[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



                         [H.A.S.C. No. 109-13]
 
  MILITARY CONSTRUCTION, FAMILY HOUSING, BASE CLOSURES AND FACILITIES 
                       OPERATIONS AND MAINTENANCE

                               __________

                                HEARING

                               BEFORE THE

                         READINESS SUBCOMMITTEE

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                             MARCH 15, 2005

                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     



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                         READINESS SUBCOMMITTEE

                    JOEL HEFLEY, Colorado, Chairman
HOWARD P. ``BUCK'' McKEON,           SOLOMON P. ORTIZ, Texas
    California                       LANE EVANS, Illinois
JOHN N. HOSTETTLER, Indiana          GENE TAYLOR, Mississippi
WALTER B. JONES, North Carolina      NEIL ABERCROMBIE, Hawaii
JIM RYUN, Kansas                     SILVESTRE REYES, Texas
ROBIN HAYES, North Carolina          VIC SNYDER, Arkansas
HEATHER WILSON, New Mexico           CIRO D. RODRIGUEZ, Texas
KEN CALVERT, California              ROBERT A. BRADY, Pennsylvania
J. RANDY FORBES, Virginia            BARON P. HILL, Indiana
JEFF MILLER, Florida                 JOHN B. LARSON, Connecticut
TOM COLE, Oklahoma                   SUSAN A. DAVIS, California
ROB BISHOP, Utah                     RICK LARSEN, Washington
CANDICE S. MILLER, Michigan          JIM MARSHALL, Georgia
MIKE ROGERS, Alabama                 MADELEINE Z. BORDALLO, Guam
TRENT FRANKS, Arizona
JOHN M. McHUGH, New York
                 Ryan Vaart, Professional Staff Member
               Paul Arcangeli, Professional Staff Member
                   Christine Roushdy, Staff Assistant


                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2005

                                                                   Page

Hearing:

Tuesday, March 15, 2005, Military Construction, Family Housing, 
  Base Closures and Facilities Operations and Maintenance........     1

Appendix:

Tuesday, March 15, 2005..........................................    39
                              ----------                              

                        TUESDAY, MARCH 15, 2005
  MILITARY CONSTRUCTION, FAMILY HOUSING, BASE CLOSURES AND FACILITIES 
                       OPERATIONS AND MAINTENANCE
              STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

Hefley, Hon. Joel, a Representative from Colorado, Chairman, 
  Readiness Subcommittee.........................................     1
Ortiz, Hon. Solomon P., a Representative from Texas, Ranking 
  Member, Readiness Subcommittee.................................     3

                               WITNESSES

Grone, Philip W., Deputy Under Secretary of Defense 
  (Installations and Environment), Department of Defense.........     4
Kuhn, Fred W., Deputy Assistant Secretary (Installations), 
  Department of the Air Force....................................     8
Penn, Hon. B.J., Assistant Secretary (Installations and 
  Environment), Department of the Navy...........................     7
Prosch, Geoffrey G., Principal Deputy Assistant Secretary 
  (Installations and Environment), Department of the Army........     6

                                APPENDIX

Prepared Statements:

    Grone, Philip W..............................................    43
    Kuhn, Fred W.................................................   101
    Penn, Hon. B.J...............................................    87
    Prosch, Geoffrey G...........................................    66

Documents Submitted for the Record:
    [There were no Documents submitted.]

Questions and Answers Submitted for the Record:

    Mr. Forbes...................................................   117
    Mr. Taylor...................................................   117
  MILITARY CONSTRUCTION, FAMILY HOUSING, BASE CLOSURES AND FACILITIES 
                       OPERATIONS AND MAINTENANCE

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                    Readiness Subcommittee,
                           Washington, DC, Tuesday, March 15, 2005.
    The subcommittee met, pursuant to call, at 2:02 p.m., in 
room 2118, Rayburn House Office Building, Hon. Joel Hefley 
(chairman of the subcommittee) presiding.

 OPENING STATEMENT OF HON. JOEL HEFLEY, A REPRESENTATIVE FROM 
           COLORADO, CHAIRMAN, READINESS SUBCOMMITTEE

    Mr. Hefley. The committee will come to order. Today, the 
Readiness Subcommittee meets to address testimony from the 
Department of Defense (DOD) on the fiscal year 2006 budget 
request for military construction, family housing, base 
closures and facilities-related accounts.
    I welcome our witnesses, and we look forward to your 
testimony, particularly, Mr. Grone, we always enjoy having you 
back here so that we can abuse you as much as possible, 
particularly in your new role, it is your first time in your 
new role.
    Secretary Grone. Yes, sir.
    Mr. Hefley. New title. So that entitles you to more abuse.
    The panel before us represents the Department of Defense's 
installation environment team. It is my hope that this panel 
will help us to understand the facilities-related challenges 
facing our military. I also hope they will help to justify what 
I view as yet another disappointing Military Construction 
(MILCON) budget request.
    First, the non-Base Realignment and Closure (BRAC) MILCON 
request for 2006 is $400 million less than the amount 
appropriated in 2005. It is also $1 billion less than the 
amount forecast for 2006 and last year's budget. And as such, 
it appears that MILCON budgets continue to be the bill payer 
for other DOD priorities.
    Second, the Department continues to fall short of meeting 
its 95 percent goal for sustainment funding. Not only does the 
budget only meet 92 percent of the requirements, but the 
Department still not has implemented models for restoration, 
modernization and base operations.
    As a result, sustainment accounts will continue to be 
raided during the year to fund other must-pay requirements, and 
they will ultimately be executed at levels that will allow the 
continued erosion of our military facilities.
    And, finally, Army base operation support accounts are 
funded at approximately 70 percent of requirements, leaving 
them at least $1 billion short of the level necessary to keep 
child care centers open, dining halls serving chow, lights 
turned on and base employees reporting to work.
    Considering the Army base commanders have already 
considered such extreme measures in fiscal year 2005 due to 
budget pressures, I am astonished that the service has budgeted 
these accounts in this manner for 2006.
    Last year, I expressed the view that the Department had put 
its facilities programs on hold until BRAC 2005 in the hope 
that billions of dollars in facilities funding shortfalls would 
vanish after BRAC. My perspective has not changed, and I am 
concerned that the backlog of shortfalls continues to grow due 
to new costs associated with changes in our global basing, Army 
transformation, Marine Corps force structure changes and now 
the enormous up-front costs of BRAC.
    On this note, I hope Mr. Grone will address the committee's 
interest in the base realignment and closure process. Not only 
is the committee interested in the Department's justification 
for $1.9 billion in 2006 for implementation of BRAC decisions, 
but we are very interested to hear how the Department 
anticipates spending $5.7 billion in fiscal year 2007 for 
implementation.
    Furthermore, I would like to hear the Department's 
justification of the relatively small $300 million request for 
the Office of Economic Adjustments. This office, which is 
tasked with the critical role of supporting community efforts 
to cope with BRAC changes, appears to be significantly 
underfunded for the task at hand.
    And perhaps most importantly, I would like to ask Mr. Grone 
to describe his vision of the Department's disposal and reuse 
policies for the upcoming BRAC rounds.
    For example, what will the roles of public auctions, public 
benefit conveyances and negotiated sales in BRAC property 
disposal, how do you see that breaking down? And how does the 
Department intend to manage BRAC property clean-ups more 
effectively? DOD's approach to property disposal will affect 
every community touched by the BRAC process in 2005.
    For the members of this subcommittee, I should note that 
Mr. Grone's comments on BRAC today are well-timed in light of 
our Thursday subcommittee briefing from Government 
Accountability Office (GAO), Association of Defense Communities 
(NAID) and the Office of Economic Adjustment on community 
options for preparing and managing the local effects of BRAC. 
That briefing will be held at 2 p.m. in 2118 in Rayburn, right 
here in this room.
    Clearly, the panel before us has much to address, so I want 
to close with one final comment. The House Armed Services 
Committee has a long history of recognizing the importance of 
facilities to military readiness and quality of life. We 
believe in treating DOD facilities as assets worthy of 
investment, maintenance and modernization.
    The 2006 budget request does not treat DOD facilities as 
assets. Instead, it treats DOD facilities accounts as bill 
payers for other Department priorities. This approach erodes 
readiness and diminishes quality of life for America's military 
personnel.
    I am confident that our witnesses recognize this fact, and 
I urge each of them to renew their commitments to increase and 
protect facilities budgets in the future. This is nothing new. 
We have been dealing with this for a long, long time.
    At this time, I would like to recognize the Honorable 
Solomon Ortiz, my friend and colleague from Texas and the 
ranking member of this committee, for any comments he might 
have.

   STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM 
         TEXAS, RANKING MEMBER, READINESS SUBCOMMITTEE

    Mr. Ortiz. Thank you, Mr. Chairman. It is nice to see some 
of our old friends here sitting on the other side.
    I thank you, Mr. Chairman, and I join you in welcoming our 
distinguished witnesses, and I look forward to hearing their 
testimony on this important issue.
    Mr. Chairman, let me first say that I am concerned with the 
direction that the Department has taken with regards to its 
overall military construction budget request. The fiscal year 
2006 MILCON budget request is nearly half a billion dollars 
less than the 2005 request. It is $1 billion less than last 
year's budget forecast. I think this is very troubling trend.
    It is a trend that suggests that MILCON continues to be 
used as a bill payer for the Department's other requirements.
    At this funding level, the recapitalization of facilities 
will continue to slip. I hope that the Department has some plan 
to stop the slide quickly and recover the ground it has lost 
before this shortfall impacts the readiness of the armed 
forces.
    I would like to point out that despite the MILCON shortage, 
progress is being made on improving the condition of military 
family housing. It appears that the services have public-
private ventures and are now on track to eliminate inadequate 
family housing by fiscal year 2009. While this still is not 
soon enough, I am very pleased to see many military families 
already benefiting from housing PPVs.
    I encourage the service to continue their efforts to 
support quality of life and correct the family housing problems 
caused by years of underfunding and neglect.
    One last point I would like to address is the base 
operations support budget for the services. This budget was 
underfunded in 2004 and 2005, and the request for 2006 is no 
different. The Army's request for 2006 will only fund 71 
percent of the Base Operations Support (BOS), which is the base 
operations support requirements, and will fall $1 billion short 
of meeting the Army's basic needs.
    Base operations support represents such essential 
requirements as municipal services, force protection and 
communication services. It also funds family support programs, 
such as child care, gymnasiums, libraries and other quality of 
life programs that our soldiers and their families depend on.
    Unless BOS is funded adequately, many installations will be 
forced to cut services. I do not believe that the services can 
afford to cut quality of life programs that directly affect 
morale. We ask a great deal of our service members and their 
families. Should we reward their service by asking for greater 
sacrifices at home? I hope that our witnesses will take this 
opportunity to explain how the Department plans to correct this 
serious shortfall.
    Mr. Chairman, I am interested in hearing the testimony of 
our witnesses and their thoughts on how we can endure the 
readiness of the Department's facilities and meet the needs of 
our service members and their families.
    Mr. Chairman, I thank you and welcome all the witnesses. 
Thank you, Mr. Chairman.
    Mr. Hefley. Thank you, Solomon.
    First up is Phil Grone, the Deputy Undersecretary of 
Defense for Installations and Environment.
    And, Mr. Grone and all the witnesses, without objection, we 
will enter your complete statements in the record, and I would 
ask each of you to take whatever time you need. This is 
important testimony, but at the same time if you can keep it 
brief and we can have some interchange, that would be good as 
well.
    Next up is Geoffrey Prosch, Principal Deputy Assistant 
Secretary of the Army for Installations and Environment. Next 
is Mr. B.J. Penn, the newly confirmed Assistant Secretary of 
the Navy for Installations and Environment. And, finally, Mr. 
Fred Kuhn, the Deputy Assistant Secretary of the Air Force for 
Installations.
    Phil, with that, we will turn it over to you.

STATEMENT OF PHILIP W. GRONE, DEPUTY UNDER SECRETARY OF DEFENSE 
     (INSTALLATIONS AND ENVIRONMENT), DEPARTMENT OF DEFENSE

    Secretary Grone. Thank you, Mr. Chairman.
    Mr. Hefley. And you really are welcomed back.
    Secretary Grone. I do appreciate that, sir. I truly do.
    Chairman Hefley, Mr. Ortiz and distinguished members of the 
Subcommittee on Readiness, I am pleased to appear before you 
this afternoon with my colleagues to discuss the President's 
budget request for the Department of Defense for fiscal year 
2006.
    This budget request for the Department continues the 
efforts of this Administration to place our military 
infrastructure on a sound management footing.
    The Department's management responsibilities extend to an 
infrastructure with 510,000 buildings and structures and a 
replacement value of $650 billion, as well as stewardship 
responsibility for roughly 29 million acres, or 46,000 square 
miles of land, roughly the size of Connecticut and my native 
Kentucky combined.
    And this the business are comprising the Department's 
support for the support of military installations, assets and 
the stewardship of natural resources includes programs totaling 
over $46 billion for the coming fiscal year.
    The President's management agenda contains three key 
elements for which my office has primary responsibility. Those 
initiatives include competitive sourcing, the privatization of 
military housing and real property asset management, the last 
of which is the focus of Executive Order 13327, issued on 
February 4 of last year.
    We have made significant progress in many of these areas 
with the strong assistance of the Congress. The military 
housing privatization initiative is achieving results. Through 
the end of fiscal year 2004, leveraging the power of the market 
and the expertise of industry, we have awarded 43 projects, 
privatizing 87,000 units.
    To achieve the scope of those 43 projects, the taxpayer 
would need to provide $11 billion in military family housing 
construction. Over the life cycle, these privatized projects 
will save the taxpayer 10 to 15 percent, even when taking into 
account the allowances paid to our military personnel.
    And 10 of those 43 projects have reached the end of their 
initial development phase, and tenant response is very 
positive.
    By the end of fiscal year 2007, we expect 185,000 units of 
housing, 84 percent of the inventory, to be privatized.
    The Department's efforts to more properly sustain and 
recapitalize our facilities inventory is also demonstrating 
results. Four years ago, the recapitalization rate stood at 192 
years. The President's budgets supports a recapitalization rate 
of 110 years, and we remain committed to our goal to achieve a 
67-year recapitalization rate in fiscal year 2008.
    Facility sustainment is budgeted this year at 92 percent of 
the requirement. In both cases, we have built the program 
around private sector best practices and commercial benchmarks 
wherever they can be applied and continue to refine our models 
and guidance to keep them current those best practices and 
benchmarks.
    We also continue our efforts to strengthen the nation's 
defense through the global posture review and BRAC. Abroad, we 
will reconfigure our basing and presence to meet the threats of 
the 21st century as opposed to the static defense of the Cold 
War. At home, we will rationalize our infrastructure to further 
transformation and to improve military effectiveness and 
business efficiency.
    As well, the Department continues to be a leader in every 
aspect of environmental management. To make our operations more 
efficient and sustainable across the Department, we are 
continuing our aggressive efforts to implement environmental 
management systems at our installations based on the plan, do, 
check, act framework of the international standard for EMS ISO 
14001.
    In concert with the President's August 2004 executive order 
on facilitating cooperative conservation, the Department has 
developed a program of compatible land use partnering that 
promotes the twin imperative of military test and training 
readiness and sound conservation stewardship through 
collaboration with multiple stakeholders.
    Moreover, we are fundamentally reengineering the business 
process for real property inventory, resulting in standard data 
elements and definitions for physical, legal and financial 
aspects of real property, and we have developed a real property 
unique identification concept that will enable greater 
visibility of our assets and linking them to our financial 
obligations.
    Our most recent defense installation strategic plan, issued 
late last year, entitled, ``Combat Power Begins at Home,'' 
reflects our focus on improving the management of our 
installation assets and to ensure their ability to contribute 
to military readiness.
    All of our efforts are designed to enhance the military 
value of our installations and to provide a solid foundation 
for the training, operation, deployment and employment of the 
armed forces, as well to improve the quality of life for 
military personnel and their families. While much remains to be 
done, we have accomplished a great deal, and with the support 
of this subcommittee, we will continue to do so.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Grone can be found in 
the Appendix on page 43.]
    Mr. Hefley. Thank you, Phil.
    Mr. Prosch.

  STATEMENT OF GEOFFREY G. PROSCH, PRINCIPAL DEPUTY ASSISTANT 
 SECRETARY (INSTALLATIONS AND ENVIRONMENT), DEPARTMENT OF THE 
                              ARMY

    Secretary Prosch. Chairman Hefley, Ranking Member Ortiz and 
members of the committee, I am pleased to appear before you 
today. This is my fourth year to have this distinct honor to 
represent our great Army and testify before Congress.
    It is wonderful to be here today with old friends and Army 
supporters from this committee. I look forward to the 
opportunities this committee brings toward leveraging enhanced 
quality of life for our soldiers and families.
    I have provided a written statement for the record that 
provides details of our Army's fiscal year 2006 military 
construction budget.
    Joining me today are my installation management partners: 
Major General Geoff Miller, from the active Army; Major General 
Walt Pudlowski, from the Army National Guard; and Brigadier 
General Gary Profit, from the Army Reserve.
    So on behalf of the entire Army installation management 
team, I would like to comment briefly on the highlights of our 
program.
    I 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 mission so well without your steadfast 
support.
    We have submitted a military construction budget of $3.3 
billion 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 our 
Army vision, encompassing current readiness, transformation and 
people.
    As we are fighting the Global War on Terror, 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 hundreds of thousands of soldiers 
mobilizing and demobilizing, deploying and redeploying. More of 
our troops are coming and going on our installations than in 
any era since World War II. Our soldiers and installations are 
on point for the nation.
    And on a special note, I would ask you to keep our forward 
deployed soldiers in your thoughts and prayers. New forces have 
rotated recently to Iraq. The 3rd Infantry Division is back for 
its second tour, and the enemy will test them early on. Keep 
them in your hearts and prayers.
    The Army recently identified key focus areas to channel our 
efforts to win the Global War on Terror and to increase the 
relevance and readiness of our 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 from the installations.
    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.
    The installations are a key ingredient to combat readiness 
and well-being. Our worldwide installations structure is 
critically linked to Army transformation and the successful 
fielding of the modular force. Military construction is a 
critical tool to ensure that our installations remain relevant 
and ready.
    Our fiscal year 2006 military construction budget will 
provide the resources and facilities necessary for continue 
support of our mission. Let me summarize what this budget will 
provide for our Army: New barracks for 5,190 soldiers, adequate 
on-post housing for 5,800 Army families, increased MILCON 
funding for the Army National Guard and Army Reserve over last 
year's request, new readiness centers for over 3,300 Army 
National Guard soldiers, new reserve centers for over 2,700 
Army Reserve soldiers, a $292 million military construction 
investment in training ranges and facilities support and 
improvements for our Stryker brigades.
    With a sustained and balanced funding represented by this 
budget, our long-term strategy will be supported. With your 
help we will continue to improve soldier and family quality of 
life while remaining focused on our Army's transformation to 
the future force.
    In closing, Mr. Chairman, I thank you for the opportunity 
to outline our program. As I have visited Army installations, I 
have witnessed steady progress that has been made, and we 
attribute much of this progress and success directly to the 
long-standing support of this committee and your able staff. 
With our continued assistance, our Army pledges to use fiscal 
year 2006 MILCON funding to remain responsive to our nation's 
needs.
    Thank you for the opportunity to appear before your 
subcommittee and answer any questions you may have.
    [The prepared statement of Secretary Prosch can be found in 
the Appendix on page 66.]
    Mr. Hefley. Thank you.
    Mr. Penn.

STATEMENT OF HON. B.J. PENN, ASSISTANT SECRETARY (INSTALLATIONS 
            AND ENVIRONMENT), DEPARTMENT OF THE NAVY

    Secretary Penn. Mr. Chairman, members of the subcommittee, 
it is a privilege for me to be here today. Being in this job 
for a little over a week, I can assure you I will be very 
brief.
    I believe you will find much good news on the Department of 
the Navy's installations and environmental program from my 
written statement. I would like to talk about one specific 
aspect of our fiscal year 2006 budget request: The financing of 
our prior BRAC cleanup and caretaker needs with a mix of $143 
million in appropriated funds and an estimated $133 million in 
land sales revenue.
    It is important to view the 2006 prior BRAC request in the 
context of the fiscal year 2005 request. The Department 
expected to finance the entire fiscal year 2005 prior BRAC 
program from the sale of the former Marine Corps air station, 
El Toro, California and did not request nor receive any 
appropriations in fiscal year 2005.
    That sale was delayed by unforeseen circumstances. 
Fortunately, the sale of portions of the former Marine Corps 
air station, Tustin, California in 2003, gave the Department 
the financial flexibility to slow fiscal year 2004 program 
execution to conserve cash to cover its fiscal year 2005 
environmental commitment, most of which are in the State of 
California.
    With fiscal year 2005 execution depleting prior year BRAC 
funds and the public auction of the El Toro property still a 
future event, the Department last fall opted to include 
appropriated funds in fiscal year 2006 to finance its minimum 
cleanup and caretaker needs, along with the conservative 
estimates for land sales revenue to accelerate the 
environmental cleanup.
    Although the auction of the El Toro property has now been 
completed with a winning bid of nearly $650 million, I must 
caution the members of this committee that there is still some 
measure of risk ahead until the buyer and Navy complete the 
sales transaction at settlement. I want to emphasize that we 
cannot be absolutely sure of having land sales revenue until a 
settlement occurs, which is planned for sometime in July. The 
buyer of a previous property in 2003 defaulted at settlement.
    Even after settlement, our past experience is that it often 
takes well over four months for the sales proceeds to be 
processed to the DOD accounting system before the funds are 
available to the Navy for program execution.
    We still have a substantial cost to complete environmental 
cleanup, primarily at closed bases in California, and are 
developing plans to responsibly accelerate cleanup. That will 
be our first priority for the use of the land sales revenue.
    Even with successful settlement of the El Toro property in 
July, we may still need some measure of fiscal year 2006 
appropriated funds to finance first quarter program 
commitments.
    Mr. Chairman, I would like to thank you and your committee 
for all you are doing for our great country. I look forward to 
working with you and the Congress on resolving this situation 
and on to more challenging installations and facilities issues.
    Thank you.
    [The prepared statement of Secretary Penn can be found in 
the Appendix on page 87.]
    Mr. Hefley. Thank you.
    Mr. Kuhn.

     STATEMENT OF FRED W. KUHN, DEPUTY ASSISTANT SECRETARY 
          (INSTALLATIONS), DEPARTMENT OF THE AIR FORCE

    Secretary Kuhn. Mr. Chairman, Mr. Ortiz and distinguished 
members of the committee, good afternoon.
    This year's Air Force military construction budget request 
is the largest in 14 years with increases across the spectrum 
of Air Force operations throughout our total force. Our fiscal 
year 2006 military family housing submission is the largest in 
Air Force history and keeps us on target to meet our goal of 
eliminating Continental United States (CONUS) inadequate 
housing in 2007, 2008 for four northern tier bases and 2009 
overseas.
    The Air Force remains committed to funding restoration and 
modernization to meet the Office of the Secretary of Defense 
(OSD) goal of a 67-year recapitalization rate by 2008. The Air 
Force is meeting OSD facilities sustainment goal by funding 95 
percent and will continue to fund sustainment in accordance 
with that model.
    Air Force facilities, housing and environmental programs 
are key components of our support infrastructure. At home, our 
installations provide a stable training environment and a place 
to equip and reconstitute our force. Both our stateside and 
overseas bases provide force projection platforms to support 
combatant commanders.
    Because of this, the Air Force has developed an investment 
strategy focused on sustaining and recapitalizing existing 
infrastructure, investing in quality of life improvements, 
accommodating new missions, continuing strong and environmental 
leadership, optimizing use of public and private resources and 
eliminating excess obsolete infrastructure wherever possible.
    In fiscal year 2006, the Air Force bolstered operation and 
maintenance investment in our facilities infrastructure, which 
is comprised of two components: Sustainment and restoration and 
modernization. Sustainment funds are necessary to keep good 
facilities good, and restoration and modernization (R&M) 
funding is used to fix critical deficiencies and to improve 
readiness.
    This year, the amount dedicated to total force sustainment 
funding is $2 billion, right on the OSD goal of 95 percent of 
the facilities sustainment model requirement. In fiscal 2006, 
the Air Force's total force R&M funding is $174 million. In the 
future, the Air Force will invest in critical infrastructure 
maintenance and repair through our Operation and Maintenance 
(O&M) Program to achieve the OSD goal of a facility 
recapitalization rate of 67 years in 2008.
    In conclusion, I would particularly like to thank the 
members of this committee and the Congress for its efforts to 
lift the cap on housing privatization. Without that relief, our 
military members and their families would be deprived of the 
opportunity to choose to live in a privatized home on or near 
our Air Force bases.
    Our leverage of nine privatized dollars for every taxpayer 
dollar would have been lost, and additional pressures on the 
housing MILCON budget would have been immense. Your efforts are 
appreciated by all our Air Force men and women and their 
families.
    That concludes my statement. Thank you.
    [The prepared statement of Secretary Kuhn can be found in 
the Appendix on page 101.]
    Mr. Hefley. Thank each of you. We appreciate it very much.
    Let me ask you, it appears that if you look at the 
timelines of the BRAC process, that this bill will be completed 
along with the appropriations companion bill before the BRAC 
process is finalized. We do not know that for sure, but it 
would appear, if you look at all the timelines, that that will 
be the case.
    Phil, you and probably the rest of you, except for those 
who have been here one week may not have, have visited bases 
after prior backgrounds, which had new basics changes, nice new 
parking lots with weeds growing up in them, computer centers, 
all kinds of things that were built new at bases just prior to 
base closings.
    We do not have enough money to do everything. We do not 
want to waste any of these MILCON dollars, but we do want to 
provide you what you need to do your job. So what would your 
suggestion be to this committee as we look at the MILCON 
requests.
    I know you cannot give away, because you probably do not 
know at this point, you do not because it has not gone to the 
committee and you may not have all your recommendations put 
together yet, do not know for sure what is going to stay and 
go. How would you recommend this committee handle it so that we 
do not waste money on facilities that are going to be closed 
fairly shortly but that we do put the money into things that 
are vitally needed?
    Phil, you want to take that?
    Secretary Grone. Mr. Chairman, I will begin and then to the 
extent my colleagues want to further elaborate, certainly I 
hope they will do so.
    As we built this budget request, as you indicated, we did 
not build the budget request and the services did not build 
their budget request with an eye on recommendations for base 
realignment and closure that were not yet able to be developed, 
because we were still doing the analysis. So the budget request 
reflects the Department's best judgment as to the support of 
its missions and forces in their current configurations.
    As with all things in the first year of an implementation, 
there are steps we will have to go through. One of the steps we 
will likely go through, and I have discussed this with the 
Undersecretary of Defense Comptroller, is that upon the 
Secretary's release of recommendations to the independent 
commission on May 6, we will likely to provide the oversight 
committees and the appropriations committees with appropriate 
documentation on projects that we believe in the budget request 
are there, by the fact of the recommendations, no longer 
required and may provide for some additional substitutions for 
other needs of the Department.
    I understand with regard to internal and committee markup 
and floor action, that timing is going to be a little tight, 
but I think it is fair to say that if we work in a 
collaborative way, heading toward conference agreement, I think 
we can probably work this out in a way where we will not have 
that kind of significant strains of investment or that we will 
be putting money in the actual budget for facilities we will 
not require.
    We will have to sort of take our chances that the 
commission will not make any significant changes, but I think 
we will have to just, as we work through the year, work through 
that.
    With regard to the underlying budget request for $1.9 
billion, and you asked in your opening statement for some 
justification for that, we certainly today cannot provide a 
justification at a detailed level of how we would expend those 
funds in fiscal year 2006. That will have to await the final 
determinations of the commission process.
    We built that number taking a very careful look at the 
lessons of the past. And if you look at the 1993 round of base 
closure and you sort of inflate the first year's request to 
current-year dollars, it comes out to about $1.5 billion, 
approximately. The 1995 round, if you applied that same 
analytical framework, represents about $1 billion in today's 
terms.
    But the General Accounting Office, as they have noted on 
many occasions, indicated that the Department's recommendations 
for the 1995 round were smaller than were projected at the 
start of that process, and their analysis at the time found 
that the services' concerns over closing costs forced them not 
to take certain actions. There was an issue of affordability 
with regard to the internal BRAC process that caused the 
services to pull back from recommendations that they might 
otherwise have made.
    So that when we look at that history and when we also 
consider the cost of returning forces from abroad as part of 
the global posture realignment and our desire to do that and 
utilize BRAC to be able to select sites within the United 
States, it seemed prudent to us that the request for $1.9 
billion was reasonable.
    We will exercise the same process that we have utilized in 
the first year of implementation from prior years. Upon the 
disposition of the recommendations, the committees will receive 
a report that detail how we will expend those funds in the 
first year of execution.
    The Congress has traditionally given the Department great 
latitude on the budget request and awaiting that initial 
report, and it would be my expectation based on what we will 
need to do with the closure and realignment round, that we can 
sufficiently expend those funds and implement them in fiscal 
year 2006.
    Mr. Hefley. Would the Department have any objections to 
something like a reverse supplemental by the 1st of the year if 
there were funds out there, we had closed the bill out, that 
would give you the authority, rescission authority, 
reprogramming authority for those funds so that we do not go 
ahead and spend them on some things--in other words, can we be 
assured that you are not going to let contracts until we know 
for sure what we are going to need?
    Secretary Grone. I think it is fair to say that in 
implementation we would not expend funds on any fiscal year 
2006 project that we knew we were not going to need. That would 
not be prudent management. And in terms of any particular 
device that the Congress might suggest, I think we would have 
to discuss that with the appropriate senior officials in the 
Department, but I think anything that would improve our ability 
to work cooperatively and with some flexibility I think would 
be welcome.
    Mr. Hefley. Thank you very much.
    Yes.
    Secretary Prosch. Sir, If I could just reinforce what my 
colleague has said, we will continue to fund our highest 
priority projects without prejudice, but once the decisions 
have been made, we will evaluate all projects to determine the 
future utility and take appropriate action. We may withhold the 
award if we have time to do that, we could issue a stop work 
order if it is earlier enough on or we could elect to complete 
the project and include the structure as part of the value of 
the closed property that we would work with our local reuse 
authority.
    For us in the Army, this BRAC 2005 is very important to us. 
It is a strategic lever to help us transform. We are going to 
be taking a look at where we are putting our 10 new brigade 
units of action to validate where we have placed them. We will 
be using it to verify where we reset our OCONUS brigades coming 
home, and we will be using it to transform the Army by 
synchronizing and consolidating, and I think you will be very 
pleased with the candidate list.
    Thank you, sir.
    Mr. Hefley. Well, I just want it on your radar screen that 
we have made some mistakes, we have screwed up in the past with 
this, and I want it very clear that we do not want to screw up 
with it this time. And I am not even talking about saving 
money. I do not think your MILCON budget is what it ought to 
be, particularly in the Army, but we do not want to waste the 
money. We want to put it where you really do need it, so help 
us as we work through that process.
    Mr. Ortiz.
    Mr. Ortiz. Thank you, Mr. Chairman.
    Secretary Prosch, you described the installations as 
flagships. Can you please explain to the committee what you 
mean by flagships?
    Secretary Prosch. Yes, sir. That is one of the Army's 17 
focus areas to allow us to really bore in on what is important. 
And it is to help us understand that installations are very, 
very key to everything we do. Think about what goes on at our 
installations. That is where we project power from, that is 
where we support our families, that is where we mobilize, 
demobilize, it supports an expeditionary force. We are 
transforming from a division-centric type of organization to a 
brigade unit of action organization where the brigades are task 
organized to hit the ground running when they deploy and hit 
the ground.
    We have to have reach-back capability and with our 
satellites and our information management, our installations, 
we now have that. It is critical to our soldiers and our 
families, and to retain an all-volunteer force, we must have a 
top quality of life. Our soldiers live there, the families stay 
there when they are deployed, and surely our soldiers deserve 
the same quality of life that is afforded the people off-post 
that they are pledged to defend.
    So they are a very key part of the Army vision, and as we 
transform, we want to make sure we keep a focus on 
installations.
    Mr. Ortiz. I know that everybody on this committee is 
waiting for the list to come out to see which bases are going 
to be on that list, what will be recommended. And this list may 
include installations that are vital to the defense industrial 
base which supports the war fighter.
    Currently, our industrial capacity is under great strain to 
meet the needs of the forces in the field. When making 
determinations about base closure, is the Department 
considering the need to maintain a search capacity in the 
industrial base? Also, how is the Department ensuring 
compliance with the laws, such as the 50-50 rule when 
considering base closure. How does that play in that, the 50-50 
rule?
    Secretary Grone. Mr. Ortiz, to the first part of your 
question on surge, the selection criteria that the Secretary 
had caused to be published required us within the scope of the 
analysis to consider mobilization, demobilization, contingency 
and other requirements. The Congress, believing that there was 
a bit of an ambiguity there and wanting to ensure that we did, 
as a matter of requirement what had been policy, required the 
insertion of the word, ``surge,'' into the selection criterion 
3.
    So all of the analysis that we are doing, pursuant to the 
statutory requirements for BRAC and the implementation of the 
selection criteria in that process, all encompasses missions to 
take into account the components, the joint cross-service 
groups who are analyzing the common business oriented support 
processes, of which the industrial base is one, industrial base 
of the Department is one. We have to take surge into account.
    Surge will vary depending upon the mission, it will vary 
depending on the needs of the component. But we have to define 
it, we have to asses it, and we have to take it into full 
consideration as we develop recommendations that the Secretary 
will produce in May.
    So, yes, we are taking surge fully into account. And, 
certainly, with regard to existing statutory frameworks, 
everything that we are doing in the process is fully consistent 
with the statutory frameworks of existing law, and we will 
produce recommendations based upon it.
    Mr. Ortiz. So you do not think there is going to be any 
messing around with the 50-50 rule.
    Secretary Grone. Mr. Ortiz, I mean, I think I would like to 
stand on my statement that we will follow the statute. I would 
prefer not to get into characterizations of tweaks in any areas 
or adjustments in any area or what we may do in a particular 
area of analysis, as the Secretary has not finalized 
recommendations, and I would not want to mischaracterize what 
we may do within the industrial group or in any other group. 
But I think it is fair to say that we will adhere to the 
statutory framework as it has been laid out by Congress.
    Mr. Ortiz. As long as you understand where this committee 
stands or at least the caucus stands.
    Secretary Grone. Yes, sir.
    Mr. Ortiz. Something else that I would like to mention, I 
have been through all base closures. One of the things that I 
see happen is that when you close down a base many 
installations that have been paid by soldiers' funds--PXs, 
commissaries, theaters--are not paid by appropriation funds. 
They are paid by the money generated from soldiers' purchases 
and things like that.
    Are we going to take that into consideration when we shut 
down a base to be sure that that money that belongs to the 
soldiers comes back to the soldiers' funds so that they can 
generate more support for the soldiers, family welfare for the 
children and things like that?
    Secretary Grone. It is certainly my understanding that as 
any assets that are mass supported, the proceeds resulting from 
those kind of assets would return to the NAF accounts, and I 
believe there is a reserve account established, pursuant to 
law, for the receipt of those funds.
    In prior years, there had been some difficulty with 
accessing those funds, because the funds were subject to 
subsequent appropriation. But I believe, and I can be corrected 
for the record, but I thought that provision has been addressed 
or there had been at least an attempt to address it. There was 
direct spending, I believe, associated with it, but I believe 
in a prior year it may have been addressed.
    If it has not been, I will clarify that for the record, 
but, certainly, we are not unmindful of the soldier and 
sailors' funds, and, certainly, as assets are disposed of, that 
reserve account would be in receipt of those revenues.
    Mr. Ortiz. If you could look into that because we have seen 
some foreign bases where we have shut down, and of course that 
had to do with the State Department reaching an agreement of 
some sort where we lost millions and millions of dollars in 
facilities, from golf courses, to theaters, to bowling alleys, 
and we never saw that money. I just hope that somehow we could 
look after the welfare of the soldiers and that fund goes to 
where it belongs.
    Thank you, Mr. Chairman.
    Mr. Hefley. Mr. Ryun.
    Mr. Ryun. Thank you, Mr. Chairman.
    First of all, let me say thank you to the witnesses for 
being here and their staff and all the personnel that are in 
uniform for serving our country. We very much appreciate what 
you do.
    I would like to address this, if I may, to Secretary Grone, 
and it is with regards to housing. Due to modularity and 
repositioning, many bases will soon experience large increases 
in soldiers coming back, which is a good thing. For example, 
Fort Riley in Kansas will have an additional 3,400 troops early 
2006 and possibly more later in the future. Bases like this may 
experience housing shortages for military and civilian 
personnel.
    What is DOD doing with regard to accommodating these needs, 
and do you have any recommendations for the surrounding 
communities as to ways they might be able to be prepared for 
all of this?
    Secretary Grone. Mr. Ryun, I certainly would, particularly 
with regard to the Army, yield at the appropriate time to my 
colleague, Mr. Prosch, but in a general way, what we have to be 
mindful of when we permanently station forces in new locations, 
particularly when we have a significant increase in the 
population of that base, the housing of course is an issue.
    We will do whatever we can to work cooperatively with state 
and particularly local government and the development community 
to ensure how we can do that in as seamless a way as we 
possibly can.
    With regard to our own programs, certainly our policy 
remains that we want to rely on the private sector and the 
private market first. If it is clear that that is not able to 
be absorbed or there is a capacity issue, our housing 
privatization authorities give us the ability to begin look at 
alternatives that would begin to build out that deficit, 
address that deficit to ensure that our people have adequate 
housing options available to them.
    It will be a long-term process in some ways, but I believe 
that we are postured well internally looking at the heart of 
that question. Certainly, there are some things that we are not 
in a position to do yet until we have final outcomes. Where 
will temporary units of action be based on a permanent basis? 
Where will forces returning from Europe be based on a permanent 
basis?
    And as those decisions come into clarity, we will be able 
to work with all affected stakeholders in this process but 
certainly local government to ensure that we have as seamless a 
transition as we possibly we can. But we are not unmindful of 
the impact, particularly on the local housing markets, and we 
are going to address that as well as we can.
    Secretary Kuhn. If I could add to that just a couple of 
examples of the cooperative efforts the Air Force and the Army 
and housing privatization are working the McGuire Air Force 
Base-Fort Dix combined initiative in New Jersey. We have been 
asked to look and consult with the Army as they are doing 
housing privatization at Fort Lewis in Washington and we at 
McCord Air Force Base taking into account that there might be 
additional forces from the Army potentially coming into Fort 
Lewis and how could our privatization help that.
    We also have provisions, Mr. Ryun, in our housing 
privatization contracts that allow the successful developer, at 
his own risk, to build beyond the requirement. In other words, 
if he believes that they will come and occupy his housing with 
some minimal restrictions, he is allowed to build above the 
requirement, anticipating some of those points that you have. 
We are trying to be flexible in these areas.
    Mr. Ryun. And if I may say, I appreciate the assurance you 
have given me, because I know a lot of my smaller communities 
that surround those particular installations are just 
concerned, they just need to know that there is a plan, and I 
wanted to reassure them of that, but I also know that there are 
certain things that have to happen here first.
    And if I may go to a second question just very briefly, 
Fort Leavenworth is in my district and it is entering a final 
phase of construction on the Lewis and Clark Education Center. 
I have been informed that the fiscal year 2006 budget actually 
reduces the planned funding for that center by several hundred 
thousand dollars. Too early yet to tell what that cut means. In 
other words, if they start the project, are they going to have 
sufficient funds to actually finish it?
    And so I guess that is my question: What kind of guarantee 
once they start, if they should start this, will there be that 
there might be some shifting of funds to allow them to go ahead 
and complete this most important education center?
    Secretary Prosch. Sir, let me comment for a minute, and let 
me just assure you on your previous question that the Army has 
pledged to work closely with you for the RCI project at Fort 
Riley, which we are very excited about. You will notice in the 
fiscal year 2006 budget, we do have $68 million of equity 
investment to fund the pump to make sure that that project 
goes.
    And for the record, I would like to thank the good chairman 
and this committee for really coming up with this overall 
military housing privatization initiative. You all really 
created this, and we thank you for lifting the cap and for 
helping us to sustain this.
    Concerning the Lewis and Clark facility, I am going to be 
at Fort Leavenworth on the 28th of March with Lieutenant 
General Scott Wallace, my college classmate. We are going to do 
a terrain walk, and I will get back to you personally to let 
you know the status of that project. I would invite you to join 
us if you would like, sir. We are going to have our 
installation association United States Army symposium in Kansas 
City where Phil Grone is one of the keynote speakers, and so we 
will be in your area of operations, and I will bore into that 
for you, sir.
    Mr. Ryun. Thank you very much.
    Thank you, Mr. Chairman.
    Secretary Prosch. And, finally, sir, our goal is to build 
it to the total requirement.
    Mr. Hefley. Dr. Snyder.
    Dr. Snyder. Thank you, Mr. Chairman.
    Thank you, folks, for being here.
    Secretary Grone, I wanted to ask, I guess I have three 
questions I wanted to direct to you. First one can just be a 
really short answer.
    One of the concerns that I guess all Americans that follow 
the issue has always been about the BRAC processes, both past 
and future, is are they going to be decided on the merits and 
not on the politics or in whose district or all the kind of 
pressures, and it seems like we have had a tremendous number of 
lobbyists involved in these kinds of activities on base 
closure.
    If you were to give the process, as it has progressed over 
the last year or two, at this point, in terms of a process that 
is proceeding based on the merits and not on considerations 
other than the merits, what kind of a letter grade would you 
give it, A, B, C, D or F?
    Secretary Grone. On the merits, I give it an A-plus. I 
mean, there has been no consideration of politics in 
development, analysis, process. And as we build options for the 
leadership to consider and for ultimately for the Secretary to 
recommend, political considerations are not--favoritism toward 
any area for any particular consideration that bears no 
relationship to the military value simply is not part of the 
process.
    Dr. Snyder. Good. Thank you.
    Secretary Prosch. Sir, if I could just add from the Army's 
perspective, I have been very pleased to have the opportunity 
to participate. Ever since August, twice a week, we have been 
really working this very hard, and the thing that is 
encouraging in this BRAC is the jointness.
    There are seven joint cross-service groups--Education and 
training, supply and storage, industrial, technical, medical, 
intelligence, headquarters and support activities--that are 
working very closely with the services. We have visibility over 
the Air Force and the Navy data, and so I think we have the 
opportunity for the first time to really have some jointness, 
to have an Army unit stationed at an Air Force base where it 
makes sense.
    Dr. Snyder. Thank you.
    Secretary Grone, the second question I wanted to ask is 
about real property maintenance, and I read through your 
statement, and I do not know if the terminology has changed or 
I am having trouble sorting it out.
    You may remember, I think it was in 1998 or so, one year on 
the committee staff here we had a witness from the National 
Academy of Engineering that thought we needed to aim for a two 
percent of plant replacement value as an annual budgetary 
number for real property maintenance. And if my calculation is 
right, $650 billion from your statement of real property 
replacement value gets us to $13 billion, an approximation of 
real property maintenance.
    But I cannot--I mean, where are we at with regard to that? 
Did you aim for a two percent goal? Help me understand. Maybe 
the terminology has changed a bit or I do not understand the 
terminology.
    Secretary Grone. Yes, sir. I believe I can do that. What I 
am looking for is a couple of quick numbers here.
    Dr. Snyder. Are you in your written statement?
    Secretary Grone. One way of looking at a long-term 
maintenance requirement is the, and sort of an older way of 
sort of thinking about the question was as a raw percentage of 
plant replacement value. Depending on the kind of inventory you 
are discussing or depending, frankly, on which engineer you are 
talking to, it could be two percent, it could be three percent. 
I have seen some as high as 3.5 or 4 percent.
    But in many ways, what we have tried to do is we have tried 
to move away from that framework, because it is useful as sort 
of a blunt instrument. What it is not useful is looking at your 
requirements from the experience of industry, the experience of 
what happens in your own inventory.
    So what we have tried to do is move the framework from 
simply one that is driven by a raw dollar calculation to one 
that relies on private sector, appropriate public sector and 
other benchmarks, rigorously controlled by cost factors that 
feed a model that is sort of based on our own inventory.
    So what we have tried to do is bring in a whole series of 
private sector best practices and apply them to our inventory 
in a way that would generate a requirement, a need for the 
Department to sustain its assets over the long term, attempt as 
best we can to budget to that need and execute as well as we 
can.
    Over the long term, a fully funded sustainment program will 
have an impact or an effect on the long-term build to 
recapitalize your facilities. No one, in industry or in 
government, knows what the one-to-one relationship between 
those two are, but we are doing a lot of research and work on 
it.
    But the old real property management, real property 
maintenance framework has given way to a different, more 
nuanced, more highly rigorously benchmarked concept called 
sustainment.
    Dr. Snyder. It seems that my time is up, Phil. It seems, 
though, that what you call more nuanced, it seems to me it is a 
bit difficult to follow. I mean, I frankly cannot tell if we 
have too much money or too little money in line with Mr. 
Hefley's concerns that we have got a bill payer budget rather 
than an assets budget or we are just like baby bear's porridge 
and just right. And I do not know how to follow these numbers 
over time, and maybe that is something I could talk to you 
another time about.
    Secretary Grone. Well, the baseline does change every year. 
Cost factors change every year.
    Dr. Snyder. Right.
    Secretary Grone. For two or three running years, we were 
able to hold cost factors down, but with global markets, 
concrete lumber prices and the rest increasing, our need 
increases. We are trying to track markets, and we are trying to 
track private sector benchmark costs and apply them to our own 
facilities. That is really what we pay. We do not pay based on 
what happens to be two percent of our plant value. We pay on 
what is actually going on in the marketplace.
    So in this President's budget, we have budgeted for 92 
percent of the sustainment requirement. It is not full 
sustainment. It is a bit of a reduction in terms of the 
percentage of the requirement from what, as the chairman 
indicated earlier, but we do believe that it is a very 
sufficient amount to continue us on the pathway to good 
management practice.
    And the fact of the matter is just a handful of years ago, 
we had no way of understanding what the need was. Now we have a 
way with a model to understand the need and try to resource to 
that need as best we can.
    Dr. Snyder. And maybe we can follow it over time.
    Secretary Grone. Yes, sir.
    Dr. Snyder. Thank you all for being here.
    Thank you, Mr. Secretary.
    Mr. Hefley. Dr. Schwarz.
    Dr. Schwarz. Thank you, Mr. Chairman.
    I would like to have each of you, perhaps starting with Mr. 
Grone and then Mr. Prosch, Mr. Penn, Mr. Kuhn, comment on the 
concept of joint reserve bases and with the BRAC coming, with 
there being numbers of reserve units which might be moved or 
actually shut down or combined with other reserve units and 
with there being certainly ample property on numbers of bases, 
one in fact in my district, how enthusiastic is the Department 
of Defense about joint reserve bases, having a base which would 
have an Army Reserve outfit, a Navy Reserve outfit, a Marine 
Reserve outfit and an Air Force Reserve outfit on it, maybe a 
couple of guard units from that state as well?
    Does that not seem to be a pretty efficient way if such 
property is available and that property might have a 10,000-
foot prevailing wind runway, it might have rail facilities, it 
might have--Mr. Grone, why are you smiling?
    Secretary Grone. I just was not sure if you were thinking 
about any particular installation. [Laughter.]
    Dr. Schwarz. And might have 7,500 acres right next door 
that has been nothing other than a military base since 1917, 
but who is counting.
    So just the general concept of joint reserve bases. Is that 
something that you are considering? Is that something that the 
Department considers a good idea?
    Secretary Grone. Well, certainly, sir, one of the important 
concepts, predicates of this BRAC process is to try to find 
ways and means to improve the joint utilization of all of our 
assets, be they active or reserve, and to try to employ them 
more effectively from a total force concept.
    So whether it would be opportunities that might present 
themselves in the process to create more joint reserve 
installations or facilities or to have reserve and active more 
directly share even more of the assets than they do today, all 
of those options are on the table as part of the process.
    What we aim to do through that process is not start with 
the predicate that we have to have so many joint facilities 
come out at the end of the process. Where we want is we are 
starting with the best military value we can. And in order to 
support the joint war fighter, we are looking at all the 
options that we can to assure that we have the best 
infrastructure support for the joint war fighter. And in many 
cases, that may result in a recommendation to do something on a 
more joint basis.
    But in terms of how many or whether or what the weight of 
emphasis is going to be on final recommendations, I simply 
could not say.
    Dr. Schwarz. Would it be safe to say that in general it is 
a concept that you would embrace?
    Secretary Grone. Jointness is an important part of the BRAC 
process.
    Dr. Schwarz. Any of the other gentlemen care to comment on 
that idea?
    Secretary Prosch. Yes, sir, if I could just comment. I 
would just assure you that Lieutenant General Schultz, the 
chief of the Army Guard, and Lieutenant General Helmly, chief 
of the Army Reserves, have a chair and meet with us every 
Tuesday at the Army Senior Review Group as we analyze all of 
our BRAC options with our active members.
    One of the tools that you all have given us, the real 
property exchange tool, we have been using that to good use. 
Where we find an old armory and maybe a valuable piece of 
terrain in an urban area and we work with the local community 
to build a perhaps joint facility out in the suburbs. That is a 
great tool that you all have given us, something we are going 
to look at as we execute this BRAC 2005.
    But if I could ask my colleagues behind me from the 
reserves and the guard, do you have any comments?
    General Profit. Sir, Gary Profit, deputy chief of the Army 
Reserve.
    I would only add that we have a process action team inside 
of the BRAC process that is looking at every opportunity to 
create joint reserve basing throughout CONUS, and we think it 
has great promise.
    Dr. Schwarz. Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr. Hefley. Mr. Butterfield.
    Mr. Butterfield. Thank you, Mr. Chairman.
    First, let me thank the four of you for coming forward 
today to give us your testimony and certainly thank you for the 
work that you do for our country. I want to direct my specific 
question to Secretary Penn.
    Now, Mr. Secretary, I realize that you have only been on 
the job for a few days; so have I. That is why I am sitting on 
the lower tier at the far end. And so I share your anxiety, and 
I thank you so very much for coming forward today with your 
testimony.
    I trust that by now you are somewhat familiar with the 
outlying landing field in eastern North Carolina. If not, I 
want to share a bit with you to give you some information on 
it.
    The Navy is proposing to place an outlying landing field in 
my congressional district, which is in eastern North Carolina. 
Specifically, the field is to be located in Washington and 
Beaufort Counties, and I just want this committee to know and I 
want you to know and the Navy and the Nation to know that I 
fully support the development of an outlying landing field and 
certainly I support it in eastern North Carolina.
    My constituents there in eastern North Carolina likewise 
support the development of such a field. But we are concerned, 
we are deeply concerned, the citizens of eastern North Carolina 
are concerned that this landing field is being placed in the 
middle of a wildlife refuge, and that is not good. And the 
citizens are very concerned about it. They feel that it is 
unwise and unfair to locate this landing field at this 
location.
    The governor of our state commissioned a team of experts 
recently to examine this site and to propose alternatives, 
viable alternatives that may be within a few minutes of flying 
time from Oceana and Cherry Point and the other bases. And in 
just a few minutes I would like to submit a copy of the draft 
of that report of the governor's commission for your 
consideration and to be a part of the record.
    What further complicates this matter, Mr. Secretary, is the 
fact that the United States District Court has heard this case; 
it is in litigation. A lawsuit was brought by the citizens of 
those two counties to the U.S. District Court, and the court 
has ruled in their favor and has issued an injunction against 
the Navy prohibiting further development of this site.
    So we are very concerned about it, and I want you--I do not 
want to unduly put you on the spot here today. I realize that 
you are new to the process, but I want you to know that the 
people of eastern North Carolina are deeply concerned with 
locating this landing field in the middle of a wildlife refuge, 
and we are begging the Navy, we are urging the Navy to look at 
alternative sites.
    I guess my first question is, Mr. Secretary, are you 
familiar with this issue in any respect?
    Secretary Penn. Yes, sir, I am familiar with it.
    Mr. Butterfield. Okay. And I guess the next question is, is 
the Navy just unalterably opposed to exploring any alternative 
site? In other words, are you willing to look at any 
alternatives whatsoever?
    Secretary Penn. Sir, until we have the final results from 
the court action, the only thing we are doing is looking at 
other analysis of the environment.
    Mr. Butterfield. Well, the case is ongoing, certainly----
    Secretary Penn. Right.
    Mr. Butterfield [continuing]. In the appellate courts, but 
for my understanding, the Navy is still attempting to acquire 
land in this region.
    Secretary Penn. No, sir, we are not.
    Mr. Butterfield. That is not correct.
    Secretary Penn. No, sir, that is not correct.
    Mr. Butterfield. And so the land that has been acquired--
you are no longer making an acquisitions.
    Secretary Penn. That is correct, sir.
    Mr. Butterfield. All right. Has the Navy completed any type 
of bird management plan that would reduce the risk to pilots? 
This wildlife refuge is full of animals and birds that are 20 
pounds in weight, they are 9 feet in diameter when fully 
extended. And the citizens are just so concerned about the 
possibility of bird strikes. Have you explored any----
    Secretary Penn. Yes, sir.
    Mr. Butterfield. Have you done any research on this?
    Secretary Penn. We are in the process of conducting a BASH, 
which is what they call a study, on bird impacts now. And from 
experience, I can tell you there is nothing worse than hitting 
a bird in a landing pattern, especially a large bird. Quite 
often they come inside the cockpit with you. It is a very 
frightening experience. And you can lose an aircraft and the 
crew.
    Mr. Butterfield. And of course you are a naval aviator 
yourself.
    Secretary Penn. Yes, sir.
    Mr. Butterfield. Of course, you would share that concern.
    Secretary Penn. Yes, sir.
    Mr. Butterfield. Yes.
    Secretary Penn. But we are analyzing it to make sure that 
it has to be safe for everyone, and I think the area that we 
are concerned with is not exactly near the wildlife refuge.
    Mr. Butterfield. All right. I just want to continue to urge 
the Navy to look at alternative sites. I know that has been 
resisted to this point, but I want to encourage you to continue 
to look at other sites, because other sites are available in 
eastern North Carolina.
    And I am going to submit for the record, Mr. Chairman, with 
your permission, a copy of the governor's report. I yield back 
the balance of my time.
    Mr. Hefley. Mr. Forbes.
    Mr. Forbes. And thank you all for being here today.
    Secretary Prosch, I would like to particularly thank you 
and your staff for all the work you have done to support the 
troops at Fort Lee and their families stationed there. You have 
just done a great job. And as you know, from time to time, some 
of those troops will approach us and they will talk about those 
1950's era open-bay barracks that are still there and they ask 
when are they going to be modernized. And I know that you have 
a program that is doing that, and I was wondering if you could 
just share with the committee the current status of the Army 
Barracks Modernization Program.
    Secretary Prosch. Yes, sir. We are in the 13th year of this 
program, and thanks to your solid support, we have been making 
steady progress. With the fiscal year 2006 appropriation, we 
will be 85 percent complete with the modernizing of our 
barracks for our 136,000 single soldiers.
    Over one-half of this year's active Army MILCON budget is 
for barracks. As I mentioned in my opening remarks, 5,190 new 
soldiers will now have barracks at the one-plus-one standard. 
The one-plus-one standard, as you know, is a suite that we 
build for the soldiers where we have private bedrooms, a walk-
in closet, a shared kitchen and a bathroom area.
    I had a chance to take my son when he was a college student 
into one of these at Fort Bragg, and he said, ``Dad, how do you 
enlist? This is great.'' So we thank you so much for allowing 
us to give our soldiers what they really deserve.
    I would like to also advise you that we are spending $250 
million of OMA dollars this fiscal year 2005 to try to get at 
some of our substandard barracks that are in a red status. We 
want to triage these barracks immediately and make sure the 
heating, the air conditioning, in some cases mold and leaks are 
repaired. And so we are going to continue to make a steady 
progress, and you can tell those soldiers that it is coming, 
sir.
    Mr. Forbes. Well, thank you, Mr. Secretary, and they 
appreciate it. As you know, they have waited a long time for 
it, and we just appreciate your efforts there.
    Secretary Grone, I have a question for you about overseas 
bases. You know, we have had a lot of discussion about long-
term bases in central Asia, for example, and I know that our 
traditional overseas bases existed in regions where the 
stability of the government was not much at issue. But the 
instability is of particular concern in some of the areas that 
we are looking at overseas bases.
    Now, how do we ensure that our investment in long-term 
bases in these regions will not be wasted if we must at some 
time abandoned the bases we have built?
    Secretary Grone. Well, sir, the best way I can answer your 
question is we have, as you indicated, tried to provide 
Congress with our best thinking on this as we have moved along 
the process that the Secretary initiated nearly three years ago 
or about three years ago to take a look at our global assets 
and global basing and presence laydown and make what 
adjustments were necessary and prudent for the needs of the 
future rather than the requirements of the past.
    In September, we provided a report to Congress. It was an 
initial report on our basing and presence laydown, and just 
within the last two weeks or so, each of the regional combatant 
commanders coordinated across the building and submitted 
through my office, submitted to the committee, overseas basing 
and overseas master plans for their areas of responsibility.
    We are trying to take a long-term, prudent, reasonable 
approach to the basing laydown that U.S. forces will require. 
In not all cases are we talking about main operating bases with 
static forces in which we have traditionally been organized. In 
many cases, what we are looking for are access agreements, 
great deal of flexibility, a lightly to no stationing of U.S. 
forces in many of these locations. It would just simply give us 
the ability to fall in on infrastructure as contingencies would 
warrant.
    So we will have a far more mixed approach to our basing 
laydown with main operating bases that look similar to our 
Ramstein Air Base, a main operating base, a large contingent of 
U.S. forces, significant mission and mission throughput, but in 
other areas, in other regions, we will have something that 
looks far less intensive that relies more on access and we can 
provide you all the appropriate briefing to give you a sense of 
what our best thinking is on this at the present time.
    But to the extent that a good deal of that is classified, 
without getting into specifics, I think that probably might be 
the best approach there if I might suggest that.
    Mr. Forbes. Thank you, Mr. Chairman.
    Secretary Prosch. Sir, if I could just jump in, just for 
one second. I would just urge you to support the Army's request 
for Outside Continental United States (OCONUS) funding this 
year. We have very carefully selected our projects in Germany 
for Grafenwoehr, Hohenfels; for Italy, Vicenza; and for Korea 
vicinity, Camp Humphreys.
    These are enduring installations, and we have very good 
combatant commanders in General Bell and General LaPorte, who 
for a $20 million equity investment have earned over $800 
million in host nation funding to support these projects. So it 
is a very wise investment, and we would appreciate your 
continued support here.
    Secretary Grone. Mr. Chairman, if I might just follow up 
quickly on that point. As we were developing the initial report 
to the Congress last year, we were very careful to look through 
the last year's budget request as well as the Future Years 
Defense Program and make financial adjustments based on where 
we saw the basing and presence strategy heading over time.
    So we tried to take a very forward-leaning approach to 
remove military construction projects from areas where we were 
not intending to have a long-term presence, so we would not 
have that kind of stranded investment in the future.
    And what we tried to do with this budget request, as Mr. 
Prosch indicated, is we have put a significant amount of 
resourcing, $782 million worth, for military construction to 
meet our requirements based on the Combatant Commanders' and 
the Secretary of Defense's and the President's best judgment 
for that overseas posture laydown looking to the future. And 
that is a reasonably consistent number, in fact it is less than 
what we have requested in some prior years, but it represents 
very clearly our judgment as to where we will be in the end 
state.
    Mr. Forbes. My time is up but if at some time you could 
also get back to me, I know that China and Russia are 
increasing their military influence or trying to in central 
Asia, and whether or not that is going to pose a threat to our 
long-term efforts to establish long-term bases and facilities 
in that region.
    Thank you, Mr. Chairman.
    [The information referred to was not available at the time 
of printing.]
    Mr. Hefley. Mrs. Davis.
    Ms. Davis of California. Thank you. Thank you, Mr. 
Chairman.
    Thank you to all of you for being here.
    Secretary Penn, perhaps I want to ask you more of the 
questions, and I appreciate the fact that you have been on the 
job a very short time. But I wanted to just ask about the 
rationale for the Navy MILCON budget being below, I believe it 
was about a 14 percent reduction in 2006 from 2005. That is of 
interest to me.
    But I also wanted to applaud the fact that we have raised 
the cap. I think particularly in San Diego that has been very 
positive. But could you also address the fact of how are we 
dealing with the privatization with bachelor housing? We know 
that one of the real management strategies in privatized 
housing is to move families in and out very quickly, but in 
some cases if we have bachelor housing, it works a little 
differently in the Navy because they do not necessarily give up 
that place on deployments and other needs to leave that 
housing.
    Could you respond to that? How is that working? What is 
that vision that we have for bachelor housing facilities after 
privatization?
    Secretary Penn. Yes, ma'am. At this time, we have three 
projects going for bachelor privatization. One, as you may 
know, is in San Diego, and we have already started on that. It 
is moving along fine. The second will be in the Chesapeake, the 
Hampton Roads area, and we are looking at the third in the 
Puget Sound area. We are also looking at trying to start a 
second phase, also in the San Diego and Coronado area.
    Ms. Davis of California. Does it work the same as it does 
for families?
    Secretary Penn. Yes, ma'am, it does. And it is working 
well.
    Ms. Davis of California. So there are no transition needs 
that would be different in whether or not that particular 
service member is actually in that housing.
    Secretary Penn. That is correct, it would not. When they go 
to sea, they will check out. Someone else can go in there, just 
like they do now. If you are living in a barracks, you go to 
sea, someone else moves into your space.
    Ms. Davis of California. Okay. So will this be providing--
--
    Secretary Penn. Exactly.
    Ms. Davis of California. Okay. All right. Thank you.
    I had another question about how we manage the land, 
because in urban settings where we have bases, we have 
geographic constraints, how are we doing at looking at the best 
use of land on those particular bases, especially where we have 
great housing needs.
    It is interesting to me that in San Diego particularly the 
number of on-station housing units are so much smaller than in 
the community and what we depend upon in the community, and yet 
I do not know if we are looking as hard as we can. Sometimes it 
is finding ways of developing that housing on base.
    Do you have a sense of whether or not we are looking into 
those issues as rigorously as we should?
    Secretary Penn. Yes, ma'am, we are.
    Ms. Davis of California. How do we evaluate that?
    Secretary Penn. Quite often we try to get land obviously 
inside the fence line, because we already own it and we can use 
that. If it is not available, then we go outside the fence 
line, outside the confines of the installation and purchase 
that land, Public Private Venture (PPV), and go forward from 
there.
    Ms. Davis of California. If we develop land within the 
fence line and for some reason or other it is not filled by the 
military, what happens then? Do we move the fence?
    Secretary Penn. Inside the fence line not filled by the 
military--sorry. If we get down to the point where we have 
empty units, private sector people can occupy the units inside 
the fence line.
    Ms. Davis of California. On the base.
    Secretary Penn. Yes, ma'am.
    Ms. Davis of California. And have we done that on a number 
of occasions?
    Secretary Penn. No, we have not at this time.
    Ms. Davis of California. Okay. Thank you.
    If I have some more time, Mr. Chairman, just a minute or 
two, just a question about the base operation support funding, 
and I know that we do see some concerns about shifting those 
dollars. Previously, we were able to take money out of other 
sources, the sustainment, restoration and modernization (SRM) 
accounts, apparently, and I am just wondering whether or not we 
are finding a different way to do that since we are not able to 
shift those dollars in the way that we did before? And of 
course some of those dollars were spent in the past, I believe, 
on services such as child support services, child care 
services.
    Do we still have the ability to move some of those dollars 
if in fact we find----
    Secretary Penn. Yes, ma'am, we do. One of the things that 
we have done recently we have set up a new organization called 
CNI, Commander Naval Installations, and for the first time we 
have been able to get our hands around a good budget as to what 
we need for our boss. And this is the year we have done it. We 
are confident that this is going to help us manage all of our 
assets much, much better. It really seems to be working well.
    Ms. Davis of California. Thank you very much.
    Secretary Penn. Yes, ma'am.
    Secretary Grone. Ms. Davis, with the chairman's indulgence, 
because it was mentioned in the chairman's opening statement, 
it is important to the question you just asked. With the 
sustainment--and all of this has to be looked at as a business 
process for facilities.
    We began some years ago to work on the sustainment 
question, and we are in the seventh version of that model. We 
are this year taking the recapitalization metric from a metric 
to a model that will generate more fully the need for financing 
for recapitalization.
    We are currently working on a joint--each of the services 
had a way of assessing their base operating support 
requirements but it is not a joint process the way sustainment 
and recapitalization are.
    We had initially set out on a path that would have taken us 
three to four years to get to a joint programming model. We 
have accelerate that through working with each other to the 
prospect that we may have that model within 12 months.
    All of that leads to an end-to-end business process for 
facilities and facilities management in the Department, which 
we have never had before. Within that process, we will still 
have the flexibility, barring the imposition of any statutory 
prohibition, but currently we have the ability to move those 
funds around, all of which or most of which are operations and 
maintenance funding, from sustainment to base operating 
support, to O&M recapitalization, as circumstances require.
    But as our end-to-end business process matures, it is 
better now than it was the year prior, than it was the year 
prior, and it will improve every year as we move forward, but 
as that process matures, we will have a far better sense as we 
are building a budget, even more than we do already, and we 
knew a good deal today, of what the real needs are and how we 
should budget and make those respective trades as we are 
building the budget. Which should, theoretically, and in most 
normal years put us in a position where we would have less 
money moving from pot A to pot B, because we would be more in a 
position to define that need.
    We still need flexibility, however, for unanticipated 
bills, so we are working a joint business process together. We 
are putting more funds into these areas than we have in the 
past. We are benchmarking them to private sector standards 
while retaining some flexibility to meet our needs.
    Ms. Davis of California. Mr. Secretary, if I may, just what 
would indicate to you that that is not working? What would be 
the first thing that you would look at in hoping that that 
flexibility exists that would not be occurring? How would you 
define that?
    Secretary Grone. Well, currently we have the flexibility to 
move funds from sustainment to base operating support and back, 
subject to the transfer limitations that are imposed by 
Congress and subject to reprogramming.
    If there is a specific sort of instance at an installation, 
we can certainly look at that, but I am not--absent looking at 
sort of broad trends in execution or the way in which funds 
would move around, that is usually what we would look to as an 
indicator of something that is either we did not anticipate a 
requirement or a bill or whatever it might be.
    Ms. Davis of California. One quick question: Will you still 
have the ability to shift the money between the BOS and the SRM 
under the new appropriations alignment?
    Secretary Grone. We would have that ability now and we 
would have that ability in the future.
    Ms. Davis of California. Okay. You will have it. Okay. I 
was trying to get at that question. Thank you.
    Mr. Hefley. Mr. Hayes. Sorry to wake you, Mr. Hayes. 
[Laughter.]
    Mr. Hayes. Thank you, Mr. Chairman. I have been here so 
long I had forgotten about it. Anyway, thank you for holding 
the hearing. Gentlemen, thanks for being here. Secretary 
Prosch, the Army is having big problems, as you were just 
talking to Ms. Davis about, SRM and BOS funding. The Army's 
2006 request will fund only 72 percent of BOS requirements 
which are typically must-pay bills. These accounts must be 
funded at approximately 90 percent in order to maintain base 
services.
    I am aware that the Army is in the process of identifying 
ways to fund BOS at 90 percent in 2005 and 2006, but meeting 
this requirement would require as much as $1.8 billion in 
additional funding for BOS.
    How will you meet the 2005 and 2006 goal, and why does the 
Army continue to fund BOS at levels far below spending 
requirements? Question number one.
    Number two, I am also aware that the Army's budget for 2006 
funds SRM at only 91 percent, short of the 95 that DOD has as a 
goal. As you know, SRM accounts that are regularly utilized as 
bill payers for BOS requirements generated 400 unheated 
buildings at Fort Bragg and a lack of SRM funds. This is 
unacceptable. We have talked about it. Redefining heat in a 
building with a space heater or a stove is not the way to solve 
the problem.
    I am aware the Army has already shifted approximately $400 
million from SRM to BOS in 2005. Because SRM accounts are 
raided to pay BOS, in 2004, sustainment budget received less 
than 60 percent of requirements, and we are on a similar track 
in 2005.
    Mr. Secretary, I would not buy a new vehicle or build a new 
building if I did not have funds to pay for the upkeep or the 
gas and the oil.
    If your MILCON dollars are unwisely spent, there is no way 
to sustain the facilities. How do you intend to fix this SRM 
funding deficit, both in short and long term?
    And last but not least, Secretary Kuhn, if we have the 
time, the Air Force is embarking upon privatized housing. From 
what I hear it is going very well. As you know, we have a 
successful program at Fort Bragg in its third year. At such 
installations as Pope and Bragg where there is already a 
privatized housing program, to what degree are you working with 
the other service and existing developers to ensure a seamless 
and uniform housing program to all service members which is 
really working well?
    Thank you.
    Secretary Prosch. Sir, let me start off. Our goal is to 
work closely with OSD to try to get this model to where we do 
fund SRM and BOS at the right level. The Army has historically 
underfunded BOS and SRM. Our installations have been the bill 
payer too long.
    Our Secretary and our Chief two weeks ago have made a bold 
policy change. They said that in some ways our socks do not 
match. We say that the quality of life and that infrastructure 
is key, and so we need to go ahead and get on with doing that. 
And they have made the decision starting in 2005 to fund our 
base operations support and our sustainment at 90 percent.
    So we are going to do that this year, we are going to do 
that in the 2006 budget, and we pledge next year to go ahead 
and work this up-front, as we should be doing.
    We thank you for all your support at Fort Bragg. We did 
have a bad cold spell there with over 400 buildings without 
heat. As of yesterday, 45 of those buildings are without heat. 
We will get them fixed in the next three weeks, and we pledge 
to take care of our soldiers and our facilities, sir.
    Secretary Kuhn. If I could answer your question on the 
housing privatization at Pope Air Force Base, we had originally 
looked at Pope as a stand-alone housing privatization project 
because of the basic allowance for housing. Its financials 
placed it in doubt as to whether it could be economically 
feasible.
    So we have now grouped Pope Air Force Base, Andrews Air 
Force Base here in Maryland and MacDill Air Force Base in 
Florida in a group of three that we will be going our in early 
2006 with the RFP asking for bids on all of those as one group. 
And then we plan to award that in early 2007.
    Mr. Hayes. Thank you, Mr. Secretary, and I appreciate those 
comments. It has been very, very successful for the folks in 
uniform.
    Mr. Prosch--and welcome back, Phil, as well--I appreciate 
the high level of awareness that you have and the commitment to 
fixing it. Is there any kind of market we can lay down on the 
table to show that for sure this is going to take place this 
time?
    Secretary Prosch. Yes, sir. We have our mid-year review 
coming up here toward the end of March. Why don't I promise to 
come see you and the good chairman and tell you how we are 
going to realign our funds from different bins to make sure 
that the base support is funded properly?
    Mr. Hayes. Appreciate that. And bring the money, we will be 
glad to see you. [Laughter.]
    Mr. Hefley. Mr. Marshall.
    Mr. Marshall. Thank you, Mr. Chairman. Appreciate you all 
being here. I will get the advertising out of the way to start 
out with. Secretary Prosch, I know you know that Stewart and 
Benning are ready to welcome any of the 10 brigades you want to 
send that way. And Warner Robins is already a multi-service, 
multi-mission facility. So that takes care of the advertising.
    Secretary Kuhn, in your testimony, you make reference to 
the Air Force's commitment to be recapitalizing on a 67-year 
schedule. That would be about 1.5 percent of your current 
capital. You say that in the sustainment budget you are at 95 
percent this year.
    Secretary Kuhn. That is correct.
    Mr. Marshall. You say that you have fallen short on the 
balance of the recapitalization and modernization----
    Secretary Kuhn. And restoration and modernization.
    Mr. Marshall. Restoration and modernization. You are at 173 
and you say that by 2006--no pardon me, 2008, two years from 
now, the backlog will be 9.8 billion. Assuming that the 
recapitalization--and I have heard what Secretary Grone said 
where we have gone through seven theories already and we are 
into our eighth as far as this sort of issue is concerned--but 
assuming the Air Force's commitment to a 67-year schedule, that 
is 1.5 percent, what is 1.5 percent of our current capital? 
What should we be spending right now, on average?
    Secretary Kuhn. On average, in restoration and 
modernization? In the 2006, like you said, we have the $2 
billion for sustainment and----
    Mr. Marshall. And 173.
    Secretary Kuhn [continuing]. And 173. And in restoration 
and modernization to reach the recap rate in 2008, we will have 
to get to just a little under $800 million, and we have 
budgeted for that to hit the 67 recap in 2008. I realize that--
--
    Mr. Marshall. You have got in your testimony a description 
what you call a $9.8 billion shortfall as of 2006. Maybe I am 
misreading this. I do not think I am. It is on page four.
    Secretary Kuhn. I am going to have to go back and look at 
that.
    Mr. Marshall. It says, ``The restoration and modernization 
backlog is projected to grow to nearly $9.8 billion in 2006.''
    Secretary Kuhn. I am not sure that is necessarily 
associated with how we reach the recap rate as to what we think 
needs to be funded in those programs. I think we have a ways to 
go. We are going to have to come out of a little bit of a 
deeper valley than we thought, but we have the money into the 
President's budget in the future years, and we still believe 
that we are on goal to hit 67-year recap, not only in year 2008 
but in the years thereafter.
    Mr. Marshall. We had a huge problem with recapitalization 
of the quarters, housing stock for soldiers, airmen, Marines, 
sailors, and at some point prior to my tenure we made the 
decision to have private funding, recapitalization and then 
lease, which effectively is just borrowing money and adding to 
our debt. But it inures to our benefit right now because we get 
a whole bunch of money that we can invest, and, consequently, 
we have a nice new housing stock that is available for these 
soldiers.
    Secretary Kuhn. That is correct.
    Mr. Marshall. Have we considered doing the same thing with 
regard to our commercial capital stock? I toured Robins on 
Saturday, some 1940 warehouses that were converted to office 
space and are now, what is that, 65 or 67 years old, pretty 
sorry shape, housing about 4,000 people who are doing support 
services for our efforts in Iraq and Afghanistan and in pretty 
bad circumstances.
    The cost to just fix that with a new building would be in 
the neighborhood of maybe $200 million, $300 million. I am sure 
we could find private individuals willing to do it and lease it 
back to us.
    Secretary Kuhn. I think we are trying to do just that 
through a concept that has been available in the law to us in 
recent years, called the enhanced use lease, where the military 
departments now are authorized to use underutilized property to 
allow somebody outside of the fence, in the private sector, to 
do something, to build something on that underutilized land 
that insures to their benefit and for the use of that land to 
build something that inures to our benefit.
    We are asking all of the commands to look at that, Air 
Force Materiel Command (AFMC) under which Robins falls, has not 
that I know of, but Hill Air Force Base in Utah is looking at 
using this authority over a period of probably 20 years to use 
private sector funding to gain facilities that would encompass 
perhaps as much as one-third of the installation through this 
enhanced use lease process. The Army is doing it as Walter 
Reed, and we are looking at many other ways of leveraging 
private sector dollars.
    Now, there are issues associated with this--force 
protection issues, allowing people to come on to the base--but 
if all these are met and they are met to the satisfaction of 
the installation commander, we are definitely looking at ways 
of leveraging private sector dollars in our commercial 
activities, as we have in our housing privatization and utility 
privatization.
    Mr. Marshall. Secretary Grone, I know I am out of time. I 
do not know whether you are the appropriate person to do this. 
I would certainly like somebody to come in and help me 
understand the effective dollars and cents of these kinds of 
techniques used to modernize our stock.
    It just seems to me that this is like buying a car, 
borrowing the money to do so, effectively adds debt, whether 
you call it a lease or you call it a loan, and if you combine 
the extent to which we are failing to recapitalize, so, for 
example, the $9.8 billion backlog, which, in essence, is a 
future obligation, with the obligations that are incurred as 
part of the leasing processes, I wonder to what extent we are 
just adding debt that is just not showing on the books.
    Secretary Grone. Well, Mr. Marshall, we will be happy to 
provide you a briefing and have whatever discussion you believe 
may be necessary.
    I do want to clarify one item, though, if I might. The 
discussion about housing seemed to center, unless I 
misinterpreted it, on the notion that we would lease the 
housing back from the private sector. That is not what we are 
doing in housing privatization.
    If it is an on-base housing area, in many cases we retain 
the fee simple title and we out-lease that land on a 50-year or 
longer lease to a private entity, which the financial markets 
treat as ownership. Off-base, it is not our land.
    If we are conveying housing units into the stock, we convey 
those as part of the deal, they become the property of the 
developer, and the individual service member chooses whether to 
execute a lease with that developer. The government does not 
lease the housing back from the private developer. The risk is 
on the private sector.
    What this program gives us the ability to do is give our 
people better housing options. They are competitive with the 
private marketplace, but in the sense that it builds up a 
financial liability with all that implied from some sort of a 
leasing arrangement, as one might traditionally think about it, 
it is certainly not that, although it is understandable why one 
might draw that conclusion. But we do not lease the housing 
back for our people. Our people make those individual choices 
themselves.
    Mr. Hefley. Mr. Ryan.
    Mr. Ryan. Thank you, Mr. Chairman. We have a vote here, so 
I am going to try to be relatively brief.
    Real quick, over the past few BRAC closures, how much 
savings have we recognized up to this point, do you know? I 
have not seen any number. Ballpark.
    Secretary Grone. The Government Accountability Office and 
every audit that we have seen suggests that the annual 
recurring savings from after implementation of all prior BRAC 
decisions is approximately $7 billion a year, with $17 billion 
that we saw through the implementation of the prior 4 rounds of 
BRAC. But that is $7 billion is an annual recurring savings 
based on decisions that were taken in those four rounds.
    Mr. Ryan. Great. Thank you very much.
    One of the questions I have, and I am not going to plug my 
base directly, the 910th Airlift in Youngstown, I guess I will 
do it directly. [Laughter.]
    I am not going to let everybody else do it and then I am 
not going to do it.
    One of the questions and the concerns that I had is as we 
are moving troops back to this country and we are closing down 
bases in the new post-9-11 threats that we may and maybe the 
role that some of these air bases or military installations are 
going to play for homeland security. And one of the concerns is 
we may close down a base that may be able to somehow help us 
down the line that we may not see just yet.
    What role throughout the closure process will location 
play? I mean, we are in Youngstown, Ohio. We are 500 miles from 
two-thirds of the country. We have the only fixed wing aerial 
spray unit, and there are things that we are working on for 
biopreparedness with Kent State where that aerial spray unit 
may play a role down the line in some kind of homeland security 
issue. Is location considered in the process?
    Secretary Grone. Certainly, location is a key component of 
the assessment process. The availability of land, air, sea 
assets, associated facilities is part of the selection criteria 
upon which the Secretary must make his judgment to develop his 
recommendation.
    From a homeland defense, homeland security perspective, 
homeland defense is a mission of the Department, and we 
certainly take that mission into account as we build a basing 
laydown and infrastructure for the future. We are doing that.
    So, certainly, all of those factors are a part of the 
process. Without being able to be specific about any given 
location, certainly, that is an obvious part of--an overt part 
of the selection criteria and a part of the assessment process 
internally.
    Mr. Ryan. Thank you. One final----
    Mr. Hefley. Very quickly, Mr. Ryan, or we could come back 
if you would like to come back and finish up your testimony.
    Mr. Ryan. Yes. I will get you and let Mr. Taylor go.
    Mr. Hefley. Can the witnesses stay? Okay. Evidently, we 
just have one vote, so we will go try to do it quickly and come 
back.
    The committee stands in recess.
    [Recess.]
    Mr. Hefley. The committee will come back to order, and 
since Mr. Ryan is not here right now, we will go to Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman. I am reading with 
great interest the environmental hurdles of building the 
outfield that is described in Secretary Penn's remarks in North 
Carolina. Secretary Penn, if Cecil Field were still part of the 
Navy's inventory, would you have to be doing all that in North 
Carolina?
    Secretary Penn. I honestly do not know, sir, but I know I 
love Cecil Field.
    Mr. Taylor. I think the correct is answer, no, if Cecil 
Field was still in the inventory, we would not be looking for 
additional bases. Why was Cecil Field closed? Did the local 
community ask us to close it or was that the result of a base 
closure decision?
    Secretary Penn. I believe that was the result of a base 
closure, sir.
    Mr. Taylor. Secretary Penn, while I have you, I just on 
Saturday visited--and I realize you have only been on the job a 
couple of days, but on Saturday I visited some brand new family 
housing built to take care of the sailors at Homeport 
Pascagoula. And when I say brand new, they have not even been 
occupied yet.
    With this round of BRAC, should Pascagoula be marked for 
closure or mothballing or whatever, what becomes of that 
housing? And the reason I ask is the housing is located almost 
equal distance between Homeport Pascagoula and Keesler Field in 
Biloxi, Mississippi.
    What I am curious is, is there a mechanism where another 
branch of the service could ask of that, because the absolute 
last thing I want to see is this housing built at taxpayers' 
expense either allowed to fall into disrepair for lack of use 
or, worse yet, be sold for pennies on the dollar in some 
brother-in-law deal that just makes all of us look bad.
    Secretary Penn. No, sir. It is PPV. It is up to the partner 
as to what happens to the house.
    Mr. Taylor. If I am not mistaken, this is not that. I think 
this was actually paid for with taxpayer funds. There was some 
talk at some point of transferring it over to a public-private 
venture, but the word I got on Saturday that it was actually 
taxpayer money that built that.
    Secretary Penn. Sir, I will take that for the record and 
get back to you.
    [The information referred to was not available at the time 
of printing.]
    Mr. Taylor. Would you?
    Secretary Penn. Pleasure, yes, sir.
    Mr. Taylor. Secretary--and I do not mean any offense--
Prosch?
    Secretary Prosch. Prosch.
    Mr. Taylor. Okay. Recently returned from Roosevelt Roads to 
see the--again, do not say this happily--to see that base being 
shut down. I think it is a mistake. I did not realize it was 
buried in the authorization bill a couple years ago, but I 
voted for it, and therefore I share the responsibility.
    It is my understanding that not only did that language 
require the closing of Roosevelt Roads, which, again, I think 
is a mistake, but has pretty well put a moratorium on all 
military construction on the island of Puerto Rico.
    A, is that accurate, and, B, what sort of problems, what 
sort of unintended problems is that creating for the Army down 
there that maybe we can correct in this year's bill?
    Secretary Prosch. Let me talk about that. Thank you for the 
opportunity to discuss that, then I am going to defer to my 
reserve colleagues in the rear here.
    We have got about 4,500 reserve soldiers in 48 units, in 14 
different locations across the island, and if you look at the 
number of soldiers and the total population per capita, Puerto 
Rico is as high as any state we have got for serving their 
country. And so it is important that we try to sustain the 
facilities that we use.
    Overcrowding can be relieved through the use of military 
construction funds, and the problem we have is that this 
moratorium was imposed. And you will see in the Army-
recommended and OSD-approved legislation some relief from this 
moratorium, because we think it is important that we be able to 
lift this moratorium and be able to drive on with our 
construction.
    The guard wants to put their headquarters at Fort Buchanan. 
Fort Buchanan could be a satellite for consolidation of a lot 
of outlying reserve units. And so it would be very important if 
we could get your support on that.
    And I would just briefly like to ask my reserve and guard 
colleague to my rear to comment on that.
    General Profit. Yes, sir, if I could. First of all, the 
moratorium applies only to Fort Buchanan, but having said that, 
Fort Buchanan is the centerpiece of an island-wide answer to 
facilities in Puerto Rico. That also includes an enclave at 
Naval Station Roosevelt Roads, Camp Santiago and armories and 
reserve centers throughout the island.
    Frankly, sir, you asked about the impact. The impact is 
that it is not very helpful for us to be able to provide 
facilities for quality of life and quality of service for 
soldiers, sailors, airmen, Marines, coastguardsmen that frankly 
is commensurate with their service to the nation. And we would 
ask your support to lift the moratorium.
    Mr. Taylor. Mr. Chairman, if I may.
    Secretary Penn, one thing I did notice at Roosevelt Roads--
I am a scrounger by nature, I literally built a boat out of 
other people's junk, of course, it looks like it--but one of 
the things that I noticed is that at Roosevelt Roads--I come 
from hurricane country. Loss of power is something we 
anticipate every August and September, and therefore almost 
every community one of the things they really place a premium 
on are generators for the courthouse, for the jail, for the 
police and fire departments.
    One of the things I did notice at Roosevelt Roads, on the 
good side, is that the Navy had done a very good job of pulling 
almost every stick of furniture out of there, because I did not 
want to see anything wasted.
    On the not so good side, and I do want to compliment the 
young lieutenant commander who rode me around that Saturday, 
who gave up his Saturday and did a great job, one of the things 
I did notice is there were probably 100 generators of various 
capacities, some of them in the hundreds of kilowatts, that the 
Navy had planned on leaving behind.
    I would ask that you take another look at that. I think 
that given that local communities can use them, given that the 
guard and reserve, particularly engineering battalions have 
left behind in Iraq almost all of their generators, I would 
hope that the Navy, again, using our great CBs, using the 
reserve capacity that you have, using possibly the Puerto Rican 
National Guard engineering units, I hate to see that 
transferred to the next person who buys those buildings. They 
are going to get a bargain anyway. They do not need a bargain 
plus that.
    Secretary Penn. Yes, sir. Yes, sir.
    Mr. Taylor. And that was my request of you. If you could 
follow up on that.
    Secretary Penn. I will follow up on that, sir.
    [The information referred to was not available at the time 
of printing.]
    Mr. Taylor. And, quite frankly, if you can find no one else 
that is interested in it, I would certainly like the 
opportunity to see if I cannot get the Mississippi National 
Guard down there.
    Secretary Penn. Yes, sir.
    Mr. Taylor. Okay.
    Secretary Penn. We will get back to you.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Hefley. So far as lifting the moratorium, I would like 
to say just as one member of this committee, I would not put a 
dime of military money back into Puerto Rico if I had my way 
after they shoved us off the island, which we really needed, 
which had a military necessity for us to use, Vieques. And we 
got shoved out because of local politics and politics up here, 
Gene.
    And I think it is a darn shame. We needed that facility, 
and it was not hurting anybody. But it became a political and 
emotional thing, and I think we should have closed Roosevelt 
Roads and everything else we have got down there.
    So you do not have to come lobby me on that now.
    Mr. Ryan.
    Mr. Ryan. Thanks, Mr. Chairman, I appreciate it.
    One of the questions I had was one of the criteria for the 
BRAC is the economic impact. If you could just maybe explain 
that a little bit, how broad that is. My concern is that an 
area like I represent that has a high unemployment rate, is 
very poor area, losing a base that employs 2,000 people and has 
$110 million economic impact, losing that to us means a lot 
more than if that base was closed down in an area that was 
doing very well.
    And you do not have to give me the exact stuff but just 
what is your sense, because I think in the long run it may cost 
the government more money to--the government as a whole more 
money to close down that base and that area. It may save the 
military money, but it may have an overall cost to the 
taxpayer.
    Secretary Grone. Well, sir, I take your point, and you are 
certainly accurate that we do have to take into account the 
economic impact of the Secretary's recommendations on 
communities. How precisely we are going to asses that, the 
weight of it, the breadth of it, and how we are going to do 
that is not something I am in a position to discuss today.
    Suffice it to say that all of that material will become 
available to the Congress and to the Commission on the 16th of 
May for both entities to exercise their respective 
responsibilities under the statute. But it is just simply not 
something, because it is for the internal assessment process at 
this point that I cannot detail at this time.
    Mr. Ryan. Let me just encourage you, because from our 
position, although we are on this committee, we also vote and 
represent other interests as well. And to save money in the 
military budget, to get the taxpayer more money because of the 
social need that would be made there I think is very important.
    So thank you very much. You guys do a great job, and I 
really appreciate your time.
    Thank you, Mr. Chairman.
    Mr. Hefley. Mr. Taylor, you have a follow-up.
    Mr. Taylor. Yes, sir.
    Gentlemen, I--and, Phil, you are a great guy, we go way 
back on this issue. You are for it, I am against it, and 
unfortunately your side won; there will be another round of 
BRAC. The number that was tossed out repeatedly by the 
Secretary of Defense and others was somewhere in the 
neighborhood of 23, 24 percent excess capacity.
    I look out and I see the simultaneous cancellation or 
reduction or delay in the purchase of the DDX, the tall combat 
ship, the F-22, the V-22, C-130 Js, and I know I am missing a 
couple. I happen to believe that reflects--and then I have 
talked to friends within the services who tell me how their O&M 
accounts are being raided. I happen to believe that that 
reflects the hidden costs of the war in Iraq where we are just 
not being straight with the American people as to the true cost 
of this. And so in order to do that war right, and I hope we 
are doing it right, we are creating some future vulnerabilities 
over here.
    My fear is that now that we have given the Department 
authority for another round of BRAC, that it is not 24 percent 
of capacity, that it is actually much worse than that, because 
you are looking for some additional savings to cover the cost 
of the war in Iraq. What guarantees do we have, if any, that 
this round of BRAC will not end up closing one base out of 
three or two bases out of five, as far as a percent of total 
capacity?
    Secretary Grone. Mr. Taylor, the best way for me to answer 
that question at the present time is to say what that number is 
and what it is not.
    That number was an estimate of excess capacity based on 
baseloading construct which was the best way that we could 
judge capacity at that time, absent an actual BRAC analysis. 
The Congress asked on two occasions, once in 1998 and once last 
year, for reports to be delivered that assessed balance of 
excess capacity available to the Department.
    In the 1998, the number across the entirety of the 
Department came out to 23 percent. The number in the last 
report to Congress came out at 24.
    I think we have gone to great lengths to say, and I have 
said repeatedly, that that does not necessarily mean that one 
base in four will close. The entire thrust of base realignment 
and closure or the mandatory direction from the Congress, not a 
matter of discretionary policy choice by the Department, but as 
a matter of law is that the military value of our installations 
and the missions that they support is the primary consideration 
for base closure and realignment recommendations. Not savings, 
not targets for capacity reduction, but the military value to 
the national defense based on a 20-year threat assessment and 
force projection and also founded upon the selection criteria.
    I cannot give you any assurances with regard to specific 
numbers, because the Secretary has not made his recommendations 
clear. What I can say is that we have set no internal or 
external targets with regard to savings projections that have 
to be achieved with regard to this BRAC. We take very seriously 
our obligations under the statute to ensure that military value 
is the highest criteria by which we make these judgments.
    We believe there are savings to be had, specifically for 
the kinds of things that you have spoken about that accrue from 
getting rid of excess capacity that we no longer require. Our 
track record demonstrates that, and I know we have had 
disagreements on that point, but, clearly, there are savings to 
be had from offloading infrastructure that is not required for 
the mission and not required by the Department for any purpose. 
Those funds can be used for a better and higher military use.
    So all I can assure you today is that we are doing the best 
we can to develop options for the Secretary for his 
consideration and ultimately his recommendation that have 
military value as that best and highest criteria within the 
process and that we have not established any arbitrary targets 
for closure and realignment, and we certainly have not set any 
internal goals for simply closing bases for the sake of 
achieving a budgetary target. That is not what we are doing.
    Mr. Taylor. Again, to the point, the number that was thrown 
out is 24 percent excess capacity; you have confirmed that. Is 
there anything to limit it from being 30 percent? Is there 
anything to limit it from being 50 percent?
    Secretary Grone. The limitation is the best military 
judgment of the uniformed and civilian leadership of the 
Department.
    Mr. Taylor. Okay. But in simplistic terms, there is really 
nothing to stop this BRAC from closing every other base in 
America if they choose to.
    Secretary Grone. Congress provided no baseline, and it 
provided no ceiling to the scope of the analysis, specifically, 
because it asked us to look at it from the perspective of 
military value.
    Mr. Taylor. Just wanted to get that on the record.
    Thank you, Mr. Chairman.
    Mr. Hefley. Thank you, Mr. Taylor. Mr. Taylor has had two 
continuing themes when we talk about BRAC. One is Cecil Field 
we have already talked about, and we did screw up there, I 
think. We should not have lost that. That is one of the 
mistakes of the BRAC process.
    And the other is that we get value for what we give up. And 
that was part of the original formula when we talked about the 
BRAC thing. Mr. Armey brought the BRAC procedure to the floor 
and we talked about in our calculations about how much money we 
were going to save and what we were going to do with it and so 
forth, that we would actually sell these properties and they 
would bring in money, and we would use that to make better some 
of the installations we had. And that has worked to a greater 
or lesser extent over the years, most lesser extent, I think.
    What is your sense, Phil, that in terms of getting value in 
this BRAC process, because there are some places that have very 
little economic value. They are good for a base and they are 
good for not much else. And there are some places with enormous 
value. The one, Gene, that you referred to many times is that 
island in New York and so forth--what?
    Mr. Taylor. Governor's Island.
    Mr. Hefley. Governor's Island, which has enormous value or 
anywhere around San Diego or Norfolk or Jacksonville would have 
enormous value.
    So do we plan to give this stuff away mostly or do we plan 
to try to do what we can to realize value from it?
    Secretary Grone. Well, Mr. Chairman, we are taking a very 
good hard look at lessons learned from the past from prior 
rounds of BRAC and taking into account the comments that we 
received from a number of sources to include members who have 
expressed concern about the disposal process over the years, 
including members of this committee.
    Recently, I have spoken about five fairly broad principles 
through which we would entertain and manage our policy process 
for base reuse after the decisions are rendered and assuming 
they are enacted into law.
    First, we want to do whatever we can to expedite the 
movement of the mission. It is in the interest of the 
Department to have realigned missions or missions moving from a 
closed installation to their ultimate destination as 
expeditiously as we can.
    That is certainly in the interest of military efficiency 
and effectiveness, and it certainly leads to the second 
principle, which would be that we must do what we can, and we 
will do what we can, to expedite the beneficial reuse of a 
closed military installation, to put it back on the local tax 
rolls so it can provide the kind of economic benefit to the 
local community that it can.
    In many cases, those processes have taken a significantly 
long time for a number of reasons, and we are looking at those 
reasons very carefully to see what we can do to expedite it.
    Fundamentally, what we seek to do as a third principle is 
to implement a mixed toolkit approach. And by that, I mean all 
the authorities that are currently available to the military 
departments, be it public sale, public benefit conveyances, 
economic development conveyances, whatever the package of 
authorities that is necessary are all on the table, and in many 
cases we could have a cookie-cutter approach but it would not 
be very effective.
    And, quite frankly, in the early part of the first rounds 
of BRAC, we probably overestimated both our capacity and our 
ability to execute public sale in an effective way. Over the 
years, that pendulum tended to swing very much to the other 
direction, much to the consternation, I think, of a number of 
players in the process.
    What we are trying to do is rebalance that equation, 
recognize that we have some powerful authorities at our 
disposal but that we have to have all of the authorities at our 
disposal in order to this process to be effective.
    Within that mixed toolkit, certainly, we do want to rely as 
a fourth principle more on the market. So to the extent that we 
have assets that are valuable in the public marketplace, we 
should seek and will seek to sell those where we can, assuming 
that they are not the subject of a public benefit conveyance or 
other process. But we do want to try to maximize value in 
return for these parcels where it is appropriate, and it will 
be appropriate in a number of venues.
    Our ability to do that, both to execute the mixed toolkit 
and to maximize value, relying on the market, is entirely 
dependent on the fifth principle, which means we cannot execute 
any of this without a very strong partnership with state and 
local government, those who have zoning authority, state 
environmental regulators, state and local development 
authorities in the private sector to do what is necessary to 
develop a local redevelopment plan or base reuse plan that can 
be effectively and expeditiously implemented.
    So it is would not be a process of we will have a parcel 
property and we will stand off to the side and try to sell it, 
as some have suggested we might do. For this process to be 
effective, we have to be involved in an aggressive way at the 
local level, with affected parties, to ensure that we get the 
best plan developed and that can provide us where we are going 
to use public sales the maximum value for property.
    The Navy has one that recently at El Toro, they have done 
it and are postured to do it at Naval Station Roosevelt Roads, 
using a mixed toolkit approach, relying on public sale where it 
is viable, relying on strong partnership with state and local 
government and the local redevelopment interest to make sure 
that we do have a package that can, in the event we do have a 
base closure, put ourselves in the best position possible to 
have economic reuse in the most expeditious way we can.
    Mr. Hefley. Thank you. Are there any other questions?
    If not, we want to thank you again for being with us. Your 
testimony was very, very helpful.
    The committee stands adjourned.
    [Whereupon, at 4:25 p.m., the subcommittee was adjourned.]


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                            A P P E N D I X

                             March 15, 2005

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             QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

                             March 15, 2005

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                   QUESTIONS SUBMITTED BY MR. FORBES

    Mr. Forbes My time is up but if at some time you could also get 
back to me, I know that China and Russia are increasing their military 
influence or trying to in central Asia, and whether or not that is 
going to pose a threat to our long-term efforts to establish long-term 
bases and facilities in that region.
    Secretary Grone. [The information was not available at the time of 
printing.]
                                 ______
                                 
                   QUESTIONS SUBMITTED BY MR. TAYLOR
    Mr. Taylor. Secretary Penn, while I have you, I just on Saturday 
visited--and I realize you have only been on the job a couple of days, 
but on Saturday I visited some brand new family housing built to take 
care of the sailors at Homeport Pascagoula. And when I say brand new, 
they have not even been occupied yet.
    With this round of BRAC, should Pascagoula be marked for closure or 
mothballing or whatever, what becomes of that housing? And the reason I 
ask is the housing is located almost equal distance between Homeport 
Pascagoula and Keesler Field in Biloxi, Mississippi.
    What I am curious is, is there a mechanism where another branch of 
the service could ask of that, because the absolute last thing I want 
to see is this housing built at taxpayers' expense either allowed to 
fall into disrepair for lack of use or, worse yet, be sold for pennies 
on the dollar in some brother-in-law deal that just makes all of us 
look bad.
    If I am not mistaken, this is not that. I think this was actually 
paid for with taxpayer funds. There was some talk at some point of 
transferring it over to a public-private venture, but the word I got on 
Saturday that it was actually taxpayer money that built that.
    Secretary Penn. [The information was not available at the time of 
printing.]
    Mr. Taylor. Secretary Penn, one thing I did notice at Roosevelt 
Roads--I am a scrounger by nature, I literally built a boat out of 
other people's junk, of course, it looks like it--but one of the things 
that I noticed is that at Roosevelt Roads--I come from hurricane 
country. Loss of power is something we anticipate every August and 
September, and therefore almost every community one of the things they 
really place a premium on are generators for the courthouse, for the 
jail, for the police and fire departments.
    One of the things I did notice at Roosevelt Roads, on the good 
side, is that the Navy had done a very good job of pulling almost every 
stick of furniture out of there, because I did not want to see anything 
wasted.
    On the not so good side, and I do want to compliment the young 
lieutenant commander who rode me around that Saturday, who gave up his 
Saturday and did a great job, one of the things I did notice is there 
were probably 100 generators of various capacities, some of them in the 
hundreds of kilowatts, that the Navy had planned on leaving behind.
    I would ask that you take another look at that. I think that given 
that local communities can use them, given that the guard and reserve, 
particularly engineering battalions have left behind in Iraq almost all 
of their generators, I would hope that the Navy, again, using our great 
CBs, using the reserve capacity that you have, using possibly the 
Puerto Rican National Guard engineering units, I hate to see that 
transferred to the next person who buys those buildings. They are going 
to get a bargain anyway. They do not need a bargain plus that.
    Secretary Penn. [The information was not availabe at the time of 
printing.]

                                  
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