[Senate Hearing 108-738]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-738

       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   on

                           H.R. 4837/S. 2674

    AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR THE 
 DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, 
                         AND FOR OTHER PURPOSES

                               __________

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                      COMMITTEE ON APPROPRIATIONS

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

                 Subcommittee on Military Construction

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

                           Professional Staff
                              Dennis Ward
                              Sean Knowles
                       Christina Evans (Minority)
                         B.G. Wright (Minority)
                            C O N T E N T S

                              ----------                              

                        Tuesday, March 30, 2004

                                                                   Page
Department of Defense:
    Office of the Secretary......................................     1
    Department of the Air Force..................................    39

                        Wednesday, April 7, 2004

Department of Defense:
    Department of the Army.......................................    57
    Department of the Navy.......................................    83


       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        TUESDAY, MARCH 30, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Kay Bailey Hutchison (chairman) 
presiding.
    Present: Senators Hutchison, Stevens, Burns, and Feinstein.

                         DEPARTMENT OF DEFENSE

                        Office of the Secretary

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


           opening statement of senator kay bailey hutchison


    Senator Hutchison. Our hearing will be called to order, and 
I am very appreciative that we could start with Mr. Dubois on 
the Military Construction Appropriations Subcommittee for the 
2005 budget request. Today we will focus on the Department of 
Defense in general, and the Air Force construction programs. 
Navy and Army to follow. I'd like to start with my statement 
and then I will turn it over to Senator Feinstein.
    This year's military construction request is up slightly 
over last year's at $9.49 billion, compared to $9.1 billion. 
Certainly this is encouraging, but it is still $1.4 billion 
below what the Department projected last year for the 2005 
fiscal year. I'm encouraged that the funding request for the 
National Guard and Reserve components, at $620 million, is a 
rise considerably from last year's request. It is still less 
than the amount enacted last year in support of the Guard and 
Reserve in our final bill, and we all know what a tremendous 
burden in the Global War on Terror our Guard and Reserve units 
are under. However, this is going in the right direction and 
we're pleased to see that.
    One item of continuing interest to the subcommittee is the 
investment of our scarce MILCON dollars in our overseas bases. 
Clearly the Department has more carefully focused its request 
for overseas construction this year, bringing it down from over 
$1 billion in its initial fiscal year 2004 request to $823 
million this year. I hope that we will be able to see the 
overseas master plan soon, so that we will have a better idea 
of what is considered to be ongoing and what is going to be 
closed.
    We're making progress toward providing a better working 
environment and better quality of life for our military 
personnel and their families. Certainly in the area of family 
housing privatization we are able to get more people in better 
housing, more quickly than we could under the traditional 
military construction approach. And I will say that we will be 
working with you on the lifting of the cap for the privatized 
housing.
    But I would ask you, Mr. Dubois, to be looking long term at 
the rise in the O&M costs that we have when there is privatized 
housing versus the initial costs, and I know there's a tradeoff 
there, but in the out years when we are providing stipends for 
off base housing for people it goes into O&M, and I'd like for 
there to be a look at whether that is--maybe after we get 
caught up if that is in our long term best interest.
    But I certainly agree with the priority that we've got to 
do better fast, and that lifting the cap on privatization is a 
way to do that.
    Let me just end my formal remarks by saying I really 
appreciate the Department's updating us so well and frequently 
on what your priorities are. Certainly on the overseas basing, 
I think you have been very forthcoming about what you're going 
to be doing. I hope we can get better information on a real 
master plan quickly, and I'd like to have a time table on that.
    But I think as compared to last year we are way ahead of 
the game. I think your focus on overseas basing is better, but 
I still want to make sure we are not wasting one dollar for the 
welcoming back of troops you will be sending back and you've 
already made that public announcement. So I thank you for the 
communication, I think it's been terrific this year. I 
appreciate it very much.
    And now I'd like to turn to my distinguished vice chairman 
and just say for the record how much I appreciate our working 
relationship. There couldn't be a closer relationship and a 
better give and take than we have had on this committee, and 
it's my hope that this lasts for a long time. Senator 
Feinstein.


                 statement of senator dianne feinstein


    Senator Feinstein. Thank you very much, Madam Chairman, and 
I'd like to echo those words, it's a very special privilege to 
have you as a friend as well as a colleague, and we have worked 
together easily and well and I too appreciate that, and it is 
going to go on. So thank you very much, and thank you for your 
leadership on this committee.
    Mr. Dubois, I want to welcome you, we look forward to 
hearing from you today. I think it's clear that it appears at 
the top line of the military construction budget request is 
that it changed very little from last year's request. However, 
last year's budget request was reduced by over 12 percent at a 
time when we were preparing for war on a major scale. The low 
request came at an unusual time and the committee had hoped to 
see a more robust request this year, in light of the military's 
ongoing war efforts.
    As our missions increase our service members deserve 
quality facilities, and their families deserve quality housing 
in which to live and work. And in fact over the past 2 years 
the requested amounts were substantially decreased. Taking a 
closer look at this request, individual accounts appear to have 
changed dramatically.
    Now, even given the Navy's ability to use land sale profits 
to assist with BRAC environmental clean up, I'm very concerned 
that the BRAC remediation request is reduced again this year. 
The overall BRAC clean up budget request has dropped 56 percent 
in the last 2 years, taking a $125 million cut this year alone. 
It was only 2 years ago when the services badly underestimated 
their environmental clean up requirements and came to the 
committee for help. And we provided that help.
    So I am hopeful that you will be willing to re-look at that 
account because the clean up needs are vast. I mean, I can say 
in California alone we can probably use the whole budget, plus. 
And that doesn't take into consideration the other 49 States.
    I would like to commend the Department for keeping its 
promise to the Reserve components to steadily increase funding 
for their infrastructure needs. Although the request for 
Reserve components is down 15 percent from last year's enacted 
amount, it is still 68 percent higher than last year's 
requested amount, so that's some good news.
    The quality of our military infrastructure impacts the 
ability of our forces, as we all well know, to train, to 
maintain their equipment, to do their jobs. Adequate 
infrastructure in terms of housing and family support 
facilities is the overriding quality of life issue for service 
members and their families. Where investment in military 
construction is needed, this committee wants to meet that need. 
But it's up to the Defense Department and to you, Mr. Dubois, 
and to the individual services to come before this committee 
and tell us what the Department needs.
    We all recognize that infrastructure is an essential 
element of readiness, it's also an easy target for cuts in the 
face of competing demands. And I think that's happened for the 
past two years and I really hope it doesn't happen again. So we 
look forward to your testimony. Thank you very much for being 
here.
    Senator Hutchison. Okay. We will have----
    Senator Stevens. Madam Chairman.
    Senator Hutchison. Oh, I'm sorry.
    Senator Stevens. Yes. Thank you. I'm invisible.
    Senator Feinstein. Not really.
    Senator Hutchison. I'm going to pay a heavy price for that. 
Mr. Chairman.


                    statement of senator ted stevens


    Senator Stevens. I just stopped by, I have another hearing, 
but I do want to echo what you said and to make a request. It's 
obvious that we're going to go into a new era now in terms of 
installations and bases, and I want to reaffirm the request 
made by the Chair to have us fully informed as to the impact of 
those plans on this subcommittee.
    Last time we went through a base closure round we found we 
had put money into bases that were listed on the base closure 
list, and at the request of the Department. I don't think that 
should happen. I think we're going into this era with both eyes 
open, and the demands, particularly for overseas relocation, 
are going to be rather extensive, as well as demands at home to 
be prepared for the relocation that's been announced.
    Some of us were briefed recently by SACEUR when we were 
visiting with him, and the extent of those relocations in 
Europe are going to be immense.
    So I would not want to be in a position we were in before 
of responding to requests for improvements of bases that we are 
going to close, or installations we're going merge. I would 
hope that we'd find some way to really program the budget out 
further than we currently have it, as far as overseas 
construction and the construction at home.
    I encourage you, Madam Chair, to make certain that we 
conserve this military construction money to the maximum extent 
possible and use it for the future--although I share the 
Senator from California's position with regard to the cost of 
base closure, installation closure, and merger from the 
environmental point of view. Those have to be factored into 
these decisions too.
    As far as I'm concerned, I do think that the worldwide 
strategy that has been discussed so far is going to have 
enormous impact on this subcommittee. I think we must be 
prepared and not get off on the wrong track again. Thank you 
very much.
    Senator Hutchison. Well, thank you, Mr. Chairman. Those are 
excellent points and in my questioning I am going to ask when 
they will start factoring into their MILCON budget request, the 
troops they've announced they're bringing home so that we can 
have a smooth transition. That's got to be a part of it.
    Senator Stevens. Well, base closure and remediation costs 
have to be part of this figure too. That's the problem.
    Senator Hutchison. That's right.
    Senator Stevens. Thank you very much.
    Senator Hutchison. That's exactly right. Well, thank you 
very much for coming. We appreciate it. Our first witness is 
Raymond Dubois, the Deputy Under Secretary of Defense for 
Installations and Environment. Mr. Dubois, your full statement 
will be a part of the record, if you could summarize. I want 
you to cover fully--you have quite a long statement, and it 
covers a lot of territory. If you can summarize, we will submit 
the full statement for the record, and then we will be able to 
ask the questions. Thank you.


                     statement of raymond f. dubois


    Mr. Dubois. Thank you, Madam Chairman, Senator Feinstein. 
The questions that you have posed in your opening statements, 
along with those of Chairman Stevens, are needless to say 
extremely important, both in terms of how we build this year's 
MILCON budget, as well as how we are looking at the out years.
    Let me take the opportunity just to briefly highlight some 
of the remarks that I've made in my written statement, because 
I think it's worth--they're worthy of emphasis. Clearly we 
believe that we have a strategy for our real property asset 
management as well as the important environmental stewardship 
obligations which we hold dearly.
    Now, I do want to thank this particular committee. As you 
know, I testify probably almost as many times as the Secretary 
of Defense himself before various committees before the House 
and the Senate. But in particular this committee has evidenced 
over the years strong support for the quality of life for our 
troops, as well as the healthy infrastructure so necessary to 
that quality of life.
    We believe that we have defined a strategy to address those 
conditions of our installations and facilities, which were 
inadequate when we came into office. Now, for many years, as 
you have pointed out, both today and in the past our facilities 
had declined. Had declined in a miserable sense due to 
competing priorities. And we can't get around that, can't get 
away from that, but it also, we think declined--those 
facilities declined due to a poor understanding of how to 
properly fund sustainment and recapitalization in particular.
    Now, we all remember that at the outset of this 
Administration, President Bush and Secretary Rumsfeld 
identified military housing as a central priority of the 
Department. We have significantly improved that housing as well 
as the military infrastructure through attention to best 
business practices and using models that we have taken from the 
private sector to improve our facilities.
    Now, full facilities sustainment is in our view the 
foundation pillar of the Department's infrastructure investment 
strategy. As you know, the Department is requesting $6.5 
billion for sustainment now, and in most respects that bill is 
not a Military Construction Appropriation per say, it comes out 
of the O&M account. But it is important to recognize that we 
are spending a considerable amount on our infrastructure and we 
are obtaining a 95 percent sustainment rate based on standard 
commercial benchmarks. 2008 is our goal to achieve full 
sustainment.
    What does full sustainment do? It prevents the 
deterioration and it does preserve the performance of the life 
of the facility, and all facilities by category have a useful 
life. Managing those sustainment costs and funding to the 
appropriate levels is in the long run less expensive than 
repairing and replacing unusable facilities.
    However, sustainment alone will not keep facilities from 
becoming obsolete. We must continue to recapitalize our 
facilities to coincide with the military mission and the needs 
of our services. The quality of our infrastructure directly 
affects their training and readiness, as you have pointed out 
in your statement.
    The Department is requesting $4.4 billion for the 
recapitalization of our facilities, which is the second pillar 
of our infrastructure investment strategy. The third pillar is 
the quality of life pillar in many respects, because if we do 
not focus on those issues we will reap the negative benefits, 
if you will, in terms of recruitment, retention, readiness, and 
morale. Now, to that end the Department is committed to 
providing quality housing. As you have pointed out, how are we 
approaching this quality housing dilemma?
    We have, one, increased the basic allowance for housing. 
Two, we have eliminated the out-of-pocket expense for off base 
housing. Three, we have increased the housing privatization 
projects, and four, we are maintaining, and with your help we 
will continue to maintain, appropriate military construction 
funding.
    We think that the Department has used privatization in a 
skillful manner to advance this goal and obtain maximum 
benefits from the Congress' appropriated levels for housing 
investment. Now, 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. And we believe our housing privatization 
efforts have now achieved unqualified success, with the 
installation commanders and service members of all ranks 
welcoming privatization efforts to revitalize their family 
housing.
    There will be at the end of this month in excess of 55,000 
military family housing units privatized, and we are continuing 
to accelerate our effort and project by the end of 2005 fiscal 
year, to have awarded over 136,000 privatized units.
    Now, it is important at this juncture I think in my opening 
remarks to reprise, if you will, your comment, Madam Chairman, 
about the issue of the so-called cap. Due to the rapid 
acceleration of the program over the last 3 years we have used 
about 70 percent of the $850 million budget authority provided 
by our original authorities for housing privatization.
    That means by the end of this calendar year we will have 
used the remaining 30 percent. We have submitted to Congress a 
legislative proposal to increase our authority by an additional 
$1 billion, that is to say to a level of $1.85 billion, 
allowing us to fully implement the President's management 
agenda to eliminate all inadequate military family housing 
through contractual privatization by the year 2007. And I thank 
you for your commitment to help us in that regard.
    Another issue that needs to be put on the table I think 
today is the importance of our access to needed test and 
training ranges, and the fact the Department over the last 
several years has asked for Congress' assistance in terms of 
mitigating the effects of encroachment in and around our 
facilities.
    No one would deny the fact that realistic live fire 
training is an enormously important aspect to our military 
readiness. But that requires substantial natural resources--
air, land, water, brown water, blue water--those natural 
resources where the military can train as they would fight. 
Those resources must replicate to the extent that we can the 
challenges, the stresses, the discomfort, physical and 
psychological, the actual conditions of combat.
    Now, as we have discussed over the last several years, 
encroachment comes from many sources, it's not just an 
environmental issue or an endangered species issue, it is also 
urban and suburban sprawl. It is also appropriate land use, or 
on the negative side, inappropriate land use in and around our 
military installations. Air space restrictions, frequency 
spectrum competition, all of these issues tend to restrict 
somehow, both in and around our installations, our training 
opportunities.
    The Department appreciates, as I indicated, the action of 
Congress in adopting several provisions from our fiscal year 
2003 and fiscal year 2004 requests, and the National Defense 
Authorization Act of those 2 years now embrace some of the 
requests that we have made. These provisions are key enablers 
of what we call range sustainability.
    And I also want to point out something that was in last 
year's bill that I think was very important because it connects 
to a request in this year's bill, and that is section 2811 of 
the 2003 Act, which allows the services, the military 
departments, to take a proactive role in developing programs to 
protect installations and ranges from urban sprawl by working 
with the States and local organizations, non-governmental 
organizations, to promote sound land use.
    The fiscal year 2005 budget request includes a new 
initiative of $20 million targeted on our new authority to 
assist in developing those partnerships with the local 
communities. The Department is very proud in this regard of our 
environmental programs at our military installations, and we're 
committed to pursuing a comprehensive environmental program. As 
you know, we have the responsibility to manage over 30 million 
acres of land. They are important to military training and 
readiness. We have completed integrated resource management 
plans, as required by the Sikes Act, at 95 percent of our 
installations.
    As you know, INRMPs, Integrated Natural Resource Management 
Plans, provide a management framework to protect threatened and 
endangered species while providing for no net loss of test and 
training opportunities.
    I think I'll stop here, Madam Chairman, and again thank you 
for this opportunity to highlight some of our initiatives that 
may come up in the questioning as it has in your opening 
statements, relative to our BRAC effort.
    The BRAC effort is extremely important. I've testified to 
this on numerous occasions, as has the Secretary, and with 
respect to both your question and that of Chairman Stevens, it 
is no doubt true that the overseas rationalization, both of 
force structure and of infrastructure, will have a tremendous 
impact on domestic BRAC.
    The Secretary I know has briefed you, and Chairman Stevens 
received a briefing I believe this week. The Secretary intends 
to finalize, he and the Chairman of the Joint Chiefs, finalize 
their decisions on these, what I call major building blocks of 
our overseas force structure and infrastructure in the May 
timeframe of this year.
    He knows that he has to do that in order to appropriately 
inform the domestic BRAC process and give the military 
departments and the joint cross service groups enough time, 
i.e. between May and June of next year, to use those decisions 
to define and design where that force structure will return, in 
terms of the base structure in the United States.
    Thank you again, Madam Chairman, and I look forward to your 
questions.
    [The statement follows:]

                Prepared Statement of Raymond F. Dubois

    Madam Chairman and distinguished members of this Subcommittee, I 
appreciate the opportunity to discuss the President's Budget request 
for fiscal year 2005 and the plan of the Department of Defense for 
improving its infrastructure and facilities. The Department is 
continuing with its efforts to transform the force structure to meet 
new security challenges and the way we do 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.
    At the outset, I want to express the Department's appreciation for 
the strong support of this Subcommittee for our initiatives. With 
regard to infrastructure, the Department has a defined strategy to 
address the condition of our installations and facilities. These issues 
are an integral component of readiness. Installations are the 
``platforms'' from which our forces successfully deploy to execute 
their diverse missions. Over many years, our facilities declined due to 
competing priorities and poor understanding of funding requirements, 
but we are significantly improving our military infrastructure through 
focused attention to best practices drawn from standard business 
models. Continuing to improve our facilities and military readiness is 
a priority of the Secretary of Defense.
    The Department currently manages nearly 600,000 buildings and 
structures with a plant replacement value of $630 billion, and over 
46,000 square miles of real estate. As you know, we have developed 
models and metrics to predict funding needs and have established goals 
and performance measurements that place the management of Defense 
infrastructure on a more data driven business basis. We accelerated our 
goal to eliminate nearly all inadequate housing from fiscal year 2010 
to 2007. By the end of fiscal year 2005, we will reduce the number of 
inadequate housing units by 66 percent (61,000) from our fiscal year 
2001 level of 180,000 inadequates. The Department's facilities 
sustainment budget funds annual maintenance, predictable repairs and 
normal component replacements. We have increased funding for facilities 
sustainment consistently since fiscal year 2002, sustaining facilities 
at an average of 89 percent, and this year's budget request raises that 
rate to 95 percent for each of the Military Services, TRICARE 
Management Activity and the Department of Defense Education Activity.
    Restoration and modernization--i.e. recapitalization--funds 
unpredictable repairs, improvements and total facility replacements. We 
have continued to improve our management of the recapitalization of the 
inventory. The budget request improves the recapitalization rate to 107 
years and we anticipate achieving our 67 year recapitalization goal in 
fiscal year 2008.
                   infrastructure investment strategy
    The Department's recent successes were made possible through 
effective management and prudent budgeting. Our investment strategy 
links the asset management plan to actual funding.
    The traditional view of the Military Construction and Family 
Housing appropriation funding requests for fiscal years 2004 and 2005 
shows a slight increase in this year's request. The Military 
Construction and Family Housing top-line is but one indicator of the 
health of our program. However, it does not represent a comprehensive 
approach to our management practices for the infrastructure as a whole.

     COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
      [President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
                                            Fiscal Year     Fiscal Year
                                           2004 Request    2005 Request
------------------------------------------------------------------------
Military Construction...................           4,574           4,877
NATO Security Investment Program........             169             166
Base Realignment and Closure............             370             246
Chemical Demilitarization...............         ( \1\ )              82
Family Housing Construction/Improvements           1,251           1,625
Family Housing Operations & Maintenance.           2,780           2,547
Homeowners Assistance...................  ..............  ..............
Family Housing Improvement Fund.........             0.3             0.3
                                         -------------------------------
      TOTAL.............................           9,144           9,460
------------------------------------------------------------------------
Note: Fiscal year 2004 Request column represents the fiscal year 2004
  Amended Budget Submission.
\1\ Chem-Demil included in Military Construction totals for fiscal year
  2004. For fiscal year 2005 Chem-Demil has a separate Treasury code.

Facilities Support Investment and Operating Expenses
    Managing our facilities assets is an integral part of asset 
management. Facilities are the ``platforms'' from which our forces 
deploy and execute their missions. The quality of our infrastructure 
directly affects training and readiness. In addition, from a purely 
financial perspective, it is more cost effective in the long term to 
fully fund the general upkeep of facilities than to allow them to 
deteriorate and replace them when they are unusable.

                SUSTAINMENT AND RECAPITALIZATION REQUEST
               [President's Budget in Millions of Dollars]
------------------------------------------------------------------------
                                            Fiscal Year     Fiscal Year
                                           2004 Request    2005 Request
------------------------------------------------------------------------
Sustainment (O&M-like \1\)..............           6,382           6,531
Restoration and Modernization (O&M-like)           1,012           1,243
Restoration and Modernization (MilCon)..           2,350           3,161
                                         -------------------------------
      TOTAL SRM.........................           9,744          10,935
------------------------------------------------------------------------
\1\ Includes O&M as well as related military personnel, host Nation, and
  working capital funds.

    Facilities sustainment, using operations and maintenance-like \1\ 
appropriations, fund the maintenance and repair activities necessary to 
keep an inventory in good working order. It includes regularly 
scheduled maintenance and major repairs or replacement of facility 
components that are expected to occur periodically throughout the life 
cycle of facilities. Sustainment prevents deterioration and preserves 
performance over the life of a facility.
---------------------------------------------------------------------------
    \1\ Includes O&M as well as related military personnel, host 
nation, and working capital funds.
---------------------------------------------------------------------------
    To forecast funding requirements for sustainment, we developed the 
Facilities Sustainment Model (FSM). FSM uses standard benchmarks drawn 
from the private and public sectors for sustainment costs by facility 
type and has been used to develop the Service budgets since fiscal year 
2002 and for several Defense Agencies beginning in fiscal year 2004.


    Full funding of sustainment is the foundation of our long-term 
facilities strategy, and we have made significant progress in achieving 
this goal. The fiscal year 2004 budget request funded sustainment at an 
average of 94 percent of the FSM benchmarks across the Services, 
TRICARE Management Activity, and the Department of Defense Education 
Activity. The fiscal year 2005 budget request of $6.5 billion improved 
this by standardizing sustainment funding at 95 percent for each of the 
Components, and we plan to achieve full sustainment in the near term.
    Restoration and modernization, together called recapitalization, 
provides resources for improving facilities and is funded with either 
operations and maintenance or military construction appropriations. 
Restoration includes repair and replacement work to restore facilities 
damaged by inadequate sustainment, excessive age, natural disaster, 
fire, accident or other causes. Modernization includes alteration of 
facilities solely to implement new or higher standards, to accommodate 
new functions, or to replace building components that typically last 
more than 50 years.
    Recapitalization is the second step in our strategy. Similar 
private sector industries replace their facilities every 50 years, on 
average. With the types of facilities in the Defense Department, 
engineering experts estimate that our facilities should have a 
replacement cycle of about 67 years on average.


    As with sustainment, we have improved the corporate 
recapitalization rate for the third straight year. The budget request 
includes funding of $4.4 billion for fiscal year 2005. The request 
improves the recapitalization rate from 136 years last year to 107. 
When we began our focused attention on this matter, the Department's 
recapitalization rate stood at 192 years. Our out-year budget plan 
would realize the target rate of 67 years in fiscal year 2008.
    Even with full sustainment and a 67-year recapitalization rate, it 
will take time to restore the readiness of our facilities from C-3 and 
C-4 status to C-2. Sustainment stops deterioration and a 67-year 
recapitalization rate stops obsolescence, but more is needed to restore 
readiness in the near term. Thus, the third step in our plan is to 
accelerate the recapitalization rate to restore existing facilities to 
at least C-2 readiness, on average, by the end of fiscal year 2010.
Improving Quality of Life
    One of our principal priorities is to support military personnel 
and their families and improve their quality of life. Our Service 
members deserve the best possible living and working conditions. At the 
outset of this Administration, the President and Secretary Rumsfeld 
identified military housing and privatization of that housing as a 
central priority for the Department. Sustaining the quality of life of 
our people is crucial to recruitment, retention, readiness and morale. 
To that end, the Department is committed to providing quality housing 
using our ongoing approach--increasing the basic allowance for housing 
and eliminating the out-of-pocket expense for off-base housing (where 
over 60 percent of our Service members live); increasing the number of, 
and accelerating the pace of, housing privatization projects; and 
maintaining military construction funding for family housing where 
necessary.
    The fiscal year 2005 budget keeps the Department on track to 
eliminate nearly all its inadequate military family housing units by 
fiscal year 2007, with complete elimination of some inadequate housing 
overseas in fiscal year 2009. The budget continues the Department's 
extensive use of privatization to advance this goal and to obtain 
maximum benefit from its housing budget.
    As I noted earlier, in January 2001, the Department had about 
180,000 inadequate family housing units (out of a total of 300,000 
housing units worldwide). At the start of fiscal year 2004, through 
traditional construction and improvement projects, housing 
privatization and demolition, we have reduced that number to roughly 
120,000. The President's fiscal year 2005 budget includes funding to 
allow us to reduce that number further--by the end of fiscal year 2005, 
we will have reduced the number of inadequate housing units to roughly 
61,000 inadequate.
    The fiscal year 2005 budget request will eliminate 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 2005 budget request 
includes necessary funding to ensure that the typical Service member 
living in the private sector, where approximately two-thirds of our 
members live, 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. The Department has skillfully used privatization to 
advance this goal and obtain maximum benefit from its housing 
investment. Our housing privatization program is crucial to providing a 
decent quality of life for our service members.
    We believe our housing privatization efforts have now achieved 
identified success, with installation commanders and Service members 
welcoming privatization efforts to revitalize their family housing. As 
of March 22, 2004, the Department has closed out awards on 29 projects, 
which include 58,503 military family housing units (a 50 percent 
increase over our privatized units as of January 2003). We project by 
the end of fiscal year 2005 DOD will privatize more than 136,000 family 
housing units
    We project 20 more privatization awards in fiscal year 2004, and 
over 25 in 2005--bringing our cumulative total end of year fiscal year 
2005 to about 136,000 units privatized. We project by the end of fiscal 
year 2007 that we will privatize over 160,000 units or more than 70 
percent of our domestic family housing.
    During fiscal year 2005, we expect several other bases to have 
their renovations and construction completed or close to completion, 
including those at Fort Carson, Colorado. 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 29 projects awarded thus far reflect an 
average leverage ratio of over 1 to 1. Tapping this demonstrated 
leveraging potential through our 29 awarded projects to date has 
permitted the Department, in partnership with the private sector, to 
provide housing for about $550 million of military construction funding 
that would otherwise have required over $6.7 billion for those awarded 
projects if the traditional military construction approach was 
utilized.
    The Department has achieved privatization successes by simplifying 
the process, accelerating project execution, and institutionalizing 
best practices in the Services deals with the private sector. Many of 
our projects require use of appropriated funds when subsidies are 
provided to the projects, especially as investments, loans and limited 
loan guarantees. The amount of such appropriated funds was limited in 
Section 2883 of Title 10, United States Code, to $850 million for 
military accompanied (family) housing and $150 million for military 
unaccompanied housing. Due to the rapid acceleration of the program 
over the last three years, we are now in position where almost 70 
percent (about $600 million) of the $850 million cap has been used. We 
project the remaining 30 percent of the cap will be used up by the 
beginning of fiscal year 2005; thus impeding the full implementation of 
the President's Management Agenda initiative to eliminate all 
inadequate military family housing by 2007. The Administration has 
requested that our budget authority for privatized family housing be 
increased by $1 Billion so that we can continue to improve housing 
options for our military families. We ask your support for this 
proposal.
    Military construction is another tool for resolving inadequate 
military housing. In fiscal year 2005, we are requesting $4.1 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--three years earlier than 
previously planned.
    We recognize that a key element in maintaining the support of the 
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. 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, following 
the Deputy Secretary's January 2003 memorandum, 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 nearly all 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.
Range Sustainment
    Another key initiative is our effort to ensure access to needed 
test and training ranges and installations to support both current and 
future requirements. This involves mitigating the effects of 
encroachment around these facilities, and posturing our test and 
training infrastructure for sustainable operations.
    Training provides our soldiers, sailors, airmen and marines the 
combat skills they need to win and return safely to their families. 
Experience has taught us that realistic training saves lives. Training, 
however, requires substantial resources; air, land and water where 
military forces can train as they would fight--replicating the 
challenges, stress, discomfort, physical and psychological conditions 
of actual combat.
    Encroachment at installations, training ranges and test sites, 
however, interferes with the ability of our military to train and 
execute their missions. Encroachment comes from many sources--
environmental, urban and suburban sprawl, airspace restrictions, and 
the frequency spectrum. Endangered species and their critical habitats 
in or near gunnery or bombing ranges also can reduce test and training 
access. As access is restricted due to encroachment, training 
opportunities for our men and women in uniform become increasingly 
limited in terms of time, scope, or realism with cumulative impact on 
military readiness.
    The Department deeply appreciates the action of Congress in 
adopting key provisions in both the fiscal year 2003 and fiscal year 
2004 National Defense Authorization Acts that were part of the 
Administration's Readiness and Range Preservation Initiative (RRPI). 
These provisions are key enablers of range sustainability. For example, 
one of the most useful provisions for countering physical encroachment 
due to incompatible development is Section 2811 of the 2003 Act. This 
provision allows the Services to take a proactive role in developing 
programs to protect installations and ranges from urban sprawl by 
working with states and non-governmental organizations to promote sound 
land use.
    To assist the Services in implementing this authority and forming 
compatible land use partnerships at the state and local level, the 
President's fiscal year 2005 Budget request includes a new initiative 
of $20 million targeted to our new authority--to assist in developing 
new policies, partnerships, and tools to assist communities and other 
interested stakeholders in executing compatible land use partnerships 
around our test and training ranges and installations. The new request 
is intended to build upon on-going efforts--innovative win/win 
partnerships with our neighbors to enhance conservation and compatible 
land use on a local and regional basis
    Last year, the National Defense Authorization Act for fiscal year 
2004 included important clarification of the Marine Mammal Protection 
Act's (MMPA) definition of harassment. This action allows the Navy to 
continue to test and train with active sonar, by clarifying regulatory 
criteria that were previously based on imprecise statutory language in 
the Act's definition of harassment. The Congress also added a national 
security exemption to the MMPA for military activity in time of 
national emergency, an exemption provided in other major environmental 
legislation that was not present in the original and reauthorized 
versions of the act. The fiscal year 2004 National Defense 
Authorization Act also authorized the use of Integrated Natural 
Resource Management Plans (INRMPs) in lieu of Critical Habitat 
designation, if approved by the Secretary of the Interior, thereby 
allowing ranges and installations to effectively manage their natural 
resources while supporting military readiness.
    Another significant environmental accomplishment is in the area of 
natural resources, where we are working to ensure continued access to 
our critical test and training ranges, supporting our readiness 
mission. The Department currently manages more than 30 million acres of 
lands which are important to military training and readiness. We have 
completed integrated natural resource management plans (INRMPs), as 
required by the Sikes Act, at 95 percent of our installations. INRMPs 
provide a management framework for our resources for no net loss of 
test and training opportunities. Legislation in The National Defense 
Authorization Act for fiscal year 2004 authorized the use of INRMPs to 
substitute for critical habitat designation under the Endangered 
Species Act, if those plans meet certain preparation and implementation 
requirements and the Secretary of the Interior determines that the DOD 
INRMP provides a benefit to the relevant species. DOD is preparing an 
INRMP strategic plan to ensure that its installations coordinate with 
all interested stakeholders, complete in a timely manner the next round 
of updates to our existing INRMPs due in 2006, and fund all required 
projects.
    Clearly, to protect our military we must also protect our all 
important test and training ranges. Substantial urban growth and other 
``encroachment'' around previously isolated ranges have strained our 
ability to conduct necessary testing and training essential to 
maintaining readiness. In response to this challenge, we are working to 
expand efforts to sustain our training mission and protect the valuable 
natural resources entrusted to our care. Both are required as we 
endeavor to ensure that our men and women in uniform get the best 
training available. Our troops deserve the best.
Improving Environmental Management
    The Department continues to be a leader in every aspect of 
environmental management. We are proud of our environmental program at 
our military installations and are committed to pursuing a 
comprehensive environmental program.

              ENVIRONMENTAL PROGRAM--SUMMARY OF REQUEST \1\
      [President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
                                            Fiscal Year     Fiscal Year
                                           2004 Request    2005 Request
------------------------------------------------------------------------
Environmental Restoration...............           1,273           1,305
BRAC Environmental \2\..................             412             322
Compliance..............................           1,603           1,665
Pollution Prevention....................             173             168
Conservation............................             153             169
Technology..............................             190             186
International...........................               3               4
                                         -------------------------------
      TOTAL.............................           3,807           3,819
------------------------------------------------------------------------
\1\ Includes operations and maintenance, procurement, RDT&E, and
  military construction funding.
\2\ Funding levels reflect total BRAC environmental requirement planned
  for execution. Funding levels are higher than the PB request (see page
  4 chart) as a portion will be financed with BRAC land sale revenues.

    In fiscal year 2005, the budget request includes $3.8 billion for 
environmental programs. This includes $1.3 billion for cleanup, $0.3 
billion for BRAC environmental, $1.6 billion for compliance; about $0.1 
billion for pollution prevention, and about $0.1 billion for 
conservation.
    By the end of fiscal year 2003, we reduced the number of new 
Federal and State Notices of Violations (NoVs) by 80 percent from the 
1992 baseline. The Department's success is due to an aggressive self 
audit program, which includes root cause analysis and corrective action 
plans. While the number of new NoVs decreased, the number of regulatory 
inspections increased by 12 percent in fiscal year 2003. Even as 
regulators are increasing their oversight, they are finding more 
installations in full compliance. In fiscal year 1994, every 100 
inspections resulted in 37 new enforcement violations. In fiscal year 
2003, every 100 inspections resulted in only 8 new enforcement 
violations.
    In calendar year 2002, we provided drinking water for over 2 
million people worldwide and less than 5 percent of the population 
received notices that the water exceeded a drinking water standard at 
some point during the year. To further protect people, assets, and 
mission, DOD is conducting vulnerability assessments and developing 
emergency response plans for all systems serving 25 consumers or more; 
far beyond the requirement in the Safe Drinking Water Act to assess 
systems serving a population greater than 3,300 persons.
    We reduced the amount of hazardous waste we dispose of by over 68 
percent since 1992, reducing the cost to manage these wastes. The 
Department diverted over 41 percent of all the solid waste generated 
from landfills to recycling; thereby avoiding over $138 million in 
landfill costs. These pollution prevention techniques continue to save 
the Department needed funds as well as reduce pollution. We increased 
the number of alternative fueled vehicles that we acquire to 77 percent 
of all non-tactical vehicles acquired, exceeding the requirement in the 
Energy Policy Act of 75 percent.
    The Department's commitment to its restoration program remains 
strong as we reduce risk and restore property for productive use by 
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 continue to 
face. Conducting environmental restoration activities at each site 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. As an example, 
instead of waiting for Federal and State regulation to determine 
cleanup standards before beginning planning for perchlorate 
restoration, in September 2003 the Department required the Military 
Components to assess the extent of perchlorate occurrence at active and 
closed installations, and Formerly Used Defense sites. We will use the 
data collected to determine priorities and funding requirements for our 
cleanup responsibilities. As soon as perchlorate standards are 
determined, the Department will be ready to request the appropriate 
funding and begin execution. In addition, the Department has invested 
$27 million to research potential health effects, environmental 
impacts, and treatment processes for perchlorate. The remediation 
technologies we are testing in several states continue to increase the 
effectiveness of treatment. We are putting ourselves in the best 
possible position to respond to any new requirement established by 
regulatory agencies.
    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 the end 
of fiscal year 2003, 83 percent of BRAC sites requiring hazardous waste 
remediation have a cleanup remedy constructed and in place, and 78 
percent have had all necessary cleanup actions completed in accordance 
with Comprehensive Environmental Response, Compensation, and Liability 
Act (CERCLA) standards.
    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 for combat. UXO 
on ranges is a result of our military preparedness training activities. 
However, we are actively developing 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.
    To address UXO problems at locations other than operational ranges, 
Formerly Used Defense Sites, some BRAC installations, and closed ranges 
on active installations--we have the Military Munitions Response 
Program (MMRP). We are currently developing goals and metrics for the 
program to track our progress to completion and finishing the 
prioritization protocol that will allow us to sequence sites by risk. 
We have an inventory of our munitions response sites, which we shared 
with the states and EPA, and have made available to the public. This 
inventory is being updated as we reconcile our list with the states. 
Even though the UXO cleanup program is in the early stages of 
development, considerable progress has been made in cleaning up MMRP 
sites at our BRAC installations and Formerly Used Defense Sites (FUDS). 
As of the end of fiscal year 2003, DOD has fulfilled its cleanup 
obligations at over 120 of the approximately 195 identified MMRP sites 
at BRAC installations, and has cleanup actions underway at 27 sites. 
These sites were identified prior to fiscal year 2001 as having UXO 
contamination and the Department has been making steady progress to 
eliminate their hazards--almost 65 percent of the BRAC MMRP inventory 
has been addressed. A similar situation can be found at FUDS sites, 
where 45 percent of the MMRP sites identified have had all cleanup 
actions completed. Over, 790 of the 1,753 FUDS sites with currently 
identified UXO contamination have been addressed, and another 36 are 
undergoing cleanup actions.
    In addition, we are developing new technologies and procedures 
through the Environmental Security Technology Certification Program and 
the Strategic Environmental Research and Development Program. Over 60 
percent of the investments in these programs focus on projects to 
sustain ranges and range operations. These, along with the Army and 
Navy's Environmental Quality Technology Programs, have helped us make 
tremendous strides for realizing our goal to reduce current and future 
environmental liability.
    Across the Department, we are actively implementing environmental 
management systems based on the ``plan-do-check-act'' framework of the 
international standard for environmental management systems (ISO 
14000). Our objective is to transform environmental management in the 
Department of Defense from an activity external to the mission to a 
systematic process that is fully integrated with mission planning and 
execution. This transformation is essential for the continued success 
of our operation at home and abroad. Our new management systems target 
reduction in our day-to-day compliance costs and long-term 
environmental liabilities by increasing environmental awareness and 
mobilizing all Defense organizations and employees to reduce 
environmental impacts through improved control of day-to-day mission 
activities. The Military Departments and Defense Logistics Agency 
reported plans to implement environmental management systems at roughly 
625 installations. Over 50 percent of these installations have 
environmental management system policies in place--the first step 
toward full scale implementation. To date, 33 installations have fully 
implemented environmental management systems.
Utilities Privatization and Energy Management
    The Department seeks to reduce its energy consumption and the 
associated costs, while improving utility system reliability and 
safety. To accomplish this, the Department of Defense is developing a 
comprehensive energy strategy that will continue to optimize utility 
management by conserving energy and water usage, improve energy 
flexibility by taking advantage of restructured energy commodity 
markets when 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 in today's high-priced market will save the Department money--
money that can be better invested in readiness, facilities sustainment, 
and quality of life. Our efforts to conserve energy are paying off; in 
fiscal year 2003 military installations reduced consumption by 1 
percent resulting in a 2.7 percent decrease in the cost of energy 
commodities from fiscal year 2002. With a 26.1 percent reduction in 
fiscal year 2003 from a 1985 baseline, the Department has, thus far, 
maintained a positive track to achieve the 2005 and 2010 facility 
energy reduction goals stipulated by Executive Order 13123.
    The comprehensive energy strategy will support the use of meters to 
manage energy usage at locations where the monitoring justifies the 
cost of installing, maintaining and reading the meter. Metering in 
itself does not save energy, however use of meters can be beneficial to 
determine accurate billing, perform diagnostic maintenance, and enhance 
energy management by establishing baselines, developing demand 
profiles, ensuring accurate measurement for reporting, and providing 
feedback to users.
    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 $4 in life-cycle savings for every dollar 
invested. The fiscal year 2005 budget contains $60 million for the 
Energy Conservation Investment Program (ECIP) to implement energy 
saving measures in our existing facilities. This is a 20 percent 
increase from the fiscal year 2004 congressionally appropriated amount 
of $50 million, partly because of the performance of the program to 
date and because of the focused management effort for continued 
success. The Department will also continue to pursue renewable energy 
technologies such as fuel cells, geo-thermal, wind, solar, and purchase 
electricity from these renewable sources when it is life-cycle cost-
effective. In fiscal year 2003 military installations used 3.2 trillion 
British Thermal Units of renewable energy, and project an increase in 
fiscal year 2004. The pursuit of renewable energy technologies is 
critical to the Department's and Nation's efforts in achieving energy 
flexibility.
    The Department has reaffirmed its preference to modernize military 
utility systems through privatization. Following on revised guidance 
signed by the Deputy Secretary of October 2002, the DOD Utilities 
Privatization Program has made solid progress. The Services have 
greatly simplified and standardized the solicitation process for 
obtaining industry proposals. The Request for Proposal templates have 
been clarified to improve industry's ability to obtain private sector 
financing and manage risks. Of 2,602 utility systems serving the DOD, 
435 systems have been privatized and 739 were already owned by other 
entities. Over 900 systems are currently under solicitation as each 
Service and the Defense Logistic Agency continue aggressive efforts to 
reach privatization decisions on all systems by September 2005.

                      BASE REALIGNMENT AND CLOSURE
    In accordance with the authorizing legislation, the Secretary 
certified on March 23, 2004, that the need exists for the closure or 
realignment of additional military installations and that the 
additional round of closures and realignments authorized for 2005 will 
result in annual net savings for each of the Military Departments, 
beginning not later than fiscal year 2011. This certification is 
contained in the report that was provided to Congress last week.
    The Secretary's certification of the need for BRAC is a direct 
result of the changed world in which we live. The conclusion that an 
additional round of BRAC is needed is shared not just by the 
Department's civilian leadership but also by the Chairman and Joint 
Chiefs. Changes in the threats we face, how we prepare for those 
threats, and changes in technology require that we reconfigure our 
force structure to most effectively and efficiently support our forces. 
Our force structure and the way we employ it is already transforming 
and this will continue. BRAC has proven to be the most effective and 
comprehensive tool to position our base structure to accommodate and 
facilitate this transformation. Therefore, an additional base 
realignment and closure (BRAC) round is essential to the Department's 
efforts to transform the Armed Forces to meet the threats to our 
national security and to execute our national strategy.
    The Secretary's certification that there is a need for BRAC also 
reflects the fact that the Department retains excess infrastructure 
capacity, even after the previous four BRAC rounds. Excess capacity 
diverts scarce resources from recapitalization. The report we have 
provided includes a ``discussion of the categories of excess 
infrastructure and infrastructure capacity'' as required by the 
legislation. Elimination of excess capacity is an important goal of 
BRAC because it is important to the Department's stewardship of the 
taxpayer's dollar and to its application of taxpayer resources to 
achieve their maximum effect. I must note, however, that the Department 
is focused on the elimination only of truly excess capacity--that which 
is not important to preserving military value. The Secretary has not 
established any quantitative capacity reduction targets for BRAC and 
the Department will not eliminate assets, even if only used marginally, 
wherever these assets are important to the preservation of the 
capabilities the Department must retain and enhance. This was a key 
consideration in the previous rounds and is even more important now.
    BRAC 2005 will be a capabilities-based analysis. The Department 
recognizes that the threats our Nation now faces are difficult or even 
impossible to forecast through conventional analysis. That realization 
compels us to review our facilities in BRAC within the context of the 
capabilities they offer instead of viewing our facilities against 
definitive requirements. Because it is critically important for the 
Department to retain the infrastructure necessary to accommodate its 
ability to ``surge'', the Department is gauging its installations 
against the range of threats faced by our Nation so that it can 
differentiate among and capitalize on those that offer needed 
capabilities, and reconfigure, realign or close those that do not. The 
previous BRAC rounds demonstrated that DOD has, in fact, focused on the 
elimination of assets that are ``reconstitutable,'' that is, available 
through construction or purchase in the private sector, while retaining 
difficult to reconstitute assets like land maneuver areas and airspace 
for training.
    The Secretary has directed that BRAC must: further transformation 
by rationalizing infrastructure to force structure; enhance joint 
capabilities by improving joint utilization; and convert waste to war 
fighting by eliminating excess capacity. I know that you share the 
Department's goal that BRAC 2005 must result in a base structure 
configured to most effectively and efficiently support the capabilities 
necessary to meet the threats of today and tomorrow. I also know that 
this Subcommittee appreciates the fact that every dollar wasted on 
unnecessary infrastructure is a dollar diverted from improving Defense 
capabilities. That is why Congress authorized BRAC 2005--it is the only 
process that uses a rigorous, objective process rooted in military 
value to rationalize the Department's infrastructure.

                               CONCLUSION
    The Department is transforming its installations and business 
practices through an asset management strategy, and we are beginning to 
see the results of that transformation. We are achieving the 
President's goal to provide quality housing for our service members and 
their families, and we have made positive progress toward our goal to 
prevent deterioration and obsolescence and to restore the lost 
readiness of our facilities. We also are transforming our environmental 
management to become outcome oriented, focusing on results. We are 
responding vigorously to existing encroachment concerns and are putting 
a long-term installation and range sustainment strategy into effect.
    The Base Realignment and Closure effort leading to the delivery of 
the Secretary's recommendations to the independent Base Closure 
Commission in May 2005 is a key means to transform our infrastructure 
to be more flexible to quickly and efficiently respond the challenges 
of the future. Together with the Global Defense Posture Review, BRAC 
2005 will make a profound contribution to transforming the Department 
by rationalizing our infrastructure with Defense strategy.
    In short--we have achieved significant accomplishments over the 
last 3 years, and we are well on our way to achieving our goals across 
the Installations and Environment Community.
    In closing, Madam Chairman, I sincerely thank you for this 
opportunity to highlight our successes and outline our plans for the 
future. I appreciate your continued support of our installations and 
environment portfolio, and I look forward to working with you as we 
transform our plans into actions.

    Senator Hutchison. Well, thank you, Mr. Secretary, let me 
just start right there with your last point and ask you again 
to clarify. First of all, apparently you're looking at a May 
deadline for the global imprint to know where we're going to be 
bringing troops home, where we're going to keep them, where 
we're going to add.
    Tell me again your time table for getting that information 
to the requisite Secretaries for the determination of where 
those troops will be deployed back.
    Mr. Dubois. Uh-huh.
    Senator Hutchison. And in conjunction with the BRAC, will 
there be plenty of overlap for the BRAC to be able to consider 
where the recommendations are for the returning troops to 
return?
    Mr. Dubois. As I indicated----
    Senator Hutchison. You said May of next year, but----
    Mr. Dubois. No, no, May of this year.
    Senator Hutchison. I was talking about----
    Mr. Dubois. May of this year would be--excuse me, I'm 
sorry. May of this year would be the time that the Secretary 
would finalize his decisions as to what force structure would 
return from overseas.
    That gives us a year to plan for where that force structure 
would go in the United States.
    Senator Hutchison. Well, what is the time table for the 
Base Closing Commission to start its deliberations in 2005?
    Mr. Dubois. The President of the United States must 
nominate, and I believe the Senate must confirm by March 17th 
of 2005, the members of the nine member commission. The 
Secretary of Defense must report to that commission no later 
than May 16th.
    Now, I would predict that as soon as the Senate confirms 
the nine members, the Secretary is going to be very close to 
making his final and formal recommendations. So the timing, 
while this President must do it no later than March, and the 
Secretary must report no later than May, I suspect that the 
report of the Secretary will come prior to that deadline of May 
16th.
    Senator Hutchison. Well, let me just try to firm that up 
and say, will you make it your goal to assure that before the 
first BRAC beginning organizational meeting that you will have 
in place the plan for where the troops will go so that can be 
part of their deliberations, as well as your own 
recommendations for what is to be closed?
    Mr. Dubois. Many of the meetings that we've had to date, 
internally at the Pentagon, of the infrastructure steering 
group, and the joint cross steering groups, and the military 
services themselves, has focused principally on process. 
Principally on how we would apply the selection criteria which 
has been published, as you know.
    The issues pertaining to specific deliberations of which 
infrastructure would be needed to accept or receive overseas 
force structure will happen beginning, as I indicated, in May 
of this year. Now, it is true that, in terms of Europe, the 
Army is facing the largest potential, potential return of force 
structure. And I know that the Army, the Vice Chief of Staff of 
the Army, the Assistant Secretary of the Army for installations 
and environment, and the Deputy Assistant Secretary of the Army 
for infrastructure issues have already begun to lay out a 
process by which if--sort of the what-if situations, where the 
Secretary and the President decide that a given force structure 
is to return, what is the implications for our analytic 
process.
    So I feel very confident that in this case, the Army has 
established a process and they are poised, if you will, to 
accept the Secretary and the President's decision on the return 
of force structure in order to insert those decisions into 
their domestic BRAC deliberations.
    Senator Hutchison. Okay. I'm taking that as a yes, it will 
be our goal to----
    Mr. Dubois. Yes, ma'am.
    Senator Hutchison [continuing]. Make sure those time tables 
meet. Okay, I'm going to finish this, and then I'm going to let 
my colleagues question. Then I do have a number of other 
questions, but I want to try to give everyone a chance.
    But again, on this overseas re-stationing, in your 
testimony you referred to the bases that will be on the 
recommendation list for being maintained, our domestic bases. 
It must have a surge capacity, because I think you rightly 
point out that we now know that we're probably going to add 
maybe 30,000 more Army troops, maybe 40 for a short period of 
time. That's a surge. Then likely they would be able to be 
winnowed back.
    My question is, how are you going to determine the keeping 
of bases with surge capacity. What are the factors that go into 
that as one of the points that you're going to have as your 
criteria for maintaining a base?
    Mr. Dubois. The issue of surge, is in our view encompassed 
in criteria number 3, under the Military Value Selection 
Criteria, and I quote, the ability to accommodate contingency, 
mobilization, future total force requirements at both existing 
and potential receiving locations to support operations and 
training.
    It is absolutely critical that in this BRAC in particular 
that the rationalization of our infrastructure, the realignment 
and in some cases the closure of infrastructure, in no way 
diminishes our capability to train. That is to say that you 
cannot get rid of impossible to reconstitute assets. And what 
falls into that category? Unrestricted airspace, maneuver 
training areas, land. These are very much in the forefront of 
the minds of those individuals in the Defense Department who 
have to wrestle with the notion of what to rationalize, what to 
realign and what not to.
    Senator Hutchison. Let me just ask you to add into your 
factors that if you're going to have surge capacity in bases, 
we're going to need to look at the traditional military housing 
construction, as opposed to the privatized housing that 
requires then the lease-back through stipends for people to be 
there.
    I would think that you'd be looking at that--if we're going 
to have the ability to house people on a quick basis off and 
on, it can't be privatized housing that has to pay leases to 
keep our commitments. It's going to have to be more of the 
traditional MILCON. So I would hope you would be considering 
that.
    Mr. Dubois. It is certainly a consideration, Madam 
Chairman. I want to point out, though, an oftentimes overlooked 
factor today. The United States Army today, has on active duty, 
in terms of active duty forces, Reserve components, Army 
National Guard, Army Reserves, almost 645,000 people. We have 
surged for Operation Enduring Freedom, and Operation Iraqi 
Freedom. Now we have surged to the battlefield. We have taken 
care of our infrastructure needs in the battlefield.
    The question is, and you have raised an important issue, 
what do we need to maintain within CONUS, within the United 
States, in terms of surge and contingencies.
    Well, we're living that right now, we're in many ways 
getting lessons learned right now, as to what kinds of 
infrastructure need to be maintained in this surge that we're 
living through. So it is something that we take into 
consideration.
    Senator Hutchison. Okay. One last question on this, and 
then I'm going to turn to my vice chairman. The budget request 
for BRAC is $246 million. But it does not reflect an additional 
$115 million of land sales which the Navy intends to obligate 
for BRAC this year. So you've basically taken about a third off 
last year's request for BRAC, but probably are trying to 
compensate for that with what the Navy expects to get in land 
sales.
    My question is, is that the case and what assurances then 
do we have that money will go for the other third of BRAC costs 
that I assume we are going to need for cleanup. And if the land 
sales result in more money, will that also accrue to the BRAC 
account?
    Mr. Dubois. Madam Chairman, the--any funds derived from 
public sale of BRAC properties must go into the BRAC 
Environmental Remediation account. It cannot be stripped away, 
stolen from or otherwise diverted. My understanding and I would 
defer to H.T. Johnson, the Secretary of the Navy for I&E, but I 
will certainly talk to him after this hearing is over.
    My understanding is a substantial amount of that money is 
already in the BRAC Environmental account, coded to the Navy. 
In other words, the BRAC Environmental account is a DOD wide 
account, but we actually have three separate accounts for each 
of the military departments. And my understanding is that much 
of that money is already sitting in that account.
    Therefore on both of your questions, can we be assured that 
monies that enter into it will be spent, the answer is yes. Can 
we be assured that the monies yet to enter into it will in 
point of fact enter into it? My understanding is that those are 
conservative estimates, on the basis of GSA's appraisal of the 
value of the land and what would happen under an auction.
    Senator Hutchison. Thank you, I will have further 
questions.
    Mr. Dubois. Yes, ma'am.
    Senator Hutchison. But I would like to give my colleagues a 
chance to pursue their interests. Senator Feinstein?
    Senator Feinstein. Thank you very much, Madam Chairman. 
Just on that subject.
    Mr. Dubois. Yes, ma'am.

                              PERCHLORATE

    Senator Feinstein. It's my understanding that the Air Force 
took a big hit and still is with respect to environmental 
cleanup, and particularly McClellan Air Force Base, a major 
problem that I'd like to talk to you a little bit about 
separately if I might. Twenty-nine States have perchlorate 
contamination. This has been a major interest of mine now for 
the last 3 years. Perchlorate is now showing up in fresh 
produce. Reports are now surfacing where produce grown in 
California, and particularly dairy products sold in Texas has 
perchlorate in it. The State has just passed its regulation of 
six parts per billion.
    In the last 2 years, in the MILCON Appropriations Report, 
we directed the Department of Defense to provide two reports to 
the Congressional Defense Committees regarding perchlorate. The 
first encompassing the activities of the Department's 
Perchlorate Steering Committee was due December 31, 2003. We 
have not received it.
    The second report which requires the Defense Department to 
identify sources of perchlorate on BRAC properties and to 
develop a plan to remediate perchlorate contamination on BRAC 
sites is due April 30th. Now, the fact that the Committee has 
not received the December report, doesn't seem to bode well for 
the April report. Can you give me the status of each report and 
let the Committee know when we can expect to receive them?
    Mr. Dubois. Yes, ma'am, on the issue of perchlorate, just 
let me say in--as an introduction. You made me extremely aware 
of the issue of perchlorate almost within months of getting 
this job 3 years ago. And quite frankly it had not been on my 
radar screen. I took your involvement and concerns very 
seriously.
    We have, we think, made some substantial investments in 
perchlorate remediation and cleanup, perchlorate detection, as 
well as the science of perchlorate health. And I can get into 
that in a minute.
    But I do want to answer specifically your questions about 
those reports. It is true that under the NDAA for fiscal year 
2004 you required the DOD to provide a report of activities on 
the Interagency Perchlorate Steering Committee by December 31, 
2003.
    My understanding was that we had discussions with your 
staff, quite frankly, Senator, to say that that was in our view 
a little bit of an unachievable deadline. Having said that, 
last--yesterday in preparation for this hearing I asked the 
question, that I presumed that you would ask and I said, all 
right, where is the report? Recognizing that we couldn't meet 
the December 31 deadline.
    It is now prepared in draft form, and we are about to send 
it to OMB. As you know, we have to go through our own OMB 
clearance process, for the interagency review before submission 
to Congress.
    This like other issues, but in particular perchlorate. As 
you know, there are a number of Federal agencies that have 
serious equities here, not the least of which is EPA. We're 
going to send it to OMB very shortly within a few days I am 
told. And how long that interagency clearance process--comment 
process takes is, as you appreciate, something that's totally 
out of my control.
    However, I am in--a week doesn't go by when I don't talk 
about perchlorates with OMB and EPA. In fact Governor Leavitt 
of EPA came over to visit with the Secretary of Defense 
recently at my request and this is one of the issues that they 
discussed. They know about your concerns, and many Americans' 
concerns.
    Senator Feinstein. And it's getting worse, Mr. Dubois. The 
contamination is spreading and the levels in many places are 
now higher, and it's permeating the food chain. And that makes 
it serious.
    Can you give me a--I mean, if--you couldn't make the 
December date, are you going to have it to us within weeks, or 
is it going to take months?
    Mr. Dubois. I would--cannot answer that question 
definitively, Senator, the only answer----
    Senator Feinstein. Well, could I get an answer from----
    Mr. Dubois. I will call OMB tomorrow, or when I get back to 
the office today and I will say, we're going to submit this 
report to you for clearance, can you give me some indication as 
to how long it might take. It's the best I can----
    Senator Feinstein. All right. How about the report due 
April 30th?
    Mr. Dubois. The report--wherein Congress required the 
Department of Defense to provide data collected from BRAC 
installations, the report is being consolidated by our lead 
executive agency, the Department of the Air Force, and we 
expect to have that report to Congress by it's due date of 
April 30, 2004.
    Senator Feinstein. April 30th, could you--I missed that.
    Mr. Dubois. The report I believe is due on April 30th.
    Senator Feinstein. April 30th.
    Mr. Dubois. And we anticipate being able to provide that 
report by April 30th.
    Senator Feinstein. Good. Good. That's some good news. Now, 
in the background--a GAO report published in December, 
recommended that DoD revise its plans, first, on the deadlines 
for completing its site inventory and initial evaluations. 
Secondly, reassess the time table proposed for completing its 
reevaluation of sites using the new risk assessment procedures, 
and third establishing interim goals.
    What I'm interested in, is what progress has been made on 
the identification of perchlorate contaminated sites, and how 
is DoD planning and prioritizing cleanup activities?
    Mr. Dubois. The Department has undertaken what we believe, 
and in no small measure because of your resolute position on 
this issue, the Department has undertaken an aggressive 
environmental sampling program wherein we require--as I say, 
the office of Secretary of Defense requires the services, the 
Military Service, to sample for perchlorate anyway--anywhere 
that there is a reasonable expectation that perchlorate may 
exist and there is--and this is critical and there is a pathway 
to a human receptor. That is to say, into drinking water. Now, 
we have invested approximately $20 million to do that through 
fiscal year 2005.
    In particular, in California, we formed an ad hoc working 
group, with the California regulatory officials, to jointly 
prioritize the sampling activities in the State. We've also 
directed that our Munitions Action Plan, which you and I have 
talked about, the Defense Planning Guidelines, that the 
Secretary signs, that components, Military Services, assess the 
hazards of off range migration of munitions constituents, 
including perchlorate, in their range assessments.
    There is, in addition to that sampling, we have invested 
approximately $25 million in the development of potential 
ground water treatment technologies for perchlorate through our 
SERDP and ESTCP programs. Now, these demonstration and 
certification treatment projects for perchlorate are in several 
key places in California, as well as in other places around the 
country. Edwards Air Force Base being one of them.
    There's another issue here. In fact, it's something that 
you brought up I think last year in this very hearing, and I 
looked into it, that is to say what are possible alternatives 
to perchlorate. It's one thing to address the perchlorate 
issues today. It's another thing to look down the road. And the 
Department of Defense has invested so far $9 million into 
possible alternatives to perchlorate.
    And finally, as you know, the Department along with EPA, 
NASA and the Department of Energy have with the Office of 
Science and Technology advisor to the President, and OMB asked 
the National Academy of Sciences to assess the science to date 
and where possible, either certify or comment on the varying 
standards quotes.
    And remember what California did recently was to publish a 
public health goal of six parts per billion. And that goal--but 
they also said we--we the State of California as well as the 
Department of Defense await the results of the National Academy 
of Science panel study to determine what is the proper 
scientific basis for contaminant limits.
    EPA and the Department of Defense and others have a 
disagreement as to what those levels are, based on scientific 
evidence. And we hope that the NAS, an objective independent 
body, will bring us to conclusion in that regard.
    Senator Feinstein. Are you aware that it is entering the 
food chain? Specifically in dairy, and lettuce?
    Mr. Dubois. I have read in--I have read in the papers that 
the--that they're finding perchlorate traces in lettuce and--
but again--
    Senator Feinstein. And dairy.
    Mr. Dubois. Dairy products.
    Senator Feinstein. And California's the largest dairy 
State. The milk goes all over the country. And the particular 
population at risk are small children, and pregnant women. And 
some of the studies have shown substantial levels in milk, 
substantial levels being over six parts per billion.
    So I'm sending out an alarm to you. I believe that the 
Department of Defense has a responsibility here and that we 
really have to get cracking and get this stuff cleaned up and 
out of our water supply.
    And I'm sorry, Madam Chairman, this has been, as you know, 
3 years now of trying to push and I'm running out of patience. 
I can tell you the concern in my State is very broad. Drinking 
wells are contaminated. Certain cities are without half to 
three-quarters of their water supply.
    Mr. Dubois. Again, Senator, if--when the State of 
California, when the Federal Government determines the maximum 
contaminant levels for perchlorate in other constituents, the 
Department of Defense intends fully to abide by--by the way, 
whichever is lower, EPA can come out with----
    Senator Feinstein. So in other words, California's 
standard, you're not going to abide by that, I recognize it's a 
goal. But that--you're not going to abide by that in the 
interim.
    Mr. Dubois. We are awaiting, as is EPA and the State of 
California, the NAS--the completion of the NAS study, which I 
have been told will be early fall of this year. But whatever 
contaminant level is lower, that is what the DoD will abide by, 
as is legally required as you know under the Safe Drinking 
Water Act.
    This is clearly an important issue, and I don't mean in 
anyway to diminish our intense focus on this and the amount of 
money that we've put behind this. We would only ask that the 
interested parties, not the least of whom are the Congress of 
the United States and Governor Schwarzenegger's staff in 
Sacramento with whom I have discussed this, let--and we all 
agree that is a determination that must be made by an 
independent body, an NAS study.
    We don't know what the contaminant level is that will 
impact varying segments of the population. It is something that 
is of importance to us.
    Senator Feinstein. Well, I've taken this as far as I 
should, at this time. But perhaps we can sit down separately, 
and I can perhaps use my other questions in the second round. 
Thank you, Madam Chairman.
    Mr. Dubois. I would like to add, if I might, Madam 
Chairman, the importance of this issue. I became seized with it 
some time ago. I searched quite frankly around the Federal 
Government for experts in water remediation and perchlorates in 
particular, water remediation in general. And I have just hired 
one of the leading experts from the Department of Interior to 
our staff at Defense and she and Alex Beeler on my right here, 
the new Environmental Deputy at the Department have this 
clearly on the top of their agenda.
    Senator Feinstein. I really appreciate that, Mr. Dubois, 
this is really serious. And I think you know that now, and 
we've really got to work fast so that those levels do not build 
up. That's one of the problems that we're finding is the 
buildup of the level of contamination. Now two States are the 
largest in terms of contamination, one is Texas, and one is 
California. So we both have a very serious interest in seeing 
that you take some aggressive steps.
    Senator Hutchison. Thank you, Senator Feinstein. Senator 
Burns.

                   STATEMENT OF SENATOR CONRAD BURNS

    Senator Burns. Thank you very much. I was interested in 
your comments today, Mr. Secretary, on the ability to train, 
especially within the Air Force. Urban sprawl yes, airspace, 
yes, spectrum, yes, and so on. And the infrastructure on the 
ground. Hang a shingle out there and put Montana on it, would 
you?
    Mr. Dubois. Yes, sir.
    Senator Burns. I've got a--I was going to bring that chart 
this morning, and I just turned everything over in my office 
trying to find it. It is a chart of 5 hours of air traffic 
activity in this country. And it illustrates that, wherever 
we've got installations where we're training both tactical and 
everything else you're out of airspace, you've got little bitty 
holes down there in the southwestern part of this country and--
which commercial uses of airspace, spectrum and this type of 
thing, and we just happen to have a lot of airspace and we've 
got spectrum, and we've got the infrastructure on the ground to 
do that kind of stuff.

                           ENVIRONMENTAL WORK

    I hope to hear your thoughts on this. And I like 40 percent 
of this appropriation in environmental work. Forty percent of 
$9 billion appropriation, and you've almost got $4 billion 
appropriated to deal with environmental issues. I'm interested 
in that because whenever we start talking about going into 
another BRAC round, how many installations are we now still in 
the process of environmental cleanup before it's ready for 
sale, or to do something else with?
    Mr. Dubois. The cost to complete is currently estimated for 
environmental remediation to the standards with the local 
redevelopment authority and the military service have agreed 
to, for BRAC properties, BRAC to date properties, but not yet 
disposed, is approximately $3.9 billion. That's a significant 
amount of money, I don't deny it.
    But it is--remember, too, that the Department of Defense 
even when we close a property, and we've disposed of the 
property, we do retain the legal liability to clean it up if 
something happens that we were not aware of. It's not like we 
push this off on the State, or we push this off on the local 
redevelopment authority or the developer who might take it 
over, or another Federal agency for that matter.
    It's an issue that we live with, and one could ask do we 
put enough money behind this every year, it is going down year, 
over year, over year.
    Senator Burns. I would just like to say that, in the past, 
the BRAC Commission has underestimated the cost of cleanup 
whenever they made their recommendations of closure or 
realignment.
    I don't want history to repeat itself because I used to 
chair this committee and I know what we had to go through when 
that happens. And sometimes I think it's good money thrown 
after bad to be honest with you, in some of these activities.
    But I just come this morning, I wanted to look at the 
housing thing, and I know that they've got more concerns than I 
have, but environmental cleanup is something that's very 
important to me. I--perchlorate is a problem to those States, 
should be looked at very seriously, and of course as we move 
down this next round of BRAC, I think we better have some 
pretty realistic figures on our obligation in the area of 
environmental remediation, once we decide to close a facility.
    And I thank you this morning for your report.
    [The statement follows:]

               Prepared Statement of Senator Conrad Burns

    Thank you for coming to brief this subcommittee on military 
construction, and for your service to our great Nation. Your work is 
critical to developing and maintaining the facilities for our soldiers, 
sailors, airmen, and marines around the world. I intend to honor our 
men and women serving and those who have made the ultimate sacrifice 
for our country by ensuring that our active, reserve, and national 
guard have the resources they need to support current and future 
requirements.
    I am encouraged to learn that our services remain strong in this 
time of extended deployments to austere and often hazardous bases 
around the world. It speaks well of the character of our airmen, who 
accept this duty, who often choose to continue their voluntary service 
to our Nation. We must ensure that we provide the resources they need 
for their installations while deployed overseas as well as here in the 
states.
    I am convinced that replacing dangerous and outdated facilities 
improves morale for our forces worldwide, contributing to better-
trained service members who can complete the mission more effectively 
and safely. Investing in facilities to support the fielding, training, 
operations, and quality of life of our forces pays great dividends in 
combat effectiveness and lives saved.
    This commitment must not end with the active forces. We will also 
continue to support essential infrastructure improvements for our 
National Guard forces, which have shouldered an increasingly 
significant role in the security of our Nation, alongside our active 
duty forces.
    While not engaged in our current operations against terrorists 
worldwide, our strategic forces remain a critical component of national 
security. I strongly encourage the investment in training and quality 
of life improvements we need to maintain the proficiency, readiness, 
and morale of these airmen, whom this Nation relies on to steward the 
strategic deterrence capability.
    I urge you to judiciously execute the efforts appropriated by this 
subcommittee. We must ensure the facilities we invest in overseas are 
aligned with our long-term defense posture, and that those investments 
in shorter-term bases are balanced against our overall posturing 
strategy.
    I have seen that the Department of Defense intends to re-align our 
forces deployed overseas, and can see the relation between the 
realignments overseas and the closures in this country. While I contend 
that it may be premature to consider closing bases in this country 
until our strategic repositioning overseas is completed, I support 
efforts to eliminate excess infrastructure where we are sure we see no 
requirement for these facilities in the future. Again, I thank you for 
being here today and look forward to the discussion this morning. Thank 
you.

    Mr. Dubois. Thank you, sir.
    Senator Hutchison. Thank you, Senator Burns. Follow-up 
questions. Housing privatization is moving obviously more of 
our military families off base. Now, in some cases I know 
privatization is being done on base. But the bottom line is the 
impact on local school districts is an issue that we also have 
to keep in mind.
    We asked for a report from the Department of Defense by 
March 15 of this year on the impact of privatization on local 
school districts. We haven't gotten that report, but I think 
again it should be very much a factor in our overall military 
budgets and our support for school districts that are in our 
military base towns. Could you look into that, and determine if 
we are going to get that report shortly?
    Mr. Dubois. Yes, ma'am, I certainly will.
    Senator Hutchison. Thank you. The Central Command 
installations. Earlier this month General Abizaid testified to 
the House Appropriations Committee that he had $531 million in 
urgent unfunded MILCON requirements in theater, plus $340 
million in MILCON which Congress has already provided. The 
conference report accompanying last year's supplemental 
appropriations bill required a report to this Committee on 
CENTCOM's master plan for facilities in its area of 
responsibility.
    General Abizaid has also said that he wants to move U.S. 
troops out of Saddam's palaces and consolidate the 44 
installations that we have in Iraq in the Baghdad area to 11. 
So I have two questions, one is: we were supposed to have a 
report again on the CENTCOM master plan due last December which 
we haven't received. When could we expect to see that?
    Secondly, how are you going to propose the MILCON for the 
consolidation that General Abizaid is suggesting that he would 
like to do?
    Mr. Dubois. The so-called CENTCOM master plan has been in 
the works for sometime, it is overdue I recognize that, Madam 
Chairman. It is a plan that I'm not--I'm not directly 
responsible for.
    However, the--the Undersecretary of Defense for Policy, the 
Joint Chiefs, or the Joint Staff, OSD installations and 
Enviro--my portfolio, and General Abizaid's command all hold a 
piece of this report, and we owe it to you. Needless to say it 
has been somewhat difficult given the situation, the emerging--
the evolving situation in Iraq in particular as to what kinds 
of infrastructure was going to be needed, and for how long.

                               O&M BUDGET

    I read recently a remark by a brigadier general out there 
that unfortunately he used the term enduring, which has meaning 
to you and me and apparently it has a different meaning to the 
brigadier general. This also pertains to the issue that has 
been discussed between Congress and the Executive Branch on 
contingency construction. And what parts of--so called 
contingency construction ought to be in the military 
construction budget and what parts are legitimately an 
emergency compelling need now. And therefore, in the O&M 
budget.
    As you know, the Comptroller of the Department, Dr. 
Zakheim, laid out some pretty strict guidelines when the 
Congress pointed out that certain O&M dollars were being spent 
on arguably, and I underline that word, installations that were 
for a longer term use than a short term use. And I've been to 
Iraq, I've actually spent the night in a palace, I've also 
spent the night in a tent, with the troops. I am not certain 
quite frankly exactly where our installations are going to end 
up in Iraq, it is as you pointed out a continuing--as I pointed 
out a continuing discussion.
    The important thing that we owe you, it seems to me, that 
General Abizaid, and the Secretary of Defense owe you is, if we 
predict that we're going to remain in Iraq for a period of 
time, 2, 3 years, with a substantial level of infrastructure, 
what does that mean in terms of the kind of infrastructure 
we're going to need.
    Now, it gets back to what's temporary and what's not 
temporary. I don't think anyone would argue with the fact that 
if we build something that clearly has a life for the next year 
or two, that's temporary. Should that then be a military 
construction appropriation? If we can predict it, and in place 
certain, I would agree with you that it ought to come before 
this committee.
    When General Abizaid, however, says, I've got $500-plus 
million of immediate construction requirements, new--repairing 
runways, or laying concrete slabs for field hospitals. I think 
that one has to conclude that that's probably a construction, 
or contingency construction requirement that he legitimately 
can pull from the O&M accounts of the services. I don't know 
how we end off on this.
    I do know this, however. That Dr. Zakheim has been very 
clear, that when the combat commander, in this case General 
Abizaid, can predictably state I need the following 
infrastructure for the foreseeable future, something in excess 
of several years, then we've got to--we have the obligation to 
come back to the MILCON committees.
    But there is also probably a substantial amount of 
contingency construction. I need it today. It's temporary, I 
won't need it 3 years from now, that's probably an O&M related 
matter. But it is a matter of discussion between your staff and 
my staff.
    Senator Hutchison. Well, you're talking about a significant 
portion of overseas MILCON budgeting. I for one favor temporary 
as long as we can do it so that we have lower costs, and can 
reuse much of that temporary equipment. On the other hand, we 
also need some way to budget rather than just supplemental and 
emergency appropriations.
    So we're looking at a huge number there, and the sooner you 
can get us something that we can plan with the better, because 
that would be a mighty big supplemental if that's the way you 
were going to go, which I really don't think is as responsible.
    Mr. Dubois. Yes, ma'am.
    Senator Hutchison. On sustainment. Your testimony says and 
you said that you're going to fund at a 95 percent rate. 
However, some of the services are indicating that a significant 
amount of those funds are going to be diverted from facility 
sustainment to base operation support and that sustainment will 
be significantly lower.
    Now, I think--your priority is exactly right, on 
sustainment. I see us tearing down buildings and building new 
ones when just basic maintenance would have made these 
buildings last a longer time. As you know, we're in old 
buildings all over our government, and I think we should be in 
old buildings longer than just tearing things down and 
rebuilding them when they're perfectly good buildings. So I 
like your priority. However, is it realistic?
    Mr. Dubois. When the Army established the Installation 
Management Agency, and the Navy has a similar agency, it 
recognized the fact that sustainment dollars are often stolen. 
Let's face it. Diverted.
    Senator Hutchison. Sure.
    Mr. Dubois. To use another term, a nicer term, in order to 
give appropriate visibility into how sustainment dollars are 
budgeted, and how they're actually spent, the Army and the Navy 
took this management action. Air Force in a similar fashion 
watches it carefully but I don't defend taking dollars out of 
that account and using them for other things.
    But when it comes to base operating services, when you have 
the notion that I've got a roof that just started leaking, and 
I've got so many dollars to sustain the infrastructure on my 
installation, and I'm the installation commander, I've got to 
use the dollars where they're immediate--the immediate need is 
required.
    Now, interestingly enough, I am the installation commander 
of a place called the Pentagon Reservation, a 280-acre campus 
if you will. A building that has in excess of 6 million square 
feet. We are re-capitalizing the Pentagon today, 60 plus years 
after it was originally built. It was reasonably well 
maintained over those years.
    But what has happened? The building itself as the national 
command center of the United States military has become 
obsolete, in terms of electronics, in terms of computers, in 
terms of communications, and in terms of how best to use that 
space. That's an example of why sustainment is important but 
recapitalization is also important.
    In any event, I do watch, and continue to watch carefully, 
as do my three colleagues in the Military Departments, the 
three assistant service secretaries for I&E, how those dollars 
are being spent well.
    Senator Hutchison. Well, I thank you, and I would hope that 
your services would look at the fact that you're operating out 
of a 60 year old building and you're going to upgrade it rather 
than tearing it down and starting all over. I think that could 
be well used in the Services as well.

                       SPECIAL OPERATIONS FORCES

    Last question, for me, and this will be my final question. 
Special Operations Forces. Our staff has been visiting several 
of the facilities this year, and found them overflowing with 
equipment, seriously short on space, and yet with all of the 
added requirements and the proposals to add more in Special 
Operations Forces, there doesn't seem to be anything in the 
budget that indicates you're asking for military construction 
to house the added needs. Are you addressing this segment, or--
--
    Mr. Dubois. Let me address--I'm sorry.
    Senator Hutchison [continuing]. Do you have plans that we 
don't see? How are you going to meet these demands?
    Mr. Dubois. The Special Operations Forces worldwide are a 
special focus of the Secretary's integrated global presence and 
basing strategy work.
    As a matter of fact, this very issue, not just where SOF 
Forces are positioned, but how to appropriately support them in 
terms of infrastructure has been teed up by--in particular, 
Admiral Fargo in the Pacific Command, and General Jones in the 
European Command. I've been present at meetings with those two 
gentlemen and the Secretary of Defense, it is--it always comes 
up in no small measure because of some of the things, and some 
of the observations that your staff has made, as well as I have 
made in my travels around the world to now in excess of 100--
nearly 120 installations some of which are the SOF 
installations.
    It is a concern, we believe, that the SOF infrastructure 
needs to be rationalized and realigned with the SOF Force 
presence.
    And again, if we're going to bring back some of that SOF 
Force structure to the United States, we want to make sure that 
we've made the appropriate investments--military construction 
investments in bases in the United States to accept and receive 
it.
    It's also true about overseas, we're looking at 
consolidation. Those small bases that your staff and I have 
gone to look at are crowded and they are--and we're trying to 
figure out does this make the most sense, is this the best 
expenditure of our dollars, both MILCON and O&M dollars. We 
have kind of concluded that it probably isn't and that's why 
it's been put on the table with respect to this global 
presence, and this global basing study.
    Senator Hutchison. Okay. Well, we need to address that, and 
provide for it if in fact it's as bad as we think it is.
    Mr. Dubois. Uh-huh.
    Senator Hutchison. Well, thank you very much. Senator 
Feinstein.
    Senator Feinstein. Thanks very much, Madam Chairman. While 
you were speaking about the CENTCOM request I was reading 
General Abizaid's testimony to the House MILCON Committee, 
which he said and I quote, ``CENTCOM has prioritized another 44 
projects at an estimated cost of $531 million, in urgent and 
unfunded contingency construction requirements. We submitted 
these requests to the Joint Staff in January 2004, we expect 
that other requirements will emerge due to changes in the 
situation, new missions and the evolution of our basing 
strategy.''
    And so he's saying that there will be additional ones, and 
this $531 million appears nowhere. Now you say you'll take it 
out of O&M in the Defense budget, in other places, is that 
correct?
    Mr. Dubois. Well, when a combat commander such as General 
Abizaid comes to the Secretary of Defense and the Joint Chiefs 
and the Joint Staff with a request in January, clearly it 
couldn't have entered into our 2005 budget request. The extent 
to which these projects are prioritized by CENTCOM, and yet to 
be prioritized, and I have to underline this, yet to be 
prioritized by the Military Services, there is a shared 
responsibility overseas for installations and infrastructure, 
it is not entirely the combat commander's priorities.
    Senator Feinstein. So you're saying, and I don't want you 
to spend a lot of time on this.
    Mr. Dubois. Yes, ma'am.
    Senator Feinstein. But you're saying it will not be in the 
O&M of the Defense budget this year, is that correct?
    Mr. Dubois. I see----
    Senator Feinstein. It means we leave it for another 
supplemental?
    Mr. Dubois. I suspect that some will, but there will be the 
question--the question is on the table, will there be a 
supplemental and if so, when? I think the Secretary of Defense 
has indicated that he believes because of the uncertainties of 
OIF and OEF that there will be a supplemental. The question is 
timing, as you know, and the question is size.
    We're dealing with a set of uncertainties. Abizaid 
himself--General Abizaid, while he comes in with his wish list, 
that wish list has already been adjusted by virtue of what's 
happened in the last 60 to 70 days.
    Senator Feinstein. Well, this was his testimony as of March 
3rd, of this year, before the House MILCON Committee, it 
appears on page 40 of the----
    Mr. Dubois. Yes, ma'am, I'm aware of it.
    Senator Feinstein. Well, I think one of the problems that I 
have, is when you can include projects in the budget, they're 
not there, and therefore the cost of the war has essentially 
been taken up by a supplemental appropriation which I find not 
the most optimum situation.

                             EUROPEAN BASES

    But let me go into the issue of our European bases. The 
request includes $428 million for MILCON in Europe and I think 
it's based on the assumption that several existing bases 
Grafenwoehr, Ramstein, Spangdahlem, Vicenza, Aviano, 
Lakenheath, and Mildenhall will be enduring bases.
    So my question is, has a final decision on the future of 
these bases been made, and has the Secretary of Defense 
designated these specific bases to be enduring installations?
    Mr. Dubois. I'm not sure that the Secretary has actually 
stated it in such definitive terms, Senator, but let me say on 
his behalf that the military construction requests for those 
European bases that you mentioned in our view reflect critical 
military requirements. And yes, we believe those bases are 
enduring in the sense that they may not--the force structure on 
those bases today may not be--the same force structure on those 
bases today, may not be the same force structure on those bases 
in a year or two or three.
    But clearly bases like Ramstein, bases like Vicenza, bases 
like Sigonella, bases like Rota in Spain, are bases that are in 
our plan for the future.
    Senator Feinstein. Okay. So the intent is to make them 
enduring bases. Has the President approved the designation of 
these bases as enduring installations?
    Mr. Dubois. I'll have to just say I don't know whether the 
President has used the term enduring. All I know is that the 
Secretary in his discussions with me and my understanding is 
with the President, although the final, final decision has not 
been made, clearly has set aside, places as I mentioned like 
Ramstein, that you mentioned Grafenwoehr, as places where we 
will remain, we the United States Military will remain. I don't 
know whether the President's----
    Senator Feinstein. So the answer is no, he has not approved 
the designation at this point?
    Mr. Dubois. I would have to say you're correct in that 
regard.
    Senator Feinstein. Okay. Has the Defense Department 
calculated the overall cost of the proposed overseas basing 
realignment and when will you have a comprehensive cost 
estimate for the Congress?
    Mr. Dubois. The--we have looked at various alternatives 
should the Secretary and the President decide that they'll 
bring back, shall we say force package A, what would be the 
cost to not just bring it back, but to build to bring it back. 
We're looking at various alternatives in this regard.
    But as it is the case with BRAC, domestic BRAC, there must 
be an upfront investment in building--military construction 
investment in building facilities at the receiving locations. 
We as you know, are very forthright in what we estimate that 
cost to be. But we also are forthright in saying the savings 
derived from that BRAC adjustment, realignment, and closure 
will also in our view--the estimates, we have made those 
estimates too.
    Senator Feinstein. Could you give us the cost estimate, you 
said you're very forthright in those cost estimates.
    Mr. Dubois. When we--yes, ma'am.
    Senator Feinstein. What is the cost estimate of the 
overseas base----
    Mr. Dubois. I have not finished that calculation at this 
time. Now, it is--please remember it is dependent upon what 
decisions the Secretary and President ultimately make. If they 
say bring back one division, that has a cost estimate. If they 
say bring back another division that has another cost estimate. 
If they say bring back an F-16 squadron, that has a cost 
estimate.
    We are building--I use the term building blocks. We are 
trying to assess the individual building block estimates so 
that when the Secretary and the President make those final 
determinations, which as I indicated I anticipate to be in May, 
we will be able to bring to you those cost estimates.
    Senator Feinstein. As you know, we spent a lot of time last 
year on these European bases, and Grafenwoehr and Ramstein and 
Vilseck, and Aviano there new ones added this year, but you're 
asking essentially for $218,553,000 for the German bases, and 
we don't know whether they're going to be enduring bases. And 
this is the second year now that we still don't know. And yet 
we'll most likely appropriate the money, and I guess the 
problem is, do we appropriate the money and then the plans 
change?
    Mr. Dubois. I think that the discussion that we've had over 
certainly beginning last year--and what I--I don't want to 
mislead this Subcommittee in any way shape or form. My view is 
the Secretary has indicated that these bases which we have 
asked for a military construction appropriation are enduring. 
You've asked me a question, since I haven't talked to the 
President whether he has said, oh yes they are enduring, I 
believe that the Secretary of Defense has concluded that they 
are enduring.
    Senator Feinstein. Can we therefore--well, I guess we can't 
conclude they're enduring.
    Mr. Dubois. Well, as I said, he intends to make that 
final--you know, there are a lot of moving parts here, Senator. 
And he wants to make that recommendation to the President 
ultimately and discuss it with the Congress.
    Senator Feinstein. The frustration we have is there were 
moving parts last year too.
    Mr. Dubois. Right. And we also cut back----
    Senator Feinstein. It took us a long time to come together 
on this.
    Mr. Dubois. We cut back seriously on what we've asked for 
in terms of Europe.
    Senator Feinstein. I know you did.
    Mr. Dubois. Because of these very reasons.
    Senator Feinstein. All right. So we're no further--we're no 
clearer.
    Mr. Dubois. Well, I wouldn't--I don't think I can agree 
with that. I think we are substantially clearer. The question 
is will the Secretary of Defense make decisions and discuss 
them with Congress prior to your markup? That's the question at 
hand, and my understanding is depending upon when your markup 
is, that is his intention. He knows that you will have a 
difficult time making these appropriations and decisions absent 
a certainty to the extent that we can be, on these overseas 
bases. He appreciates that.

                                 KOREA

    Senator Feinstein. No, I think you know, we don't want to 
waste money. I went to Korea and saw some new facilities, but 
the plan for Korea proposed essentially to do away with them. 
And we don't want to get into that.
    Mr. Dubois. But as you well know many of those new 
facilities that you saw were MILCON appropriations from several 
years ago. And rightly so, Korea had suffered for a number of 
years with not very many dollars for----
    Senator Feinstein. I understand that, I don't want to 
belabor it. We've spent $15 million on a community center 
expected I think to last for a while.
    Mr. Dubois. Uh-huh.
    Senator Feinstein. And that's the point I want to make. And 
the new housing as well.
    Mr. Dubois. In terms of Korea of course, we've only asked 
for military construction on bases and land that we control in 
concert with our announced strategy with respect to our 
reconfiguring force structure on the peninsula.
    Senator Feinstein. Well, can you, give us a progress report 
on moving out of Seoul and moving south. Where is that?
    Mr. Dubois. The two governments, our government and the 
Korean government have concluded that we will move out of the 
Yongsan Garrison to Camp Humphrey, the Camp Humphrey Osan 
footprint. South of the Han. The question quite rightly is, how 
long will it take, and does the Korean government agree that 
the monies derived from their use of Yongsan, no longer the use 
of the United Nations command, and the United States--the 
Eighth Army. And the United States forces of Korea to be 
reinvested in infrastructure in the Camp Humphreys Osan 
footprint. The decision has been made we're moving out.
    Senator Feinstein. Is there an approved agreement?
    Mr. Dubois. My understanding is there is.
    Senator Feinstein. That has been approved by the 
legislature? Or by the Korean government?
    Mr. Dubois. That's my understanding and I will clarify that 
for you when I get back to the Pentagon.
    Senator Feinstein. I appreciate that very much.
    Mr. Dubois. Now, with respect to the land purchases as we 
discussed this last year, around Camp Humphreys and around 
Osan, that has been approved by the Korean legislature, and the 
monies have been appropriated and they're in the process of 
actually buying the parcels, because they were owned by 150 
different farmers, but we didn't ask for military construction 
on those properties, until they are assembled and transferred 
to our use.
    Senator Feinstein. But there is agreement on Yongsan, and 
the price?
    Mr. Dubois. There is agreement on Yongsan and the 
concurrent cost to build new for that garrison and our troops, 
headquarters troops to move south.
    Senator Feinstein. Well, I would certainly, and I think the 
Chairman would certainly be very interested in knowing the 
details of that agreement. I notice there's nothing in this 
budget.
    Senator Hutchison. Madam Vice Chairwoman, I would agree 
with you totally on wanting to know how much of the agreements 
have been made on costs and cost sharing, but there's one 
little semantic thing, we don't need the permission of Korea to 
leave a base or any other country.
    Senator Feinstein. No, I understand. I understand.
    Senator Hutchison. But the terms certainly do require 
agreements and I would be interested in that as well.
    Senator Feinstein. Thank you, Madam Chairman, Mr. Dubois.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hutchison. Mr. Secretary, we do appreciate your 
time, and the updates that you have given us along the way. I 
think we are moving in the right direction, but there's still a 
lot to be done on both of our parts. Thank you very much.
    Mr. Dubois. Thank you very much, Madam Chair.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

          Questions Submitted by Senator Kay Bailey Hutchison

                          OVERSEAS BASING/BRAC
    Question. Mr. Dubois, have decisions been made on redeployment of 
specific units and/or numbers of forces to the United States? If so, of 
what size?
    Answer. Decisions have not been made. The Department of Defense is 
formulating a set of recommendations based on Combatant Commander and 
Service input. Per the President's instruction, the State and Defense 
Departments are consulting closely with our allies and conducting site 
surveys to determine feasibility of initial proposals. The Department 
has frequently briefed members of Congress and their staffs on the 
proposals under consideration. A report to Congress will be provided 
during Summer 2004.
    Question. Mr. Dubois, to what extent do you envision that costs 
associated with redeploying any forces from overseas to stateside 
locations (movement, military construction, etc.) would be paid for out 
of the designated BRAC account or provided for separately?
    Answer. The BRAC statute limits how the Department may spend money 
in the BRAC account. Basically, the BRAC account can only be used to 
fund the implementation of approved closure and realignment 
recommendations. To the extent that redeploying forces from overseas to 
stateside locations is part of an approved BRAC closure and realignment 
recommendation, the Department may fund that action from the BRAC 
account.
    Question. Mr. Dubois, what is the restationing of overseas forces 
going to cost? If we don't yet know, when will we know?
    Answer. Current working cost estimate is continually being updated, 
but represents less than half of 1 percent of the FYDP. As a rough 
estimate, it will be refined as more detailed plans are developed. This 
reflects the worldwide scope of global reposturing and the evolving 
nature of this initiative due to the relatively large number of 
locations and the diplomatic, cost and savings variables involved.
    Question. Mr. Dubois, if the return of forces to the United States 
will be accomplished as part of the BRAC process, and we don't know how 
much that restationing effort will cost, how can the Secretary have 
certified this month that BRAC will result in a savings by 2011? Do the 
calculations on which the Secretary's certification was based include 
the costs of accommodating troops returning from overseas? Other Due 
Outs: Perchlorate Report; School Impact Report; CENTCOM Master Plan; 
Land and Cost-Sharing Agreements with Korea; and Information on C-17 
Basing decisions, specifically with reference to Dyess AFB and Kelly 
USA.
    Answer. As required by statute, the Secretary's certification was 
based on the force structure plan, infrastructure inventory, and 
economic analysis provided to Congress pursuant to Section 2912 of the 
BRAC statue. That economic analysis was based on the experience of 
previous BRAC rounds, which suggests that each military department will 
achieve annual net savings beginning not later than fiscal year 2011, 
the 6 year of implementation. The actual costs and savings from BRAC 
2005 actions will depend on the specific recommendations adopted.
    Perchlorate (BRAC) Report and Land and Cost Sharing Agreements with 
Korea will be submitted to Congress in July 2004. The Department is in 
the final stages of report development on the CENTCOM Master Plan and 
School Impact Report and plans to submit a final report to Congress in 
August 2004.
                                 ______
                                 

               Question Submitted by Senator Ted Stevens

                         UTILITY PRIVATIZATION
    Question. Mr. Dubois, what is the status of utility privatization 
within the Department? What problems do you see in the future with 
utility privatization?
    Answer. Through the Utilities Privatization (UP) Program, the 
Department of Defense (DOD) will take advantage of industry 
innovations, efficiencies, financing and economies of scale to obtain 
safe, environmentally sound and reliable utilities services. The 
Defense Components are actively pursuing a privatization evaluation of 
the utility systems at every Active Duty, Reserve, and Guard 
installation, within the United States and overseas, that is not 
already designated for base closure.
    Of the 1,867 DOD utility systems that are eligible for 
privatization, the Defense Components have privatized 446 systems and 
exempted 244 systems for economic or security reasons. Within a 5 
percent range DOD is on track to complete evaluations on the remaining 
systems by September 30, 2005. Of those systems with active 
solicitations, RFPs have been issued and are pending closure on 95 
systems; and RFPs have closed and are under evaluation on over 860 
systems.
    The ongoing solicitations are normally receiving adequate interest 
to achieve competition. This follows a successful effort by the 
Services to share lessons learned and industry feedback to improve 
solicitation templates and better align the program with industry 
practices.
    Many systems included in earlier solicitations, which closed prior 
to March 2003 did not receive adequate interest. Most of these systems 
were located on small Reserve or National Guard sites. Utilities had 
not been interested in participating in the privatization of these 
systems for a variety of reasons. In general, they perceived that the 
cost of developing a proposal in a competitive arrangement did not 
provide a cost effective business opportunity. With the improved 
templates and engagement with industry representatives, interest has 
improved. The Services are continuing discussions with industry to 
identify barriers and develop resolutions.
                                 ______
                                 

              Questions Submitted by Senator Conrad Burns

                                  BRAC
    Question. Mr. Dubois, what role will the availability of training 
ranges play in determining realignment at Air Force installations?
    Answer. The BRAC process is the means by which the Department can 
reconfigure its current infrastructure into one in which operational 
capacity maximizes both warfighting capability and efficiency. The BRAC 
2005 process is intended to ensure a comprehensive analysis of all 
military installations in the United States and Territories, on an 
equal footing. Training ranges are an important part of this 
installation inventory, and will be evaluated using the final selection 
criteria published in the Federal Register on February 16, 2004. As 
required by law, military value will be the primary consideration in 
analyzing and making recommendations for the closure or realignment of 
military installations. Training capabilities, as reflected in criteria 
two (one of the four military value criteria), are essential to 
maintaining military capability.
    Question. Mr. Dubois, there has been discussion of placing Air 
Guard units within the boundaries of active installations for cost 
savings and security purposes--to what extent will this be considered 
by the Department in the upcoming closure and realignment process?
    Answer. The Department will analyze all installations by the same 
process, to include consideration of movement of National Guard forces 
to active bases and active duty people to National Guard bases. 
Military value will be the primary consideration for making 
recommendations for base closures and realignments, as required by 
statute.
    Question. Mr. Dubois, what steps will be taken in the base closure 
and realignment process to ensure consistency with the Strategic 
Capabilities Assessment (SCA)? Will the current policy be adjusted to 
reflect the Department's closure and realignment needs or is it the 
intent to continue the policy of retention of 500 land-based missiles?
    Answer. The Strategic Capabilities Assessment is a periodic review 
of progress in implementing the December 2001 Nuclear Posture Review 
(NPR). The NPR recommended that the planned strategic nuclear force in 
2012 would comprise 14 Trident II SSBNs, 500 Minuteman III ICBMs, 76 B-
52H bombers, and 21 B-2 bombers. The Strategic Capabilities Assessment 
was recently completed and the results are being reviewed within the 
Department. At this time there is no action underway to change the 
planned strategic nuclear force structure for 2012.
                                 ______
                                 

            Questions Submitted by Senator Dianne Feinstein

                       BRAC ENVIRONMENTAL CLEANUP
    Question. Mr. DuBois, the fiscal year 2005 budget request for BRAC 
environmental cleanup is $246 million, down nearly 36 percent from the 
$370 million requested in fiscal year 2004. No funding has been 
requested for the cleanup of Navy BRAC installations because the Navy 
is expected to finance its fiscal year 2005 BRAC cleanup requirements 
out of the revenue from land sales.
    Can you explain why the Department has chosen to reduce its 
request, rather than using the proceeds from land sales to supplement 
funding and accelerate necessary cleanup?
    Answer. The Navy opted to finance its prior BRAC fiscal year 2005 
program with land sales revenue in lieu of seeking appropriated funds 
because it believed that proceeds from the sale of El Toro and Oak 
Knoll properties would be available in sufficient time to pay for 
caretaker and environmental cleanup costs, thus allowing the Navy to 
use appropriated funds for other needs. The Navy used conservative 
estimates in its fiscal year 2005 land sale revenue projection, and has 
successfully sold a number of prior BRAC properties in the last few 
years that have generated $230 million in revenue that is being used to 
accelerate cleanup at prior BRAC locations.
    Question. Could the Services execute a larger BRAC environmental 
cleanup program in fiscal year 2005 if additional funds were made 
available?
    Answer. We believe the Services can execute a larger program if 
additional funds were made available by Congress. However, we have 
sufficient funds to meet our legal/regulatory obligations and believe 
the requested level of funding is an appropriate balance between 
environmental and other DOD mission requirements.
    Question. Did the Navy request any funding from the Office of the 
Secretary of Defense in its fiscal year 2005 budget submission? Was it 
a Navy decision or an OSD decision for the Navy to self-finance its 
entire BRAC cleanup program out of land sale revenues?
    Answer. The Navy did not request any funding from the Office of the 
Secretary of Defense for its fiscal year 2005 budget submission. It was 
a Navy decision to self-finance its BRAC cleanup program out of land 
revenue.
    As you know, I am extremely concerned about the BRAC environmental 
cleanup program because so many communities in California are impacted 
by environmental contamination on closed bases that will take many 
years and cost many millions of dollars to remediate.
    Question. Can you assure me that the fiscal year 2005 BRAC round 
will not delay or in any way divert resources from the environmental 
cleanup of installations closed under previous BRAC rounds?
    Answer. Based on resources currently available, the Services have 
sufficient capacity and capability to execute a new round of BRAC while 
finishing requirements associated with the previous rounds. The 2005 
round of BRAC will not divert funds specifically appropriated for 
restoration projects supporting previous BRAC rounds.
    Question. What lessons have you learned from the previous BRAC 
rounds that you plan to apply to environmental cleanup associated with 
the 2005 round?
    Answer. We are evaluating lessons learned over the past four round 
of BRAC and developing options associated with environmental processes. 
Some considerations are:
  --Should cleanup be done by DOD or the new owner?
  --How do we maximize property value?
  --Use of early transfer authority (ETA) should be optimized to get 
        property in the hands of new owners faster.
  --Use of environmental services cooperative agreements (ESCAs) should 
        be encouraged to help the Military Components fulfill their 
        environmental cleanup responsibilities and integrate cleanup 
        with redevelopment. For example, at Bayonne Military Ocean 
        Terminal in New Jersey, the Army transferred both property and 
        the responsibility for cleanup to the Bayonne Local Reuse 
        Authority under ETA and an ESCA. The ESCA effectively put the 
        local reuse authority in charge of their own destiny in terms 
        of both cleanup and property reuse. This action saved the Army 
        approximately $5 million and successfully defused on-going 
        frustrations over the pace and scope of cleanup actions and 
        changing reuse plans. The action was a win-win for all parties.
  --The environmental condition of the property could be documented 
        early in the process for potential transferees.
  --Work closely with Local Reuse Authorities (LRAs) and developers 
        earlier in the process to return property to productive reuse 
        faster.
  --Increased use of performance-based contracting will contribute to 
        improved cleanup and property transfer. The Department 
        currently has 15 BRAC installations where performance-based 
        contracting is setting the pace for cleanup.
  --Increased use of the Conservation Conveyance Authority where it 
        presents the best option for transfer and reuse. For example, 
        Honey Lake, a section of Sierra Army Depot in California, was 
        DOD's first land transfer using the conservation transfer 
        authority. Over 57,000 acres were transferred to four public 
        and private entities which make up the Honey Lake Conservation 
        Team. The team is completing the restoration and conservation 
        efforts.

                           RESERVE COMPONENTS
    Question. The Department is finally showing that it is concerned 
with the infrastructure needs of the reserve components. Although this 
year's overall request is 15 percent less than last year's enacted 
amount, as compared to the requested amount, the reserve components 
request amount has increased by 67 percent.
    Several facilities for the National Guard and Reserves are 
considered Federal facilities--rather than state-owned facilities. It 
is my understanding that these federally designated reserve component 
facilities may be subject to the upcoming BRAC consideration. Is this 
true--and if so, will criteria such as distance to training ranges, 
jointness, and community need be considered?
    Answer. The Department is approaching BRAC with an eye toward the 
Total Force--Active, Reserve, and Guard. This approach reflects the 
importance of accommodating Guard and Reserve training, basing, and 
quality of life needs by incorporating them into the comprehensive 
analyses of all military installations. This comprehensive analysis 
will use the final selection criteria published in the Federal Register 
on February 16, 2004, for making closure and realignment 
recommendations.

                       RENEWABLE ENERGY RESOURCES
    Question. Mr. DuBois, the fiscal year 2002 Military Construction 
Appropriations report mandated an assessment of renewable energy 
resources, including solar, wind, and geothermal, on U.S. military 
installations. As I have watched gasoline prices climb steadily in 
recent weeks, I am becoming increasingly concerned that spikes in 
electricity costs cannot be far behind. I have not for a moment 
forgotten the energy crisis of 2002 that hit California so hard, and 
that in part prompted this subcommittee's requirement for an assessment 
of renewable energy resources.
    I am interested in how OSD views the importance of this assessment, 
to what degree OSD supports the study, and whether OSD is actively 
requiring each of the Services to participate fully in the assessment. 
Can you assure me that this assessment is in fact a priority of OSD and 
that no foot-dragging or lack of cooperation will be tolerated?
    Answer. OSD considers the renewables assessment very important. We 
are fully committed to developing and executing an action plan with 
Congress's help, according to the requirements set forth in the 
Department's May 2002 Interim Report to Congress. This action plan will 
address the full range of issues for instituting a renewable energy 
program at DOD.
    Under the Air Force lead, we are moving forward now, trying new and 
different approaches to acquiring renewable energy and developing 
institutional approaches to simultaneously serve the military mission, 
reduce costs to the Services and the taxpayer, educate the military 
about renewable products and services, and streamline procurement.
    Question. The Committee earmarked $2.5 million in the fiscal year 
2004 Senate report to continue the renewables assessment. Can you tell 
me when this funding will be released?
    Answer. The Air Force, designated as the renewable study program 
lead, is in the process of drafting an investment plan for the fiscal 
year 2004 $2.5 million Energy Conservation Investment Program (ECIP) 
appropriation consistent with the Congressional intent to continue the 
renewable study effort. Once their plan is finalized, it will be 
coordinated with the other services and OSD will release the funding.

                     MINOR CONSTRUCTION THRESHOLDS
    Question. Mr. DuBois, in discussions with the Services, we have 
heard strong support for increasing the minor military construction 
ceiling from $1.5 million to $3 million for all minor construction 
projects, not just those involving life, safety and health.
    Would OSD support raising the limit on minor construction projects 
to $3 million, and if so, do you intend to submit proposed legislation 
to Congress to achieve this change?
    Answer. This year's fiscal year 2005 legislative proposals' 
submission includes language to raise the limit of minor construction 
projects to $3 million.
                      Department of the Air Force

STATEMENTS OF:
        HONORABLE NELSON F. GIBBS, ASSISTANT SECRETARY OF THE AIR 
            FORCE, INSTALLATIONS, ENVIRONMENT, AND LOGISTICS
        MAJOR GENERAL DEAN FOX, CIVIL ENGINEER, UNITED STATES AIR FORCE
ACCOMPANIED BY:
        BRIGADIER GENERAL DAVID BRUBAKER, DEPUTY DIRECTOR, AIR NATIONAL 
            GUARD
        BRIGADIER GENERAL WILLIAM M. RAJCZAK, DEPUTY TO THE CHIEF, AIR 
            FORCE RESERVE
    Senator Hutchison. Now we have the Honorable Nelson Gibbs, 
the Assistant Secretary of Air Force for Installations, 
Environment and Logistics, Major General Dean Fox, the Air 
Force Civil Engineer, Brigadier General David Brubaker, the 
Deputy Director of the Air National Guard, Brigadier General 
Rajczak, the Deputy to the Chief of Air Force Reserve. I 
understand there is a joint statement that will be given by Mr. 
Gibbs.
    While you all are getting seated, I'll just tell you a 
little story that I came away with from Albania in the early 
stages of our presence there.
    Several years ago we went to the two sides of the airfield 
in Tirana, and we visited with the Army side first where they 
were just beginning to set up the airfield and I talked to the 
soldiers and the Army guys. I asked, how are things going here? 
They said, ``well except for the mud, the bugs, the food, 
taking showers with hoses, everything's really pretty good.''
    I go to the Air Force side, where they have air conditioned 
tents for food, and they have really nice setups with air 
conditioned tents for the soldiers. We said, ``well how are 
things going.'' They said, ``well, you know, it's rough over 
here. We don't even have cable TV.''
    So with that, I welcome all of you from the Air Force, and 
welcome your testimony, Mr. Secretary.
    Mr. Gibbs. Thank you very much, Madam Chairman, Mrs. 
Feinstein, it's a pleasure to appear before you to talk about 
the Air Force military construction program for fiscal year 
2005. I have with me, the Air Force Civil Engineer for his 
first appearance before this Committee, General Fox. Generals 
Brubaker and Rajczak have been here before so they're prepared 
to answer any of your questions
    But we've made one slight modification. I've asked General 
Fox to do the opening statement to give him at least a minute 
or two to be able to speak and therefore feel comfortable with 
the Committee. But then when he's completed, we look forward to 
your questions.
    Senator Hutchison. So he will be giving the only statement, 
you will not be giving a statement.
    Mr. Gibbs. That's correct. You have a copy----
    Senator Hutchison. Just questions.
    Mr. Gibbs [continuing]. Of my prepared statement.
    Senator Hutchison. I do.
    Mr. Gibbs. I think that was submitted for the record.
    Senator Hutchison. Yes, I do have that.
    Mr. Gibbs. But he'll make the general opening remarks on 
behalf of the Air Force.
    Senator Hutchison. Thank you very much, General Fox.

                  STATEMENT OF MAJOR GENERAL DEAN FOX

    General Fox. Madam Chairman and Senator Feinstein, good 
after--good morning. I appreciate this opportunity to appear 
before you to discuss the Air Force fiscal year 2005 military 
construction program. We sincerely thank you for the support 
you've given the Air Force missions, and our people around the 
world.

                        MILITARY FAMILY HOUSING

    Our military construction and military family housing 
programs are absolutely essential to the Air Force mission 
whether it's on the flight line, in the workplace, or in the 
home.
    Although higher priorities have not always allowed us to 
address all our facility needs, the Air Force certainly 
recognizes the importance of investing in our facilities. We 
fight from our bases, whether from expeditionary locations as 
has been previously discussed, or otherwise, which makes our 
facilities critical to our mission.
    The importance our senior leaders place on our facilities 
is seen in recent budget submissions. Our military construction 
and housing facility budget has increased in fiscal year 2003, 
and 2004, and increased further in this year's program request. 
We sincerely appreciate your great support for our programs.
    In addition to the military construction and the housing 
request, we're continuing an upward trend in our operations and 
maintenance sustainment, restoration, and modernization 
accounts. The Air Force is committed to taking care of our 
people and their families. Quality of life projects such as our 
dormitories, and military family housing help support them.
    As our members are more frequently deployed away from home, 
knowing their families are well taken care of, helps our airmen 
keep focused on the Air Force's and our Nation's task. With a 
$1.7 billion request for military family housing we're able to 
maintain our good housing and continue on our path to eliminate 
inadequate housing in the Air Force by 2007 in the Continental 
United States (CONUS), and 2009 overseas.

                             PRIVATIZATION

    Through privatization initiatives and traditional housing 
construction funds, we plan to invest in more than 10,000 
housing units in fiscal year 2005 alone.
    Providing adequate housing does not stop with families. 
We're investing over $128 million to provide 1,104 rooms this 
fiscal year in our dormitories, keeping us on track to 
eliminate our inadequate dorms for our junior enlisted 
personnel both in the United States and overseas. The quality 
of our overseas installations remains a priority. Our airmen 
are sent to foreign lands from their homes in the United States 
to protect our Nation's interest. It is essential we provide 
them with the right tools and facilities for them to carry out 
their role.
    With 20 percent of our airmen stationed overseas, it is 
extremely important to make sure we continue to invest in those 
installations supported as enduring locations by our combat 
commanders.
    Our budget request of $140 million for these locations 
consists of the most essential facility needs to ensure our 
airmen can efficiently perform their task and we ask for your 
support of both the operational and quality of life projects.
    Our military construction budget also consists of projects 
to support the Air Force's new weapons systems which will 
provide our combatant commanders the capabilities to meet our 
security needs.
    In conclusion, Madam Chairman, we thank the committee for 
its strong support of Air Force military construction and 
family housing. As Mr. Gibbs mentioned, this is my first year 
I've had the honor and privilege of bringing our program before 
your committee and I look forward to appearing before you again 
in the future. We'll be happy to address any questions you may 
have.
    [The statement follows:]

                 Prepared Statement of Nelson F. Gibbs

    Madam Chairman and distinguished members of the committee, the 
strength and flexibility of airpower and our joint warfighting success 
in the Global War on Terrorism is directly enabled by three 
interdependent factors; outstanding men and women in uniform, superior 
weapons platforms, and an agile support infrastructure. The Air Force 
fiscal year 2005 military construction (MILCON) budget request reflects 
our commitment to ensuring the Air Force's continued ability to execute 
the full range of air and space missions. In turn, the Air Force 
continues to maintain the commitments made last year to invest wisely 
in installations from which we project air and space power, take care 
of our people and their families with adequate housing and quality of 
life improvements, and to sustain the public trust through prudent 
environmental management.

                              INTRODUCTION
    Air Force facilities, housing, and environmental programs are key 
components of our support infrastructure. At home, bases provide a 
stable training environment and a place to equip and reconstitute our 
force. Overseas bases provide force projection platforms to support 
combatant commanders.
    As such, the Air Force has developed an investment strategy focused 
on sustaining and recapitalizing existing infrastructure, investing in 
quality of life improvements, continuing strong environmental 
management, accommodating new missions, optimizing use of public and 
private resources, and reducing infrastructure wherever we can.
    Total Force military construction, family housing, sustainment, 
restoration, and modernization programs each play vital roles 
supporting operational requirements and maintaining a reasonable 
quality of life for our men and women in uniform.
    While the Air Force has always acknowledged the importance of 
proper funding for facility sustainment and recapitalization, too often 
competing priorities have not permitted us to address all the problems 
we face with our aging infrastructure. Despite competing priorities, 
you supported our request last year. The Air Force sincerely 
appreciates your support.
    Continuing a positive trend into fiscal year 2005, the Air Force 
military construction program included in the Presidents Budget request 
is approximately the same as last year with an increase in the military 
family housing program. The requested $2.6 billion for Total Force 
military construction and Military Family Housing is a $200 million 
increase over last year's request. This request includes $664 million 
for Active military construction, $127 million for Air National Guard 
military construction, $84 million for Air Force Reserve military 
construction, and more than $1.7 billion for Military Family Housing.
    The Air Force has also increased Operations and Maintenance (O&M) 
sustainment, restoration, and modernization (SRM) funding. This year, 
the amount dedicated to SRM is more than $200 million greater than in 
the 2004 request. With the fiscal year 2005 budget request, more than 
$2.2 billion will be invested in critical infrastructure maintenance 
and repair through our O&M program. This year's request is up almost 11 
percent from last year, to continue to move to the Air Force goal of a 
facility recapitalization rate of 67 years by 2008.
    Considering the level of effort across the entire infrastructure 
spectrum (military construction, MFH, and O&M SRM), the overall Air 
Force fiscal year 2005 budget request is more than $4.8 billion.
Overseas Military Construction
    Even though the majority of our Air Force personnel are assigned in 
the United States, 20 percent of the force is permanently assigned 
overseas, including 29,000 Air Force families. Old and progressively 
deteriorating infrastructure at these bases requires increased 
investment. While a new Global Basing Strategy is under development by 
the Office of the Secretary of Defense, the Air Force fiscal year 2005 
military construction request invests in overseas installations 
supported as enduring locations by the combatant commanders. The 
request for overseas construction in the Pacific and European theaters 
of operation is $140 million for 13 projects. The program consists of 
infrastructure and quality of life projects in the United Kingdom, 
Germany, the Azores, Italy, Spain, Japan, and Korea. I also want to 
thank you for the essential overseas MILCON funding you approved in the 
fiscal year 2004 Supplemental Appropriations Bill for construction 
projects in Southwest Asia as well as at critical en route airlift 
locations, needed to directly support ongoing operations in that 
region.
Planning and Design/Unspecified Minor Construction
    This year's request includes planning and design funding of $160 
million. These funds are required to complete design of the fiscal year 
2006 construction program, and to start design of the fiscal year 2007 
projects so we can be prepared to award these projects in the year of 
appropriation. This year's request also includes $24 million for the 
unspecified minor construction program, which is the primary means of 
funding small, unforeseen projects that cannot wait for the normal 
military construction process.

           SUSTAIN, RESTORE, AND MODERNIZE OUR INFRASTRUCTURE
Operations and Maintenance Investment
    To sustain, restore, and modernize infrastructure, there must be a 
balance between military construction and Operations and Maintenance. 
Military construction restores and recapitalizes facilities. O&M 
funding is used to perform facility sustainment activities necessary to 
prevent facilities from failing prematurely. Without proper 
sustainment, facilities and infrastructure wear out quickly. O&M 
funding is also used to directly address many 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.

                 INVEST IN QUALITY OF LIFE IMPROVEMENTS
    The Air Force recognizes a correlation between readiness and 
quality of life. Quality of life initiatives acknowledge the sacrifices 
our Airmen make in support of the Nation and are pivotal to recruiting 
and retaining our country's best and brightest. When Airmen deploy, 
they want to know their families are safe, and secure. Their welfare is 
a critical factor in our overall combat readiness. Family housing, 
dormitories, and other quality of life initiatives reflect the Air 
Force commitment to provide the facilities they deserve.
Family Housing
    The Air Force Family Housing Master Plan provides the road map for 
our Housing military construction, O&M, and privatization efforts, and 
it is designed to meet the goal of ensuring safe, affordable, and 
adequate housing for our members. The fiscal year 2005 budget request 
reflects an increase of more than $180 million over the fiscal year 
2004 budget for family housing. With the exception of four northern-
tier locations, inadequate housing will be eliminated in the United 
States by 2007. The inadequate units at those four northern-tier 
locations will be eliminated by 2008. For fiscal year 2005, the $847 
million requested for housing investment will provide over 2,200 units 
at 16 bases, improve more than 1,300 units at six bases, and support 
privatization of over 6,800 units at six bases. An additional $864 
million will be used to pay for maintenance, operations, utilities and 
leases to support family housing.
Dormitories
    Just as we are committed to provide adequate housing for families, 
we have a comprehensive program to house our unaccompanied junior 
enlisted personnel. The Air Force is well on its way in implementing a 
Dormitory Master Plan. The plan includes a three-phased dormitory 
investment strategy. The three phases are: (I) fund the replacement or 
conversion of all permanent party central latrine dormitories; (II) 
construct new facilities to eliminate the deficit of dormitory rooms; 
and (III) convert or replace existing dormitories at the end of their 
useful life using an Air Force-designed private room standard to 
improve quality of life for Airmen. Phase I is complete and we are now 
concentrating on the final two phases of the investment strategy.
    The total Air Force requirement is 60,200 dormitory rooms. The Air 
Force Dormitory Master Plan achieves the Office of the Secretary of 
Defense's (OSD) fiscal year 2007 goal to replace all inadequate 
permanent party dormitory rooms and the Air Force goal to replace all 
inadequate technical training dormitories by fiscal year 2009. This 
fiscal year 2005 budget request moves us closer to those goals. The 
fiscal year 2005 dormitory program consists of seven dormitory 
projects, 1104 rooms, at both stateside and overseas bases in direct 
support of unaccompanied personnel, for a total of $128 million.
Fitness Centers
    Fitness centers are a critical component of the Air Force quality 
of life program. The growing expeditionary nature of our activities 
requires that Airmen increasingly deploy to all regions of the world, 
in extreme environments and therefore must be physically prepared to 
deal with the associated challenges. In other words, Airmen must be 
``fit to fight.'' Our new fitness program directs Airmen to devote more 
time and energy to being physically fit, and the use of our fitness 
centers has dramatically increased to support this reorientation in our 
culture. The fiscal year 2005 military construction program includes 
three fitness centers: Lajes Air Base, Azores; Hill Air Force Base 
(AFB), Utah; and Elmendorf AFB, Alaska.

                   CONTINUE ENVIRONMENTAL LEADERSHIP
    The Air Force continues to ensure operational readiness and sustain 
the public trust through prudent environmental management. As part of 
the overall military transformation program, we actively seek and 
employ smarter solutions to long-standing environmental challenges. We 
are applying lessons learned in terms of how, and the extent to which, 
pollution can be prevented and contamination can be controlled. We are 
investing in more efficient contracting methods as a key element in our 
approach to future environmental restoration. Additional use of 
performance based contracting will focus on cleanup performance goals 
and thereby reduce process requirements. Finally, we are establishing 
systems to better identify the equity value of our installations' 
environmental resources to the surrounding community. For example, land 
that provides habitat for an endangered species may be valuable as open 
space in a community's redevelopment plan. That value should be 
identified and understood.
    In addition to ensuring our operations comply with all 
environmental regulations and laws, we are dedicated to enhancing our 
existing 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.
    The $3.3 million environmental project in the fiscal year 2005 
military construction program will allow Shaw AFB to meet current 
Environmental Protection Agency (EPA) standards for wastewater 
discharge.

                        ACCOMMODATE NEW MISSIONS
    As indicated earlier, joint warfighting success in the Global War 
on Terrorism has been possible in part due to superior weapons 
capabilities. New weapon systems are the tools of combat capability 
that enable our combatant commanders to respond quickly to conflicts in 
support of national security objectives. The fiscal year 2005 Total 
Force new mission military construction program consists of 45 
projects, totaling more than $403 million. These projects support a 
number of weapons systems; 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 and ground attack fighter. F/A-22 flight training and 
maintenance training will be conducted at Tyndall AFB, Florida, and 
Sheppard AFB, Texas, respectively. Our fiscal year 2005 military 
construction request includes two F/A-22 projects at Tyndall AFB for 
$19 million, and one F/A-22 project at Sheppard AFB totaling $21 
million.
    The C-17 Globemaster III aircraft is replacing the fleet of C-141 
Starlifters. C-17s will be based at Elmendorf AFB, Alaska; Travis AFB 
and March Air Reserve Base (ARB) in California; Dover AFB, Delaware; 
Hickam AFB, Hawaii; Jackson Air National Guard Base, Mississippi; 
McGuire AFB, New Jersey; Altus AFB, Oklahoma; Charleston AFB, South 
Carolina; and McChord AFB, Washington. Thanks to your support, 
construction requirements for Charleston and McChord were funded in 
prior-year military construction programs. The request for fiscal year 
2005 includes two projects for $15 million at Elemendorf AFB, two 
facility projects for $15 million at Travis AFB, two projects for $10 
million at March ARB, and five facility projects for $26 million at 
Hickam AFB.
    Other new mission requirements in fiscal year 2005 include the 
Global Hawk beddown at Beale AFB, California; Predator force structure 
changes at Indian Springs Air Force Auxiliary Field, Nevada; Combat 
Search and Rescue aircraft beddown at Davis-Monthan AFB, Arizona; C-
130J simulator facility at Little Rock AFB, Arkansas; F-35 Joint Strike 
Fighter test facilities at Edwards AFB, California; and various 
projects supporting Homeland Defense, such as the Air Sovereignty Alert 
missions flown by the Air National Guard at Andrews AFB, Maryland; 
Duluth International Airport, Minnesota; Atlantic City International 
Airport, New Jersey; and Truax Field, Wisconsin.

              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 
the follow-on initiatives. The first housing privatization project was 
awarded at Lackland AFB, Texas, in August of 1998, and all 420 of those 
housing units have been constructed and are occupied by military 
families. Since then, we have completed three more projects (Elmendorf 
AFB, Alaska; Robins AFB, Georgia; and Dyess AFB, Texas) and have three 
more under construction (Wright-Patterson AFB, Ohio; Patrick AFB, 
Florida; and Kirtland AFB, New Mexico). Once these three projects are 
complete, there will be nearly 5,500 privatized units. We are on track 
to privatize 60 percent of our U.S. based family housing by 2007. The 
fiscal year 2005 budget request includes $83 million to support the 
privatization of nearly 7,000 units at six bases: Tyndall AFB, Florida; 
Scott AFB, Illinois; Columbus AFB, Mississippi; Keesler AFB, 
Mississippi; Holloman AFB, New Mexico; and Fairchild AFB, Washington.
   continue demolition of excess, uneconomical-to-maintain facilities
    For the past 8 years, the Air Force has pursued an aggressive 
effort to demolish or dispose of facilities that are unneeded and no 
longer economically feasible to sustain or restore. From fiscal year 
1998 through fiscal year 2003, we demolished 15.5 million square feet 
of non-housing building space at a total cost of $200 million. This is 
equivalent to demolishing more than three average size Air Force 
installations. For fiscal year 2004 and beyond, we will continue to 
identify opportunities for demolition and facility consolidation. In 
general, the facility demolition program has been a success, enabling 
us to reduce the strain on infrastructure funding by getting rid of 
facilities we don't need and can't afford to maintain.

                               CONCLUSION
    The near and long term readiness of our fighting force depends upon 
this infrastructure. We will continue to enhance our installations' 
capabilities, remain good stewards of the environment, and ensure Air 
Force infrastructure is properly distributed to maximize military 
readiness.

    Senator Hutchison. Well, thank you, and thank all of you 
for being here. I want to start, General Fox, or Mr. Secretary, 
with the issue of privatization. I think we discussed it fully 
with Mr. Dubois and the need to raise the cap. And I have 
certainly a great interest in the Air Force privatization 
projects at Lackland and Sheppard Air Force Base. There are 
others. And I will be working to lift the cap so that those can 
stay online.

                    BUILD-TO-LEASE HOUSING OVERSEAS

    But my question is really on build-to-lease housing 
overseas. The Air Force is requesting $44 million for family 
housing this year at RAF Lakenheath, and an additional $131 
million would be requested over the next four years, it 
obviously will be an enduring base. And it includes $58 million 
for family housing at Ramstein this year, with another $10 
million in the out years.
    The state of Rheinland-Pfalz has proposed a build-to-lease 
program for military family housing in the Ramstein AB area, an 
approach which has met with success in other places in Germany. 
My question is, are you aware of this and have you considered 
build-to-lease in lieu of traditional family housing at 
Ramstein and could this be a more prominent part of your 
building housing overseas at other bases including Lakenheath 
where you're going to make a substantial investment.

                                GERMANY

    Mr. Gibbs. Yes, I am aware of those proposals in Germany 
for the build-to-lease. That is a potential solution. We have 
had other build-to-lease projects in Germany previously. But 
they currently have a--they have not reached resolution with 
the Federal Government. The difficulties there is----
    Senator Hutchison. Federal government of Germany?
    Mr. Gibbs. Federal government of Germany. Their proposals 
there would be to build on the--on Federal land, and they don't 
currently have permission to do that. So they have some more 
work to do internally within their governments, federal and 
state level, to allow those projects to move forward.
    To my knowledge, and this was through last week, they 
hadn't made any proposals to do any of those activities on 
private land at this point. But certainly----
    Senator Hutchison. He said that, however----
    Mr. Gibbs. Certainly.
    Senator Hutchison. Is it something that you would consider?
    Mr. Gibbs. Oh, absolutely.
    Senator Hutchison. Are you really looking at it seriously. 
I'm sure that they will get over the hump and there would be 
other options to look at if it's working so well in the United 
States, is it something that we ought to be looking at 
overseas?
    Mr. Gibbs. Absolutely. We would encourage them to go beyond 
the build-to-lease, to go into--to what effectively would be a 
private--more closely--would look more similar to the 
privatization that we do here. Which would be for them to 
construct housing and effectively put it at our disposal in 
exchange for the allowance for quarters over there. Which would 
not give us a long-term commitment as a build-to-lease does.
    We have had some preliminary discussions with them about 
that. They've been a little apprehensive because of the 
increased risk. One of the things that we want to talk with 
them further about is the success it has enjoyed here. Try to 
convince them to consider that in addition to the build-to-
lease.
    Senator Hutchison. Well, since you are making commitments 
to enduring bases, which I certainly support because it will 
mean that we can do no military construction at bases that will 
not be designated right now as enduring, I hope that you will 
factor that in as quickly as possible as we are looking at some 
pretty substantial investments in traditional housing. And 
perhaps prioritize the traditional housing that you know would 
be best on base whether it's general, officer, or----
    Senator Hutchison [continuing]. Or whatever would be right. 
So that we can save any dollars that might be able to be saved 
down the road.
    Mr. Gibbs. Absolutely.

                           GUARD AND RESERVE

    Senator Hutchison. I'd like to ask General Brubaker and 
General Rajczak. In past Base Realignment and Closure (BRAC) 
rounds our Guard and Reserve forces have not been treated as 
well, and perhaps you can say, well, we haven't used them to 
the extent that we are now using Guard and Reserve units. 
However, would you just make a brief statement about where you 
think we are now in the planning for BRAC and in military 
construction ongoing, as it relates to assuring that our Guard 
and Reserve units have the capacity and the military 
construction that they need.

                           AIR NATIONAL GUARD

    General Brubaker. If I may start, I would just say that 
first of all we are, I think, very fairly and well represented 
in the BRAC process. From the National Guard perspective we are 
a sitting member of the Air Force Base Closure Executive Group 
(BCEG). And I'm very pleased with our interaction and our 
ability to express any concerns from the National Guard 
perspective.
    As far as how we will play in BRAC and whether or not that 
will be considered, I think again we will be equally 
represented in that process as the Air Force works its way 
through the BRAC and makes its formal recommendations.

                                RESERVE

    General Rajczak. I agree with General Brubaker's comments. 
We are also a representative, or also a member of the Base 
Closure Executive Group, for the Air Force. And to address your 
second point about new construction, or being able to get 
adequate support for our construction requirements, most of the 
new construction that is in our fiscal year 2005 budget request 
as a matter of fact is for new mission support. Including 
installations and activities in Texas and California both, as 
well as in Ohio, and in Oregon.
    Again, we compete very well through the Air Force budgeting 
process and I think we're very fairly represented both in the 
BRAC and in new construction requirements.

                                  C-17

    Senator Hutchison. Mr. Gibbs, I read in your testimony the 
commitment and the military construction that you're asking for 
to support the F/A-22 and the C-17. And I just wanted to ask 
you and perhaps you can answer this for the record, because 
it's somewhat parochial.

                              C-17 BASING

    But in looking at all of the places that there would be 
basing for the C-17, I would just like to ask you to look at a 
couple of places in Texas, where there might be some savings in 
military construction. Either Dyess, where there is excess 
capacity still, ramp space. And of course for the B-1s, and 
Kelly where there is significant space, hangar space still 
available and could take C-17s. If any of those would be able 
to save military construction in the other basing, I would 
appreciate your just looking at that.
    Senator Feinstein. You know they're going to California.
    Senator Hutchison. Well, some aren't.
    They're going to California, Alaska----
    Senator Feinstein. I'm shocked at you, Madam Chairman.
    Senator Hutchison. California, Alaska, Delaware, Hawaii, 
Mississippi, New Jersey, Oklahoma, South Carolina, and the 
State of Washington. I'm not suggesting that we mess with 
California, but I'm just wondering if with all of the bases 
that are in the works here, if there would be some savings. 
That's what I'm asking you to----
    Senator Feinstein. Texas doesn't have enough--no, never 
mind.
    Senator Hutchison. Well, we have capacity that is unused. 
And particularly Dyess, and then for repairs and maintenance 
would be the only place that Kelly would work. But there is 
significant space--hangar space there because of the losses.
    Mr. Gibbs. The short answer to your question is yes. The 
longer answer, if I could take about 2 or 3 minutes. What you 
just described to a great extent is the beauty of the BRAC 
round. There are a lot of numbers that are thrown around as to 
excess capacity and what it is and it's obviously in the eye of 
the beholder.
    But in the eye of this beholder it's a substantially 
different environment that we have today, than we had in all of 
the preceding rounds that considered Base Closure and 
Realignment. In all of those previous periods, what we had were 
a number of bases that were significantly underused. They were 
using only 20 or 30 percent of their capacity. So the BRAC was 
approached at, well, if we have this base that's 30 percent 
used and this space that's 30 percent used, let's just close 
one and move that mission to the other one, and that was easily 
done.
    We don't have that condition existing today to any 
substantial extent. Certainly not in the Air Force. What we 
have is a lot of bases that are 60 to 90 percent used. When we 
come out of this BRAC round, the task, the goal to be achieved 
here is to get the utilization on the remaining bases up into 
the 85 to 90 percent range.
    So we will no longer have the luxury of keeping bases, all 
bases at a mission unique category. We cannot afford to have a 
70 percent utilized base. We have to find a mission to take it 
up to 85 or 90. So that's exactly what we are attempting to do 
in the analysis leading up to the BRAC round, to make sure that 
we as effectively use as we possibly can, making allowances--to 
respond to a question you asked to the previous panel--for the 
ability to surge and also to look out for the unknown unknowns 
that will be occurring over the next 20 years, the time period 
that the Congress has directed that we look to for sizing this 
base structure.
    Senator Hutchison. Well, certainly placement is a big part 
of it. The facilities that you are looking at for this year's 
MILCON would be Alaska, Hawaii and California. But there are a 
lot of other smaller bases that you're saying are going to take 
C-17s, and I would hope that you might look at an enduring base 
which would be Dyess as a possible recipient of some the C-17s 
when there is that excess capacity.

                        GENERAL OFFICER QUARTERS

    Just a last question. On the general officer quarters. The 
Air Force rating for adequacy apparently according to the 
Defense Department IG is different from the other services. And 
therefore there's a significant difference in the Air Force 
declaration that 82 percent of its general officer quarters are 
inadequate, while Army and Navy deem all of theirs adequate.
    My question is, should everybody be coming up to your 
standards, or should you be looking at it in a more uniform 
way, and are you addressing those issues that the IG has 
raised?
    Mr. Gibbs. I'll ask General Fox to answer it both from an 
Air Force, and a personal perspective, I think.
    General Fox. Madam Chairman, I would tell you that we have 
set goals for family housing, military family housing of 2007 
across the continental United States, and 2009 overseas and 
we're meeting those goals. We're doing a terrific job through 
privatization and our housing MILCON program of upgrading 
quarters for our troops.
    Since Mr. Gibbs said, let me give you the personal 
anecdote. I can tell you that at Bolling Air Force Base here in 
Washington we are well along with taking care of quarters for 
our airmen and our non-commissioned officers. And we're 
developing those quarters to commercial standards, the same 
thing that they would be able to rent or buy downtown. That's 
the standard.
    Similar for senior officers, the goal is commercial 
standards. What we live in at Bolling Air Force Base is 70 year 
old quarters, that are very rundown. We have put those quarters 
at the end of the cycle to upgrade taking care of our troops 
first. As we get towards the goal of 2007, the people who will 
be left remaining to have quarters fixed to a commercial 
standard, to a decent standard that they would rent or buy 
downtown will be the senior officers.
    Senator Hutchison. Thank you. Senator Feinstein.
    Senator Feinstein. Thanks very much, Madam Chairman, and 
thank you gentlemen for your service. I just want to assure 
that the bed down costs for the C-17 and the C-5 transformation 
are in the FYDP, aren't they?
    Mr. Gibbs. To the extent that we know them, yes, ma'am.

                        BEDDOWN FOR C-17 AND C-5

    Senator Feinstein. Okay. To the extent that you know them, 
right. So the commitment is to put them in the Future Years 
Defense Program (FYDP). I recognize that in the 2005 bill we 
have two facility projects, two at Travis for $15 million, and 
two projects for $10 million at March. So I think that 
California is going to be very happy about that, and we thank 
you for that.
    Mr. Gibbs. That's one of the earlier locations.
    Senator Feinstein. Pardon me?
    Mr. Gibbs. That's one of the earlier locations from the 
list that the Chairman read.
    General Fox. Senator Feinstein, if I can answer. The way 
that we prioritize our military construction program, when we 
bring in a new weapon system like the C-17 to California we 
will ensure that those requirements are funded up front in our 
President's budget submission.

                       VANDENBERG AIR FORCE BASE

    Senator Feinstein. Good, that's what I really wanted to 
hear. Thank you very much. Appreciate it very much, General. 
Last year we were unable to fund the consolidated fitness 
center requested by the Air Force for Vandenberg. However, we 
included language in the conference report supporting the 
project and urging its inclusion in the 2005 budget request. 
And it's not in the 2005 budget request. Could you tell us what 
the reason is? It's not even in the future, in the FYDP, any 
longer.
    Mr. Gibbs. I think it's----
    Senator Feinstein.--and it was requested.
    Mr. Gibbs. I think it's out about 4 years, 3 or 4 years.
    General Fox. 2008.
    Mr. Gibbs. 2008. It's a--I'll give you an answer that I 
know when I give it to you before I start, it's going to be 
inadequate from your perspective. Putting together the military 
construction budget for the Air Force, since there are always 
needs, and there are always more needs than there are resources 
to fill them. So we plan out over a period of time, and the 
military construction funds are held quite dearly and the 
competition is severe within the Air Force to obtain those.
    When the Congress eliminates something that the Air Force 
had put into its budget, it makes it very difficult to get that 
thing back into the budget in the near term. Because there are 
too many people that have the competing needs and say the 
Congress has already told you you don't need it, if you put it 
again, you stand the chance of losing it again.
    So it--it becomes very difficult to get those back in 
shortly after they're taken out.
    Senator Feinstein. Well, let me just say what the signal 
was, we had some major problems fitting in the European basing 
towards the end. And we had many protracted negotiations and it 
turned out that I had to give up a project, so we gave up 
Vandenberg with the commitment that it would be funded this 
year. And we put the report language in the bill saying that we 
would fund it this year. So----
    Mr. Gibbs. Ma'am, I'm not aware of any discussions like 
that.
    Senator Feinstein. Well, you should be aware, respectfully, 
of the report language.
    Mr. Gibbs. Yes, ma'am, I am.
    Senator Feinstein. It was in the bill which says that we 
would fund it. So you're saying it isn't a necessity any 
longer, or you would have submitted it to us.
    Mr. Gibbs. No, ma'am, I think I said it the way I believe 
it, that in fact when the Congress takes something out of the 
budget, it's very difficult to get it back within the process.
    Senator Feinstein. So that is for all the overseas basing? 
Several were eliminated last year, and they were included in 
the President's 2005 budget. I think that's somewhat 
disingenuous. I mean, we deleted things in Europe last year.
    So how can you come back and say, you know, it's--true, it 
is a fitness center. But that also was a priority in your 
opening statement, the commitment to fitness.
    Mr. Gibbs. Absolutely.
    Senator Feinstein. Let me just ask you----
    Mr. Gibbs. The same amount of money is going into fitness 
centers in 2005 as was--if you'll go back and look at the 2004 
plan for 2005, those projects are still there and the same 
amount of money is committed to fitness centers as we had said 
there would be the previous year.
    Senator Feinstein. But you just are putting them somewhere 
else?
    Mr. Gibbs. No, they're the ones that were in for 2005. 
They're the same ones.
    Senator Feinstein. But you're not applying the same 
standards to the fitness center that you apply in Europe, where 
a project denied last year comes back this year.
    Mr. Gibbs. No, I think what I just said was that the same 
amount of money is included in 2005 request for fitness centers 
as we told you in the 2005 plan would be applied to fitness 
centers. And without looking at each one individually and I 
will go back and confirm that for you, but I think it's the 
same ones we said a year ago were going to be in 2005.
    Senator Feinstein. Well, in my view, Mr. Secretary, you're 
splitting hairs. You clearly didn't put the money in for the 
Vandenberg fitness center, right?
    Mr. Gibbs. That's correct.
    Senator Feinstein. And we clearly said in our report 
language that if you did, we'd fund it this year.
    And--okay. I have no other questions, Madam Chairman.

                       VANDENBERG AIR FORCE BASE

    Senator Hutchison. Okay. Well, I would just like to follow-
up and ask General Fox, would you say that Vandenberg is still 
a priority, as it was last year?
    General Fox. Madam Chairman, we have a lot of priorities 
that we weren't able to get into the fiscal year 2005 
President's budget. I would tell you even from Secretary 
Dubois' comments about how the Department of Defense is 
beginning to build back its military construction program, we 
believe that the Secretary of Defense, the Secretary of the Air 
Force are very committed to building back the military 
construction program, such that we'll be able to bring a 
healthier MILCON program to you in following years after this 
submittal in fiscal year 2005.
    To answer your question specifically, I believe the 
Vandenberg fitness center is a very viable project. There were 
actually three projects that we were unable to have headroom in 
our military construction submittal to get into the fiscal year 
2005 program. When we buy our new mission requirements for C-
17, and other aircraft, then buy the must do legal requirements 
for environmental compliance, and look at the dormitories as a 
priority, we were constrained in 2005.

                     ADDITIONAL COMMITTEE QUESTIONS

    But I believe the major command that owns the requirement 
for the Vandenberg fitness center will push it very very hard 
in the near term.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing.]

          Questions Submitted by Senator Kay Bailey Hutchison

                            FITNESS CENTERS
    Question. Your written testimony notes the Air Force's new emphasis 
on fitness. Our staff just visited a number of Air Force bases in 
Europe and found that even brand new fitness centers, such as the one 
that just opened at Aviano, are overcrowded because of the new fitness 
emphasis. Is the Air Force adjusting its design guidelines for fitness 
centers to account for the increased demand, and are the three fitness 
centers in this year's budget adequately sized to accommodate that 
demand?
    Answer. Yes, the Air Force is changing the Fitness Center Facility 
Design Guide to accommodate the impact of the ``Fit to Fight'' 
initiative; increased use of fitness centers by both individual users 
and larger groups. Proposed changes include the addition of indoor 
running lanes, adjustments in size requirements for locker rooms, group 
exercise areas, and equipment areas, and the addition of parent-child 
workout area.
    The three fitness center projects in the fiscal year 2005 
President's Budget (Elmendorf AFB, AK; Hill AFB, UT; and Lajes AB, 
Portugal) all are currently under design based on the current guide. 
Elmendorf AFB is developing a companion O&M project to improve their 
facility. The combination of MILCON and O&M work will meet immediate 
needs. Hill AFB's only major scope concern is an indoor running track, 
which they identified as an optional bid item. If construction bids are 
favorable, they will include the indoor running track in the fiscal 
year 2005 project. The Lajes fitness center project will provide an 
additional 1,300 SM of space to greatly improve their existing 
conditions.

                        GENERAL OFFICER HOUSING
    Question. The Air Force has an elaborate system for rating the 
adequacy of its General Officer Quarters and is to be commended for 
establishing a systematic approach to this question. However, the 
system has resulted in the Air Force declaring 82 percent of its 
General Officer Quarters as ``inadequate'' while the Army and Navy deem 
all of theirs to be adequate. The Defense Department Inspector General 
issued a memorandum in January noting significant issues in the Air 
Force's approach and suggesting steps to improve it. What are you doing 
to address the issues raised by the IG?
    Answer. The Air Force uses the Condition Assessment Matrix (CAM) to 
assess/rate the condition of its Military Family Housing (MFH) 
inventory, including the existing General Officer Quarters (GOQ) 
inventory. This system rates the condition of each component of the 
house and evaluates its functional adequacy with regard to Air Force 
standards. The goal of these standards is to construct and maintain 
housing that is comparable to what Airmen can rent or buy downtown.
    Through this systematic approach, the Air Force developed the GOQ 
Master Plan. This plan identifies 82 percent of the GOQ inventory as 
requiring a one-time MILCON project. These whole-house improvement 
projects would address all deficiencies, conditional and functional. 
For the remaining 18 percent of the GOQ inventory, deficiencies can be 
addressed through routine MFH operations and maintenance cycles.
    The Air Force non-concurred with the Department of Defense 
Inspector General (DOD IG) memorandum regarding the GOQ Master Plan, 
stating: ``We appreciate the efforts of the DOD IG during the past 4 
years regarding the Air Force GOQ Master Plan and agree that there are 
minor administrative procedures that may warrant improvements. However, 
in reviewing the assumptions and findings contained in the audit 
memorandum, Air Force policy is misstated and there are factual errors 
that warrant a response.'' The Air Force provided a 45-page, detailed 
response, which addressed assertions contained in the DOD IG 
memorandum.
    Prior to the completion of the DOD IG audit, the Air Force 
independently took action to refine and improve the Condition 
Assessment Matrix (CAM) definitions. The Air Force also proactively 
corrected administrative errors found within the GOQ Master Plan.
    The Air Force fully supports the Condition Assessment Matrix (CAM) 
process and the GOQ Master Plan as excellent planning tools for 
managing its GOQ inventory. The GOQ Master Plan methodology is 
supported by the Office of the Secretary of Defense (OSD AT&L). The OSD 
AT&L Housing and Competitive Sourcing director endorsed the GOQ Master 
Plan methodology in a November 20, 2003 memorandum to the DOD IG. 
Furthermore, the American Planning Association Federal Division 
recognized the GOQ Master Plan as the ``Outstanding Federal Program of 
the Year'' for 2004.

                          C-17 BASING DECISION
    Question. Information on C-17 Basing decisions, specifically with 
reference to Dyess AFB and Kelly USA
    Answer. The Air Force briefed a comprehensive Mobility Roadmap to 
Congress on 15 April 2002. The roadmap was part of a detailed force 
structure plan that included 33 states and 53 bases and identified the 
beddown plan for 180 C-17s, 112 C-5s, and the remaining C-130 fleet 
following the reduction of 56 C-130s. The roadmap development 
considered numerous options while building a plan that balanced 
requirements and fiscal constraints.
    Given the current and authorized mobility force structure, the Air 
Force plan is to maintain the C-130 mission at Dyess AFB and the C-5 
mission at Lackland AFB (Kelly Field). Additionally, the Air Force will 
transfer the C-5 Flying Training Unit mission to Lackland AFB in fiscal 
year 2007.
                                 ______
                                 

            Questions Submitted by Senator Dianne Feinstein

                            REDUCED REQUEST
    Question. When comparing the active component military construction 
funding requests, the Air Force, by far, asked for much less funding 
this year than in previous years. For example, this year's request is 
20 percent less than last year's requested amount, and 36 percent less 
than the enacted amount. With the recapitalization rate of your 
infrastructure climbing, how do you justify this reduced request?
    Answer. The Air Force has a balanced program and we continue to 
concentrate on our backlog and achieving OSD's 67-year recap rate goal 
by 2008.
    Although the active portion of the Air Force's fiscal year 2005 
military construction request ($664 million) is 14 percent less than 
the fiscal year 2004 request ($773 million), the total force (active, 
Guard, and Reserve) request of $876 million is $89 million greater than 
our fiscal year 2005 projection in the fiscal year 2004 President's 
Budget (PB) request and near the same level as the fiscal year 2004 PB 
request of $878 million. Also, our fiscal year 2005 recapitalization 
rate of 148 years is better than the 180 years of last year's budget 
request, putting us on track to achieve and maintain a 67-year rate by 
2008. Although we are taking some near-term risk in our facilities, we 
expect our outyear investment increases will help us make significant 
improvements.

                        FAMILY HOUSING REQUESTS
    Question. This year your request for funding family housing is 16 
percent greater than last years request. Conversely, the Navy's request 
has decreased by almost 19 percent from last year's requested amount. 
It is my understanding that the Navy attributes this decrease to family 
housing privatization. As your testimony states, the privatization 
concept allows the services the opportunity to leverage through 
contractors, private funds, that will get military families into 
modern, adequate housing more quickly.
    Initially, the Air Force was more reluctant to use privatization to 
fill this housing deficit. However, now, at least in the continental 
United States, the Air Force program is well underway. Could you 
describe the Air Force's current position on family housing 
privatization?
    Answer. With over 40,000 housing units requiring revitalization, 
the Air Force recognizes housing privatization as a key part of OSD's 
three-pronged strategy of using local community housing, privatization, 
and MILCON to provide adequate housing for our Airmen. Privatization 
allows the Air Force to attract private sector capital and expertise to 
provide quality housing for Air Force members, thereby leveraging our 
construction dollars. As of March 2004, the Air Force has privatized 
6,092 units by contributing $122.3 million for a total development cost 
of $647.3 million--a leverage of 6.28:1. Eight more projects are 
planned for award by June 2004 to privatize 10,027 units for a leverage 
of 22.85:1. With housing privatization providing quality housing sooner 
and at less cost, the Air Force has budgeted $39.1 million in fiscal 
year 2005 to develop privatization concepts and acquire 48 projects 
valued at over $5.6 billion. Besides leveraging Air Force construction 
dollars, housing privatization is proving to be more cost effective 
than traditional MILCON. Of seven awarded projects, privatization is 
6.5 percent less costly than traditional MILCON over the 50-year life 
cycle; and of six projects pending award, privatization is 14.5 percent 
less. Succeeding with housing privatization, the Air Force is 
considering every base with housing areas not yet privatized for 
privatization during updates to the Family Housing Master Plan (FHMP) 
to revitalize remaining inadequate housing units. Currently, 
feasibility studies are on going at 25 separate installations. 
Privatization will be selected when payback meets OSD criterion and the 
life cycle cost analysis indicates privatization to be cheaper than 
continued government ownership. With continued support from the budget 
authority for military family housing privatization and on-going 
successes in housing privatization, the Air Force's FHMP will meet the 
Secretary of Defense's 2007 goal.

                             DERF FUNDS USE
    Question. The Committee has become extremely frustrated by the 
poorly planned use of Defense Emergency Response Funds (DERF) to 
implement physical security measures. It appears that neither the Air 
Force, nor any of the other services for that matter, has adopted a 
standardized plan regarding certified and tested physical security 
measures and the products used to ensure these measures.
    The Department of State has a long-standing physical security 
program including product testing and certification. Time-proven 
security measures could be adopted immediately by each of the services. 
Has the Air Force made efforts to explore standardized measures for 
security enhancement and to immediately adopt products and measures 
that are proven?
    Answer. The Air Force employs a multi-pronged approach to the 
acquisition of physical security technologies. This approach includes 
capitalizing on Research and Development (R&D), and operational testing 
efforts, as well as tapping into existing governmental and commercially 
available solutions. Several entities including the Electronic Systems 
Center at Hanscom AFB MA, the Force Protection Battlelab at Lackland 
AFB TX, and the DOD Physical Security Equipment Action Group (PSEAG) 
are integral to this effort.
    The PSEAG is a Joint-service R&D program that supports the Physical 
Security Equipment requirements of the four Services. The PSEAG selects 
or designs, evaluates, and acquires the most efficient and productive 
security equipment at the most reasonable cost to ensure the effective 
protection of DOD resources, including personnel, classified 
information, material, and readiness assets. The PSEAG provides 
programming, planning, and funding support for both near and long term 
requirements, and eliminates duplication of R&D while ensuring 
interoperability between essential elements of security systems fielded 
by the DOD components to ensure Joint Interest/Joint Capability. The 
acquisition of SmartGate technology is an example of a successful 
product and operational development.
    In addition, the Air Force is fully engaged with the Technical 
Support Working Group (TSWG). The TSWG, the U.S. national forum that 
includes the Department of State, identifies, prioritizes, and 
coordinates interagency and international R&D requirements for 
combating terrorism. The TSWG rapidly develops technologies and 
equipment to meet the high priority needs of the combating terrorism 
community, and addresses joint international operational requirements 
through cooperative R&D with major allies. Since 1986, the TSWG has 
pursued combating terrorism technologies in the broad context of 
national security by providing a cohesive interagency forum to define 
user based technical requirements spanning the Federal interagency 
community.
    The Air Force recently fielded the Integrated Base Defense Security 
Systems (IBDSS) contract which provides a critical line of defense for 
all critical assets, fixed, temporary or mobile by way of electronic 
detection, alarm assessment, access control, communications and 
command, control and display capabilities to support an effective 
response. The intent of this effort is to provide security personnel 
with standardized and integrated security systems that neutralize or 
mitigate anticipated threats while reducing manpower levels wherever 
possible.
    IBDSS acquisition is a contract vehicle for satisfying all of the 
Force Protection Command and Control Directorates acquisition 
requirements for the next 5 years. This contract supports quick 
reaction temporary and permanent fixed site deployments as well as 
multiple installations at different locations in parallel throughout 
the world. It will also be the vehicle of choice for providing 
standardized material solutions to combat mission need statements in 
support of the global war on terrorism, after appropriate approvals are 
obtained, if required.
    From a MILCON standpoint, construction guidance supports security 
operational and acquisition development. The Air Force recently fielded 
an Antiterrorism/Force Protection (AT/FP) Facility Investment Strategy 
(FIS) to effectively manage AT/FP facility requirements. To get the 
most for our AT/FP facility investment, FIS assigns highest priority to 
securing our perimeters. Once perimeters are secure, we can ``move in'' 
to take care of critical and mass gathering facilities. Combined with 
new Air Force entry control facility design standards and SmartGate 
acquisition, FIS succeeds making the most of our construction funds to 
protect our installations.

                             AIR FORCE BRAC
    Question. The Air Force's budget request for BRAC environmental 
cleanup took a $53 million (-27 percent) cut. Only 2 years ago, under 
my Chairmanship, the Air Force was desperately short funding for BRAC 
environmental remediation, and Senator Hutchison and I added an 
additional $25 million to assist you. Now, only 2 years later, the 
request is on a downward glide slope while the needs are equally, or 
maybe even more pressing.
    Six of the Air Force's National Priority list sites are in 
California. With cleanup at McClellan AFB estimated to continue until 
2034, it's inconceivable to me that 27 percent less funding is 
required. How do you justify this greatly reduced request?
    Answer. The fiscal year 2005 Air Force BRAC environmental 
President's Budget request was not a result of a program cut. As our 
overall program matures, we move from high cost construction projects 
to lower cost system operation and maintenance projects. The shift to 
system operation and maintenance requirements will be reflected in more 
level funding requests in this and in future years.
    As the BRAC environmental program moves forward, we are taking 
advantage of remedial system optimization efforts to reduce our overall 
program long-term costs in order to deal with our challenges and meet 
our commitments at McClellan and other bases.

                             MC CLELLAN AFB
    Question. Air Force representatives, and representatives of 
McClellan Park met the week of March 22nd to negotiate the early 
transfer of McClellan. I was happy to add funding to the Defense Bill 
last year to advance to sewer replacement which I understand will begin 
construction this summer. Could you please describe the progress that 
has been made in these negotiations and which items remain open?
    Answer. Regarding the sewer project, we have budgeted $3.0 million 
in fiscal year 2004 to augment the OEA grant of $4.9 million to begin 
the replacement project. The Air Force portion of the sewer project is 
the removal of contaminated soil encountered during the sewer trenching 
operation. The Air Force, Sacramento County, along with McClellan Park 
are working to finalize an Environmental Services Cooperative 
Agreement. Project is on track to begin July 2004.
    Regarding privatization, the Air Force, County, California State 
regulators, EPA Region IX, and McClellan Park met on March 25, 2004 to 
initiate the project. The meeting was considered a success by all 
attendees; agencies committed to completing general action items and 
agreed on delivery dates, and to move ahead on the privatization 
proposal. The County is preparing a project for a specific parcel of 
land for the agencies to consider. This project, which is due by the 
end of April 2004, will provide the basis for developing the required 
agreements and documents to execute privatization.

                          SUBCOMMITTEE RECESS

    Senator Hutchison. Okay. Well, we'll work with you and with 
Senator Feinstein. Thank you very much for your time, we 
appreciate it. Thank you.
    Mr. Gibbs. Thank you very much, Madam Chairman.
    [Whereupon, at 12:05 p.m., Tuesday, March 30, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]

 
       MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL YEAR 2005

                              ----------                              


                        WEDNESDAY, APRIL 7, 2004

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:51 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Kay Bailey Hutchison (chairman) 
presiding.
    Present: Senators Hutchison and Landrieu.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF GEOFFREY G. PROSCH, ACTING ASSISTANT 
            SECRETARY OF THE ARMY, INSTALLATIONS AND 
            ENVIRONMENT
ACCOMPANIED BY:
        MAJOR GENERAL LARRY J. LUST, ASSISTANT CHIEF OF STAFF FOR 
            INSTALLATION MANAGEMENT, DEPARTMENT OF THE ARMY
        MAJOR GENERAL WALTER F. PUDLOWSKI, SPECIAL ASSISTANT TO THE 
            DIRECTOR, ARMY NATIONAL GUARD
        BRIGADIER GENERAL GARY M. PROFIT, DEPUTY CHIEF, ARMY RESERVE

           OPENING STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. First, I apologize for being late for 
this hearing. We just finished our second vote and so I was 
detained on the floor. I talked to Senator Feinstein on the 
floor and because of the delay she is not going to be able to 
make it to this hearing; she had an emergency briefing in the 
Intel Committee that was just called so she is not going to be 
able to make it. She had intended to come and then leave, but I 
told her I certainly understood and I knew that you would.
    But we do have quite a bit to discuss and I appreciate very 
much the Army and the Navy coming in today to talk about 
Military Construction. And I would like to start with the Army 
budget and say that in the remarks that you have put forward, 
Mr. Prosch, the Army Military Construction is 15 percent above 
last year's request and National Guard is 75 percent above last 
year's request and Reserve is up 27 percent. However, even 
though Guard and Reserve are up they are still below the levels 
that we enacted last year, and I am concerned that we are 
getting further and further behind in Guard and Reserve 
Military Construction. I am very hopeful that you will talk 
about the Residential Communities Initiative. I have seen some 
of those at Fort Hood, I think it is a wonderful concept, and I 
know that this is a priority for you, which I totally support; 
it's what we ought to be doing for our military families, and I 
hope we can work together to raise the privatization cap so 
that you will have the opportunity to do that.
    I think the fact that it has been announced that we are 
bringing mostly Army troops back from Germany and Korea in the 
next 5 to 6 years is very important for the Military 
Construction issue but I also am concerned, and I hope you will 
address this, that with the numbers that we are looking at, 
roughly half what we have in Europe today in the Army are going 
to be coming home, when will we start seeing the Military 
Construction affects of this? When will we start seeing what 
you're going to need for those bases to which these people will 
be coming? In addition, General Abizaid has testified before 
Congress that he has 44 unfunded MILCON projects with a price 
tag of $531 million, most of which will be in Army support. I 
said last week that we really need to start looking at that 
because that's a major part of any Military Construction 
funding that we would be looking at.
    So with that let me say welcome. I am glad we've been able 
to visit. I look forward to hearing the summary of your 
statement, and then I will have some questions. Thank you.
    Mr. Prosch. Thank you very much, Madam Chairman. I am 
pleased to appear before you with my Army Installation 
partners--Major General Larry Lust from the Active Army; Major 
General Walt Pudlowski from the Army National Guard and 
Brigadier General Gary Profit from the Army Reserve--to discuss 
the Army's fiscal year 2005 Military Construction budget. We 
have provided a detailed written statement for the record but I 
would like to comment briefly on the highlights of our program.
    We begin by expressing our deep appreciation for the great 
support that the Congress has provided to our soldiers and 
their families who are serving our country around the world. We 
are a Nation and an Army at war and our soldiers would not be 
able to perform their mission so well without your support.
    We have submitted a robust Military Construction budget of 
$3.7 billion, 13 percent over fiscal year 2004 amended budget 
request, that will fund our highest priority, Active Army, Army 
National Guard and Army Reserve facilities, along with our 
family housing requirements. This budget request supports the 
Army vision encompassing current readiness, transformation and 
people. As we are fighting the global war on terrorism we are 
simultaneously transforming to be a more relevant and ready 
Army. We are on a path with the transformation of installation 
management that will allow us to achieve these objectives.
    We currently have almost 250,000 soldiers mobilizing and 
demobilizing, deploying and redeploying. More troops are coming 
and going on our Army installations than in any era since World 
War II. Our soldiers and installations are on point for the 
Nation.
    The Army recently identified key focus areas to channel our 
efforts to win the global war on terrorism and to increase the 
relevance and readiness of the Army. One of our focus areas is 
installations as flagships, which enhances the ability of our 
Army installations to project power and support families. Our 
installations support an expeditionary force where soldiers 
train, mobilize and deploy to fight and are sustained as they 
reach back for enhanced support. Soldiers and their families 
who live on and off the installation deserve the same quality 
of life as is afforded the society they are pledged to defend.
    Installations are a key ingredient to combat readiness and 
well-being. Our worldwide installation structure is critically 
linked to Army transformation and the successful fielding of 
the future force. Military Construction is a critical tool to 
ensure that our installations remain relevant and ready. Our 
fiscal year 2005 Military Construction budget will provide the 
resources and facilities necessary for continued support of our 
mission. Let me summarize what this budget will provide for the 
U.S. Army: new barracks for 4,200 soldiers; adequate on-post 
housing for 14,200 Army families; increased MILCON funding for 
the Army National Guard and the Army Reserve over last year's 
request; new readiness centers for over 3,000 Army National 
Guard soldiers; new Reserve centers for over 2,800 Army Reserve 
soldiers; a $287 million military construction investment and 
training ranges; a battalion-size basic combat training complex 
and facilities support and improvements for four Stryker 
brigades.
    With the sustained and balanced funding represented by this 
budget our long-term strategies will be supported. With your 
continued help we will be able to improve soldier and family 
quality of life while remaining focused on the Army's 
transformation to the future force.
    In closing Madam Chairman, we thank you for the opportunity 
to outline our program. As I have visited Army installations I 
have witnessed progress that has been made and we attribute 
much of this success directly to the long-standing support of 
this committee and your able staff. With your continued 
assistance the Army pledges we will use fiscal year 2005 MILCON 
funding to remain responsive to the Nation's needs.
    Thank you for the opportunity to appear before your 
subcommittee. Me and my partners here will be happy to answer 
any questions you may have.
    [The statement follows:]

                Prepared Statement of Geoffrey G. Prosch

                              INTRODUCTION
    Madam Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Army's Military Construction budget 
request for fiscal year 2005. This request includes initiatives of 
critical importance to the Army and this committee, and we appreciate 
the opportunity to report on them to you. We would like to begin by 
expressing our appreciation for the tremendous support that the 
Congress has provided to our Soldiers and their families who are 
serving our country around the world. We are a Nation and an Army at 
war, and our Soldiers would not be able to perform their missions so 
well without your support.

                                OVERVIEW
    The Army has begun one of the most significant periods of 
transformation in its 228-year history. We are ``An Army at War--
Relevant and Ready.'' This maxim will define how we meet the Nation's 
military requirements today and into the future. As we are fighting the 
Global War on Terrorism, we are simultaneously transforming to be a 
more relevant and ready Army. We are on the road to a transformation 
that will allow us to continue to dominate conventional battlefields 
and provide the ability to deter and defeat adversaries who rely on 
surprise, deception, and asymmetric warfare to achieve their 
objectives. To accomplish our objective, our operational force will 
temporarily increase by 30,000 soldiers. We currently have almost 
250,000 soldiers mobilizing and demobilizing, deploying and 
redeploying--more troops are coming and going on our installations than 
in any era since World War II. Military Construction is an important 
tool to our network of installations to meet our challenging 
requirements.
    As part of this transformation, the Army is fielding and equipping 
six Stryker Brigade Combat Teams (SBCT) to meet Combatant Commanders' 
requirements and to continue the Army's commitment to the Global War on 
Terrorism. These SBCTs allow the Army to continue modernizing and 
transforming the Current Force. The rapid development and fielding of 
six SBCTs is leading the transformation of the Army--physically and 
culturally.
    To meet the challenges of today's missions, 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 deployment platforms to generate the capabilities 
necessary to sustain a lethal force. We must ensure that a trained and 
qualified force will be in place to support the Future Force of a 
transformed Army. To meet that goal and ensure continued readiness, we 
must take care of Soldiers and families. Our installations are a key 
component in this effort.

                       INSTALLATIONS AS FLAGSHIPS
    The Army recently identified 17 Army Focus Areas to channel our 
efforts to win the Global War on Terrorism and to increase the 
relevance and readiness of the Army. One of the Focus Areas--
Installations as Flagships--enhances the ability of an Army 
installation to project power and support families. Our installations 
support an expeditionary force where Soldiers train, mobilize, and 
deploy to fight and are sustained as they reach back for support. 
Soldiers and their families who live on and off the installation 
deserve the same quality of life as is afforded the society they are 
pledged to defend. Installations are a key component in the tenets of 
the Army Vision. Our worldwide installations structure is inextricably 
linked to Army transformation and the successful fielding of the Future 
Force.

                        INSTALLATION STRATEGIES
    There is much work to be done if all installations are to be 
flagships with the ability to both project power and support families 
to an equitable standard. We are a world-class combat ready force being 
supported by substandard facilities that impair our ability to meet the 
mission. To improve our facilities posture, we have specific 
initiatives to focus our resources on the most important areas--
Barracks, Family Housing, Focused Facilities, Ranges, and 
Transformation.
    Barracks.--The Army is in the 11th year of its campaign to 
modernize barracks to provide 136,000 single enlisted permanent party 
Soldiers with quality living environments. This year's budget request 
includes 19 barracks projects providing new or improved housing for 
4,200 Soldiers. The new complexes provide two-soldier suites, increased 
personal privacy, larger rooms, walk-in closets, new furnishings, 
adequate parking, landscaping, and unit administrative offices 
separated from the barracks. With the approval of $700.4 million for 
barracks in this request, a significant portion of our requirement will 
be funded. We are making considerable progress at U.S. installations 
and the Army funded two barracks projects, based upon the Combatant 
Commander's request, for Grafenwoehr, Germany.
    Family Housing.--This year's budget continues our significant 
investment in our Soldiers and their families by supporting our goal to 
have funding in place by 2007 to eliminate inadequate housing. We have 
included funding in this year's budget request to privatize 11,906 
houses. In addition we will replace 1,313 houses, build 100 new houses 
to support Stryker Brigade Combat Team deployment, and upgrade another 
875 houses using traditional Military Construction. For families living 
off-post, the budget request for military personnel increases the basic 
allowance for housing to eliminate out of pocket expenses. Once 
overseas basing decisions are made, we will adjust our plans for new 
housing construction overseas.
    Focused Facilities.--Building on the successes of our housing and 
barracks programs, we are moving to improve the overall condition of 
Army infrastructure with the Focused Facility Strategy. The 
Installation Readiness Report is used to determine facilities quality 
ratings of C-1 to C-4 based on their ability to support mission 
requirements.
    Installation Readiness Report--Facilities Quality Ratings
  --C-1 facilities fully support mission accomplishment
  --C-2 facilities support the majority of assigned missions
  --C-3 facilities impair mission performance
  --C-4 facilities significantly impair mission performance
    We are a C-1 Army living and working in C-3 facilities. Our goal is 
to reach an overall Army average of C-2 quality by 2010 by 
concentrating on seven types of C-3 and C-4 facilities. These focus 
facilities are general instruction buildings, Army National Guard 
Readiness Centers, Army Reserve Centers, tactical vehicle maintenance 
shops, training barracks, physical fitness centers, and chapels. We are 
requesting $207 million in fiscal year 2005 to support this initiative.
    Army Range and Training Land Strategy.--Providing ranges and 
training lands that enable the Army to train and develop its full 
capabilities is key to ensuring that America's forces are relevant and 
ready now. The Army's Deputy Chief of Staff G-3 developed the Army 
Range and Training Land Strategy to support the Department of Defense's 
Training Transformation, Army Transformation, and the Army's 
Sustainable Range Program. It identifies priorities for installations 
requiring resources to modernize ranges, mitigate encroachment, and 
acquire training land. The strategy serves as the mechanism to 
prioritize investments for these installations and seeks to optimize 
the use of all range and land assets. The result is a long-range plan 
that provides the best range infrastructure and training lands based on 
mission and training requirements.
    Current to Future Force.--The Army is undergoing the biggest 
internal restructuring in the last 50 years. As part of this 
transformation effort, we are fielding and equipping six Stryker 
Brigade Combat Teams throughout the Army. This transformation will 
drive our efforts to ensure that our ``training battlefields'' continue 
to meet the demands of force structure, weapons systems, and doctrinal 
requirements. Providing ranges and training lands that enable the Army 
to train and develop its full capabilities is crucial to ensure that 
America's forces are relevant and ready now. Our fiscal year 2005 
Military Construction budget requests $305 million for projects for 
operations and training facilities, training ranges, maintenance 
facilities, logistics facilities, utilities, and road upgrades in 
support of the Stryker Brigade Combat Teams.
    The former Army Strategic Mobility Program ended in fiscal year 
2003 with the capability of moving five and one-third divisions in 75 
days. We must improve current processes and platforms so intact units 
arrive in theater in an immediately employable configuration.
    The new Army Power Projection Program (AP3) is a combat multiplier 
for Army transformation and a catalyst for joint and Service 
transformation efforts related to force projection. AP3 is a set of 
initiatives and strategic mobility enabling systems, including 
infrastructure projects, that ensures we are able to meet Current and 
Future Force deployment requirements. AP3 funding began in fiscal year 
2004. AP3 ensures the capability to deploy Army forces in accordance 
with Regional Combatant Commanders' operational plans.

                         MILITARY CONSTRUCTION
    The Army's fiscal year 2005 request has increased over fiscal year 
2004 and includes $3.7 billion for Military Construction appropriations 
and associated new authorizations.

----------------------------------------------------------------------------------------------------------------
                                                                             Authorization of
          Military Construction Appropriation              Authorization      Appropriation      Appropriation
                                                              Request            Request            Request
----------------------------------------------------------------------------------------------------------------
Military Construction Army (MCA).......................     $1,535,400,000     $1,771,285,000     $1,771,285,000
Military Construction Army National Guard (MCNG).......                N/A        295,657,000        295,657,000
Military Construction Army Reserve (MCAR)..............                N/A         87,070,000         87,070,000
Army Family Housing (AFH)..............................        636,099,000      1,565,006,000      1,565,006,000
                                                        --------------------------------------------------------
      TOTAL............................................      2,171,499,000      3,719,018,000      3,719,018,000
----------------------------------------------------------------------------------------------------------------

                   MILITARY CONSTRUCTION, ARMY (MCA)
    The active Army's fiscal year 2005 Military Construction request 
for $1,771,285,000 (for appropriation and authorization of 
appropriations) and $1,535,400,000 (for authorization) is for People, 
Current Readiness, and Transformation to the Future Force. These funds 
are critically needed to provide new barracks, invest in training 
ranges and land, recapitalize existing facilities, and support three 
Active Army Stryker Brigade Combat Teams in Alaska, Hawaii, and 
Louisiana. The request also includes funds for planning and design for 
future projects, along with Unspecified Minor Military Construction.
    The Department of Defense continues to assess its global stationing 
strategy. We have included only minimal, but critical, overseas 
projects in the fiscal year 2005 Military Construction budget request. 
These projects are required to provide the infrastructure necessary to 
ensure continued Soldier readiness and family well-being that is 
essential throughout any period of transition.
    People.--We are requesting $798 million to improve the well-being 
of our Soldiers, civilians, and families. Approximately 50 percent of 
our MCA budget request will improve well being in significant ways--
providing 19 unit barracks complexes for 4,200 Soldiers ($700 million), 
a basic trainee barracks complex ($50 million), a physical fitness 
center ($18 million), a chapel ($10 million), two child development 
centers and a youth center ($20 million).
    Current Readiness.--Our budget request includes $504 million to 
keep our Soldiers trained and ready to respond to the Nation's needs. 
Current readiness projects include operational and training 
instructional facilities ($92 million), training ranges ($122 million), 
logistics facilities ($31 million), utilities and land acquisition ($27 
million), maintenance/production and tactical equipment facilities ($82 
million), communication/administration facilities ($104 million), a 
research and development facility ($33 million), and community support 
facilities ($13 million).
    Current to Future Force.--Our budget request also includes $298 
million for projects to ensure the Army is trained, deployable, and 
ready to rapidly respond to national security requirements and support 
transformation for the Stryker Brigade Combat Teams. Projects include 
operations and training facilities ($63 million), training ranges ($79 
million), a maintenance facility ($49 million), logistics facilities 
($19 million), and utilities and roads ($88 million).
    Other Worldwide Support Programs.--The fiscal year 2005 MCA request 
includes $171 million for planning and design, along with Unspecified 
Minor Military Construction. Planning and design funds ($151 million) 
are used to accomplish final design of future projects and oversight of 
host Nation construction. As Executive Agent for the Department of 
Defense, the Army uses planning and design funds for oversight of 
construction projects funded by host Nations for use by all Services. 
Finally, the fiscal year 2005 MCA budget contains $20 million for 
Unspecified Minor Military Construction to address unforeseen critical 
needs or emergent mission requirements that cannot wait for the normal 
programming cycle.

           MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)
    The Army National Guard's fiscal year 2005 Military Construction 
request for $295,657,000 (for appropriation and authorization of 
appropriations) is focused on Current Readiness and transformation to 
the Future Force.
    Current Readiness.--In fiscal year 2005, the Army National Guard 
has requested $116.1 million for nine projects. These funds will 
provide the facilities our Soldiers need as they train, mobilize, and 
deploy. They include one Readiness Center, one Armed Forces Reserve 
Center, three Army Aviation Support Facilities, two Ranges, and two 
Training projects.
    Current to Future Force.--This year, the Army National Guard is 
requesting $144.2 million for 23 projects needed to transform from 
Current to Future Force. There are 16 projects for the Army Division 
Redesign Study, three for Aviation Transformation, two for the Range 
Modernization Program, and two for the Stryker Brigade Combat Team 
initiative.
    Other Worldwide Support Programs.--The fiscal year 2005 MCNG budget 
request contains $30.8 million for planning and design of future 
projects, along with $4.5 million for Unspecified Minor Military 
Construction to address unforeseen critical needs or emergent mission 
requirements that cannot wait for the normal programming cycle.

               MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)
    The Army Reserve's fiscal year 2005 Military Construction request 
for $87,070,000 (for appropriation and authorization of appropriations) 
is for current readiness and other worldwide unspecified programs.
    Current Readiness.--The Army Reserve will invest $72.9 million in 
current readiness projects. We will invest $58.6 million to construct 
four new Reserve Centers, and one military equipment park; invest $7.9 
million to modernize and expand one Reserve Center, invest $3.9 million 
to construct two ranges; and invest $2.5 million to acquire land for a 
future Armed Forces Reserve Center.
    Other Worldwide Unspecified Programs.--The fiscal year 2005 MCAR 
budget includes $11.2 million for planning and design. The funds will 
be used for planning and design of future projects. The fiscal year 
2005 MCAR budget also contains $2.9 million for Unspecified Minor 
Military Construction to address unforeseen critical needs or emergent 
mission requirements that cannot wait for the normal programming cycle.

                ARMY FAMILY HOUSING CONSTRUCTION (AFHC)
    The Army's fiscal year 2005 family housing request is $636,099,000 
(for appropriation, authorization of appropriation, and authorization). 
It continues the successful and well-received Whole Neighborhood 
Revitalization initiative approved by Congress in fiscal year 1992 and 
supported consistently since that time, and our Residential Communities 
Initiative program.
    The fiscal year 2005 new construction program provides additional 
housing in Alaska in support of a Stryker Brigade Combat Team and Whole 
Neighborhood replacement projects at nine locations in support of 1,413 
families for $394.9 million.
    The Construction Improvements Program is an integral part of our 
housing revitalization and privatization programs. In fiscal year 2005, 
we are requesting $75.4 million for improvements to 875 existing units 
at three locations in the United States and two locations in Europe, as 
well as $136.6 million for scoring and direct investment in support of 
privatization of 11,906 units at six Residential Communities Initiative 
(RCI) locations.
    In fiscal year 2005, we are also requesting $29.2 million for 
planning and design in support of future family housing construction 
projects critically needed for our Soldiers. Privatization. RCI, the 
Army's Family Housing privatization program, is providing quality, 
sustainable housing and communities that our Soldiers and their 
families can proudly call home. RCI is a critical component of the 
Army's effort to eliminate inadequate family housing in the United 
States. The fiscal year 2005 budget request provides support to 
continue implementation of this highly successful program.
    We are leveraging appropriated funds and Government assets by 
entering into long-term partnerships with nationally recognized private 
sector real estate development and management firms to obtain financing 
and management expertise to construct, repair, maintain, and operate 
family housing communities.
    The RCI program currently includes 34 installations with almost 
71,000 housing units--over 80 percent of the family housing inventory 
in the United States. By the end of fiscal year 2004, the Army will 
have privatized 19 installations with an end state of 42,000 homes.

                 ARMY FAMILY HOUSING OPERATIONS (AFHO)
    The Army's fiscal year 2005 family housing operations request is 
$928,900,000 (for appropriation and authorization of appropriations), 
which is approximately 59 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 or uneconomical housing, and funds supporting 
management of the Military Housing Privatization Initiative.
    Operations ($150 million).--The operations account includes four 
sub-accounts: management, services, furnishings, and a small 
miscellaneous account. All operations sub-accounts are considered 
``must pay accounts'' based on actual bills that must be paid to manage 
and operate family housing.
    Utilities ($132 million).--The utilities account includes the costs 
of heat, air conditioning, electricity, water, and sewage for family 
housing units. While the overall size of the utilities account is 
decreasing with the reduction in supported inventory, per-unit costs 
have increased due to general inflation and the increased costs of 
fuel.
    Maintenance and Repair ($402 million).--The maintenance and repair 
account supports annual recurring maintenance and major maintenance and 
repair projects to maintain and revitalize family housing real property 
assets. While the overall account is smaller than fiscal year 2004, the 
reduced inventory allows for greater per-unit funding than has been 
possible in the recent past. This allows us to better sustain our 
housing inventory.
    Leasing ($218 million).--The leasing program provides another way 
of adequately housing our military families. The fiscal year 2005 
request includes funding for over 13,600 housing units, including 
existing Section 2835 (``build-to-lease''--formerly known as 801 
leases) project requirements, temporary domestic leases in the United 
States, and approximately 7,700 units overseas.
    RCI Management ($27 million).--The RCI management program funding 
includes procurement requirements, environmental studies, real estate 
requirements, management, operations, implementation, and oversight of 
the overall RCI program.

                  BASE REALIGNMENT AND CLOSURE (BRAC)
    In 1988, Congress established the Defense Base Closure and 
Realignment Commission to ensure a timely, independent and fair process 
for closing and realigning military installations. Since then, the 
Department of Defense has successfully executed four rounds of base 
closures to rid the Department of excess infrastructure and align the 
military's base infrastructure to a reduced threat and force structure. 
Through this effort, the Army estimates approximately $9 billion in 
savings through 2004.
    The Army is requesting $100.3 million in fiscal year 2005 for prior 
BRAC rounds ($8.3 million to fund caretaking operations of remaining 
properties and $92.0 million for environmental restoration). In fiscal 
year 2005, the Army will complete environmental restoration efforts at 
three installations, leaving 11 installations requiring environmental 
restoration. We also plan to dispose of an additional 8,000 acres in 
fiscal year 2005.
    Fiscal year 2003 was a superb year! Using all the tools the 
Congress provided, including the Conservation Conveyance Authority and 
Early Transfer Authority, the Army transferred 100,957 acres of BRAC 
property. This is almost 40 percent of the total Army BRAC excess 
acreage, and almost as many acres as all prior years combined. To date, 
the Army has disposed of 223,911 acres (85 percent of the total acreage 
disposal requirement of 262,705 acres). We have 38,794 acres remaining 
to dispose of at 28 installations. The Army continues to save more than 
$900 million annually from previous BRAC rounds.

                       OPERATION AND MAINTENANCE
    The fiscal year 2005 Operation and Maintenance budget includes 
funding for Sustainment, Restoration, and Modernization (SRM--$2.54 
billion) and Base Operations Support (BOS--$6.57 billion). The SRM and 
BOS accounts are inextricably linked with our Military Construction 
programs to successfully support Installations as Flagships.
    Sustainment, Restoration, and Modernization (SRM).--The fiscal year 
2005 budget for SRM is $2.5 billion, of which $2.42 billion funds 
sustainment at 95 percent of the requirement. SRM provides funding for 
the Active and Reserve Components to continue making positive progress 
towards our goal to prevent deterioration and obsolescence and restore 
the lost readiness of facilities.
    Sustainment is the primary account in installation base support 
funding responsible for maintaining the infrastructure to achieve a 
successful readiness posture for the Army's fighting force. It is the 
first step in our long-term facilities strategy. Installation 
facilities are the deployment platforms of America's Army and must be 
properly maintained to be ready to support current Army missions and 
any future deployments.
    The second step in our long-term facilities strategy is the 
recapitalization by restoring and modernizing our existing facility 
assets. In fiscal year 2005, the Active Army request for Restoration 
and Modernization is $93.2 million. 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.
    Base Operations Support.--The fiscal year 2005 budget for Base 
Operations Support is $6.57 billion (Active Army, Army National Guard, 
Army Reserve). This is 70 percent of the requirement. This funds 
programs to operate the bases, installations, camps, posts, and 
stations of the Army worldwide. The program includes municipal 
services, family programs, environmental programs, force protection, 
audio/visual, base communication services and installation support 
contracts. Army Community Service and Reserve Component family programs 
include a network of integrated support service that directly impact 
Soldier readiness, retention, and spouse adaptability to military life 
during peacetime and through all phases of mobilization, deployment, 
and demobilization.

                  HOMEOWNERS ASSISTANCE FUND, DEFENSE
    The Army is the Department of Defense Executive Agent for the 
Homeowners Assistance Program. This program provides assistance to 
homeowners by reducing their losses incident to the disposal of their 
homes when military installations at or near where they are serving or 
employed are ordered to be closed or the scope of operations reduced. 
For fiscal year 2005, there is no request for appropriations and 
authorization of appropriations. Requirements for the program will be 
funded from prior year carryover and revenue from sales of homes. 
Assistance will be continued for personnel at ten installations that 
are impacted with either a base closure or a realignment of personnel, 
resulting in adverse economic effects on local communities.

                                SUMMARY
    Madam Chairman, our fiscal year 2005 budget is a balanced program 
that supports our Soldiers and their families, the Global War on 
Terrorism, transformation to the Future Force, and current readiness.
    We are proud to present this budget for your consideration because 
of what this $3.7 billion fiscal year 2005 request will provide for the 
Army:
  --New barracks for 4,200 Soldiers
  --Adequate housing for 14,200 families
  --Increase in Army National Guard and Army Reserve funding over 
        fiscal year 2004
  --New Readiness Centers for over 3,000 Army National Guard Soldiers
  --New Reserve Centers for over 2,800 Army Reserve Soldiers
  --80-year recapitalization rate for the Army
  --$287 million investment in training ranges
  --A new Basic Combat Training Complex
  --Facilities support for four new Stryker Brigades
    Our long-term strategies for Installations as Flagships will be 
accomplished through sustained and balanced funding, and with your 
support, we will continue to improve Soldier and family quality of 
life, while remaining focused on the Army's transformation to the 
Future Force.
    In closing, we would like to thank you again for the opportunity to 
appear before you today and for your continued support for our Army. 
This concludes my statement. Thank you.

    Senator Hutchison. Thank you very much and thank all of you 
for attending. Let me start by talking about the housing 
privatization authority, the $850 million cap. I am 
particularly focused on two areas, Fort Bliss and Fort Hood, 
that have major privatized housing in the works and I want to 
know what the $850 million cap will do to those projects and 
others that you have planned for this year, for this year's 
budget.

                       HOUSING PRIVATIZATION--CAP

    Mr. Prosch. Madam Chairman, if the $850 million cap is not 
lifted the Army estimates an additional $2.2 billion would have 
to be programmed in Army family housing construction to 
eliminate the inadequate housing at the 12 installations that 
would be impacted when we believe that we will hit the cap in 
November of 2004. Now, that would otherwise be eliminated with 
our $256 million of equity with our current program invested in 
privatization. The Army would not have a program in place to 
eliminate inadequate housing in the United States by 2007 as we 
had pledged to our soldiers. And as you stated, Fort Sam 
Houston and Fort Bliss are two of the installations that would 
be impacted; I can list the others.
    Senator Hutchison. I would like for you to, yes.
    Mr. Prosch. Fort Drum, New York.
    Senator Hutchison. Just for this year's budget, right? 
They're in the works?
    Mr. Prosch. These are RCI projects that would stop in 
November when the $850 million cap is hit because we could not 
put the equity investment into all these future projects.
    Fort Drum, New York; as we said, Fort Sam Houston, Texas; 
Carlisle Barracks, Pennsylvania; Picatinny and Fort Monmouth in 
New Jersey; Fort Bliss, Texas; Fort Benning, Georgia; Fort 
Knox, Kentucky; Fort Rucker, Alabama; Fort Leavenworth, Kansas; 
Fort Gordon, Georgia and Redstone Arsenal, Alabama.
    And General Lust, would you like to say anything about this 
important program?
    General Lust. I would just add that realistically it would 
be folly to think we're going to get $2.2 billion to put 
against housing when we could make that up with $256 million of 
our equity put into it.
    You mentioned Fort Hood. Fort Hood was in the first go-
around; it has already been privatized and that project is 
done. And I know you visited there and I know you've been to 
Comanche Village.
    Senator Hutchison. Yes.
    General Lust. They used to have their ups and downs, but 
with $51,000, that contractor has made that all one nice set of 
quarters. They used to have people not wanting to live in 
Comanche Village, now they have people standing in line to live 
there. The RCI partners have done just a wonderful, wonderful 
job.
    Senator Hutchison. Well, I agree with you and I have never 
seen family housing that good anywhere on any base that I have 
visited, really anywhere in the world, certainly in our 
country. I do want that to be available to every family, every 
military family, every base where you are going to make it a 
priority, and we will work to lift that cap. I just hope you 
will keep putting that concept in place. In your testimony you 
talk about the areas of focus that you're going to have, and 
I'm glad you've said this should be one of them, because I love 
what General Schoomaker is saying he's going to do in letting 
our new entrants stay in one place longer to get a community 
support base for families. I think that's a very important new 
concept, and we need to have the nice places for them to be.

                       RETURNING OVERSEAS FORCES

    I want to also ask about when you are looking at returning 
the forces from Europe and Korea. I'd like to ask you what your 
criteria are for where the people are going, particularly I 
want to say, again, Fort Hood and Fort Bliss have such a huge 
space for training, and one of the problems you have, even at 
Grafenwoehr, where you're going to still want Military 
Construction, but their training space is so limited compared 
to Fort Bliss, Fort Hood and some of the other places around 
the country, that I'd like to ask you, in your preparations for 
bringing those people home, will that space be a factor, and 
what are the other factors that you're going to consider?
    Mr. Prosch. Ma'am, Secretary of Defense has indicated that 
no later than early May he will publish his integrated global 
presence and basing strategy, which will tell us which units, 
which probably brigade-size units he would like to be sending 
back to the United States. We believe that the timing is 
perfect for this ongoing BRAC process to allow us to do the 
analysis to determine where the good capacity is, where the 
excess capacity is, posts that you mentioned that have good 
military value; that will assist us in doing that.
    General Lust, would you like to expand?
    General Lust. There are several criteria. First off, 
wherever we place them, there's got to be training space. I 
mean it doesn't make any sense to put a unit somewhere where 
you've got a postage stamp, and then you'd automatically have 
to move them somewhere to train; so where we've got to have 
training space. It has not been lost on us that 68 percent of 
the Army's training land is at one particular post in your 
state, and we haven't got a maneuver unit there.
    Senator Hutchison. Fort Bliss?
    General Lust. Yes ma'am.
    What installation's got facilities which wouldn't cause us 
to have to build more. And that will all be cranked into part 
of the BRAC process so as they go look at what we've got for 
space and facilities, that's what's important about having the 
overseas basing study completed so we can hand that requirement 
off to the BRAC people so when they do their analysis that's 
all been factored in. The other thing is what kind of housing 
we've got there, how quickly can we get it built. Obviously if 
I had RCI housing at an installation I could get it built 
quicker than I would if I have to go through the MILCON 
process. And also another part that plays on it, what can the 
community absorb? Because 60 percent of our people we plan to 
have live off-post, and also that community's got to be able to 
absorb those folks into the school system, etcetera. So all 
that's got to be taken into account as the BRAC people figure 
out we're going to position returning units.
    Now, you would be naive to think we've got a place that 
fits all that. So what we'll try doing is identify the 
locations where we have the least amount of effect.

              MILCON TO SUPPORT RETURNING OVERSEAS FORCES

    Senator Hutchison. So when do you think you would start 
requesting the Military Construction to support those returning 
units?
    General Lust. I believe that first request you'll see will 
be in the fiscal year 2007 budget because we will not have the 
BRAC announcement until May of 2005 the 2006 budget which will 
be locked in by that time. So we see fiscal year 2007 being the 
first year that we'll be able to have requirements in, ma'am.
    Senator Hutchison. Let me just ask Mr. Prosch if it 
wouldn't make some sense to begin at least a year earlier than 
that. It just seems that if you're going to have by April of 
next year, at the very latest, an idea where you're going to 
move them, it surely would help if we could not wait for the 
whole BRAC process, just sitting stagnantly on Military 
Construction and losing a year. Because once you make the 
decision that you're going to leave a base, say in Germany, 
then you know that you're not going to add any Military 
Construction there. It's going to start deteriorating, so the 
more delay you have, the harder it's going to be to service the 
troops who are still there. You do not want to just bring them 
home and have something ongoing. You want something that would 
be perhaps a little more continuous. That's something I know 
you can't answer right now, but I would ask you to consider it.
    Mr. Prosch. Yes ma'am, we will consider that and we will 
try and we will get back with you and tell you our progress.
    Senator Hutchison. Thank you. I do have more questions, but 
I'd like to defer to my colleague who has just gotten here. 
I'll let her have a few minutes for your questions and then 
I'll come back with a second round.

                               JOINTNESS

    Senator Landrieu. Thank you, Madam Chair, and welcome, 
thank you all for being here. I know that the Chair had spoken 
generally about the reorganization which we obviously generally 
support or just a realignment and the importance of refocusing 
our troop strength, saving money and doing some realignment 
from Europe and other places in the world and getting ready for 
this BRAC closing, which I've generally supported, sometimes 
hesitantly in the sense that you never want to see that happen 
in your own State but you do want to save money and so we can 
refocus it. And Louisiana as Texas has as well but Louisiana's 
been very cooperative in the sense that we've seen some of our 
bases added to and we've had some of our bases, you know, 
closed, but we think we've made lemonade out of lemons in those 
circumstances and look forward to the next couple of years to 
try to realign and save dollars. But we have been operating 
under a theory, which I want to ask each of you, if we are 
going to continue to operate under, the assumption that joint 
operations is better than individual operations. We've got 
several joint operations, obviously the one that would come to 
mind, General, you've served as our commanding general at Fort 
Polk in Louisiana. So my question would be to each of you and 
whomever wants to go first, Secretary Rumsfeld has stated that 
a high priority should be placed on the military value of joint 
bases in the upcoming BRAC round and generally. Do you share 
that vision? Is it the same operating principle that we'll be 
moving forward on, the jointness of these bases, both among 
Actives as well as Reserve units?
    Mr. Prosch. Yes ma'am, I'll start off. I think that this 
BRAC, more so than any previous BRAC rounds, is really going to 
get into the joint analysis piece. We have seven joint cross 
service groups that were put together that we didn't have in 
previous BRAC rounds and we have a flag-level official from 
each service on each one of these joint cross service groups 
that's going to analyze different functional areas such as 
headquarters, training and education, medical, supply, 
etcetera. And so I see a real effort this time to really take a 
look at the jointness. And this BRAC is going to enable us to 
have better joint cooperation and realignment. It's going to 
allow us in the Army to reshape. I really don't think we could 
do our transformation and reshaping to go from 33 to up to 48 
modular unit of action brigades if we didn't have this 
opportunity with BRAC that will give us the legislative ability 
to do this and to put these units in the right locations. And 
it's proven over time that BRAC will save us some money in 
doing this. So yes ma'am, I believe we're really doing that. 
And I would ask General Lust to amplify.
    General Lust. I agree with everything Mr. Prosch said and I 
would not be surprised, coming out of this BRAC, if we do not 
have an Army unit being positioned on another service's base if 
it will allow us to get a quicker deployment and it's got the 
training space and so forth. Because wherever I can have joint 
basing I don't have to pay the fixed cost of running two bases 
and that money can be put somewhere else. So from my position 
as the ACSIM wherever I can get jointness and still be able to 
meet the training needs and other stuff for the units, 
absolutely.
    Senator Landrieu. Now maybe this--could you just estimate 
for us, maybe you don't know but, what percentage of your 
bases, General, are in a joint situation now and what 
percentage aren't? I mean, just roughly.
    General Lust. I wouldn't venture a guess but I do know when 
I was out at Fort Sam Houston about a month-and-a-half ago I 
was unaware we had all services represented on that base, yet 
we don't consider it a joint base.
    Senator Landrieu. Because I think, Madam Chair, as we move 
forward I think that is a concept that I'm hoping there's some 
consensus and unanimity if we fight jointly we should train, 
you know, jointly. And I think there's a movement which I've 
been happy to see, and I think it's more effective. It's not 
what maybe we're used to over the last several decades but I 
can testify, actually representing a State that has two very 
strong joint Reserve bases here that it seems to be working and 
we're getting very positive feedback from the individual 
services. So as we move forward I just wanted to ask Mr. Prosch 
and the General, but General would you add your comments? And 
if you feel differently this would be a good time to discuss it 
because these are the issues that we're going to be dealing 
with.
    General Pudlowski. Yes ma'am, we're in agreement from the 
Army National Guard perspective. We currently have 164 of our 
facilities that are joint use and we share those facilities 
with all Reserve components
    Senator Landrieu. Out of how many? One hundred sixty-four 
out of how many, I'm sorry.
    General Pudlowski. Out of almost 3,000 armories, looking at 
how we are organizing based across America with the number of 
armory facilities we have. And we're looking at increasing that 
for numbers of reasons. One, because of many that you had said 
but two, it does give us a better relationship with the other 
services as we step forward into the future. Currently in the 
fiscal year 2005 FYDP budget we have one joint use facility and 
we've got 14 others that are scheduled over the next 5 years. 
We're working to increase the number of those facilities. The 
Army National Guard is also working in conjunction with other 
Reserve components, and we participate in the Joint Service 
Reserve Component Facility Board. What those boards do is 
identify potential joint projects for the services that affect 
the Reserve components. Those boards review on a quarterly 
basis. They're facilitated by the Deputy Assistant Secretary of 
Defense for Reserve Affairs Office, and in this case we have 
seen some future benefits for our organizations in sharing 
that.
    I would also add that in many of the armories across 
America and in the territories there's another portion that 
goes beyond joint between the services and that is working with 
some of the civilian organizations who are first responders in 
homeland defense and homeland security. So there's another 
style of jointness from the National Guard perspective and how 
we look at this.
    Senator Landrieu. General.
    General Profit. Ma'am, if I could add two things. First of 
all, as a part of the BRAC process we've chartered with the 
Army and the Army National Guard and the Army Reserve, a 
Reserve component process action team that will, I think, offer 
us some insight into opportunities that can be created to 
create jointness in establishing more of the joint Reserve 
bases that you've referenced and that's, I think, an initiative 
that's very useful at this point in the process.
    The other thing I would say is we were privileged last 
Monday at Ellington in Texas to participate in an event that I 
think will produce a joint opportunity and we'd just like to 
thank the Chair for her leadership in helping us do that. So I 
think those are some of the kinds of opportunities that we see 
coming out of the process and we're trying to be as aggressive 
as we can be to find ways to make those things a reality.
    Senator Landrieu. So the bottom line from all of you would 
be from the Garrison Commander and the Generals that jointness 
is a plus in this restructuring effort and that it's something 
that we are moving more aggressively to as we fight together, 
to train together and that's one of the underlying premises of 
our, you know, future plans. Does that generally summarize 
that?
    General Pudlowski. Absolutely, ma'am.
    General Profit. Yes, I agree with that.

                                SCHOOLS

    Senator Landrieu. One other question and then I have others 
but we'll switch back, the troops overseas, at least I've 
gotten back from individuals one of their not highlights but 
strengths of that overseas deployment, although it's difficult 
because you're away from the mainland, if you would, your 
families are usually with you but the quality of the schools--
It's not something we talk about often in this committee but 
Madam Chair, quality of life issues are very important for 
military families, housing and general quality of life issues 
obviously schooling is part of that. Do we have any plans at 
all for the integration as these troops do move back? And I 
bring this up because we have a model program in Louisiana that 
I'd like to speak about, maybe not at length at this time, but 
we've created the first military charter school in the Nation, 
at the Bell Chase Academy. Have any of you given any thought to 
that particular quality of life issue as these troops are 
resettled and the quality of the military schools that are 
found abroad compare to what might be found in some areas in 
the country? I don't know who would want to make just a general 
comment about that.
    Mr. Prosch. Well, I'll talk a little bit then I'll turn it 
over to General Lust here. My spouse is a teacher and she 
taught overseas and in the continental United States in both 
DoD schools and local county schools. We really worked very 
hard to try to partner with the schools. When I was the 
Garrison Commander at Fort Polk I was a member of the Vernon 
Parish school board. And so I really had a chance to impact on 
that. I will tell you that we worked really hard with our RCI 
partners so that as we build our new houses on post that we 
make sure that the schools are there to support the additional 
population when they come onboard. You'll find quite frequently 
that the teachers on the post are spouses of the soldiers so 
that's another opportunity. The DoD schools overseas are good; 
the DoD schools in the United States are good also. And we have 
to continue to support the DoD schools as we expand the 
population on post and partner with DoD for the Military 
Construction to make sure those schools are built. And likewise 
we have to work with our neighboring communities, like we have 
in Vernon Parish, to continue to ensure that the schools are 
supported. At Fort Polk we have three schools; they are Vernon 
Parish schools but the land was donated by Fort Polk and 
they're excellent schools. My two children attended them and my 
wife also taught in that school system. So we have to continue 
to focus and keep the emphasis on that.
    General Lust.
    General Lust. In reference to your question about 
consideration of schools, as the units return back from 
overseas it will definitely be one of the things that needs to 
be looked at. First and foremost is where do we position that 
unit so it can in fact be trained and ready and etcetera and so 
forth. But one of the things that will definitely have to be 
looked at is how many children do we think are going to go 
there, and there will be a team that will go get with the local 
school system to make sure that they're not surprised when so 
many kids show up. I will not say we've done that well in the 
past; I will tell you we've done it better each time. When we 
had the big drawdown in Europe, we got a lot better at the end 
of that than we did at the very beginning and those lessons are 
going to carry over here. But schools will definitely be 
something that's going to have to be addressed because there 
are three things I think a soldier owes his family: a good 
education, health care, and a good place to live. And those all 
three kind of go in tandem if you want to have a quality of 
life.
    Mr. Prosch. I might also add that we're going to strive 
when we move the units from overseas to do it in the summer so 
we don't disrupt the school year for the children.
    Senator Hutchison. I think that is a very important point, 
and on jointness, which the Senator from Louisiana has focused 
on, the Ellington Field concept is just a wonderful one, and I 
appreciate so much the Army's support for moving to what is now 
an air base but will hopefully be a joint base in the near 
future because one of the things that you mentioned, General, 
and I want to emphasize and am going to especially emphasize 
with the Navy, is that I think the Coast Guard needs to be more 
of a factor here. The Coast Guard is at Ellington, there's a 
huge need for homeland security on these bases, particularly in 
the bases that are close to water, and I believe the Coast 
Guard should be an integral part of joint use as we are melding 
national security and homeland security and trying to make the 
best use of our dollars. So I think the Ellington concept is 
going to be everybody; it's going to be Navy, Marine, Army, Air 
Guard and Coast Guard and I can't think of a better 
combination.
    But I also, I wanted to go back to something that General 
Lust said, and then I'm going to leave this concept. But when 
you said that the Army would be willing to move to a base that 
is another service base, if that made the most sense, it seems 
to me that we were just talking earlier about space and we 
have, seems to me, some huge Army bases that might be the host 
for other services to move in and create more of a joint 
concept. Is that something that you also think?
    General Lust. Absolutely. I could take Fort Huachuca. Fort 
Huachuca has, I think, the largest military controlled air 
space where you can fly UAVs without having to have a chase 
plane. And you know, there would be a place where you could 
move other services onto that location, if it was desired and 
met the other services' training needs and such.
    Senator Hutchison. Or White Sands.
    General Lust. We're not only looking to go somewhere else 
but also we're going places that people can move in. Again, 
first and foremost, so now you know it, wherever you put them 
it's going to meet the mission need. The last thing we want to 
do is jointness for jointness, just check the block there.
    Senator Hutchison. Right.
    General Lust. Because that doesn't do anybody any good. But 
yes, I can see it going the other way.
    Senator Hutchison. I mentioned White Sands as well. That 
should be an opportunity with air space that is coordinated 
with big land space.

                              SUSTAINMENT

    Well, let me move on to the sustainment subject. We are 
very interested on the Military Construction Subcommittee in 
sustainment. Everyone is saying they're going to have 95 
percent sustainment so that we can make use of our facilities 
for a longer term. However, all of us know that sustainment 
funds are the ones that get raided when you've got the base 
operations support accounts that are must pay. So let me ask 
you to give me a realistic assessment of what you think you're 
going to be able to spend on sustainment and what you do to try 
to prevent migration of these funds away from sustainment.
    Mr. Prosch. Well ma'am, we applaud the initiative that OSD 
has done to try to come up with a model that funds sustainment 
initially at 95 percent. But as you accurately stated all too 
often that is used to migrate money to your base operations 
accounts, which are more and more becoming must fund accounts. 
It would make sense to develop a base operations support model 
for all the services along the lines for sustainment, and we 
have been working with DoD to develop such models. And once we 
had these models adopted it would permit us to effectively 
budget for the base operation support as we do the sustainment. 
When you look at the base support accounts, the base operations 
portion is the biggest for the Army, and it contains such 
things as salaries, contracts. And as we have more contracts to 
do services on our installations, and as we privatize utilities 
and as we privatize Army housing more of these base operation 
support things are going to be executed at about the 95 percent 
level. And so, when you're only funded at 70 percent you're 
going to have to find a bill payer and all too often it's been 
sustainment. So we would welcome an opportunity to try to fix 
that. General Lust.
    General Lust. On the sustainment model, the military 
departments are given guidance by OSD to put 95 percent funding 
in sustainment, but with the other priorities and stuff we end 
up taking risk in the base ops area. And in the year of 
execution, we end up migrating money back. Now, part of your 
question says what are we doing about controlling that? You may 
recall in October 2001 we stood up an organization called 
Installation Management Agency, which took over control of the 
garrisons of our Army and the money now flows from Department 
of the Army to the Installation Management headquarters, then 
from there directly down to the installations. And this year 
they were given guidance, the garrisons were given guidance 
that they were to fund their base ops which were brought up to 
85 percent and the SRM was brought down to 70 percent and no 
other migration could take place without coming back into the 
headquarters of IMA. They have done a very aggressive spending 
of their SRM money this year to get it committed, etcetera, and 
as we go back in a mid-year review, the Headquarters Army is 
very aware that there is a need now to move additional money 
back into base ops so we don't have to go in and take any money 
from SRM.
    I think another part of your question is where do we think 
we'd eat if we have to? If we have to migrate any more money 
out of SRM, we believe we'll end up in the 65 to 68 percent of 
SRM, about 65 percent, to finish our must funds on base ops, 
which is better than we have been in the previous 4 years of 
spending money, being able to commit money to SRM. Please do 
not mistake, that is not where we want to be. But we had to 
take risks in those areas.
    Senator Hutchison. Well, I understand and the point of the 
question is, just to make sure that we keep sustainment as a 
priority. I realize we're in a very tough time right now, and 
the Army is in the most transition of any of our services. So 
I'm just saying that should be a factor. I understand when it 
slips but we do pay a price down the road.
    General Lust. Yes ma'am.

                    ARMY GUARD AND RESERVE REQUESTS

    Senator Hutchison. I'm going to ask one more question and 
then turn it over to Senator Landrieu, but I'm not finished. 
But I want to give her opportunities as well. And that is to 
you, General Pudlowski. You have in the President's request 
about 18 percent of the Guard requirements, and I'm concerned 
about this. And General Profit also I'd like the Reserve 
perspective here because what we have is a budget that 
shortchanges Guard and Reserve in my opinion. You correct me if 
you think that I'm wrong, but I think we are shortchanging the 
Guard and Reserve and this is an area where members of Congress 
are going to step in, the members of Congress support the Guard 
and Reserve; we acknowledge and respect the incredible job that 
they are doing as a part of our war on terrorism. And I told 
Senator Stevens this morning that I wanted to have more than 
the President's request for Guard and Reserve, that I think 
probably the Department expects the Congress is going to plus 
that up, but it's going to have to come from something else. So 
Senator Stevens didn't give me an answer, I might add, about 
what my allocation would be, but I am trying to increase it to 
increase the amount of Guard and Reserve because I'm very, very 
worried about the Army's submission. So please, General Profit, 
General Pudlowski.
    General Pudlowski. Here, let me take it first. Ma'am, the 
MILCON program for the Army Guard for the fiscal year 2005 to 
2009 time frame is increasing dramatically. We went from $265.6 
million in fiscal year 2005 to $819 million in fiscal year 
2009. That has actually increased because of Commanche 
cancellation to plus up to $30 million, which has taken our 
fiscal year 2005 figure to $295.6 million. So there has been an 
increase. I would also add that if everything holds true with 
the current FYDP we will reduce our revitalization rate from 
144 years down to 67 years by fiscal year 2008. So the program 
is becoming more conducive to what our needs are.
    Senator Hutchison. You are increasing from your last year's 
request but it is a decrease from what we actually did last 
year. My question really is are you really satisfied that you 
have enough for the job you're being asked to do?
    General Pudlowski. There is opportunity for increased 
usage. Because of some of the capabilities that we have and the 
ability to contract all these at one given time we may not be 
able to handle it all at one point in time, thus the FYDP and 
thus the way we developed this program over a 5-year period. 
There is opportunity to take on more and to increase that.
    Senator Hutchison. General Profit.
    General Profit. Ma'am, I guess it would be--I would be 
disingenuous if I suggested to you that if resources were 
unconstrained that we couldn't buy down our recapitalization 
rate quicker. But having said all of that let me just suggest 
to you that, you raised the issue of global repositioning and 
let me just make that analogous to the transformation that I 
believe is going on within the Army Reserve. And I would just 
suggest to you that as we do that we believe that there are 
opportunities for us to create greater efficiencies with 
respect to facilitization that will enhance our ability to 
provide quality of service and quality of life for our 
soldiers, which is really what this is all about to us. And one 
of the pieces I would just add at this time that is important 
to us and we think we can leverage with your continued support 
is the Real Property Exchange Program in the Army Reserve and I 
think that it has great promise to further enhance that. And so 
we in fact have a legislative proposal on the Hill as a part of 
this budget that I think would even leverage that opportunity. 
So there are lots of ways I think to get at the quality of 
service and quality of life for our soldiers that we're looking 
at in the Army Reserve.
    Senator Hutchison. Okay, thank you.
    Mr. Prosch. Madam Chairman, I'll just add that we will 
strive to ramp up the Army Reserve and the Army National Guard 
MILCON over this FYDP. That's our current plan.
    Senator Hutchison. Okay, thank you. We'll be working on it. 
My hope is that we get more than we now have, but we have not 
gotten a final answer on that yet.
    Senator Landrieu. I just want to support the comments that 
the Chair has just made about the Guard and Reserve and to add 
again for the record that it's my understanding, and if I'm 
wrong I would be corrected, but I think 40 percent, or 45 
percent of our troop strength today is from our Guard and 
Reserve. And I understand that there would be reasons why you 
wouldn't want to say well, if they are 40 percent of the 
frontline they should be 40 percent of the budget. And I 
understand that there are other factors that play into that but 
clearly being 45 percent of the frontline they warrant more 
than 8 percent or 10 percent or 15 percent or even 20 percent 
of the budgets that support their facilities, their equipment, 
their training, etcetera. And the reason that we feel this so 
strongly is not that we don't also represent Actives in our 
State but I just left Louisiana Monday, visiting with the 256 
Army Reserve that's shipping out, 3,000 soldiers strong, one of 
the largest brigades in the--and they say and I believe the 
best trained and ready to go, and they're all saying yes and 
nobody's trying to stay home. And I mean, that's just kind of 
how those guys and gals are, and I just visited with them but 
you know, they're going right to the frontline and I think that 
the Chairman's remarks should be taken as really representing a 
broad feeling in the Congress that we'd like to see the 
resources in our budgets committed to that support, both for 
Active and Reserve that are carrying their more equal, seeming 
to us, share of the responsibilities. So, with that said I 
really don't have any additional questions on that subject so 
I'll----
    Senator Hutchison. Did you have another round?
    Senator Landrieu. Not at this time.

                          MILCON--FORT STEWART

    Senator Hutchison. Okay. I do have a couple of other 
things. The Army has notified the committee that it intends to 
spend $18.5 million in Military Construction funds for 
construction that is not now authorized at Fort Stewart to 
support the reorganization of the 3rd Infantry Division from 
two brigades into three units of action. Is it your view that 
this initiative justifies bypassing the normal authorization 
and appropriations process?
    Mr. Prosch. Yes ma'am. Let me start off and I'll turn it 
over to General Lust, who actually is our point of contact on 
the Army staff for working this action. Now the site work is 
being done right now for a temporary modular building complex 
for the unit of action, and Fort Stewart is the pilot program 
for where we are creating modular brigades, so the three 
brigades will become four brigade-size units of action. And the 
project includes connections to the utilities systems, it 
includes hard stand concrete for the motorpools, and as you 
stated, it was $18.5 million. General Lust can you explain why 
we need this money now?
    General Lust. Yes sir, I can. And to start off, let me make 
sure, we weighed very heavily about asking the Secretary of the 
Army to use emergency procedures; we did not use it lightly. We 
have a policy first in, first out. The 30th Division was the 
first deployed in support of Operation Iraq, Freedom-1, and 
they came back. Things we learned from that deployment, things 
we learned from the fight, and things that we knew on 
transition we had to get on with it. The Chief decided there 
was no time better than right now. To get the Division ready to 
deploy when needed is what has driven us to this timeline. The 
point I'm trying to get to is that if we want the 30th to be C-
1 by July 1, I've got to start doing spade work by the end of 
April, first week of May to start having things go. And that is 
what's driving this timeline. We tried every other way we 
thought we could get around it that was legal and it drove us 
to this path here. Like I said in the beginning, we did not 
take this lightly. The only option I had to be able to make 
this Division C-1 by July is to start having groundwork done by 
the end of April, first of May, ma'am.

               REQUIRED MILCON TO SUPPORT TRANSFORMATION

    Senator Hutchison. Thank you. Mr. Prosch, General 
Schoomaker has said we're going to have a 30,000 temporary 
increase in Army personnel. Is there any Military Construction 
that you're going to need to accommodate 30,000 more people 
plus 100,000 activated Guard and Reserve units? Are we 
sufficiently able to take care of that kind of an add without 
something more?
    Mr. Prosch. The 30,000, as you know, is needed for us to do 
our transformation.
    Senator Hutchison. By the way, I support the 30,000 
totally.
    Mr. Prosch. Yes ma'am.
    Senator Hutchison. My question is just do we have the 
MILCON to accommodate them?
    Mr. Prosch. Well, at this time we're not using Military 
Construction for the same reason that General Lust was just 
explaining with our modular units. Downstream as we go through 
the BRAC process and we use these 30,000 soldiers to allow us 
to create and expand our number of brigades and as we know 
where we're going to bring the troops back from Europe, 
hopefully more in 2006 as you suggested, we will do that.
    General Lust, would you like to add?
    General Lust. I know of no MILCON plan to take care of the 
30,000 because we only plan to have them for about a 4-year 
period and as you know by the time they go through the MILCON 
process I can't have it done. Where I need facilities and stuff 
the intent is to take care of them by temporary structures, 
etcetera, with the plan being that we spend our MILCON money 
against projects for the additional brigades we're going to 
create plus the way we are going to relook how we mobilize. The 
model we use to mobilize for the Cold War is not the model 
that's going to work in the future and I believe there will be 
some MILCON required to support that new model, ma'am.
    Senator Hutchison. Okay, well we'll be looking for how that 
transpires.

                    ARMY RESERVE CENTER--PUERTO RICO

    Now, my final question to you is something that I just want 
an explanation for. You've got $26 million for an Army Reserve 
Center in Puerto Rico. After what happened in Vieques and 
losing a training place that we really had the right to keep, 
why are we investing more in Puerto Rico and are we concerned 
about losing training capabilities for a Reserve Center there 
as we lost Vieques?
    Mr. Prosch. Let me say something about that. Your question 
is very timely because General Profit and I last weekend were 
in Puerto Rico looking at what you are talking about. How do we 
make sure that we do smart things and have joint facilities? 
And our vision would be to try to have Fort Buchanan, which is 
becoming a U.S. Army Reserve installation, as the Special Ops 
Command and the Army South moves up to Fort Sam Houston. It 
will be part of the Installation Management Agency, and we 
believe that it will have a useful purpose downstream for joint 
units in Puerto Rico.
    General Profit, you want to comment on that?
    General Profit. Yes ma'am. First of all, let me just say 
that we have reached what I believe with the Navy and with 
other joint partners an island-wide solution to our needs in 
Puerto Rico. It is, as Mr. Prosch suggests, with Fort Buchanan 
as an Army Reserve installation as of last October at the 
centerpiece and with, I'll call them subinstallations for lack 
of better, at Naval Station Roosevelt Roads and with the very 
important training areas that are actually run by the Puerto 
Rico Army National Guard at Camp Santiago. And then the final 
piece of that island-wide solution is really a plethora of 
joint installations that the Army Guard and the Army Reserve 
and other joint partners are entering into. And I would just 
tell you that it's our view right now, having reached that, I 
think final accommodation with the Navy that we have a very 
sound, very realistic and very executable program to recognize 
a very important part of the Army that is stationed in Puerto 
Rico.
    Senator Hutchison. Well, that's a big investment.
    General Profit. Yes ma'am.
    Senator Hutchison. In a place that has not kept its 
commitments to our Services, and I just would like to have a 
little more explanation about why we're doing it there and 
making that kind of investment.
    General Profit. With your concurrence we'd like to work 
with your staff on the Committee to explain it to you.
    Senator Hutchison. Thank you.
    Senator Landrieu. If I could just add something on Vieques 
too, I've had the opportunity to tour Roosevelt Roads before it 
was closed and to spend some time on the island. I was very 
disappointed to see the training facility close because I 
thought it was an opportunity that the Navy had but we've moved 
on. But my point, besides what the Chairperson brought up is, I 
mean, obviously to be fair to the island and to the men and 
women that serve in uniform from Puerto Rico and have for many, 
many decades honorably in our Armed Services, but also to raise 
the issue of the cost of that environmental cleanup. I hope we 
don't make the mistake of underestimating the cost of that 
environmental cleanup, and as we work with and through the 
regular routine of transferring and going through this transfer 
that we can minimize the cost to the American taxpayer for the 
cleanup that's going to occur. Now obviously we're responsible, 
the Navy is primarily responsible but this is very valuable, 
very valuable property and could be very valuable. And I've 
read the different versions and views of the hopefully new 
governor of Puerto Rico who I happen to admire a great deal and 
think he's been an extraordinary leader, hopefully the 
governor-to-be, but I just hope that whatever we do we can 
minimize the cost to the taxpayer as the value of that property 
is added to, as value is added. And I'm going to be following 
it pretty closely. Puerto Rico doesn't have a Senator so some 
of us have to take a little special interest in this issue, and 
because I serve on the Energy Committee, Madam Chair, which is 
the authorizing committee for Interior, which does a lot of the 
regulations for our territories, I'm going to be following this 
very carefully to make sure that Puerto Rico gets a fair shake, 
but also that our taxpayers are spared some expense, hoping 
that maybe as we develop the island some of it can be offset. 
This is what I'm saying. And I don't know, Mr. Prosch, if you 
want to just say something briefly because I know we have 
another panel.
    Mr. Prosch. Yes ma'am. And I'm sure that my partner, 
Assistant Secretary of the Navy, H.T. Johnson, can comment on 
this in the next session. But he and I did sign a memorandum of 
agreement last week and I do believe the Navy has a good game 
plan to sell the valuable property with the wonderful port in 
the Moskrit portion of Roosevelt Roads that would address 
everything you just talked about. And I think that's exactly 
what we should be doing.
    Senator Landrieu. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hutchison. Well thank you all very much. I 
appreciate it. It's been a good exchange, and I appreciate that 
very much. As I said earlier, you are in the most 
transformation of any of our Services and, we want to work with 
you to anticipate your needs and make sure that the people who 
are brought back from overseas do have the housing and you have 
a good place to put them and also keep up with the present day 
needs that you have. So we'll be working with you. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted to Geoffrey G. Prosch

            Questions Submitted by Senator Mary L. Landrieu

                         INSTALLATIONS IN IRAQ
    Question. Secretary Prosch, soon, the United States will no longer 
maintain bases in Saudi Arabia. We will have to look elsewhere for 
basing opportunities in the Middle East. DOD has said Iraq will soon 
become a new locus for U.S. troops in the Middle East. In some cases, 
DOD plans to upgrade military installations used by Saddam Hussein for 
future use by American armed forces. What plans does the Army have for 
long-term basing in Iraq?
    Answer. The Army is constantly assessing courses of action to 
enhance support to the Joint Force Commanders worldwide, to include 
within this region, with trained and ready Army forces to support the 
Defense Strategy and Joint and Combined operations. Currently, our 
focus is on near-term combat operations and related activities in 
support of the Coalition objectives in and around a free and sovereign 
Iraq. There are no current Army plans for long-term basing in Iraq.
    Question. How many soldiers does the Army intend to station in 
Iraq?
    Answer. The number of units and Soldiers in Iraq will vary based on 
Combatant Commander requirements.
    Question. When will the Army begin to budget for the military 
construction needed to house the U.S. Army in Iraq?
    Answer. There are no current plans for long term basing in Iraq.
    Question. Thru a Supplemental Appropriation?
    Answer. We currently budget only for temporary projects in Iraq 
that support our troop rotations. Some of these projects are being 
funded with Military Construction, but we are only building the minimum 
necessary to support the mission. The only billeting type projects are 
relocatable facilities. We anticipate the military construction needs 
in Iraq to remain temporary in nature.
    Question. If not Iraq, what other countries within Central Command 
might the Navy and Army seek to expand their presence?
    Answer. In the context of a Department of Defense review of 
worldwide posture and presence, the Army is working with the Department 
of Defense, the Joint Staff and the commanders within the Central 
Command Area of Responsibility to determine the requirements for 
forward-presence forces. The long-term plans for both the presence and 
the posture footprint in that region are still under review. 
Consultations are on-going with congressional, inter-agency and 
diplomatic leaders to review the key strategic principles and 
implementation concepts.

                  DOD REALIGNMENT OF FORCES IN EUROPE
    Question. Secretary Prosch, nearly 2 years ago, DOD began 
discussions on the realignment of forces in Europe. In that time, 
Congress has not received any concrete details for what DOD has in 
mind. We have seen reports that DOD plans to move some personnel and 
infrastructure out of Old Europe and into New Europe and the Former 
Soviet states. When asked for elaboration on these plans, DOD has 
provided little. I am pleased to see this Subcommittee will hold a 
hearing on Europe's realignment on April 21st. Can you shed any light 
on how many Army soldiers within Europe may be realigned from current 
installations to new installations?
    Answer. The Army and its Component Command to U.S. European Command 
(EUCOM) are full participants in the Defense Department review of 
Global Posture, and will transform both posture and presence in 
accordance with the final DOD approved Posture plan. Until that time we 
cannot know the impact on installations.
    Question. What current facilities do you anticipate will continue 
to operate?
    Answer. Efficient Basing initiatives will consolidate capabilities 
and allow for ease of projection while maintaining the training 
necessary for readiness. The Army and U.S. Army Europe will ensure that 
our Soldiers and their families in Europe will have superior Quality of 
Life infrastructure and services during any potential re-stationing 
period. It will be essential to continue to support projects at key, 
enduring installations and facilities upon final determination of the 
posture in Europe.
    Question. If we reduce forces in Europe, won't we see an increase 
of troops and equipment returning to the United States for basing?
    Answer. The potential for reducing the posture footprint in Europe 
is still under review; the final composition and disposition of forces 
in Europe has not yet been approved determined.
    Question. Does it make sense to enter into BRAC in 2005 if we have 
not yet fully determined the shape and size of our presence abroad?
    Answer. The force composition and its disposition are under 
constant review. The Defense Strategy, Combatant Commanders' concept 
plans, and the on-going Army transformation of capabilities all inform 
the Army requirements for posture of forces. Similarly, imperatives for 
manning, equipping, training, deploying and sustaining the future force 
guide key decisions for presence and basing. Future force decisions 
will be an element within the analysis for BRAC 2005.

 BRAC AT FORT POLK AND BELLE CHASSE--HOW CAN JOINT OPERATIONS BENEFIT 
                              THESE BASES?
    Question. Secretary Prosch, Secretary Rumsfeld has stated that a 
high priority should be placed on the military value of Joint bases for 
the upcoming BRAC round. Do you share Secretary Rumsfeld's vision for 
our military to move toward and support Joint bases?
    Answer. The future Joint Force will train, deploy and fight in an 
interdependent and closely related battle space. The value of joint 
basing solutions must be measured against those key imperatives for 
fielding, training, rapidly deploying and then employing a joint force 
for combat operations. Concepts to support these imperatives, such as 
joint logistics and sustainment operations, are maturing now in order 
to inform the upcoming analysis.
    Question. As the former Garrison Commander of Fort Polk, could you 
please discuss how Fort Polk's Joint Readiness Training Center, where 
the Army, Navy, Air Force, Marines, and Special Ops can all train 
together, meets Secretary Rumsfeld's vision for jointness.
    Answer. The Joint Readiness Training Center (JRTC) is one of the 
U.S. Army's three maneuver Combat Training Centers. All these centers 
have and are continually improving their programs and infrastructure to 
meet the Secretary of Defense's vision to train in a Joint, Inter-
agency, Inter-governmental, and Multi-national Force context during 
peacetime, in order to improve joint capabilities during worldwide 
contingencies. JRTC has resident U.S. Air Force and Special Operations 
Command trainers on the ground now, to build the essential 
relationships and interdependencies between these joint team members 
and the Army's tactical units. JRTC has also forged a training 
relationship with the U.S. Marine Corps, to include United States 
Marine Corps (USMC) training exercises at JRTC alone, or as part of a 
larger U.S. Army exercise. This initiative continues to improve land 
forces interoperability, as well as achieving the vision for joint 
training. JRTC is scheduled to participate in a Joint Forces Command 
(JFCOM) sponsored Joint National Training Capability (JNTC) exercise in 
August 2004, and has two exercises on the JNTC planning calendar for 
fiscal year 2005. The effort to nest the Army's Combat Training Center 
Program within JFCOM's JNTC effort is a specified task from the Chief 
of Staff, Army in support of the Secretary of Defense's Vision.
                                 ______
                                 

             Question Submitted by Senator Dianne Feinstein

                 UNFUNDED FORCE PROTECTION REQUIREMENTS
    Question. Mr. Prosch, following 9/11, through a Defense 
Supplemental bill, the Defense Emergency Response Fund (DERF) was used 
heavily by Army to address force protection requirements. However, this 
past year the Army returned to the Committee asking for reprogramming 
of unspecified minor construction funds to address force protection 
needs that they deemed needed for life, safety, and health. What are 
the Army, Army Guard, and Army Reserve unfunded force protection 
requirements?
    Answer. Current operations in support of the Global War on Terror 
continue to generate force protection requirements for installations 
both at home and abroad: The Army has not identified all the 
requirements on force protection. It continues to plan to meet existing 
and emerging challenges. Below is information on unfunded requirements 
relevant at this time knowing more requirements will come in the way of 
the Military Construction planning and programming process.
  --Active Component requirements include installation access control, 
        barriers, blast mitigation, communication systems, explosive 
        detection devices, and site improvements for various facilities 
        worldwide. The validated unfunded requirement is $15.4 million 
        for Military Construction, with a longer list of projects 
        totaling approximately $263 million currently under review.
  --Army Reserve requirements include facility hardening and correcting 
        long-standing physical security deficiencies at approximately 
        1,100 facilities worldwide. These projects provide barriers, 
        blast mitigation, intrusion detection systems, exterior 
        lighting, fencing, and access control. There is no unfunded 
        Military Construction requirement because no single project is 
        anticipated to exceed the $750,000 threshold. The validated 
        unspecified minor construction unfunded requirement is $24.1 
        million in Operations and Maintenance.
  --Army National Guard requirements include design for electronic 
        security systems; facility hardening, security fencing, closed 
        circuit television; access control; arms, ammunition, and 
        explosives storage area security improvement measures; and 
        intrusion detection. The validated unfunded requirement is 
        $27.8 million for Military Construction.
                                 ______
                                 

           Question Submitted to General Walter F. Pudlowski

             Question Submitted by Senator Dianne Feinstein

                        guard wmd/cst facilities
    Question. General Pudlowski, with the addition of WMD/CST 
facilities throughout the country, has the Guard budgeted for the 
required facilities? If not, please supply me a list, detailing the 
locations of each facility needed and how much funding will be required 
to complete the needed construction.
    Answer. The Army National Guard did not fund for these projects.

------------------------------------------------------------------------
               State                      Location             Cost
------------------------------------------------------------------------
CA \1\............................  Hayward.............      $1,348,000
CT................................  East Granby.........       2,442,464
DE \2\............................  Smyrna..............               0
DC................................  TBD.................       1,549,500
GU................................  Barrigada...........       3,353,118
IN \2\............................  Gary................               0
MD................................  Pikesville..........       1,436,624
MS................................  Jackson.............       1,334,008
MT \1\............................  Ft. Harrison........       1,488,000
NC................................  Morrisville.........       1,514,856
ND................................  Bismarck............       1,576,832
NE................................  Hastings............       1,344,168
NH................................  Concord.............       2,190,496
NJ................................  Lawrenceville.......       1,424,432
NV................................  Henderson...........       1,515,872
OR................................  Salem...............       2,461,768
PR................................  Sabana Seca.........       1,665,224
RI................................  East Greenwich......       2,063,496
SD................................  Rapid City..........       1,576,832
UT................................  West Jordan.........       1,519,936
VT \2\............................  S. Burlington.......               0
VT................................  TBD.................       1,549,500
WI................................  Madison.............       1,522,984
WY................................  Guernsey............       1,645,920
P&D...............................  various.............       3,031,923
                                                         ---------------
      Total.......................                           39,555,953
------------------------------------------------------------------------
\1\ As of 7 April, 2004: Project awaiting approval from Congress as part
  of an Unspecified Minor Construction Formal Reprogramming.
\2\ Included in a new Readiness Center and does not require separate
  facility or funds for CST facility.

                         Department of the Navy

STATEMENT OF HANSFORD T. JOHNSON, ASSISTANT SECRETARY 
            OF THE NAVY, INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
        REAR ADMIRAL MICHAEL LOOSE, COMMANDER, NAVAL FACILITIES 
            ENGINEERING COMMAND
        BRIGADIER GENERAL WILLIE WILLIAMS, ASSISTANT DEPUTY COMMANDANT 
            FOR INSTALLATIONS AND LOGISTICS (FACILITIES), UNITED STATES 
            MARINE CORPS

    Senator Hutchison. We're very pleased to have the Honorable 
H.T. Johnson, the Assistant Secretary of the Navy for 
Installations, along with you, Admiral Loose and General 
Williams. And we obviously have looked at what you're going to 
say. Your funding requests are down, and I know that you will 
talk about that. I particularly want to mention your Home Port 
Ashore plan that I think is a great beginning effort that you 
are making and one that we want to fund as we can because I 
think it does make being a sailor a whole lot easier to get off 
the ship from time to time. And I do want you to talk about 
your Reserve funding, which seems to be somewhat less than you 
might need. So with that, let me welcome you to the committee 
and ask for your opening statement.
    Mr. Johnson. Thank you ma'am. I'd like to say a few words 
and if you don't mind just a couple of words from my partners. 
We're pleased to have Admiral Loose and General Williams with 
us. We have a strong Navy-Marine team, as you well know. Our 
budget shows strong support for the Navy and Marine Corps bases 
around the world. In most cases our budget request is lower 
this year but there's a reason for it; we've been able to find 
efficiencies and we think we have the proper priorities.
    Better housing, as you mentioned, for our single Sailors 
and Marines, as well as our families is a very high priority. 
We've done a lot with the family public-private venture and we 
really want to take that same concept and make it work for our 
bachelors. Bachelors are a little different than families 
because we have to have the dormitories, if you will, in places 
that are severable and we have to ensure that we can keep the 
dormitories full. If you put it at a base that everybody's 
going to move from, into combat or whatever, it makes it more 
difficult. But our public-private ventures for housing are very 
important, and I appreciated your comments with the Army about 
raising the cap. This year we will have 26,000 homes at ten 
Navy and Marine Corps bases. This will give us a total of 
31,000 public-private venture homes across these two Services. 
As the increase in the housing allowances continue we find that 
more and more of our Sailors and Marines want to live in the 
community, and living in the community is the first priority 
for us. You talk about our Sailors aboard ships; we've seen 
examples where we bring them ashore while in port and it makes 
a very big difference, and we want to continue that.
    We have three projects that we want to use for public-
private ventures with barracks. Initially we will have a room 
they call the one plus one arrangement, where you have a room 
and share a bath, and usually we'll put two Sailors from aboard 
ships in each of these rooms until we get enough of them so 
they can have a private room. We are very pleased that in 2005 
that the Marine Corps gets rid of its last gang head barracks; 
the Navy will do so in 2007.
    Our MILCON is a robust program; it's $1.1 billion along 
with sustainment and modernization funds of $1.9 billion. We 
have refined our sustainment model and both the Navy and Marine 
Corps are funded at 95 percent of the requirement, and I'm sure 
you'll ask us a question as you did the Army about being able 
to spend at that level and we'll appreciate that question when 
it comes.
    We mentioned earlier about closing Roosevelt Roads. I for 
one was very concerned because of what happened when we closed 
Vieques. The 31st of March came and there was nothing; it was 
very smooth and we're very pleased with Puerto Rico, and our 
people who are working hard to make that a picture perfect 
transition. We're going to keep the schools open until the end 
of the academic year. So we think everything is in good shape; 
all of our people have been cared for, the civilians and of 
course the military have moved.
    I'd be remiss if I didn't talk a little bit about BRAC. I'd 
like to give you three assurances. First of all, we'll 
meticulously follow the law. Secondly, there's no closure or 
realignment list in anyone's desk drawer; there will not be one 
until we have certified data, it's been carefully analyzed, 
compared against the force structure and rigorously assessed 
for each activity using military value, and we meet all the 
requirements of the law. While eliminating excess capacity to 
generate savings is an important driver, the Secretary of the 
Navy, the CNO, the Commandant and I view BRAC 2005 as a unique 
opportunity to do things that are positive for our Military 
Forces. We talked about a joint approach, I heard you talk 
about it with the Army. We're pleased that this time the 
difference is we're taking a look at everything in a joint 
fashion. And I echo what the Army friends said.
    Environmentally we're doing very well. We think that we 
have been going about it in the proper way, we're closing some 
bases and of course we have to do the environmental work after 
we close it but we find that selling property is a win-win for 
everyone. We get it back on our tax roles very quickly, a 
community gets the reuse, and the Department of Navy gets the 
funds for cleanup. We have spent $2.3 billion so far on BRAC 
clean-up and we have about one-half a billion dollars left and 
we are moving forward on that.
    This year we had a great event. Last month, we transferred 
Adak, which was 71,000 acres. After that we'll be down to only 
7 percent of the total remaining acres to be disposed of. So 
Adak was transferred and that was a monumental process.
    We are very pleased at what the Congress did last year on 
the Readiness Range Preservation Initiative. We are working all 
of those authorities, Endangered Species Act and Marine Mammal 
Protection Act, along with Migratory Bird Treaty Act of the 
year before. We are implementing them and we are very pleased 
with the results. Certainly as we implement these changes we 
will maintain the special trust and confidence that you gave us 
in these authorities. We'll be careful not to misuse them. 
Environmental programs total about $1 billion, about the same 
as what we had last year.
    We've done quite well on the cleanup of active bases; 69 
percent of all of our sites have remedies in place or is 
completed. And these are a lot of different ones on different 
bases and if you visit our bases and talk to the environmental 
cleanup people you'll be really impressed with their enthusiasm 
and the successes that they have had.
    I'd like to ask Admiral Loose for a couple of words and 
then General Williams.
    Admiral Loose. Good afternoon, Madam Chairman. It's a 
pleasure to be here today to discuss the Navy's fiscal year 
2005 Shore Infrastructure Budget Request. The Navy's Facility 
Investment Strategy focuses on making prudent investment 
decisions that balance the Shore Infrastructure improvements 
and enhance readiness and the quality of service while 
maintaining assets to effectively sustain the operations in 
support of our Navy forces. I'd like to add just a few comments 
and amplify some of the areas mentioned by Secretary Johnson in 
his opening statement.
    Our budget concludes a 4-year effort to eliminate the 
average out-of-pocket expenses for Navy family housing. The 
increase in basic allowance for housing means our Sailors can 
now find good affordable housing in the community without 
additional out-of-pocket expenses. We are achieving excellent 
results for our family housing privatization program. The 
Navy's public-private ventures are eliminating inadequate 
family housing and delivering better quality, new homes, 
meeting the DoD's goals. We have developed a better strategy 
that eliminates our liability by managing risk. Our approach 
incorporates essential safeguards and protections. This 
business strategy and acquisition approach have been accepted 
by others both in the government and in the private sector, and 
PPV enables us to provide a higher quality of affordable 
housing to our Sailors and their families faster and at a lower 
initial cost and at a lower lifecyle cost. It also benefits the 
local communities by refreshing aged housing stock and 
stimulating local businesses.
    For the Navy's part, we have now awarded nine PPV projects 
for a total of 9,700 homes and during fiscal year 2004 and 2005 
we plan to award another six projects, resulting in another 
20,000 homes. However, the success at providing adequate homes 
for our Sailors and their families is clearly at risk due to 
the statutory cap on the amount of budget authority that can be 
used in military family housing privatization. We project that 
DoD will reach the current cap by the fall of this year. This 
will impact our ability in the Navy to award approximately 
5,500 of the 20,000 homes we were planning to award in 2005. 
Military family housing privatization is successfully providing 
quality self-sustaining houses for the Navy families. We feel 
it's very important that we stay the course and we greatly 
appreciate your support in ensuring that our Sailors and their 
families will continue to live in quality housing.
    We're also very committed to improving the quality of 
housing for our single Sailors. As you are aware, we have 
roughly 17,500 Sailors living onboard ships while they're in 
home port. These Sailors, like all Sailors in the Navy endure 
an austere lifestyle aboard ship while it is underway on 
deployment. While their ships are in home port it's imperative 
that we offer them a better place to call home, one that is 
similar to their shipmates ashore, married and single. This is 
a major quality of life issue that we take seriously. We have a 
program and are executing projects to address this challenge 
and we are looking at innovative ways to make additional 
quality housing available for all our single Sailors such as 
privatized bachelor housing. The privatized bachelor housing 
concept in San Diego looks very promising; we hope to bring 
this project to you for consideration in the near future. The 
goal is to provide all shipboard Sailors the opportunity to 
live in quarters ashore when their ship is in home port by 
fiscal year 2008. Again, this initiative will improve the 
quality of life for these Sailors and ensure a comparable 
standard of living between Sailors assigned aboard ships and 
those assigned to shore duty.
    In conclusion I sincerely thank you for the continued 
support that this committee and your staff have provided the 
Navy and very much look forward to working with you now and in 
the future. And I would be happy to answer any questions.
    Mr. Johnson. General Williams brings tremendous experience 
at all levels in managing bases, so if he doesn't do it 
correctly he's forgotten his previous lessons. So, just a few 
words.
    General Williams. Thank you. Madam Chair, it's certainly a 
pleasure for me to appear before you today and with Secretary 
Johnson. But first, on behalf of our Marines and their 
families, I want to thank you for your continued support for 
Marine Corps Military Construction, family housing, 
encroachment and environmental programs. Our installations are 
the fifth element of our Marine Air-Ground Task Force and as 
such they're critical to our war fighting and our war fighting 
readiness.
    Our fiscal year 2005 Active and Reserve budget request 
devotes over a $1 billion to Military Construction facilities 
sustainment and maintenance, family housing and environmental 
initiatives at our Marine Corps installations. And although the 
total program is a little less than fiscal year 2004 our 
installations will be in better condition at the end of 2005 
than at the beginning. The Active and Reserve Construction 
Program provides some urgently needed readiness, compliance and 
quality of life construction projects. We're investing about 
$75 million for our barracks project, which will enable us to 
eliminate our gang head barracks for our permanent personnel. 
Our family housing, we're requesting approximately $270 million 
and that's to keep us on track to eliminate inadequate family 
housing by the end of fiscal year 2007. And as has been 
mentioned, public-private venture is very key to our success in 
that area. So your support of the proposal to eliminate the 
$850 million cap certainly will be needed and is very much 
appreciated. Our sustainment programs that we're proposing 
maintains funding of our facilities at 95 percent of the OSD-
established goals.
    The Marine Corps is committed to maintaining a ready force 
and our installations are critical to the maintenance and 
sustainment of that readiness. We take this mission very 
seriously, as we do our Environmental Stewardship Program, 
which is also key to our ability to train as we fight.
    Madam Chair, the Marines and families make great sacrifices 
in serving our great Nation. And the Marine Corps prides itself 
on its legacy of taking care of our own and we will reward that 
sacrifice that they have made. And this 2005 budget supports 
the continuance of that legacy.
    Again, the Marine Corps would like to thank this committee 
for its strong support of our infrastructure program and the 
benefits that this support provides in improved readiness and 
quality of life. Thank you, Madam Chair, this concludes my 
statement. I'll be happy to answer any questions that you might 
have.
    [The statement follows:]

               Prepared Statement of Hansford T. Johnson

    Madam Chairman and members of the Committee, I am H.T. Johnson, 
Assistant Secretary of the Navy (Installations and Environment). It is 
a pleasure to appear before you today to provide an overview of the 
Department of the Navy's shore infrastructure and environmental 
programs.
                    fiscal year 2005 budget overview
    Projecting power and influence from the sea is the enduring and 
unique contribution of the Navy and Marine Corps to national security. 
The Department of Navy (DoN) fiscal year 2005 budget request of $119.4 
billion ($1.4 billion below the fiscal year 2004 enacted level of 
$120.8 billion) balances risks across operational, institutional, force 
management and future challenges identified by the Secretary of 
Defense.


    The Navy and Marine Corps installations and environmental programs 
total $9.1 billion in fiscal year 2005, or about 8 percent of the DoN 
budget. That our portion of the DoN budget is declining bears witness 
to the successes we have had in the last few years managing costs and 
pursuing innovative solutions to long-term problems. We continue to 
meet all Department of Defense (DOD) and DoN installations and 
environmental goals. This budget provides funds to operate, 
recapitalize and transform our fleet assets and our shore 
installations.
    Base Operations Support funds provide fundamental services such as 
utilities, fire and security, air operations, port operations, and 
custodial care that enable the daily operations of our bases. Our 
fiscal year 2005 request of $4.3 billion is about $200 million above 
the fiscal year 2004 enacted level of $4.1 billion. This increase 
includes an $83 million transfer of Navy Working Capital common support 
services to O&MN, $44 million for Marine Corps military to civilian 
conversion costs, $24 million for Marine Corps to transition to the 
Navy-Marine Corps Corporate Intranet, and $24 million for the fiscal 
year 2004 pay raise.
    Our Military Construction request is a very robust $1.1 billion. It 
keeps us on track to eliminate inadequate bachelor housing, and 
provides critical operational, training, and mission enhancement 
projects.
    The Family Housing request of $844 million provides funds to 
operate, maintain and revitalize the worldwide inventory of 36,600 
units. Our Family Housing request declines because of increases in the 
military pay accounts for Basic Allowance for Housing, which makes 
finding affordable housing in the community more likely, and the 
success of our housing privatization efforts. Through privatization and 
future construction funds, both the Navy and Marine Corps achieve the 
DOD goal to eliminate inadequate homes by fiscal year 2007.
    Sustainment, Restoration and Modernization (SRM) includes military 
construction and Operations and Maintenance funds. To avoid double 
counting military construction, the funding shown in the chart includes 
only the Operations and Maintenance accounts. Facilities sustainment 
requirements are based on a DOD model. The budget achieves 95 percent 
of the model requirement for Navy and Marine Corps bases, an increase 
of 2 percent for the Navy above the fiscal year 2004 request. While the 
fiscal year 2005 recapitalization rates decline slightly for Navy and 
improve for Marine Corps, both the Navy and Marine Corps meet the DOD 
67-year recapitalization rate goal by fiscal year 2008.
    Our fiscal year 2005 request for environmental programs totals $1.0 
billion. This request is sufficient to meet all known environmental 
compliance and cleanup requirements, invest in pollution prevention, 
and fund cultural and natural resources conservation efforts, including 
implementation of Integrated Natural Resources Management Plans.
    I will now discuss these areas in more detail.

                                HOUSING
    We have made a special effort in this budget to maintain progress 
in 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 
        DOD 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 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 support from the Congress, we 
        have used statutory PPV authorities enacted in 1996 to partner 
        with the private sector to use private sector capital. These 
        authorities, which I like to think of in terms of public/
        private partnerships, allow us to leverage our own resources to 
        provide better housing considerably 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.

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

                    Fiscal Year 2004/2005 PPV Homes
Navy
  --Hawaii: 1,948
  --Northeast: 4,210 \1\
  --Northwest: 2,705
  --Mid-Atlantic: 5,930
  --Great Lakes/Crane: 2,823
  --San Diego: 2,668
Marine Corps
  --Yuma/Camp Pendleton: 897
  --Lejeune: 3,516
  --Twentynine Palms: 1,382
  --Kansas City, 137

    \1\ Scope being revised to retain 250 more units previously planned 
for divestiture at Mitchel Housing Complex in Long Island, NY.

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

The Importance of BAH
    Higher BAH allowances help more Sailors and Marines and their 
families to find good, affordable housing in the community without 
additional out-of-pocket expenses. This reduces the need for military 
housing, allowing us to divest excess, inadequate homes from our 
inventory. Higher BAH also improves the income stream for PPV projects, 
making them more economically attractive to potential developers. The 
fiscal year 2005 request completes a 5-year DOD goal to increase BAH 
and eliminate average out-of-pocket expenses for housing.


Eliminating Inadequate Homes
    The DoN remains on track to eliminate its inadequate family housing 
units by fiscal year 2007. We continue to pursue privatization at 
locations where it makes sense. We will eliminate almost three-quarters 
of our inadequate inventory through the use of public/private ventures. 
As of February 1, 2004, we have awarded 11 projects totaling over 
16,000 units. We recently awarded a joint Army/Navy military housing 
project at Monterey, California that includes 593 homes at the Naval 
Postgraduate School. During fiscal year 2004 and fiscal year 2005, we 
plan to award projects totaling over 26,200 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. 
The Navy is now taking a regional approach to accelerate progress and 
improve the financial viability of its PPV projects.
    There will still be a residual inventory of Government-owned 
housing after fiscal year 2007 with a continuing need for family 
housing construction, operations, and maintenance funds. However these 
requirements will decline as family housing is privatized. We continue 
to review these requirements, particularly in the management sub-
account, as we transition from ownership to privatization.
    The single biggest challenge in our efforts to eliminate inadequate 
family housing by fiscal year 2007 is the statutory ``cap'' on the 
amount of budget authority that can be used in military family housing 
privatization. DOD projects that the Services will reach the current 
cap of $850 million in fiscal year 2004, and that it will impede our 
ability to carry out our fiscal year 2005 privatization effort. 
Military family housing privatization is a successful tool to provide 
quality, self-sustaining housing for Navy and Marine Corps families. It 
is important that we stay the course. We will continue to work with the 
Congress to ensure that our Sailors and Marines live in quality 
housing.
Bachelor Housing
    Our budget request of $205 million for bachelor quarters 
construction continues our emphasis on improving living conditions for 
unaccompanied Sailors and Marines. There are three challenges:
  --Provide Homes Ashore for our Shipboard Sailors.--There are 
        approximately 17,500 Sailors worldwide who are required to live 
        aboard ship while in homeport. Based upon actions taken by the 
        Navy and funds provided by Congress through fiscal year 2004, 
        we have now given 4,900 Sailors a place ashore to call home. 
        This is our most pressing housing issue. The Navy will achieve 
        its ``homeport ashore'' initiative by fiscal year 2008 by 
        housing two members per room. Our fiscal year 2005 budget 
        includes one ``homeport ashore'' project at Naval Shipyard, 
        Bremerton, Washington. By housing two members per room, this 
        project will provide spaces for almost 800 shipboard Sailors.
  --Ensure our Barracks Meet Today's Standards for Privacy.--We are 
        continuing our efforts to construct new and modernize existing 
        barracks to provide more privacy for 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.
  --Eliminate Gang Heads.--The Navy and Marine Corps remain on track to 
        eliminate inadequate barracks with gang heads for permanent 
        party personnel.\1\ The Marine Corps will eliminate their 
        permanent party barracks with gang heads the fiscal year 2005 
        budget request; the Navy by fiscal year 2007.
---------------------------------------------------------------------------
    \1\ Gang heads remain acceptable for recruits and trainees.
---------------------------------------------------------------------------
    While we believe privatization will be as successful in 
accelerating improvements in living conditions for our single Sailors 
and Marines as it has been for families, it does present a different 
set of challenges. For years, we have built barracks to military rather 
than local community standards. For example, there were limits on room 
size, and no common area for occupants to prepare meals or to 
socialize. I want to thank the Congress for legislation last year to 
allow building privatized barracks to private sector standards.
    We must now consider other unique aspects in privatizing bachelor 
housing: the impact of extended deployments on unit occupancy and 
storage requirements; their location outside the fence line of the 
base, or inside the fence line but on severable Government land; and 
sharing a unit by two or more members. We are confident that the 
Government can join with a private partner to fashion a solution to 
these concerns that preserve the viability of a project while 
protecting Government interests. We are developing pilot unaccompanied 
housing privatization projects for San Diego, CA; Hampton Roads, VA, 
Camp Pendleton, CA.

                         MILITARY CONSTRUCTION
Military Construction Projects
    Our fiscal year 2005 military construction program requests 
appropriations of $1.086 billion and authorization of $1.045 billion. 
It includes $406 million for 12 waterfront and airfield projects; $205 
million for eight bachelor housing projects; $69 million for six force 
protection projects, and $64 million for three environmental compliance 
projects. There is $87 million for planning and design, and $12 million 
for unspecified minor construction.
    In aggregate, about 66 percent of the military construction request 
is for restoration and modernization projects. The remaining 34 percent 
is for new footprint projects that provide new capabilities, e.g., 
force protection, bachelor quarters, and facilities for new platforms. 
There are 5 projects totaling $94 million at non-U.S. locations 
overseas--Rota, Spain; Andros Island, Bahamas; Diego Garcia; and two 
projects in Sigonella, Italy. The Naval Reserve construction program 
has four projects for a total of $25 million.
    Eleven projects totaling $467 million in fiscal year 2005 have 
construction schedules (including fiscal year 2004 continuing projects) 
exceeding 1 year and cost more than $50 million, thus meeting the 
criteria for incremental funding. Five of these projects received full 
authorization in fiscal year 2004 and are being continued or completed 
in fiscal year 2005. We are requesting $289 million appropriations and 
$607 million in new authorization to start six incrementally funded 
projects in fiscal year 2005.
Outlying Landing Field, Washington County, North Carolina
    The new F/A-18E/F Super Hornet is replacing F-14 and older F/A-18C 
aircraft. The DoN prepared an Environmental Impact Statement that 
examined a range of alternatives for homebasing these new aircraft on 
the East Coast. A Record of Decision was signed in September 2003 to 
base eight tactical squadrons and a fleet replacement squadron at Naval 
Air Station Oceana, VA, and two tactical squadrons at Marine Corps Air 
Station Cherry Point, NC.
    This homebasing decision requires a new Outlying Landing Field 
(OLF) to support fleet carrier landing practice (FCLP) training. The 
current site near Virginia Beach, VA is not as effective for night-time 
training due to ambient light sources, and lacks the capacity to handle 
a training surge such as experienced for the war on terrorism and 
Operation Iraqi Freedom. The Washington County site is about halfway 
between NAS Oceana and MCAS Cherry Point. We believe it is the best 
alternative from an operational perspective.
    In fiscal year 2004 the Congress provided authority to acquire 
approximately 3,000 acres for the core area of the OLF and to begin 
constructing the runway. We are now seeking authority to acquire a 
30,000-acre buffer zone for noise, build a control tower, and erect 
fire and rescue facilities. We are asking for this authority over 2 
years, with the first increment of $61.8 million in fiscal year 2005.
    There is some local opposition to the OLF site we selected; two 
lawsuits challenge the sufficiency of the Department's Environmental 
Impact Statement. The Navy wants to be a good neighbor, and will 
consider the concerns of local property owners. For example, the Navy 
has committed that all land not required for actual OLF operations will 
be available for continued agricultural use. The Navy believes it has 
met all legal and regulatory requirements, and is proceeding with 
property acquisitions and construction planning.
VXX
    Marine Helicopter Squadron One (HMX-1), located at the Marine Corps 
Air Facility, Quantico, VA, now performs helicopter transportation for 
the President, Vice President and heads of state. Numerous 
modifications and improvements have limited the mission effectiveness 
of the current VH-3D and VH-60N helicopters. The planned acquisition of 
a replacement helicopter, called VXX, will improve transportation, 
communication, and security capabilities and integrate emerging 
technologies. The total acquisition cost is $5.9 billion. Originally 
planned for an initial operating capability in 2013, the acquisition 
schedule has now been accelerated to December 2008.
    The fiscal year 2005 budget includes $777 million in Research and 
Development for VXX system design and demonstration, and $106 million 
in appropriations ($166 million authorizations) for military 
construction to support VXX. Facilities are required to support the 
test and evaluation of three VXX scheduled for delivery in October 
2006, to provide hangar space for the eventual full complement of 23 
aircraft, and to provide in-service support for the life cycle of the 
aircraft.
    The accelerated VXX acquisition schedule required us to make some 
judgments in the fiscal year 2005 military construction program to 
ensure that facilities would be available in time to house the aircraft 
and the combined government/contractor support team. There is 
insufficient excess hangar capacity to house VXX at Naval Air Station 
Patuxent River, MD, where the Navy conducts most of its test and 
evaluation of new aircraft. Similarly, the 1935 era hangers at Quantico 
are inadequate to meet current HMX-1 needs.
    However, before committing large sums to construct new facilities, 
we are studying whether there is excess capacity elsewhere in the 
National Capital Region that could be adapted to accommodate both the 
test and evaluation phase and the operational mission for VXX at lower 
cost than building new facilities at Patuxent and Quantico. In 
addition, the VXX program manager has a business case analysis underway 
to determine whether a government owned, contractor operated facility 
at Patuxent is the most cost effective solution for in-service support. 
As another variable, the Systems Development and Demonstration (SDD) 
and initial production solicitation released in December 2003 gives the 
vendor the option to use its own facilities. We plan to complete these 
studies, consider the vendors' proposal, and decide this spring on the 
most cost effective location for the facilities. This timeframe 
supports the current acquisition timeline. In the absence of specific 
locations, we labeled two VXX projects in our fiscal year 2005 program 
under the title ``Various Locations.''

                               FACILITIES
Facilities Sustainment, Restoration and Modernization (SRM)
    Sustainment.--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 avoid 
premature degradation. The Navy and Marine Corps achieve 95 percent 
sustainment of the model requirements in fiscal year 2005. Sustainment 
dollars decreased by 9 percent due to the removal of old facilities in 
our inventory as a result of our demolition program, and revised 
pricing assumptions.

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                                   SRM
------------------------------------------------------------------------
                                                   PB-03   FY-04   PB-05
------------------------------------------------------------------------
                      Navy
Sustainment (percent)...........................      84      93      95
Recap Rate (years)..............................     116     140     148
                  Marine Corps
Sustainment (percent)...........................    Full      97      95
Recap rate (years)..............................     156      88      78
------------------------------------------------------------------------

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

    Recapitalization.--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, the fiscal year 2005 recap 
rate rises to 148 years for Navy while improving to 78 years for the 
Marine Corps. The Navy will manage its near term facilities investment 
to limit degradation of operational and quality of life facilities.
Closure of Naval Station Roosevelt Roads, Puerto Rico
    The Navy closed Naval Station Roosevelt Road on March 31, 2004, as 
directed by section 8132 of the fiscal year 2004 Defense Appropriations 
Act. We have begun the required environmental reviews and the initial 
phases of the property disposal process. The Navy is taking great care 
in relocating military personnel and families, and assisting civilian 
employees with relocation and outplacement. The DOD school will remain 
open until the end of the school year.
    As directed in the law, the closure and disposal is being carried 
out in accordance with the procedures contained in the Defense Base 
Closure and Realignment Act (BRAC) of 1990, as amended. The Navy 
established Naval Activity Puerto Rico as a successor organization to 
maintain the property and preserve its value through disposal, which we 
expect to occur in late 2005. The Commonwealth has formed a Local 
Redevelopment Authority (LRA) that has begun land use planning for the 
property. The Navy and DOD Office of Economic Adjustment are 
coordinating with the LRA. We will ensure the needs of the military and 
civilian employees are met as we carry out this closure and property 
disposal. Nebraska Avenue Complex
    At the request of the Department of Homeland Security (DHS), the 
Navy has agreed to relocate 10 Navy commands with 1,147 personnel from 
its Nebraska Avenue Complex (NAC) in Northwest Washington, D.C. The 
556,000 square feet of office space will provide a headquarters 
facility for DHS personnel. DHS will pay for the Navy's first move, and 
if necessary, the first year's lease costs. As of the end of January 
2004, seven Navy commands with 469 personnel had relocated. The 
Administration has requested authorizing legislation that would allow 
the remainder to move by January 2005. To meet this timeline, the 
requested legislation must be enacted by April 30, 2004. Several of the 
Navy commands will relocate to government-owned facilities, while 
others will move to leased spaces until we identify permanent 
government-owned facilities.
    The requested legislation allows the Navy to transfer custody of 
the NAC property to the General Services Administration (GSA), who will 
manage the facilities for DHS. We will require a legislative waiver 
from Section 2909 of the Defense Base Closure and Realignment Act 
(BRAC), which specifies that bases many not be closed except through 
the BRAC process. The Navy will receive consideration for the fair 
market value of NAC in the fiscal year 2006 budget process.

                              EFFICIENCIES
Naval Safety Program
    Senior level management attention to safety concerns, coupled with 
selected financial investments, can yield profound benefits to the well 
being of our Sailors, Marines, civilians, contractors, and the bottom 
line mission costs. Ensuring the safety of our people has been and 
remains a top priority for Secretary England's and myself. Secretary 
Rumsfeld recently challenged the Military Services to reduce the rate 
of mishaps by 50 percent by fiscal year 2006.
    That has amplified efforts to reduce mishaps and reaffirm the value 
we place on safety. We have elevated the position of Commander of the 
Naval Safety Center from a one-star to a 2-star Flag Officer. Secretary 
England recently convened the first senior-level Navy and Marine Corps 
Safety Council to review DoN mishap reduction plans. Navy Flag and 
Marine Corps General Officers chair or co-chair four of the nine 
Defense Safety Oversight Council Task Forces. We are reducing lost 
workdays due to injuries in our civilian workforce. I personally 
visited several commands and installations and witnessed the great 
teaming between our command staff, management, and labor organizations 
to reduce injuries and lost workdays.
    Human error is a factor in over 80 percent of our mishaps. We are 
studying ways to modify high risk driving behaviors, particularly by 
young Marines. Our fiscal year 2005 budget will expand our Military 
Flight Operations Quality Assurance initiative, a highly successful 
program used in commercial aviation that downloads flight performance 
data (black box data) after every flight and allows the aircrew and 
aircraft maintenance team to replay a high fidelity animation of the 
flight and aircraft performance parameters.
Commander, Navy Installations
    The Navy established Commander, Navy Installations (CNI) on October 
1, 2003 to consolidate and streamline management of its shore 
infrastructure. Instead of eight Navy commands responsible for 
planning, programming, budgeting and executing resources for shore 
installations, there is a single command--CNI. The Navy now has an 
enterprise wide view of installation management and resources.
    CNI will guide all regions and installations towards Navy strategic 
objectives. The centralized approach will identify and disseminate best 
business practices across all regions/installations. The ability to 
identify standard costs and measure outputs is improving the capability 
based budgeting process. Managing from a program centric knowledge base 
allows for a top-level assessment of capabilities and risks.
    This central focus on facilities can leverage capabilities between 
the military services to avoid duplicate investments while still 
creating surge capacity through joint use opportunities. CNI has 
developed strategic partnerships with Naval Supply Systems Command 
(NAVSUP) and Naval Facilities Engineering Command (NAVFAC) to apply 
their logistics and contracting expertise.
    The Navy is already realizing savings, estimated at $1.6 billion 
across the FYDP, AND improving services from CNI initiatives.
  --Consolidating functions at the regional level vs. installation 
        level (e.g., housing management, administrative functions, 
        contracting, supply, comptroller, business management, 
        maintenance, warehousing).
  --Combining command staffs (e.g., NAB Coronado and NAS North Island; 
        CBC Port Hueneme and NAS Point Mugu)
  --Consolidating installation contracts (e.g., tug and pilot 
        contracts; custodial and grounds maintenance; negotiating area 
        wide utility rates).
  --Shifting installation level supply and contracting functions to 
        NAVSUP and NAVFAC (e.g., eliminate duplication at the 
        installation and regional levels).
  --Studying in 2004 the merger of other overlapping installation 
        functions from Naval Bureau of Personnel (e.g., morale, welfare 
        and recreation programs, fleet and family support programs, 
        child care), NAVSUP (personnel support programs such as food 
        services), and NAVFAC (facilities management).
Joint Cooperation on Installation Management
    I had the pleasure in February to witness the signing an agreement 
between the installation commanders from Naval Air Engineering Station, 
Lakehurst, the Army's Fort Dix, and McGuire Air Force Base. This 
partnership encourages joint solutions for common problems between the 
three contiguous bases and their tenant commands. The three 
installation commanders are already reducing operating costs by 
consolidating firearms training, radar information for air operations, 
and contracts for pest control, linen service, and hazardous waste 
disposal. We want to encourage such cooperation wherever we have 
opportunities to partner with the other military departments.
BRAC 2005
    Now more than ever, we need to convert excess capacity in our U.S. 
shore infrastructure into war-fighting capability. BRAC 2005 may well 
be our last significant opportunity to reduce excess infrastructure, 
and apply savings to improve readiness. More importantly, it will allow 
us to transform our infrastructure to best support the force structure 
of the 21st Century.
    The Congress gave considerable thought on how to structure a BRAC 
2005 process that sets fair and objective evaluation standards and 
incorporates the lessons learned from four previous BRAC rounds. We 
will be meticulous in meeting these statutory standards. We will treat 
all bases equally. We will base all recommendations on the 20-year 
force structure plan, infrastructure inventory, and published selection 
criteria. In no event will we make any decisions concerning the 
reduction of infrastructure until all data has been collected, 
certified and carefully analyzed.
    We will look for joint use opportunities in our analysis and 
recommendations. This is a fundamental change from past BRAC processes. 
I believe, as does the Secretary of the Navy, the Chief of Naval 
Operations, and the Commandant of the Marine Corps, that we can and 
must apply the type of joint warfighting successes witnessed in 
Afghanistan and Iraq to a more efficient and effective Department of 
Defense shore infrastructure.
    Within the DoN, the overall BRAC 2005 process is under the 
Secretary of the Navy's oversight and guidance. The Secretary of the 
Navy established three groups to support the process. The 
Infrastructure Evaluation Group (IEG) which I chair, will develop 
service unique recommendations for closure and realignment of the DoN 
military installations. It will also ensure that the operational needs 
of the fleet commanders are carefully considered.
    The Infrastructure Analysis Team (IAT) will develop the analytical 
methodologies, collect certified data from Navy and Marine Corps 
activities, examine joint and cross-service basing opportunities, 
perform in-depth analysis, and present the results to the IEG for 
evaluation. The Deputy Assistant Secretary of the Navy for 
Infrastructure Strategy and Analysis, who is a member of my staff, 
leads the IAT. The IAT has 93 military, civilian and contract personnel 
with a broad range of expertise and warfare disciplines.

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

                  DoN Infrastructure Evaluation Group
    Asst Sec Navy, Installations & Environment (Chair)
    Dep Asst Sec Navy, Infrastructure Strategy & Analysis (Vice Chair)
    Dep CNO Fleet Readiness and Logistics
    Dep Commandant Installations and Logistics
    Dep Commandant Aviation
    Dep Asst Sec Navy Research Development Test & Evaluation
    Dep Asst Sec Navy Manpower & Reserve Affairs

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

    A Functional Advisory Board (FAB) reports directly to the IEG and 
bridges the analysis by the DOD Joint Cross Service Groups and the DoN. 
The FAB includes Navy and Marine Corps flag officers and senior 
executives who are assigned to the seven Joint Cross Service Groups 
(JCSG). The FAB ensures that the DoN position on joint functions are 
clearly articulated and the leadership is kept current on JCSG matters.
Demolition/Footprint Reduction
    After the Navy and Marine Corps achieved the fiscal year 2002 DOD 
goal of 9 million square feet and two million square feet, 
respectively, they have continued to demolish excess and vacant 
facilities. In fiscal year 2005, the Navy has budgeted $49 million to 
demolish 1.6 million square feet, and the Marine Corps $5 million to 
demolish about 305 thousand square feet.
    The demolition effort has evolved from just eliminating ``eye-
sores'' to encouraging installations to consolidate, move out of costly 
leased or antiquated facilities, and eliminate the most inefficient 
facilities. We want to avoid spending SRM and base operating support 
funds on facilities we no longer need.
Utility Privatization
    Privatizing DOD electricity, water, wastewater, and natural gas 
utility systems to corporations who own and manage such systems will 
allow DOD to concentrate on core defense functions and yield long term 
cost savings. The Secretary of Defense has directed that each Service 
evaluate the potential for privatizing their utility systems, while 
10USC  2688 provides the legislative authority to convey utility 
systems where economical. The DoN is on track to meet the DOD goal of 
reaching a source selection authority (SSA) decision for all of its 
utility systems by 30 September 2005. To date, we have made SSA 
decisions for 111 systems, or 17 percent of the 654 systems available 
for privatization. Of the 111 systems with an SSA decision to date, 15 
systems have been privatized, 41 systems have been exempted, and 55 
systems are under review. DoN expects to achieve SSA decisions for 
approximately half of its systems by the end of fiscal year 2004. It is 
still too early to predict what percentage of our utility systems will 
successfully be privatized.
Strategic Sourcing
    Our strategic sourcing program examines cost effective options to 
deliver service and support services to our shore installations. There 
are three components: OMB Circular A-76 Competitive Sourcing program, 
Strategic Manpower Planning, and Divestiture.
    A-76 competitions compare performance costs for civilian employees 
vs. contract performance for facility management, logistics support, 
real property maintenance, and other similar functions that are widely 
available in the commercial sector. The program has competed 24,700 
positions since 1998 and generated over $640 million in cost avoidance 
through fiscal year 2005. Our fiscal year 2005 program will begin 
studies on 6,480 positions as part of a plan to examine 29,000 
positions in fiscal year 2004 through 2008, with expected cost 
avoidance of $250 million.
    Strategic manpower planning ensures uniform service members perform 
assignments that are inherently military while converting functions 
that are commercial in nature to civilian or contractor performance. 
The Department will study about 4,700 military positions in fiscal year 
2004 and fiscal year 2005 for potential conversion.
    We are examining opportunities to divest functions that are not a 
core competency of the Department and are readily available in the 
commercial sector. As an initial effort, the Department is studying 
whether to divest Navy's optical fabrication to private industry. Navy 
employs 380 military and civilian personnel, and spends $36 million to 
produce 1.3 million pairs of eyeglasses each year. The study is 
scheduled for completion in fiscal year 2004.

                 PRIOR BRAC CLEANUP & PROPERTY DISPOSAL
    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 has achieved a steady State savings of $2.7 billion per 
year since fiscal year 2002. All that remains is to complete the 
environmental cleanup and property disposal on all or portions of 22 of 
the original 91 bases. We have had significant successes in sales, 
disposal, and cleanup.
Property Sales
    We have used property sales as a means to expedite cleanup and the 
disposal process as well as recover the value of government owned 
property purchased by taxpayers. We have successfully completed several 
sales. We sold 235 acres last year at the former Marine Corps Air 
Station Tustin, CA on the GSA Internet web site for a net $204 million. 
We sold 22 acres at the former Naval Air Facility Key West, FL in 
January 2004 for $15 million. The city of Long Beach, CA opted to pre-
pay its remaining balance plus interest of $11.3 million from a 
promissory note for the 1997 economic development conveyance of the 
former Naval Hospital Long Beach. We are applying these funds to 
accelerate cleanup at the remaining prior BRAC locations.
    More property sales are planned that will finance the remaining 
prior BRAC cleanup efforts. We are close to resolving legal issues in 
the aftermath of the lawsuit by the LRA at the former Oak Knoll Naval 
Hospital in Oakland, CA. We are monitoring progress on the lawsuit 
filed against the City of Irvine on the environmental impact report it 
prepared under California statutes for annexation of the former Marine 
Corps Air Station El Toro, CA and expect to proceed soon with the sale 
of that property. We will use the proceeds from both sales to finance 
our fiscal year 2005 program of $115 million. If necessary, we will use 
the funds from the Long Beach and Key West sales as a cash flow bridge 
if the Oak Knoll and El Toro sales are delayed.
Property Disposal
    The DoN had about 161,000 acres planned for disposal from all four 
prior BRAC rounds, with the former Naval Air Facility Adak, AK 
accounting for nearly half of those acres. I am pleased to report that 
last month the Navy relinquished over 71,000 acres of its Adak land 
withdrawal to the Department of Interior, and Interior exchanged 
portions of that land with other lands held by The Aleut Corporation. 
Statutory authority provided by the Congress last year was the key 
enabler for this successful land exchange. The Navy has fenced and is 
retaining about 5,600 acres due to the presence of munitions.
    The transfer of Adak, along with recent successful property 
conveyances at Louisville, KY; Key West, Fl; Indianapolis, IN; and 
Richmond, CA means that by the end of this fiscal year the DoN will 
have less than 7 percent (or about 11,000 acres) of the property from 
all four prior BRAC rounds left to dispose.
Cleanup
    The DoN had spent $2.3 billion on environmental cleanup at prior 
BRAC locations through fiscal year 2003. We expect the remaining cost 
to complete cleanup at about $495 million for fiscal year 2006 and 
beyond, most of which is concentrated at fewer than twenty remaining 
locations. Any additional land sale revenue beyond that currently 
budgeted will be used to further accelerate cleanup at remaining prior 
BRAC locations. These sites are primarily former industrial facilities 
that tend to have the most persistent environmental cleanup challenges.

                         ENVIRONMENTAL CLEANUP
Cleanup Program at Active Bases
    We continue to make substantial progress toward completing our 
environmental restoration program and are on target to complete the 
cleanup on active bases by the DOD goal of 2014. For the third year in 
a row, the number of cleanups completed at active bases exceeded the 
planned target. The program Cost to Complete (CTC) continues to 
decline: it is now $3.0 billion for fiscal year 2004 and beyond. Almost 
70 percent of all sites have remedies in place or responses complete. 
We have kept a stable funded program and predict steady progress to 
cleanup the remaining sites. We believe the Department of Navy cleanup 
program is one of the best in government.
  --Our Alternative Remedial Technology Team reviews innovative 
        technologies and promotes their use in the field.
  --Our process improvements have reduced the number of sites being 
        ``re-opened'' by regulators from 50 in 1999, to 20 in 2001 to 9 
        in 2003.
  --Our partnering with regulators minimizes disputes and has served as 
        a model for other agencies. Our Environmental Management 
        Executive Council brings together two EPA Regions and six 
        states on the west coast to jointly resolve issues.
  --Our acquisition strategy matches the type of work to be performed 
        with the most cost-effective contractual vehicle while 
        enhancing opportunities for small businesses.
Munitions Response Program
    We are working with the Office of the Secretary of Defense to 
develop Munitions Response Program (MRP) objectives for discarded 
military munitions and unexploded ordnance (UXO) at locations other 
than operational ranges. We completed an extensive inventory of our 
installations to identify potential MRP sites, finished nine 
Preliminary Assessments (PAs), and initiated PAs at 31 installations 
through the end of fiscal year 2003. We will initiate PAs at 13 other 
installations in fiscal year 2004 and fiscal year 2005 and expect to 
achieve the DOD PA completion goal by fiscal year 2007. The $8 million 
budgeted in fiscal year 2004 and $16 million in fiscal year 2005 is 
sufficient to complete all PAs. Site Inspections (SIs) will begin in 
fiscal year 2006. Any imminent human health or environmental concerns 
identified during our investigations will be addressed immediately.
Vieques Cleanup
    We ceased military training on Vieques in 2003 and, as required by 
law, transferred 14,572 acres on eastern Vieques to the Department of 
Interior (DoI) in April 2003. Interior will manage the majority of it 
as a wildlife refuge, with the former Live Impact Area (about 900 
acres) designated as a wilderness area. The Governor of Puerto Rico has 
proposed listing Vieques and Culebra on the National Priorities List 
(NPL). We expect to sign a Federal Facilities Agreement to govern the 
cleanup after the NPL listing becomes final.
    Cleanup on western Vieques (the former Naval Ammunition Supply 
Detachment (NASD)) is proceeding as we work closely with the Puerto 
Rico Environmental Quality Board. Seventeen sites have been identified, 
but none with major environmental contamination, as NASD was not an 
industrial operation. These sites make up 490 acres of the 8114 acres 
transferred. We expect to spend about $16 million on these sites and 
complete the cleanup by 2007.
    Cleanup assessments are also underway on eastern Vieques (former 
training/bombing range). Twelve sites consisting of 80 of the 14,572 
acres transferred require assessment and potential cleanup. The sites 
include routine waste disposal areas used to support the former Camp 
Garcia, a landfill, and sewage lagoon. Other areas of concern will be 
examined. We expect to spend about $14 million on cleanup for the 12 
non-munitions sites and complete the cleanup by 2014.
    The former bombing ranges will require munitions assessment and 
cleanup. In the spring of 2003 the Navy investigated two beaches for 
potential munitions. The Navy has budgeted $8 million in fiscal year 
2005 for range assessments and initial clearance actions. Beaches and 
the live impact area will be high priorities. We estimate a cleanup 
cost of $76 million in fiscal year 2006 and beyond for munitions 
assessments and clearance actions based on the land uses designated in 
the statute. We will be working closely with the EPA and DoI. Worker 
safety and minimizing disturbance of the natural environment will be 
important considerations.
Kaho'olawe
    Kaho'olawe is a 28,800 acre uninhabited island in Hawaii used as a 
naval gunfire and bombing range from 1942 through 1990. In accordance 
with Title X of the fiscal year 1994 Defense Appropriations Act, the 
Navy transferred title of Kah'olawe to the State of Hawaii in 1994, and 
has been clearing ordnance according to the State's priorities.
    Navy relinquished control of access to Kaho'olawe to the State on 
November 11, 2003, as required by Title X, ending a ten-year cleanup 
effort. The Congress appropriated a total of $460 million for the 
cleanup, including $44 million provided to the State to assist them in 
preparing a reuse plan and managing the island. As of January 16, the 
Navy had cleared a total of 22,059 acres, consisting of 1,543 acres 
cleared of surface ordnance only; 20,516 acres cleared of surface 
ordnance and all scrap metal (known as Tier I); and 2,636 Tier I acres 
that were further cleared up to a four-foot depth (known as Tier II). 
During the cleanup, the Navy completed many non-clearance State goals, 
including road construction, historic and archaeological assessments, 
and shipped over 10 million tons of scrap metal, along with more than 
14,000 tires and aircraft debris used as targets.
    The cleanup contractor is completing demobilization, removing 
remaining scrap items and equipment not needed by the State. The Navy 
has signed an agreement with the State, as required by Title X, to 
respond to newly discovered, previously undetected ordnance found on 
the island in the future. The Navy believes it has accomplished the 
original Title X goal to provide reasonably safe and meaningful use of 
the island, as several thousand visits by the public have already been 
recorded. However, there is no technology that can assure the complete 
removal of all ordnance. We will remain partners with the State to 
manage the risk to humans from ordnance that certainly remains on the 
island.

                         ENVIRONMENTAL QUALITY
Marine Mammals
    The Navy is proud of its record of environmental stewardship, 
particularly our marine mammal research efforts and protective measures 
for military training activities.
    We are leaders in marine mammal research and are committed to find 
ways to avoid harm to animals while still performing our mission at 
sea. The Navy spends about $8 to $10 million per year in marine mammal 
research, representing about half of all known worldwide investments in 
this area. We coordinate with and share findings with other agencies 
such as the National Oceanic and Atmospheric Agency, and the National 
Science Foundation.

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

                 DoN Marine Mammal Research Focus Areas
    Underwater sound propagation
    Marine mammal locations and densities
    Behavior effect thresholds
    Mitigation techniques

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

    The Navy has protective measures to avoid harm to marine mammals 
during training and operations at sea while preserving training 
realism:
  --Planning.--Using historical marine mammal location information to 
        plan training activities. Protective measures are tailored to 
        the type of training, location, and season.
  --Detection.--Posting trained lookouts 24 hours per day on surface 
        ships. Submarines employ passive acoustic detection devices to 
        determine range and bearing of vocalizing marine mammals. We 
        may launch aerial searches for marine mammals in training areas 
        before, during and after training events.
  --Operations.--Establishing buffer zones during training exercises, 
        and suspending operations when necessary. Navy may limit active 
        sonar training through standoff distances, source power level 
        reductions, limit nighttime and bad weather operations, or opt 
        to train in deep rather than shallow water.
    The changes made by the Congress to the Marine Mammal Protection 
Act will allow us to better balance our readiness requirements with our 
legal obligations to ensure military activities are protective of 
marine mammals, and will allow us to ``train as we fight'' when our 
activities do not have biologically significant effects on marine 
mammals. We urge the Congress to reaffirm those changes as they 
consider reauthorization of the Marine Mammal Protection Act.
Shipboard Programs
    The Navy invested $465 million in the last decade to install 
pulpers, shredders, and plastic waste processors on its surface ships. 
This equipment avoids the need to discard plastics into the world's 
oceans and allows environmentally acceptable disposal of other solid 
wastes such as food, paper, cardboard, metal and glass. Submarines will 
be outfitted with similar solid waste equipment by the end of 2005, 
well in advance of the December 2008 deadline established in the Act to 
Prevent Pollution from Ships.


    The Navy has been converting air conditioning and refrigeration 
plants on its surface fleet from ozone depleting CFCs to 
environmentally friendly coolants. We plan to spend a total of $400 
million on this effort, including $30 million in fiscal year 2005. We 
expect to complete the conversion of nearly 900 CFC-12 plants by 2008, 
and over 400 CFC-114 plants by 2012. We expect to spend about $35 
million to install suites of pollution prevention equipment (e.g., HVLP 
paint sprayers, aqueous parts washers) on ships, including $5 million 
in fiscal year 2005. This equipment, combined with management actions, 
reduces 10,000 pounds per year of hazardous material brought aboard our 
large ships.
    We continue efforts with EPA to establish uniform national 
discharge standards for all armed forces vessels. This has proven to be 
a very complex undertaking. Navy and EPA have opted to segregate the 25 
types of discharges into ``batches'', with control standards for the 
first batch of 5 discharges (including hull coatings) to be published 
by September 2005.
Alternative Fuel Vehicles
    For the second year in a row, the Navy-Marine Corps Team 
substantially exceeded the Energy Policy Act requirement that 75 
percent of covered fleet vehicle procurements be alternative fuel 
vehicles. At the Pentagon, our Navy Public Works Center in Washington, 
D.C. converted the entire executive motor pool to alternative fueled 
vehicles.
    We are hoping to expand our procurement of hybrid vehicles in 
fiscal year 2004 and beyond and increase the use of bio-diesel and 
ethanol. We are working with the Army's National Automotive Center to 
place hydrogen-powered fuel cell vehicles at Marine Corps Recruit 
Depot, San Diego, and to open a fueling station at Camp Pendleton. 
These actions help develop a regional hydrogen-fueling infrastructure 
and provide us with hands-on experience with hydrogen and fuel cell 
transportation technology. While there are important environmental 
benefits, these investments also provide opportunities for technology 
transfer to future weapons systems.
Conservation
    Integrated Natural Resources Management Plans (INRMPs) are the 
foundation upon which Navy and Marine Corps activities protect and 
manage lands. The DoN has 96 bases that require INRMPs: 82 INRMPs are 
in place; 13 are being revised because they have passed the end of 
their 5-year cycle; and one is for the Barry M. Goldwater Range. This 
one is being prepared jointly with the Air Force and Department of 
Interior, and is delayed due to litigation. Navy and Marine Corps 
INRMPs already address endangered species and migratory birds. We have 
revised our INRMP guidance to ensure they provide a conservation 
benefit to endangered species. Our bases work closely with the U.S. 
Fish and Wildlife Service, State fish and game agencies to prepare the 
INRMPs. We are serious about our obligation to conserve natural 
resources entrusted to us by the American people as a means to ensure 
continued access to these resources to enable our military mission. 
Good conservation practices and military training operations can be 
mutually beneficial:
  --Navy efforts increased the population of federally protected 
        California least terns from 13 nests in 1977 to 1,200 today, 
        and the snowy plover population from 12 nests in 1992 to 101 
        today at the Silver Strand portion of Naval Amphibious Base 
        Coronado. Because of this success, the Fish and Wildlife 
        Service reduced training restrictions for our Special Forces.
  --Using animals provided by the Government of Mexico, the Marine 
        Corps, Air Force, U.S. Fish & Wildlife Service, and State of 
        Arizona have established a captive breeding program for the 
        Sonoran pronghorn ram, an endangered species that inhabits the 
        Goldwater Range. Increasing the population of this species will 
        reduce restrictions on the timing and tempo or ordnance 
        delivery to target areas on this joint military training range.

                              ENCROACHMENT
    We have made great strides in addressing encroachment issues over 
the past 2 years. Congress has provided much needed relief through 
enactment of legislation in the 2003 and 2004 National Defense 
Authorization Acts that allows the DoN to balance military readiness 
and environmental stewardship.
  --We worked closely with the Department of the Interior to implement 
        congressional direction to develop a rule that clearly defines 
        the relationship between military readiness activities and the 
        Migratory Bird Treaty Act. The Department of the Interior plans 
        to publish the proposed rule soon.
  --The Marine Corps is sponsoring conservation forums to help identify 
        land and conservation partners as a means of limiting 
        encroachment on its training areas from commercial development. 
        With the Nature Conservancy as a partner, we have completed one 
        project for 2,500 acres adjacent to Camp Lejeune tank and rifle 
        ranges. Other efforts are underway in California, South 
        Carolina, and Georgia with partners such as San Diego County, 
        the Trust for Public Land and the Sierra Club.
  --The Congress amended the Endangered Species Act to allow the 
        Secretary of the Interior to exclude military installations 
        from critical habitat designation when such installations are 
        managed in accordance with an INRMP and the Secretary 
        determines the INRMP provides a benefit to the endangered 
        species. The U.S. Fish and Wildlife Service is under court 
        order to designate critical habitat for a number of species in 
        April 2004, including four species \2\ that occur on Marine 
        Corps Air Station Miramar and Marine Corps Base Camp Pendleton. 
        INRMPs at these bases provide benefits to these species. The 
        legislative change should allow the Secretary of the Interior 
        to exclude both installations from critical habitat 
        designations, thus ensuring our ability to continue to conduct 
        realistic military training.
---------------------------------------------------------------------------
    \2\ Southwestern arroyo toad, Riverside fairy shrimp, San Diego 
fairy shrimp, California coastal gnatcatcher.
---------------------------------------------------------------------------
  --We will use the revised definition of harassment of marine mammals 
        in analysis of new technologies for military readiness training 
        programs (such as the Virtual At Sea Training (VAST) system for 
        naval gunfire), littoral warfare training, and supplemental 
        analysis on deployment of the SURTASS LFA sonar system. The 
        revised definition ensures that analysis of impacts on marine 
        mammals is based on science, not speculation. The changes 
        approved by Congress reflect current methodologies used by Navy 
        and the National Marine Fisheries Service and reduce the 
        likelihood of costly, time-consuming litigation caused by 
        ambiguous language.
    Notwithstanding the gains we've achieved thus far, encroachment 
continues to be a very real problem--one that will become more complex 
as populations grow, pressures on ecosystems mount, and the means 
required to sustain military readiness evolve through new technologies 
and threats.
    Coming to grips on when military munitions become solid wastes 
under the Resource Conservation and Recovery Act can ensure effective 
range management for both military readiness training and waste 
management. Flexibility for implementing the general conformity 
requirements of the Clean Air Act will allow more effective deployment 
of new weapons systems and the realignment of existing assets. We 
continue to discuss these important issues with the states and groups 
such as the National Governors Association and the Environmental 
Council of the States.
    Congressional efforts to address balancing military readiness and 
environmental stewardship have not gone unnoticed by State 
legislatures. Following your example, three states--California, 
Arizona, and Texas--have enacted laws requiring local governments to 
consider impacts on military readiness during environmental planning 
and land use planning processes.

                               CONCLUSION
    In conclusion, I would ask the members of this committee to judge 
the merits of the Department of the Navy's installations and 
environmental program through the considerable progress we are making 
in virtually all areas. Funding reductions are driven by reduced 
requirements, less costly alternatives, and improved business 
processes.
    That concludes my statement. I appreciate the support of each 
member of this committee, and will try to respond to your comments or 
concerns.

    Senator Hutchison. Thank you. Thank you all. You've 
answered my question on housing privatization so I'm not going 
to ask that again for the record. I think we're going to have 
the same problem in all the Services on sustainment. But my 
goal is just to make sure that we do try as hard as we can to 
keep the 95 percent rate or something as close to that as 
possible.

                            OVERSEAS BASING

    Let me move to the overseas basing. Obviously, Army is the 
biggest one that has announced so far that they are moving from 
Germany and Korea a large number of their troops. Do you see 
Navy bases overseas coming back, and is that something that is 
going to figure into your BRAC and our Military Construction 
decisions in the future?
    Mr. Johnson. Without the-we obviously cannot yet announce 
what's going to happen but we don't see large units coming back 
like the Army and the Air Force. Now, some individuals will 
come back and some small bases might close but nothing in 
comparison to what the Army and the Air Force. The Marines have 
almost no presence in Europe but they have presence in the 
Pacific. That may change a little bit but on the margins as 
opposed to nothing like the other two Services.

                    PRESIDENTIAL HELICOPTER PROGRAM

    Senator Hutchison. The presidential helicopter program. You 
have an $80 million request for the test and evaluation 
facilities, and I noticed in your remarks, or your written 
text, that you are looking for places around the Capital area 
where you might be able to do that, but you're not yet sure. My 
question really is, do you think you're going to need that 
money or all of that money in this year's budget?
    Mr. Johnson. As best we can determine, I'll let my expert 
talk here, if the selection had gone earlier, as they had 
planned, the MILCON funds would have probably been short to 
need. If it's delayed until, say, the end of the year it will 
be about right to have the MILCON, or the MILCON will be in the 
right sequence. There are two parts of that. One is a test and 
evaluation as you mentioned. Patuxent River is where we 
normally do that but in the sense of fairness we're looking at 
alternatives; that should be completed pretty quickly. The 
Marines have long needed a new facility at Quantico, that's the 
second part, and that's needed with a new or a continuing 
helicopter program. So both of them will be needed in this 
year's budget. It would have been nice to have had them in last 
year's budget, if we'd gone through with the original time 
frame.
    You want to add anything?
    Admiral Loose. Everything the Secretary said-again, the 
construction, I'm sorry, the acquisition award was delayed a 
little bit. They're now determining what the impact would be on 
the first aircraft, which was before November of 2006. And 
right now we envision no impact at this point and we definitely 
need the money in the fiscal year 2005 program.
    Senator Hutchison. We may want to look at that as we get 
closer to the time that we're going to pass our bill and see if 
there's any efficiency in this number for this year or if it 
can be put somewhere else that would be a higher priority 
within the Navy budget.
    Mr. Johnson. We'd be pleased to continue to interact with 
you and your staff on it.

                              JOINT BASING

    Senator Hutchison. Okay. Let me ask you a question on joint 
use. It came up in the Army but particularly as I look at some 
of the bases that you have around Corpus Christi and Ingleside, 
already we have joint use with the Coast Guard. We have joint 
use with the Army in some of them but I'm just wondering if the 
Navy has really looked at the Coast Guard as a real joint use 
partner as much as it could in light of the very enhanced Coast 
Guard responsibility in homeland security and their need to be 
all along the Gulf Coast, really, for homeland security 
purposes. Are you really factoring in as a major partner and of 
course, I know the Corpus Christi-Ingleside area, I'm sure the 
Senator from Louisiana has the same type of potential, because 
you have a Coast Guard presence. Are you really looking at 
that?
    Mr. Johnson. In the government there's no closer 
relationship between two departments than the Coast Guard, the 
Navy and all the Services for that matter. We treat them as a 
part of Department of Defense and we recognize they're 
certainly not but they're full partners in everything we do and 
I know that at Joint Reserve Base Carswell we have all five 
services there. And I think we have it at Belle Chasse also, 
Coast Guard is at that Joint Reserve Base, and we try very 
hard; sometimes there might be an oversight but it's an 
oversight when it doesn't occur.
    Senator Hutchison. Yes, well, Carswell is a great example 
and that's a different priority. But I just wondered on the 
coasts if you're looking at your coastal bases for partnership 
with Coast Guard.
    Mr. Johnson. As you and others visit our bases along the 
Coast you'll find that Coast Guard is inevitably present. And 
also more and more Customs; we don't always acknowledge that 
but at Corpus Christi they have built a new hangar, as I 
recall, just for Customs.
    Senator Hutchison. Yes, Customs is right there with Coast 
Guard and Army in the depot and so there is quite a bit of 
interaction there.
    Mr. Johnson. And when you go to pilot training bases no 
matter where they are you see all services who fly, Corpus 
Christi being a good example and some in Louisiana also.
    General Williams. Madam, I would just also like to add that 
although Camp Lejeune is not designated a joint base we in fact 
do have Coast Guard presence there at Camp Lejeune. And we 
certainly are always looking for opportunities to train jointly 
with the Coast Guard as well as other services. So we do have 
some presence there as well.
    Senator Hutchison. One of the things that I would just like 
to ask you to do, as we're moving into BRAC, since the Coast 
Guard isn't in the same category as the Navy in BRAC, it might 
be that the Navy could be proactive in looking for places that 
there could be consolidation that would be to the benefit of 
both, even though it wouldn't be all Department of Defense. But 
I just think because they're different, we shouldn't forget 
about them as a way to become more efficient.
    Mr. Johnson. We cannot forget about them if we wanted to; 
we don't want to and your friend and my boss feels very 
strongly about homeland security and so do we.
    Senator Hutchison. Yes, that is a good connection. I forgot 
about his recent past. But you, of course, being from the Air 
Force yourself, are someone who can help on joint use 
opportunities so I think that could be very helpful if the Navy 
would sort of take the lead.
    Senator Landrieu.

                     NEW ORLEANS JOINT RESERVE BASE

    Senator Landrieu. Yes, thank you, Mr. Secretary. And I 
appreciate the Chairman's line of question and wanted just to 
follow-up along the same lines because the city of New Orleans, 
which is my hometown, of course, and the State I represent, has 
been somewhat negotiating with the Navy about a plan that would 
just make a tremendous amount of sense from our perspective. We 
have the Navy Reserve, you know, headquartered in New Orleans. 
There's a move underfoot with a broad base in our community to 
try to consolidate some of the different components, freeing up 
some of the very valuable riverfront space for the expansion of 
the cruise ship industry, which has become very important to 
New Orleans and we've reached out but they've actually reached 
to us because it becomes one of these favorite destinations of 
people, or launching off points, I should say, to leave from 
the city, which we're grateful for. But in that there's a real 
possibility that with just a little bit of out of the box 
thinking but with no cost to the Navy we could end up with 
really substantial facilities in a consolidated format that, 
you know, add to the footprint of that great base in New 
Orleans.
    So I wanted, Mr. Secretary, to ask you if you're familiar 
with these negotiations? Is it possible for them to, you know, 
continue because again, it's not just related to BRAC, it's 
related to the Coast Guard, related to this other industry and 
other businesses that have a real economic interest in the 
outcome of these plans.
    Mr. Johnson. I've been there, I've seen it and General 
McCarthy came to visit me Monday or Tuesday; I gave him some 
very encouraging guidelines and I checked with my staff and I'm 
going to give him some different ones next week. But when we 
give those guidelines they will be so those in the community 
and others can rely on. I liked what he proposed but we have to 
look at it in a larger context and we'll come up with some 
guidelines that the city can understand, he can understand and 
hopefully we'll work all sides' interest.
    Senator Landrieu. Well, is it fair to ask you if these next 
set of guidelines is going to be as encouraging as the last 
ones that you gave him?
    Mr. Johnson. It will be a little bit different because we 
have to look at the larger context. The last thing we want to 
get into is to have a community that's coming and saying, we 
will build you a new building if you won't leave. So we have to 
make sure that when the city does it it's at the right time. 
And what I suggested to him was we should know that when we're 
making decisions, but we want to put it in the right context so 
that others, some of your other Senators, couldn't say we did 
it wrong. And I was pleased when my staff asked me to pause and 
come up with the right guidelines so that we can do it 
correctly.
    Senator Landrieu. Because I really appreciate that and look 
forward to working with you because it's of course important, 
you know, to our community and there's just such an opportunity 
if this would work out for the Navy to be benefitted, the 
taxpayers to be benefitted, the city and a variety of other 
industries.

                          WASHINGTON NAVY YARD

    The other is to compliment you all on the work that you're 
doing here in the District on the revitalization of the Navy 
Yard. Would that be under your jurisdiction?
    Mr. Johnson. Yes.
    Senator Landrieu. And to compliment you all on the way that 
you're doing that with the leadership team here in the city. I 
also wear another hat as the Appropriator for the District of 
Columbia, so I'm fairly closely associated. And I'm just seeing 
tremendous progress along that whole corridor. I hope, I'm 
certain that what you're doing is benefitting the Navy but the 
way that you're engaging in a very integrated process with the 
other parts of the government, as well as with the local 
community here in the city I think is going to have just 
tremendous long-term benefits to this whole region. And I just 
wanted to commend you and to encourage you and to let you know 
that I'm looking closely at that and if there's anything I can 
do to help you. I know the Navy may have some special needs in 
regards to the relocation of a museum and some other things 
that you all may need some help with and I'd be particularly 
interested in working with you on that.
    Mr. Johnson. I'd very much like to work with you on that. 
And we have worked well with the city. We're concerned, 
encouraged, whatever, about the Southeast Federal Center, if we 
can ever get that moving.
    Senator Landrieu. Southeast? I'm sorry.
    Mr. Johnson. It's the land next door, it's owned by GSA, 
it's on the contract.
    Senator Landrieu. Yes, the development for the housing 
units and the--I was telling them, I was complimenting them, 
Madam Chair, on the good work that they're doing at the Navy 
Yard and how they've done it in a very integrated fashion with 
the city and the community and if it continues, and hopefully 
as it has even improved and getting better it's going to be a 
tremendous legacy for the Navy as well as for the city and the 
region, that it will have an impact on the region that we're 
in.
    Mr. Johnson. We hope that we can make the museum a center 
part of that but we have some troubles.
    Senator Landrieu. And there may be a better, you know, 
location or avenue. But opening up that whole area in the 
appropriate ways to give access to the waterfront for the 
neighborhood and the region and then have a very vibrant and 
dynamic community, which the Military shares with other aspects 
of the government as well as the local city, I just think it's 
been a real testimony to you all and to the leadership the 
Navy's provided. So I just wanted to thank you for that.
    Mr. Johnson. The last time I was there I went through the 
Southeast Federal Center and the new building for the 
Department of Transportation is really springing forth out of 
the ground; it's quite exciting to watch that development.
    Senator Landrieu. Thank you.
    General Williams. Senator, I'd just like to add to that 
also. As you probably know we'll be opening our Marine barracks 
that we're building there this Summer, probably around the June 
timeframe and we certainly would----
    Senator Landrieu. They look beautiful and you've done a 
beautiful job.
    General Williams. Yes.
    Senator Landrieu. And I just--because I live a few blocks 
from there so not only professionally do I focus on it but 
because I live in the general neighborhood I see it and I've 
been able to watch firsthand the development. The Marines have 
done a beautiful job, that whole corridor, and I just want to 
communicate how happy the people that live in this neighborhood 
are with the way that you have conducted yourself. And it's 
going to be a tremendous help, not just to the, you know, to 
the neighborhood but to the whole region and a real feather in 
the cap of the Navy and Marines.
    General Williams. Yes ma'am.

                        NEBRASKA AVENUE COMPLEX

    Senator Hutchison. Just one last question on the Nebraska 
Avenue Complex and obviously the Navy is moving. I noticed in 
your testimony that you're going to be in some cases going to 
lease space. All I would like to ask is, are you going to make 
sure that the Navy doesn't incur any costs from moving out to 
accommodate the Department of Homeland Security?
    Mr. Johnson. Yes ma'am. To date we have not incurred any 
costs. Now, we incurred some costs because we planned some of 
the moves but not for the moves and not for the changes up in 
Nebraska Avenue. We can move approximately half of the people 
before we touch the BRAC requirements. The last two large 
organizations we cannot do that until we get permission from 
Congress, and there's a bill over here, a legislative package. 
In that case the GSA folks will pay for our interim quarters 
and also the new buildings up to their appraised value. 
Nebraska Avenue is being appraised by a third party and up to 
that level GSA will reimburse us. Every indication is that 
level is above what we need. We've also gotten the Department 
of Homeland Security to pay for the move, this is the last half 
again, and also to pay for the first year's lease. Then GSA 
picks it up through the move to the final quarters.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hutchison. Well, I know you'll be very attentive to 
that but certainly we don't want any DoD cost.
    Mr. Johnson. And we appreciate your strong support in that 
area.
    Senator Hutchison. You have it.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted to Hansford T. Johnson

          Questions Submitted by Senator Kay Bailey Hutchison

                         RECAPITALIZATION RATE
    Question. Secretary Johnson, your testimony asserts the Navy will 
meet DOD's 67-year recapitalization goal by 2008. But your 
recapitalization rate is clearly headed in the wrong direction, moving 
from 116 years in fiscal year 2003 to 140 years in fiscal year 2004 and 
148 years under this budget request.
    How is the fiscal year 2008 target of 67 years going to be met 
without extraordinary and unrealistic investments over the next couple 
of years?
    Answer. The Navy and Marine Corps are funded to meet the 67-year 
recapitalization rate goal by fiscal year 2008 in the current 
President's Future Year Defense Plan. This investment requirement will 
be met through a combination of initiatives such as (1) minimizing new 
footprint as appropriate while taking into account new mission 
requirements and (2) reducing footprint and therefore plant replacement 
value to ensure that we are investing in only needed recapitalization 
requirements.
    Question. What confidence do you have that the needed outyear 
investment will materialize?
    Answer. Through a combination of initiatives to reduce footprint 
thus plant replacement value, and investment of funds, I am optimistic 
that the Navy and Marine Corps will meet the 67-year recapitalization 
rate goal by fiscal year 2008.

                                  BRAC
    Question. Secretary Johnson, the Navy has not asked for any 
appropriations for BRAC cleanup this year. Your testimony states that 
you intend to spend $115 million in proceeds from land sales for BRAC 
cleanup. I applaud the Navy's aggressive use of land sales to defray 
BRAC costs, but I am a little uneasy about making BRAC cleanup efforts 
dependent on this mechanism.
    If the land sale proceeds don't materialize, what assurances do we 
have that the $115 million will be spent?
    Answer. It is possible that we will not receive all the proceeds 
anticipated in fiscal year 2005. If it appears that predicted land 
sales revenue may be delayed, the Department of Navy will take steps to 
preserve available cash to meet fiscal year 2005 expenses. The 
Department of Navy had received substantially more land sale revenue in 
fiscal year 2003 and fiscal year 2004 than anticipated, which was to be 
used to further accelerate environmental cleanup. The Department may 
opt to defer accelerating some of this cleanup work to carryover 
portions of these funds to cover the most critical projects planned in 
fiscal year 2005 until the planned land sales revenue materializes.
    Question. If you get more than $115 million from land sales, can 
you spend it this year?
    Answer. Generally, yes, substantially more than $115 million can be 
spent for BRAC cleanup in fiscal year 2005. The Department of Navy will 
ensure that all land sale revenue funds are spent prudently. Depending 
on the amount of additional funds received, environmental cleanup 
schedules, and regulator reviews, we may opt to carryover some excess 
land sale revenue into fiscal year 2006 and beyond as we pursue the 
cleanup in the most effective manner we can.
    Question. Do you need any additional authorization to spend 
proceeds in excess of $115 million?
    Answer. We do not need additional authorization from the Congress 
to spend more than $115 million. However if land sales revenue exceeds 
our prediction in the budget, we would require additional obligation 
authority from OMB.
                                 ______
                                 

            Questions Submitted by Senator Dianne Feinstein

                       BRAC ENVIRONMENTAL FUNDING
    Question. Secretary Johnson, the Navy has requested no funding for 
BRAC environmental remediation in the fiscal year 2005 budget request 
because you intend to finance your fiscal year 2005 BRAC cleanup 
requirements out of the revenue from land sales.
    According to your prepared testimony, the Navy has realized $230 
million from BRAC land sales at Tustin and Long Beach, California, and 
Key West, Florida. In addition, you are anticipating $115 million in 
revenues from the sale of Oak Knoll Naval Hospital at Oakland and 
property at El Toro to finance your fiscal year 2005 program.
    What is the status of the $230 million you have already realized? 
Has that money been committed to specific projects, and if so, can you 
give the Committee a breakdown of those projects?
    Answer. Most of the $230 million received has been obligated and 
the remainder is funding critical projects this year and next. The 
bases that have received the most funding to date from these land sales 
are:
    NAF Adak, AK; NAS Alameda, CA; MCAS El Toro, CA; Hunters Point 
Annex, CA; NAS Moffett Field, CA; FISC Oakland (Point Molate) Richmond, 
CA; NAS South Weymouth, MA; NS Treasure Island, CA; MCAS Tustin, CA; 
Mare Island NSY (Vallejo), CA.
    Question. Secretary Johnson, your prepared testimony includes the 
following statement: ``If necessary, we will use the funds from the 
Long Beach and Key West sales as a cash flow bridge if the Oak Knoll 
and El Toro sales are delayed.''
    It appears from that statement that you are uncertain when the El 
Toro and Oak Knoll land sales will be complete.
    What is your current estimated timetable for those sales--what 
level of confidence do you have that you will have proceeds from those 
sales available backfill the BRAC account by the beginning of the 2005 
fiscal year in October?
    Answer. We expect both El Toro and Oak Knoll sales to be initiated 
this year (fiscal year 2004) and result in funds being available in 
fiscal year 2005, though it may be later in the year. As a precaution, 
we are prepared to defer fiscal year 2004 funds in hand, which were 
previously planned to accelerate cleanup, in case the land sale revenue 
does not materialize in time. There is sufficient funding and workload 
to assure a continuous and steady clean up effort in fiscal year 2005.
    Question. Was it a Navy decision or an OSD (Office of Secretary of 
Defense) decision for the Navy to self-finance it's entire fiscal year 
2005 BRAC cleanup program out of land sale revenues?
    What is the Navy's remaining cost to complete its BRAC 
environmental cleanup program?
    Answer. Based on the data used to prepare PRESBUD 2005, the cost to 
complete for the BRAC environmental cleanup program is about $0.5 
billion in fiscal year 2006 to completion.
    Question. How much of that could you execute in fiscal year 2005, 
if additional funding were available?
    Answer. The Navy could execute about an additional $150 million.
    Question. What lessons has the Navy learned from the previous BRAC 
rounds that you plan to apply to the environmental cleanup requirements 
associated with the 2005 BRAC round?
    Answer. The following concepts are being pursued:
  --Combining cleanup with redevelopment saves time and money for all 
        parties.
    --Use CERCLA ``early transfer'' authority to get property quickly 
            to the developer.
  --Early transfer of BRAC property can accelerate redevelopment and 
        parallel cleanup.
    --Reliable characterization of the contamination allows potential 
            new owners to consider cleanup costs as part of the 
            purchase price of the property, and provides safe transfer 
            with interim land use controls.
  --Cleanup program in far better shape than previous BRACs. Most sites 
        are either done, cleanup is underway, or contamination is well 
        characterized.
  --Local Redevelopment Authorities are best at traditional 
        governmental functions of planning/zoning.
    --Developers are best at property development within established 
            zoning rules.
  --Involve regulators early in process. CERCLA early transfer 
        authority requires approval by State Governor, and EPA if it's 
        a National Priorities List site.

                      MARINE ONE HELICOPTER (VXX)
    Question. Secretary Johnson, in your testimony, you note that 
military construction is required to support the test and evaluation of 
three VXX helicopters scheduled for delivery in October 2006.
    What impact will the delay in awarding the VXX contract have on 
that delivery schedule?
    Answer. The delay in awarding the VXX contract is not expected to 
have any significant impact on the arrival of the first aircraft, 
currently planned for November 2006.
    Question. Does the Navy have a new target date for awarding the VXX 
contract?
    Answer. Award of the VXX contract is expected by December 2004.
    Question. Given the delay in awarding the contract, has the Navy 
determined whether it still requires full funding for construction of 
the test and evaluation project requested in the President's fiscal 
year 2005 budget submission?
    Answer. Because the delay in awarding the contract is not expected 
to cause any significantly delay in the arrival of the first aircraft, 
facilities are still required in the fiscal year 2005 budget.
       outlying landing field (washington county, north carolina)
    Question. Secretary Johnson, the Navy is requesting $61.8 million 
in fiscal year 2005 MilCon to acquire land and begin construction on an 
Outlying Landing Field in Washington County, North Carolina, to support 
the basing of new F/A-18E Super Hornet squadrons in Virginia and North 
Carolina. In fiscal year 2004, this Committee appropriated $27.6 
million for the first increment of land acquisition.
    I understand that there is opposition to this project from the 
local communities of Washington and Beaufort counties, and that several 
lawsuits have been filed.
    What impact has the lawsuits had on the Navy's timetable or plans 
to acquire the land for the outlying field?
    Answer. Two lawsuits were filed in Federal District Court 
challenging the Navy's decision regarding home basing of the Super 
Hornet on the east coast. These lawsuits allege that the Navy's 
environmental analysis conducted pursuant to NEPA was inadequate to 
support the Navy's basing decision, including the selection of a site 
for an outlying landing field (OLF) in North Carolina. The lawsuits 
were file under the Administrative Procedures Act (APA). Under the APA, 
the Federal District Court will review the adequacy of the analysis 
underlying the Navy's decision and determine whether additional 
environmental analysis is needed. The court could enjoin the Navy from 
engaging in land acquisition activities until the additional analysis 
was completed. However, the court cannot substitute its judgment for 
that of the Navy and direct that the OLF be sited at a location other 
than Washington County, NC.
    Question. There was a hearing in Federal court on March 30 on a 
request from opponents of the landing field for a temporary injunction 
against the Navy. Has any ruling been made on that request, and if not, 
when do you expect a ruling?
    Answer. Plaintiffs in the two lawsuits on the Navy's home basing 
decision requested that the court issue a preliminary injunction 
prohibiting the Navy from engaging in further activity regarding the 
OLF pending final adjudication of the lawsuits. On April 21, 2004, the 
Court issued a preliminary injunction precluding the Navy from engaging 
in any direct or indirect activities related to construction and 
operation of an OLF in Washington County, NC. On May 4, 2004, the Navy 
asked the Court to reconsider its decision to issue a preliminary 
injunction. The Court has yet to rule on the Navy's request for 
reconsideration. In the meantime Navy is taking steps to move forward 
with the trial on the merits in order to obtain a final decision in the 
matter.
    Question. If the judge grants a temporary injunction, how will that 
affect the Navy's acquisition process?
    Answer. The Court did grant the plaintiffs' request for a 
preliminary injunction, prohibiting the Navy from engaging in any 
direct or indirect activities related to the construction and operation 
of an OLF in Washington County, NC. The preliminary injunction will 
remain in effect until the Court makes a final ruling on the lawsuits. 
The preliminary injunction is very broad in scope and prohibits the 
Navy from acquiring land, preparing management plans or even conducting 
environmental studies. At present the Navy has discontinued all of its 
land acquisition efforts, including negotiations for the voluntary sale 
of land to the Navy by private citizens, as well as studies that would 
form the basis for a Bird Aircraft Strike (BASH) Plan and the 
Integrated Natural Resources Management Plan required by the Sikes Act. 
If land acquisition were precluded for an extended period, the effort 
to base Super Hornet aircraft on the East Coast could be delayed. On 
May 4, 2004, the Navy filed a request that the Court to reconsider its 
decision and either terminate the preliminary injunction or modify the 
scope of the injunction. The Court has yet to rule on the Navy's 
request for reconsideration.
    Question. What is the status of the $27.6 million we appropriated 
for this project in fiscal year 2004? When do you expect to obligate 
that funding?
    Answer. The fiscal year 2004 funds consisted of $16.9 million for 
acquisition of 3,024 acres of core land, and $10.7 million for design 
and construction of horizontal work, for a total of $27.6 million.
    Progress to date with fiscal year 2004 Funds:
  --1,157 acres of the 3,024 have been purchased, obligating $4.1 
        million of the $16.9 million.
  --Offers have been made to 9 owners for another 1,826 acres,
  --Navy is ready to make offers to the remaining 4 owners.
  --$539 thousand has been spent on planning and design.
    The Navy filed a request asking the Court to reconsider its 
decision and either terminate the preliminary injunction or modify the 
scope of the injunction. The court has not yet ruled on the Navy 
motion. Navy is prepared to obligate additional funds immediately if 
the judge relaxes the terms of the injunction he issued on 20 April.
    Question. Is the Navy undertaking any further environmental studies 
on the potential impact of activities at the landing field on 
waterfowl?
    Answer. The Navy believes it has thoroughly analyzed environmental 
impacts on waterfowl in the Environmental Impact Statement that was 
completed in August 2003. Therefore, no further environmental impact 
studies have been undertaken or believed necessary. The Navy had begun 
preliminary work on development of a Bird Aircraft Strike Hazard (BASH) 
plan. That preliminary work included radar studies of waterfowl 
activities in the vicinity of the Pocosin Lakes National Wildlife 
Refuge and the proposed OLF site. Further progress on BASH was halted 
as a result of the Court's decision.
    Question. In light of the lawsuits, how confident are you that the 
Navy will be able to obligate the fiscal year 2005 land acquisition 
funding requested during the 2005 fiscal year?
    Answer. The fiscal year 2005 budget request for OLF totals $95.7 
million ($33.9 million for horizontal construction, $4.8 million for 
vertical construction, and $57.0 million for buffer land acquisition.
    The Navy has filed a motion requesting that the Court reconsider 
the scope of the injunction. If the Court agrees, the Navy will resume 
voluntary land sales and low impact design work such as soil borings 
and surveying.
    Under a best-case scenario, the fiscal year 2005 projects can be 
executed in fiscal year 2005. Under a likely-case scenario, land sales 
would be executable in late fiscal year 2005, but construction projects 
would not be executed until fiscal year 2006.

                        NEBRASKA AVENUE COMPLEX
    Question. Secretary Johnson, I understand that the Navy expects the 
appraised value of the Nebraska Avenue Complex to cover the cost of 
relocating Navy personnel.
    Have you determined what the final cost will be, where the Navy 
personnel will go, and whether the relocation will require any new 
MilCon? Would any MilCon requirements come out of the military 
construction appropriation, or would they be paid for by the GSA out of 
its appropriation?
    Answer. The appraisal of the Nebraska Avenue Complex will be 
completed in late April. We have defined the scope of the remaining 
work--the move out, interim leasing, permanent construction and move in 
of two Navy commands, SSP and NIPO. This involves 578 people. We expect 
the BRAC analysis process to determine in mid-2005 where the final 
location would be for these two commands. Since we have not determined 
their final location, we cannot know the final cost of the replacement 
facility, but expect the costs to be within the appraised value of 
Nebraska Avenue Complex. It is premature to say what, if any, MILCON 
requirement would come out of the Military construction appropriation.
    Question. If GSA is responsible, how can you be sure that the 
Navy's requirements will be met in a timely manner, since you have no 
control over the GSA's budget?
    Answer. This is a legitimate concern. OMB has taken responsibility 
to manage the overall flow of funding to ensure that Navy does not pay 
for these moves, and that they are accomplished in a timely manner.
    Question. Did the Navy give any consideration to keeping the chapel 
at the complex and continuing to use it as a chapel? Do you have any 
concern about the reaction from the Navy community to turning this 
chapel into a conference room?
    Answer. Because of potential concern from the Navy community, 
consideration was given to keeping the Chapel. However, the chapel has 
not been used on a regular basis since the Security Group personnel 
moved out of NAC, and it does not meet a specific Navy requirement. 
Since that time it has only been used for weddings, funerals, 
retirements and a few all hands meetings for tenants aboard the 
Nebraska Avenue complex. The burden for financial upkeep, manpower 
requirements and the limited accessibility to military and families 
were also considered. In addition, Homeland Security's decision to move 
all military off the complex would make access even more difficult to 
the Navy community. Plans for a deconsecrating service are being 
developed and consideration is being given to removing the large 
stained glass window, the E.B. Skinner pipe organ and other historical 
keepsakes.
                                 ______
                                 

            Questions Submitted by Senator Mary L. Landrieu

                         INSTALLATIONS IN IRAQ
    Question. Secretary Johnson, soon, the United States will no longer 
maintain bases in Saudi Arabia. We will have to look elsewhere for 
basing opportunities in the Middle East. DOD has said Iraq will soon 
become a new locus for U.S. troops in the Middle East. In some cases, 
DOD plans to upgrade military installations used by Saddam Hussein for 
future use by American armed forces.
    What plans does the Navy have for long-term basing in Iraq?
    Answer. The Navy supports the interim Iraqi government and a 
peaceful transition of power to a democratic state. To complete this 
goal, the Navy does not anticipate a requirement to maintain any long-
term basing requirements in Iraq.
    Question. Does the Navy intend to build any facilities on Iraqi 
waters of the Persian Gulf, perhaps near Um Quasr?
    Answer. No. The Navy does not intend to build any facilities in 
Iraqi waters of the Persian Gulf.
    Question. How many sailor does the Navy intend to station in Iraq?
    Answer. The Navy does not anticipate the need to station additional 
personnel in Iraq outside of those already provided in support of the 
Central Command (CENTCOM) Commander and Naval Forces Central Command 
(NAVCENT)/Fifth Fleet Commander.
    Question. When will the Navy begin to budget for the military 
construction needed to house the U.S. Navy in Iraq?
    Answer. The Navy does not anticipate a requirement to maintain any 
long-term basing requirement in Iraq. Hence, military construction will 
not be required to support our current presence.
    Question. Through a Supplemental Appropriation?
    Answer. The Navy does not anticipate a requirement to maintain any 
long-term basing requirement in Iraq. Hence, additional military 
construction funding will not be required to support our current 
presence.
    Question. If not Iraq, what other countries within Central Command 
might the Navy seek to expand its presence?
    Answer. The Navy does not anticipate a requirement to expand its 
presence in the Central Command Area of Responsibility.

                  DOD REALIGNMENT OF FORCES IN EUROPE
    Question. Secretary Johnson, nearly 2 years ago, DOD began 
discussions on the realignment of forces in Europe. In that time, 
Congress has not received any concrete details for what DOD has in 
mind. We have seen reports that DOD plans to move some personnel and 
infrastructure out of Old Europe and into New Europe and the Former 
Soviet States. When asked for elaboration on these plans, DOD has 
provided little. I am pleased to see this Subcommittee will hold a 
hearing on Europe's realignment on April 21st.
    Can you shed any light on how many Navy sailors and ships/aircraft 
within Europe may be realigned from current installations to new 
installations?
    Answer. By our expeditionary nature, the Navy does not maintain a 
significant garrison force overseas. However, the Navy is reviewing its 
overseas posture to ensure that we can best support our existing 
operational assets. This support is being explicitly addressed in 
Secretary Rumsfeld's Integrated Global Presence and Basing Strategy 
(IGPBS) initiative. In consultation with our friends, allies and 
partners, these basing initiatives are being closely scrutinized to 
ensure that they directly support Defense strategy. Although the Navy 
expects to reduce its permanent force structure in Europe, the final 
decision to modify existing base structure is still being reviewed.
    Question. What current facilities do you anticipate will continue 
to operate?
    Answer. The Navy does not anticipate closing any of its existing 
main operating bases in Europe. However, operations at a few of these 
bases may be significantly curtailed. The final decision to modify 
existing base structure is still being reviewed.
    Question. If we reduce forces in Europe, won't we see an increase 
of sailors and equipment returning to the United States for basing?
    Answer. Yes. The Navy does expect to return some Navy assets based 
in the European theater to the United States. In order to maximize our 
existing infrastructure, the Navy intends to use the BRAC 2005 process 
to determine the final disposition and maximize Navy capabilities.
    Question. Does it make sense to enter into BRAC in 2005 if we have 
not yet fully determined the shape and size of our presence abroad?
    Answer. The Navy is committed to conducting a 2005 round of base 
realignment and closure (BRAC), as authorized by the Congress. The 
convergence of ongoing strategy and overseas basing actions, the 
transformational direction in all the Services and force structure 
changes together afford us a once-in-a-generation opportunity to truly 
transform the Services' combat capability in an enduring way.
    The ongoing overseas basing review is nearly complete and those 
assets that are identified to return to the United States will be 
considered in the BRAC 2005 process. The timing of the overseas basing 
review and the BRAC 2005 process is perfect to ensure appropriate 
consideration is given to the optimal stationing of all of our naval 
assets.

 BRAC AT FORT POLK AND BELLE CHASSE--HOW CAN JOINT OPERATIONS BENEFIT 
                              THESE BASES?
    Question. Secretary Johnson, Secretary Rumsfeld has stated that a 
high priority should be placed on the military value of Joint bases for 
the upcoming BRAC round.
    Do you share Secretary Rumsfeld's vision for our military to move 
toward and support Joint bases?
    Answer. We strongly support Secretary Rumsfeld's vision of joint 
use of installation assets because it helps us reduce lifecycle 
investments and share overhead. In addition, joint bases are a more 
accurate reflection of how our forces operate jointly in wartime. Navy 
is participating in DOD efforts to revise policies, processes, 
procedures, and practices to enhance joint base operations and support.
    I know you have visited Belle Chasse on a number of occasions.
    Question. Could you please discuss how Belle Chasse--the home to 
the Navy Reserve, Air Force Reserve, Marine Reserve, Army Reserve, Air 
National Guard, and Coast Guard--meets Secretary Rumsfeld's vision for 
jointness?
    Answer. Joint use of installation assets is a way of life in Belle 
Chasse. The Navy serves as host of the air station, providing logistics 
support to its DOD and non-DOD tenants for airfields, air traffic 
control, bachelor quarters/barracks, family housing, galley, recreation 
activities, fire and safety, etc. None of these services are duplicated 
among the tenants. Also an Armed Forces Reserve Center (AFRC) is under 
construction on the air base to accommodate additional Reserve units of 
the Air Force, Army, Marine Corps, and Navy. This new facility 
consolidates these Reserve functions from other locations in or near 
New Orleans, reducing overhead and providing greater access to military 
personnel and family support programs available on the base.
    Question. Secretary Johnson, over 550 new town homes were recently 
built at the Naval Air Station/Joint Reserve Base New Orleans. This is 
uncommon because our Citizen Soldiers are not generally provided with 
military housing, although the base in Belle Chasse is actually a full-
time Reserve base.
    How many installations within the Navy provide housing for the 
Reserve Component?
    Answer. Three Navy installations provide military family housing 
primarily for the Reserve Component--Naval Air Station and Joint 
Reserve Base (NAS JRB) New Orleans, LA; NAS JRB Fort Worth, TX; and NAS 
JRB Willow Grove, PA. Reservists housed in family housing at these 
three bases are serving in the active component, i.e., for the training 
and administration of reservists or as part of an unit activated for 
more than 180 days and, therefore eligible for assignment to military 
family housing.
    Question. Are any Public Private Partnerships projects currently 
under way to provide housing for the Reserve Component?
    Answer. The housing at New Orleans has been privatized. There are 
currently no plans to privatize the housing at the other locations. 
However, it is possible that members of the Reserve Component could 
rent privatized housing at other locations.
    Question. How much funding out of the Family Housing budget is 
allocated for the Reserve Component?
    Answer. The Family Housing budget is used to support the overall 
operation and maintenance of military family housing, regardless of who 
occupies it. As such, there is no specific allocation of the Family 
Housing budget to the Reserve Component.

              KEEP NAVY RESERVE O&M SEPARATE FROM BIG NAVY
    Question. Secretary Johnson, last year, DOD's budget request called 
for the merging of Reserve and Active Personnel accounts, which 
Congress roundly rejected because Congress feared the Active Services 
would rob the Reserves of personnel funding.
    The Navy established the Commander of Navy Installations (CNI) for 
the management of in-shore installations in fiscal year 2003. As a 
result, CNI now provides O&M dollars to Belle Chasse, not the Commander 
of Naval Reserve Forces.
    Is CNI keeping the funding for Reserve Installations separate from 
Active Installations?
    Answer. Yes. Operations and maintenance funding for Reserve 
activities flows from the Operations and Maintenance, Navy Reserve 
appropriation while Operations and Maintenance funding for Active 
activities flows from the Operation and Maintenance, Navy 
appropriation.
    Question. Is there any effort to merge the Navy's O&M and O&M 
Reserve accounts? I do not support such a merger if the Reserve cannot 
guarantee big Navy will not siphon funds.
    Answer. There is no current initiative to merge the Navy's active 
and reserve Operations and Maintenance accounts.

         BELLE CHASSE--COMMISSARY AND EXCHANGE--STILL ON TARGET
    Question. Secretary Johnson, groundbreaking is scheduled for July 
on a new Commissary and Naval Exchange. It will serve the 7,500 men and 
women stationed at Belle Chasse and up to 100,000 veterans in Greater 
New Orleans.
    Is the groundbreaking still on schedule for July?
    Answer. Yes. Based on a construction contract award in July, the 
groundbreaking is still on schedule for that same month.
                                 ______
                                 

            Question Submitted to Rear Admiral Michael Loose

           Question Submitted by Senator Kay Bailey Hutchison

                                BARRACKS
    Question. Admiral Loose, your testimony expressed appreciation for 
the authority to build barracks to private sector, rather than 
military, standards.
    Can you tell us what plans the Navy has to make use of this 
authority?
    Answer. The Navy initially plans to use this authority in 
combination with our bachelor housing privatization initiative.
                                 ______
                                 

             Question Submitted to General Willie Williams

          Questions Submitted by Senator Kay Bailey Hutchison

                    INSTALLATION MANAGEMENT--MARINES
    Question. General Williams, the Navy has created the position of 
Commander, Navy Installations (CNI) to consolidate management of its 
shore infrastructure.
    Does the Marine Corps take a similar approach to consolidation and 
to what extent are you working with the Navy to share lessons learned?
    Answer. The Marine Corps is committed to managing its installations 
in ways that are both effective and efficient. With 15 major bases and 
stations to manage, Marine Corps installations are organized in a 
consolidated approach similar to CNIs. For example, while our 
installations are not regionalized exactly like those under CNI, Marine 
Corps operating force installations are consolidated under the most 
senior Marine Corps operational commanders: Marine Forces Atlantic, 
Pacific and Reserve. In this way, Marine Corps bases and stations are 
closely linked to those operational forces they directly support within 
their region. Our remaining installations (recruit depots, logistics 
bases and training bases), receive their support directly from Marine 
Corps headquarters much like Navy installations are supported by CNI.
    We continuously look for ways that improve installation management 
while supporting our operating forces requirements. We work very 
closely with CNI to share experiences and, where practicable, implement 
similar practices across both Services. Examples include employing 
similar readiness reporting systems, utilizing regional Facility 
Support Contracts, and managing Family Housing from a regional 
perspective.

                         CONCLUSION OF HEARINGS

    Senator Hutchison. All right, well, that is all the 
questions that I have and I appreciate very much your time and 
effort and the great job that you're doing. Thank you.
    Mr. Johnson. Thanks very much.
    [Whereupon, at 4:22 p.m. Wednesday, April 7, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Brubaker, Brigadier General David, Deputy Director, Air National 
  Guard, Department of the Air Force, Department of the Defense..    39
Burns, Senator Conrad, U.S. Senator From Montana:
    Prepared Statement of........................................    25
    Questions Submitted by.......................................    34
    Statement of.................................................    23

Dubois, Raymond F., Deputy Under Secretary of Defense, 
  Installations and Environment, Office of the Secretary, 
  Department of Defense..........................................     1
    Prepared Statement of........................................     7
    Statement of.................................................     4

Feinstein, Senator Dianne, U.S. Senator From California:
    Questions Submitted by..............................35, 52, 80, 107

    Statement of.................................................     2
Fox, Major General Dean, Civil Engineer, United States Air Force, 
  Department of the Air Force, Department of Defense.............    39
    Statement of.................................................    40

Gibbs, Honorable Nelson F., Assistant Secretary of the Air Force, 
  Installations, Environment, and Logistics, Department of the 
  Air Force, Department of Defense...............................    39
    Prepared Statement of........................................    41

Hutchison, Senator Kay Bailey, U.S. Senator From Texas:
    Opening Statements...........................................1, 57

    Questions Submitted by........................33, 51, 106, 112, 113

Johnson, Hansford T., Assistant Secretary of the Navy, 
  Installations and Environment, Department of the Navy, 
  Department of Defense..........................................    83
    Prepared Statement of........................................    87
    Questions Submitted to.......................................   106

Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions 
  Submitted by..................................................78, 110

Loose, Rear Admiral Michael, Commander, Naval Facilities 
  Engineering Command, Department of the Navy, Department of 
  Defense........................................................    83
    Question Submitted to........................................   112
Lust, Major General Larry J., Assistant Chief of Staff for 
  Installation Management, Department of the Army, Department of 
  Defense........................................................    57

Profit, Brigadier General Gary M., Deputy Chief, Army Reserve, 
  Department of the Army, Department of Defense..................    57
Prosch, Geoffrey G., Acting Assistant Secretary of the Army, 
  Installations and Environment, Department of the Army, 
  Department of Defense..........................................    57
    Prepared Statement of........................................    59
    Questions Submitted to.......................................    78
Pudlowski, Major General Walter F., Special Assistant to the 
  Director, Army National Guard, Department of the Army, 
  Department of Defense..........................................    57
    Question Submitted to........................................    80

Rajczak, Brigadier General William M., Deputy to the Chief, Air 
  Force Reserve, Department of the Air Force, Department of the 
  Defense........................................................    39

Stevens, Senator Ted, U.S. Senator From Alaska:
    Question Submitted by........................................    34
    Statement of.................................................     3

Williams, Brigadier General Willie, Assistant Deputy Commandant 
  for Installations and Logistics (Facilities), United States 
  Marine Corps, Department of the Navy, Department of Defense....    83
    Question Submitted to........................................   113


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                      Department of the Air Force

                                                                   Page
Accommodate New Missions.........................................    43
Additional Committee Questions...................................    51
Air:
    Force BRAC...................................................    54
    National Guard...............................................    46
Beddown for C-17 and C-5.........................................    48
Build-to-Lease Housing Overseas..................................    45
C-17.............................................................    46
    Basing.......................................................    47
        Decision.................................................    52
Continue:
    Demolition of Excess, Uneconomical-to-Maintain Facilities....    44
    Environmental Leadership.....................................    43
DERF Funds Use...................................................    53
Family Housing Requests..........................................    52
Fitness Centers..................................................    51
General Officer:
    Housing......................................................    51
    Quarters.....................................................    48
Germany..........................................................    45
Guard and Reserve................................................    46
Invest in Quality of Life Improvements...........................    42
McClellan AFB....................................................    54
Military Family Housing..........................................    40
Optimize Use of Public and Private Resources.....................    44
Privatization....................................................    40
Reduced Request..................................................    52
Reserve..........................................................    46
Sustain, Restore, and Modernize our Infrastructure...............    42
Vandenberg Air Force Base........................................49, 50

                         Department of the Army

Additional Committee Questions...................................    78
Army Family Housing:
    Construction (AFHC)..........................................    63
    Operations (AFHO)............................................    63
Army:
    Guard and Reserve Requests...................................    73
    Reserve Center--Puerto Rico..................................    76
Base Realignment and Closure (BRAC)..............................    64
BRAC at Fort Polk and Belle Chasse--How can Joint Operations 
  benefit these bases?...........................................    79
DOD Realignment of Forces in Europe..............................    79
Guard WMD/CST Facilities.........................................    80
Homeowners Assistance Fund, Defense..............................    64
Housing Privatization--CAP.......................................    65
Installation:
    As Flagships.................................................    60
    In Iraq......................................................    78
    Strategies...................................................    60
Jointness........................................................    68
Milcon:
    Fort Stewart.................................................    75
    To Support Returning Overseas Forces.........................    67
Military Construction............................................    61
    Army:
        (MCA)....................................................    61
        National Guard (MCNG)....................................    62
        Reserve (MCAR)...........................................    62
Operation and Maintenance........................................    64
Overview.........................................................    59
Required Milcon to Support Transformation........................    76
Returning Overseas Forces........................................    66
Schools..........................................................    70
Sustainment......................................................    72
Unfunded Force Protection Requirements...........................    80

                         Department of the Navy

Additional Committee Questions...................................   106
Barracks.........................................................   112
Belle Chasse--Commissary and Exchange--Still on Target...........   112
BRAC.............................................................   106
    At Fort Polk and Belle Chasse--How can joint operations 
      benefit these bases?.......................................   111
    Environmental Funding........................................   107
DOD Realignment of Forces in Europe..............................   110
Efficiencies.....................................................    93
Encroachment.....................................................   100
Environmental:
    Cleanup......................................................    96
    Quality......................................................    98
Facilities.......................................................    92
Fiscal Year 2005 Budget Overview.................................    87
Housing..........................................................    88
Installation:
    In Iraq......................................................   110
    Management--Marines..........................................   113
Joint Basing.....................................................   102
Keep Navy Reserve O&M Separate From Big Navy.....................   112
Marine One Helicopter (VXX)......................................   108
Military Construction............................................    91
Nebraska Avenue Complex........................................105, 109
New Orleans Joint Reserve Base...................................   103
Outlying Landing Field (Washington County, North Carolina).......   108
Overseas Basing..................................................   101
Presidential Helicopter Program..................................   101
Prior BRAC Cleanup & Property Disposal...........................    95
Recapitalization Rate............................................   106
Washington Navy Yard.............................................   104

                        Office of the Secretary

Additional Committee Questions...................................    33
Base Realignment and Closure.....................................    15
BRAC.............................................................    34
    Environmental Cleanup........................................    35
Environmental Work...............................................    24
European Bases...................................................    30
Infrastructure Investment Strategy...............................     8
Korea............................................................    32
Minor Construction Thresholds....................................    37
O&M Budget.......................................................    26
Overseas Basing/BRAC.............................................    33
Perchlorate......................................................    20
Renewable Energy Resources.......................................    36
Reserve Components...............................................    36
Special Operations Forces........................................    28
Utility Privatization............................................    34

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