaMoore Naval Air Station because of the coincidence
that there was a nearby bomber base that was closing.
Those are the sorts of near misses that we want to avoid by
building a bit of extra flexibility into the act. That
flexibility, the 3-year window that we would have to come into
compliance, would give us the opportunity and the time to
actually do the things that Mr. Benevento was discussing, try
to adjust our nonreadiness activities, to try and make offsets
on-base, or to purchase offsets, or to work with the State to
revise the State Implementation Plan. Any of those are
possibilities, but they do take time, and under the current
statutory regime there is no flexibility. We cannot even begin
to implement the activity. We could not begin to base a new
weapons system unless we could demonstrate conformity from the
get-go.
So what we are trying to do is build in a window of time
where we could both begin the readiness activity, but at the
same time take that opportunity to try to find the offsets that
would permanently bring us into conformity.
With respect to your question about weapons systems, we are
trying right now--and we will get back to you, sir, for the
record--to come up with some examples, characteristic examples
of some of the emissions outcomes that we would expect from a
normal-sized deployment of a new weapon system. That is
currently being prepared. We had hoped to have it available by
today.
[The information referred to follows:]

Please see Mr. Cohen's response to QFR #3 for this information.

But characteristically, even our largest military readiness
activities at a base would generate only some hundreds of tons
of emissions in air basins whose emissions budgets can run into
the thousands and tens of thousands of tons. To that end, I
would like to quote actually a letter that was sent by former
EPA Administrator Carol Browner to then-Secretary of Defense
Cohen. The letter was specifically about PM-2.5, but I think
the closing paragraph is very telling:
``In summary, defense sources are a small part of the air
quality problem and provide a unique and critical need for the
Nation's security. I look forward to continuing to work with
you and DOD on issues related to environmental compliance by
military facilities.''
So that is the Administrator's imprimatur, not only for our
readiness activities, but for all DOD activities, that they are
only a small part of the air quality problem. We would not be
here, sir, asking for this added flexibility if we thought that
there would be serious health impacts on the surrounding
communities in the air basins where we have our bases.
Senator Ensign. Thank you.
I want to talk along these lines. It is my understanding
that the administration's proposal for management of munitions
on operational ranges is consistent with EPA's military
munitions rule. I believe this proposal also preserves the
authority to address imminent and substantial endangerment on
the range. Mr. Cohen, why is it necessary to codify existing
regulatory policy and how will communities be assured that
human health and the environment will be protected on
operational ranges?
Mr. Cohen. The reason again, sir, for having to codify
existing practices and existing policy is that they are under
threat from litigation. There is a case at Fort Richardson in
Alaska, in which there is an ongoing effort to attempt to
characterize our training activities at that base as the
creation of solid waste for purposes of RCRA and a release for
purposes of CERCLA, both of which are regulatory triggering
events. They require regulatory responses.
While that is only one litigation, it is certainly
indicative of a trend that we are concerned about, because the
groups that brought that litigation at the time that they
brought it did, I believe, express a desire to take that
litigation on the road. In fact, if a court were to establish
that precedent, it would be very difficult for the Defense
Department to distinguish the live-fire training that we do at
Fort Richardson from the training we do at basically all of our
operational ranges.
Senator Ensign. So why not just use exemptions?
Mr. Cohen. Sir, then it would be necessary for us to do it
at all of our operational ranges, certainly all of our active
ranges, for routine test and training activities, which seems
to us to be very different than the intention of Congress in
providing for time-limited and site-specific exemptions.
In terms of what we are doing to try to foster range
sustainment and also to build the confidence of communities in
our efforts, there are a whole suite of policy directives that
we have prepared or are preparing. The DOD directive on
sustainment of ranges and operating areas was signed by the
Deputy Secretary on January 10 and is now in effect. It is
designed to establish capstone-level guidance to DOD and the
Services on an overall policy for test and training, range
sustainment planning, management, coordination, and outreach,
and as a capstone directive it is intended to serve as a guide
for the development or revision of all the other directives of
the Department applicable to range sustainment.
It requires that range planning and management must
identify range requirements for training and testing, identify
encroachment concerns and other inhibiting factors to the
ranges, and develop responsive plans to address any conflicts.
Coordination and outreach on sustainment issues that include
off-range stakeholders is also directed, with a goal of
promoting understanding of range management and use decisions
and working with outside groups to consider their concerns and
work cooperatively to address shared concerns.
In addition, sir, other related policies on noise, active
range clearance, air installation compatibility, use zones, and
outreach are in formal staffing now and should be published
later this year. We are also dramatically expanding our
outreach efforts to communities with respect to range
sustainment. That includes not only the discussions that we
have been having with Mr. Benevento and some of the other State
groups, but much more decentralized, locally based discussions
with communities, private parties, and nongovernmental
organizations.
Last year we signed the Munitions Action Plan in
coordination with EPA, which is again designed to promote
sustainable use of our ranges and promote public confidence in
our range management activities. We have a green munitions
program that we are working on, again cooperatively with the
regulators.
In short, a whole series of programs, policies, and
resources are being brought to bear on this, because we realize
that we cannot justifiably ask for this regulatory treatment of
our operational ranges, unless we can make a case both to
Congress and to the communities that we have valid sustainment
policies in place.
Senator Ensign. It is Senator Akaka's, but I think he would
probably like to hear from both of you on what Mr. Cohen has
just talked about. So I will start with Mr. Mears and then we
will go to Mr. Benevento.
Mr. Mears. Sure. There was a number of points that Mr.
Cohen just addressed. One that jumps out at me is the concern
about the threat of litigation by citizens groups, and that may
ultimately prove to be a concern. It should not be a concern
now. I have had the chance to review the pleadings in that case
and they have not proceeded to any decisions in that court. I
think it is premature to assume that there is actually a
likelihood that, for instance, in the arena of RCRA there will
be precedent-setting law set that will impede the DOD at other
sites around the country.
In fact, the pleadings are fairly light on the RCRA end.
The State of Alaska is not actually delegated to implement the
RCRA statute and there is not--the definition of solid waste is
not, at least at present, at issue in that case. So I think it
is premature to presume based on that litigation that there is
a need to change the statute.
Mr. Benevento. I think what we want to avoid, whether it is
RCRA, CAA, or any other law, is a district-by-district
decisionmaking process, district court-by-district court, or
appeals-by-appeals, that could lend to different implementation
throughout the country. I think it is a legitimate policy call
for Congress to say there are certain military readiness
activities in certain active and inactive ranges that while
they are in use deserve to be exempted from environmental
regulations, and then if there is a cleanup necessary we can
follow on with a cleanup afterward.
So I think if what you are seeking to do is avoid a
different application based upon court decisions, it would make
sense for Congress to just make a call and step in and broadly
do what the intent of the legislation is. I think what you want
to avoid is what has happened with wetlands policy in the
country, where you have different district courts making
decisions and you basically have a different wetlands law
depending upon where you live in the country.
Senator Ensign. Senator Akaka.
Senator Akaka. Thank you, Mr. Chairman.
Mr. Mears, Mr. Cohen has characterized the DOD proposal as
codifying the munitions rule. Would you like to comment on
that?
Mr. Mears. Thank you, sir. Yes, the munitions--actually,
the statutory provisions that have been suggested, the
amendments, go further than the munitions rule. The munitions
rule, of course, because it is a regulation, cannot amend the
statutory definition of solid waste, which this legislation
does. That has, as a practical matter, the impact of
potentially--of clearly impeding the State's ability to bring
imminent and substantial endangerment claims.
The fact that EPA retains some authority to bring those
claims is of small comfort to the States. We, over the past few
decades, have become the primary implementers of these
statutes. We have invested significant resources and developed
significant expertise in the application of these laws to these
sites in these States, and as a consequence, EPA has withdrawn
its investment in large part in those States like Washington
that has a very strong and effective program.
We cannot rely on EPA to be the ones that step in and
identify problems and work with these defense installations to
solve those problems. So again, there are other ways in which
the munitions rule is more narrow than this legislative
proposal, but it is not exactly accurate. It may be the
intention to try to achieve simply what is in the munitions
rule, but the statutory language as proposed is much broader.
Senator Akaka. I want to say thank you very much for your
responses, and I want to take the time to thank the chairman
for calling this hearing. I also want to thank the chairman and
his staff for calling such three great panels today. Without
question, this will be very helpful to the committee.
Thank you very much.
Senator Ensign. Thank you, Senator Akaka, and for working
with us.
I want to thank the panel for your excellent testimony,
really all three panels today. I think it was a very helpful
discussion and we got some good testimony on the record, and
hopefully we can now go forward and improve the legislation,
address some of the concerns that were brought up today, and
come out with something that everybody I talked about, and that
is the need for balance.
We are at war. I think it now comes into focus of how
important readiness is and training, and for us to be able to
go forward, protecting the environment, protecting human health
and safety, but at the same time making sure that our Armed
Forces have the training and readiness that they need to fight
a war when they are called upon to fight that war.
Also, just very briefly, Senator Allard, Mr. Benevento,
wanted to be here today, but unfortunately he was unable to
attend because he is on the floor helping a judicial nominee
from Colorado. So he wanted to be here and welcome you, but he
was unable to do that.
Senator Akaka. Mr. Chairman, I would like to take the time
to thank my staff also.
Senator Ensign. Ours as well. I think both staffs did a
great job preparing. Once again, it is just terrific to work
with this subcommittee staff. They are very professional in the
way they work with all the witnesses and get us ready for these
hearings.
So thank you all very much, and this hearing is adjourned.
[Questions for the record with answers supplied follow:]

Questions Submitted by Senator John Ensign

ADMINISTRATION ENVIRONMENTAL LEGISLATIVE PROPOSAL

1. Senator Ensign. Mr. Cohen and Mr. Suarez, during the hearing on
April 1, 2003, Doug Benevento, Executive Director of the Colorado
Department of Public Health and Environment, testified that he wanted
to offer some suggestions on the administration's legislative proposal
on the Resource Conservation and Recovery Act (RCRA), the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), and
the Clean Air Act (CAA). Could you provide responses to suggestions
proposed by Mr. Benevento in his testimony at the April 1, 2003,
hearing before the Subcommittee on Readiness and Management Support?
Mr. Cohen. The Defense Department has worked very extensively with
Mr. Benevento since the hearing to refine our RRPI RCRA/CERCLA
proposal. As a result of these very cooperative, informative
discussions, the Defense Department has recently submitted to EPA a
modified version of the Department's current RCRA/CERCLA proposal that
would narrow the circumstances in which the Department's RCRA provision
would apply in the event of off-range migration. (Attached) EPA is
currently reviewing this proposal.

Mr. Suarez. EPA appreciates the thoughtful suggestions Mr.
Benevento proposed in his testimony. Since the April 1, 2003 hearing,
EPA and DOD agreed on new proposed legislative language that would
address Mr. Benevento's concern regarding the applicability of the
proposed exemptions under RCRA and CERCLA: the Agencies jointly agreed
on a revised definition of ``operational range'' that clarifies that
the exemptions would apply to active and inactive ranges under the
jurisdiction, custody or control of a the military services.
EPA and DOD have pledged to work together to refine the legislative
proposals to address concerns raised by the States, communities, and
other stakeholders. These concerns include monitoring and reporting of
environmental impacts of military readiness activities and protecting
ground and surface water--two of the concerns Mr. Benevento raised in
his testimony. In addition, EPA and DOD appear to be nearing agreement
on the use of land use controls to prevent the migration of
contamination at Superfund sites, and we continue to work together
through the Munitions Response Committee to address a number of
environmental issues related to ordnance and explosives (OE) and
unexploded ordnance (UXO).
Finally, EPA continues to believe that proposed changes to the
Clean Air Act appropriately addresses two important national
priorities--military readiness and the protection of human health and
the environment--while holding the States harmless for any
nonattainment of ambient air quality standards resulting from military
readiness activities.

2. Senator Ensign. Mr. Cohen and Mr. Suarez, how does the
administration propose to work with States and communities to address
concerns related to these proposals?
Mr. Cohen. The Services and DOD are working intensively with all
stakeholders to ensure range sustainability and environmental
protection. It is an essential military mission to protect the natural
resources of the U.S. and to maintain the lands entrusted to us for
training purposes. In order to achieve this goal, DOD has partnered
with the Nature Conservancy and other land trust and conservation
groups, and works closely with the Fish and Wildlife Service and the
National Oceanic and Atmospheric Administration, to preserve sensitive
habitat throughout the U.S.
DOD is partnering with land trust organizations and State and local
governments to find ways to create buffer zones and acquire sensitive
habitat for threatened and endangered species adjoining our test and
training ranges.
With respect to concerns expressed by some State and local
regulators over our RRPI proposals, the Department is engaging in
vigorous outreach to a broad range of officials and organizations,
including National Association of Attorneys General, Conference of
Western Attorneys General, National Conference of State Legislators,
Association of State and Territorial Solid Waste Management Officials,
Environmental Council of States, International City/County Management
Association, National Association of Counties, and the National
Governors Association. I personally have met with dozens of State
regulatory officials on this issue.
In addition, EPA and DOD have carefully assessed the concerns
expressed, and have completely revised our RCRA/CERCLA proposal in an
attempt to meet these concerns. We continue to work intensively with
State and local officials across the country on these issues.
DOD continues to work with local communities on current cleanup
initiatives underway at military sites across the United States. DOD
intends to meet its obligations to clean up contamination from past
practices and continue our strong pollution prevention and
environmental compliance programs. In this fiscal year alone, the
environmental budget for DOD will be $4 billion.
Finally, as I noted in my testimony, for areas other than
operational ranges that require cleanup, the Department has established
a Munitions Response Committee that includes partners from the U.S.
Environmental Protection Agency, Federal Land Managers, States, and
Tribes. The primary goal of the committee is to define a collaborative
decisionmaking process that ensures each party's rights and respective
responsibilities are respected. This approach will allow coordination
and, where appropriate, integration of the applicable statutory and
administrative authorities under Federal and State environmental laws.
This approach ensures that action will be taken within an agreed upon
approach when operational ranges are closed in the future.
Mr. Suarez. EPA values and actively solicits input and advice from
our State partners and community members. We continue to work closely
with the States through organizations like the Environmental Council of
the States (ECOS) and the Association of State and Territorial Solid
Waste Management Officials (ASTSWMO).

3. Senator Ensign. Mr. Cohen, you testified that the DOD was in the
process of preparing some estimates and/or assumptions regarding the
air emission impacts of new weapon systems. Could you provide that
information?
Mr. Cohen. Although we have made initial efforts preparing
estimates, such estimates must be used with great caution. In some
cases, aircraft operational data have not yet been fully defined and
published--a prerequisite for a reliable estimate. Further, to arrive
at estimates, the number and type of operations are generalized as
landings and takeoffs (LTOs), whereas basing documents will consider
the full range, location, and frequency of operations. Finally, since
final basing decisions have not been made with respect to each weapon
system, the estimates are difficult to place in meaningful context
regarding the significance of any increases or decreases in emissions
from newly based weapon systems. In the process of making basing
decisions, air impacts are considered in detail in environmental
analysis documents.

4. Senator Ensign. Mr. Cohen, if estimates are provided, what were
the underlying assumptions?
Mr. Cohen. The assumptions to arrive at a comparative net emissions
delta between a new weapons system and the system it will replace
appear below the comparative emissions table in the previous answer.
The LTO operational assumptions provide a generic glimpse of the
potential emissions differential. Any actual emissions differential
between a new weapons system and the system it will replace will be
determined by various site-specific data, involving a calculation that
is typically much more complex.

5. Senator Ensign. Mr. Cohen and Mr. Suarez, it is my understanding
that the administration's proposal for management of munitions on
operational ranges is consistent with the EPA's Military Munitions
Rule. I believe this proposal also preserves the authority to address
imminent and substantial endangerment on the range. Why is it necessary
to codify existing regulatory policy?
Mr. Cohen. It has been the uniform policy of the States not to
issue RCRA permits for test and training activities on operational
ranges, reflecting widespread, longstanding consensus that test and
training with munitions on operational ranges is not a waste management
activity. This policy is reflected in the 1997 EPA Military Munitions
Rule, which has been adopted by a majority of the States. However,
litigants are now asserting that notwithstanding EPA's and the States'
regulatory policy and practice, the more ambiguous statutory language
allows them to claim that such test and training with munitions is in
fact waste management. Our amendment would confirm existing State and
Federal policy and conclusively close the door to such litigation.
Mr. Suarez. Your understanding is correct in both respects. The
proposed legislation would largely codify and confirm EPA regulatory
policy, including the Military Munitions Rule. Moreover, EPA would
retain authority under CERCLA section 106 to address an imminent and
substantial endangerment from munitions on an operational range. As DOD
has testified, the purpose of codifying this policy is to protect
against litigation the regulatory policy that the use of munitions for
testing and training on an operational range is not a waste management
activity, and that DOD must address the environmental consequences of
such testing and training use involving the discharges of munitions
when the range closes, when munitions or their constituents migrate or
threaten to migrate off-range, or when munitions or their constituents
may present an imminent and substantial endangerment to public health
or the environment.

6. Senator Ensign. Mr. Cohen and Mr. Suarez, how might communities
be assured that human health and the environment will be protected on
operational ranges if the RCRA and CERCLA proposals were enacted?
Mr. Cohen. The RRPI initiative expressly preserves the authority of
EPA under section 106 of CERCLA to ``issu[e] such orders as may be
necessary to protect public health and welfare and the environment''
whenever it ``determines that there may be an imminent and substantial
endangerment to the public health, welfare, or the environment because
of an actual or threatened release of a hazardous substance from a
facility.'' Such orders are judicially enforceable. Because EPA's
sweeping section 106 authority covers not only actual but ``threatened
release,'' our proposal would clearly enable EPA to address groundwater
contamination before the contamination leaves DOD land--which is also
the objective of DOD's existing management policies.
In addition, States and citizens exercising RCRA authority under
our RRPI RCRA provision addressing off-range migration could
potentially use that authority to enforce on-range measures necessary
to redress the migration where appropriate.
Furthermore, the RRPI has no effect whatever on the authorities of
EPA or the States to respond to threats under the Safe Drinking Water
Act. EPA's continuing authority under the Safe Drinking Water Act to
prevent likely contamination clearly empowers the Agency to act before
contamination leaves DOD ranges.
Mr. Suarez. The bill specifically maintains the ability of States
and citizens to take actions against the military in the event that
munitions or their constituents migrate off-range and may pose an
imminent and substantial endangerment to human health or the
environment, if such materials are not addressed under CERCLA. States
and citizens also have authority to take action under State law or
bring citizen suits under RCRA if munitions pose a threat after a range
is closed. They would no longer have imminent hazard authority under
RCRA or State hazardous waste laws over environmental contamination
caused by explosives, ordnance, munitions, or unexploded ordnance (UXO)
on operational ranges used for their intended purpose and which remain
on the range.

7. Senator Ensign. Mr. Cohen and Mr. Suarez, on January 10, 2003,
the Secretary of Defense signed a DOD directive for Sustainment of
Ranges and Operating Areas. The directive provides the military
departments with policy guidance for test and training range
sustainment planning, management, coordination, and outreach. How do
such efforts contribute to environmental protection?
Mr. Cohen. The DOD directive, ``Sustainment of Ranges and Operating
Areas'' was developed as part of our overall comprehensive range
sustainment strategy. As I noted in my testimony, this directive
provides capstone-level guidance to DOD and the Services on overall
policy for test and training range sustainment planning, management,
coordination, and outreach. As a capstone document, it is intended to
serve as a guide in the development or revision of other directives
with applicability to range sustainment. Subordinate directives and
guidance documents will be developed to execute the policy contained in
the DOD directive. Several of the key policies of the directive will
contribute directly to environmental protection. First, the directive
requires DOD components to identify environmental concerns that are
implicated in range and operating area activities. Second, management
programs must be developed using a functionally integrated
decisionmaking process that includes all relevant staffs, including
those specializing in environmental compliance, protection, and
restoration. Finally, sustainment programs and management plans
developed by the DOD components must provide for multi-tiered
(national, regional, and local) coordination and outreach programs that
ensure consideration of all stakeholder interests in DOD range-related
decisions.
Mr. Suarez. I believe that the DOD is in a better position to
address the impacts of this directive.

8. Senator Ensign. Mr. Cohen and Mr. Suarez, critics of the
proposed legislative changes pertaining to management and cleanup of
munitions on active ranges complain that such changes would allow the
military to shirk responsibilities in cleanup and shift the burden to
private industry. Others have stated that the proposals would exempt
DOD open burning, open detonation pits, and other chemicals from
environmental regulation. Do you agree with this characterization? If
not, why?
Mr. Cohen. Both of these concerns do not reflect DOD's intention in
this legislation. EPA and DOD have completely redrafted the RCRA and
CERCLA proposals to make unambiguously clear that they apply only to
munitions test and training on operational ranges, not to munitions
waste management activities either on operational ranges or elsewhere,
such as open burn/open detonation or landfilling of munitions.
Similarly, although our provision would confirm existing State and
Federal policy that munitions test and training on operational ranges
are not waste management requiring cleanup, they have no impact on our
existing cleanup obligations on closed ranges, or for nonreadiness
activities, or for our contractors' activities. Accordingly, it cannot
result in shifting of burdens to the public or private industry.
Mr. Suarez. No. The proposed legislation, in our view, strikes an
appropriate balance between ensuring military readiness and
environmental protection. The legislation, if enacted, would preserve
essential authorities for EPA to protect human health and the
environment. The bill explicitly preserves EPA's Superfund authority
under CERCLA Sec. 106 to order an abatement of any imminent and
substantial endangerment created by munitions used for their intended
purpose on an operational range. For munitions that migrate off-range
or munitions not used for their intended purpose--or, indeed, for
releases of other hazardous substances, pollutants, and contaminants--
EPA retains its full panoply of CERCLA response authorities. The same
is true for munitions on closed ranges. Similarly, the bill provides a
limited RCRA exemption only for military munitions used for their
intended purpose on an operational range. Nevertheless, such munitions
will be subject to the full panoply of RCRA authorities, if they are
recovered, collected, and then disposed of by burial or landfilling or
if they migrate off the operational range and are not addressed by a
Superfund response action. The same is true for waste munitions on
closed ranges. All other waste handling activities will be subject to
the usual RCRA requirements.

9. Senator Ensign. Mr. Cohen and Ms. MacDonald, as a result of a
recent ruling by the Federal District Court in Arizona, the Fish and
Wildlife Service has asserted that the words ``special management
considerations or protection'' should be removed from the
administration's proposal under the Endangered Species Act. What is the
administration's position?
Mr. Cohen. The Department of Defense and the Department of the
Interior have been cooperatively working to develop revised language
that will address the Interior Department's concern that retention of
the phrase ``special management considerations or protections'' may
generate litigation risks.
Ms. MacDonald. The suggestion that the committee remove the words
``special management considerations or protection'' from the
legislative proposal was included in my written statement presented to
the subcommittee. The statement was cleared throughout the
administration, and therefore represents the administration's position.
As noted in my statement, the recent U.S. District Court ruling in
Arizona has called into question one of the methods the Fish and
Wildlife Service utilizes to exclude military lands with an approved
integrated natural resource management plan (INRMP) from a critical
habitat designation. The method in question (based on section 3(5)(A)
of the ESA) is the exclusion of military lands covered by an INRMP
because those lands do not need ``special management considerations or
protection'' due to the fact that this is provided in the INRMP.
However, the District Court has ruled, in a case relating to Forest
Service lands, that the Fish and Wildlife Service could not exclude
lands from critical habitat if those lands needed ``special management
considerations or protection.''
This court ruling could remove the option of excluding those lands
under section 3(5)(A). Because the ruling was based on the ``may need
special management considerations or protection'' provisions of the
act, using that term in subsequent statutory language could well
confuse the issue.
Therefore, removing the language referring to ``special management
considerations or protection'' would avoid a possible adverse linkage
between the administration's proposal and the court's ruling. This
language is not needed to accomplish the objective of the proposal.

10. Senator Ensign. Mr. Cohen and Dr. Lent, Dr. Lent testified that
some notice and comment language was inadvertently omitted from the
administration's proposal on Marine Mammal Protection Act. What is the
administration's position?
Mr. Cohen. It is correct that provisions requiring notice in the
Federal Register and an opportunity for public comment were
inadvertently left out of the RRPI provision dealing with the Marine
Mammal Protection Act. The DOD supports such notice and comment
opportunities for DOD incidental take requests.
Dr. Lent. The statement in question refers to the National Defense
Authorization Act (NDAA) for Fiscal Year 2004, not the administration's
Marine Mammal Protection Act (MMPA) reauthorization bill. The
provisions that this question refers to are not in the administration's
MMPA bill.
Proposed section 101(A)(b)(2) of the NDAA excluded a requirement,
currently contained in the MMPA, for the Secretary of Commerce to
provide public notice and opportunity for comment on requested
incidental take authorizations by the DOD.
NOAA Fisheries believes in the importance of public review and
participation. These amendments in the NDAA would require regulations
to be promulgated for taking marine mammals incidental to certain
activities and thus would follow the notice and comment procedures for
rulemaking under the Administrative Procedure Act. Furthermore, these
provisions would not prohibit NOAA Fisheries from announcing the
proposed rule in media other than the Federal Register.

[Whereupon, at 12:27 p.m., the subcommittee adjourned.]

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2004

----------

WEDNESDAY, APRIL 9, 2003

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

READINESS OF THE MILITARY SERVICES TO CONDUCT CURRENT OPERATIONS AND
EXECUTE CONTINGENCY PLANS

The subcommittee met, pursuant to notice, at 2:33 p.m. in
room SR-222, Russell Senate Office Building, Senator John
Ensign (chairman of the subcommittee) presiding.
Committee members present: Senators Ensign and Akaka.
Majority staff members present: William C. Greenwalt,
professional staff member; Gregory T. Kiley, professional staff
member; and Joseph T. Sixeas, professional staff member.
Minority staff member present: Maren R. Leed, professional
staff member.
Staff assistants present: Andrew W. Florell and Sara R.
Mareno.
Committee members' assistants present: John A. Bonsell,
assistant to Senator Inhofe; Arch Galloway II, assistant to
Senator Sessions; D'Arcy Grisier, assistant to Senator Ensign;
Clyde A. Taylor IV, assistant to Senator Chambliss; Davelyn
Noelani Kalipi, assistant to Senator Akaka; William K. Sutey,
assistant to Senator Bill Nelson; Andrew Shapiro, assistant to
Senator Clinton; and Terri Glaze and Andy York, assistants to
Senator Pryor.

OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

Senator Ensign. Good afternoon. I would like to welcome
both of our panels today and our ranking member on the
subcommittee, Senator Akaka. This is the fifth hearing that we
have held in this subcommittee and it will be the last one
before the markup. I think we have had a great set of hearings
and been very productive. We have learned a lot and I am
looking forward to today's testimony to learn a lot more for
the markup.
We are in critical times right now and, instead of reading
my opening statement, I am just going to summarize a few things
and submit the rest of it for the record and, without
objection, any opening statements will be part of the record,
as well as all of your full statements will be made part of the
record.
I just want to share a few observations. First of all, I
have not been able to tear myself away from the television
today, even more than most days. The events that are unfolding
before us are just absolutely spectacular. I think of the
bravery and the celebrations that are going on today in
celebration of that bravery that has brought freedom to the
Iraqi people.
But I also harken back to the sacrifices by those who have
either been injured or who have given the ultimate and paid the
ultimate price for that freedom, and we certainly owe them a
debt of gratitude as far as the Nation is concerned.
But I want to tell you members of the armed services and
those who represent the armed services today how as a Nation,
how proud we are of the job that you are doing. I think that
you have shown the rest of the world what the United States is
about, not only in the effectiveness of the way that you
fought, but in the way that the military conducted itself in
trying to minimize civilian casualties, in trying to do the
targeting.
I think the one story that was unfolded on television, I
cannot remember his rank, whether it was captain or colonel. We
talked about this yesterday, General, about going up before
that mosque. We had just had the suicide bomber the day before
and that young soldier asked his people to take a knee in the
face of what could have been a very dangerous situation, and
yet he calmly handled it and backed down what could have blown
up, would have looked very bad on international television.
It just could have really been a very negative point during
the war and instead, because of the way that you put them
through training, the kind of training that they had, I think
ended up being a situation that we all looked in awe of, and I
certainly did.
I also think back to the story that we heard with the
marines who had the opportunity to talk on the telephone and
each one of them was offered, and they turned down that
opportunity so that the first phone call could go to the
parents of the marine who was killed in action, just to see how
they were doing. The journalist said, at the end of that, where
do you find such people?
On Monday, I went down to Parris Island and had a great
privilege there, as well as I know it would be the same at each
one of our training bases, just to see some of the recruits.
That is where we get those kind of people. It is amazing to see
what you put them through, that they are voluntarily signing up
to put themselves through that.
Then every time I have heard either a family member or an
active duty, actually the person themselves in uniform, when
they talk about it, they want to be there. They know what they
are up against. They know the dangers, and yet they say they
are doing what they love. Not that they love killing people,
but they love the idea that we are liberating a country and
protecting our own citizens at the same time.
So I just wanted to start with that opening. I am looking
forward to your testimony. We have some serious business to
conduct today, but in the light of the events that are
unfolding before us, there is a great deal of celebration ahead
of us. I cannot wait to welcome a lot of those troops when they
come home.
Senator Akaka.
[The prepared statement of Senator Ensign follows:]

Prepared Statement by Senator John Ensign

Good afternoon. The Subcommittee on Readiness and Management
Support is meeting today to review several issues related to the
current and future readiness of our Armed Forces. We have a lot of
ground to cover this afternoon. I don't know that we'll be nearly as
successful in covering our ground here as our young men and women in
uniform have been in spearheading over Iraqi ground on the drive to
Baghdad these last couple of weeks, but we will endeavor to do our
best.
This is the fifth hearing that Senator Akaka and I will have
conducted with the Readiness Subcommittee in review of the President's
fiscal year 2004 budget request for the Department of Defense. Over the
last 6 weeks, I think that he and I have developed a solid, well-
documented record of the critical challenges facing the readiness of
the military Services today. Senator Akaka and I, and the other members
of this subcommittee, have enjoyed positive, thoughtful, candid
discussions with our many witnesses to date. I am confident that our
discussion with the witnesses today will further add to this important
record.
I want to take a moment to thank Senator Akaka for his continuing
commitment to the work of this subcommittee. In my opinion, Senator
Akaka's insight and perspective have been instrumental, not only in
helping shape these absolutely necessary hearings, but also in
developing thought-provoking dialogue with our witnesses. My
understanding of the many challenges facing the readiness of our
Services today has certainly benefited from Senator Akaka's
contributions. Again, thank you, Senator Akaka.
Let me first begin by welcoming our witnesses. Senator Akaka and I
have asked you to meet with us today because each of you are focal
points--in the Office of the Secretary of Defense (OSD), on the Joint
Staff, and for your services--for military readiness. The civilian and
military leadership in the Defense Department and, in fact, other
federal departments and agencies look to you for your analysis of what
operations and contingencies our soldiers, sailors, airmen, and marines
are prepared to do--and how they will accomplish those tasks. Your
understanding of the readiness of the Services must be second-to-none.
Having had the privilege of visiting with several of you earlier
and also having read all of your prepared testimonies, I am convinced
that this is the case. Without objection, your prepared statements will
be made part of the record and we look forward to your personal
presentations here today.
Before proceeding, I have to note that this hearing is being
conducted at the unclassified level. I believe that it is important
that the American public be fully aware of how well their military is
prepared--prepared not only to conduct current military operations, but
also for future challenges. There is much that can be discussed in an
open setting and I believe that it is important that we do so. I do,
however, appreciate the fact there are certain security sensitivities
that we must recognize. I would ask each of you to discern whether an
answer to a particular question might more appropriately be submitted
for the record.
Like most Americans, I am fascinated--and inspired--by the success
with which coalition forces swept across sea, air, and land to Baghdad.
I read one column last week that paralleled Operation Iraqi Freedom
with the Pacific island-hoping campaign devised by General MacArthur
and Admiral Nimitz in World War II. There is no question in my mind
that the brilliant strategy behind Operation Iraqi Freedom, like that
of MacArthur and Nimitz, was well-thought, that our Armed Forces were
ready for the mission, and that this operation is being conducted
successfully. I know that challenges remain, but, as the commander in
chief observed last week, ``The vise is closing''--Hussein's regime of
tyranny is coming to an end.
On Monday, I had the privilege of visiting one of the foundries for
one component of the vise--the Marine Corps Recruit Depot at Parris
Island. What a truly amazing place--and I have to believe that this is
representative of the recruit training sites for each of the Services.
Young men and women with purpose, with focus, with commitment--eager to
commit themselves to something larger, to defend the Nation, the
Constitution, and our American way-of-life. It is our duty to ensure
that those recruits have the training, the equipment, and the
leadership critical for their success in future operations. Readiness
truly begins there.
What was also compelling for me at Parris Island was the sense of
camaraderie that flourishes among the recruits. When I saw this, I
couldn't help but recall an account forwarded to me by email last week
that described an experience of an embedded reporter with the First
Battalion-First Marines during their drive up the Euphrates Valley. The
reporter offered to allow a few of the marines with whom he had been
traveling--none of whom had spoken to their loved ones for weeks--to
use his video phone to call home. One by one, each of the marines
offered `a call' asked that `their call' be made by someone else--by a
fellow marine who's wife was pregnant, for example--or not to call
their loved ones, but instead to call the family of a marine who would
not be coming home, a marine who had made the ultimate sacrifice in
defense of our Nation. The reporter, rightfully humbled by these
generous offers, had to ask, ``Where do they get young men like this?''
I would suggest the reporter might want to file his next story from
Parris Island, or Fort Jackson, or Great Lakes, or Lackland.
Our witnesses today will testify in two panels. Dr. Paul Mayberry,
the Deputy Under Secretary of Defense for Readiness, and Lieutenant
General Norton Schwartz, the Director of Operations on the Joint Staff,
will comprise the first panel. On the second panel are the directors of
operations for each of the service chiefs: Lieutenant General Richard
Cody, United States Army; Vice Admiral Kevin Green, United States Navy;
Lieutenant General Emil Bedard, United States Marine Corps; and Major
General Randall Schmidt, United States Air Force.
Before we proceed with the testimonies of the witnesses on the
first panel, the chair now welcomes any opening remarks from the
ranking member.

STATEMENT OF SENATOR DANIEL K. AKAKA

Senator Akaka. Thank you very much, Mr. Chairman.
Before I welcome our witnesses today, I just want to say,
Mr. Chairman, thank you for arranging this hearing and I want
to thank your staff as well as mine for the work that they have
done.
I want to let all of you know how much we appreciate what
you and the brave men and women who are putting their lives on
the line for America are doing. You are all in our thoughts and
in our prayers and you and your soldiers, sailors, airmen, and
marines all have our sincere gratitude. We are truly proud of
what men and women are doing for our country in the military.
I want to welcome back Dr. Mayberry and General Bedard in
particular, who both testified on these same issues last March.
Welcome also to our other witnesses as well. We hope that you
will also be willing to come back in the future to share your
thoughts and expertise with the Readiness Subcommittee.
While I expect that most of what we will be discussing this
afternoon will address current operations and its effect on
readiness, our first panel will also address other important
key issues. While our forces are engaged all over the globe,
DOD continues to move forward on improving both joint training
and readiness assessment. I applaud these efforts, particularly
in light of pressing distractions, and I am looking forward to
hearing more about DOD's ongoing initiatives.
I also welcome the opportunity to get more deeply into
specific readiness issues. During our hearing last year, our
witnesses universally stated that, while our forces were ready
for the demands of the global war on terrorism, they were
strained, and if the pace of operations remained high,
readiness problems could emerge. A little over a year later,
our global war on terrorism (GWOT) demands have not diminished
and the addition of a major conflict is absorbing a huge
percentage of our military capability.
While I have every confidence in our U.S. Armed Forces and
their ability to excel at whatever we might ask of them, I am
worried about what comes next. It seems to me that as current
demands on our forces rise, meeting them means we have to tap
resources we would otherwise use to sustain these forces and
our need to reconstitute those forces also increases. General
Hagee, the Commander of the Marine Corps, testified before
another subcommittee last week that he was more concerned about
reconstitution than he was about the current fight, which in my
mind is a pretty significant statement.
At the same time that operational demands are higher than
they have ever been, we are considering a budget request that
seems disconnected in many senses from our current reality.
Because DOD does not budget for contingencies and because of
the long budgeting cycle, there is little or no reflection of
the strains we can already anticipate in the fiscal year 2004
budget request.
As we consider that request, therefore, it seems to me that
we should do our best to ensure that what moves forward out of
this committee and for the rest of the authorization process is
as strong as it can be in support of the readiness of our
forces.
Hopefully, our discussions today will shed some light on
how we can best accomplish this goal. Again, I want to say that
we are proud of what you are doing, we are proud of our troops,
and I thank God for the kind of support we are able to give our
troops, to give all of you, and I look forward and welcome all
of you to this hearing, Mr. Chairman.
Senator Ensign. Thank you, Senator.
Our witnesses today will testify in two panels. Dr. Paul
Mayberry, the Deputy Under Secretary of Defense for Readiness;
and Lieutenant General Norton Schwartz, the Director of
Operations on the Joint Staff, will comprise the first panel.
On the second panel are the Directors of Operations for each of
the service chiefs: Lieutenant General Richard Cody, United
States Army; Vice Admiral Kevin Green, United States Navy;
Lieutenant General Buck Bedard, United States Marine Corps; and
Major General Randall Schmidt, United States Air Force.
I call on Dr. Mayberry to start and I look forward to your
testimony.

STATEMENT OF DR. PAUL W. MAYBERRY, DEPUTY UNDER SECRETARY OF
DEFENSE FOR READINESS

Dr. Mayberry. Thank you very much, Mr. Chairman, Senator
Akaka. It is a privilege to be here this afternoon to address
you on the military readiness of the Department of Defense.
With me this afternoon is the Director of Operations for the
Joint Staff, Lieutenant General Norton Schwartz of the Air
Force. It certainly is an honor to work with such a
professional as he.
Today we are a Nation at war. As you said, sir, on an
hourly basis we can observe and witness the results of your
past support and investments in the people, in the equipment,
and also in the realistic training of our Armed Forces. Our
forces remain strong, agile, and ready to meet the threats
facing this Nation, whether that is from the sands of Iraq or
to the mountains of Afghanistan.
The uniformed men and women of this Nation, reinforced by
our Department's civilian staff, stand ready for missions
assigned to them by our Commander in Chief. We appreciate your
commitment and your oversight of the resources entrusted to our
Department.
I would like to address briefly three important readiness
issues in my statement today before going forward to answer
your questions: first, the readiness of our military forces to
conduct current operations, as well as the contingency plans,
and also the adequacy of our budget request to be able to
continue that high state of readiness; second, to speak about
the Department's effort to develop a joint national training
capability; and finally, our plans for addressing shortfalls in
current readiness reporting by developing a defense readiness
reporting system.
I do not know a better measure, as both of you have spoken
to, of our current force readiness than the performance that we
see daily on the battlefield. What our forces have accomplished
in Operation Iraqi Freedom truly is remarkable. Our air crews
have flown thousands of sorties, striking leadership and
Republican Guard targets both at day and certainly at night.
Our ground forces have raced across more than 200 miles worth
of Iraqi territory, through enemy fire and hostile terrain, to
now occupy the capital city of Baghdad.
Working with our coalition forces, which are an extremely
important part of this operation, we have established the
foundation for considerable humanitarian aid and medical care
that can be provided to the Iraqi people. We have accomplished
all of these goals with minimal U.S. military and Iraqi
civilian casualties.
Even as current operations are ongoing, our active Army
divisions still maintain at high readiness levels and Air Force
mission capable rates have improved over the last 7 months.
Naval forces continue to meet readiness goals for both deployed
and non-deployed segments of the force and the Marine Corps
reports that they are ready to meet the demands of both current
and potential operations.
You have asked about the adequacy of the fiscal year 2003
budget and the fiscal year 2004 budget request in keeping our
forces ready. First I want to assure you that maintaining the
readiness of our Armed Forces is the highest priority in the
Department of Defense. Even as efforts continue in Iraq, we are
working to ensure that our forces can be reconstituted and
ready for other missions. Much of this work lies ahead of us,
but the fiscal year 2003 supplemental budget request will
provide the critical funding needed to start the reconstitution
effort.
Although we do not know exactly when the war in Iraq will
end, we have proposed a supplemental budget of $63 billion to
cover the most critical needs of the Department. These
supplemental funds will go towards reimbursing the Services and
the defense agencies for the costs associated with preparation
for the war as well as covering the costs attributed to the
military operations in Iraq, as well as the global war on
terrorism.
We have also worked very carefully to craft the President's
2004 budget. This proposal allows us to continue to wage an
aggressive global campaign against terrorism while supporting
transformation of our Nation's military capabilities. It
provides for unparalleled training and equipment for our forces
and troops and funds the intelligence programs that are really
necessary to enhance both our country's and military
intelligence needs.
The proposal also enhances the quality of life for our
military personnel and their families. Finally, the budget
proposal advances transformational efforts to ensure that our
forces remain agile and effective.
Secretary Rumsfeld has noted that in the 21st century that
we will fight wars jointly. Yet our forces are still too often
trained and prepared for war as individual Services. That needs
to change. We plan to make the Joint National Training
Capability that instrument of change. We can no longer simply
deconflict our unique service warfighting skills, but rather
must integrate them into a single, focused joint capability.
I am pleased to report that the Department and its senior
leadership, not just within the Office of the Secretary of
Defense, but also with the leadership of the Services and Joint
Forces Command, are committed to the concept of the Joint
National Training Capability. Secretary Rumsfeld has stated
that, ``Among the more important transformational investments
that we propose is our request for funds to establish a Joint
National Training Capability.'' It is our plan to establish
this initial capability by October of next year under the
direction of Joint Forces Command.
The success of our training and readiness depends in no
small part to our continued access to high quality and
realistic training space. As I am sure you are aware, the
Department is working hard on a number of fronts to counteract
the effects of encroachment on readiness. In fact, you had a
hearing on this just a week ago.
Several legislative initiatives, changes, and
clarifications, part of our Readiness and Range Preservation
Initiative, have been submitted for congressional consideration
in this year's defense authorization bill. The sustainment of
our ranges and operating areas for training and testing
purposes is a critical issue, not only for near-term readiness
but also for our transformed forces of the future.
Finally, let me discuss the status of our ongoing efforts
to enhance the Department's readiness assessment and reporting
system. I would like to highlight that one of the most
essential elements of our reporting process is the active
involvement of senior DOD leadership in resolving these
readiness issues. The Department's Senior Readiness Oversight
Council, which is chaired by the Deputy Secretary of Defense,
meets routinely to review and discuss the most pressing
readiness issues. Recently, the Council met to focus on issues
related to chemical and biological defense preparedness of our
Armed Forces.
We are also improving the tools and the systems that we use
to report and assess readiness and are implementing a new
capabilities-based approach. This system, called the Defense
Readiness Reporting System, or DRRS, will provide timely and
accurate information on the readiness of our forces as well as
the supporting infrastructure for use in a deliberate planning
process as well as responding to emerging crises.
The Defense Readiness Reporting System will transform our
readiness assessment by focusing on unit current capabilities
to execute mission-essential tasks in support of combatant
commanders' war plans. These tools will provide visibility not
only into the readiness of assigned and allocated forces, but
also into the ability of supporting commands, agencies, and
other services to execute their respective war plan
responsibilities.
The core element of this system will allow the Department
to maintain almost a near-real-time visibility on all global
status of resources and training system inputs, as well as to
expand to include other critical information that is not
presently captured in the system, such as ammunition, supplies,
and infrastructure.
Given the uncertainties in the strategic environment that
we currently face, we need this flexibility and adaptive
readiness reporting system to reduce the likelihood that the
Department may be surprised by unforeseen readiness challenges
in the early stages of crisis planning. Our plan is to field an
initial spiral of these readiness tools for use next year, with
full operational capabilities 3 years after that.
In conclusion, I want to emphasize that our forces, our
total force, our active and Reserve components, are ready to
meet the challenges facing our Nation today. We continue to
robustly fund the readiness of our forces as well as transform
to meet future challenges. We are improving the ways that we
measure our readiness and also transforming our training to
meet new military strategy.
We appreciate this subcommittee's continued support of our
Armed Forces and of the programs that ensure that they remain
the best manned, the best equipped, and the best trained forces
in the world. I thank you, each of you, for your continuing
support of America's most precious treasure, that is our men
and women in uniform. Sir, I appreciate your comments and the
passion that you spoke with earlier.
I look forward to addressing your questions that you may
have. Thank you very much.
[The prepared statement of Dr. Mayberry follows:]

Prepared Statement by Dr. Paul W. Mayberry

Good afternoon Chairman Ensign, Senator Akaka, and distinguished
members of this subcommittee. On behalf of the Under Secretary of
Defense for Personnel and Readiness, Dr. David S. C. Chu, I am
privileged to speak before this subcommittee on the state of military
readiness in the Department of Defense. With me today is the Director
of Operations for the Joint Staff, Lieutenant General Norton Schwartz
of the United States Air Force.
Let me begin by saying that your Armed Forces remain strong, agile,
and ready to meet any threat facing this Nation. With the most precise,
most versatile, and best-led forces on earth, our Armed Forces are
prepared to decisively win. From the sands of Iraq to the mountains of
Afghanistan, the uniformed men and women of this Nation, reinforced by
the Department's civilian staff, stand ready for the missions assigned
to them by our commander in chief. This readiness would not be possible
without the continued support of this committee for our critical
defense needs.
For this testimony, you asked about the readiness of our military
forces to conduct current operations and contingency plans. I do not
know of a better measure of force readiness than performance on the
battlefield. What our forces have accomplished in Operation Iraqi
Freedom is quite remarkable: our aircrews have flown thousands of
sorties, striking leadership and Republican Guard targets day and
night; our ground forces have raced across more than 200 miles of Iraqi
territory--through enemy fire and inhospitable terrain--to reach a
point just south of Baghdad in less than a week; we and our coalition
partners have secured Iraq's southern oil fields, preventing an
environmental disaster; we have launched devastating attacks on
terrorist targets and have prevented an Iraqi advance on the Kurds in
the north; and we have greatly diminished Iraq's ability to threaten
neighboring countries from the western region. We have established the
foundation so that considerable humanitarian aid and medical care can
be provided to the Iraqi people. Furthermore, we have accomplished all
this with minimal U.S. military and Iraqi civilian casualties. We have
proven ourselves ready in this operation, and I can assure you we are
ready if called to do much more.
Even with the current operations, our active Army divisions still
maintain high readiness levels, and Air Force aircraft mission capable
rates have improved over the past 7 months. Navy forces continue to
meet readiness goals for both the deployed and non-deployed segments of
the force, and the Marine Corps reports they are ready to meet the
demands of current and potential operations.
Our strategic mobility triad of airlift, sealift, and pre-
positioned materiel provides us the capability to swiftly move forces
around the world. Such mobility maintains the U.S. as the only nation
who can routinely move units and materiel globally with confidence and
speed.
Our materiel readiness has improved substantially due to the
tremendous support of Congress. One example is munitions, where past
supplemental measures have allowed combatant commanders to increase
stockpiles of key all-weather and advanced precision-guided munitions.
In short, we are ready for both current and future contingency
operations.
You have also asked about the adequacy of our fiscal year 2003
budget and fiscal year 2004 budget request in keeping our forces ready.
First, I want to assure you that maintaining the readiness of our Armed
Forces is the highest priority of the Department of Defense. We have
the best-trained, best-equipped, and most effective military force in
the world, and we intend to keep them that way.
Even as our mission in Iraq continues, we are working to ensure
that our forces can be reconstituted and ready for other missions. Much
of this work lies ahead of us, but the fiscal year 2003 supplemental
budget request will provide critical funding to start the
reconstitution effort. Although we do not know exactly when the war in
Iraq will end and how much funding will be needed, we have proposed a
supplemental budget of $63 billion to cover the most critical needs of
the Department of Defense. These supplemental funds will go toward
reimbursing the Services and Defense agencies for costs associated with
preparing for war as well as covering the costs attributed to military
operations in Iraq and the global war on terrorism.
The supplemental funding includes:

At least $53.4 billion for military operations in
Iraq. This amount would cover the costs associated with: the
mobilization to Active Duty of Reserve and National Guard
personnel to support military operations on a full-time basis,
including pay, travel, per diem, and health care; personnel
necessary to maintain critical manning at authorized levels and
special pays, such as Imminent Danger Pay, Family Separation
Allowance, and Foreign Duty Pay; support for active duty
military personnel; and, operations, such as incremental flying
hours, ship steaming days, ground operations, special airlift
missions, increased associated ship and aircraft maintenance,
associated logistics support, fuel purchases, base support, and
reconstruction. These funds also will reimburse accounts used
for projects completed or underway that were necessary to
prepare for military action in Iraq.
Up to $3.7 billion for munitions replenishment. These
funds could be used to replace precision munitions, ammunition,
and other conventional munitions, expended during military
operations in Iraq and in the global war on terrorism, to pre-
conflict levels.
At least $1.7 billion for classified activities. These
funds would cover the costs associated with classified
activities undertaken in Iraq and in the global war on
terrorism.
Up to $1.1 billion for equipment procurement and
research and development. These funds would be used to develop,
procure, and upgrade systems necessary to prosecute the global
war on terrorism, including operations in Iraq. These systems
include command, control, communications, computer and
intelligence equipment, chemical and biological detection and
decontamination gear, targeting devices, and spare and repair
parts.

We have also worked to carefully craft the President's fiscal year
2004 budget. This budget proposal allows us to continue to wage an
aggressive and global war on terrorism while supporting transformation
of our Nation's military capabilities. It provides for unparalleled
training and equipment for the troops, and funds the intelligence
programs necessary to protect the country and support military needs.
The budget proposal enhances the quality of life for military personnel
and their families, and incorporates innovative management practices
that increase efficiency. Finally, the budget proposal advances our
transformation efforts to ensure our forces remain agile and effective.
The President's fiscal year 2004 budget assures military readiness
by increasing key defense programs, and increase in the defense top
line of $15.3 billion over fiscal year 2003 levels. The budget requests
over $98 billion for military personnel, including a range of pay
increases from 2.0 to 6.3 percent, targeted by rank and years of
service. It improves military housing and puts the Department on track
to eliminate 163,000 inadequate housing units by 2007--years sooner
than previously planned. The request also lowers the average out-of-
pocket housing costs for those living off-base from over 7.5 percent to
3.5 percent in 2004--putting us on track to eliminate all out-of-pocket
housing costs for the average person in uniform by 2005. The budget
also includes nearly $27 billion to cover the most realistic cost
estimates of military healthcare.
The fiscal year 2004 budget will improve the training of our
forces, and requests $133 billion for the operations and maintenance
accounts. This includes substantial funding for our unit training,
equipment maintenance, and operations. The Department has also
requested resources in the fiscal year 2004 budget to address other
pressing readiness issues, such as our ability to protect our forces
against chemical, biological, and missile attacks. Finally, the budget
request will improve the maintenance and sustainment of equipment,
facilities, and the availability of spare parts and engines.
You had also asked that I specifically address the Joint National
Training Capability and the Defense Readiness Reporting System. Let me
first start with the Joint National Training Capability, commonly
referred to as the JNTC, and later discuss the Department's readiness
reporting system.

JOINT TRAINING

In recent testimony to this Congress on the progress of the
Department of Defense transformation efforts, Secretary Rumsfeld stated
that ``transforming is about more than developing new strategies and
structures--it is about changing culture, about encouraging new ways of
thinking so that we can develop new ways of fighting and provide our
Armed Forces the tools they need to defend our way of life.'' The path
to this cultural change will be through a transformation of DOD
training that includes establishing a Joint National Training
Capability.
Our ability to successfully defend our Nation's interests relies
heavily upon a military capable of adapting to rapidly changing
situations, ill-defined threats, and a growing need to operate across a
broad mission spectrum. The military departments have garnered combat
successes over the years by superbly preparing our soldiers, sailors,
airmen, and marines, giving the United States a training superiority
over potential adversaries. We intend to maintain that critical edge by
continuing to move our training methods and capabilities beyond those
of the Cold War. We will no longer simply deconflict or synchronize
unique Service warfighting instruments, but rather integrate them into
a single, fused joint capability. Each of our four Military Services
has achieved an extraordinary integration of the various elements of
their forces to create unprecedented combat power. Now, we need to go
beyond and achieve this same integration of force elements across the
Services to create a truly joint force--a force that is capable of
dominant combat power whenever called upon. In addition, this joint
capability will extend beyond today's meaning of ``jointness'', beyond
the Services and into full integration of intergovernmental,
interagency, and coalition elements to build a force that is ready and
capable of winning any complex 21st century conflict. Secretary
Rumsfeld has stated that, ``in the 21st century, we will fight wars
jointly. Yet our forces still too often train and prepare for war as
individual Services. That needs to change.'' We plan to make the Joint
National Training Capability, as part of the overall T2 initiative,
that instrument of change.
Transformed training is a key enabler to transforming this fighting
force. We are committed to meeting joint mission requirements of the
combatant commanders across the joint strategic, operational, and
tactical levels. As we have witnessed on the ground and in the skies
over Afghanistan during Operation Enduring Freedom, it is not easy to
plan complex combat operations or execute joint tactical tasks, such as
joint close air support, when the Services have not had opportunities
to train to accomplish joint tasks to a joint standard. We are finding
that although the core functions of the Services are conducted
superbly, there are weaknesses among the gaps and seams between the
Services, the joint force command structure and the Service component
elements in the theater. Today in Operation Iraqi Freedom our forces
and headquarters are distributed throughout Southwest Asia, at many
disparate locations, and operate over great distances. This coalition
force is conducting unified action in a distributed manner yet their
preparatory joint training was lacking what a Joint National Training
Capability would provide. U.S. forces are operating under British
Command for the first time since World War II. Our forces are filling
gaps in humanitarian aid missions. We should not encounter, learn, or
practice a joint task nor conduct joint and combined operations for the
first time in combat.
I am pleased to report that the Department and its senior
leadership, not just within the Office of the Secretary of Defense but
the leadership, military and civilian, of all the Services and the U.S.
Joint Forces Command, are committed to transforming training in order
to meet emerging 21st century needs. Secretary Rumsfeld has stated
that, ``among the more important transformational investments we
propose is our request for funds to establish a new Joint National
Training Capability.'' The Secretary's planning and programming
guidance establishes training transformation as the highest priority,
second only to fighting the global war on terrorism. Overarching
guidance, direction, roles, responsibilities, and resources have been
aligned within the Defense Planning Guidance, Unified Command Plan, the
DOD Strategic Plan for Transforming Training, and a Training
Transformation Implementation Plan now in development. A key readiness
component that will carry our transformation efforts forward is the
establishment of an initial Joint National Training Capability by
October 2004 under the direction of U.S. Joint Forces Command.
Although JNTC will emphasize the use of simulations and
stimulators, realistic, live training remains the key to transforming
the way units operate. The success of our training readiness will also
depend in no small part on continued access to high-quality, realistic
training space. As I am sure you are aware, the Department is working
hard on a number of fronts to counteract the effects of encroachment on
readiness. Several legislative changes and clarifications, part of our
Readiness and Ranges Preservation Initiative, have been submitted for
congressional consideration in this year's proposed Defense
Authorization bill. The sustainment of our ranges and operating areas
for training purposes is a critical issue, not only for the individual
Services as they prepare their forces for combat in the near term, but
also for our transformed forces who will fight jointly on the
battlefields of tomorrow.
The last training transformation occurred in the 1970s with the
establishment of major Service training centers or range complexes. The
Joint National Training Capability comprises the ``second''
transformation and will be the cornerstone for building on previous
transformational pillars that made the major Service training centers
and range complexes so successful. We will use realistic combat
training according to joint doctrine, professional opposing forces, a
means of determining ground truth, and a process for identifying,
measuring, reporting jointness, and then correcting joint weaknesses
and exporting joint lessons learned. The U.S. Joint Forces Command is
working with the Military Services to achieve this realistic, network-
centric, distributed global combat joint training and mission rehearsal
capability that builds on and incorporates all of the major ranges and
training centers of the Military Services. The Secretary has charged me
to rapidly implement the JNTC. The Commander, U.S. Joint Forces
Command, in accordance with Section 924 of the Bob Stump National
Defense Authorization Act for Fiscal Year 2003, is also preparing a
report to the Secretary on the establishment of a ``Joint National
Training Complex and Joint Opposing Forces.'' The Secretary will
forward the report to Congress with his and the Chairman of the Joint
Chiefs of Staff's comments.
Although we are ready to lean forward in our efforts to make this
capability a reality in the near term, our plans for JNTC events in May
and June of this year have been impacted by current real world
operations. However, we still plan to conduct simulated technology
linking events throughout the summer and fall in order to better
prepare and test stand up procedures and processes so that, when our
deployed forces return to the training environment, we will have a
joint training environment that they can successfully plug into
quickly.
As Secretary Rumsfeld has said, ``We are working hard to push joint
operational concepts throughout the Department, so we train and prepare
for war the way we will fight it--jointly. We are taking steps to
better measure and track performance.'' We need and welcome your
support and involvement in our continuing transformational efforts.

READINESS REPORTING

Let me now discuss the status of our ongoing efforts to enhance the
Department's readiness assessment and reporting system. I would first
like to highlight that one of the most essential elements of our
readiness reporting system is the active involvement of the senior DOD
leaders in resolving readiness issues. We have that involvement and
commitment. The Department's Senior Readiness Oversight Council, which
is chaired by the Deputy Secretary of Defense, meets routinely to
review and discuss the most pressing readiness issues. Recently, the
Council met to focus on actions addressing preparedness issues related
to chemical and biological defense capabilities of our Armed Forces for
operations in Southwest Asia. The review highlighted several areas
where chemical and biological defense capabilities could be enhanced.
These areas include biological early warning and point detection;
medical surveillance and protection; fixed site collective protection;
and decontamination systems. As a result of the council's meeting,
actions were taken to enhance the preparedness of our military for
operations in Iraq.
We are also improving the tools and systems we use to report and
assess readiness, and are implementing a new ``capabilities-based''
readiness reporting system. This system, called the Defense Readiness
Reporting System (DRRS), will provide timely and accurate information
on the readiness of our forces and supporting infrastructure for use in
deliberate planning, responding to emerging crises, and decisionmaking
during hostilities.
DRRS will transform our readiness assessment by focusing on a
unit's current capability to execute mission essential tasks in support
of the combatant commander's war plans. For the first time, the
readiness reporting system will provide commanders--at all levels
leading to the Secretary--specific information on the current readiness
of units within the Department to meet mission essential tasks for the
war plans. Not only will the combatant commanders be able to
immediately assess the readiness of assigned and allocated forces, but
they will also be able to assess the ability of the supporting
commands, agencies, and the other Services in executing the war plan.
The core elements of the system will allow the Department to
maintain almost near real time visibility on all current global status
of resources and training system resource inputs and will be expanded
to include additional critical information such as ammunition,
supplies, and infrastructure. This expanded view of readiness will
allow leadership to quickly answer the primary question, ``ready for
what?'' Given the uncertainties in the strategic environment, we need
this flexible and adaptive readiness reporting system to reduce the
likelihood of the Department being surprised by unforeseen readiness
challenges in the early stages of crisis planning.
We believe that this improved reporting and assessment can be
achieved by using existing personnel, training, and logistics
databases. By incorporating information from existing transactional
databases, we can reduce or even eliminate workload and errors
associated with manual, multiple inputs of data. This will further aid
our goals of reducing the reporting burden and responding more quickly
to requests for readiness information.
Our plan is to field the initial spiral of tools for use in fiscal
year 2004, with the full operational capability achieved by fiscal year
2007.
In conclusion, I want to emphasize that our forces--our total
forces--are ready to meet the challenges facing this Nation. We
continue to robustly fund the readiness of forces and transform to meet
future challenges. We are improving the ways we measure our readiness
and transforming our training to meet the new strategy. We appreciate
this committee's continued support of our Armed Forces, and of the
programs that ensure they remain the best-manned, equipped, and trained
forces in the world. I thank the honorable members for your continuing
support of America's treasure--her men and women in uniform. This
concludes my statement. I look forward to discussion and any questions
you may have.

Senator Ensign. Thank you.
General Schwartz.

STATEMENT OF LT. GEN. NORTON A. SCHWARTZ, USAF, DIRECTOR FOR
OPERATIONS, THE JOINT STAFF

General Schwartz. Mr. Chairman, it is an honor to join
Secretary Mayberry here before your subcommittee today. With
your permission, I would like to make some brief remarks and
then submit a more comprehensive statement for the record.
Mr. Chairman, Senator Akaka, it is a delight to provide
comments on the readiness of the military Services to conduct
current operations and execute contingency plans. I must first
acknowledge and thank Congress for its sustained and very
significant support to the men and women in our Armed Forces.
Your efforts were critical to arresting and reversing the
declining readiness trends that we experienced in the late
1990s. These improvements are manifesting themselves today in
remarkable fashion, not only on the battlefield in Iraq, but
also worldwide.
While we conduct decisive combat operations in Operation
Iraqi Freedom, a significant portion of our forces remain
deployed worldwide, serving our Nation's vital interests in
numerous, differing roles. Our men and women of the Armed
Forces continue to enhance homeland security, prosecute the
global war on terrorism, keep the peace in the Balkans, deter
adversaries on the Korean Peninsula, and conduct a host of
other smaller-scale but nonetheless important operations.
In every instance, our forces have performed superbly,
validating the capability, flexibility, and readiness of our
force. Maintaining this level of effort obviously presents
challenges. We face challenges in several areas, including the
traditional issues voiced by our Services and those joint
issues voiced by the combatant commanders.
While our ability to generate major forces such as
divisions, air expeditionary wings, and carrier battle groups
to support other combat operations is quite robust, force
enablers, such as sea and air lift, intelligence, surveillance,
and reconnaissance capability, battle management, and
munitions, will continue to require close management and
prioritization. As a result, we must clearly formulate and
implement our strategic priorities and make informed,
deliberate decisions regarding the future disposition of our
force.
Prosecuting a major combat operation impacts the readiness
of the overall force and a period of reconstitution following
combat operations in Iraq will be necessary. The Joint Staff,
in conjunction with the Services and the combatant commanders
and the Office of the Secretary of Defense, have developed a
framework for joint force reconstitution. However, until we
have entered the post-conflict phase of operations in Iraq we
will not be able to determine specific Service reconstitution
time lines, combatant commander requirements for force
availability, or the costs associated with reconstitution.
Regardless of the specifics of the joint force
reconstitution plan, a key element and perhaps the key element
will be the timely approval of supporting resources. The fiscal
year 2003 budget and the fiscal year 2004 President's budget
support our normal readiness requirements. It is clear that as
we expend Service readiness executing Operation Iraqi Freedom
and other global operations the fiscal year 2003 budget alone
will not fully support all of our readiness requirements.
Our Services simply cannot absorb the cost of Operation
Iraqi Freedom, the global war on terrorism, and other ongoing
operations without a supplemental. Therefore, timely approval
of supplemental funding is absolutely crucial to the continued
preparedness of our joint force.
In closing, sir, I would like to emphasize that our
previous wartime experiences have proven that readiness is a
fragile commodity. When expended in combat operations, it is
important to reestablish readiness levels or they can quickly
erode further. Congress' support over the past year has made a
dramatic and positive difference in the readiness of our joint
force and our ability collectively to meet the call.
Post-Operation Iraqi Freedom readiness will require your
continuing support so that we may rapidly reconstitute
preparedness to meet the demands of the global war on terrorism
and mitigate potential risk to the overall defense strategy.
Again, sir, I am grateful for having the opportunity to
represent those wonderful soldiers, sailors, airmen, marines,
and coastguardsmen you mentioned earlier, who truly represent
the product of your work in Operation Iraqi Freedom and in the
global war on terrorism, and I too look forward to your
questions. Thank you.
[The prepared statement of General Schwartz follows:]

Prepared Statement by Lt. Gen. Norton A. Schwartz, USAF

Members of the Senate Armed Services Committee, Readiness and
Management Support Subcommittee, I am pleased to provide this written
statement on the readiness of the military Services to conduct current
operations and execute contingency plans.
I must first acknowledge and thank Congress for its sustained and
significant support to the men and women of our Armed Forces. Your
efforts were critical to arresting and reversing the declining
readiness trends we experienced in the late 1990s. Quality of life
initiatives, housing improvements, and pay increases demonstrate your
continued commitment to our dedicated soldiers, sailors, airmen, and
marines. Our improved warfighting readiness is also reflected in good
recruiting and retention rates, improved equipment mission capable
rates, and enhancements across a wide range of warfighting capabilities
including logistics, intelligence/surveillance/reconnaissance (ISR),
munitions (particularly precision munitions), and command and control.
These improvements are manifesting themselves today in remarkable
fashion on the battlefields of Iraq. While we conduct decisive combat
operations in Operation Iraqi Freedom (OIF), our other forces remain
deployed worldwide, serving our Nation's vital interests in numerous
areas in many differing roles. For instance, our forces continue to
enhance homeland security, prosecute the global war on terrorism (GWOT)
to include highly effective and ongoing Enduring Freedom operations in
Afghanistan, Horn of Africa, and the Philippines; keep the peace in the
Balkans, deter adversaries on the Korean peninsula, and conduct a host
of other smaller-scale but important endeavors. In every instance, our
forces have performed well, validating the capability, flexibility, and
readiness of our force.
Our readiness to prosecute a major combat operation is evident and
demonstrated every day in Iraq. Our forces are highly trained,
professional, motivated, and smart. Our equipment--ships, aircraft,
ground forces, and command and control capabilities are ready and
second to none. Our military leaders' ability to integrate and
synchronize the effects of these capabilities to achieve our national
objectives is well exercised. We stand prepared to meet the full
demands of OIF and to continue to fulfill our global commitments in the
war on terror.
Maintaining this level of effort obviously presents challenges. We
face challenges in several areas, including traditional readiness
issues voiced by the Services, and joint readiness issues voiced by the
combatant commanders. While our ability to generate major forces such
as divisions, air expeditionary wings, and carrier battle groups to
support another combat operation is robust, force enablers such as air
and sea lift, ISR, battle management, and munitions will require close
management and prioritization. As a result, we must clearly formulate
and implement our strategic priorities and make informed, deliberate
decisions regarding the future disposition of our forces.
The nature of conflict precludes setting a precise date for
cessation of OIF hostilities. However, it is certain that prosecuting a
major combat operation impacts the readiness of the overall force, and
a period of reconstitution following combat operations in Iraq will be
necessary. For now, the breadth, depth, and duration of any
reconstitution plan following OIF are not clear. The Joint Staff, in
conjunction with the Services and combatant commanders, has developed a
framework for Joint Force reconstitution that will provide a foundation
for the accomplishment of Service and USSOCOM reconstitution goals.
However, until we have entered the post-conflict phase of operations in
Iraq, determining specific Service reconstitution timelines and
combatant commander requirements for forces availability is informed
speculation at best.
Additionally, to meet the demands of OIF, Reserve component forces
have assumed, understandably, a significant role. To reconstitute the
force while meeting existing force presence requirements, a continued
reliance on the Reserve component may be necessary for the foreseeable
future. What is certain, though, is that we can't reconstitute the
total joint force at the expense of not satisfying our global military
demands. I assure you, we will determine the best way to accomplish
this with the least risk to the execution of the overall defense
strategy.
Regardless of the specifics of a joint force reconstitution plan, a
key element . . . perhaps the key element . . . will be the timely
approval of supporting resources. The fiscal year 2003 budget and
fiscal year 2004 request support our readiness requirements and
unquestionably enabled the impressive performance we've witnessed thus
far. Over the last several years, operations and maintenance funding
has been increased to curb declining readiness trends, and the fiscal
year 2004 budget ensures our forward deployed and ``first to fight''
forces continue to be ready to conduct their combat missions. It is
clear that as we expend Service readiness executing OIF and other
global operations, the fiscal year 2003 budget alone will not fully
support our readiness requirements. Our Services simply can't absorb
the cost of OIF, the global war on terrorism, and other ongoing
operations without a supplemental. The negative impact on force
readiness, troop morale, and ongoing transformation efforts would be
manifested across all Services. Therefore, timely approval of
supplemental funding is absolutely crucial to the continued
preparedness of the joint force.
Briefly, I'd like to provide you with my assessment of two
readiness initiatives . . . the Joint National Training Capability
(JNTC) program and the Defense Readiness Reporting System (DRRS).
First--the JNTC program holds great promise as a means to create a true
joint training venue. It will provide a much-needed construct to
enhance and standardize joint training and exercise events across all
Services and combatant commands. Ultimately, the JNTC program will
enable us to better exercise and measure the performance of the joint
force, and further enhance the joint readiness that is so evident in
our forces deployed throughout the world.
Second--Secretary Mayberry and his team in the OSD/Personnel and
Readiness office are leading the Defense Readiness Reporting System
effort, with support from the Joint Staff. I have been briefed on
several aspects of DRRS, and I think it has great potential. Elements
of the DRRS concept call for streamlined readiness data input/
gathering, rapid assessment of multiple scenarios, identification of
noncommitted forces, and their readiness for conducting additional
missions.
In closing, I would like to emphasize that our wartime experiences
have proven that readiness is a fragile commodity. When expended in
combat operations, it is important to re-establish readiness levels or
they can quickly erode further. Congress' support over the past years
has made a dramatic, positive impact on the readiness of the joint
force, and our ability to `meet the call'. Post-OIF readiness will
require your continuing support so that we rapidly reconstitute
preparedness to meet the demands of the global war on terrorism and
mitigate potential risk to the overall defense strategy. Again, I am
grateful for having the opportunity to testify today on behalf of the
270,000 soldiers, sailors, airmen, and marines who represent the
product of your work in Operation Iraqi Freedom. I look forward to your
questions.

Senator Ensign. We thank both of you.
I will start with Dr. Mayberry. The Department's timeline
for implementation of the Joint National Training Capability
was established before Operation Iraqi Freedom. We talked a
little bit about this in my office yesterday, but for the
record, what are the immediate and long-term implications for
the Joint National Training Capability given the ongoing
operations?
Dr. Mayberry. Certainly. The basic premise for the Joint
National Training Capability is one that we fight as a joint
team and therefore we must train within a joint context. Let
there be no question, the Services are world-class trainers,
but they tend to focus on their respective core competencies
and therefore there are some gaps and seams between the
Services, and this area of joint training between the gaps and
seams at a tactical and an operational level is truly where the
Joint National Training Capability is intended to go.
Under the leadership of Joint Forces Command and the
involvement of the Services and OSD and the Joint Staff, the
Joint National Training Capability is truly a forcing function
to correct this gaps and seams issue. The Department has really
committed a tremendous amount of resources to the effort. It is
a top priority. The amount--approximately $1.3 billion over the
fiscal year 2003 to 2009 time period.
As you mentioned, as a result of current real world
operations, we had had plans within the May time frame to bring
together the western range complex that would be in conjunction
with the National Training Center at Fort Irwin, Nellis Air
Force Base, and the forces flying out of there, Twentynine
Palms for the Marine Forces, and San Diego's naval and maritime
components participating in a virtual sense. Those have since
been pushed back.
We always knew in the developmental process here that 2003
was going to be a tough year because we are going to seek most
of the funding for this in the omnibus reprogramming request. I
do not know the timing for that omnibus request, but certainly
would appreciate your support for this specific item of the
Joint National Training Capability.
Senator Ensign. Okay, very good.
General Schwartz, the Joint Staff Mobility Requirements
Study for Fiscal Year 2005 identified about a 20 percent
shortfall in strategic airlift. This analysis, however,
measured the planned airlift force structure in 2005 against
the previous national military strategy, the two major theater
war scenario.
With the new capabilities-based strategy and with the
ongoing global war on terrorism and Operations Enduring Freedom
and Iraqi Freedom, do you believe that the current procurement
plans for airlift and their operational readiness rates are
sufficient to address the requirements of military planners for
airlift?
General Schwartz. Sir, it seems to me there are a number of
aspects to that question and it is not just the military
capability to transport our forces. First of all, one of the
strong suits of the American Armed Forces and this Nation is
the ability to project forces. That is true both in the air and
on the sea. We have both Government-owned and commercial
capabilities in both areas that continue to need attention.
But in order to deliver the shooters to the fight in such a
way, in a compelling way that gets them there with the right
equipment at the right time to perform the missions that are
required, requires the kind of lift which you have supported in
recent years, both fast sealift, for example, mobility for the
amphibious forces, and the airlift that is reflected in the C-
17 program.
Our Service counterparts will be able to better address the
specifics, but in general, sir, we are using that capability to
its maximum extent as we speak, and the recommendations would
be to continue the procurement of those assets to their
objective states which the Services specify.
Senator Ensign. Dr. Mayberry, one of the concerns regarding
the process the Department has undertaken to develop the
Defense Readiness Reporting System is whether a plan exists to
pull this concept together. Does the Department have a plan?
How much funding has the Department obligated for fiscal year
2003 for the Defense Readiness Reporting System and how much is
requested in the President's budget request for the system?
For the record, can you provide the status of the Readiness
Reporting System's implementation and the summary of the
implementation approach to the committee?
Dr. Mayberry. Certainly. Considerable improvements have
been made to readiness reporting in the last few years, but we
have a ways to go. The congressionally-mandated review that
came out a year or so ago noted several specific deficiencies,
and the most fundamental of this was really the transition to
measure readiness against a new military strategy.
That most basic shift in the underlying principles against
which we are to assess readiness is analogous to shifting from
steam propulsion to nuclear power, and we have yet to fully
harness the capabilities of the new concept. That is where we
are at today.
The Defense Readiness Reporting System is going to be an
ongoing iterative process, a spiral development process, using
state-of-the-art technologies to developing a near real-time
comprehensive system capable of rapid assessments against
multiple scenarios. Each one of those particular components or
functions of this new Defense Readiness Reporting System will
take some time.
But our focus is on putting tools in the hands of the users
as soon as possible. We really need to have the feedback, as
opposed to trying to create the objective end state from the
very beginning and succeed in failure. There is already a lot
of efforts going on by each of the individual Services, and to
capitalize on those efforts and to move this project forward.
You asked specifically about funding in the fiscal year
2003 time period. We are looking in the range of $8 million to
$9 million for this current year, and as we go forward and
build upon the spiral development process for the tools that
will assist us, not only in readiness assessment, but near-term
data collection and integration, the effort would increase to
approximately $20 million on an annual basis after that.
I believe that the President's budget has about $90 million
over the FYDP for this particular developmental effort.
I appreciate and the Department knows that there is a lot
of work ahead, but I certainly am pleased with the efforts and
the progress that we have made to date. We do have plans in
place. I believe the GAO study said that there were not
specific plans. That was correct at that particular point in
time. We have put together milestones, objectives, this
particular funding profile that I mentioned, as well as
expectations and responsibilities.
This has all been encapsulated as well in the first ever
published DOD directive on readiness. It really lays out the
responsibilities between the Services, the Joint Staff, the
combatant commanders, and OSD.
Senator Ensign. When you talk about the spiral development
of this process, my concept of spiral development is within a
certain timeframe you are trying to be about 80 percent
perfected and then from there you make your other improvements
as you deploy and test. What is the timeline to get to that 80
percent and then go from there?
Dr. Mayberry. Certainly. The initial effort here in the
near term is to build upon what we already do well. That is,
that we have over 10,000 units reporting in terms of readiness
within the system. The problem is we are missing some specific
information. Joint organizations do not necessarily report.
Many of the defense agencies have yet to participate.
So we have some low-hanging fruit that will get us along
that path that we need to make. The Services have predictive
readiness models that they are improving upon, strategic
readiness systems that they are building. The issue is how do
we bring common data. I think all of us need to get at the data
issue. We lag in terms of much of the information there.
One of the essential components that is going to take some
time within the Defense Readiness Reporting System is the
notion of being able to report against mission-essential tasks.
Previous readiness reports ratings have been against the two
major theater wars. As we transition to the combatant
commanders' mission-essential tasks, what is our ability to
perform to standard in each of those tasks is going to be truly
a fundamental shift here, and I suspect that that is going to
be the long pole as we work to refine the conditions and
standards to those mission-essential tasks and to measure, to
assess readiness against those.
Senator Ensign. My time has expired. Just one quick comment
before I turn it over to Senator Akaka. I would imagine that
the current conflict and how it is being waged may give you a
little bit of a model how to measure some things when you are
going forward and give you a lot of ideas on what can be
effective measures.
Senator Akaka.
Senator Akaka. Thank you.
General Schwartz, can you please give a brief description
of how the Joint Staff used readiness data in its
decisionmaking process for planning and executing Operation
Iraqi Freedom and what information from Global Status of
Resources and Training System (GSORTS) was useful, and what
readiness information would you have liked to have had, to have
known, but did not?
General Schwartz. Certainly, sir. The way the process
worked is that General Franks requested forces to use in his
war plan and that request for forces came to Washington, and we
in the Pentagon with our Service counterparts then looked at
the menu of potential units that could provide the capability
that General Franks requested.
In that process, in addition to assessing whether this
particular unit could accomplish the mission assigned, there
was also an assessment of whether it was sufficiently ready to
deploy to go forward into theater. That is where the readiness
assessment mechanism played in that whole process of developing
the force structure which is now operating in the battlefield
in Iraq as we speak.
It is important to note that there are a couple aspects
that were looked at. Certainly, overall training was assessed.
The training metric, if you will, and likewise the equipment
metric were very important in assessing whether the units were
truly prepared to go to do the mission in support of General
Franks in Operation Iraqi Freedom.
Now, in terms, sir, of the things that perhaps we did not
have, we are very good at the moment at measuring things we
understand. We can measure boxes on the shelf, we can measure
how many personnel are trained to a certain level, and so on.
The thing that we are not so good at, as Dr. Mayberry referred
to earlier, is this sense of really understanding what the
capability of all of those individual metrics produce.
It is our hope that the new reporting system would enable
the application of information technology, of modern
information technology, to give us better insight into those
kinds of capabilities.
Senator Akaka. Thank you.
Dr. Mayberry, there has obviously been a lot of concern
over the past few years about protecting DOD's training ranges
and making sure that they remain viable into the future. Our
subcommittee and other committees in the Senate have been
looking hard at some of DOD's legislative proposals to help
address this issue.
But I wanted to ask you about it from a slightly different
perspective. As I understand it, DOD's testing ranges are
operated largely independently of training ranges for some very
legitimate reasons. Most of the testing ranges also operate on
a revolving fund basis, which requires them to recover some, if
not all, of their direct operating costs. On the other hand,
training ranges are funded through direct appropriations by the
Services, which will now be further enhanced with funds to
build up their joint capabilities.
One of the implications of this arrangement is that test
range managers, even if they have the space available, cannot
afford to support very much training because they cannot earn
enough money from training exercises. My question is, is DOD
looking at a more comprehensive system of managing testing and
training ranges together along with a funding structure that
would optimize the use of scarce resources? If not, can you
explain why a more coordinated approach is not a good idea?
Dr. Mayberry. Sir, you have hit on a very important issue,
why are there barriers in the past? It comes down to the issue
that you specifically mentioned, basically the funding
requirements. The capabilities within many of our testing
ranges are the exact types of capabilities that we need to
bring to bear in terms of our Joint National Training
Capability--threat emitters, instrumentation--maybe not
necessarily to the level of detail or fidelity required within
a testing scenario, but there are a tremendous amount of assets
in the testing area that could be brought to bear in terms of
the training areas.
Also, as we think about future transformed platforms and
capabilities of each of the Services' weapons systems, many of
those are going to expand beyond the limits, literally, the
real estate, of what our current training ranges are. So we are
going to have to specifically address the cross-functional use
of training and testing at ranges in a more positive sense.
The Deputy Secretary created the Range Sustainment Group,
of which I am one of the co-chairs--it also includes the Deputy
Under Secretary of Defense for Installations and Environment,
and it also includes the Director of Operational Test and
Evaluation--to get at this exact issue of how can we make
better cross-functional use of our capabilities.
One of the tough issues that we are going to have to face,
and I will be candid, we do not have a strategy in place
specifically at this time to address the funding structure
piece of this. But within the context of our Joint National
Training Capability, we are hopeful that we will have funding
streams to be able to allow us to build upon what the Navy is
doing now in terms of their training resource strategy in the
use of Eglin Air Force Base, for example, for training
purposes; and that the issue of who funds joint we will seek
to, at least in the near term, try to address within the
context of our Joint National Training Capability.
Senator Akaka. Thank you.
My time has expired, Mr. Chairman.
Senator Ensign. General Schwartz, earlier this month, the
Washington Post printed an article that highlighted the role of
commercial contractors in support of current military
operations. The article noted that a number of commercial firms
have employees, in one case as many as a thousand, in Southwest
Asia. General, in the context of the development of an
operational plan such as for Operation Iraqi Freedom or for
Operation Allied Force, how is the requirement for contract
support, if any, identified and developed, and are the risks of
relying on contractors captured in the operational planning
process?
To what extent do military planners develop alternatives to
the use of private contractors to mitigate any risks associated
with relying solely on commercial firms?
General Schwartz. Sir, one thing it is important to note,
that the planning was sufficiently detailed to ensure that the
commercial contractors were as well-equipped and in many cases
inoculated for the conditions that they might experience in the
theater of operations as were their uniformed counterparts.
So the truth of the matter is, sir, they are part of the
team, and in many cases they are indispensable. They have skill
sets and experience and so on that their uniformed counterparts
do not share.
The short answer is that that is carefully considered. They
are part of the warfighting team. In many cases, some of these
individuals are former military members and they definitely are
an asset and one that we should not diminish the importance of,
one that truly contributes to the war fight in a very
significant way.
Senator Ensign. Actually, this was just handed to me. An
American pilot was killed today when his single-engine plane
crashed while spraying drug crops in southern Colombia. The
pilot was the fifth United States Government contractor killed
in Colombia in 2 months.
What are the rules of engagement that apply to the use of
the contractors? Are they combatants and can they become POWs?
General Schwartz. Sir, in fact that happened a few days
ago, and that was an aircraft in the southwest corner of
Colombia near the Ecuadorean border. This particular individual
was a Dyncorp Corporation contractor and he was on contract to
the State Department, not to the Department of Defense.
So the question about whether these people are prisoners of
war, in this particular instance, of course, the individual was
killed in the crash. But they are certainly detainees and by
direction we consider them in the same category as other
detained Americans. That certainly is the case of the two folks
that were taken by the Revolutionary Armed Forces of Colombia
(FARC) some months ago.
Bottom line is that they are part of the family as
contractors and we treat them as such.
Senator Ensign. Thank you.
Senator Akaka, do you have anything else?
Senator Akaka. Dr. Mayberry, your prepared testimony stated
that the fiscal year 2003 supplemental bill will--and I am
quoting, ``provide critical funding to start the reconstitution
effort.'' Yet, as I understand it a very small portion of the
supplemental request is dedicated to reconstituting the force,
and I also understand that this is mostly for munitions.
What reconstitution activities are we referring to here
and, given that there are no funds for reconstitution in the
fiscal year 2004 budget request, will we need a fiscal year
2004 supplemental to help pay--how will we pay the additional
bills in this area? Do you have even a ballpark estimate of how
much it might require?
Dr. Mayberry. The issue of reconstitution is a very complex
task and it requires that we really balance many factors.
Presently there are many unknowns here, but I think that there
are a variety of considerations that the Department is going to
have to address in terms of the reconstitution issue, although
these are guiding principles as opposed to specifics.
I think first and foremost we need to take care of our
military service members, allowing them and their families time
to decompress. This is true for not only the active component,
but for the Reserve component as well.
I think that we need to return our training pipelines back
to their normal production levels. That will not be an easy
process as many of those instructors and equipments were part
of the support for Operation Iraqi Freedom. That is the portion
that I am getting at in terms of that statement within my
written testimony, is that there are assets now, particularly
in terms of the training pipelines, that have gone forward.
I think we are also going to have to regenerate our aging
fleet that has had substantial program maintenance actions
delayed. Finally, I think we are going to have to rebuild our
logistics backbone, everything from the spare parts issues to
precision guided munitions.
So this is going to be a very complex task, and at the same
time the rest of the world goes on. So there are going to be
post-war operations in Iraq in terms of reconstruction. There
are also going to be the continuing global war on terror. We
are going to have to be attentive to issues on the Korean
Peninsula, and we also have to continue our operations in other
theaters.
So although there are a lot of uncertainties here, I
believe that we are beginning a process, the Services, the
Joint Staff, and OSD, of thinking through what those
reconstitution requirements are going to be, and I would say
that these four principles are the guiding guidelines as to how
those analyses will go forward, but there are still quite a few
unknowns.
Senator Akaka. Dr. Mayberry, in your written testimony you
stated that there are weaknesses among the gaps and seams
between the Services, the joint force command structure, and
the service component elements in the theater. Can you give us
some specific examples of those weaknesses and how they have
made themselves manifest in current operations?
Dr. Mayberry. Certainly. Let me just, before I get into
that, reiterate that the Services are true world-class
trainers, as illustrated in terms of their performance levels
on a daily basis now in Iraq, in Afghanistan, and in many of
the forward-deployed operations that are ongoing.
But there are specific joint issues that the Joint National
Training Capability must address. Joint close air support, for
example; this is a joint tactical task that is trained at the
National Training Center and Nellis in the context of air
warrior exercises. But the issue here is bringing together,
making sure that the appropriate joint context and the planning
that goes into the conduct of that tremendously complex task is
fully brought to bear.
We have a combined arms operations center at Nellis. How
does that participate? How do we train those staffs within the
context of these complementary exercises? How do we get at
instrumentation on the ground against which air forces would
fly against? How do we solve very complex problems of close air
support impacting the ground battle, yet still being able to
maintain the training objectives for both the air and ground
forces, yet being able to coordinate the joint component of
this?
These are all very complex issues that we seek to bring
together and to use the Joint National Training Capability also
as a vehicle for transformation, because there are many areas
that we do not have standing joint doctrine or techniques,
tactics, and procedures developed in. Joint urban operations is
a good example there. How are we going to address the
complexities of time-sensitive targeting, the interfacing of
maneuver units, of bringing together combined arms in a very
close urban situation while trying to limit collateral damage?
It is these types of gaps and seams issues, as well as
evolving joint capabilities, that I think will need to be
addressed by such a concept as the Joint National Training
Capability.
Senator Akaka. Mr. Chairman, I want to thank Dr. Mayberry
and General Schwartz for their responses. Thank you very much.
Senator Ensign. I also want to thank you and I know you all
have a lot to be doing these days. We also want to try to get
the Deputy Chiefs up here and the Deputy Commandant and get
their testimony and get them on their way as well. So thank you
both very much. I would call the next panel to the table.
General Schwartz. Thank you, Mr. Chairman.
Dr. Mayberry. Thank you, Mr. Chairman, Senator Akaka. I
appreciate it. [Pause.]
Senator Ensign. Just while they are getting all situated, I
know you probably cannot sit down without name tags in front of
you, so just to tell you which order we will go in, Lieutenant
General Cody, you will start off, followed by Vice Admiral
Green, Lieutenant General Bedard, and Major General Schmidt, in
that order. General Cody.

STATEMENT OF LT. GEN. RICHARD A. CODY, USA, DEPUTY CHIEF OF
STAFF, G-3, DEPARTMENT OF THE ARMY

General Cody. Thank you, Mr. Chairman. I would ask that my
formal statement be entered into the record and I just have a
few opening comments I would like to make, with your
permission.
Senator Ensign. Just as a reminder, if you want to
summarize, your entire statements will be entered and made part
of the record.
General Cody. Thank you. Mr. Chairman, Senator Akaka, good
afternoon. Thanks for the opportunity to address your questions
relating to the readiness of our United States Army. I am
pleased to be here with my counterparts from the Navy, Air
Force, and Marines. Just as we sit before you here today as a
joint team, our soldiers, sailors, airmen, and marines are
serving side by side around the world in defense of freedom and
our way of life.
The ongoing efforts in Operation Iraqi Freedom are an
excellent example of the jointness that the founders of the
Goldwater-Nichols Act had envisioned. The Army, Navy, Air
Force, and Marines, along with our coalition partners, are
fighting in a seamless effort to bring the brutal Iraqi regime
to a close.
Twelve years ago when I was an Apache battalion commander
during Operation Desert Storm, our joint team fought in a
battle space deconflicted by time, space, and distance. Today
we are truly joint. The superb rescue last week of Private
First Class Jessica Lynch reflects the gains that we have made
in joint interoperability as Army, Navy, Special Operations
Forces, Rangers, and Marines all brought that young lady home
to safety.
Our Army is strong, it is trained, and it is ready. We have
a non-negotiable contract with the American people to fight and
win our Nation's wars. As of today, we have over 284,000
soldiers, including 148,000 soldiers from the Reserve
components, deployed across the homeland and in 120 different
countries around the world. Our soldiers are serving proudly
and are executing their assigned tasks with the vigor and
enthusiasm we have come to expect from these great young
Americans.
As some of you know, I have two sons on active duty in the
Army as pilots. My son Clint is today flying Apaches with the
101st Airborne Division inside Iraq. I am proud of him and what
he is doing. But I am also proud of his great leaders and the
superb young troops he is serving with, who enlisted to serve
their Nation in our global war on terrorism.
We are a Nation at war, we are an Army at war, and,
although these are difficult times, let there be no doubt that
our Armed Forces are trained and ready and they will prevail.
I look forward to the session and answering whatever
questions you may have.
[The prepared statement of General Cody follows:]

Prepared Statement by Lt. Gen. Richard A. Cody, USA

Mr. Chairman, and distinguished members of the subcommittee, I
thank you for this opportunity to report on the readiness of the United
States Army and our ability to provide for our Nation's security today,
and in the future.
I would like to begin by thanking this subcommittee, and Congress
as a whole, for your tremendous support of Defense issues in the fiscal
year 2003 budget. At the time of its submission, this budget sent a
strong signal to the men and women serving around the world in our
Armed Forces, and provided the resources to sustain Army readiness
under ordinary circumstances. We are living in extraordinary times. The
war in Iraq and the ongoing global war on terrorism create additional
requirements. To pay these bills we have had to spend money initially
intended for the third and fourth quarters. Therefore, rapid passage of
the 2003 supplemental currently under review is critical to the
continued readiness of our forces.
The fiscal year 2004 budget reinforces the positive message of
support to our soldiers and provides adequate funding for Army
readiness in a peacetime environment. The Army chose to manage risk in
the modernization of its Legacy Force and the associated mid-term
warfighting readiness. This risk takes the form of more selective
modernization and recapitalization efforts for the Legacy Force, while
still retaining sufficient efforts to ensure essential readiness
requirements. The immediate readiness impacts of this strategy are
minimal. The Army's primary metric for resourcing future years'
readiness is ground and air operating tempo (OPTEMPO). For fiscal year
2004, ground and air OPTEMPO accounts are funded to sustain Army
readiness. I greatly appreciate your support of our critical Defense
needs at a time when our Nation is facing so many challenges. Your
leadership does not go unnoticed and is deeply appreciated by our
soldiers and their families.
We have the most powerful Army in the world . . . resourced with
outstanding equipment and enhanced with cutting edge technologies. But
equipment, organizations, and precision-guided munitions don't fight
and win wars . . . our people do. Our most valuable resource--the
single thing that makes our Army the best in the world--is the men and
women who serve in our ranks. The greatest moments in the Army's
history have always revolved around our people--and it will remain that
way in the future. Soldiers are the centerpiece of our formations and
the engine behind our numerous accomplishments. Our soldiers are
professionals in every respect of the word . . . intelligent,
disciplined, highly trained, and extremely motivated. By far, this is
the best Army I've seen in my 31 years of service.
Let me put into perspective what this Army is doing in comparison
to the Army I joined in 1972. In the 40 years preceding the end of the
Cold War, the Army was involved in 10 significant deployments on the
spectrum of conflict. During this same period, the Army went from 64
Active and Reserve divisions in 1950, to 40 divisions in 1968, and to
28 divisions by 1989. Over the past 14 years--from 1989 to present--our
Army has been deployed 56 times while simultaneously reducing force
structure from 28 Active and Reserve divisions to our current strength
of 18 divisions.
As of today, we have 270,650 soldiers deployed in 120 different
countries--either forward stationed, forward deployed, or defending the
homeland here in the United States. The Army, which consists of Active
and Reserve component soldiers, and Department of the Army civilians,
is involved in a wide variety of tasks at home and abroad covering
nearly the entire spectrum of conflict in support of our National
Security and Defense Strategies. We are decisively engaged with our
joint and coalition partners in removing a brutal regime in Iraq;
fighting the war on terrorism in Afghanistan, Yemen, Djibouti and the
Philippines; deterring aggression in Korea; guarding detainees at
Guantanamo Bay; engaged across Europe; keeping the peace in the Sinai,
Bosnia, and Kosovo; helping to secure the homeland and bases overseas;
and training our friends and allies around the world in places like
Colombia, Honduras, and the Republic of Georgia. In the homeland, we
are engaged in missions in every State across the Nation, from
providing air defense for the National Capital Region to assisting in
the Columbia recovery mission.
None of this would be possible without the outstanding performance
of our Reserve component soldiers. We currently have Reserve and
National Guard soldiers mobilized in support of every mission that our
Army is conducting. From the sands of Iraq, to here in the homeland,
our Reserve component soldiers are absolutely indispensable to the
execution of our assigned missions. Immediately following the attacks
of September 11, our National Guard soldiers joined first responders
across the Nation to provide critically needed support. In the days and
months following the attacks they filled the vast majority of airport
and sensitive site security, as well as the security requirements at
the Olympics in Salt Lake City. In 2000 they responded when our Nation
called during one of the worst wild fire seasons on record. Today, they
are conducting the multinational force and observers (MFO) mission in
the Sinai, the SFOR mission in Bosnia, and will soon be taking over the
KFOR mission in Kosovo. Our Reserve components are carrying the flag in
Iraq, Afghanistan, Guantanamo Bay, and indeed, in every location you
find an Army presence. But, as well as our Reserve components have
performed, their service comes with a significant cost. Some of our
National Guard soldiers are on their second deployment since September
11. Our steady-state mobilization, from September 11 until the recent
build-up for Iraq, was nearly 41,000 soldiers. As of today, we have
150,071 Reserve component soldiers mobilized in support of ongoing
operations.
We are thankful for the support Congress has provided to build the
readiness of the Army. In every case, our soldiers have performed
magnificently and their equipment, in many cases, exceeded our
expectations. During Operation Anaconda in Afghanistan, our helicopters
operated at altitudes and with weights we previously didn't think were
possible. In Iraq, our tanks, infantry fighting vehicles, and aircraft
are living up to their reputations as being the best in the world. But
the extreme conditions and continued use will require us to undertake a
significant effort to reconstitute our formations. We will be repairing
our damaged and broken equipment, replacing material that has been
destroyed, replenishing our stores of ammunition and spare parts, and
refurbishing our pre-positioned stocks. This will be a costly and time-
consuming process, and we are hard at work assessing our current and
future requirements. With your support, we will get our force back to
pre-war condition as rapidly as possible and prepare for the next
fight, whenever and wherever it may occur.
The Army must train the way it intends to fight, because our
soldiers will certainly fight the way that they have trained. This is
why the subject of encroachment is so important to the Army. The Army
has endeavored to take care of the 16.5 million acres America has
entrusted to us. But America also entrusts us with an even more
precious resource--her sons and daughters. We are committed to
providing our soldiers with the most realistic training possible.
Recent trends limiting our access to quality training conditions give
us cause for great concern. As the Army continues to improve our
weapons systems and transforms our organizations, the combat training
footprint will be greater than that currently required to train
existing units. We appreciate the legislation Congress has already
passed in this area, particularly in the National Defense Authorization
Act for Fiscal Year 2003, but there is still more work to be done. The
legislative proposals within the Defense Department's Fiscal Year 2004
Readiness and Range Preservation Initiative will be a major step toward
establishing the legislative clarification we require to conduct
flexible, realistic training, while simultaneously protecting the
environment.
While executing these numerous missions and planning for future
contingencies, the Army is also simultaneously transforming itself to
meet future challenges. There will not be an operational pause that
allows us to transform while out of contact, and we cannot afford to
wait. These demanding commitments mean we must nurture a balance
between current and near-term readiness and our transformation
objectives. The Army has accepted reasonable operational risk in the
mid-term in order to fund our transformation to the Objective Force. To
mitigate risk we structured transformation to occur along three
mutually supporting axes for change. On the first axis, we preserved
the readiness of our Legacy Force--the force that's fighting our
battles around the world today. Over the past year we have
significantly increased our investment in Army Special Operations
Forces (SOF) including the accelerated fielding of several key pieces
of communications, mobility and intelligence support equipment. The
Army has also resourced significant increases in SOF manpower and we
are aggressively working to expand our Special Operations Aviation
capability. To avoid unacceptable risk, we are closely monitoring the
current operational situation as we support the combatant commanders in
the global war against terrorism, conduct homeland defense, and
prosecute the long-term effort to defeat transnational threats. We
developed and implemented the Strategic Readiness System (SRS) as a
comprehensive strategic management and readiness system. SRS also
provides a predictive tool with which to monitor the Army and to
provided senior leadership a decisionmaking tool to make appropriate
adjustments to preserve current readiness. On the second axis, we are
bridging the operational gap we discovered about 10 years ago--the gap
between our heavy and light forces--with Stryker Brigade Combat Teams.
We fully expect our first Stryker Brigade to be certified and part of
the operational force by the 4th quarter of this year. On the third
axis, we are developing a capabilities-based and strategically
responsive Objective Force optimized for the emerging and future
strategic environment. The Objective Force will consist of modular,
scalable, and flexible organizations that will be more lethal, more
agile, and more rapidly deployable than our current formations. We are
committed in the transformation effort to become a more joint,
strategically responsive, and full-spectrum dominant force to support
the combatant commanders' warfighting needs.
As we transform we are also in the process of reviewing our Reserve
component force structure in the form of the Army Guard Restructuring
Initiative. This concept restructures the Army Guard to meet emerging
requirements in line with the ``1-4-2-1'' Defense Strategy's force-
sizing construct. It will convert existing combat structure to new
designs that better support combatant commanders, including Northern
Command. Conversion to these new organizations, combined with efforts
already under way as part of the Army National Guard Division Redesign
Study, will result in a decrease in the current number of tracked
vehicles in Army Guard combat divisions and brigades. The end-state
will be organizations enhanced with systems that provide commanders
with more versatile capabilities over current divisional brigades to
meet the Nation's requirements.
With the soldier as our centerpiece, we are well aware that our
leaders must be grown from the ground up. The second lieutenants
entering active duty this year will be our colonels commanding
Objective Force units of action in 2025. Given today's complex
operational environment, and the infusion of new technologies at
increasingly lower levels of command, our leader development process
has never been more important. Over the past 2 years, we have undergone
a series of reviews, beginning in June 2000, with the Army Training and
Leader Development Panel. The purpose of this panel was to review,
assess, and provide recommendations for the development of 21st century
leaders for a transforming Army. We followed this initial panel, which
focused on the officer corps, with a series of studies to look at our
warrant officers, noncommissioned officers, and our civilian workforce.
We then developed implementation plans to address the panel's
recommendations. We are in various stages of refinement in each of
these categories, but I am confident that the end-state will ensure our
Army continues to be the best-trained and best-led military force in
the world.
Another initiative to ensure the future success of our men and
women serving in uniform is the Joint National Training Capability.
Although we've successfully integrated our sister Services at the
Army's existing combat training centers, the Joint National Training
Capability will take this concept to new heights. This new capability
builds on the Army (and other Services') training successes and adds a
coherent joint focus for the way ahead on joint and Service-
interoperability training. It is focused on four pillars: realistic
combat training, an adaptive and credible opposing force, common ground
truth, and high quality feedback. Our Army Title 10 training remains a
vital prerequisite to the important joint and Service-interoperability
training issues that this capability will address. The Office of the
Secretary of Defense has programmed approximately $1.34 billion over
the fiscal years 2003-2009 for the development of the Joint National
Training Center Capability.
For 227 years our Army has stood in defense of freedom and our way
of life. We have a non-negotiable contract with the people of the
United States to fight and win our Nation's wars. Whatever the
mission--whether defending the homeland, prosecuting the global war on
terrorism, or fighting a conventional war to destroy weapons of mass
destruction--your Army is ready. In peace and in war, the soldiers of
the United States Army will continue to serve our Nation with the
professionalism, tremendous courage, and indomitable spirit that we
have all come to expect. I am blessed to be an American, I am proud to
be the father of two soldiers serving on active duty today, and I'm
honored to have the opportunity to work together with the men and women
in our United States Army.

Senator Ensign. Thank you.
Admiral Green.

STATEMENT OF VICE ADM. KEVIN P. GREEN, USN, DEPUTY CHIEF OF
NAVAL OPERATIONS FOR PLANS, POLICY, AND OPERATIONS

Admiral Green. Good afternoon and thank you, Mr. Chairman,
Senator Akaka. It is truly an honor and a pleasure for me to be
here with you this afternoon. I am pleased to report that our
Navy is performing superbly in Operation Iraqi Freedom and in
our other commitments and operations around the world.
As we meet here this afternoon, 64 percent of our 302 ships
are under way. The majority of them are forward deployed. Seven
aircraft carrier battle groups and 9 of our 12 amphibious ready
groups are forward deployed to such areas as the Mediterranean,
the Arabian Gulf, and the western Pacific. This level of effort
is a remarkable testament to the superb amount of work and
leadership and wise counsel that has been done, particularly by
this committee.
Your steadfast support of the $6 billion readiness
improvement over the past 2 years made the Chief of Naval
Operations' culture of readiness vision a reality and has
produced the most ready naval force in our history. These
investments were vital to sustaining the war on terrorism,
assuring friends and allies, and leading the Nation's global
response to crisis.
Today one of the biggest challenges in sustaining this
level of readiness following the completion of our current
mission in Iraq will be facing the readiness that we are
required to sustain in the future. We look forward to working
with you to meet this challenge.
Mr. Chairman, I have provided my written statement which I
would like to have entered in the record and I stand ready and
pleased to answer your questions. Again, thank you very much.
[The prepared statement of Admiral Green follows:]

Prepared Statement by Vice Adm. Kevin P. Green, USN

INTRODUCTION

Chairman Ensign, Senator Akaka, and distinguished members of this
subcommittee, I appreciate the opportunity to be with you today. It is
an honor to report to you on the operational status and readiness of
this great Navy during these exceedingly challenging times, as we are
engaged in OIF, while continuing to prosecute the global war on
terrorism (GWOT). Your generous support has been instrumental in our
efforts to improve the combat readiness of our Navy. The results are
evident in the strong forward deployed posture and readiness for combat
of our people and units.
I'll begin my statement today by briefly reviewing the past year,
including our support of Operation Enduring Freedom and homeland
defense. Next, I'll address our operations today and how we got here,
focusing on the sailors, training, maintenance, platforms, and
munitions which are the key enablers of our current high forward
deployed state of readiness. I will then discuss the challenges we face
in maintaining this readiness level and in reconstituting the fleet
once the war in Iraq comes to a close. Finally, I will outline how we
will leverage technology and business practices within the Chief of
Naval Operations' Sea Power 21 vision to position the Navy for future
readiness.

THIS TIME LAST YEAR . . .

At this time last year, 103 Navy ships and 48,000 sailors were
deployed around the world supporting the global war on terrorism and
other operational commitments. We were in the process of scaling back
the Navy's participation as a joint and coalition partner in the
campaign in Afghanistan. The Navy had surged to support the overall
military effort, and the persistence, precision, and operational
flexibility of our naval forces provided major contributions to the
campaign. Three carrier battle groups, supported by Air Force tanker
crews, provided continuous 24-hour tactical aircraft presence over 700
miles inland. Two amphibious ready groups fully supported marines
deployed deep into Afghanistan and Pakistan. Navy Special Forces
(SEALs) provided key elements of the special operations effort on the
ground while an aircraft carrier employed on short notice as an
innovative afloat forward staging base (AFSB) hosted Army Special
Forces units. Specially configured P-3 aircraft flew extensive missions
overland providing direct reconnaissance support for forces on the
ground. The Navy also participated in a host of operations intended to
interdict terrorists and contraband material moving over the oceans.
Meanwhile, our naval coastal patrol craft teamed with the Coast Guard
for port security in support of homeland defense.
Nearly every ship in the Navy has deployed over the past year in
support of combat operations, some twice. U.S.S. Carl Vinson, which was
on station for the opening salvos in Afghanistan, deployed again last
month. Nine of 12 Navy aircraft carriers deployed at some point in the
past year, and all but one has participated in forward deployed
operations since 11 September 2001.

WHERE WE ARE TODAY . . .

The Navy is underway on an even larger scale today, supporting
Operation Iraqi Freedom, executing other missions in the global war on
terrorism, and maintaining our Nation's commitments to our allies. One
year ago, in support of Operation Enduring Freedom, the Navy was called
upon to provide a moderate surge force; today we are surging near
maximum capacity. Indeed, 210 of our 305 ships--representing 69 percent
of our force--are underway, including 7 of 12 carrier battle groups, 9
of 12 amphibious ready groups, and 25 of 54 attack submarines. The Navy
and Marine Corps alone have nearly 600 aircraft forward deployed in
support of operations against Iraq and other potential contingencies.
SEALs, construction battalions, explosive ordnance disposal teams, port
operations support units, maritime patrol squadrons, medical teams, and
naval coastal warfare units also are overseas--all are performing
magnificently in combat or in support of other theaters of operation.
Maritime prepositioning ships and ships of an amphibious task force
offloaded equipment in support of marines in Kuwait, and 135 ships
under the control of the Military Sealift Command are transporting
forces to the theater. We have deployed U.S.N.S. Comfort, a hospital
ship with a 1,000 bed capacity, and three field hospitals as well as
our High Speed Vessel (HSV), which serves as a test bed for the
Littoral Combat Ship. One of our command ships, U.S.S. Mount Whitney,
is deployed as the flagship for Commander, Joint Task Force Horn of
Africa. In all, nearly 77,000 Navy men and women are deployed today
worldwide, 50,000 of whom are devoted to Operation Iraqi Freedom.
Over the past weeks, our sailors have performed superbly in
Operation Iraqi Freedom. By any measure, today's Navy is the most
capable force we have ever put to sea, maintaining a persistent and
capable forward presence, and we've demonstrated our ability to surge
significant combat power quickly, wherever required, using the largest
maneuver space on the planet. Moreover, in an era of growing anti-
access threats--whether political or threat-based--the inherent ability
of naval forces to project offensive and defensive power in an
unconstrained manner from the sovereign sea base is growing in
importance. As we confront and defeat the threat posed by the current
Iraqi regime and continue the worldwide fight against terrorist
organizations, we do not neglect our other global responsibilities. In
the western pacific, the U.S.S. Carl Vinson Battle Group is deployed in
support of the Pacific theater commander, and the ESSEX Amphibious
Ready Group, permanently forward based in Japan, is conducting routine
operations and exercises in this important area of the world.
We are trained and ready on arrival, able to climb into the ring
with the enemy and project power in ways we could only imagine a few
years ago. Thanks to the support of this committee, we are presently
experiencing the highest state of overall readiness I've ever witnessed
in my 32 years of naval service.

HOW WE GOT HERE . . .

Realizing several years ago that we needed to balance, more
effectively, current readiness against the requirement to recapitalize
our fleet, we invested an additional $6 billion in readiness accounts
from fiscal year 2002 to fiscal year 2004, including the Flying Hour
Program, Ship Depot Maintenance, Ship Operations, and Sustainment,
Restoration, and Modernization. We made some tough budget choices to
fix critical personnel and readiness issues. With this committee's
support, we made these investments in a timely and fortuitous manner,
and are now reaping the resultant personnel, material, and training
benefits in the success of our ongoing operations.
We continue to make difficult, but prudent, choices in the fiscal
year 2004 budget. For instance, you will notice a decline in ship depot
maintenance funding. Despite the reduction, our budget achieves the
CNO's readiness goals: funding 96.2 percent of validated requirements--
the same as fiscal year 2003. This is a function of the return on the
readiness investment made over the past two budgets and the
supplemental funding that allowed us to reduce the maintenance backlog,
improve business practices and maintenance processes, and accelerate
the retirement of older, maintenance-intensive ships.
Beginning with the personnel side of readiness, the Navy is
retaining sailors at the highest rates in decades. During fiscal year
2001 and fiscal year 2002, first term reenlistments averaged over 67
percent. In a phenomenal increase, our deploying battle group manning,
measured at the 6 month point prior to the start of a deployment, has
improved from 91 percent in fiscal year 2000 to 99 percent for the last
five battle groups. Pay raises and enhancements to special pays
(especially career sea pay) enacted over the past 2 years are yielding
impressive results. Moreover, our efforts to reduce out-of-pocket
housing expenses, authorization for our sailors to participate in the
Thrift Savings Plan, improvements in medical care, and retirement
reforms approved by Congress are among the significant factors that
have helped us retain the sailors we need today. On the recruiting
front, we have now met our accession planning goals for 4 straight
years and for 19 straight months. Our Delayed Entry Program posture
(which measures the percentage of the year's recruiting goal that is
already accommodated at the beginning of the year) was 54 percent for
fiscal year 2003, near the highest level ever. We are encouraged by the
fact that we have garnered higher quality recruits than in previous
years, with over 92 percent of the fiscal year 2002 recruits being high
school graduates.
Anti-Terrorism/Force Protection (AT/FP) personnel requirements
continue to stress our ashore and afloat manpower planning. As much of
our surge capability in the AT/FP mission area resides in the Reserve
component, this essential element of our total force has been
fulfilling a crucial role in the global war on terrorism. Additionally,
for the first time since the Korean War, we have activated a Reserve
carrier based fighter-attack squadron, which presently is flying F/A-
18A aircraft deployed aboard U.S.S. Theodore Roosevelt in the Eastern
Mediterranean. It was necessary to activate this squadron to deconflict
the transition timeline for one of our active F/A-18E/F Super Hornet
squadrons that would have been required to deploy early in support of
then possible operations in Iraq. We are very pleased with the
responsiveness and performance of VFA-201 in this important role.
More than 87,800 Naval reservists make up nearly 23 percent of the
Navy's total force. With a total of over 11,000 reservists recalled to
active duty today, the effective integration of Reserve elements into
active components is indispensable to readiness and management of our
personnel tempo in the global war on terrorism. We face three
challenges with this Reserve activation. First, several of our key
Reserve capabilities, such as Inshore Boat Squadrons providing
worldwide port security, soon will be close to the 2-year involuntary
activation limit. We are examining ways to migrate some of this
important capability to our Active Force while expanding Reserve
capability in this area. Second, with over 3,600 medical personnel
deployed aboard U.S.N.S. Comfort, in fleet hospitals, and to other
forward locations above our normal posture, we are maintaining
continuity of medical care for CONUS-based forces, their dependents,
and retirees by combining selected medical reservist backfills with an
outsourcing strategy. Finally, we continually revalidate the billets
filled by Reserves with an eye toward demobilizing those who are not
essential to the war effort in order to achieve optimum manning
efficiency. However, the cost to mobilize reservists to active duty is
an unplanned resource challenge.
Two years ago, the Navy reported to you significant concerns with
the material aspect of our current readiness. As one of the CNO's top
five priorities, Navy current readiness received significant attention
within our budget submissions. With focused effort, careful planning
and congressional resource support, we have made tremendous gains in
aviation material readiness, ship material readiness, and preferred
munitions.
In aviation material readiness, 1 year ago there were 44 bare
firewalls in the EA-6B Prowler fleet--a critical support aircraft that
we place in the category of ``low density-high demand'' assets. Today
there are zero bare Prowler firewalls, although we now need to purchase
new outer wing panels for a number of these aircraft to ensure their
continued viability until replaced by the EA-18G. I also report to you
that we have made significant progress in reducing aircraft
cannibalization, the practice of taking parts from one aircraft to make
another operational. Despite the increased operational tempo (OPTEMPO)
associated with executing the global war on terrorism, we've continued
to make progress in this area, reducing cannibalization by an
additional 5 percent.
The Navy also has made significant progress in shifting our weapon
system logistics support strategy from one of buying parts and managing
inventory to one of buying performance and managing results. The
vehicles to accomplish this transition are performance based logistics
(PBL) contracts. These contracts are usually long term in nature and
both empower and incentivize the provider to improve product support
while reducing the total cost of ownership. The primary goal of the PBL
approach is to enhance warfighter logistics support via improved supply
availability, decreased cycle time, increased reliability and reduced
obsolescence. The PBL methodology is structured to accomplish these
goals by capitalizing on industry best practices and reengineering
logistics support to perform more like a commercial system.
Currently, the Navy has approximately 25 percent of its active
inventory managed under a PBL agreement. This approach has achieved
unparalleled success across both aviation and ship programs and is
equally effective when applied to a single item of supply or an entire
weapons platform. A sampling of PBL successes may be found in the
following examples.

F/A-18 E/F: The F/A-18 E/F Integrated Readiness
Support Teaming (FIRST) contract encompasses support for the
entire aircraft. Supply availability is 85 percent versus 62
percent for F/A-18C/D aircraft. Projected savings are $52
million over 5 years.
Close-In Weapon System (CIWS): This contract is
achieving 89 percent supply availability versus a previous
performance level of 60 percent. Projected savings are $5
million over 5 years.
Aviation Tires: This innovative 5-year contract has
virtually taken the Navy out of the business of buying and
warehousing tires in support of 17 different aircraft. Supply
availability is 98 percent versus a previous performance level
of 81 percent, with projected savings of $46 million over 15
years.
AEGIS Weapons System: This contract is achieving 95
percent availability versus a previous performance level of 85
percent. Projected cost savings is $6 million over 4 years.

Early retirement of some aircraft models enabled the Navy to avoid
costly maintenance requirements and reinvest those savings across other
readiness accounts. For example, the F/A-18E/F Super Hornet--the first
three squadrons of which are deployed today to the Arabian Gulf--
operates at one third the cost of the aging and maintenance-intensive
F-14s it is replacing. Moreover, the Super Hornet provides significant
readiness improvements while simultaneously providing a 40 percent
increase in combat radius and greater payload capability than the F/A-
18C/D.
The addition of precision-guided munitions (PGM) capability to
every strike aircraft means we now measure air wing capability in
targets per sortie instead of sorties per target. Accordingly, early
attention to the Navy's preferred munitions requirements was another
key enabler of today's readiness gains. At the onset of Operation
Enduring Freedom, the Navy and Marine Corps did not possess the desired
inventory of PGMs. This inventory was further depleted by operations in
Afghanistan. However, our increased investment in the PGM industrial
base and procurements continues to move us in the right direction.
Laser guided bomb (LGB) production is currently at the maximum rate,
and Joint Direct Attack Munition (JDAM) production is forecast to reach
the maximum rate by August 2003. In anticipation of combat operations
in Iraq, the Navy initiated cross leveling of LGB and JDAM inventories
with the Air Force to mitigate the delay in production ramp-up and to
replenish the Navy's JDAM inventory shortfalls. Maximum procurement of
PGMs continues to be a high priority for the CNO and Navy Fleet
Commanders.
We have made similar gains in ship material readiness. Supplemental
funding; cost avoidance through the accelerated retirement of older,
high maintenance frigates and destroyers; the expanded use of multi-
ship/multi-option, maintenance contracts with private industry; and
innovative scheduling enabled us to reduce deferred ship maintenance by
45 percent (from $356 million in fiscal year 2001 to $197 million in
fiscal year 2002). Meanwhile, the consolidated shipyard activity in
Pearl Harbor continues to demonstrate the flexibility and effectiveness
of integrating depot and intermediate ship maintenance under a mission
funding financial system. Mission funding enabled Pearl Harbor Naval
Shipyard and Intermediate Maintenance Facility to begin immediately
repairing damage resulting from U.S.S. Denver and U.S.S. Greeneville
collisions and to provide recent unscheduled drydock repairs on U.S.S.
Paul Hamilton and U.S.S. Reuben James. Based on this success, our
fiscal year 2004 budget includes the transition of Puget Sound Naval
Shipyard from a Navy Working Capital Fund activity to a mission funded
activity.
Recognizing that naval forces at sea are less vulnerable than
ground forces to chemical, biological, or radiological (CBR) attack,
one of our concerns as we prepared for a possible contingency in Iraq
was the adequacy of our sailors' protection against such attack. We
determined that our current quantity of equipment was adequate for
rotational force operations but not for large surge force operations.
Considering the volume of forces identified for this campaign, we
fundamentally changed scheduled deployment priorities due to the
requirement to surge such a large force structure outside of the normal
deployment cycle. The Commander, Fleet Forces Command (CFFC) validated
and requested additional emergent funding to improve chemical,
biological, radiological, and nuclear defense (CBRND) readiness for the
increased force requirements. The CFFC study concluded that afloat
forces possessed the requisite gear but that expeditionary forces most
vulnerable to CBR attack needed additional equipment and training. We
expedited procuring additional CBRND equipment stocks and accelerated a
``pilot'' Naval Sea Systems Command CBRND Readiness Improvement Program
(RIP) to improve ashore forces' readiness and training. We also fielded
an interim presumptive and confirmatory biological warfare threat
identification capability. These actions resulted in a significant
improvement in CBRND capabilities for the fleet.
In total, the Navy has expended over $160 million to improve its
ability to fight and win in a CBR contaminated battle space. Today, all
of our forward deployed sailors, including those who are or could be
based ashore, are equipped with adequate supplies of the most
appropriate CBRND equipment available. Meanwhile, we are committed to
an aggressive anthrax and smallpox vaccination program, which is
proceeding apace. To the maximum extent possible, we will look to deter
and avoid direct CBRN threats to our forces. Finally, we maintain
efforts to field additional capability, and continue to analyze our
prospects for sustained operations in a CBRND environment and our
ability to reconstitute for additional future tasking.
Training readiness is another success story. We continue to place
greater emphasis on use of simulation and other means of finding
efficiencies that can be captured and diverted into other readiness
accounts. Inherent in our employment shift to a rotational force that
is surge-capable, we have found innovative ways to achieve an
acceptable level of surge readiness earlier in a battle group's
deployment cycle. Adjustments to key training and scheduling events
during the inter-deployment training cycle are resulting in ships and
squadrons being capable of accelerating to a deployable status sooner.
This has been manifested during the current crisis in that the last
three carrier battle groups we sent forward were all deployed early at
acceptable levels of readiness.

SUSTAINING THE SURGE . . . AND RESTORING READINESS POST-CRISIS

While we have invested wisely in order to gain the highest
available readiness, today's surge has put a significant strain on
every Navy resource. Our military forces are deployed far beyond normal
peacetime Global Naval Force Presence Posture (GNFPP) training and
deployment cycles. It is likely that the Abraham Lincoln Battle Group
and the NASSAU Amphibious Ready Group will have been deployed for over
9 months, upon their return from the Arabian Gulf. Such deployments
bear significant, unprogrammed costs in fuel and parts that we will
need to recover if we are to continue to operate at this tempo.
Moreover, once we complete our mission in Operation Iraqi Freedom, we
will need to reconstitute our forces quickly in order to sustain the
readiness required to continue the global war on terrorism. Returning
to and stabilizing a rotational, forward deployed/surge capable naval
force will require careful analysis and balancing of ship maintenance
schedules, deployment durations (including some battle group
deployments in excess of our 6 month goal), aircraft modification and
transition schedules, resupply of parts inventories, and possible
relaxation of overseas commitments. At the same time, our most precious
asset--our sailors and their families--will need time to recover from
the personal cost of these long deployments.
Innovative planning already is underway to maximize on-station time
of our ships while mitigating the impact of longer deployment schedules
on our sailors. One such effort, the Navy's Sea Swap initiative, is
experimenting with exchanging forward deployed crews, the first of
which occurred aboard U.S.S. Fletcher in the Western Australian port of
Fremantle. We will continue this initiative with another crew change
this summer and we intend to examine other pilot programs in optimal
manning, rotational crewing, and assignment incentive pay designed to
make more optimum use of our capital assets.
Current operations have severely disrupted planned maintenance
schedules for our ships and aircraft. Schedule ``churn'' challenges a
maintenance infrastructure sized and culturally inclined to support
peacetime sustained operations instead of a large, post-surge ship and
aircraft workload. This, in turn, results in greater cost for the same
amount of maintenance performed. Accordingly, we are focusing on the
maintenance strategies and processes we will use to restore our ships
and aircraft to deployment-ready status. We are already working hard to
reorganize priorities and resolve competing maintenance requirements in
order to return to a full readiness posture capable of surging in
support of future joint operations. Finally, we are examining ways of
incorporating the lessons learned from this surge into a new approach
to maintenance that will be more capable of handling future surge
operations.
Replacing units which have been deployed for many months will
likely require the same type of shortened training cycles we have been
using for our surging units. This is sustainable in the near term, but
we will need to work toward more normal training cycles in order to
retain our critical warfighting skills in all areas (especially those
which might not be required during the conflict with Iraq, such as
anti-submarine warfare).
Despite increases in production, the conflict with Iraq has reduced
the Naval PGM inventory, including the Tomahawk Land Attack Missile
(TLAM). Consequently, and depending on the duration of the conflict, it
will be necessary to continue PGM production at maximum capacity.

CHALLENGES AND TRANSFORMATIONAL INITIATIVES

The Navy is committed to extending our culture of readiness into
the future, to include support for an operational concept that will
maintain a substantial portion of the fleet in a readiness condition
that would permit a rapid surge of significant combat power to augment
the normal rotational force posture maintained under the Global Naval
Force Presence Policy. This construct also includes the ability to
reconstitute rapidly following a contingency.
To date, the Navy has conducted significant analysis and has
established a ready surge force construct of six carrier battle groups
(soon to be transitioned to carrier strike groups, or CSGs, in line
with the CNO's Sea Power 21 vision) and six amphibious ready groups
(soon to be transitioned to expeditionary strike groups, or ESGs). We
are currently defining our surge requirement across the full spectrum
of Navy combat power and reshaping our readiness processes, including
the inter-deployment training cycle, to institutionalize this surge
capability. We also will seek to do a better job of balancing our
resources to support this re-alignment. Elements of the CNO's Sea Power
21 vision will complement these initiatives while enhancing the key
enablers of people and processes.
One of the biggest challenges we face as a surge capable rotational
force is in maintenance workload predictability and stability.
Implementing this new surge concept will require innovative approaches
to maintaining our ships and aircraft. In fiscal year 2004, we will
integrate Puget Sound Naval Shipyard and the Pacific Northwest
Intermediate Maintenance Facility. Converting these activities to
mission funding is a vital part of this integration and will deliver
increased responsiveness to the warfighter and more efficient use of
resources. Mission funding provides the flexibility to match workforce
to the highest priority work requirements without delays or
administrative funding constraints. It will allow for the most
effective use of all maintenance resources in the region, unconstrained
by organizational boundaries, and will eliminate redundant overhead
functions. In short, mission funding is essential to provide fleet
commanders with the inherent flexibility to execute their highest
priority requirements in this surge environment, where ship maintenance
availabilities and operational schedules will be flexing to support the
GWOT, Southwest Asia, and future contingencies.
Ensuring that an increasing number of deployed ships sustain high
readiness is critical and not easily attainable given the restrictions
on the use of overseas depot facilities. Acquisition restrictions
forced us to send U.S. shipyard workers overseas to do routine
maintenance work on U.S.S. Fletcher, our Sea Swap experiment test ship.
This is not good stewardship of taxpayer dollars. We need a common
sense approach to afford better, more cost-effective maintenance
support to our forward deployed forces.
Public/private partnerships are a key enabler to improve our
maintenance capability. For example, our naval aviation depots (NADEPs)
are world-class organizations, replete with examples of novel
approaches to the aircraft maintenance business. The NADEPs currently
are executing 15 public/private agreements valued at over $182 million.
These partnerships are primarily long-term contracting initiatives or
memoranda of agreement that establish a joint venture between private
industry and the public yards. Often this involves one party providing
technical expertise and direct labor, with the other providing the
actual facilities or support equipments required to execute the work.
There are approximately 16 additional agreements in the approval and
negotiation phases valued at over $492 million for the base period of
their contracts. With the agreements that are in place, we have seen
the most common inhibitors to maintenance depot production (material,
carcass, and engineering constraints) become exceptions rather than the
rule. By removing the barriers that inhibit government/industry
teaming, we can encourage greater use of these partnerships as a
primary means of improving depot support. Congress' support for
``Centers of Industrial and Technical Excellence'' has been a very
positive development in this regard.
The Secretary of Defense has cited public/private partnerships as a
key initiative under the Future Logistics Enterprise, which is intended
to transform logistics support to the warfighter in the areas of
supply, maintenance, and transportation. In addition, the CNO has cited
public/private partnerships as one of the key facets of Sea Enterprise,
the sweeping initiative to capture efficiencies in order to
recapitalize the Navy. Along with the NADEP examples mentioned above,
other partnerships include aircraft carrier and submarine maintenance
work and resource sharing, propeller repair facilities, and SSGN design
and conversion.
Enterprise Resource Planning (ERP) is a critical part of any
discussion about modernizing our organizations and improving their
efficiency. Navy ERP is comprised of four distinct efforts covering
program management, financial management, regional maintenance, and
supply management. ERP is the tool which enables a significant
reduction of costly legacy systems; it facilitates an economic,
standardization of business and administrative processes, and will
provide much greater resource and cost visibility to decisionmakers at
all organizational levels. We must sustain our ERP investment and
implementation to continue to harvest efficiencies that can be
redirected to warfighting priorities.
The high quality of training we provide to our sailors is largely
unseen by the public and often taken for granted, yet it is an
essential element of their impressive combat readiness. Accordingly,
you will note a significant investment in training within the
President's budget. The Navy has trained its last battle group at
Vieques Island, Puerto Rico and will cease operations there next month.
The loss of this valuable asset will be offset by upgrades in certain
range capabilities, cooperative use of other service ranges and
integration of new technologies such as virtual at sea training (VAST),
which together will provide fleet training superior to that currently
being conducted by deploying battle groups. The developing Joint
National Training Capability (JNTC) has tremendous potential in terms
of expanding the interoperability and technological facets of our
training syllabus. The JNTC concept, as envisioned, will provide a
global, integrated network of live-fire training ranges and a linked
network of simulation capabilities focused on better preparing U.S.
forces from all Services for joint operations.
We intend to use the Training Resource Strategy (TRS) as a key
resourcing framework to support continued transformation of fleet
training. Beginning in the Atlantic Fleet, TRS will move us to a 21st
century training environment. These transformational training
initiatives were needed to replace a legacy training regimen that did
not fully train to the increasingly joint, interoperable, and
geographically dispersed nature of today's combat operations. With this
initiative, our Navy is aligning its training methodology to flex naval
forces in shifting operational and tactical training environments
through a mix of live and virtual training environments.
Battle groups soon will be able to conduct combat exercises in port
with netted combat system trainers that enable crews and staffs to
train under tactically stressful scenarios prior to at-sea training
events. Our carrier air wings will use simulation more effectively and
will conduct long and short-range strike missions against a variety of
challenging fixed and mobile targets. These initiatives, together with
new range instrumentation being developed cooperatively with the Air
Force, also position Navy ranges to support fully the developing Joint
National Training Capability. This program will be expanded in future
years to support the Pacific Fleet and will serve as the vehicle for
continued transformation of fleet training in the Navy.
The new DOD Readiness Reporting System (DRRS) concepts will further
augment joint training initiatives. In particular, Navy is currently
developing an enhanced reporting system to fulfill all of the mandated
requirements set forth for the Services. With prototype completion
expected this year, this system will link Navy reporting metrics to
joint mission essential tasks (JMETs), provide near real-time
reporting, roll-up readiness assessments, and provide drill-down
assessment capability.
No readiness challenge is greater than that of encroachment on our
training ranges. We rely on full use of our ranges; facilities and
advanced technology to ensure our forces have a decisive advantage in
combat. Unfortunately, training areas that were originally located in
isolated areas are today surrounded by recreational facilities and
urban and suburban sprawl. Increasing regulation, permitting processes,
and litigation have cumulatively diminished the Department of the
Navy's ability to effectively train our personnel and test our weapon
systems. We actively seek to be good stewards of the environment, and
the record shows we have been successful in this area. However, we also
are asking for the legislative relief we need in the form of the
Readiness and Range Preservation Initiative in order to bring the twin
requirements of national security and environmental conservation into
better balance.
We believe it is important that our facilities sustainment,
restoration, and modernization (FSRM) program remains robust enough to
maintain our shore facilities and infrastructure. While our fiscal year
2004 military construction and sustainment program reflects difficult
but necessary trade-offs between shore infrastructure and fleet
recapitalization, the majority of the SRM trends are very good.
Sustainment funding has increased from 84 percent to 93 percent of the
requirement in fiscal year 2004. Our fiscal year 2004 budget request
puts us on a course to achieve the DOD goal of a 67 year
recapitalization rate by fiscal year 2008. (Note: DOD goal is fiscal
year 2007, but the budget reflects fiscal year 2008). In pursuing that
goal we will explore innovative solutions to provide safe, efficient
installations for our service members, including design-build
improvements, more efficient facilities, and Base Realignment and
Closure (BRAC) land sales via the General Services Administration (GSA)
Internet.

CONCLUSION

Again, I would like to thank the members of this subcommittee for
all you have done for our Navy. The first war of the 21st century
promises to be a challenging struggle. Over the past year, the United
States Navy has excelled in a very dynamic and dangerous environment in
support of this vital effort because we are well trained and equipped
to go in harm's way. Every day, your volunteer sailors are dedicated to
providing flexible, forward deployed, combat ready power on a moment's
notice anywhere in the world to ensure the safety and vital interests
of the American people. We are this way because of the tremendous
support we have received from the American people and from Congress--
support we must be able to count on if we are to remain prepared to
conduct the global war on terrorism and respond to any other
contingencies that arise in this dangerous world.
Budgets always present difficult choices, and this budget is no
exception. I believe the President's 2004 budget request firmly
supports the priorities needed to allow the Navy to continue delivering
precise, persistent, and responsive combat capability at sea. It builds
upon previous submissions and will help continue to translate the
Navy's vision into tomorrow's warships, aircraft, weapons, information
networks, and, ultimately, sailors. On behalf of our sailors and their
families who proudly serve our Nation, I thank you for your continued
commitment to the readiness of the finest Navy in the world.

Senator Ensign. Thank you.
General Bedard.

STATEMENT OF LT. GEN. EMIL R. BEDARD, USMC, DEPUTY COMMANDANT
FOR PLANS, POLICY, AND OPERATIONS

General Bedard. Mr. Chairman, Senator Akaka, it is an honor
for me to be here to represent your Marine Corps today. I would
like to thank you very much and certainly this subcommittee's
strong support for the issues and programs that are of such
vital importance to the readiness of the Marine Corps and to
all our Services.
Today some 70 percent of the Marine Corps' operational
forces are forward deployed and the Marine Corps' operations
throughout this past year have highlighted the versatility in
deployment of our expeditionary forces and its contribution to
the joint force.
This year has been filled with challenges in terms of
operational requirements, participation in the global war on
terrorism, Operation Enduring Freedom, and Operation Iraqi
Freedom, all of which I believe attest to the training, the
readiness, and the capability of not only the Marine Corps, but
of our forces.
I do believe that we have some definite challenges ahead
for all of us. In my mind I see these challenges in terms of
those close at hand, such as conflict resolution and subsequent
reconstitution of the force. On the horizon, we need to stay
the course relative to modernization and transformation.
I want to thank you for your assistance in the ongoing
effort with respect to the supplemental. It will be critical to
rapidly rebuilding the force capability. We must ensure maximum
future readiness with minimum degradation. The global war on
terrorism and other potential adversaries cannot be given a
time out.
We are doing what we were trained to do and we are ready to
support our Nation through whatever challenges may lie ahead
worldwide. We remain the only sea-based rotational, truly
expeditionary combined arms force, ready to answer the call, as
part of the highly integrated joint force.
I thank you again for your continued support for the Corps,
our marines, and their families, as well as for the soldiers,
sailors, and airmen, and my colleagues who sit with me today. I
look forward to your questions. Thank you.
[The prepared statement of General Bedard follows:]

Prepared Statement by Lt. Gen. Emil R. Bedard, USMC

INTRODUCTION

Chairman Ensign, Senator Akaka, and distinguished members of the
subcommittee, it is my privilege to report on the state of readiness of
America's Marine Corps.
I am deeply honored to report on the readiness of your Marine Corps
at a time when the heroic sacrifices of our men and women actively
engaged in combating terrorism are being broadcast nightly into every
household across America. The Marine Corps' first priority is, and will
continue to be, readiness. Our sequence of priorities is ``Mission
First, Marines Always''. Our service in Afghanistan, Iraq, and many
other places attests to the state of our readiness better than mere
words alone.

OPERATIONS

As recent events have proven, the world remains uncertain and
dangerous. Our Nation is a superpower with national interests that
extend well beyond our geographic borders. We are participants in a
global economy that has brought peace, prosperity, and stability to
remote parts of the world, while improving the quality of lives of
millions worldwide. Whenever or wherever our national interests were
threatened, the Marine Corps has distinguished itself as a certain
force in an uncertain world. Being ready when the Nation is least
prepared requires focus, dedication, and flexibility. Our national
interests face threats ranging from conventional forces to rogue para-
militiary organizations masquerading as civilians using unconventional
weaponry and bent on self-destruction. Being ready across the full
range of conflict requires organizational scalability. In each
instance, we must be able to provide a measured response, to surgically
eliminate the threat with minimal collateral damage, while protecting
our national interests and goodwill, on a battlefield not of our
choosing. Providing a full range of capabilities to the combatant
commander has tremendous utility in today's world. I know that the
distinguished members of this committee understand the value of ready
forces, as you have always demonstrated your understanding through the
strong support you've provided.
The Marine Corps maintains a global, expeditionary perspective, and
we posture our forces accordingly. Marine Forces serve as a strategic
deterrent, as an instrument of diplomacy, and as a demonstration of our
national resolve to protect freedom wherever it is threatened and if
required, the Marine Corps can rapidly commit combat forces to resolve
the conflict. We are a transformational force that is affordable,
scalable, sustainable, and prepared to respond across the spectrum of
operations, from humanitarian assistance and disaster relief to major
conflict. As you have seen in Iraq and elsewhere, your marines are
trained and prepared to be first on the scene, first to help, first to
fight, first to serve, and to serve as an enabler and nucleus for the
follow-on joint forces. Our Marine Air Ground Tasks Forces (MAGTF) with
their organic logistics and versatility may be task organized as the
ideal model of how effective, efficient, well integrated joint
operations will execute.
In the global war on terrorism, we are exploiting the capabilities
and talents of our most sophisticated state-of-the-art weapon--a United
States Marine. When the President called, our marines proved themselves
to be well trained, adequately equipped, and up to any challenge. Our
equipment, though aging, is well maintained and is accomplishing the
task at hand. Marine Corps doctrine of maneuvering from the sea to
objectives deep inland has proven itself to be extraordinarily
effective. As we speak today, the Nation's premier Expeditionary Force
in Readiness is deployed across the globe in support of Operations
Enduring Freedom (OEF), Noble Eagle (ONE), and Iraqi Freedom (OIF).
The Marine Corps has deployed more than 60,000 marines in support
of Iraqi Freedom. Our Navy-Marine Corps team deployed and massed two of
our forward deployed Marine Expeditionary Units, Special Operations
Capable (MEU (SOC)) in the Central Command area of responsibility, to
establish a presence, and provide a capability to protect our sea
passageways and ports of arrival at our intended staging areas. MEU
(SOC)s are routinely forward deployed and positioned for global
coverage to establish goodwill, maintain a national presence, preserve
order, and protect our national interests abroad. Their forward
presence protects our homeland from threats well outside our borders.
The MEU (SOC)s provided a strategic reserve for Central Command, during
the arrival and subsequent off-load of two squadrons of our Maritime
Prepositioning Force (MPF) in Kuwait. We rapidly offloaded two
squadrons of our MPF--11 ships within 18 days. The equipment coming off
Maritime Prepositioning Ships Squadrons 1 and 2 had equipment readiness
ratings of 98 percent and 99 percent respectively. MPF equipment is
modern and 100 percent compatible with our Active Force. Once
offloaded, it is immediately available for integration into a Marine
Expeditionary Brigade (MEB) force consisting of approximately 15,000
marines and sailors. The success of our preparation for combat
operations in Iraq was made possible because of the readiness of our
MPF program as their collective efforts served as a foundation for a
Marine Expeditionary Force (MEF). The MEF's efforts were augmented by
two amphibious task forces, which sailed from the east and west coasts
of the United States. Upon arrival the East Coast Amphibious Task Force
(2d MEB) executed various combat missions. The West Coast Amphibious
Task Force was composited with the First Marine Expeditionary Force and
augmented with follow-on forces arriving by strategic lift.
Our successes in these global operations and exercises have not
been achieved alone. We have worked closely alongside the Navy, our
sister Services, and Federal agencies to realize the true potential of
joint, interoperable forces in the new environment of 21st century
warfare. The superior operational and personnel readiness levels we
have been able to maintain directly reflect the strong, sustained
support of Congress in last year's National Defense Authorization and
Appropriations Acts. In fiscal year 2004, we seek your continued
support for the President's budget so we can consolidate the gains made
to date, improve those areas where shortfalls remain, and continue
transforming the way the Navy-Marine Corps team will fight in the 21st
century.

MARINE CORPS OF THE 21ST CENTURY

The Marine Corps is grateful for the congressional support in
recent budgets; support that has been essential in improving our
readiness, while enabling your Marine Corps to fight the global war on
terrorism. As we continue to execute missions in the defense of our
Nation, we are also ready for other missions the President may direct.
The fiscal year 2004 budget funds our most pressing near term readiness
requirements and continues the progress toward addressing future
readiness.
We have partially funded our efforts to support the global war on
terrorism by leveraging our modernization efforts and placing some of
them at risk. This experience has validated many of our doctrinal
precepts and mandated a review of our current and future procurement
programs. We have provided supporting documentation to support the
President's request for supplement funding to cover the costs
associated with the ongoing global war on terrorism. The Marine Corps'
future readiness is less certain with significant elements of risk. I
would like to share some of my concerns as they relate to readiness
indicators and to provide a glimpse of how we foresee the
reconstitution and regeneration of our forces once the current war is
over.

PERSONNEL--TAKING CARE OF OUR MARINES AND THEIR FAMILIES

The Marine Corps believes the deadliest weapon on the battlefield
is a well-trained, well-led, and motivated U.S. marine. ``Every marine
a rifleman'' remains more than an institutional belief. We remain
committed to ``equipping the marine'' not manning the equipment.
Achieving and maintaining our current level of readiness is
accomplished through extensive maintenance of our legacy equipment and
on the backs of the dedicated marines who maintain them.
The greatest contributor to our continued success is the motivation
and desire of our young marines to be the very best in the world. We
have 214,600 marines today, 175,000 in the Active Forces and 39,600 in
the Selected Marine Corps Reserve. With your help, we have made
significant progress in taking care of these young men and women and
their families. Increases in military pay and benefits, especially
basic allowance for housing increases, improvements in health care, and
improvements in on-base housing are key enhancements you have made
reality.
While we recruit marines, we retain families. The young men and
women we don't retain in our Corps return to society as solid American
citizens. Our marines care for their families with the same level of
commitment as they serve our Corps. Medical care for sick children,
good schools, and a chance to save for a child's college education are
as vital to ensuring our marines' readiness as ensuring there is
adequate ammunition. A focused marine gets the most from his or her
training, and knowing that their family is well taken care of allows a
marine to focus.
Reserve Integration
It is important to note that the Marine Corps operates as a total
force, including elements of both Active and Reserve components. We
depend on the readiness of our total force. Our Reserve component is
organized on the same lines as our Active Force; we have not
transferred a horizontal capability from the active to the Reserve
Forces. Our posture as forward deployed, forces in readiness does not
allow us to have combat support or combat service support functions
primarily in the Reserve structure. Accordingly, we strive to ensure
our Reserve Forces are as well trained and as ready as our Active
Force. We integrate the Marine Corps Reserve Forces into ongoing
exercises and training. Two combined arms exercises per year are
conducted entirely by Reserve Forces. In support of the global war on
terrorism and current operations, we have activated more than 20,000
Reserve Marines in units and as staff augmentees. I would personally
like to express my gratitude and appreciation to the employers,
families, business owners, companies, and government offices at all
levels who have made it possible for our Reserve Marines to train and
to mobilize in support of our efforts against terrorism.
Safety
We are committed to preserving our most precious asset--the
individual marine. We do this by ensuring a safe command climate and
working environment remains a critical concern for every operation. The
work settings and the missions our marines complete are inherently
dangerous. Effective command climates continually mitigate those
dangers through planning, leadership, and education. Our safety
programs are integral to force protection and operational readiness.
Leadership, operational risk management, and programming in safety
awareness and standards are vital to providing marines and their
families with a meaningful quality of life and service. Our leadership
at all levels is deeply concerned and actively working to improve
readiness and save our most precious assets--marines and equipment.

TRAINING--ENSURING SUCCESS ON THE BATTLEFIELD

The key to the Marine Corps' success is no secret, it's our marines
and their level of readiness and training. They are fit, smart, well
trained and motivated. They are devoted to their training, their
country, and their Corps.
Ensuring these marines' skills are honed to a razor's edge is an
enduring mission of the Marine Corps. We train hard at every
opportunity, trying to achieve as much combat training as possible at
home station in order to be efficient with our time and money. Marine
units train in their core competencies at their home stations. Time
spent in transit to distant training areas is lost training time. A
lost training minute is never regained. With our forward deployed
posture, there is no time, nor are there training areas, to retrain and
refresh marines prior to committing them to either contingency or
combat operations. They leave their home stations ready, and we seek to
ensure they maintain that readiness during their forward deployments
through an aggressive exercise schedule. These exercises, conducted
while forward deployed, hone coalition team building and enhance
interoperability with our allied partners.
There are few things regarding battle of which I'm certain, but I
know that combat is chaotic and confusing. This has never been clearer
to Americans than right now. I'm also confident that the weapons
systems and equipment you provide are the best and most lethal in the
history of warfare. It is essential that we conduct rigorous, realistic
training to ensure the safety of our marines and ensure we can impose
our will on our enemies. Rigorous training demands we place our
marines, as closely as possible, under the same stresses, chaos, and
confusion we envision they will face in combat.
Rigorous, realistic training can be accomplished in a variety of
ways, but the best method we've found replicates the way we fight, and
combines live fire and maneuver. We accomplish this service combat
training most effectively at the MAGTF Training Center at Twenty-nine
Palms, California. Ongoing initiatives will expand the role of the
Combat Training Center and transform it into a ``Center of Excellence''
that will focus the training efforts across our operating forces. The
Combat Training Center facilitates and supports the development of new
concepts and capabilities, thereby reinforcing our combat
effectiveness, enhancing joint interoperability, and supporting DOD
transformation efforts.
The future role of the Combat Training Center will grow beyond its
current emphasis on battalion-level integrated live fire, combined arms
training to support expanded training opportunities for all elements
(ground, air, combat service support, and command) of Marine Air-Ground
Task Forces up to and including a Marine Expeditionary Brigade. This
will include enabling multi-site, distributed training evolutions that
tie together units from various bases; and investing in technology that
simultaneously links live, virtual, and constructive training. We must
retain the areas where we train, particularly those where we train in
combined arms in conjunction with our sister Service teammates. If we
can't retain the areas we currently use, we must replace them with like
or better facilities.
Realistic, challenging joint exercises are equally important to
ensure Marine Forces are fully capable of contributing to integrated
joint operations. As a combined arms force of both ground and air
forces, and with our close relationship to the U.S. Navy, the Marine
Corps fully appreciates the synergy inherent in the joint force concept
and is an active participant in these challenging exercise programs.
Providing well-trained, Service unique capabilities is the foundation
for providing forces for joint warfighting and is our Nation's truly
asymmetric advantage.
One of the most important things we can provide our forward
deployed Navy-Marine Corps teams is confidence in their ability to
employ all weapons systems at their disposal. Confidence that the
forward air controller is going to coordinate an effective and safe
mission, that the ground forces will suppress enemy air defenses and
direct the trajectories of their projectiles in directions which do not
hazard the aircraft and that the strike aircraft will hit the target.
We can learn the elements of this training in parts, and in multiple
sites, but separate training only works on the skills and techniques in
piecemeal fashion, and does not necessarily engender the critical level
of integration essential for combat readiness. It is absolutely
critical that the Navy and Marine Corps maintain areas where they can
combine naval gunfire, artillery, air and ground maneuver forces
simultaneously which is the topic of my next point.
Training at Eglin Air Force Base
With cessation of training at Vieques, Puerto Rico, the established
training ranges, quality of training support, and proximity to the
ocean available at Eglin Air Force Base, Florida can provide Naval
Expeditionary Forces with an alternative training capability. Eglin's
capabilities, location, and tenant commands provide the opportunity to
facilitate joint training between Air Force, Navy, Marine Corps, Army,
and Special Operations Forces. Development of an expeditionary force
training capability at Eglin can support the Secretary of Defense's
vision and direction for training transformation and the development of
a Joint National Training Capability. This type of training area will
be critical to naval expeditionary combat-readiness.
The Marine Corps proposes to execute two 10-day training exercises
with a Marine Expeditionary Unit at Eglin each year. These exercises
include a variety of scenarios such as amphibious landings, raids,
mechanized operations, helicopter operations, and live fire and
maneuver exercises. No final decision on training activities can be
made until an environmental assessment currently underway is completed.
The Navy and Marine Corps are actively working to develop and sustain
cooperative relationships with the local community and the State of
Florida to support our training at Eglin AFB.
The Marine Corps strongly supports the development of a Joint
National Training Capability that exercises the horizontal and vertical
elements of the joint force. The Marine Corps also strongly believes
that this capability can, and should, be developed in a manner that
minimizes increases in OPTEMPO, preserves Service-training
opportunities, and improves both Service and joint training areas,
ranges, and facilities. The regional approach presented offers the best
and most viable option in terms of training opportunities, training
value, and maximization of the training audience while minimizing the
impact on OPTEMPO and preserving and enhancing Service training.
Development of a live-virtual-constructive Joint National Training
Center strongly supports the Marine Corps training vision centered on
development of a live-virtual-constructive training environment at all
major Marine Corps bases and ranges. This training environment will
integrate live training (enhanced by a range instrumentation system)
with the full range of existing and emerging Marine Corps virtual
capabilities into a virtual/constructive command and control training
system called CACCTUS.
Encroachment is a serious threat to the operational readiness of
the Corps as it impacts our ability to train. Urban and residential
areas now surround many Marine installations that were originally
remotely located. The Marine Corps is proactively engaged with Federal,
State, and local agencies and governments, as well as nongovernmental
organizations, to provide win-win solutions to encroachment pressures.
Unimpeded access to our installations and ranges is critical to the
Marine Corps remaining America's ``Force in Readiness.''
Our Nation has crafted a strong environmental code of conduct
structured on a wide range of Federal, State, and local laws and
regulations. Vague or inflexible environmental requirements, however,
can present significant challenges for marines training to perform
their missions. The Marine Corps supports ongoing efforts to seek
clarity and flexibility in environmental laws, so that we may more
effectively balance our training requirements with our long-term
environmental stewardship responsibilities. The impact of encroachment
on the Corps' ability to fully utilize its installations are varied and
require constant vigilance and attention to ensure that operational
readiness is not diminished.
Additionally, we support the development of the Department of
Defense Readiness Reporting System (DRRS). Our efforts to implement our
own training and requirement manuals with performance standards
throughout the Corps will support the DRRS concept. The Marine Corps
continually strives to increase the accuracy of our readiness
reporting. We readily endorse the concepts and programs that support
readiness. The Marine Corps is working with the Department of Defense
to develop a system that would automate our reporting requirements,
reducing the burden of administrative reporting, while reflecting an
accurate portrayal of the status of available resources.

CONCEPTS AND PROGRAMS THAT SUPPORT READINESS

The amount of wear and tear we are putting on our aging equipment,
and the manpower required to maintain them is tied directly to
readiness. Thanks to your efforts, the fiscal year 2004 budget allows
the Marine Corps to adequately fund our top priority ground and
aviation programs vital to future readiness. Our plan will allow us to
make more robust investments in transformation and modernization of
equipment. However, until this new equipment is fielded, we will
continue to maintain the readiness of our legacy systems. We will
continue to take maximum advantage of service life extension programs
(SLEPs) that enable us to improve the reliability and availability of
our legacy systems, as we will be forced to continue to invest
increasing levels of resources--manpower and dollars--in the
maintenance of our aging equipment. The fiscal year 2004 budget request
will, with your help, allow us to invest in modernization of
expeditionary capabilities, equipping the marine, warfighting, tactical
mobilitiy, fires, and command and control such as:
Expeditionary Capabilities
The Marine Expeditionary Brigade (MEB) is the Nation's premier,
medium weight, combat credible, sustainable, forcible entry capability.
No combat force in the world, either on-call today or envisioned for
the future, has the ability to prevail in an anti-access environment
with a forcible entry and then conduct high tempo full spectrum
operations in support of U.S. national policy better than a MEB. The
Marine Corps maintains a 6.0 MEB lift requirement; 3.0 MEB amphibious
lift, and 3.0 MEB-Maritime Pre-positioned Force.
Seabasing
Seabasing is the concept of how we will use the sea as maneuver
space. Seabasing includes the command and control capability, maneuver
from and through, combat support from, as well as combat service
support from afloat to support operations to defeat the enemy ashore.
The seabase is the platforms and connectivity that support the
seabasing concept. Seabasing provides a sustainable global projection
of American power from the high seas. Seabasing offers the potential
for secure, sovereign, and mobile assembly areas and sanctuaries for
key elements of the joint force, allowing our forces to most
effectively utilize the international domain of the sea as maneuver
space. Fully networked, forward-deployed Naval Forces and platforms
that are integrated into our seabasing capability will provide naval
power projection for Joint Force Commanders. Seabasing will enable a
broad range of joint campaign operations. Sea-based operations
incorporate, integrate, protect, and sustain all aspects of naval power
projection, from space to the ocean floor, from blue water to the
littorals and inland--without dependence on land bases within the joint
operating area. Seabasing will provide enhanced capabilities to the
Naval Force, such as rapid force closure, phased arrival and assembly
at sea, selective offload of equipment tailored for individual
missions, and force reconstitution for follow-on employment. The
traditional naval qualities of persistence and sustainment--enhanced by
advanced force-wide networks--underpin the staying power and
flexibility of the sea base. Naval platforms can stay on-station, where
they are needed, for extended periods of time. The at-sea
maneuverability of the seabase, coupled with advanced underway
replenishment technologies and techniques, will ensure force readiness
over time.
Amphibious Shipping
Our amphibious lift requirement has been consistently validated at
3.0 MEB assault echelons. In terms of today's capabilities, that
equates to approximately 45 amphibious ships. We understand the fiscal
realities we operate within, and have thus adapted to a fiscally
constrained amphibious lift capability of 2.5 MEB assault echelon
equivalents. We will be able to achieve our 2.5 MEB lift requirement
with an all-Active Force upon delivery of the 12th LPD-17 amphibious
ship in 2014. Ultimately, we envision the amphibious fleet consisting
of 12 LHDs/LHAs or their replacements, 12 LSDs, and 12 LPD-17s in the
2014 time frame. While currently short of the 3.0 MEB AE goal, this is
a force that will provide us, at some risk, the necessary capability to
project power in an anti-access environment in the near- and mid-term.
We are also concerned with replacing the LHA-1 Tarawa class ships.
They will begin to reach the end of their 35-year service life in 2011,
and considering the time to design and build a replacement ship, we
need to begin the process now. The Marine Corps supports a modified
LHD-8 (``Plug Plus'') ship design in fiscal year 2007 to replace
existing LHA class ships. We will through analysis of alternatives and
ongoing studies, evaluate the adequacy of the R&D and SCN funding for
the development of ships for the LHA follow-on replacements. The
overall age of the amphibious fleet is also a concern as it is 25
percent older than the average of all other Navy ships.
Expeditionary Strike Groups
The Marine Corps and Navy are engaged in a series of experiments
that will explore the Expeditionary Strike Group concept. This concept
will combine the existing capabilities of surface action groups,
submarines, and maritime patrol aircraft with those of Amphibious Ready
Groups and Marine Expeditionary Units (Special Operations Capable), to
provide greater combat capabilities to combatant commanders. These
experiments will provide critical information to support the future
implementation of the concept and highlight any needed changes in
service doctrine, organization, training, and personnel.
Maritime Prepositioning Force (MPF)
Our 3.0 MPF-MEB is loaded aboard leased commercial shipping that is
strategically positioned in ports around the world. Prepositioning
minimizes the requirement for strategic lift and saves thousands of
sorties of strategic lift during the most time sensitive portion of the
force deployment. The Department of the Navy has programmed a buy out
of the 13 leased vessels by the end of fiscal year 2006 before their
leases expire in fiscal years 2009, 2010, and 2011.
Maritime Prepositioning Force (Future) (MPF (F))
When it becomes operational, the MPF (F) role will expand beyond
that of today, and will provide a true seabasing capability. It is
envisioned that MPF (F) will provide four new capabilities currently
unavailable: (1) Phased at-sea arrival and assembly of units; (2)
Selective offload of equipment and cargo; (3) Long-term, sea-based
sustainment of forces; and (4) At-sea reconstitution and redeployment
of the force. The naval services are exploring several new technology
areas during the development of Maritime Pre-positioning Force
(Future). Currently, the Maritime Pre-positioning Force (Future)
Program is conducting an analysis of alternatives to support an
acquisition decision by the Office of the Secretary of Defense and the
program of record is funding one ship in fiscal year 2008 and two in
fiscal year 2009.
Blount Island Acquisition
We are committed to undertake the wisest possible course to
conserve our real property and, when necessary, to acquire any
additional property that is mission critical. The Blount Island
facility in Jacksonville, Florida is a national asset that must be
acquired to ensure its availability for long-term use. Blount Island's
peacetime mission of supporting the Maritime Prepositioning Force is
vitally important, while its wartime capability of supporting large-
scale logistics sustainment from the continental United States gives it
strategic significance. The facility will play a vital role in the
National Military Strategy as the site for maintenance operations of
the Maritime Prepositioning Force for years to come. The Marine Corps
began the acquisition of Blount Island with Phase 1, funded in fiscal
year 2000 and fiscal year 2001 to acquire interests in approximately
311 acres of land for the primary purpose of ensuring public safety on
parcels adjacent to the leased central management operational area.
Phase 2, planned for fiscal year 2004, involves acquisition of the
central maintenance operational area consisting of over 1,000 acres.
The Phase 1 purchase remains ongoing.
Warfighting--Skill Enhancements
Mine Countermeasures
The proliferation of cheap but effective mines employable in
critical waters, beaches, ports, roads, and other key areas precludes
us from simply detecting and avoiding them. We have significant
capability gaps in shallow water, the surf zone, on the beach, and
inland. Navy-Marine Corps programs such as the far-term Assault
Breaching System, the Joint Direct Attack Munition (JDAM) Assault
Breaching System, the Assault Breacher Vehicle, the Advanced Mine
Detector, and the Coastal Battlefield Reconnaissance and Analysis
Sensor System are addressing significant aspects of the capability gap.
Continued support is required to close the gaps in our mine
countermeasures capability.
Chemical, Biological Defense (CBD)
In regards to our current CBD capabilities, our marines are
trained, ready, and equipped to operate in a chemically or biologically
contaminated environment. We have sufficient stocks to give three Joint
Service Lightweight Integrated Suit Technology (JSLIST) equivalent
suits and gas mask canisters to the marines who need them. Our forces
are augmented by 14 specially equipped ``Fox'' vehicles, which are able
to detect chemicals in the atmosphere or in the ground. When required,
our forces can prevail in a contaminated combat environment. However,
mass decontamination of men and equipment remains a significant
challenge for our marines and the joint force. It will also be critical
to reconstitute our CBD capabilities after hostilities cease in OIF.
Increased Tactical Mobility
The ability to engage the enemy and maneuver with greater speed,
range, and depth of battlespace.
MV-22 Osprey--Our Top Aviation Priority
The MV-22 Osprey remains the Marine Corps' number one aviation
acquisition priority. While fulfilling the critical Marine Corps medium
lift requirement, the MV-22's increased range, speed, payload, and
survivability will generate truly transformational tactical and
operational capabilities. With the Osprey, Marine Forces operating from
the sea will be able to extend their range of maneuver providing an
element of strategic surprise while providing a sustainable forcible-
entry capability. Ospreys will replace our aging fleets of CH-46E Sea
Knight and CH-53D Sea Stallion helicopters--both aircraft have an
average age of in excess of 30 years.
Internally Transportable Vehicle (ITV)
A vehicle being developed jointly with US SOCOM, that can be air
lifted inside a CH-53 helicopter and MV-22 aircraft. This vehicle will
be a high-mobility weapons platform that supports a variety of
operations, especially light-strike raids. The secondary purpose of
this vehicle is to provide reconnaissance units equal or greater
mobility than the maneuver elements they support, thereby enhancing
their mission performance and survivability. The speed, agility, and
mobility of the ITV will allow the MAGTF commanders to maximize the
versatility and range offered by the MV-22 and CH-53 by deploying
ground units equipped with light-strike vehicles armed with a heavy or
medium machine gun.
Advanced Amphibious Assault Vehicle (AAAV)
In addition to the previously mentioned MV-22, the AAAV is the
Marine Corps' only acquisition category 1D program. AAAV will combine
never before realized high-speed land and deep water maneuver, day/
night fighting capabilities, and active and passive countermeasures
including advanced armor and nuclear-biological-chemical protection and
a remarkably lethal 30mm turreted gun. The AAAV will exploit the sea as
a maneuver plane and seamlessly maneuver from the sea at 25+ knot
speeds and ashore to the objective at 45 mph. This vehicle will provide
us with the speed, agility, and firepower and combat force protection
needed for the next century, and operationally complements the
capabilities of the MV-22.
KC-130J
The KC-130J will bring increased capability and mission flexibility
to the planning table with its satellite communications system,
survivability enhancements, night systems, enhanced rapid ground
refueling, and improved aircraft systems. The KC-130J has 21 percent
increased speed and 35 percent increased range over current versions of
the KC-130. The KC-130J will replace our aging fleet of KC-130Fs, Rs
and Ts.
Fires
Supporting the marine on the ground with combat power, when he
needs it most. It is all about timing, priorities, and effects on the
enemy.
The Marine Corps places great emphasis on the power of close air
support (CAS). CAS is more than mere air strikes conducted in close
proximity to ground forces. It is an integral part of our combined arms
capability. CAS provides the MAGTF commander the ability to maneuver
and respond quickly to targets of opportunity, vice mere air strikes
conducted in close proximity to ground forces. Because of our
familiarity with close air support, we also understand what it cannot
do. Surface based, indirect fires, whether from the land or the sea,
are irreplaceable when forces are joined in close combat, particularly
in the early phases of a seabased operation. Nothing else is as
responsive to the Commander's needs, or as reliable. They are not
weather or facility dependent. They are a key component in continuing
to extend the reach and lethality of our ground forces. These new
ground based systems, and the seabased fires under development by the
Navy in combination with STOVL JSF and the upgraded Cobra and Huey
helicopter provide the Marine Corps a complete family of integrated
sea, air, and land based fires.
Joint Strike Fighter (JSF)
The Joint Strike Fighter is the next-generation strikefighter for
the Marine Corps, Air Force, and Navy and will replace the Marine
Corps' AV-8B and F/A-18A/C/Ds. The JSF family of aircraft will include
a short takeoff and vertical landing (STOVL) variant, a conventional
take-off and landing (CTOL) variant, and an aircraft carrier-capable
variant. Commonality between the variants will reduce both development
and life cycle costs and will result in significant savings when
compared to the development of three separate aircraft. The Marine
Corps requires that its STOVL variant be able to operate from large-
deck amphibious ships, austere sites, and forward operating bases. The
STOVL Joint Strike Fighter version will be able to operate from three
to five times as many airfields around the world than our existing
conventional take-off and landing aircraft. Moreover, because the STOVL
variant can operate from both conventional carriers and amphibious
assault ship decks, it doubles the number of platforms available for
seabased operations. The advantages of a stealthy STOVL strike
fighter--capable of taking off from an expeditionary base on land or at
sea, flying at supersonic cruise, accomplishing its mission with
advanced sensors and weapons, and then returning to its expeditionary
site--are dramatic. The STOVL Joint Strike Fighter will provide the
reliability, survivability, and lethality that marines will need in the
years ahead, and transform the very foundations of naval tactical air
power for the 21st century.
High Mobility Artillery Rocket System (HIMARS)
High on our priority list is the capability to marry precision
maneuver with precision fires. We require ground based fire support
which is lethal, mobile, and with long range. HIMARS fills this need.
The HIMARS will provide ground-based, responsive, general support and
general support reinforcing indirect fires that accurately engage
targets at long range, with high volumes of lethal fire, under all
weather conditions and throughout all phases of combat operations
ashore. It will fire both precision and area munitions and has a
maximum range of 60 kilometers. The Ground Weapon Locating Radar will
be introduced into the fleet to protect our forces from our
adversaries' counter-battery fires. The Ground Weapon Locating Radar
can be used in conjunction with the HIMARS and the Lightweight 155mm
howitzer.
Lightweight 155mm (LW 155)
LW 155 towed howitzer is required to replace the M-198 howitzer
that is at the end of its service life. This is a joint USMC/U.S. Army
system that will meet or exceed all the requirements of the current
M198 system while reducing the weight from 16,000 to 9,500 pounds. The
maximum range using unassisted projectiles is 15 miles and 18 miles
using assisted projectiles.
Naval Surface Fire Support
Expeditionary maneuver warfare places unprecedented requirements
for long-range, accurate, timely fires in support of the maneuver
force. Systems such as the Extended Range Guided Munition (ERGM) will
ensure the continuous availability of surface based fires firing during
an expeditionary operation. ERGM is a guided projectile fired from
cruisers and destroyers out to a maximum range of 63 nautical miles.
Development of land attack missile technologies will provide supersonic
surface-to-surface missiles that will have a range far in excess of
naval guns. Combined, the systems will provide a highly responsive,
accurate, all-weather means of attacking critical targets and providing
support to deployed marines beyond the range of naval guns.
The Marine Corps strongly supports the development and fielding of
DD(X), armed with two 155mm advanced gun systems and an advanced land
attack missile, to fully meet our naval surface fire support
requirements. Our ability to wage expeditionary warfare will remain at
considerable risk for want of suitable sea-based fire support until
DD(X) joins the fleet in strength.
Reestablishment of Air-Naval Gunfire Liaison Companies
We have validated the requirement to reestablish our Air-Naval
Gunfire Liaison Companies (ANGLICO). These companies will provide our
commanders a liaison capability with foreign area expertise to plan,
coordinate, and employ terminal control of fires in support of joint,
combined, and coalition forces. ANGLICO will be reestablished with a
company on each coast, and a separate company (-) in Okinawa. The
companies on the East and West coasts will have a habitual relationship
with the Reserves. Full operational capability is expected by late
summer 2004.
Marine Corps--U.S. Special Operations Command (USSOCOM) Initiatives
Today, more than a hundred marines are filling Special Forces
billets around the world. In addition to providing the current Chief of
Staff to USSOCOM, the Marine Corps provides support to and ensures
interoperability with Special Forces through the actions of the SOCOM-
Marine Corps Board. One of the initiatives is a marine detachment to
conduct special reconnaissance, direct action, coalition support,
foreign internal defense, and other special operations missions. They
will report to USSOCOM during October 2003, and deploy in the spring of
2004 as augmentation to a Naval Special Warfare Squadron.
Equipping the Marine
New rifle
We are seeking to upgrade our service rifle to better ensure
``Every Marine a Rifleman'' remains more than an institutional belief.
The Modular Weapon System (MWS) consists of the M16A4 service rifle--a
newer version of the M16A2 now in service--modified with a military
standard 1913 rail adapter system. The rail adapter system and modified
hand guards allow for the mounting of various accessories such as a
modified M203 grenade launching system, high-intensity flashlights,
night-vision devices, scopes, and infra-red laser target designators.
We will also purchase a quantity of M4 carbines for personnel who
require a lighter, more compact weapon. Use of the MWS will result in a
significant improvement in the ability to mount various accessories and
will improve the accuracy, target detection, day and night engagement
capability, and maintainability of the M16 family of rifles. The M16A4
is in production and we will take delivery of its first weapons in
fiscal year 2003. The M4 is undergoing final reliability and endurance
tests and will be fielded in selected units in the first quarter of
fiscal year 2004.
Marine Corps Combat Utilities and Combat boot
The Marine Corps has recently introduced a new and improved combat
utility uniform made of a durable permanent press fabric with a
permanent press crease. The combat utilities have a camouflage pattern
that is more effective either wet or dry. The Marine Corps issues them
in both woodland and desert patterns for readiness. The Marine Corps
has also fielded a new Marine Corps combat boot that is designed to be
low maintenance and worn with the new combat utilities. Our initial
issue stocks must be continually re-vitalized to sustain our new
recruits and officers. The new uniforms have been very well received in
the fleet and are extremely popular. The demand for both the new
utilities and boot has kept supply stocks lower than expected and
ultimately not widely available throughout the fleet.
Improved Load Bearing Equipment (ILBE)
The Marine Corps is testing and evaluating commercially available
packs to replace its current service pack. The new pack will be
designated the improved load bearing equipment (ILBE) pack. Rugged
field testing is being conducted in garrison and in actual combat field
conditions. Packs will be evaluated against the current field pack the
Modular Lightweight Load Carry Equipment (MOLLE) II, down to the fire
team level. Final selection is projected for mid-fiscal year 2003 and
full rate production to commence in fiscal year 2004.
Command and Control
Exploiting the capabilities offered by long-range aircraft, long-
range fires, and operating from a seabase with full connectivity to our
joint and coalition partners poses enormous command and control
challenges.
Common Aviation Command and Control System (CAC2S)
The CAC2S modernizes our legacy mix of aviation C2 systems,
enabling MAGTFs to seamlessly integrate aviation with ground combat
operations. CAC2S will condense the applications of six separate
aviation combat element (command and control) systems into one combined
and coordinated operational system. It will provide a common hardware
platform, with similar software, and equipment.
Unit Operations Center (UOC)
The UOC improves command and control coordination for the elements
of the MAGTF. The UOC is comprised of Combat Centers and Combat
Operation Centers (CoCs), providing a centralized facility to host
command and control functionality. The UOC will create an integrated
package with expeditionary shelters, power sourcing, cabling, software
integration, local area networking, and processing systems and is
scalable to support command echelons for battalion level or above.
Interoperability
Interoperability is the key to improving naval expeditionary
command and control effectiveness, especially as we integrate
battlespace sensors in our future manned and unmanned aerial, space,
sea surface and subsurface, and ground vehicles. The command, control,
communication, and computer (C4) end-to-end interoperability of the
global information grid will enhance our ability to conduct joint,
combined, multi-department, and multi-agency operations through the use
of technology, standards, architectures, and tools. These
transformational C4 initiatives, in concert with the fielding of a
Deployable Joint Command and Control (DJC2) capability, will vastly
improve our joint force interoperability.
Reconstitution and Regeneration
The Marine Corps will be faced with many competing requirements as
Operation Iraqi Freedom de-escalates and a transitional form of
government is installed. These competing priorities are expected to
include Reserve Forces returning to demobilize, redeployment of forces
required to assume a forward presence mission, ongoing global war on
terrorism requirements, preparation for follow-on missions, and
returning the Marine Corps to its pre-conflict state of readiness,
while transforming the Marine Corps into a greater force than we have
today. Our pre-positioned stocks must be cleaned and preserved after
extensive use in order to be ready for the next mission. The critical
aspect is our ability to fund all that will be required. It is
anticipated that our deployment tempo could remain at higher levels
than those experienced before the global war on terrorism began, for
sometime to come after the hostilities in Iraq have long since ceased.

CONCLUSION

Your marines stand ready to be the ``First To Fight.'' We will
continue to be so with whatever is on hand--with older well-maintained
equipment or the newest equipment. However, our equipment while well-
maintained, is old and aging fast due to the higher usage rates caused
by the ongoing war. We are able to defeat our enemies in Afghanistan
and Iraq because we were ready when called. Answering the call remains
our focus, and our number one mission. We need your help in maintaining
our old gear, modernizing where we can, and taking care of our marines
and their families.
What you saw in Afghanistan and see in Iraq is just the beginning
of what America and the world will see from a fully modernized and
transformed Marine Corps. Our marines are ready, our doctrine works,
and with the new equipment ready to come on line, you're going to get a
Marine Corps that's leaner, more lethal, and even more ready just like
you've expected for 227 years. Only then, it will come with a thousand
mile reach. We know that we're really just beginning the hard work of
the global war on terrorism; the tough targets are in our windshield,
not our rearview mirror. We need your help to be ready for the tough
fights ahead. We believe we have proven worthy of your support and ask
that you continue to support your Marine Corps as you always have.
Thank you for giving me the opportunity to address readiness--an issue
critical to marines and our Nation.

Senator Ensign. General Schmidt.

STATEMENT OF MAJ. GEN. RANDALL M. SCHMIDT, USAF, ASSISTANT
DEPUTY CHIEF OF STAFF, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR
AIR AND SPACE OPERATIONS

General Schmidt. Good afternoon, Chairman Ensign and
Senator Akaka. I too would like to make a brief oral statement
and submit a written testimony for the record.
It is my pleasure to be here representing over 700,000
total force members of your Air Force, 55,000 of whom are
currently deployed and many of whom are serving in harm's way
in close unison with our fellow soldiers, sailors, marines, and
coalition comrades as we speak.
Like you, the leadership of the Air Force is focused on
continuing to provide our airmen with a blend of the best
training, equipment, and organization possible. Clearly, our
asymmetric edge is in our people, our training, and our
technology. Every day we make the hard choices to ensure we
continue to pursue proper readiness in several key areas:

In presenting a balanced force, the correct
combination of the right faces in the right places with
the improved development and organization to be
successfully prepared to face our future joint
challenges;
In leveraged integration, building an
expeditionary force better capable to plug and play
across the spectrum of conflict. To plug and play
requires adapting individual legacy systems with clever
new ideas or hooking old things together in new ways.
This requires us to pursue the common interactive
architectures to enable a seamless joint force; and
In technology, as our adversaries turn to
asymmetric strategies and terrorist tactics, we must
continue to leverage our lead in space, air, and
information technology to both preserve and to forge
new asymmetric strengths of our own, whether these
advantages are manned, unmanned, airborne, landborne,
or spaceborne.

Readiness is a continuous state of preparation to meet our
Nation's security challenges and deals with tough issues
balanced against available resources. You can be assured that
we are engaged and will remain engaged as we work together with
our sister Services, our leadership, and our Congress in
continuing to forge the most professional and powerful Air
Force in the world.
I would be remiss if I did not echo what has been said
earlier about the support you have given us. The results of our
investments are seen daily in the battle space over Iraq and
Afghanistan.
Thank you for the opportunity to provide this statement and
I am ready to answer your questions.
[The prepared statement of General Schmidt follows:]
Prepared Statement by Maj. Gen. Randall M. Schmidt, USAF
Mr. Chairman, members of the subcommittee, thank you for this
opportunity to provide you with the status of Air Force readiness. As
the Air Force's Assistant Deputy Chief of Staff, Air and Space
Operations, I want to thank you for your continued focus on the
readiness challenges facing our airmen today. The Air Force is
committed to maintaining a ready force while controlling cost growth,
modernizing systems, and recapitalizing physical assets.
As we celebrate 100 years of powered flight this year, we are
firmly focused on the future of air and space power. We are in the
midst of more than a decade of unparalleled and unmatched air and space
dominance across the full spectrum of operations--humanitarian to
warfighting. We are proud of our record of success but will not rest on
our past accomplishments. We have embraced the opportunities afforded
by the information revolution and have marshaled the full resources of
our service to leverage these technologies in the battlespace. Our
airmen have met the challenges of the changed security environment, and
they stand ready for the next challenge at home and abroad. Born as an
expeditionary service, we remain true to those roots today, presenting
our forces and capabilities through our Air and Space Expeditionary
Force (AEF) construct.
Your Air Force highlights three air and space core competencies as
our service source of strength: developing airmen, technology-to-
warfighting, and integrating operations. Together these core
competencies form the basis by which we organize, train, and equip our
forces as part of our military power to achieve national security
objectives.
Developing airmen is the heart of combat capability. A ready force
is founded on its people. Developing the competence of our airmen from
accessions through retirement (quality), and producing the correct
numbers of skill sets (quantity) continues to evolve as our Air and
Space Expeditionary Force (AEF) continues to mature. The men and women
that comprise our total Air Force--active duty, Guard, and Reserve--are
the best America has to offer. They are officers, enlisted, civilians,
and contractors from every corner of the country and every walk of
life. These world-class airmen are the key ingredients to sustaining
our record of success and we are dedicated to recruiting, training, and
retaining professional airmen. We can make no greater investment in and
have no greater resource than our people. They are our #1 priority.
The Air Force requires sophisticated airmen who are trained to
leverage technology and ready to perform in a dynamic environment. They
will become our future air and space leaders for the 21st century. This
will require targeted investments in the next generation of airmen,
from the ground up and throughout their careers. To that end, the Air
Force has introduced a coordinated effort to address all aspects of an
airman's career development, professional education, and assignments in
sum rather than individually. This deliberate force development effort
generates policies tailored to achieve Air Force requirements and
address the needs of the individual airman throughout his or her
career. The Air Force needs both expert specialists and broadly
competent generalists; our force development program overhaul provides
both opportunities for our airmen.
Comprehensive in scope, our training is doctrinally based and
focused on three levels of development: tactical, operational, and
strategic. Tactical development focuses on the individual's functional
or mission skills. The AF tactical development is what we accomplish
best due to our maturity as a service. Getting the correct mix of
people and defining job skills are areas for future refinement.
We refer to the next echelon of development as operational. It is
at the operational level where our airmen must seamlessly integrate the
employment of our joint capabilities. To accomplish this development,
AF senior leadership has instituted numerous efforts for the road
ahead. For example, the Secretary of the Air Force has initiated a
program to modify our professional military education (PME). This plan
has many aspects. First, it improves the intermediate service school in
summer of 2003 to provide a greater depth of education for the
operational level of warfare and more time to prepare students for the
next assignment. It also increases advanced academic degree
opportunities for officers, with special emphasis in science,
engineering, and politico-military affairs. In conjunction with our
standardization of the baseline configuration for the Air and Space
Operations Centers (AOC), we will standup an AOC Formal Training Unit
(FTU) this summer.
At the strategic level, our development focuses on the integration
and interaction between other government departments as well as other
governments to achieve our national security objectives. The USAF
supports establishment of the Joint National Training Center (JNTC).
When implemented, JNTC will create a cooperative collection of
interoperable training locations, nodes, and exercises that synthesizes
the combatant commander and service requirements to improve our
training aligned with the way we intend to fight. AF training
transformation builds upon past successes and focuses on three training
requirements: First, to connect our high-fidelity simulators and
training devices to enable warfighters to train together practicing the
integration of multiple joint missions to achieve designated
operational objectives; second, to enhance existing service
interoperability training by synchronizing events at major training
centers to produce airmen well versed in joint operations; third, to
develop a robust ability to fully measure joint training effectiveness.
The accurate assessment of planning and execution will capture lessons
learned and provide the cornerstone of our future improvement and
innovation. JNTC, as a pillar of DOD training transformation efforts,
will support the joint warfighter and ensure our airmen are properly
prepared, and developed as competent leaders in confronting the
challenges of the 21st century.
Our number one personnel challenge is adapting to the new Air and
Space Expeditionary (AEF) steady state, based on a higher tempo of
operations and defining the correct total force balance and a shifting
skill mix requirement. With a 30 percent reduction in manpower since
1990 and a significant increase in worldwide taskings over that same
period, the Air Force has experienced a dramatic jump in operations and
personnel tempo. We have discovered that while the number of airmen is
adequate, we must adjust the mix of skill sets and the military/
civilian/contractor ratio to reflect new realities.
Recognizing the new demands placed on us by the Operations Enduring
Freedom (OEF), Noble Eagle (ONE), and Iraqi Freedom (OIF) war on
terrorism, we have initiated a comprehensive manpower review to
determine relative stress amongst career fields and to explore options
to alleviate that stress. We have identified nearly 26,000 military or
civilian positions that potentially could be converted to civilian or
contractor positions, with the goal of redirecting uniformed airmen
into those positions that reflect our distinctive capabilities.
Furthermore, we have realigned some new recruits into our stressed
career fields and are exploring technologies to reduce the workload. We
have several human capital initiatives underway to address this skill
mix problem, but it will take focus, time, and funding to solve.
Technology-to-warfighting are the tools of combat capability and
the second AF core competency. Moving technology from the drawing board
to the hands of the warfighter is essential to maintaining a ready
force. When America sends its men and women into combat, they deserve
the resources and support to guarantee victory over any adversary they
face. We are determined to give them those cutting-edge tools.
The Air Force was born out of innovation, and it remains our
hallmark today. With a pioneering spirit, we are dedicated to pushing
technology's boundaries. We are rapidly applying recent advances to
dramatic effect, translating our technological vision into required
warfighting requirements seen in our unmanned aerial vehicles (UAVs),
integrated architectures, and revolutionary capabilities.
There is no greater example than the Predator UAV. It combines the
dynamics of manned aviation with the remote operations techniques of
unmanned satellites and information connectivity into a single system
capable not only of collecting and disseminating information, but of
producing combat effects. In the midst of combat, we accelerated the
Predator program to increase production and to retrofit existing
airframes with improved capabilities. The use of streaming video during
recent operations was critical, and we are adding Hellfire missiles to
the entire Predator fleet.
Global Hawk builds on the success of the Predator system by
incorporating a robust reachback capability that reduces our forward
operating footprint, lowers costs, and improves personnel tempo. This
long endurance, multi-role platform gives us the persistence we need to
keep the Joint Force Commander (JFC) informed up-to-the-minute.
We are aggressively developing additional unmanned platforms and
are exploring their appropriate future role in combat. We are eager to
field these systems because of their persistence capability and
capabilities in very high-risk missions. They are responsive to dynamic
tasking and afford us the ability to swarm the battlespace and
overwhelm enemy defenses.
The integration of these unmanned platforms seamlessly into a
network of manned, unmanned, and space-based systems will dramatically
shorten the find, fix, track, target, engage, and assess (F2T2EA) cycle
allowing us to anticipate our enemy's moves and to defeat him on our
terms. To that end, we are transitioning from a collection of
independent, stovepipe systems to a horizontally integrated system of
systems capable of machine-to-machine conversations.
The Multi-Sensor Command and Control Constellation (MC2C) will
provide the JFC with real-time, enhanced battlespace awareness and will
help alleviate the high stress on our Low Density/High Demand (LD/HD)
assets such as the Rivet Joint, AWACS, Global Hawk, JSTARS, and space-
based systems. In the future, the Multi-sensor Command and Control
Aircraft (MC2A), the E-10A, a new wide-body platform, will complement
our existing, independent C\4\ISR platforms. It will be a core element
of the future Joint Cruise Missile Defense architecture by fielding the
Multi-Platform Radar Technology Insertion Program (MP-RTIP) sensor.
This next-generation sensor is capable of wide-area surface
surveillance and tracking to find, fix, and track ground targets and
airborne cruise missiles. Its enhanced Battle Management/Command and
Control (BM/C2) will enable dynamic execution against time sensitive
targets, dramatically shortening the kill chain.
We are also partnering with the National Reconnaissance Office on
an innovative, creative, technology-pushing initiative known as the
Transformational Communications Architecture (TCA). TCA will combine
upcoming satellite communications systems such as Advanced EHF and
Wideband Gapfiller with future technology-leveraging capabilities such
as laser communications and internet-based protocols to remove
bandwidth and access as constraints on the warfighter.
The Space-Based Radar (SBR) program will give warfighters the
ability to survey as well as reconnoiter deep into denied areas. SBR
will be part of a larger mix of air, space, and ground-based
intelligence, surveillance, reconnaissance (ISR) assets; all of which,
integrated together have the potential synergy to revolutionize our
capability to find, fix, target, track, engage, and assess.
Because we recognize the Air Force never fights alone, we are
coordinating closely with our sister Services to ensure full
interoperability of these future acquisitions and to eliminate seams
between existing systems.
We are identifying interaction and connectivity requirements of our
C2, ISR, and operational programs to integrate properly for joint
employment. For example, we are working to integrate AF sensor
information with ground units. We are also researching the capability
to integrate SIGINT collection from all Services into a common joint
working stations.
The F/A-22 Raptor is the cornerstone of the Air Force's ongoing
transformation. America needs the F/A-22 for 21st century air
dominance. It is the only aircraft capable of countering anti-access
threats from Day 1 of any conflict, allowing joint and coalition forces
to operate with impunity inside enemy territory. The F/A-22 brings
stealth into the daytime for the first time, enabling persistent 24-
hour operations. Its revolutionary capabilities are designed to defeat
future air defense systems for decades to come. The Air Force will
continue executive oversight of the F/A-22 acquisition to ensure
program success.
The F-35 Joint Strike Fighter (JSF) also represents a revolutionary
leap in technology and will complement the F/A-22. This versatile
multi-role fighter is optimized for all-weather, precision air-to-
ground operations and provides the persistent force required for
around-the-clock operations. With a commitment to affordability, the
Air Force is using the ``Cost As an Independent Variable'' approach to
help ensure the JSF is not cost-prohibitive.
Integrating operations is the AF third core competency and primary
means to maximize AF capabilities with our sister Services to create
the effects, which achieve the joint commander's objectives. The Air
Force effectively focuses the power of its people and the strength of
its technology into a synergistic whole to generate immediate effects
in the battlespace. We are developing effects-based capabilities rather
than individual systems. We are exploring and employing innovative
operational concepts to maximize our combat capabilities. Integration
of effects-based capabilities is the key to success. Success in this
new century requires a modern, ready force with the integrated air-
space-information systems, infrastructure, and capabilities necessary
to achieve the desired effects.
Capabilities-Based Force
Our emerging Air Force Concepts of Operations (AF CONOPs) are
lending focus to our continuing transformation. The AF CONOPs provide
focus on effects and mission vice threat. Each AF CONOPs describes
capability requirements and will transition us from a platform-based
garrison force to a capabilities-based expeditionary force. AF CONOPs
define how we fight and drives our efforts to identify, prioritize, and
define our air and space capabilities. The AF CONOPs are then assessed
for system interoperability in order to integrate with other CONOPs,
our joint, allied, and coalition forces, and in the case of homeland
security, with other government agencies. AF CONOPs helps to define
efficiencies, eliminate waste, and prioritize resources for the
warfighter. All defined AF CONOPs capabilities are then assessed for
risk and reviewed for any program development disconnects and required
end-user capabilities.
Recapitalization and Modernization
Dedicated airmen employing innovative concepts are mitigating the
impact of old systems and technology. However, aging systems pose a
real threat to our continued air dominance. The average Air Force
aircraft has about 23 years in service. With some manufactured as early
as 1955, our KC-135 fleet averages 42 years in service. We have never
dealt with a force this old. Our aging aircraft are vulnerable to
myriad problems, including technical surprise, vanishing vendors, and
increased operational costs. We have enjoyed a down payment on our
recapitalization but require sustained funding to maintain the force
capable of supporting the National Security Strategy and JV2020.
Eventually, new acquisitions will have to replace these legacy systems.
In the interim, we are finding innovative means to keep current systems
operational in the near term and are taking advantage of new
opportunities to employ old systems in new ways.
Current projections show all three Air Force bombers should be
structurally sound for the next four decades. Through our planned
bomber modernization programs, we can meet current AF requirements
through the foreseeable future. The Air Force is committed to SOF
modernization through fielding the CV-22 and air combat modernization
through upgrades to precision employment and data link. The approved
multi-year procurement of 180 C-17s will support mobility requirements
to move 54.5 million ton-miles per day, with six additional bases
receiving C-17s starting in fiscal year 2004.(start)
Precision Munitions
With the advent of precision munitions, the Air Force has
effectively improved the employment capability from ``many sorties for
one target'' to ``one sortie for many targets.'' Today, we employ
precision weapons as the preferred weapon of choice to maximize our
combat capability while limiting the threat of collateral damage in any
weather, day or night--they are critical to our success. Our current
efforts in OIF are consuming our precision munitions at a high rate and
our reconstitution plan will address weapons replenish. The Air Force
will increase its production requirement for laser-guided bombs and the
Joint Directed Attack Munitions (JDAM).
Budget
Today and tomorrow, our airmen deserve the resources, training, and
cutting-edge weaponry to overwhelm our enemy's capabilities. This and
next year's budgets look to build on the fiscal year 2002 foundation,
to accelerate modernization while maintaining gains in readiness and
people. We are investing short-term and long-term across all of our
CONOPs capabilities, balancing modifications of existing systems with
the development of new systems. Air Force modernization efforts are
supporting our transformation goals while continuing to develop and
field needed systems, with nearly half of our investment in RDT&E.
The fiscal year 2004 Air Force budget is a peacetime request. Much
of the increased OPTEMPO we see today is for wartime operations. The
only major wartime costs in this request are for Combat Air Patrols
flying over the continental United States. In this peacetime request,
we have tried to balance the competing demands of supporting current
readiness levels, as we face aging aircraft and personnel challenges,
with the necessity of developing and fielding new weapon systems to
keep our Air Force relevant today and into the future. If enacted, this
request would continue the positive momentum we are making for people,
address increased operating costs, fund peacetime flight operations,
continue critical modernization programs, and increase funding for
infrastructure improvements above our fiscal year 2003 request. Still,
there are more things we could do to strengthen our efforts. While we
have added funds over fiscal year 2003 levels, much of this is required
to cover higher costs such as utilities and increased maintenance and
flying operations costs driven by an aging fleet and higher fuel costs.
Near term readiness is more than spare parts, and equipment
modifications or iron on the ramp--it's the experienced men and women,
military, civilians, and contractors who operate and maintain front
line warfighting equipment, support equipment, and infrastructure. Most
of the funds we have added for maintenance are eaten up by increased
costs of aging weapon systems.
The fiscal year 2003 supplemental request for the GWOT and
operations in Iraq supports the Department's best aggregate estimate of
total defense requirements in this fiscal year. Each Service's portion
of the supplemental are not knowable because the nature of OIF is too
dynamic to adequated quantify at this time, predominately for personnel
and operating costs. Without it, we go broke in our operation and
maintenance accounts around 1 June 2003 and 15 July 2003 for military
personnel. The expeditious manner that Congress has taken up
consideration of this supplemental request will allow us to continue
the task at hand--defeating the enemies of peace and freedom.
Readiness
AF readiness trends have been increasing for the past few years;
however, recent commitments in Operations Enduring Freedom, Noble
Eagle, and now Iraqi Freedom have caused our readiness trends to level
off to a current steady state. From 1996 to 1999, readiness rates for
our major combat units dropped from 91 percent to a low of 65 percent.
Since then, they have climbed and remained at roughly 70 percent.
Shortages of personnel, higher tempo, and aging aircraft are keeping
readiness below our targeted levels, which is a cause for concern.
However, we have been able to hold steady in the face of increased
operational demands on our force.
Our aircraft readiness has improved and will continue due to the
robust support for spare parts. This is a testament to a dedicated
workforce, fleet modernization efforts, and process improvements from
depots to the field. In fiscal year 2002, we enjoyed our highest
overall readiness rates in 6 years--the largest improvements since the
mid-1980s. Sixteen of 20 systems improved mission capable rates, at a
time when all of our systems were flying more hours.
In June 2002, the DOD directive 7730.65 established the DOD
Readiness Reporting System (DRRS) in accordance with the National
Defense Authorization Act of 1999. This directive established a
capability-based adaptive, near real-time readiness reporting system.
Current AF readiness metrics and supporting data will be captured in
the DRRS compatible Enhanced Status of Resource and Training System
(ESORTS). The Air Force, in addition to measuring current readiness, is
also developing a compatible and Predictive Readiness Assessment System
(PRAS) to provide senior leadership with a decision tool to forecast
the readiness implications on the force as it responds to taskings and
absorbs changes in key input variables of funding, equipment and
logistics, personnel, infrastructure, training, SORTS indicators, and
the strategic environment.
Our engine readiness rates have reflected impressive gains as
recent investments continued to pay dividends throughout fiscal year
2002. Our U-2s sustained their mission capable rate while flying their
most hours since the Gulf War, 35 percent higher than fiscal year 2001.
Our Predator fleet posted its best readiness rates ever while averaging
almost 200 hours per month. Our C-5s posted their best readiness rates
since fiscal year 1996 while flying the most hours since the Gulf War.
The B-1 consolidation is paying dividends, as our B-1s posted dramatic
gains in readiness, with current rates at historical highs. All of our
fighters are experiencing a steady decline in parts cannibalization,
which is good. We have made great strides in reducing the number of
aircraft in depot for maintenance, putting over 25 percent more
aircraft on the ramps for the warfighter since 2000.
Space launch readiness is an area where we are moving forward. Last
year was an important year for space launch. Both of our new Evolved
Expendable Launch Vehicles (EELV), the Atlas V and the Delta IV,
successfully reached orbit on their maiden launches. We are encouraged
by their success, but each of our launch providers is suffering due to
a downturn in the commercial launch market. Since maintaining two
launch providers is critical to assuring access to space for our
national security programs, we will continue to grow EELV capability
for near-term assured access, while evaluating longer-term alternatives
such as the Operationally Responsive Spacelift (ORS) concept.
Of concern, we are at greater risk for losing ground to rising
costs of aging systems. This will translate into deferred depot
maintenance on engines and aircraft and ultimately affect our
readiness. While maintenance readiness challenges remain, we are
confident the dramatic gains we experienced last year provide the
momentum the Air Force needs for continued improvements.
Our people are ready. We are sustaining our personnel readiness
rates in the face of higher OPTEMPO, manning shortages, and reduced
training opportunities. Operations Noble Eagle alerts, Enduring Freedom
and Iraqi Freedom deployments deplete operational unit capability and
the opportunity to train. Fortunately, our pilots are flying adequate
hours. Despite uncertainty in taskings and mission profiles, the Air
Force fully funded the flying program in fiscal year 2002 and fiscal
year 2003 and will continue to fly 100 percent of the flying program.
For the past 3 years, the Air Force has executed its budgeted O&M
flying hours without requesting additional funding for contingency
flying hours. Our airmen are gaining real-world experience you cannot
create in a training environment. Today, over 70 percent of our rated
aircrews are combat experienced!
However, many of our aircrew instructors have been pulled to
fulfill priority operational requirements, making it difficult to train
new aircrew to relieve the combat stress. This is especially true of
our LD/HD assets which have been working at ``surge'' capacity. We
recognize that some of the most significant detractors to unit
readiness are lengthy, frequent deployments. Once airmen return from
deployments they require up to a 90-day reconstitution period,
primarily for personnel training. Maintaining our AEF rotation schedule
helps stability and predictability, but most of our stressed career
fields are exceeding the 90-day goal. While the Air Force has taken
steps to mitigate the impact of lost training, sustained operations
will remain a challenge. As long as the current OPTEMPO persists, we
expect Air Force training to remain at current levels, if not decline,
as training currencies and continuation training are harder to achieve.
Retention
We have found our high operations tempo and uneven workload are
major determinants in an airman's decision to leave the Air Force. It
was difficult to accurately determine last year's retention rates due
to Air Force implementation of stop loss. Nonetheless, we will continue
to use an array of funding tools, to include bonuses, mentoring, and
re-recruiting efforts to sustain our record of retention success. Air
Force quality of life initiatives will ensure a suitable standard of
living for our world-class airmen and are essential retention tools.
While our increased accession levels and improved retention have
created a unique over strength problem, we remain committed meeting
total end strength goals.
Retention of pilots, navigators, and air battle managers is of
major concern. Though pilot retention is the highest in 4 years, we
still suffer from a long-term shortage of pilots. We have increased the
output of our pilot training courses, but training new pilots does not
immediately solve the problem--you cannot replace the lost experience.
The resulting experience shortage has detrimental effects on force
management leaving us with undermanned staffs, less experienced formal
flying training instructors, stressed test programs, and less mentoring
opportunities.
Our flexible Aviation Continuation Pay (ACP) program is an
important part of our broad-based plan to retain pilots, and we
extended the program this year to include navigators and air battle
managers. Encouragingly, the ACP long-term initial take rate rose
sharply to 49 percent in fiscal year 2002 from 30 percent in fiscal
year 2001.
Retention for high tech specialties is also a concern as the pull
from industry is strong. This draw is exacerbated by long, frequent
deployments in many of our high tech career fields. In response, the
Air Force this year introduced the critical skills retention bonus for
highly stressed and highly skilled career fields.
The Air Force has reduced its civilian workforce by nearly 100,000
since 1990, leaving only 10 percent of today's Air Force civilians with
less than 10 years in service and over 40 percent eligible to retire in
5 years. We must revitalize our professional occupations with new hires
while minimizing the impact on the existing civilian employees.
Recent pay increases are making a difference and have reminded our
airmen that we value their service. Targeted pay increases that reflect
the realities of the marketplace are critical to meeting our toughest
retention challenges. We must retain the flexibility to put more pay
where it is needed while ensuring that entry-level pay is very
competitive.
Another concern is mid-grade officer and enlisted manning levels.
We have a skill level mismatch: too many new apprentices and not enough
experienced journeymen. The resulting imbalance means higher
expectations for our less experienced airmen and greater stresses on
the remaining mid-level leaders, managers, and trainers. We cannot
afford to lose this experience; it will translate into lower readiness.
While there is clearly room for improvement, we are pleased with
our recent gains in equipment readiness and are proud to have
maintained overall steady state readiness despite the increased
operational challenge.
Reconstituting of our expeditionary forces following Operation
Iraqi Freedom will be the key to our future Air Force readiness
capability. The Air Force, along with our sister Services are working
closely to create the most effective way to reconstitute our forces
without compromising our military capabilities and readiness. The Air
Force is focusing its reconstitution effort towards a few main goals.
First, is to establish a total force steady state battle-rhythm. This
will involve the demobilization of our Air National Guard and AF
Reserve Forces, the cessation of our current `stop-loss' programs, and
re-deployment of our Active-Duty Forces to resume our AEF scheduling
cycle. Second, we will need to replenish our weapons expenditures with
the correct quantities and qualitative mix of current and future
weapons. A final major goal is to replenish our consumed war reserve
materials (WRM). The AF reconstitution effort is only a part of whole
military reconstitution effort and the proper implementation will
determine the quality of our future force capabilities.
Future Total Force
Like never before in the history of the Air Force, we are a total
force. Mission success demands the interdependence of Active Duty, Air
Reserve component (ARC), civilian workforce, and contractors. ARC
forces are essential to our success; they comprise nearly half of the
forces assigned to AEFs and contribute the majority of forces in some
mission areas, such as global strike and homeland security. We have
begun to consolidate, when practicable, two or more components into a
single wing with a single commander. We stood up our first ``blended''
wing, the 116th Air Control Wing, in October at Robins AFB, GA. This
and future blended wings will leverage each component's comparative
strengths to increase efficiencies, synergies, and capabilities. We are
also placing Reserve airmen directly into Active-Duty flying
organizations, giving us a new degree of experience and stability in
these units.
Under our new steady state, the ARC will continue to assume more
and more of an active duty role. As such, they need compensation,
benefits, and entitlements commensurate with these increased
responsibilities. We are working to facilitate seamless movement
between the components by minimizing appointment and accounting
burdens. We are exploring options to relieve surge stressors such as
the use of civilian contractors. We are committed to using ARC
volunteers versus mobilization whenever possible to allow the units and
members the flexibility they need.
We are also closely monitoring ARC recruitment. Historically the
ANG and AFRC gain nearly 25 percent of separating Active-Duty members.
Continued high OPTEMPO may threaten this source of recruiting and force
the ARC to explore alternative options to make up the loss.
Summary
The greatest testament to Air Force readiness is our continued
success in ongoing operations to protect America from its enemies. We
have the finest airmen in the world and are the most respected Air
Force in history. We enjoy the confidence of the American people and
are committed to maintaining their trust. This record of success and
promising future would not be possible without your support. For that,
you have our deepest thanks. Our recruiting and retention success,
dramatically improved maintenance rates, infrastructure improvements,
and weapon system modernization are a direct result of your recent
investments. We are especially grateful for your continued support for
pay raises for our people. You share our conviction that adequate
compensation is not a luxury but a necessity. Together, we have laid
the foundation for continued dramatic improvements and further
transformation. Let me assure you, your United States Air Force stands
ready, whenever and wherever we are called.

Senator Ensign. We thank all of you for your testimony.
Staff has written a beautiful question here. I am going to
try to summarize it for you. It basically has to do with
comparing this with some kind of a sporting event. You train
for the sporting event and then you have the sporting event and
then you have afterward, and all of this in relation to
readiness for the next sporting event.
The training has been remarkable up to this point. A lot of
these people are going to need rest. During a game or during
the operation, whether it is Afghanistan or whether it is what
we have going on in Iraq right now, to some degree it is just
like during a game, that sort of training, but it is executing
your training. You are keeping your skills up, but other skills
probably are diminishing, and that you are not practicing some
fundamentals that you do when you are out there.
So the question is, if each one of you could just take a
minute or so to discuss that and how you are going to, as part
of reconstitution, get your forces back ready to go. God forbid
we have to be in another conflict someplace, but that is what
we have to be ready to do.
General Cody. Thank you, Senator. Our staffs hand us stuff
too, but they did not hand me that one.
Senator Ensign. They might have handed you the one that I
got.
General Cody. We fully appreciate the fact that we are
right now in a major fight. As we speak, we are in Kosovo, the
Balkans, and Afghanistan. What we have learned from those
deployments as well as what we learned the last war in Iraq was
that we have to maintain the crown jewels of the Army training
base and that is our combat training centers.
I just reviewed the training at the National Training
Center, the Joint Readiness Training Center, as well as the
Combat Maneuver Training Center in Germany. We are maintaining
those rotations. It is hard to do, but we must have the force
that is not in combat. So we are maintaining those rotations.
We are adapting them based upon some quick lessons learned that
we are seeing during the fight.
We are a full-spectrum force and you are correct, as soon
as we bring this force back we have to rest them, reconstitute
them, but turn right around and put them back in, because we
have to make sure they are well-trained on the full spectrum of
operations. So we have plans to do all that.
I will give you one vignette. Third Brigade Combat Team,
101st Airborne Division, the same brigade that went into the
Shalikot Valley some 8 months ago, that brigade is now back in
Iraq. When they came back to Fort Campbell and we gave them the
time off and started going, we put them right back into a
training center and now they are back in the fight.
So those are our plans. But the reconstitution dollars are
not just for our weapons systems, because our most important
weapon systems are our soldiers and their training and we have
plans to do that.
Senator Ensign. Thank you.
Admiral Green. Senator, I think it is a terrific question
that really goes to the very core of what we are about and what
we do. I think from our perspective one of the big differences
between what we do and what a sporting team might be involved
in is that, first of all, we do not know what the schedule is
going to be, when our next game is going to come up, and we are
not quite sure whether it is going to be hockey or football or
baseball or tennis.
Quite frankly, the Abraham Lincoln Battle Group, which
thought it was on its way home from a routine scheduled
deployment earlier this year, found that we had other work for
them to do and in fact is on their way home right now.
What we are compelled to do as we go through each of our
engagements, campaigns, or wars is to ensure that we just do
not go back to the old pattern of training and development. We
need to ensure that we incorporate the lessons learned from not
just our own experience, but particularly within the context of
this joint force that is winning the war right now. We need to
ensure that, while we reconstitute, we are also recapitalizing
and we are transforming our force.
As Dr. Mayberry said, I think very well, putting all of
that together and making the right decisions is the only
approach that makes sense to us. We are deeply engaged, as are
the other Services and as are the Office of the Secretary of
Defense and the Joint Staff, in ensuring that we are doing the
right thing in this reconstitution program and approach that we
are taking.
I am very confident that at the end of the day we are going
to be ready, whatever that game is and whatever the schedule
calls on us to do.
Senator Ensign. Thank you.
General Bedard. Senator, I am a former college wrestling
coach and I could well talk about----
Senator Ensign. You do not look like a wrestler.
[Laughter.]
General Bedard. But, sir, I will tell you we have been
actively involved in, as we take a look at the reconstitution.
We look at the aspect of ensuring the readiness of those forces
we have that are not committed today and how do we stand up and
ensure that training is an integral part of everything we do as
we bring the force back.
Dr. Mayberry, although, mentioned it briefly. We have a
large training center at Twenty-Nine Palms, California. We will
not only bring forces back and start that train up very
rapidly, but we have also used that for forces that we are
continuing to deploy and are being prepared to deploy over
there.
I think the aspect of the lessons learned--we have had a
team on the ground since almost the time that we started to
deploy forces over there, and providing that almost daily
feedback of lessons that are being learned so they can be
incorporated in the remainder of the force is a very critical
part of what we do as we prepare for the future.
Senator Ensign. Thank you.
General Schmidt, when you are addressing, I was just out at
Nellis a couple of weeks ago and they were talking about--and I
probably should have started before I asked the question, but
General Wood out there was saying they have called off several
during these last couple of months, several of the planned
operations, training operations that they had going on. So how
does that all fit in?
General Schmidt. Sir, that is a good additive to what I
think Team Air Force needs to do to reconstitute. Obviously,
the devil is in the details. But in some of the more obvious
things, such as before we get in another game, obviously we
want to reload our guns, make sure we have the right kind of
guns and the right kind of ammunition. Obviously, we want to
reestablish our training cycle and we want to make sure we
train for the next war, not the last war, so that we are not
looking backwards, we are looking forwards.
But we do want to get our battle rhythm back and that is
probably the biggest thing. If you have a team and you just
played a big game and you have another one coming up, obviously
you want to get your primary players back in shape and you want
to reestablish your bench. I would probably focus on a couple
things that are additive to what my colleagues have already
said.
We do want to get our bench repositioned, the Guard and
Reserve for the Air Force. They are on mobilized orders right
now. The Air Force normally uses large amounts of our Guard and
Reserve, but we use them in a voluntary capacity. It does not
take very long to call them up and it does not take very much
to spin them up to combat-ready status. So stop loss and
demobilization, it is very important to us that we get our
bench reestablished.
But the heart and soul of what the Air Force needs to do,
because our deployable population within our Air Force
population is a little over 200,000 people divided into 10
relatively equal Air Expeditionary Forces--and we know the
amount of those forces that can be out any time sustained 24-7
indefinitely. We also know that when we go above that level
that we go into a declining mode as far as readiness. We also
know that at a certain level we begin to break.
We want to get back down to the level where we can sustain
operations, and that is at about 20 percent of our deployable
force at any one time, in increments of about 60 to 90 days,
are out there around the world. That would be the number one
priority, reestablish that battle rhythm for our Air
Expeditionary Forces.
At Nellis, I am sorry, sir, to answer the rest of your
question, what General Wood was referring to are our training
exercises. Those assets, those people, and those aircraft, the
iron, they are forward. Now, they are getting some training out
there, but not against a near-peer adversary.
Senator Ensign. That was the point I was making. By the
way, just one comment. The British were telling us that they
have 60 percent of their force deployed right now, so I guess
they have some big challenges ahead of them as well.
Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Generals, Admiral, in my opening statement I alluded to a
disconnect between current operations and how we here in
Congress do budgeting. I know that each of your Services has
been cash-flowing funds to pay for our many ongoing missions.
Hopefully, we will approve a final supplemental bill shortly
that will restore some of those funds.
But I wanted to ask each of you specifically about the
readiness impact of doing business in this way. My first
question is whether the Services in your view tend to get fully
paid back for what they pay out once supplemental funds are
approved? If not, what impact does this have on readiness?
My second question is about opportunity costs. Are there
certain things that you put off because of this cash flowing
that can never be bought back, as it were, even if the money
does get restored later? If so, can you give me some examples
and tell me what impact you think those loss opportunities
have? General Cody?
General Cody. Thank you, Senator, for that question. First
off, there is a readiness impact to the operational tempo and
deployment tempo that we have had on our forces, not just for
Operation Iraqi Freedom, but for Afghanistan as well.
Also, for the Army, if you remember, we started out with
just a battalion task force in Kuwait after the war and we kept
ramping that up, so now we are rotating a brigade. So over time
we have had a lot more what I would call deployed tempo and
operational tempo on heavy systems in probably the worst
conditions you would want to put them in, and that has taken a
wear and tear on those systems.
The question about cash flowing. We have cash flowed in the
Army about $2 billion out of our 2003 accounts, and with the
supplemental coming it will prevent us from stopping operations
in May. We run out of money at the end of May. Will we get
fully paid back? This is the first time I have gone through it,
Senator. I will see.
I do know that we have a very solid tracking system with
OSD on all the preparatory tasks that they approved, that
General Franks had asked for, and there was a very strict
regimen in the auditing of what we cash flowed, make sure it
was all approved and everything else. We will just have to wait
and see when the dollars cash flow down.
In terms of opportunity costs, we were very careful this
year to make sure that we did not lose the opportunity to field
the Stryker Brigade. So all the decisions we made to cash flow,
the Stryker Brigade is still on target to be certified in May,
and we did not break any programs yet. But the timely receipt
of the supplemental in terms of dollar for dollar will ensure
us that those things you just mentioned will stay on track.
Senator Akaka. Admiral.
Admiral Green. Thank you for your questions, Senator. Our
experience is similar to that of the Army. We have been
compelled to forward some cash from the latter part of the year
in order to operate in the light of the current contingency and
are counting on the supplemental to allow us to continue
operations. Should we not receive that supplemental, we will be
compelled to cease operations in June.
That said, we have been very well-supported in our
readiness accounts this year and that comes on top of a couple
of very good years for readiness based on the wisdom of this
subcommittee and the great support of the Senate and the House
as well. We watch that carefully. We cannot predict what
contingencies we might be compelled to answer, but that is why
we have this relationship, after all.
In terms of opportunity costs, that will be driven, I
suspect, in terms of timing and how quickly we can move to
solve whatever the questions are with regard to being able to
sustain the operations. But at this point we have great
optimism that we are going to be able to continue and get the
job done as you expect and require of us.
Senator Akaka. General Bedard.
General Bedard. Sir, in terms of cash flow, based on
requirements and those things to ensure the capability of the
force, we have gone in and probably spent a little over a
billion dollars in various programs. We certainly, as I said in
my opening remarks, are very much looking forward to the
supplemental both in terms of amount and timeliness of it.
I would hope that those dollars that we have spent in the
war effort are refunded to the Service. If not, just as General
Cody said, we have been very careful to ensure that we have not
broken any of our programs in the cash flow business. But we
have taken some risks in maintenance and a couple of other
areas, which we hope that we will be able to rebuild rapidly as
we get the supplemental moneys.
Senator Akaka. General Schmidt.
General Schmidt. Senator, like my colleagues, our crystal
ball when we put the budget together for 2004 did not include a
lot of things that are now occurring, such as Operation Noble
Eagle, where we are over the homeland, where we fly at levels
varying from level 3 to level 5, which means the difference
between having 15 or 16 fighters on a call to support that
operation up to where it is today with about 68 or so, not to
mention the tankers, the C-130 airlift, and the early warning
aircraft. That is quite expensive and it has taken its toll on
the Air National Guard primarily.
The global war on terrorism and operations in Iraq are
represented. We are not looking for a replacement necessarily
approach to what we get from the supplemental. It is the cost
of war. Like my colleagues, we do appreciate that. We do need
it. We have taken risk in numerous areas, and we appreciate
your support.
Senator Akaka. Thank you, Mr. Chairman.
Senator Ensign. I believe that the end of Hussein's tyranny
in southwest Asia will have an impact of historical
proportions, I think that all of us feel, and profound
implications, especially on that region, in terms of stability.
What are your thoughts of the implications of a post-Saddam
Middle East basically as far as stability and the rest of it,
looking at your crystal balls?
General Cody. I will go first, I guess, sir, because no one
else will pipe up on that one. Not being a policy guy, I think
from what I have seen, one, we cannot underestimate----
Senator Ensign. I am not just asking policywise, by the
way. I am asking you to take a guess what the potential
military implications, stability are. You all are in charge of
our armed services to go and win wars, to keep the peace,
sometimes humanitarian aid and all that. So you have to make
judgments what you think is going to be out there to have to
respond to, and that is really more the line of the question.
General Cody. Thanks for reframing it for me, sir. That
makes it a lot easier. The ice is a little thicker on that end
of the pond.
I think that for the Army we are looking at some sizable
footprint post-hostilities and that footprint will be
determined by General Franks, General McKiernan, as well as
their staffs. It will depend upon a level of stability that is
in that country, as well as the assessment of the level of
stability on those bordering countries, and also the amount and
how quickly we can secure the WMD sites and the sensitive site
exploitations.
That takes boots on the ground. That is a large country, a
little bit larger than California, and I do not know how long
that will last. The Department, as well as OSD, is looking at
several options about how large that force will be. What we are
doing in the Army is looking at each one of those courses of
actions and trying to set up a rotation that will work with
those types of boots on the ground numbers as well as get the
reconstitution of the other parts of the force so that we will
be ready for the next contingency.
It is a little premature for me to even harbor whether it
is going to be two divisions, one division, one brigade or
whatever, because General Franks and his combatant commanders
have not come back in and said what the numbers are. It will
not be measured just in combat divisions or combat brigades. A
lot of the post-phase 4, post-hostility operations, will be in
the combat service support arena and civil affairs and
psychological operations (PSYOPS) arena, and those are small
numbers in terms of formations, but usually those are our high
demand, low density outfits, and that is where we are watching
it very carefully.
Senator Ensign. Part of the other question is, for the rest
of you, and if you want to take a stab at it do. If you want to
avoid it I do not mind you avoiding it. As I am looking out
there and I am one of the other tyrants in some of these other
countries, I guess you have to look into their mindset and, as
quickly and as overwhelmingly as you all moved through Iraq, if
I am a Syria or a North Korea, certainly that is part of what I
am talking about implication-wise as well, what does that do?
Part of this is a guess. Some of these are going to be bad
guesses, some are good guesses. If you want to take a stab at
it, go right ahead.
Admiral Green. Yes, sir. I was never very good at dodgeball
as a kid, so let me jump right into this. It is our
expectation, and I think yours as well, that as we go through
the process of reconstitution, this question will be central to
not just the way that we reconstitute, but the way we position
our forces, which will drive other issues as well.
Our hope, of course, is that upon completion of this
campaign that the environment will be much improved in that
part of the world. That said, we, the joint force, are
compelled to ensure that we have the forces in theater that can
persuade those who might wish us ill and might wish to take
advantage of a potentially unstable situation that that is not
in their best interests and that we are ready to do whatever is
needed to defend United States' interests should they make that
miscalculation.
There are other regions of the world as well that will
require our presence, and we are all global Services. We have
the ability to move quickly, to carry out campaigns if
necessary, but to assure our friends and allies and to deter
those who would wish us ill. That is exactly, in fact, at the
very core, the center, of our considerations now as we look at
the post-war, the post-Operation Iraqi Freedom world.
General Bedard. Sir, without repeating what has already
been said, I think first of all as we take a look at Iraq
itself probably one of the most dangerous times is when we
transition from conflict to stability operations. I think
ensuring that we have the right force and the right
organizations in the theater to do that are critical.
I think this is a very clear wake-up call to Syria, Iran,
North Korea. Which way they decide to go based on what they
have seen and so on probably remains to be seen, but there
certainly is a very clear blueprint to them of what can happen.
I would also say and echo Admiral Green that being out
there and being forward deployed is a tremendous deterrence in
itself, and I think we need to continue to do that probably in
a greater effort in the future. Part of my rationale for that,
I think we are going to squirt a lot of terrorism out to a lot
of different parts of the world that are probably going to
leave from where they are at right now. Those that have been
harbored in Iraq or in other countries in that part of the
region, we will probably see them in greater numbers and
quantities throughout the world in other places, and that I
think will be the challenge for us and for our forces.
General Schmidt. Mr. Chairman, I think--and I agree with
General Bedard--as we look around at the landscape post-Saddam,
there are still a few standing large military forces, to
include North Korea, that will be looked at for the kind of
strategies that we have used traditionally. But I also think
that a large piece of the remaining threat out there is more
probably a stateless, uniformless, do-or-die ideologist.
We are now adapting our capabilities using technology and
other things to deal with this. Our intelligence, surveillance,
reconnaissance investments are adapting quickly and we are
showing that, while the Services do have in a smaller context
our special operators, I think we will spend a lot more
resources and investment in building their capabilities and
maybe even their size in proportion to the rest of the Service.
Our ability to find, fix, and target that kind of enemy and
maybe kill that kind of enemy is going to get called on more
and more, I think, in the future. Our force structure, which is
people, equipment, and our training, would be more and more
tailored I think in the future to do that.
Senator Ensign. Thank you all.
My time is up.
Senator Akaka. Generals and Admiral, Dr. Mayberry testified
during the first panel about training transformation and the
Joint National Training Capability, and there is no question
that future readiness will certainly have a capital ``J'' on
it. I am pleased to see that DOD is focusing a lot of attention
on improving joint training in particular. But I wonder also
about where the line is between jointness and allowing the
military Services to fulfill their Title 10 responsibilities to
organize, train, and equip their own forces.
Can each of you comment briefly on your perspectives on
this issue and even where you think the line is and, if it is,
then why is it? General Cody?
General Cody. Yes, sir. We have talked about this in
several of the meetings that we have had with Dr. Mayberry and
all of us have been part of the Joint National Training Center
concept and training transformation. We are the greatest
military power in the world today because we have the best
Navy, we have the best Marine Corps, we have the best Air
Force, we have the best Army and Coast Guard, and we do not
want to sacrifice that for a higher level of joint piece.
What we are going to do with the training transformation is
ensure that we do not jeopardize the core competencies of each
one of our Services. What we bring to the table is five
different ways for an enemy to die and we have to synchronize
that, and I think that will be the context and how you will see
the joint readiness and the Joint National Training Center
brought to bear.
We see it--I will give you an example. The National
Training Center brigade combat teams. You can wrap on top of
those brigade combat teams the joint piece of it so that the
standing joint task force headquarters knows how to orchestrate
an Army brigade, a MEF, Marine Expeditionary Force, Navy air
power, air power from the Air Force, and synchronize all of
that in a joint construct and still not jeopardize that brigade
on the ground or that marine battalion on the ground or the
fighter piece.
That means we have to do some changes to the enemy set we
put at our training centers, we have to make some changes to
some of the scenarios so we can get all those parts and pieces
in there. But we are not going to sacrifice the core
competencies of our different Services to do it.
Senator Akaka. Admiral.
Admiral Green. Thank you, Senator. In fact, from an
operator's perspective that is the big question for us. There
was a time when we might have defined the cut line being
somewhere at about the unit level and I think that no longer
pertains, for many of the same reasons that General Cody just
described. When we look at mission-essential task lists, we
look at the required operational capabilities for units and for
formations of units and combinations of joint units in
particular, we need to ensure that not only the equipment and
not only the unit training, but the combined and joint training
satisfies the requirements of the combatant commanders.
They are the ones who really define the requirement on us
and under the guidance of the commander of the Joint Forces
Command and the Services themselves we are pushing forward to
do just exactly what you suggest and require of us.
Speaking as someone who is a member of a Service that has
been a joint Service ever since 1775 along with the Marine
Corps, this is central to our combat effectiveness and to what
we give the country. There is not a fight that I can imagine
today that is not a joint fight. There is training that has to
follow that model as well, and that is the direction we are
going within the Navy through the training resource strategy,
but also in continuation and in deepening and broadening the
joint task force exercises and the other new exercises that are
coming up with the other Services as well.
I think you are absolutely on the mark and we get that
message very clearly.
Senator Akaka. General Bedard.
General Bedard. Senator, I think first and foremost what
each Service probably best contributes to the joint fight is
bringing their own competencies of their Services to a level
that can be used in the joint effort. From a standpoint of the
Marine Corps, I guess we are somewhat unique in that our basic
organization of the marine air-ground task force with its
aviation and maneuver and a command element and logistics and
operating from naval ships gives us a very unique joint
perspective at a very early age in our careers in how our force
is organized.
But I think too often there is a bill put around our necks
that says we are not joint enough. I will tell you, I think,
and my colleagues sitting at this table today would agree, the
level and degree of jointness that goes on every day, not just
over in Iraq, although that is certainly a great testimony to
what we do, the training level of jointness has only increased
over the last several years in my opinion, and we will continue
to make that effort to ensure that we understand how to operate
on the battlefield together as a joint force.
Senator Akaka. General Schmidt.
General Schmidt. At the risk of sounding like a parrot that
I agree with my colleagues, I do. The core competency the
Services have is gained through the training that we do within
our own Service, and then we bring that capability to the joint
fight. I think the Joint National Training Capability is
additive to that.
I think it is a perfect opportunity to horizontally
integrate the best of what we bring, and if those systems that
we produce, procure, and implement among the Services do not
work in our training environment, they are not going to work in
our combat environment. Those habit patterns, those reflexes
that we develop in the training environment, need to be
automatic in the combat environment.
The last comment I think I would add to this conversation
is that the future of training really is also migrating to what
we call a distributed training. It is not all geographically
located in the same place. The concept that we all come to the
same range, pound the same dirt, talk on the same line of sight
communication systems, is not there any more.
This Joint National Training Capability offers the
opportunity to integrate those systems that allow the fighter
pilot in South Carolina to work the same fight as the Army in
California or the Navy in the Gulf of Mexico. That is the same
fight virtually. The training derived from that for everyone to
be involved in a large scale is almost inestimable.
Senator Akaka. Thank you, Mr. Chairman.
Senator Ensign. Thank you.
Unfortunately, I have been notified I had something that
started at 4 o'clock. We are still working on this budget
thing. So I appreciate all of you. I do have other questions
and I am sure you do, Senator Akaka, that we will have to
submit for the record.
Just in conclusion, I want to thank all of you for your
great testimony today. We are really looking forward to working
with you on this whole reauthorization bill and providing you
what you need to make sure to continue to provide those people
who are on the front lines what they need.
I also want to compliment the Services for breaking the
whole idea of turf battles. It has been commonly known that
each Service takes so much pride in what they do that the idea
of this joint training 20 years ago was really almost a foreign
concept. I want to compliment you. Part of it out of necessity,
but it seems to be that the Services--and I am hearing this all
the way down, up and down through the Services, that it is
being embraced. That is really, that is a compliment to each
and every one of you, because it is absolutely critical that we
do it.
It becomes obvious in our operations, but it does not mean
that it would be embraced as well as it is being embraced. I
would compliment you and encourage you to keep that up, because
I think the more that you embrace that while maintaining your
core competencies, the better off our military is going to be
in the future.
Once again, thanks, Senator Akaka. We have had five
terrific hearings now and I think that it will go a long way
toward our ability to get you a good markup and provide you
what you need. So thank you, each one of you, for being here
today.
This hearing is concluded.
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Daniel K. Akaka

TROOP DEPLOYMENT

1. Senator Akaka. General Schwartz, since we started deploying
large numbers of forces to the Persian Gulf, there have been occasional
articles in the press about ``hiccups'' in the mobilization and
deployment process. While it's generally acknowledged that things have
gone much more smoothly this time than they did during the Gulf War,
there appear to be some challenges that remain. Could you give your
take on the mobilization and deployment process for Operation Iraqi
Freedom thus far? What has gone well, and what, in your view, needs
improvement?
General Schwartz. Overall, the mobilization and deployment
processes for OIF has been very successful to date. We have been
effective in providing General Franks with the right forces in the
right place at the right time. The Department of Defense (DOD) is
currently compiling lessons learned from OIF and developing
recommendations to improve our processes for mobilizing and deploying
forces. In addition, we intend to conduct a study based on current and
anticipated events in the global war on terrorism to determine if we
have the correct mix between Active and Reserve Forces.
One area that we are currently evaluating is the mobilization time
period. We are attempting to balance the needs of the combatant
commander for rapidly deployable forces versus the need for Services to
train, equip, and prepare Reserve Forces for deployment. The Reserve
component is a major contributor to OIF forces in the areas of combat
support and combat service support. DOD instruction recommends 30 days
between receipt of mobilization orders and the requirement to report
for mobilization, and providing the full 30-day time period remains the
intent of DOD. For OIF, reservists averaged from 10 to 15 days between
receipt of mobilization orders and actually reporting for mobilization.
Our goal is to establish procedures that will increase the deployment
readiness of the Reserve Force and reduce the time between a combatant
commander's request for forces and deployment of those forces.
With regards to deployment, the request for forces/deployment order
process we are using for OIF allows the Secretary of Defense to meter
the force flow. This approach provides a more flexible response to the
combatant commander's force requests and ensures excess forces are not
deployed. This approach also ensures we have as many forces as possible
available for other potential contingencies and reduces the costs of
the operation by avoiding unnecessary deployments. As we work through
the lessons learned, we will seek to reengineer the current joint
deployment process to streamline and to increase responsiveness to meet
combatant commander requirements.

2. Senator Akaka. General Schwartz, how well does the fiscal year
2004 budget request support any improvements that are necessary?
General Schwartz. The fiscal year 2004 budget request does not
include funding estimates for mobilization and demobilization
improvements based on Operation Iraqi Freedom. Future budget requests
may address improvements to the mobilization and deployment process as
the Department continues to study lessons learned to create more agile
and responsive processes.

HELICOPTER MAINTENANCE

3. Senator Akaka. General Cody and General Bedard, some of the
media coverage in Iraq has talked about the challenges that the very
fine dust in that region poses for our rotary wing aircraft in
particular. Certainly it makes landings very hazardous. How difficult
is it to maintain our helicopters there now, and how hard will it be
for us to restore our helicopters to good condition once they return?
General Cody. Helicopter operations in a desert environment are a
tremendous challenge, both operationally and logistically. Operation
Iraqi Freedom has proven to be no exception.
Operationally, our pilots experience ``brown-outs'' during nearly
every takeoff and landing. A ``brown-out'' is when a cloud of dust or
fine sand, stirred up by the helicopter's rotor wash, becomes so thick
that it obscures the pilots' vision. When pilots lose visibility during
a takeoff or landing, they may become disoriented and inadvertently
begin to drift in a direction that they had not intended. These `brown-
outs' have resulted in at least seven significantly damaged aircraft. A
flight stabilization system is available to mitigate this risk to our
aircraft and crews. The system uses Global Positioning Satellite
signals and an internal display to improve low visibility situational
awareness.
The extremely fine sand in the region has also significantly
impacted the maintenance and logistical support of our aircraft. The
sand erodes rotor blades, clogs and unduly wears engines, pits our
windscreens, clogs filters, causes premature bearing failure, intrudes
into and chafes wire bundles, and a host of other problems. Not
surprisingly, we have seen a tremendous increase in our consumption of
engines, blades, and bearings. While it hasn't been a significant issue
yet, the extreme temperatures of the region will also adversely impact
our aircraft engine performance; limiting operational loads, range, and
maneuverability.
We do anticipate a large reconstitution effort, for both air combat
and combat support systems. Our primary objective will be to return our
fleets to a pre-war condition to ensure readiness to meet future
missions. In addition to the extensive cleaning and repair of deployed
systems, the effort will include the acquisition of new systems to
replace those lost in combat and accidents. Where it is efficient to do
so, we may incorporate some of our recapitalization efforts with the
reconstitution. We will have to be extremely careful to synchronize
this effort in such a way that we continue to support the Army's
ongoing missions; peace keeping, humanitarian, stability and support,
and global war on terrorism operations, as well as support home station
training requirements and Army transformation. This may mean we have to
conduct some of our reconstitution efforts forward in the theaters of
operation.
Currently, the Army Staff, the Army Material Command, Program
Executive Office-Aviation, and the Major Commands are conducting a
detailed mission analysis to determine the full requirement and to
develop a coordinated, synchronized strategy that balances the
reconstitution workload across the full spectrum of the Army's
industrial base capability. The Army is reviewing the full capability
of the sustainment base to include, organic depots, installation
Directorate's for Logistics and the private sector industrial base. We
anticipate the private sector, in partnership with our organic base, to
conduct a significant amount of work, within the limits imposed by
United States Code Title 10, Sections 2464 and 2466. Additionally, our
parts suppliers, both manufacturers and overhaul facilities, will be
called on to increase production to support this reconstitution effort.
General Bedard. The impact on aircraft engines particularly the T-
64 has resulted in engine changes at a rate of twice the normal non-
deployed rate. Failures are due primarily to leaking/inadequate Engine
Air Particle Separators (EAPS) and EAPS seals. The purpose of the EAPS
is to filter out and discharge overboard all particulate matter in the
air stream. The inability of the EAPS to effectively filter out fine
sand while operating in austere desert sites results in excessive wear
on the engines, resulting in reduced power, and early removal. Current
availability of engines is adequate, but accelerated engine removals
negatively impacted both the organizational and intermediate level
maintenance departments' ability to reconstitute engine pools.
Additionally, the accelerated removals drive up the cost per flight
hour for the CH-53.
The major effects on rotor blades continues to be pitting and
corrosion, however, the damage rates and replacement ratios for
Operation Iraqi Freedom (OIF) have not yet been determined. Aircraft
returning from OIF will initially require some level of additional
maintenance to recover from deferred maintenance that could not be
accomplished in theatre. The initial increase in required maintenance
man-hours per flight hour may be significant on return to home bases
but should not be long term in duration.

4. Senator Akaka. General Cody, I am particularly concerned about
the Army's helicopters, which I know you care deeply about, because of
their ongoing problems with spare parts shortages. I believe a recent
readiness report stated that Army helicopter readiness rates are likely
to remain low for at least 12 to 18 months, until long-lead spare parts
arrive in the fleet. Would you comment on this issue?
General Cody. I do expect to see lower aircraft readiness rates for
a period of time, but not solely due to spare part lead times. The
primary reason for lower readiness will be from the increased
maintenance down time resulting from reconstitution.
As I discussed in the previous question, the aviation
reconstitution will be a tremendous effort. Our goal is to complete
this effort in approximately 2 years. As discussed earlier, we are also
in the process of synchronizing the effort to support the Army's
ongoing peace keeping, humanitarian, stability and support, and global
war on terrorism operations, possible future missions, as well as
sustain home station training requirements and Army transformation.

OPERATIONAL LESSONS

5. Senator Akaka. General Cody, Admiral Green, General Bedard, and
General Schmidt, last year witnesses from each of your Services
provided a fairly lengthy written response about lessons learned in
recent operations. If you would, I'd like to ask you to update those
answers for the record to reflect the past 13 months. Are there
particular lessons that stand out from the global war on terrorism and/
or Operation Iraqi Freedom?
General Cody. Our current operations in Afghanistan and in Iraq
have provided the Army with several lessons. The first lesson is that
our training programs work--in particular our Combat Training Center
(CTC) program. Soldiers and leaders continually have attested to the
value of the ``CTC experience'' in preparing them for combat operations
in Afghanistan and Iraq. We must continue to fund training and training
resources, to include the expansion of our range capacity and the full
implementation of our Joint National Training Capability (JNTC)
concept.
Tough, demanding training supported by an infrastructure that
allows us to train, sustain, and deploy is essential to readiness.
History shows that the higher the quality of training, the better the
leaders and warfighters we produce. The performance of Army soldiers in
OIF clearly shows the benefits of high quality training and improved
readiness. Army forces repeatedly engaged and defeated numerically
superior enemy forces in a variety of terrain and weather conditions.
To continue our successful training strategy, we must fully
modernize training ranges, combat training centers, and training aids,
devices, simulators, and simulations to provide adequate and
challenging training. In addition to live field training, the Army has
funded the integration of virtual and constructive training
capabilities. Yet, despite all the advantages of virtual and
constructive training we expect to gain, there is no substitute for
training in the field. As the quality of our forces, our equipment, and
our networkcentric command and control operations continue to advance,
our forces will operate with ever-greater dispersion. Maintaining
sufficient maneuver areas for training these extended formations will
become even more critical.
Prior to initiation of combat operations in Iraq, Army forces
utilized vast portions of Northern Kuwait for training exercises. This
training area afforded our forces the opportunity to exercise in the
same tactical formations used in combat operations and contributed to
their success in OIF. Such opportunities are limited to only a few
training areas in the world. Both within the continental United States
and in our overseas training areas, these areas are increasingly being
encroached upon, intensifying environmental constraints and operational
limitations that place very restrictive limits on testing and training
facilities. The Army is one of the best stewards of the environment. To
improve on our stewardship, we are implementing a sustainable program
that integrates operational needs, land management, explosives safety,
and environmental concerns into the lifecycle management of our ranges.
The next lesson is that our forces are ready to fight when they
arrive, but we must continue to work with the Air Force and Navy as
well as the Joint Staff and USTRANSCOM to ensure that they arrive in
theater faster. OIF clearly illustrated the need for more strategic
airlift and sealift. This weakness became apparent when the movement of
forces into northern Iraq was delayed after Turkey denied our request
to stage from their territory. The lack of strategic airlift and the
inability to sustain our forces through airlift once deployed to Iraq
delayed the movement of heavy and medium forces from Europe. The Army
fully supports continued purchase of C-17 aircraft and fast sealift to
ensure the joint force can get us to where the Nation needs us, when it
needs us.
Finally, the complexities of the Contemporary Operational
Environment (COE)--as experienced in both Operation Enduring Freedom
(OEF) and OIF--are here to stay. This reinforces the Army's
transformation efforts and demonstrates a clear need to field both the
Stryker Brigade Combat Teams (SBCT) and the Objective Force. Operations
in Iraq demonstrated the need for a rapidly deployable medium force.
The SBCT provides the combatant commander with a rapidly deployable
force to deal with unforeseen challenges. If the SBCT had been
available, it could have been quickly deployed to Iraq to provide
greater security for Army and Marine lines of communication, or could
have provided light forces in Northern Iraq with more lethality,
survivability, and mobility.
OIF clearly illustrated the great promise of transformation and the
continuing relevance of the Army's heavy forces. The joint force
exploited dramatically improved C\4\ISR capabilities to achieve near
real time situational awareness. Commanders used their improved
understanding of the battlefield to leverage the speed and lethality of
air and ground forces resulting in the Iraqi regime's complete
disintegration--with minimal collateral damage and coalition
casualties. We must continue to enhance our C\4\ISR capabilities with
particular focus on joint and multi-national interoperability. The M2
Bradley fighting vehicle and M1 Abrams tank continued to prove their
worth in major combat operations, surviving multiple engagements with
minimal damage, and dominating enemy forces. During OIF, we achieved an
unprecedented level of integration of SOF units/elements with our heavy
forces and a re-validation of the heavy-light concepts we train at the
CTCs.
OIF also exposed vulnerabilities in the current force that will be
addressed by Army transformation. Heavy ground forces are still
dependent upon vulnerable supply lines. The Army's Interim and
Objective Forces reduced logistics footprints will minimize the
requirement to maintain long lines of communication. These forces will
also deploy more rapidly and with less strategic lift to provide the
commander with multiple options for responding to unforeseen challenges
on the battlefield.
The Army does not think short term. History has shown that the Army
not only wins wars, but it also bears the preponderance of the
responsibility for post-hostility operations. U.S. ground force
presence is critical to stabilize the region and support the long
process of rebuilding the economic and political infrastructure in
Iraq.
As we have demonstrated previously in Panama, the Gulf, Haiti,
Bosnia, and Kosovo, and more recently in Afghanistan and Iraq, soldiers
can defeat enemy armies, seize and control terrain, and control
populations and resources with minimal collateral casualties and
damage. They can operate across the spectrum of military operations,
from full-scale conventional conflicts to asymmetric conditions, from
fighting terrorists to setting the conditions for humanitarian
assistance and transition seamlessly between these levels. In an era of
precision weapons, nothing is more precise and discriminating than the
U.S. Army soldier.
Admiral Green. While we continue to analyze the lessons from OIF
and the ongoing global war on terrorism, our preliminary analysis
reinforces the lessons learned from Operation Enduring Freedom,
validates some enduring principles of naval warfare, and provides
additional insights that we are using to prepare for future joint
combat operations.
Navy lessons learned from OEF stressed the value of carrier-based
airpower in a limited access environment, the importance of leveraging
Special Operating Forces (SOF), the significant impact of agile and
ready expeditionary forces, and the contributions of our coalition
partners. As OEF continued, the readiness investments that Navy was
able to make over the previous 2 years with your support continued to
pay dividends. We were able to provide the President significant
flexibility in setting the force for OIF with a focused effort to
provide 7 Carrier Strike Groups (CSG) on call from August 2002, the
planning and execution of a surge plan to get 12 TLAM-armed SSNs on
station to support strike operations, the availability of two maritime
pre-positioned squadrons to support deployment of a Marine
Expeditionary Force (MPSRONs), the short notice deployment of two
Amphibious Task Forces (ATF), and early activation of sufficient
Military Sealift Command shipping to meet TRANSCOM requirements.
OIF clearly validated the strategic utility of sea-based forces.
Even with the difficulties in obtaining access, overflight, and basing
from countries in the region, and the requirements to posture
additional deterrent forces in the Western Pacific (1 CSG, 1 ARG, and 4
SSNs), Navy provided the flexibility to be able to meet Central
Command's naval force requirements, including 5 CSGs, 3 ARGs, 2 ATFs, 2
MPSRONs, 12 SSNs, a command ship for theater Reserve, and ISR
capabilities.
Naval forces were able to contribute significantly to the timely
precision fires necessary for an effects-based war. A key enabler for
successful precision fires was persistent, fused ISR at both the
strategic and theater level. We were able to mitigate early basing
shortfalls with over 800 sea-based TLAMs fired, with over 88 percent
discernible damage assessed in the preliminary analysis. Similarly,
carrier air provided tremendous flexibility and precision, with over 95
percent of the ordnance expended being precision guided, and targeting
information sent to over 78 percent of the missions in-flight. In
conjunction with the JFACC, an unprecedented number of time sensitive
target (TST) missions were executed within the ATO process, with over
800 conducted with an average of 3.5 hours from nomination to ordnance
on target.
OIF again demonstrated that it was possible to meet strategic
objectives without massed force by leveraging conventional support to
SOF, including immediate precision fires (e.g. Navy Tactical Air
(TACAIR) providing close air support) and support by ISR assets at the
tactical level. In fact, SOF both supported conventional forces such as
3rd ID and IMEF and was supported by conventional ground forces such as
the 26th MEU and 173rd Airborne Brigade. Navy SOF successfully executed
key missions by taking early, calculated risks focused on key nodes.
One example was the early take down of the Iraqi gas oil platforms and
Al Faw pumping stations to preserve the oil infrastructure and prevent
environmental damage. This integrated operation involved SEALs,
coalition SOF, coalition surface ships, tactical ISR, Navy armed helos,
Air Force SOF helos, and USMC support. Similarly, Joint SOF was able to
integrate dedicated general-purpose forces to support WMD and
leadership interdiction as well as POW rescue operations. Finally, the
effective integration of Information Operations (IO) into the OIF
campaign plan also appears to have achieved unprecedented success.
Initial observations support the conclusion that IO contributed to oil
fields being preserved despite the emplacement of explosives, mass
desertions of enemy forces, and WMD not being employed.
Maritime dominance remained critical to success in OIF. Over 25
surface combatants were dedicated to escorting shipping for OIF, which
supported the flow of forces and logistical support into theater
including over 184 sealift and pre-positioned ships. Because of the
ongoing terrorist threat, force protection requirements extended
worldwide. This requirement was met by leveraging coalition naval
support assigned to OEF and coalition naval forces outside the region
(e.g. Spain in the Straits of Gibraltar). Although our maritime
dominance provided unimpeded tactical movement of naval forces and
rapid access for humanitarian assistance, an equally important lesson
is that OIF was not as challenging as potential future scenarios in
that there was no submarine threat, a negligible enemy surface force,
and no Iraqi air threat. Clearly, maritime dominance cannot be taken
for granted in future conflicts but remains crucial for success.
OIF also generated several issues that we are working jointly to
resolve. First, multiple blue-on-blue engagements occurred in OIF,
involving coalition partners and all Services. Second, execution of
joint close air support (JCAS), while successful, requires
standardization throughout the joint force. Third, the growing
importance of IO demands the development of measures of effectiveness
and a timely, integrated kinetic/non-kinetic combat assessment process.
Fourth, ISR capabilities require improved analytical capacity to permit
timely exploitation. Fifth, a number of processes instituted to support
targeting in OIF (e.g. Time Sensitive Targets, Commander Priority
Targets, and TLAM ATO changes) require improvement and effective
integration into CAOC doctrine. Sixth, although the CAOC structure was
effective and joint to an extent never before realized, we must
institutionalize a process to quickly stand-up a truly joint CAOC.
Finally, coalition networks were not mature enough to provide the
required connectivity for all users.
In preparation for future conflicts, Navy has begun to
significantly modify its operational posture to provide a constant
surge capability in addition to its rotational force presence. The CNO,
Admiral Clark, has directed the Commander, Fleet Forces Command, to
implement a concept called the Fleet Response Plan. In his
implementation message to the Fleet, Admiral Natter noted that the war
on terrorism requires the Navy to ``be more ready and more
responsive.'' The FRP has a goal of providing a force of six surge-
ready CSGs, including those forward deployed, with two additional CSGs
ready soon after. As such, the Navy's traditional schedule of sending
ships to sea for 6 months, followed by 18 months at home preparing for
the next deployment, could be made far more flexible so more ships are
available to surge during a national crisis. Navy expects to be able to
reset its forces and be ready to respond to future threats within the
approved supplemental funding of $9.8 billion approved by Congress and
allocated into direct appropriations and the approximately $1 billion
allocated from the Iraqi Freedom Fund.
General Bedard. The Marine Corps recently published the Combat
Assessment Team summary report for Operation Enduring Freedom and
distributed them to Members of Congress (HQMC, Office of Legislative
Affairs can provide additional copies if desired). Some of those
lessons may apply to OIF. Teams are in the Central Command theater,
gathering surveys and interviews in order to capture lessons from OIF,
and we'll share our assessment when complete. There will undoubtedly be
areas for improvement, but the indications that I've received are that
many of our lessons will be positive and favorable.

- Our expeditionary, forward deployed forces provide combatant
commanders a rapid response capability, and sea-basing can
overcome challenges of anti-access.
- Our ability to quickly deploy, marry up with pre-positioned
equipment, and provide combat forces ready for immediate action
is crucial to our continued success.
- Our Marine Air Ground Task Forces (MAGTFs) are scalable,
multi-faceted, and able to task organize on the fly to conduct
highly sophisticated joint and coalition operations covering
the spectrum of combat missions, including port seizure,
operations in urban terrain, hostage rescue, and peace keeping
operations.
- An increased confidence and reliance on the timing and
prioritization of well-coordinated precision fires (artillery
and close air support), enabled the bold maneuvering of our
MAGTF, SOF, and coalition ground forces operating in the
MAGTF's assigned area of responsibility, while facilitating the
exploitation of their successes.
- Marine forces conducted sustained operations ashore on an
unprecedented scale and at great distances.
- Our MAGTFs must possess the ability to communicate and
interface with SOF, joint, and coalition forces without being
constrained by terrain or geography.

General Schmidt. Success in future operations hinges upon our
ability to learn from previous operations and prepare for future
operations. To ensure the Air Force learns from ongoing operations and
adapts accordingly, the CSAF established the Task Force Enduring Look
(TFEL) office. TFEL is responsible for Air Force-wide data collection,
exploitation, documentation, and reporting for all our campaigns in the
global war on terror--including ONE, OEF-A, and now OIF. The objective
for TFEL is clear--provide reach-back support to the warfighter, and
properly recognize and apply lessons learned--during, rather than only
at the conclusion of, these operations. To accomplish this mission, we
deployed TFEL experts to the Combined Air Operations Center (CAOC)
during Operation Iraqi Freedom to collect data during all phases of the
war--from planning-preparation-execution through assessment--
traditionally done in the months following a conflict. We are beginning
to analyze the data that we've collected from OIF and at least one
major theme is emerging: ``Integration is the Key.''
A well-trained integrated joint force is a force multiplier
producing effective and successful results, and very lethal results to
our enemies. The potential is unlimited when the unique and
complementary (Air-Land-Sea-Space-Info) capabilities of all the
Services and our allies are linked together for integrated joint
employment. The U.S. military again proved ``the more we sweat in
peace, the less we bleed in war.'' Our joint team achieved victory in
Iraq because we were the best-trained, equipped, and prepared force
ever fielded for an operation. The CAOC painstakingly trained and
practiced its processes, procedures, and scenarios before the onset of
OIF. The USAF and Special Operations Forces jointly practiced counter-
mobile missile operations (``SCUD hunting'') to deny the Iraqi SCUD
threat. The Army/Air Force joint mobility rehearsed exercises and
training of airborne ops which allowed the seamless inter-service
execution of air insertion. Our ``precision employment force,''
composed of ISR, navigation, information, and weapons systems,
successfully prosecuted a record number of surgical TST strikes at a
pace faster than any in history. The persistent all-weather precision
employment against all target sets mitigated collateral damage. The
experiences gained from Joint C\2\ISR and air dominance in the AOR for
the past decade (due to OSW, ONW) has paved the way for these
integrated joint successes.
We are only at the genesis of OIF lessons learned and will continue
to gather, analyze, exploit, and assess the data from Operation Iraqi
Freedom and focus on the improvements for future potential operations.

6. Senator Akaka. General Cody, Admiral Green, General Bedard, and
General Schmidt, to the extent that any of these lessons have resource
implications, how well are any adjustments supported in the fiscal year
2004 budget request?
General Cody. Because the Army's planning and programming is not
short sighted, the fiscal year 2004 budget does provide adequate
funding for the readiness and transformation lessons addressed in
Question #5.
The first lesson is that our training programs work--in particular
our CTC program. Soldiers and leaders continually have attested to the
value of the ``CTC experience'' in preparing them for combat operations
in Afghanistan and Iraq. We must continue to fund training and training
resources, to include expansion of our range capacity and the full
implementation of our JNTC concept. To support this lesson learned all
scheduled training rotations are fully funded: 10 brigade rotations (9
Active components and 1 Army National Guard) through the National
Training Center, 10 brigade rotations (9 Active components and 1 Army
National Guard) through the Joint Readiness Training Center, and 4
brigade rotations through the Combat Maneuver Training Center. The
Battle Command Training Program will conduct three corps warfighter
exercises and train seven Active component division command and staff
groups.
The next lesson: the complexities of the COE--as experienced in
both OEF and OIF--are here to stay. This reality reinforces the Army's
transformation efforts and demonstrates a clear need to field both the
SBCT and the Objective Force. To support this lesson learned, in fiscal
year 2004 the Army continues the research and development of the Future
Combat Systems (FCS), providing the Army a full spectrum force system
with substantially improved deployability; provides funding to purchase
301 Stryker vehicles for the 4th Stryker Brigade Combat Team; continues
selected procurement programs to improve strategic responsiveness,
increase lethality of light forces, and recapitalize legacy systems;
and restructures or divests $2.3 billion from procurement programs that
did not meet the Army vision to provide research, development, test,
and evaluation resources for the Army transformation.
Admiral Green. Initial analysis of the lessons learned from the
global war on terrorism (GWOT), including OEF and OIF, has validated
the enduring principles of naval warfare and the funding decisions
supporting their development. The PB04 budget request supports
investments in current readiness, weapons procurement, and the further
development of specific focus capabilities, such as information,
surveillance, and reconnaissance (ISR), IO, and antiterrorism and force
protection (AT/FP). As additional analysis is completed, and new
lessons learned are analyzed, the Navy's future budget requests will
reflect the necessary adjustments.
Readiness investments remain an integral part of the success
achieved in recent operations. OEF and OIF validated Congress' and the
Navy's recent investments in current readiness. The PB04 request
maintains current readiness funding levels necessary to support the
Navy's forward presence and surge capabilities being developed as a
part of the Fleet Response Plan (FRP).
In addition to overall fleet readiness, significant investments
have been made in weapons procurement, that contributed to the
successes of the global war on terrorism. While Tomahawk land attack
missile (TLAM) is no longer in production, funding for the follow-on
missile, Tactical Tomahawk, was increased by $835 million across the
FYDP between PB03 and PB04. The effect is an increase in production
totaling 638 missiles across the FYDP.
Both OEF and OIF validated the theory that military campaigns of
the future would require less ordnance but more precise weapons. The
shift in weapons procurement in the PB04 Navy budget reflect a trimming
down of weapons inventories and development of more capable, precise,
tri-service weapons such as the Joint Direct Attack Munition (JDAM),
Joint Standoff Weapon (JSOW) and Joint Common Missile (JCM).
To support the delivery of new weapons, the DON PB04 budget for
naval aviation includes several significant initiatives to sustain our
current force and produce a future naval aviation capability that
incorporates lessons learned from OEF and OIF. The premiere strike
fighter capability delivered from Carrier Strike Groups (CSGs) has been
right-sized in the TACAIR integration initiative jointly endorsed by
the Chief of Naval Operations (CNO) and the Commandant of the Marine
Corps (CMC). This transformational initiative set inventory objectives
for F/A-18E/F and Joint Strike Fighter, as well as set investment
objectives for significant capability improvements such as Advance
Targeting FLIR, Advanced Electronically Scanned Array (AESA) radar and
Joint Helmet Mounted Cueing System (JHMCS). These capability
investments promise a smaller, more capable force.
A focus of the lessons learned from GWOT has been in the areas of
ISR and IO, two of the mission capability packages (MCP) that comprise
the FORCENet pillar of the CNO's Sea Power 21. Funding for both ISR and
IO programs experience a substantial increase across the FYDP,
reflecting the importance the Navy has placed on improving performance
in these two areas. Several key programs have begun development or have
received necessary funding increases to meet overall Navy objectives in
these two areas. These programs include: broad area maritime
surveillance (BAMS), unmanned combat air vehicle (UCAV) and EP-3
upgrades. The chart below summarizes the increases in funding from PB03
to PB04 in the areas of ISR and IO.

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year
------------------------------------------------------ FYDP
2004 2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
PB03 ISR....................................... 160.1 457.8 188.0 187.0 N/A N/A 992.9
PB04 ISR....................................... 301.3 509.1 515.5 569.9 651.6 679.6 3,227.0
DELTA (fiscal year 2004-2007).................. +141.2 +51.3 +327.5 +382.9 ....... ....... +902.9
----------------------------------------------------------------------------------------------------------------
PB03 IO........................................ 324.4 408.9 568.4 924.2 N/A N/A 2,225.9
PB04 IO........................................ 775.8 817.6 830.8 710.9 756.5 537.8 5,529.4
DELTA (fiscal year 2004-2007).................. +451.4 +408.7 +262.4 (213.3) ....... ....... +909.2
----------------------------------------------------------------------------------------------------------------

As a result of recent global events, including the U.S.S. Cole
incident, the events of September 11, 2001, and the two recent
conflicts, the Navy has focused strongly on improving the protection of
its forces. The Navy has increased its efforts in antiterrorism and
force protection in the 2004 President's budget submission. Aggressive
programs have been funded in physical security (afloat and ashore) and
chemical and biological protection (ashore, afloat, and aviation).

In addition to the aviation investments in ISR/IO discussed above,
DON has initiated replacement for the EA-6B electronic attack
capability with the EA-18G. Investment in anti-terrorism/force
protection and mine warfare were improved with commitment to funding
the helicopter concept of operations through procurement of the MH-60R
with integrated armed helicopter capability and the MH-60S that will
field both an organic mine countermeasure and armed helicopter
capability.
The PB04 budget request has been validated by several key lessons
learned from recent operations. Throughout future budget processes, the
lessons learned will be incorporated into the analysis that supports
future budget submissions.
General Bedard. The fiscal year 2004 budget serves as a baseline
that addresses our program requirements and forward posture, to include
lessons learned prior to the budget submission. The costs incurred
associated with Operation Iraqi Freedom and global war on terrorism
support have not yet been fully identified and need to be addressed in
a future budget adjustment. In the interim, we will continue to
evaluate our lessons learned, re-validate our requirements, and make
whatever adjustments are needed to ensure that the Marine Corps remains
the Nation's premier total force in readiness.
General Schmidt. Integration is the key requirement to meeting our
current and future Air Force's expeditionary challenges. The fiscal
year 2004 budget continues to make investments prioritized to develop
our airmen, to pursue machine-to-machine interfaces, and to integrate
our air and space operations with our sister Services' operations to
create desired effects. Our integration achievements were the
foundation to the success of Operation Iraqi Freedom. Today, we are
still assessing the lessons of this operation. We hope to accommodate
some of the lessons learned in recent engagements as we plan for the
reconstitution of assets in Operation Iraqi Freedom.

SPARE PARTS

7. Senator Akaka. General Cody, I am pleased to see the Army
appears to have found the resources to address its shortfalls in spare
parts, which we knew are crucial to equipment readiness. It seems,
however, that this issue had to reach a ``crisis'' stage before it was
dealt with. In your view, why did it take the Army so long to identify
that it had severe spare parts shortages?
General Cody. The Army first identified the problem in the summer
of 2000. In the mid-1990s, the Army systemically reduced our strategic
inventories supporting all major weapon systems. This decision was made
in response to the Office of the Secretary of Defense (OSD) mandate to
reduce inventories and implement stock funding of depot level
reparables as well as force structure changes. For several years, high
weapon system readiness rates and high supply stock-availability rates
were maintained by redistribution of excess inventories and local
repair of components. However, in recent years, the combination of
increased operating tempo (OPTEMPO), aging weapon systems, and reduced
national level stocks negatively impacted weapon system readiness and
supply availability.
In early 2000, the Army logistics and financial communities started
working to develop and validate the increased requirement for spares.
The initial fiscal year 2001 requirement of $1.268 billion was to
support current readiness and OPTEMPO, ``prime the pump'' for our RECAP
program, and put spares on the shelf to sustain future contingency
operations. The Army worked internally to fund some of the sustainment
requirement and the RECAP program--we took risks on the contingency
operations stocks. In fiscal year 2002, the strategic-level requirement
to sustain current peacetime readiness continued to grow, specifically
$1.006 billion for aviation support, $320 million for ground systems as
well as a $237 million for future contingency operations. The Army
continued to work the issue internally, but this requirement was
competing with a multitude of other force structure and operational
requirements. As the global war on terrorism started to unfold, the
requirement continued to grow until the fiscal year 2003 unfinanced
requirement (UFR) reached $1.563 billion in August 2002. The Army
leadership was able to fund 91 percent of the requirement. This
provided authorization to the United States Army Materiel Command to
procure new assets and repair unserviceable ones where we did not have
enough on hand to support the increased demand. Because the Army has
long acquisition lead-times due to the complex, highly technical,
weapon system specific items that we manage, it will be 18-24 months
before the majority of stocks are delivered. Repair lines should start
producing serviceable items in 4-6 months.
The fiscal year 2003 UFR primarily supports a garrison OPTEMPO. We
have asked for an additional $408 million in funding for spares in the
current supplemental request to support OIF and might have to increase
our requirement to support the demands we are continuing to incur
during OIF. We are closely monitoring the supplies flowing into the
theater of operation. As units redeploy, we will use these assets to
the maximum extent possible to offset the UFR, but they will not fill
our total requirement. In addition, we do not know at this point how
much will be expended in the area of operations, returned to the
shelves, or be available for redistribution. The Army continues to size
the requirement in order to sustain the warfighter.

8. Senator Akaka. General Cody, why were indicators of these
problems not evident in readiness reporting?
General Cody. The Army's readiness reporting encompasses several
systems with varying degrees of detail depending upon the specific
application or functional area. For example, our unit status reporting
(USR) system provides information regarding the status of personnel,
equipment, and training for our operational forces. Specific details
regarding class nine (IX) repair parts reside in our logistics
reporting channels maintained by the Office of the Deputy Chief of
Staff for Logistics (G4). On a monthly basis, the Army's senior leaders
review key readiness indicators that draw information from these two
systems, as well as many others. The specific indicators revealing unit
level shortcomings with spare parts were not available via our current
reporting systems. In October 2002, the Army began implementing the
Strategic Readiness System (SRS) designed to capture leading measures
that trigger leadership intervention prior to performance falling below
acceptable levels. Our previous systems as mentioned above rely on
lagging measures using empirical data. The SRS will look across the
entire Army to assess for example, the distribution pipeline,
production timelines, warehouse stockage levels, and transshipment
timelines that effect availability of spare parts. When fully
implemented, the SRS will synchronize the cause and effect of
performance across the Army through the alignment and use of balanced
scorecards.

9. Senator Akaka. General Cody, what steps are being taken to
ensure that we don't end up with shortfalls in the future, which
degrade readiness, while parts are being manufactured?
General Cody. The Army has established several management oversight
mechanisms to preclude a future shortage of spares. We have a joint
logistics/financial process action group with members from the
Department of the Army and the United States Army Materiel Command
(USAMC). This group reviews and validates the requirement, works to
obtain funds, and oversees the execution of additional funding and
authorization for repair and procurement. As a result of the efforts to
support the global war on terrorism, the Office of the Deputy Chief of
Staff, G-4, in conjunction with the USAMC, G-3, established a biweekly
reporting structure that analyzes the top 25 readiness drivers for our
major weapons systems--helicopters, ground equipment, and engineer
equipment. This has allowed us to focus our attention and funding on
items that are essential to sustain readiness and the warfighter. We
report out quarterly to the Vice Chief of Staff, Army (VCSA) on
execution of the additional funding for spares. The monthly Army
strategic readiness update to the Secretary of the Army and Chief of
Staff, Army provides the current readiness posture. We are working to
include a ``spares assessment'' as part of this update.
The Army continues to be concerned about the health of our spares
inventory and its effects on readiness. Our attention is focused on
getting well. This will take a while. Our initial efforts were focused
on a peacetime, garrison environment. The successful effort to conduct
OIF has stressed our logistics system and emptied the shelves of
essential parts. As we posture ourselves to ``reset'' our equipment and
sustainment inventory to their pre-OIF levels, we will have to
undertake the job of replenishing the shelves. The requirement for
spares will be tempered by our switch to performance based logistics
and reliance on contractor support. We are currently assessing the
levels we will need and looking for resources to obtain assets. We are
working to achieve a judicious mix of spares and equipment to sustain
readiness. Our capability to sustain the warfighter remains our number
one goal.

FORCE STRUCTURE ADJUSTMENTS

10. Senator Akaka. General Schmidt, in a written response to a
question from last year's hearing, General Wald stated that
``unprecedented demands are being placed on our aircraft and people,''
and that coping with higher OPTEMPO would require the Air Force to
either to ``cut back on the number and types of missions that we do
worldwide, or increase our force structure to accommodate the new
demand.'' In your written testimony you stated that you do not need
additional manpower, but that your force structure needs to be
adjusted. Will making these changes relieve the stresses on the force,
or is the Air Force still considering reductions in its missions? If
so, which ones?
General Schmidt. The Air Force is currently transforming/maturing
itself by adjusting both the workforce and the force structure to
create 10 equally-capable Air and Space Expeditionary Forces (AEFs),
which exploits advantages in efficiencies and economies of scale.
Operations Enduring Freedom, Noble Eagle, and Iraqi Freedom, for
example, continue to validate the AEF construct. The AEF is allowing
the AF to present sustained Air and Space Expeditionary Task Forces
(AETFs) to provide combat employment capability to the Joint Force
Commander much quicker, precisely, and more lethal than in the past.
As our AEF continues to mature, the AF continues to mitigate the
``AEF stresses'' through increasing the eligibility across more airmen
for AEF taskings, and to identify and create the correct mix/balance of
job skills required for AEF operations.
We believe these measured investments will result in the long-term
stress reduction in our worldwide OPTEMPO while preserving our ability
to meet our current and future missions. As always, the U.S. Air Force,
along with our sister Services, will continue to be prepared to achieve
the national security objectives for the United States.

FLEET RESPONSE CONCEPT

11. Senator Akaka. Admiral Green, the Chief of Naval Operations has
directed that the Navy will move to a new Fleet Response Concept (FRC)
in order to enhance the Navy's surge capability. Would you give a brief
description of the FRC, including its implications for maintenance and
training?
Admiral Green. The purpose of the FRC is to ensure we are always
ready to rapidly build on the combat power of our forward deployed
forces. It is an approach to achieve and maintain a Navy ready to surge
when required. CNO tasked Commander, Fleet Forces Command to lead an
effort to develop the FRC, changing our readiness processes to
institutionalize an enhanced surge capability for our Navy. The FRC
requires both readiness and asset availability.
By the FRC, the intent is to conduct more efficient maintenance
scheduling and execution, and following maintenance, to train units to
prescribed readiness goals, achieving various phases of employability
prior to regularly scheduled deployments.

12. Senator Akaka. Admiral Green, does implementing the FRC have
any budget implications, and if so, are they reflected in the fiscal
year 2004 budget request?
Admiral Green. The FRC was developed to align within current
budgetary considerations (President Budget 2004). The FRC has now
evolved into the Fleet Response Plan (FRP) as discussed in CNO GENADMIN
222221Z May 2003. Implementation of this plan centers around a
progressive readiness concept with significant emphasis on maintaining
manning levels and properly planned and funded ship depot maintenance
periods. The FRP contains no new funding requirements. Commander Fleet
Forces Command (CFFC) is reviewing all aspects of the FRP to determine
any associated funding risk within the fiscal year 2004 budget request.

SUSTAINING READINESS

13. Senator Akaka. General Cody, Admiral Green, General Bedard, and
General Schmidt, in your written testimony, Admiral Green, you stated
that overall readiness is higher than you can ever remember it. A
number of other witnesses have made similar statements to our committee
this year, and some of you have mentioned it to me in personal
conversations as well. This is great news, and I want to make sure we
stay focused on what things we can do that would be most helpful in
ensuring that readiness stays as high as possible in the future. Can
each of you tell me your ``top three'' priorities for sustaining the
readiness of our forces?
General Cody. As outlined in my opening statement, the Army's
primary metric for resourcing and ensuring future years' readiness is
ground and air operating tempo (OPTEMPO). To this end it is essential
that we continue to maintain adequate funding in these critical
training accounts to support execution of our training strategy. It is
this strategy that prepared and trained the force we currently have in
Iraq and fighting the global war on terrorism. The post-Iraqi Freedom
Army will undoubtedly have substantial reconstitution costs to reset
our forces, repair and replace our equipment, restock our spare parts,
and replenish prepositioned stocks and munitions. Being able to do this
as quickly and efficiently as possible will be a critical factor in
sustaining our future readiness and may require substantial
supplemental funding. In addition, continuing to fund Army
Transformation to enable the Army to fully field the Interim Force and
continue to move toward the Objective Force, while sustaining the
Legacy Force, will ensure that the Army maintains its current high
readiness levels.
Admiral Green. The Navy's top three readiness priorities are as
follows:
1. Full funding of the readiness accounts (Ship Operations and
Flying Hour Program), as well as the readiness enabler accounts (ship
and aviation maintenance, aviation support equipment, air systems
support, etc.). This will ensure that personnel are properly trained,
that the systems are properly maintained, and both are ready when
needed.
2. Readiness and Range Preservation Initiative (RRPI). Encroachment
on military training and test areas has gradually increased over time
to the point where we find ourselves stretched to the limit of our
ability to implement effective training processes. While we have found
ways generally to work around encroachment in the past, the net effect
of satisfying existing regulatory requirements is ``death by a thousand
cuts,'' and DOD is increasingly forced to restrict or relocate training
and testing when encroachment affects our ranges. Both of those
alternatives degrade the readiness of U.S. military forces, and the
cumulative effect of environmental restrictions can prevent effective
training for combat. The RRPI seeks modest and narrowly focused
legislative clarification where laws are being applied beyond their
original legislative intent. These reforms strike a balance between the
Title 10 requirement of providing a combat ready force and creating a
regulatory regime for military readiness activities while maintaining
our commitment to environmental stewardship.
As it pertains to the Marine Mammal Protection Act (MMPA), the
proposal would clarify the definition of ``harassment'' to reflect the
position of the National Research Council and focus on minimizing
injury and biologically significant disruptions to behavior critical to
survival and reproduction. It also clarifies the application of the
MMPA to strictly military readiness activities when permits are
required, adds a national security exemption, and provides definitions
for the terms ``military readiness activities,'' ``combat,'' and
``combat use'' as they are used in the statute.
As it pertains to the Endangered Species Act (ESA), the legislative
proposal requests the use of Integrated Natural Resource Management
Plans (INRMPs) as a substitute for critical habitat designation under
the ESA, where the U.S. Fish and Wildlife Service (USFWS) concurs with
the INRMP. INRMPs are required for all installations by the Sikes Act,
are prepared in coordination with USFWS and State fish and wildlife
agencies, and are subject to public review and comment. They consider
an installation's natural resources holistically and provide greater
flexibility for installation commanders to manage their lands for the
benefit of both readiness and threatened and endangered species that
are present.
3. Expanding mission funding of naval shipyards. Our naval forces
returning from wartime operations will challenge our shipyard capacity.
To alleviate this, we are expanding our mission funding initiative of
naval shipyards with a proposed 2-year pilot program at the Puget Sound
Naval Shipyard (PSNSY). Also, allowing a consolidated depot maintenance
budget will help us achieve the synergistic benefits (e.g. more
efficient sharing of skilled workforce) that we anticipate from a
common funding system based on the previously executed pilot and now
permanent program at the Pearl Harbor Naval Shipyard and Intermediate
Maintenance Facility.
General Bedard. The Marine Corps' pre-conflict readiness rates were
high due to: the Corps' emphasis on current readiness--even greater
than the emphasis placed on the important goals of modernization and
transformation, stop loss/stop move, and recent congressional actions
which increased the funding available for readiness efforts. We are
grateful for Congress' support. Our top three priorities are to
maintain current readiness, reset our force, and modernize/transform
our force.
General Schmidt. Sustaining and restoring our readiness will
require years of substantial and sustained recapitalization in our
people, equipment, and infrastructure. To accomplish this the Air Force
will:
1. Continue to address personnel issues such as manning shortfalls
in critical specialties through bonuses, re-enlistment incentives, re-
training programs, and the continued use of Air Reserve component
volunteers.
2. Continue to address aging weapon system concerns. The age of
some aircraft have resulted in previously unanticipated problems on the
aircraft. Service life extensions, fleet viability, and maintenance
costs remain concerns across the Air Force. The old age of a variety of
aircraft and systems in the Air Force inventory require new solutions
such as the Lockheed Martin [LMT] F/A-22 and the lease of Boeing [BA]
767 tanker aircraft. Additionally, the Air Force has continued
commitments to improve spares management to include funding.
3. Stabilize the operations and personnel TEMPO in order to restore
our capabilities to meet future AEF requirements. It's important to
return to a predictable AEF battle rhythm for our expeditionary force,
especially for the LD/HD assets. To accomplish this the following
factors will be considered. First, provide our people needed post-
hostility time for their overall health, family matters, and
professional education opportunities. In addition, units need time to
resume training plans, repair equipment, reduce backlogs, and restock
consumables.

FORCE ENABLERS

14. Senator Akaka. General Schmidt, your statement noted that
``force enablers'', like lift and munitions, would be the biggest
inhibitors to responding to other contingencies. Are we redirecting
significant resources in the fiscal year 2004 budget request or across
the Future Years Defense Plan to relieve pressures in these areas? If
not, why not?
General Schmidt. The Department is currently looking at all force
enablers to determine how we can best invest to ensure responsiveness
to future contingencies. We will request that Congress redirect fiscal
year 2004 resources if necessary.
______

Questions Submitted by Senator Bill Nelson

SIMULATION SYSTEMS

15. Senator Bill Nelson. Dr. Mayberry and General Schwartz, we have
noted the cancellation of the Joint Simulation System (JSIMS) program
in the Department's fiscal year 2004 request. Those of us on the Armed
Services Committee who care deeply about the pace and scope of efforts
to increase joint experimentation, joint training, creation of a
standing joint operational headquarters, and validation of joint
requirements and acquisition, are troubled by this development. I am
concerned that we have abandoned this program on the threshold of its
initial operational capability. Block I of the system is supposed to be
undergoing validation testing at Joint Forces Command now. We seem to
be blithely accepting years of possible delay of a simulation system
necessary to successful joint training and experimentation. What
analysis informs this decision and provides the compelling
justification for so dramatic and comprehensive a reduction?
Dr. Mayberry and General Schwartz. The Department added significant
resources on three occasions to provide full funding for the JSIMS
program and keep it on schedule. In August 1999, $7.9 million was
reprogrammed to ensure an initial operational capability (IOC) of April
2001. In August 2000, an additional $265.5 million was allocated for
fiscal year 2002-2007 to support a rescheduled IOC of March 2002.
Several months later, during the budget review, a further $7.4 million
increase was approved for fiscal year 2001-2002, to address shortfalls
identified late in the process by the program office.
Several changes also were made to the management structure in an
attempt to improve program performance and keep development on track.
In December 1999, the program was given an ACAT-1D (Acquisition
Category 1D) designation to increase management oversight. In January
2000, the Army was directed to appoint a full-time program manager. At
the same time, the program office was instructed to produce a cost
estimate, split JSIMS development into blocks, and develop appropriate
acquisition documents. Although some of these measures were adopted,
problems persisted. By December 2002, the official IOC date had slid to
March 2005.
In addition to standard ACAT-1D oversight, there were at least four
other reviews to assist program management, two of which were led by
former Directors of Defense Research and Engineering. In December 1999,
the Senior Review Board directed the program office to reconfigure its
development plan around the Department's high-level architecture
standard. Then, in 2001, an independent panelled by Dr. Anita Jones
concluded that JSIMS needed to establish sound performance-prediction
capabilities and improve its integration with its major partners, like
the Army's Warfighter Simulation program. That same year, an audit
conducted by the Army Materiel Command concluded that current
engineering practices would not resolve performance issues within cost
and schedule constraints. Finally, in December 2002, another
independent review team, this time headed by Dr. Dolores Etter,
recommended looking externally for commercial technologies and
strategies that support scalability in order to facilitate spiral
development for future JSIMS blocks. Dr. Etter's team also recommended
an independent outside assessment of the JSIMS architecture. All of
these reviews, in addition to numerous ACAT-1D assessments, highlighted
serious concerns about the technical and performance standards for
JSIMS. The decision to conduct an analysis of alternatives (AoA) before
proceeding with further JSIMS development is consistent with the
results of these reviews.

16. Senator Bill Nelson. Dr. Mayberry and General Schwartz, what
alternatives are DOD/JFCOM considering to meet the requirement for a
simulation tool that supports joint training, joint experimentation,
and joint program evaluation?
Dr. Mayberry and General Schwartz. This question will be addressed
by the AoA and cannot be definitively answered before the study is
complete. Final guidance is now being developed, but the AoA will
likely consider the following alternatives: 1) continuing the JSIMS
program, 2) separating the joint and Service JSIMS elements and
pursuing them as independent programs, 3) modifying existing
simulations, and 4) commercial sources.

17. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
much will delivery of a joint simulation system slip based on this
decision and what risks (operational and programmatic) are associated
with such a slip?
Dr. Mayberry and General Schwartz. JFCOM did not plan to fully
replace the Joint Training Confederation with the JSIMS until the Block
III software had been delivered. Since Block III software requirements
have not yet been defined and there is no delivery schedule, any
estimates of slippage in JSIMS' delivery would only be speculative.
Because of this, the military Services and defense agencies had all
programmed funds to support legacy simulation training systems through
at least fiscal year 2008.
Current systems and the JNTC, when it is available, will meet the
Department's immediate training needs. One limitation of current
systems is the lead-time required for scenario generation, narrowing
the scope of missions the Department can rehearse on short notice. It
is unknown whether JSIMS would correct this deficiency, but it should.
The AoA is intended to be a risk-mitigating step to determine the most
cost-effective method for meeting joint and Service training
requirements. The AoA will assess risk associated with each alternative
against the JSIMS cost estimate.

18. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
will DOD/JFCOM support, and who will be responsible for, a new joint
simulation program in the fiscal year 2004 request?
Dr. Mayberry and General Schwartz. A new joint simulation is not
funded in the fiscal year 2004 budget. The Department has initiated an
AoA to identify the most cost-effective approach for meeting joint and
Service training requirements. Until the AoA is complete, we cannot say
whether a new program ultimately might be needed.

19. Senator Bill Nelson. Dr. Mayberry and General Schwartz,
Congress appropriated millions of dollars for JSIMS and its related
Service programs in fiscal year 2003. How does DOD/JFCOM propose to use
that funding now that they are all (with one exception) zeroed in the
fiscal year 2004 request and Future Years Defense Plan?
Dr. Mayberry and General Schwartz. All fiscal year 2003 funds
remained with the program to ensure delivery of Block I software in
accordance with program office estimates. The JSIMS Software Support
Facility was funded at $14 million in fiscal year 2004, using monies
originally planned for the JSIMS program office. The remaining $168.6
million in fiscal year 2004 funding proposed in the fiscal year 2003
President's budget was allocated to other priorities.

20. Senator Bill Nelson. Dr. Mayberry and General Schwartz, this
program decision memorandum potentially unhinges a valuable ``center of
gravity'' in modeling and simulation research, development, and
acquisition based upon the synergy of a tightly organized and
interdependent network of industry, academia, and military agencies
that has existed and excelled over a number of years. How will DOD/
JFCOM ensure that this network is sustained, energized, and leveraged
in fiscal year 2003 and fiscal year 2004 while alternatives to JSIMS
and its related programs are evaluated for the out years?
Dr. Mayberry and General Schwartz. The intent of the Program
Decision Memorandum (PDM) is to take delivery of Block I software at
the Joint Warfighting Center, where a software support facility will be
established to maintain JSIMS products. This action, in conjunction
with moving the hardware and cataloging documentation, will preserve
our software investment for future use, should a decision be made to
resume the program. JSIMS is only one of many modeling and simulation
programs being conducted in Orlando, Florida. While many engineers will
no longer work directly on JSIMS, their expertise will transfer readily
to these other programs, thereby keeping their modeling and simulation
skills current. Should the AoA recommend a continuation of the program,
we would seek to reassemble the best of the team and restart the
program, using the Block I software maintained at the software support
facility.

21. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
will DOD/JFCOM avoid increased costs associated with a ``new start''
program in the out years?
Dr. Mayberry and General Schwartz. The JSIMS program has a poor
cost-forecasting record, and no independent cost estimates have been
prepared for it, making it impossible to assert that any new start
would incur additional costs. It is possible that a new program may
actually be less costly. This question will be addressed by the AoA and
cannot be answered prior to the study's completion.

JOINT NATIONAL TRAINING CAPABILITY

22. Senator Bill Nelson. Dr. Mayberry and General Schwartz, what is
the current state of analysis and planning leading to creation of a
JNTC?
Dr. Mayberry. The JNTC program has an approved budget, and JFCOM is
setting up a Joint Management Office. The implementation plan, now
being drafted, will define what will be required to support JNTC
certification and accreditation. Fiscal year 2003 activities will
include establishing and testing technical support requirements,
determining opposing force capabilities, developing and testing data
collection methods, and establishing and testing the exercise-control
architecture. JFCOM is leading the planning for JNTC events in fiscal
year 2004 and beyond.
General Schwartz. U.S. Joint Force Command is making significant
progress on analysis and planning leading to the creation of a Joint
National Training Capability by October 2004. The Joint Management
Office (JMO) has been established. It has instituted a formal
requirements process with full Service participation, developed a
detailed implementation plan, and prepared personnel, facilities,
equipment, acquisition, and interim contracting plans. The JMO has
coordinated efforts to transform Service-training venues to accommodate
training in specific joint tactical tasks including joint combat air
support, joint personnel recovery, joint combat identification, and
joint fires. Plans for integrated east and west coast range complexes
and communications architectures are being developed. Initial event
planning has yielded significant operational improvement related to the
single integrated air picture (SIAP), exercise fidelity, joint context,
instrumentation, live virtual-constructive simulation, coalition
capabilities, and logistics. Site certification and event accreditation
requirements are also in development and will be implemented for
initial sites and events.

23. Senator Bill Nelson. Dr. Mayberry and General Schwartz, what
are the overarching challenges identified at this point to creation of
a JNTC?
Dr. Mayberry. The overarching challenge for the program is to
create a solution within a high-level architecture that provides for
rapid integration of live, virtual, and constructive components so that
trainees are immersed in a seamless, combat-like environment, without
realizing that some aspects are virtual or constructive.
General Schwartz. The foremost challenge is to establish
transformed training programs that preserve Service core competencies
while at the same time making needed improvements in training within a
proper joint context. This includes the need to fully identify tasks,
conditions, standards, and desired capabilities that can be measured
ranging from the tactical to strategic levels of military operations. A
second challenge is to integrate the best training capabilities and
systems of the individual Services and defense agencies promoting
improved joint training, reducing redundancies, and optimizing use of
national resources. Third is the challenge of the program to create a
solution within a higher level architecture that provides for rapid
integration of live, virtual, and constructive simulations so that
trainees are immersed in a seamless, combat-like environment such that
the training audience is unaware of artificialities.

24. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
does cancellation of the JSIMS and related Service simulation programs
contribute to the challenge or facilitate the creation of a JNTC?
Dr. Mayberry. JSIMS and JNTC are independent of each other,
although JSIMS could be used by JNTC if it met JNTC requirements.
Without JSIMS, JNTC will use legacy systems, complemented if necessary
by new systems, to meet its objectives.
General Schwartz. Our ability to achieve initial operational
capability and execute near-term JNTC activities is not impacted by the
success or failure of Joint Simulation System. These are independent
capabilities. The current Joint Training Confederation, the Millennium
Challenge 2002 model federation, tools such as the Joint Theater Level
Simulation and the Joint Conflict and Tactical Simulation, and
continuing efforts by the Services, industry, and academia to search
for and develop improved models will be sufficient to sustain the
implementation and maturation of the JNTC. The single area not fully
supported by current models or projected near-term model improvements
is rapid database builds for mission rehearsal. But, this is a future
requirement.

MOBILIZATION

25. Senator Bill Nelson. Dr. Mayberry and General Schwartz, current
and future operations in Iraq and in the global war on terrorism are
increasingly requiring mobilization of large numbers of Reserve
component forces. Mobilization of these patriotic citizen-soldiers is,
of course, a burden on thousands of families and communities
nationwide. Looking into the future, what do you think the long-term
impact of extended and frequent Reserve mobilizations will be on the
strength and readiness of the Reserve Forces?
Dr. Mayberry. On April 17, 2002, we had a total of about 220,000
Reserve component (RC) individuals and units mobilized in support of
Operations Noble Eagle/Enduring Freedom/Iraqi Freedom. This number
represents about 18 percent of the RC force of 1.2 million. Although a
small majority of these reservists have been mobilized frequently, the
Department has been effective in implementing judicious and prudent use
of RC personnel. We have tried to minimize the burden on families,
employers, and communities through a variety of support programs.
In the long run, history tells us there will be a modest, positive
readiness impact on most mobilized units and individuals--especially in
the short-term. Troops who are mobilized in a prudent and judicious
manner are personally and professionally satisfied at having
accomplished a meaningful mission. There is a higher degree of morale
and comradeship in these units and an increased appreciation for the
value of good training and maintenance. Retention improves, personnel
are better trained following a call-up, and for the most part recently
mobilized units tend to have more and better equipment. The readiness
effect of recently mobilized units and individuals needs to be
maintained during normal training periods to sustain the improvement. I
see no reason to believe this trend will not continue.
General Schwartz. While the current operations are certainly
demanding, our Reserve component (RC) forces will continue to
participate in contingencies with minimal impact to strength and
readiness. Our RCs are completely integrated into operations in Iraq
and our war against terrorism. Because we do have a substantial RC pool
to draw from we are able to support additional requirements using the
current partial mobilization authority and the use of volunteers. It is
our intent to demobilize RC forces as quickly as possible consistent
with ongoing operational requirements. We have seen no marked changes
in RC recruiting or retention over the past 12 months. It may be too
soon to tell if recent PERSTEMPO will negatively impact retention. We
are monitoring these trends closely. But, we'll certainly need the
continued support of employers and families to maintain the commitment
of our many reservists and guardsmen.

26. Senator Bill Nelson. Dr. Mayberry and General Schwartz, is the
current mobilization causing you to re-think the size, structure, and
readiness priorities of the Reserve Forces?
Dr. Mayberry. The overall size of the Reserve Force is about right
and we do not recommend any changes to end strength this time. However,
there are efforts underway within the Department to rebalance the
Active/Reserve component force mix to prevent the frequent, repeated
mobilization of the National Guard and Reserve that have occurred
during Operations Noble Eagle/Enduring Freedom/Iraqi Freedom. The
readiness priorities of the Reserve and forces continue to focus on
ensuring that our soldiers, sailors, airmen, marines, and
coastguardsmen are trained and ready to fight.
General Schwartz. There are always lessons to be learned from any
action, and of course we attempt to consider all previous actions (OIF,
ONE, OEF, etc.) when we do our planning for the future.
I am certain there are minor adjustments for the Reserve components
that should be considered based upon our observations of current
mobilizations, just as there are adjustments we should make to the
Active component to improve the total force. We do not believe,
however, that wholesale changes are required, as by all accounts we
appear to have been rather successful.
We do need to guard, however, against the ever-present temptation
to ``fight the last war,'' as the next requirement will invariably not
be a repeat of the most recent event. Hence, as we study the full
spectrum of requirements and make force recommendations to satisfy
them, we must review the mobilization process to make certain it is as
efficient as possible. We must determine what forces/specialties we
anticipate having the highest usage. We must make certain they are
readily available, Active or Reserve. If it makes sense to have a given
force type in the Reserve components, we must make certain they are
adequately funded for training so that their readiness level allows us
to immediately draw upon their skills.

BASE REALIGNMENT AND CLOSURE

27. Senator Bill Nelson. Dr. Mayberry and General Schwartz, what is
your role in the establishment of criteria, collection, and analysis of
data, and recommendations or decisions during the base realignment and
closure (BRAC) 2005 process?
Dr. Mayberry. In his November 15, 2002, memorandum to kick off the
BRAC 2005 process, ``Transformation through Base Realignment and
Closure,'' the Secretary of Defense directed the formation of two
senior groups to oversee and operate the BRAC 2005 process. The
Infrastructure Executive Council (IEC), chaired by the Deputy
Secretary, will be the policymaking and oversight body for the entire
BRAC 2005 process. The subordinate Infrastructure Steering Group (ISG),
chaired by the USD(AT&L), will oversee joint cross-Service analyses of
common business oriented functions and ensure the integration of that
process with the military department and defense agency specific
analyses of all other functions. The ISG approved the Principal Deputy
USD(P&R) as chair of the Education and Training (E&T) Joint Cross-
Service Group (JCSG). The E&T JCSG has been convened with the key
Service and Joint Staff education and training OPRs who will
participate in the consideration and recommendation of the functions
that should receive joint cross-Service analysis. I am participating in
this process within the JCSG.
General Schwartz. The BRAC process is an important effort designed
to ensure the Department maintains and operates a military basing and
supporting infrastructure posture that optimally balances training,
readiness, and presence requirements in order to meet national security
needs in the most cost-efficient manner.
To oversee and operate the BRAC 2005 process, two senior leadership
groups have been established. The Chairman of the Joint Chiefs of Staff
sits on the Infrastructure Executive Council, which will be the
policymaking and oversight body for BRAC 2005. The subordinate
Infrastructure Steering Group will oversee joint cross-Service analysis
of common business oriented functions and ensure the integration of
that process with the military departments and defense agencies. These
leadership groups will oversee the establishment of criteria,
collection, and analysis of data, and make recommendations or decisions
during the BRAC 2005 process.

28. Senator Bill Nelson. Dr. Mayberry and General Schwartz, several
admirals in the Navy have told me how much they regret losing Naval Air
Station Cecil Field in the 1995 BRAC. How will we avoid that kind of
mistake in this next round?
Dr. Mayberry. The BRAC 2005 process we are now embarking on will be
a comprehensive analysis of all military installations with the primary
goal being enhanced war fighting capability and efficiency. The
Department will do everything possible to ensure the BRAC process is
fair and objective, within a very disciplined analytical framework. All
military installations will be reviewed and all recommendations will be
based on approved, published selection criteria and a force structure
plan. As required by Public Law 107-107, military value is the primary
consideration in analyzing and making closure or realignment
recommendations. The Education & Training (E&T) Joint Cross-Service
Group (JCSG) will work to develop closure and realignment
recommendations through detailed analyses and strict adherence to BRAC
guidelines. The Infrastructure Steering Group and the Infrastructure
Executive Council will review the E&T JCSG procedures and
recommendations for consideration by the Secretary of Defense. The
independent BRAC Commission will review the SecDef's closure and
realignment recommendations (due to the Commission by May 16, 2005).
Commissioners will be nominated by the President in consultation with
the congressional leadership. Upon completion of public hearings and
deliberations, the Commission must forward its closure and realignment
recommendations to the President for approval not later than September
8, 2005. The President must approve the recommendations (on an all-or-
none basis) and forward them to Congress.
General Schwartz. The BRAC 2005 process we are now embarking on
will be a comprehensive analysis of all military installations with the
primary goal being enhanced war fighting capability and efficiency. The
Department will do everything possible to ensure the BRAC process is as
fair and objective as possible, within a very disciplined analytical
framework. All military installations will be reviewed and all
recommendations will be based on approved, published selection criteria
and a force structure plan. As required by Public Law 107-107, military
value is the primary consideration in analyzing and making closure or
realignment recommendations. The independent BRAC Commission will
review the SecDef's closure and realignment recommendations (due to the
Commission by 16 May 2005). The President in consultation with the
congressional leadership will nominate commissioners. Upon completion
of public hearings and deliberations, the Commission must forward its
closure and realignment recommendations to the President for approval
not later than 8 September 2005. The President must approve the
recommendations (on an all-or-none basis) and forward them to Congress.
I am confident this process will produce basing recommendations that
will serve us well over the long term.

29. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
will training resources be captured and evaluated through this process
to ensure that installations are accurately measured for their current
and future military value?
Dr. Mayberry. The Secretary signed out a BRAC ``kickoff' memorandum
in November 2002 that provides the analytical construct for conducting
the 2005 BRAC analyses. In this memorandum, the Secretary indicated
that a primary objective of BRAC 2005 is to examine and implement
opportunities for greater joint activity. To implement this direction,
the memorandum further divided the BRAC analyses into two categories of
functions: joint cross-Service teams will analyze the common business-
oriented support functions and the military departments will analyze
all Service-unique functions. Where the Department determines that
education and training functions are common business-oriented, they
will be reviewed and analyzed by one of these teams. The remaining
training functions will be analyzed by the responsible military
department.
General Schwartz. Public Law 107-107, which authorizes the BRAC
process, requires that military value be the primary consideration in
making closure and realignment recommendations. Installation training
resources is an important component in determining military value. The
Secretary of Defense signed out a BRAC ``kickoff'' memorandum in
November 2002 that provides the analytical construct for conducting the
2005 BRAC analyses. In this memorandum, the Secretary indicated that a
primary objective of BRAC 2005 is to examine and implement
opportunities for greater joint activity. To implement this direction,
the memorandum further divided the BRAC analyses into two categories of
functions: joint cross-Service teams will analyze the common business-
oriented support functions and the military departments will analyze
all Service-unique functions.
All installations will be considered during BRAC 2005. They will be
assessed based on enabling legislative guidelines, the force structure
plan, and approved selection criteria with military value being primary
consideration. In doing so, we will take into account the training
resources at these installations.

SPECIAL OPERATIONS

30. Senator Bill Nelson. Dr. Mayberry and General Schwartz, the
President's budget includes a significant increase in funding for
Special Operations Forces. Special Operations Forces are busier than
ever, but there are real limits to how big these forces can be without
compromising their quality. In future years, how do you see the
Department managing the training challenge of ever-increasing
operational tempo for these forces with the inherently limited size of
Special Operations units?
Dr. Mayberry. This question is equally applicable Defense-wide and
is not limited to Special Operations Forces. America's competitive
advantage of her Armed Forces is people. Those who serve--be they in
the Active, Reserve, or civilian component--are well trained and
equipped. But it is our people, quality/people, who make the difference
every day of every year. We will never compromise quality for size.
We can however mitigate risks be they operational tempo,
requirements-resource imbalances or training challenges, by adopting a
capabilities based approach to planning to deter and defeat adversaries
who will rely on surprise, deception, and asymmetric warfare to achieve
their objectives. We must, as Secretary Rumsfeld has said, maintain our
military advantages in key areas while developing new areas of military
advantages through the transformation of U.S. forces and capabilities.
This administration is committed to transformation. We will divest
ourselves of legacy forces and organizations and processes to maximize
warfighting effectiveness. As part of this transformation, Special
Operations Command will be divested of various missions, such as
routine foreign military training and civil support that can be
successfully accomplished by other elements of the U.S. Armed Forces,
agencies, or outsourced.
The Secretary's highest priority following fighting the global war
on terrorism is transforming training to better enable joint
operations. The Department's vision for transformation training is to
provide dynamic, capabilities-based training for the Department of
Defense in support of national security requirements across the full
spectrum of Service, joint, interagency, intergovernmental, and
multinational operations.
The Department is in the process of defining the requirements to
develop a training capability that provides interoperability of live,
virtual, and constructive training systems across the Department,
leading to the creation of a Joint National Training Capability
environment that meets Service, interoperability, and combatant
commander training needs.
With your continued support we will create this Joint National
Training Capability that allows for a realistic network centric,
distributed global combat joint training and mission rehearsal
capability.
General Schwartz. I agree that SOF cannot be mass-produced, and it
is the human dimension of SOF, not necessarily the hardware, which
makes U.S. Special Operations Command such a capable organization. We,
therefore, continue to wrestle with the operational tempo implications
that the war on terrorism has imposed on SOF units.
While it's true that prosecuting a major combat operation impacts
the readiness of the overall force, it is also true that nothing
prepares our forces for conflict as well as participation in real-world
operations. That said, a period of reconstitution following combat
operations will be necessary and we expect the Reserve component forces
to assume a significant role in the reconstitution process for the
foreseeable future.
This is not a new problem set for SOF commanders. SOF has always
been a low-density/high-demand commodity performing a balancing act
between operational demands, training requirements, and personal time.
SOF commanders have met this challenge, and will continue to do so,
through a combination of careful management of personnel, awareness of
current and future requirements, and individual sacrifice.
In an attempt to mitigate the burden on the SOF community, we
intend to increase numbers but will not do so at the expense of
readiness or quality of personnel, as this would result in a net loss
of capability. We will focus on retention of personnel by providing
quality-of-life, advancement opportunities, and effective family
support. Where appropriate, we will utilize the expertise of former SOF
personnel, DOD civilians, and contractors, and will carefully manage
assignment of SOF personnel outside the SOF community.
Finally, we must ensure that we do not over-commit at the expense
of our training institutions. Instructors are sometimes seen as a
convenient source of additional personnel. Cannibalizing our
schoolhouses to support operations, however, is risky as it restricts
our ability to reconstitute the force and will quickly result in
reduced readiness.

31. Senator Bill Nelson. Dr. Mayberry and General Schwartz, how
will managing this training challenge affect the global war on
terrorism in the long term?
Dr. Mayberry. As the Secretary has stated, when our Nation was
attacked on September 11, there was a great deal of pressure to put off
transformation--people cautioned, you can't fight the global war on
terrorism and simultaneously transform the Department. The opposite is
the case. The global war on terror has made transforming an even more
urgent priority. Our experience on September 11 made clear that our
adversaries are transforming the ways in which they will threaten our
people. We cannot sit still.
The leadership of the Department is deeply engaged in training
transformation. Our implementation efforts are growing significantly in
pace and intensity. Over time this effort will significantly enhance
our capability to fight the global war on terrorism.
General Schwartz. As I stated previously, nothing prepares our
troops for conflict as well as real-world operations. Experience is
perhaps the single greatest force multiplier there is. SOF units are
gaining experience with each passing day and stand prepared to meet the
full demands of Operation Iraqi Freedom and to continue to fulfill our
global commitments in the war on terror. We will manage reconstitution
of the force while satisfying our global military demands.
Maintaining this level of effort obviously presents challenges.
While our ability to generate major forces is robust, our SOF assets
will require close management and careful prioritization. We are
conducting an assessment of both SOF core and collateral missions and
capabilities required for the global war on terrorism. As we transform
the Services, it is likely that some capabilities and missions now
commonly associated with SOF could find a home in conventional forces.
We expect the skill-sets of our conventional forces to increase
dramatically as we continue to prosecute the global war on terror,
allowing them to assume increasingly difficult missions and lessening
the burden for SOF.
Additionally, the U.S. Special Operations Command and the U.S.
Marine Corps are working closely together to examine how SOF and U.S.
Marines can operate jointly to undertake a range of contingencies
previously done exclusively by SOF. Similar collaborations will further
ease demands on our special operations units and allow them to focus on
core missions.

SIMULATORS

32. Senator Bill Nelson. General Cody, Admiral Green, General
Bedard, and General Schmidt, what is your position on the cancellation
of the JSIMS program and the impact on your related Service simulation
programs?
General Cody. I do not believe the cancellation of the program will
have an impact on joint training. The fiscal year 2003 funding was
retained, so that the program manager could deliver the Block I
software to the Joint Warfighting Training Center (JWFC) for their use
to conduct Joint Task Force (JTF) component level training. This will
enable the JWFC to continue further development to support joint
training, doctrine, and experimentation. Moreover, the program decision
memorandum (PDM) directed an AoA to identify a cost effective method of
meeting future joint and Service training requirements. The impact on
the Army simulation is greater, however, because the Block I software
provides little utility for Service use. To this end, I believe it is
better for the Army to pursue its own Title 10 solution with a
capability to link with a joint simulation when it has matured.
Admiral Green. Navy supports the decision to cancel the JSIMS for
Service use. JSIMS was over budget ($12 million in fiscal year 2003),
behind schedule (over 1 year for Block I and estimates as much as 5
years for Block II), and delivering a product that does not meet all of
the requirements in the Operational Requirements Document. The impact
to the Navy is that funding to support wargaming development has been
zeroed. However, unlike the other Services, Navy training requirements
for wargaming are directed at a small audience (Battle Group/Amphibious
Ready Group Staff only) and therefore do not require the extensive
hardware and manpower to run a JSIMS scenario. Navy will reprogram
existing funds to upgrade the Enhanced Naval Wargaming System (ENWGS)
to meet emerging training requirements. Because the reprogramming is
minimal, Navy chose not to reclama the JSIMS portion of the PDM to DOD.
General Bedard. The cancellation of JSIMS will not have a
significant effect on the near term Joint National Training Center
support or simulation programs.
General Schmidt. The Air Force accepts the fiscal trade-offs that
led to the OSD PDM decision on the JSIMS program. Impacts to related
Air Force simulation programs will require funding adjustments to
maintain and improve legacy systems in current use for Service and
joint training, doctrine, and experimentation.

33. Senator Bill Nelson. General Cody, Admiral Green, General
Bedard, and General Schmidt, are you satisfied that DOD directed the
cancellation with a clear understanding of the risks and costs
associated with closing the existing program, delaying establishment of
a replacement program, and the potential loss of time and skilled
modeling and simulation development personnel?
General Cody. I can only assume that DOD had a clear understanding
of the risks and costs of terminating this program. The Army worked
very closely with them while they were drafting the PDM. We recommended
completing Block I, assessing the software, and then developing an AoA
before deciding on termination. We also strongly recommended the
Service program funding be retained regardless of the JSIMS decision so
that the Services could progress on their own toward their own Title 10
capability with the intent to link to JSIMS at a later date.
Admiral Green. Navy is satisfied that DOD made a good faith
decision on the JSIMS based on dysfunctional management structure,
overhead, and nature of the separate development environments. JSIMS
has not adhered to basic acquisition principles and shows no potential
to deliver a usable product for Service use in the near future
(certainly not within the Acquisition Program Baseline timeframe).
However, the PDM does allow for completion of Block I to address joint
training requirements. The PDM directed AoA should recommend a follow-
on program that has the ability to ``learn'' from JSIMS mistakes and
possibly deliver a better product in less time than JSIMS had projected
for Block II.
General Bedard. Simulation training support for MEF level exercises
and Joint Task Force exercises were two of eight primary objectives for
the Marine Corps participation in the JSIMS development program that
the Marine Corps would like to enhance with simulation. The JSIMS
program simulates a joint training capability that is less than the
Marine Corps' desired threshold. Therefore, further development of the
JSIMS program would not be prudent. The Marine Corps supports the
Secretary of Defense's ongoing initiative to develop and field a JNTC
for all of the reasons provided during Dr. Mayberry's testimony. In the
interim, the Marine Corps will forego simulation training in these
particular areas until the JNTC concept can be adapted to provide the
degree of automation required.
General Schmidt. We are satisfied that OSD principals understood
the risks and costs implied and that the final decision reflects the
difficult fiscal trade-offs often required among competing OSD
priorities and the mandate to remain within DOD total obligation
authority.

34. Senator Bill Nelson. General Cody, I understand that the Army
has found funds to continue development of WARSIM, but to what joint
simulation will this be connected? How will we know if WARSIM will be
compatible with the next joint simulation? Isn't this a bit of a
developmental gamble?
General Cody. The Army has not found funds to continue development
of WARSIM. The only funds currently against the program are the $15
million the Office of the Secretary of Defense restored in fiscal year
2004. We are exploring options for the next generation of constructive
simulations, and it will certainly be built to link to a joint
simulation at a later date. However, the WARSIM program lost $168
million of Army Total Obligation Authority in fiscal year 2004-2009,
and it will difficult to restore that funding in the program objective
memorandum.

35. Senator Bill Nelson. General Cody, are you satisfied that
cancellation of the JSIMS program is necessary to accelerate
establishment of a Joint National Training Capability or does it
complicate achieving such an objective?
General Cody. Cancellation of the JSIMS program should not
complicate achieving a JNTC. Constructive simulations are only a small
piece to JNTC effort and current/existing simulations should support
near term JNTC requirements until JSIMS is built to meet that
requirement.

36. Senator Bill Nelson. General Cody, what are your views on the
importance of quality modeling and simulation to joint experimentation,
joint training, joint doctrine, joint requirements development, and
joint acquisition?
General Cody. Quality modeling and simulation is indispensable to
effective joint experimentation, joint training, joint doctrine, joint
requirements development, and joint acquisition. Regrettably, a
simulation that is good for training and doctrine may not be suitable
for experimentation and requirements development. We in the Army and
DOD need the flexibility to develop the right simulations for each of
the purposes you mention.
Problems frequently arise in simulation development when we try to
apply a single modeling and simulation solution to accomplish multiple
requirements. Recent history has shown that trying to develop large,
complex simulations can be costly, difficult, and very risky. Even
federations made up of smaller simulations, such as Millennium
Challenge 2002, can grow in size to where the cost, complexity, and
risk can become excessive. We can't let the word ``joint'' delude us
into thinking that one simulation is applicable for every situation and
every Service.
The DOD must have a modeling and simulation environment available
to it that allows for multiple simulations to be quickly and
efficiently built and/or used. Critical to this type of environment is
the underlying knowledge, data, models and algorithms, and especially
the organizational agility, to rapidly assimilate these components into
a ``quality'' simulation that is most relevant to the intended use.
Ultimately, smaller overlapping simulations are likely to be more
effective and efficient than attempts to create one all-encompassing
simulation.

37. Senator Bill Nelson. General Cody, in your view, what DOD
agency should be responsible for the definition of requirements,
research, development, testing, evaluation, and procurement of a joint
simulation system?
General Cody. No single agency can address all of these tasks by
itself. A combination of established agencies working through one
overarching organization, such as Joint Forces Command (JFCOM), would
provide a unified direction and purpose. JFCOM should identify research
topics but allow established research agencies at both the Service and
Office of the Secretary of Defense level to conduct research within
their guidance. Established Service level agencies should continue
small or unique program procurement, while larger programs are managed
through a Joint Program Management office. In both cases, requirements
definition, testing, and evaluation for a joint simulation system
should be a JFCOM responsibility with Service input.

BASE REALIGNMENT AND CLOSURE

38. Senator Bill Nelson. General Cody, Admiral Green, General
Bedard, and General Schmidt, I have no doubt that the Services are well
into preparation for data collection and analysis leading up to a BRAC
recommendation in 2005. I am interested to know your views on BRAC.
What is your role within your Service or DOD in the establishment of
criteria, collection and analysis of data, and recommendations or
decisions during the BRAC 2005 process?
General Cody. I view BRAC 2005 as a great opportunity to enhance
our warfighting capability and efficiency through infrastructure
realignment. It will be a critical component of our transformation.
As the Deputy Chief of Staff, G3, I am the staff proponent for unit
activations, inactivations, relocations, and other force structure
changes, and, ultimately, the strategic stationing of Army forces. I
will provide the Army's Stationing Strategy to the Army's Basing Study
Group, and participate in the development and evaluation of
alternatives.
I am also a member of the Army's BRAC Senior Review Group, which
provides guidance to and reviews products of the BRAC 2005 study group.
Admiral Green. A successful BRAC 2005 is most important to the
Department of the Navy, to the Department of Defense, and to the
Nation. Now more than ever we need to convert excess capacity into
warfighting capability--we owe it to all Americans--particularly our
men and women in uniform--to seek every efficiency in the applications
of funds on behalf of our warfighter.
As the Deputy Chief of Naval Operations (Plans, Policy and
Operations), I do not have a direct role in any aspect of the
Department's BRAC 2005 efforts. However, my understanding is the
Department of Defense, with all of its components, will work as a team
to develop the BRAC 2005 selection criteria. The common theme will be
having military value as the primary consideration.
General Bedard. The Marine Corps supports the requirement of the
Department of Defense to reduce excess infrastructure, in order to
redirect resources to other important programs. The Marine Corps is
fully committed to participation in the BRAC process. The Department of
Defense has formed two senior groups to oversee and evaluate the
process. The Commandant of the Marine Corps serves on the
Infrastructure Executive Council and the Assistant Commandant serves on
the Infrastructure Steering Group. Marine Corps Reserve Forces are also
fully participating in the review and analysis. I will be actively
engaged in this process through periodic updates as the analysis
proceeds, and will consult as to the military value of the results or
recommendations arising from that analysis from my perspective as
Deputy Commandant, Plans, Policies, and Operations. The Secretary of
Defense has stated that all installations will be subject to review
during this analysis.
General Schmidt. Under BRAC law, the Secretary of Defense proposes
and finalizes selection criteria upon which the Services and DOD are to
base their closure and realignment recommendations. All Services will
have input into these criteria through the Infrastructure Executive
Council and Infrastructure Steering Group created by the Secretary of
Defense to oversee and operate the BRAC 2005 process.
Based upon these criteria, both DOD joint cross-Service groups and
the Services will design detailed questions to collect the information
and data necessary to analyze all required military installations on
the basis of these criteria, the DOD force-structure plan, and the
infrastructure inventory required by BRAC law. Through both DOD and
Service internal control plans, we will ensure our analysis and
recommendations are based on accurate and complete data and that the
process is properly documented and auditable. The Services have
established interdisciplinary teams to design the questions and make
recommendations through the Service Secretary to DOD, and DOD in turn
has established similar mechanisms. Under the BRAC law, however, the
final recommendations transmitted to the BRAC Commission are those of
the Secretary of Defense.

39. Senator Bill Nelson. General Cody, Admiral Green, General
Bedard, and General Schmidt, what systems are in place that give you
confidence that we will avoid a NAS Cecil Field kind of mistake in this
next round?
General Cody. I cannot comment on decisions made involving
installations belonging to other Services in previous BRAC rounds.
However, the Army intends to take full advantage of lessons learned
from previous BRAC rounds throughout our entire process. In addition,
the Army has implemented several systems that give me confidence that
we can avoid missteps in this round of BRAC. They include more
sophisticated analytical tools, a disciplined data collection/
certification process, a rigorous set of internal control procedures,
and a thorough, comprehensive review of all BRAC products by the Army's
Senior Review Group.
Admiral Green. I cannot speak to decisions made in previous BRAC
rounds however, for BRAC 2005 the law sets out a very fair selection
and review process. It requires all bases to be treated equally,
whether considered for closure or realignment in the past; all
recommendations will be based only on 20-year force structure plan,
infrastructure inventory, and published selection criteria; all data
used will be certified as accurate and complete and provided to the
Commission and Congress; and all DOD recommendations will be reviewed
by independent Commission and President.
General Bedard. The Department of Defense has studied lessons
learned from the last four rounds of BRAC. The Marine Corps is working
closely with the other Services to develop tools that will improve the
BRAC decision-making processes. One of the tools the Office of the
Secretary Defense is developing to use in BRAC analysis is the
Installation Visualization Tool (IVT), which will employ Geographical
Information Systems (GIS) to provide decisionmakers with more complete
information about installations and their environment. The Air Force
has the lead for the development of the IVT. The IVT will assist in
relating operational infrastructure, training requirements, airspace
and environmental analysis.
General Schmidt. The BRAC law prescribes a very logical progression
of rigorous and objective reports, studies, and analysis that should
culminate in Secretary of Defense recommendations for closures and
realignments that reasonably, effectively, and efficiently meet our
national defense security needs. The Department of Defense and the
Services either have or will establish and rigorously adhere to
Internal Control Plans to ensure our analysis and recommendations are
based on accurate and complete data and that the process is properly
documented and auditable. As DOD's recommendations are reviewed,
evaluated, revised, and/or approved by the BRAC Commission, the
Comptroller General's Office, the President, and ultimately by
Congress, numerous levels of checks and balances are built in to the
process.

40. Senator Bill Nelson. General Cody, Admiral Green, General
Bedard, and General Schmidt, how will your critical training
resources--land, airspace, and sea--be captured and evaluated through
this process to ensure that installations are accurately measured for
their current and future military value?
General Cody. We have well-defined training resource requirements
for our current forces and a good working template for future force
requirements. Our critical training resources will be captured and
evaluated to ensure that installations are accurately measured for
their current and future military value by implementing a process which
includes clearly defined requirements, a disciplined data collection/
certification process, a rigorous and auditable analytical process, and
a thorough post-analysis review.
Admiral Green. The law requires that published selection criteria
must ensure that military value is the primary consideration. I
anticipate that both current and potential future training resources
will be identified and considered as a part of the installation
military value assessments during the BRAC 2005 process. Additionally,
as required by the law, the selection criteria must address the
following:

- Preservation of training areas for maneuver by ground, naval,
or air forces
- Preservation of military installations in the United States
as staging areas for the use of the Armed Forces in homeland
defense missions
- Preservation of military installations throughout a diversity
of climate and terrain in the United States for training
purposes
- Consider the impact on joint warfighting, training, and
readiness
- Contingency, mobilization, and future total force
requirements at both existing and potential receiving locations
to support operations and training
- The extent and timing of potential costs and savings,
including the number of years, beginning with the date of
completion of the closure or realignment, for the savings to
exceed the costs
- The economic impact on existing communities in the vicinity
of military installations
- The ability of both the existing and potential receiving
conununities' infrastructure to support forces, missions, and
personnel
- The impact of costs related to potential environmental
restoration, waste management, and environmental compliance
activities.

General Bedard. The Department of Defense has begun to form the
structure for the Base Realignment and Closure process. The Commandant
of the Marine Corps serves on the Infrastructure Executive Council and
the Assistant Commandant serves on the Infrastructure Steering Group.
These groups will provide the executive level oversight to ensure
future requirements are fully considered. Marine Corps Reserve Forces
are also fully participating in the review and analysis. Six joint
cross-Service groups are formulating procedures for looking across the
Services for many common functions. Individual departments will review
Service unique functions. We will be working closely with the other
Services to ensure accurate data collection and analysis to determine
the optimum infrastructure and alignment to support our force
structure, weapons systems, doctrine, and tactics for how we will
operate and train for the foreseeable future. The Secretary of Defense
has stated that all installations will be subject to review during this
analysis.
General Schmidt. Until DOD's final selection criteria are proposed
and finalized in accordance with the BRAC law, we cannot provide a
definitive response. However, the BRAC law does provide that for the
BRAC 2005 process military value must be the primary consideration for
these selection criteria and DOD's recommendations. The BRAC law
further specifies that military value must include: preservation of
suitable training areas for maneuver for all forces now and in the
future; preserving military installations for training purposes
throughout a diversity of climate and terrain; impact on training; and
contingency, mobilization, and total force requirements, current and
future, at both existing and potential receiving locations to support
operations and training. Accordingly, critical training resources will,
at a minimum, be captured and analyzed in this manner.

[Whereupon, at 4:11 p.m., the subcommittee adjourned.]