    [Senate Hearing 109-22]
    [From the U.S. Government Publishing Office]

                                                      S. Hrg. 109-22, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2006

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1042

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2006 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
    PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR FOR THE ARMED FORCES, AND FOR
                                 OTHER PURPOSES

                                   __________

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   __________

                             APRIL 6, 13, 20, 2005

             Printed for the use of the Committee on Armed Services

                                   ----------
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    21-104 PDF                       WASHINGTON : 2005

    For sale by the Superintendent of Documents, U.S. Government Printing
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    Washington, DC 20402-0001

                          COMMITTEE ON ARMED SERVICES

                        JOHN WARNER, Virginia, Chairman

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

                        Judith A. Ansley, Staff Director

                 Richard D. DeBobes, Democratic Staff Director

                                     ______

                Subcommittee on Readiness and Management Support

                         JOHN ENSIGN, Nevada, Chairman

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

                                      (ii)

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
                         Military Installation Programs
                                 april 6, 2005

                                                                       Page
    Grone, Philip W., Deputy Under Secretary of Defense,
      Installations and Environment..................................     4
    Prosch, Geoffrey G., Principal Deputy Assistant Secretary of the
      Army for Installations and Environment.........................    15
    Penn, Hon B.J., Assistant Secretary of the Navy for Installations
      and Environment................................................    24
    Gibbs, Hon. Nelson F., Assistant Secretary of the Air Force
      (Installations, Environment, and Logistics)....................    39

         High Risk Areas in the Management of the Department of Defense
                                 april 13, 2005

    Walker, Hon. David M., Comptroller General of the United States..    88
    Wynne, Hon. Michael W., Under Secretary of Defense for
      Acquisition, Technology, and Logistics.........................   108
    Henke, Robert J., Principal Deputy Under Secretary of Defense
      (Comptroller)..................................................   119

    The Readiness of Military Units Deployed in Support of Operation Iraqi
                     Freedom and Operation Enduring Freedom
                                 april 20, 2005

    Metz, LTG Thomas F., USA, Commanding General, III Corps and Fort
      Hood...........................................................   147
    Sattler, Lt. Gen. John F., USMC, Commanding General, I Marine
      Expeditionary Force............................................   155
    Buchanan, Lt. Gen. Walter E., III, USAF, Commander, 9th Air Force
      and U.S. Central Command Air Forces............................   160
    Austin, MG Lloyd J., III, USA, Commanding General, 10th Mountain
      Division (Light Infantry) and Fort Drum........................   163
    McCullough, RADM Barry, USN, Commander, Carrier Strike Group Six.   168

                                     (iii)

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2006

                                  ----------

                            WEDNESDAY, APRIL 6, 2005

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

                         MILITARY INSTALLATION PROGRAMS

        The subcommittee met, pursuant to notice, at 9:32 a.m., in
    room SR-232A, Russell Senate Office Building, Senator John
    Ensign (chairman of the subcommittee) presiding.
        Committee members present: Senators Ensign, Cornyn, Thune,
    Akaka, and Clinton.
        Committee staff member present: Leah C. Brewer, nominations
    and hearings clerk.
        Majority staff members present: William C. Greenwalt,
    professional staff member; Gregory T. Kiley, professional staff
    member; David M. Morriss, counsel; and Lucian L. Niemeyer,
    professional staff member.
        Minority staff members present: Peter K. Levine, minority
    counsel; and Michael J. McCord, professional staff member.
        Staff assistants present: Andrew W. Florell, Bridget E.
    Ward, and Pendred K. Wilson.
        Committee members' assistants present: Arch Galloway II,
    assistant to Senator Sessions; Alexis Bayer, assistant to
    Senator Ensign; Russell J. Thomasson, assistant to Senator
    Cornyn; Bob Taylor, assistant to Senator Thune; Darcie Tokioka,
    assistant to Senator Akaka; William K. Sutey, assistant to
    Senator Bill Nelson, Eric Pierce assistant to Senator Ben
    Nelson; and Andrew Shapiro, assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

        Senator Ensign. Good morning. The Readiness and Management
    Support Subcommittee meets today to receive testimony on
    installations and environmental programs in the fiscal year
    2006 President's budget request. We have also asked our
    witnesses to be prepared to answer questions about the Base
    Realignment and Closure (BRAC) Commission.
        Along with Senator Akaka, who I am honored once again to
    have as our ranking member on this subcommittee for the 109th
    Congress, we welcome all of our witnesses: Philip Grone, Deputy
    Under Secretary of Defense for Installations and Environment;
    Geoffrey Prosch, Principal Deputy Assistant Secretary of the
    Army for Installations and Environment; the Honorable B.J.
    Penn, Assistant Secretary of the Navy for Installations and
    Environment; and the Honorable Nelson Gibbs, Assistant
    Secretary of the Air Force for Installations, Environment, and
    Logistics.
        This year promises to be a challenge for this committee,
    Congress, the Department of Defense, and the hundreds of
    communities that support our military personnel and their
    families across the country. Over the next 6 months, the 2005
    Defense Base Realignment and Closure round will be a difficult
    challenge for some and a relief for the rest. Ultimately it
    will free up the vital military resources while improving the
    efficiency of operations and the effectiveness of training and
    readiness programs.
        While our witnesses are not able to discuss potential BRAC
    recommendations, we are able to discuss the policies related to
    the implementation of the decisions. These policies will have a
    profound impact on the ability of communities to respond
    quickly to BRAC decisions with economic investment and reuse
    initiatives. We must ensure that the Department's goal to
    receive maximum monetary return on the disposal of property is
    tempered by an equally important priority to cooperate with and
    assist affected communities with grants and expertise related
    to the environmental cleanup and economic redevelopment.
        The Department of Defense has set the stage for BRAC by
    looking overseas first to consolidate installations and to
    bring over 70,000 military personnel and their families back to
    the United States over the next 2 years. The President's
    integrated global posture strategy in September 2004
    established a plan to update the basing of our military forces
    around the world to convert from Cold War garrisons to a more
    flexible array of expeditionary locations, in cooperation with
    new allies, to meet the national security challenges of the
    21st century.
        The next important step is the implementation of formal
    agreements with new host countries to establish the status of
    forces, basing arrangements and terms for burdensharing. These
    agreements are crucial to ensure that all future investments
    proposed by the Department of Defense are backed by a firm
    commitment that taxpayer funds will be put to good use over the
    long term.
        This subcommittee remains keenly interested in the ability
    of the Armed Forces to maintain their readiness for executing
    combat and difficult non-combat missions through rigorous and
    realistic training. I believe this national security imperative
    can be successfully balanced against the Department's
    responsibility to be a good steward of the environment.
    Congress and the American public strongly believe these goals
    should be mutually supportive.
        I invite each of the witnesses to discuss the challenges
    they face in complying with the environmental laws and
    regulations and the impact of encroachment on their ability to
    carry out realistic combat training. Congress has recently
    provided clarification and added flexibility to some
    environmental laws. I invite the witnesses to discuss their
    views of the impact of these changes, whether they have been
    helpful and any concerns they may have. The witnesses should
    discuss any new problems or changes in the laws they believe
    Congress should consider.
        Turning to facility investment programs, the fiscal year
    2006 budget request of $12.1 billion for military construction
    and housing programs reflects the deliberate decision to
    maintain a consistent level of recapitalization funding in a
    dynamic and uncertain basing environment. Within this amount is
    a lump sum request for $1.88 billion to cover the first year's
    costs of implementing BRAC results and decisions related to the
    relocation of overseas units. I look forward to hearing the
    Department's plan to notify Congress of the intended use of
    these funds.
        Finally, this committee continues to be concerned about the
    migration of funds budgeted for facility sustainment. These
    funds are being diverted to cover other shortfalls in accounts
    for base operations support. Only a fraction of the high
    sustainment funding level proclaimed in budget presentations to
    Congress is being realized at the installation level, resulting
    in the deferment of critical repairs and the maintenance to
    facilities and infrastructure. This slow deterioration of our
    physical plant will continue to have a detrimental effect on
    the operations, readiness, and training of our combat forces.
    We need to reverse this negative trend, and I look forward to
    hearing the views of our witnesses on this and other
    installation programs.
        Before I turn it over to Senator Akaka, who I welcome this
    morning, I just want to say quickly our time this morning is
    going to be shorter than what we had originally budgeted simply
    because we have a vote at 10 o'clock. So my plan is to go
    somewhere around 10:00 to 10:15 and then after that, the Senate
    is supposed to be meeting in the chamber to go over to the
    House to hear from the new President of the Ukraine, Mr.
    Yushchenko. So we are going to try to keep everybody as
    succinct as possible this morning so we can have much time as
    we can for questions.
        Senator Akaka.

                  STATEMENT OF SENATOR DANIEL K. AKAKA

        Senator Akaka. Thank you so much, Mr. Chairman. Again, I
    want to say I am so happy to be working with you in this
    session.
        I join all of you in welcoming our witnesses this morning
    to discuss the Department's construction of family housing,
    base closure, and environmental restoration compliance
    programs. I would like to welcome back Secretary Gibbs, who is
    the only one of today's witnesses who has testified before this
    committee, and I wish to welcome the rest of our witnesses to
    their first official appearance before our committee.
        In Secretary Penn's case, we welcome you back to your first
    appearance in your new position since your recent nomination
    hearing. Despite not having testified before, some of our
    witnesses, in particular Mr. Grone, are well known to the
    members of the subcommittee.
        Because our time is so limited, due to the upcoming joint
    session with the President of the Ukraine, I will be brief in
    my opening remarks.
        We are here today to discuss both the budget request for
    military construction, family housing, and Department of
    Defense (DOD) environmental programs, but also, or perhaps I
    should say especially, the 2005 base closure round. There are a
    number of questions regarding the implementation of the BRAC
    round that I hope we can address during today's hearing, to the
    extent time allows. Between the BRAC round here in the United
    States and the potential changes in our overseas basing due to
    recommendations from the Global Posture Review, which are not
    subject to the BRAC process, we will have many important
    matters before Congress and the Department that fall within the
    jurisdiction of this subcommittee. I look forward to the
    discussion today.
        Thank you very much, Mr. Chairman.
        Senator Ensign. Thank you, Senator Akaka.
        Mr. Grone.

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

        Mr. Grone. Senator Ensign, in the interest of time, we will
    try to expedite opening statements in order to accommodate your
    request.
        Senator Ensign. The full statements will be included in the
    record.
        Mr. Grone. Thank you, Mr. Chairman.
        Chairman Ensign, Senator Akaka, and distinguished members
    of the Subcommittee on Readiness and Management Support, I am
    pleased to appear before you this morning with my colleagues to
    discuss the President's budget for the coming fiscal year for
    the Department of Defense.
        The President's budget request for the Department of
    Defense for this coming fiscal year continues the efforts of
    the administration to place our military infrastructure on a
    sound management foundation. The business area comprising the
    Department's support for the support of our installation assets
    and the stewardship of natural resources in this year's budget
    for the coming year totals over $46 billion.
        Our management responsibilities extend to an infrastructure
    with 510,000 buildings and structures and a plant replacement
    value of $650 billion, as well as stewardship responsibility
    for roughly 29 million acres of land, roughly the size of the
    States of Connecticut and my native Kentucky combined.
        In a number of key areas, working with Congress, we have
    made significant progress. The privatization of military
    housing, which is an important part of the President's
    management agenda, is achieving results. We are deeply
    appreciative of the action of Congress last year in addressing
    the limitation on budget authority for this program. Your
    continued bipartisan support will allow the Department to
    continue to enhance housing options for military personnel and
    their families.
        Through the end of fiscal year 2004, leveraging the power
    of the market and the expertise of industry, we awarded 43
    projects, privatizing 87,000 units of housing. To achieve a
    similar scope, the taxpayer would have had to have provided $11
    billion in construction funds. Over the life cycle, even taking
    housing allowances into account, these privatized projects will
    save the taxpayer roughly 10 to 15 percent over that life
    cycle. Ten of our projects have achieved the end of their
    initial development phase and the response that our developing
    partners are getting from tenants is very positive.
        Our efforts to sustain and recapitalize our facilities are
    also achieving results. Four years ago, the Department's
    recapitalization rate stood at 192 years. The President's
    budget for fiscal year 2006 supports a rate of 110 years, and
    we remain committed to our goal of a 67-year recap cycle in
    fiscal year 2008. Facilities sustainment is budgeted this year
    at 92 percent of the requirement, and in both cases, we built
    the program around commercial benchmarks and private sector
    best business practices.
        The defense of our Nation and our environmental protection,
    as the chairman indicated, are strongly linked. In concert with
    the President's August 2004 executive order on the facilitation
    of cooperative conservation, we have developed a program of
    compatible land use partnering that promotes the twin
    imperatives of military test and training readiness and sound
    conservation stewardship through collaboration with multiple
    stakeholders.
        The Department continues to be a leader in every aspect of
    environmental management, deepening our implementation of
    environmental management systems (EMS) and based on the
    international standard for EMS (ISO 14001).
        Our most recent defense installations strategic plan,
    entitled ``Combat Power Begins at Home,'' reflects our focus on
    improving the management of our 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 which, as a
    result of BRAC, Global Posture, and our sustainment and
    recapitalization strategy, all of that taken together, as well
    as the important efforts we are making in the environment,
    provide us solid platform for the future.
        While much remains to be done, we have already accomplished
    a great deal, and with the continued support of this
    subcommittee, we will continue to do so.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Grone follows:]
                     Prepared Statement by Philip W. Grone
        Mister Chairman and distinguished members of this subcommittee, I
    appreciate the opportunity to appear before you today to address the
    President's Budget request for fiscal year 2006 and the plan of the
    Department of Defense to improve its infrastructure and facilities.
        The Department of Defense recognizes the long-term challenges
    associated with its infrastructure strategy. The Department has
    developed a strategy and several tools to address these challenges. The
    President's Management Agenda recently added the stewardship of Federal
    real property as a new initiative. The Department is a full participant
    in the Federal Real Property Council established by Executive Order
    13327.
        Working in full cooperation with the military services and other
    Defense components, the Department set out in 1997 to build a
    corporate-wide inventory of assets. The idea was and remains that the
    Department's funding requirements for installations is a function of
    the assets currently on hand and planned for the future. Hence, an
    accurate inventory and a forecast of those assets are fundamental to
    determining and assessing budget requirements. The Department is
    continuing to improve its inventory process and is working extensively
    in the interagency process to support a more useful Federal inventory
    that can be used for management purposes.
        In 1998, the Department set out on a 6-year program to eliminate 80
    million square feet of obsolete and excess facilities. Six years later,
    we concluded that effort by exceeding our target--removing a total of
    86 million square feet. As part of a continuing effort to dispose of
    unneeded facilities, the Department recently completed a new survey of
    demolition requirements.
        In 2001, the Department issued its first ever Defense Facilities
    Strategic Plan. In September 2004, we issued a comprehensive,
    capabilities-based, and performance-oriented Defense Installations
    Strategic Plan. Our new plan begins to integrate more fully
    environmental management systems, safety, and occupational health into
    a comprehensive approach to asset management. The 2004 plan addressed
    recommendations made by the Government Accountability Office (GAO) and
    was approved by the Office of Management and Budget (OMB) as being
    consistent with the guiding principles of the Federal Real Property
    Council in meeting the objectives of the President's Management Agenda.
    Global Posture Realignment
        While the Department addresses better business practices, we also
    are working to realign our infrastructure to deal effectively with
    military transformation and 21st century threats. The Defense posture
    of the past 50 years reflects the Cold War strategy, with U.S. forces
    forward deployed primarily to fight near where they were based. Today's
    environment requires more agile, fast, and lean forces able to project
    power into theaters that may be distant from where they are based. This
    agility requires not only a shift in military forces, capabilities and
    equipment, but also a new basing strategy.
        Last fall, the Department completed a 2-year comprehensive review
    of its global posture and basing strategy, which will result in the
    most profound restructuring of U.S. military forces overseas since the
    end of the Korean War. This review was conducted with extensive
    participation by the combatant commanders, the Joint Chiefs of Staff,
    and our interagency partners. We provided Congress with a copy of the
    report in September 2004.
        The new posture will enable the Department to respond more quickly
    to worldwide commitments and make better use of our capabilities by
    thinking of our forces globally. In terms of ``footprint'', we will
    tailor our forces to suit local conditions while strategically pre-
    positioning equipment and support. We anticipate realigning or closing
    a number of large permanent bases in favor of small and scalable
    installations better suited for deployments to trouble spots. This will
    also reduce friction with host nations. For example, removal of the
    U.S. Air Expeditionary Wing from Prince Sultan Air Base should help
    improve our relations with Saudi Arabia, and relocating U.S. forces out
    of densely-populated Seoul, Korea, to hubs further south will resolve
    problems with the Korean public while bolstering our military
    capabilities on the peninsula.
        Senior officials of this Department and the Department of State
    have already begun the process of consulting with our friends and
    allies around the world to incorporate their input into our plan. We
    recognize that our allies are sensitive to changes in our overseas
    posture, and we will continue to consult with them as we make final
    decisions and begin executing the strategy. We will continue to consult
    with Members of Congress on our plan and will seek your support as we
    implement these far-reaching and enduring changes to strengthen
    America's global defense posture.
        Since some overseas personnel will return to the United States,
    global posture changes will influence BRAC recommendations that will be
    announced in May 2005. Even though global posture changes will be
    executed over several years and will continue to be adjusted as
    strategic circumstances change, the Department will incorporate
    projected overseas posture changes into the BRAC process.
    BRAC 2005
        The domestic BRAC round and the global posture review are key
    elements that support transformation. A well supported, capabilities-
    based force structure should have infrastructure that is best sized and
    placed to support emerging mission requirements and national security
    needs. DOD must configure its infrastructure to maximize both
    warfighting capability and efficiency. Through BRAC and the global
    posture changes the Department will support the warfighter more
    effectively and efficiently. The Secretary will provide his
    recommendations for domestic closures and realignments to the
    Commission and Congress by May 16 as required by the BRAC 2005 statute.
        From a domestic perspective, the Department recognizes it has an
    obligation to assist communities impacted by BRAC 2005. The Defense
    Economic Adjustment Program will include assistance for communities to
    plan for the civilian redevelopment of available real and personal
    property; and implement local adjustment actions to assist impacted
    workers, businesses, and other affected community interests. The
    Department will work to partner with affected communities as we both
    seek opportunities for quick civilian reuse of former military
    installations. For communities engaged with installations that will
    receive new missions, we also recognize the importance of cooperatively
    planning to ensure our mission can effectively be stood up and
    supported.
                            managing infrastructure
        The Department currently manages nearly 517,000 buildings and
    structures with a plant replacement value of over $650 billion, and
    over 46,000 square miles of real estate. We have developed models and
    metrics to predict funding needs and have established goals and
    performance measurements that place the management of Defense
    infrastructure on a more objective, business-oriented basis.
    Infrastructure Investment Strategy
        Managing our facilities assets is an integral part of comprehensive
    asset management. The quality of our infrastructure directly affects
    training and readiness.
        Facilities sustainment, using primarily operations and maintenance-
    like \1\ appropriations, funds the maintenance and repair activities
    necessary to keep an inventory in good working order. It includes
    regularly scheduled maintenance and major repairs or replacement of
    facility components that are expected to occur periodically throughout
    the life cycle of facilities. Sustainment prevents deterioration and
    preserves performance over the life of a facility.
    ---------------------------------------------------------------------------
        \1\ Includes O&M as well as related military personnel, host
    nation, and working capital funds.
    ---------------------------------------------------------------------------
        To forecast funding requirements for sustainment, we developed the
    Facilities Sustainment Model (FSM). FSM uses standard benchmarks drawn
    from the private and public sectors for sustainment costs by facility
    type and has been used to develop the Service budgets since fiscal year
    2002 and for several defense agencies beginning in fiscal year 2004.
        Full funding of sustainment is the foundation of our long-term
    facilities strategy, and we have made significant progress in achieving
    this goal. The Department increased funding for facilities sustainment
    consistently from fiscal years 2002 through 2005, sustaining facilities
    at an average of 93 percent of benchmarks. In the fiscal year 2006
    budget request, the Department shows a slight decrease in the
    department-wide rate to 92 percent. The budget request, however, is an
    improvement upon the plan for the fiscal year 2006 contained in the
    fiscal year 2005 Fiscal Year Defense Program (FYDP), which funded
    facility sustainment at 90 percent. Our priorities have not changed and
    with the support of Congress our goal remains to reach full sustainment
    by fiscal year 2008.
        Restoration and modernization, collectively termed
    recapitalization, provide resources for improving facilities and are
    funded with either operations and maintenance or military construction
    appropriations. Restoration includes repair and replacement work to
    restore facilities damaged by inadequate sustainment, excessive age,
    natural disaster, fire, accident, or other causes. Modernization
    includes alteration of facilities solely to implement new or higher
    standards, to accommodate new functions, or to replace building
    components that typically last more than 50 years.
        Recapitalization is the second step in our strategy. Similar
    private sector industries replace their facilities every 50 years, on
    average. With the types of facilities in the Defense Department,
    engineering experts estimate that our facilities should have a
    replacement cycle of about 67 years on average. In fiscal year 2001,
    the Department's recapitalization rate stood at 192 years. This budget
    request supports a recapitalization rate of 110 years, and we remain
    committed to achieving our 67 year recapitalization goal in fiscal year
    2008.

                    SUSTAINMENT AND RECAPITALIZATION REQUEST
                   [President's budget in millions of dollars]
    ------------------------------------------------------------------------
                                         Fiscal Year 2005   Fiscal Year 2006
                                             Request            Request
    ------------------------------------------------------------------------
    Sustainment (O&M-like \2\)........              6,515              6,529
    Restoration and Modernization (O&M-             1,321              1,008
     like)............................
    Restoration and Modernization                   3,161              3,474
     (MilCon).........................
                                       -------------------------------------
      TOTAL SRM.......................             10,997             11,011
    ------------------------------------------------------------------------
    Includes O&M as well as related military personnel and host nation.

        As a key component of our facility program, the Military
    Construction appropriation is a significant contributor to the
    Department's comprehensive approach to asset management practices. The
    Fiscal Year 2006 Department of Defense Military Construction and Family
    Housing appropriation request totals $12.05 billion. This budget
    request will enable the Department to transform in response to
    warfighter requirements, to enhance mission readiness, and to take care
    of our people. We do this, in part, by restoring and modernizing our
    enduring facilities, acquiring new facilities where needed, and
    eliminating those that are excess or obsolete.

         COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
          [President's budget in millions of dollars--budget authority]
    ------------------------------------------------------------------------
                                         Fiscal Year 2005   Fiscal Year 2006
                                          Appropriation         Request
    ------------------------------------------------------------------------
    Military Construction.............              4,745              5,284
    NATO Security Investment Program..                166                207
    Base Realignment and Closure......                246              2,258
    Family Housing Construction/                    1,622              2,020
     Improvements.....................
    Family Housing Operations and                   2,547              2,220
     Maintenance......................
    Chemical Demilitarization.........               81.9                  0
    Homeowners Assistance.............                  0                  0
    Family Housing Improvement Fund...                2.5                2.5
    Energy Conservation Investment                     50                 60
     Program..........................
                                       -------------------------------------
      TOTAL...........................              9,460             12,052
    ------------------------------------------------------------------------

    Improving Quality of Life
        At the outset of this administration, the President and Secretary
    Rumsfeld identified elimination of inadequate family housing as a
    central priority for the Department and set an aggressive target of
    2007 to meet that goal. Greatly expanded use of the privatization
    authorities granted under the fiscal year 1996 Military Housing
    Privatization Initiative has enabled achievement of that target at U.S.
    based installations where those authorities apply. Sustaining the
    quality of life for our military families is crucial to recruitment,
    retention, readiness, and morale. The fiscal year 2006 budget funds
    elimination of all inadequate domestic family housing by 2007, and
    eliminates remaining inadequate houses overseas by 2009.
        DOD policy relies on the ``community first'' (private sector) to
    provide quality housing. Only when the private market demonstrates that
    it cannot supply sufficient levels of quality housing does the
    Department provide housing to our military families using privatization
    as its primary option followed by government-owned and leased housing.
    For example, we address our housing needs overseas through military
    construction and leasing in the absence of privatization authority.
        To ensure the Department is making the best investment decisions in
    determining the appropriate level of housing, the government provides a
    single and consistent methodology for calculating the requirement which
    was introduced in January 2003 and is being extensively utilized by the
    Services. Currently, 73 percent of military families reside in
    privately owned housing, including 11 percent in privatized military
    housing and 27 percent in government-owned housing areas.
        The Department has skillfully used privatization to more quickly
    eliminate inadequate housing and to provide additional housing where
    shortfalls existed. As of February 2005, the Department has awarded 43
    projects. This includes over 87,000 military family housing units,
    which is a 58 percent increase since January 2004. DOD policy requires
    that privatization yield at least three times the amount of housing as
    traditional military construction for the same amount of appropriated
    dollars. The 43 awarded projects have permitted the Department, in
    partnership with the private sector, to provide housing for about $767
    million in military construction investment. The same level of
    construction activity would otherwise have required over $11 billion if
    the traditional military construction approach was utilized. This
    reflects an average ratio of over 14 to 1, well exceeding program
    expectations.
        The Department's privatization plans in the fiscal year 2006 budget
    will privatize 84 percent of its domestic family housing inventory, or
    roughly 185,000 units privatized by the end of fiscal year 2007. By the
    end of fiscal year 2006, we will have privatized 172,400 housing units.
        For fiscal year 2006, the Department requests $4.243 billion in new
    budget authority for family housing construction, operations and
    maintenance:

             $1.9 billion to construct 3,447 new/replacement units
            and improve 3,584 existing units.
             $2.2 billion to operate and maintain approximately
            123,452 government-owned family housing units, and lease
            another 26,281 units worldwide.

        Funding to support the privatization of family housing is
    programmed and budgeted in the family housing construction
    appropriations and is transferred to the DOD Family Housing Improvement
    Fund (FHIF) when the privatization projects are executed. The fiscal
    year 2006 construction account requests a total of $281 million in
    funding for privatization. Of this amount, approximately $182 million
    is anticipated to be transferred to the Family Housing Improvement Fund
    during fiscal year 2006 along with $428 million in previously
    appropriated construction funds. This $610 million will be used to
    finance the privatization of approximately 34,964 units.
    Utilities Privatization and Energy Management
        The Department seeks to reduce its energy consumption and
    associated costs, while improving utility system reliability and
    safety. The Department has developed a comprehensive energy strategy
    and issued new policy guidance that will continue to optimize utility
    management by conserving energy and water usage, improve energy
    flexibility by taking advantage of restructured energy commodity
    markets when opportunities present themselves, and modernize our
    infrastructure by privatizing our deteriorated and outdated utilities
    infrastructure where economically feasible. The comprehensive energy
    strategy supports the use of meters to manage energy usage at locations
    where the monitoring justifies the cost of installing, maintaining and
    reading the meter. Metering in itself does not save energy, however,
    use of meters can be beneficial to determine accurate billing, perform
    diagnostic maintenance, and enhance energy management by establishing
    baselines, developing demand profiles, ensuring accurate measurement
    for reporting, and providing feedback to users.

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        DOD, as the largest single energy consumer in the Nation, consumes
    over $2.8 billion of energy per year. Conserving energy and investing
    in energy reduction measures makes good business sense and frees up
    resources for sustaining our facilities and for higher DOD priority
    readiness and modernization. Recent dramatic fluctuations in the costs
    of energy significantly impact already constrained operating budgets,
    providing even greater incentives to conserve and seek ways to lower
    energy costs. These include investments in cost-effective renewable
    energy sources or energy efficient construction designs, and
    aggregating bargaining power among regions and Services to get better
    energy deals.
        Conserving energy in today's high-priced market will save the
    Department money that can be better invested in readiness, facilities
    sustainment, and quality of life. Our efforts to conserve energy are
    paying off; in fiscal year 2004, military installations reduced
    consumption by 1.1 percent despite an 8.8 percent increase in the cost
    of energy commodities from fiscal year 2003. With a 26.8 percent
    reduction in standard building energy consumption in fiscal year 2004
    from a 1985 baseline, the Department has deviated slightly from the
    track required to achieve the 2005 and 2010 facility energy reduction
    goals stipulated by E.O. 13123. This is mostly attributable to the
    lapse of Energy Savings Performance Contract (ESPC) authority which
    typically accounts for more than half of all facility energy savings.
    However, with ESPC authority reauthorized in the fiscal year 2005
    National Defense Authorization Act, DOD has launched an aggressive
    awareness campaign and plan to get back on track to meet fiscal year
    2010 reduction goals.
        DOD has significantly increased its focus on purchasing renewable
    energy and developing resources on military installations. The
    Department has increased the use of Energy Conservation Investment
    Program (ECIP) funds for renewable energy projects from $5 million and
    $11 million in fiscal year 2003 and fiscal year 2004, respectively, to
    $13 million and $18 million in fiscal year 2005 and fiscal year 2006,
    respectively.
        The Department has a balanced program for energy conservation--
    installing energy savings measures using appropriated funding and
    private-sector investment--combined with using the principles of
    sustainable design to reduce the resources used in our new
    construction. Energy conservation projects make business sense,
    historically obtaining about $4 in life-cycle savings for every dollar
    invested. The fiscal year 2006 budget contains $60 million for the ECIP
    program to implement energy saving measures in our existing facilities.
        To improve utility systems, the Department has reaffirmed its
    preference to modernize military utility systems through privatization.
    The DOD Utilities Privatization Program has made solid progress over
    the past 2 years. The Services have greatly simplified and standardized
    the solicitation process for obtaining industry proposals. Request for
    Proposal (RfP) templates were clarified to improve industry's ability
    to obtain private sector financing and manage risks. Of 2,601 utility
    systems serving the DOD, 463 systems have been privatized and 733 were
    already owned by other entities. Over 950 systems are currently under
    solicitation as each Service and the Defense Logistic Agency continue
    aggressive efforts to reach privatization decisions on all systems.

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Installations Support
        The Installations Support function consists of two major programs:
    Installation Services (formerly referred to as ``base operations
    support'') and Facilities Operations (formerly referred to as ``real
    property services''). The current budget request of $22.5 billion
    includes $16.8 billion for Installations Services and $5.7 billion for
    Facilities Operations in fiscal year 2006. The Defense Installations
    Strategic Plan articulates the need to define common standards and
    performance metrics for managing Installations Support. The Department
    has initiated an effort to define and model each subfunction of
    Facilities Operations (utilities, leases, custodial services, snow
    plowing and the like) by fully utilizing commercial benchmarks. For the
    more diverse tasks within Installation Services, the Department has
    established a cross-Departmental working group to examine definitions
    and budget structures.
    Range Sustainment
        In concert with the President's August 2004 Executive Order
    ``Facilitation of Cooperative Conservation'' the Department has
    developed a program of Compatible Land Use Partnering that promotes the
    twin imperatives of military test and training readiness and sound
    conservation stewardship through collaboration with multiple
    stakeholders. The executive order defines ``cooperative conservation''
    as actions that relate to use, enhancement, and enjoyment of natural
    resources, protection of the environment, or both, and that involve
    collaborative activity among Federal, State, local, and Tribal
    governments, private for-profit and nonprofit institutions and other
    nongovernmental entities and individuals. The Department's Range
    Sustainment Program is fully consistent with the President's goals in
    this area. Section 2811 of the 2003 National Defense Authorization Act
    authorizes the Services to take a proactive role in developing programs
    to protect our installations and ranges from urban sprawl by working
    with States and non-governmental organizations to promote compatible
    land use through cooperative conservation efforts. This authority has
    enabled DOD to initiate the Readiness and Environmental Protection
    Initiative (REPI)--a multi-year program to sustain test and training
    space for our troops while simultaneously assisting in the protection
    of valuable habitat and open space. This program provides a lasting
    solution and a long-term framework for developing new policies,
    partnerships, and tools to assist communities and other interested
    stakeholders in executing compatible land use partnerships around our
    test and training ranges and installations, as well as work with our
    other Federal landowners on cooperative conservation projects. In the
    coming years, military readiness will still require substantial
    resources, air, land, and water areas where military forces can test
    and train as they would fight. It is imperative that we be able to
    posture our test and training infrastructure for transformational and
    sustainable operations.
        The Department appreciates greatly the $12.5 million in fiscal year
    2005 funding provided by Congress to fund the REPI program, and the
    military Services are already executing critical projects in many
    states. A recent agreement to address encroachment at Fort Carson,
    Colorado, and to enhance regional environmental conservation is one
    example of this win-win approach. Other projects are under
    consideration in Hawaii, at MCB Camp LeJuene, North Carolina, and in
    California and Florida. In fiscal year 2004, the Services implemented
    successful partnerships with State and nongovernmental organizations
    (NGOs) at locations such as NAS Pensacola (Navy and Escambia County),
    Camp Blanding (National Guard Bureau and State of Florida). These
    multi-faceted conservation partnerships will ensure the long-term
    sustainability of test and training centers supporting the military
    mission. Thus, the administration has requested $20 million for the
    REPI program for fiscal year 2006 and we are in the process of refining
    the Service priorities for those funds. I have requested that the
    Services prepare and submit requirements associated with fiscal year
    2007 and out-years to support a long-term funding strategy for the REPI
    program. These compatible land use partnering efforts will become even
    more critical to our ability to protect and preserve our test and
    training missions as we enter our post-BRAC transformational
    environment. We look forward to participation in the White House
    Cooperative Conservation Conference later this year to find ever more
    innovative ways to work with others to help secure critical test and
    training ranges. I look forward to working with Congress to ensure our
    ability to fulfill the important programming requirements for these new
    efforts.
    Safety and Occupational Health
        The Department is aggressively supporting the Secretary of
    Defense's (SECDEF) priority to reduce mishaps in DOD by implementing
    SOH management systems and by making it a priority in our Defense
    Installations Strategic Plan. Our programs focus on continuous
    incremental improvement in Safety and Health, but we're also involved
    in implementing significant changes in safety through our partnership
    with the Under Secretary of Defense for Personnel and Readiness, who
    chartered the Defense Safety Oversight Committee (DSOC). Together, we
    are leading DOD's efforts to cut mishaps in half by the end of fiscal
    year 2005. The DSOC, composed of senior leaders throughout the
    Department, is finding ways to decrease the detrimental effect on our
    readiness caused by mishaps. We are focusing on acquisition; base
    operating support; training; and deployment operations. For acquisition
    and training, the Army and Marine Corps is responding to deaths from
    high-mobility multipurpose wheeled vehicle (HMMWV) rollovers by
    acquiring improved seat belt systems for tactical vehicles and by
    training deployed soldiers and marines to improve their driving skills.
    For deployment health protection, we began a program for the factory
    treatment of Army and Marine Corps combat uniforms with permethrin.
    This will provide protection against mosquitoes, and the diseases that
    they transmit, for the life of the uniform. Factory treatment ensures
    that all uniforms are treated and deployment-ready and that soldiers
    are not exposed to concentrated pesticides.
                            environmental management
        The Department continues to be a leader in every aspect of
    environmental management. We are proud of our environmental program at
    our military installations and are committed to pursuing a
    comprehensive environmental program.
    Environmental Management Systems
        To make our operations more efficient and sustainable across the
    Department, we are continuing our aggressive efforts to implement
    environmental management systems (EMS) based on the ``plan-do-check-
    act'' framework of the international standard for EMS (ISO 14001). We
    are embedding environmental management as a systematic process, fully
    integrated with mission planning and sustainment. This transformation
    is essential for the continued success of our operations at home and
    abroad. Implementing EMS will help preserve range and operational
    capabilities by:

             creating a long-term, comprehensive program to sustain
            training and testing capability while maintaining healthy
            ecosystems;
             conducting environmental range assessments to ensure
            that we protect human health and the environment; and
             funding and implementing the Integrated Natural
            Resource Management Plans (INRMP) for our ranges.

        In addition, EMS will help maintain and preserve our historic
    properties, archaeological resources, Native American, and other
    cultural assets for the benefit of future generations. Today, DOD has a
    large inventory of historic properties: 75 National Historic Landmarks,
    and nearly 600 places on the National Register of historic places,
    encompassing more than 19,000 individual properties, including
    buildings, structures, objects, and sites located at over 200
    installations. Over the next two decades, tens of thousands more
    buildings will reach an age requiring evaluation of their historical
    significance.

                  ENVIRONMENTAL PROGRAM--SUMMARY OF REQUEST \3\
          [President's budget in millions of dollars--budget authority]
    ------------------------------------------------------------------------
                                         Fiscal Year 2005   Fiscal Year 2006
                                         As Appropriated        Request
    ------------------------------------------------------------------------
    Environmental Restoration.........              1,352              1,370
    BRAC Environmental \4\............                328                449
    Compliance........................              1,666              1,561
    Pollution Prevention..............                142                143
    Conservation......................                175                205
    Technology........................                274                206
    International \5\.................                  3                  3
                                       -------------------------------------
      TOTAL...........................              3,937              3,934
    ------------------------------------------------------------------------
    \3\ Includes operations and maintenance, procurement, RDT&E, and
      military construction funding.
    \4\ Funding levels reflect total requirement.
    \5\ International is included in Pollution Prevention and Compliance.

        In fiscal year 2006, the budget request includes $3.9 billion for
    environmental programs. This includes $1.4 billion for cleanup, $0.4
    billion for BRAC environmental, $1.6 billion for compliance; about $0.1
    billion for pollution prevention, and about $0.2 billion each for
    conservation and environmental technology.
    Managing Cleanup
        The Department is committed to the cleanup of property contaminated
    by hazardous substances, pollutants, and military munitions. We have
    achieved remedy in place or restoration complete at 15,950 out of
    19,710 sites on active installations. At the end of fiscal year 2004,
    4,046 out of the 4,832 BRAC sites requiring hazardous waste remediation
    have a cleanup remedy constructed and in place, or have had all
    necessary cleanup actions completed in accordance with Comprehensive
    Environmental Response, Compensation, and Liability Act (CERCLA)
    standards. Hazardous waste cleanup at Formerly Used Defense Sites
    (FUDS) achieved remedy in place or response complete at 1,539 out of
    the 2,647 sites.
    Managing Compliance and Preventing Pollution
        The Department is committed to going beyond mere compliance. But
    compliance with existing laws and regulations is the base line for our
    program and we continue to plan and fund for this requirement. Our
    ability to meet these compliance driven goals continues to improve. In
    a letter to the editor of USA Today, acting Environmental Protection
    Agency (EPA) Assistant Administrator Skinner publicly complemented the
    Department by stating, ``The DOD has been a leader in pollution
    prevention and implementing environmental-management systems that serve
    as models for other facilities.'' Pollution prevention techniques
    continue to save the Department needed funds as well as reduce
    pollution. The Department continues to demonstrate pesticide use risk
    reduction on installations and was recognized by the EPA as Pesticide
    Environmental Steward Program Champion, for the third year in a row.
    Emerging Contaminants
        In January 2005 the National Academy of Sciences (NAS) released a
    review of the science used to determine the public health risks from
    perchlorate, a chemical with important national defense applications
    due to its use in missile and rocket propellants, munitions,
    pyrotechnics, and flares which was funded jointly by DOD, DOE, EPA, and
    NASA. Even before the start of the NAS study, Federal agencies were
    working hard to understand and address potential risks of perchlorate.
    The NAS report yielded an independent assessment of the available
    science. Now Federal agencies will be able to take actions based on
    sound science to address the issue of perchlorate in our Nation's
    drinking water supply.
        We continue to develop more comprehensive strategies to enable us
    to protect public health while sustaining our assets and better
    managing our liabilities. In 2004, in advance of any legally
    promulgated standard for perchlorate, the Department issued a policy to
    sample for perchlorate that has enabled the Department to better
    characterize the nature and extent of perchlorate plumes associated
    with its facilities. Over the last year, a joint effort between the
    Department and the State of California yielded a sampling
    prioritization protocol to ensure that active and former DOD sites with
    the greatest potential to cause a perchlorate-based health threat were
    investigated first. All current and formerly used DOD sites have now
    been jointly assigned a priority for sampling according to that
    protocol.
        The Department is moving ahead with efforts directed toward
    removing perchlorate from the environment. In advance of any
    requirement, DOD proactively initiated remediation demonstration
    projects at several sites in California, Texas, and Massachusetts. We
    have taken corrective measures to ensure proper disposal and added
    additional wastewater treatment to manufacturing facilities using
    perchlorate. We continue to fund remediation technology research and,
    this year, we launched a $9.5 million wellhead treatment demonstration
    effort with several Southern California communities. The Army's effort
    to find substitutes for some of its training uses of perchlorate is
    also yielding positive results.
        We are using these comprehensive approaches as a model to more
    proactively and cooperatively address other emerging contaminants such
    as trichloroethylene (TCE) and Royal Demolition Explosive (RDX). The
    Department continues to engage with other agencies in a sustained
    collaborative effort to address emerging contaminants by creating
    mutually satisfactory sustainable solutions. Last fall, DOD began
    working with the Environmental Council of States to define
    opportunities for States, DOD, DOE, and EPA to address emerging
    contaminants more effectively in the future.
                            business transformation
    Business Management Process Transformation
        The Business Management Modernization Program (BMMP) was
    established 3 years ago and has made significant progress in
    establishing key foundational elements necessary to enable broad
    business transformation across the Department. In April 2003, the DUSD
    (I&E) was designated as the Domain Owner for the Installations and
    Environment Domain of BMMP. Because the foundation is now laid, the
    program is redefining itself to focus on facilitating rapid delivery of
    DOD Enterprise capabilities.
        The I&E Domain has achieved significant accomplishments over the
    past year. We developed a real property unique identification concept
    that will enable greater visibility of real property assets and
    associated financial resources. Our efforts focused on reengineering
    the business process for real property inventory, resulting in standard
    data elements and data definitions for physical, legal and financial
    attributes of real property. Our efforts also produced, for the first
    time in DOD, an end-to-end process of real property management that
    articulates the interfaces with real property asset accountability and
    financial records. Our focus on data (data strategies, elements, and
    definitions) will facilitate rapid implementation of the real property
    inventory capability upon deciding on our systems implementation
    strategy. Additionally, we developed a process model for environmental
    liabilities recognition, valuation, and reporting that contributes to
    our overall auditability. During this past year, we also established
    the Defense Installation Spatial Data Infrastructure project to
    implement DOD-wide policies and resource oversight for geospatial
    information resources that support the Installations and Environment
    business mission area.
        During this fiscal year, we will conduct an analysis of system
    alternatives and prepare a transition plan to determine the best
    implementation strategy for the real property inventory reengineering
    effort. We will continue to make improvements across the Department in
    managing hazardous material by developing an enterprise-wide procedure
    for hazardous materials management. We will define I&E geospatial
    information needs and continue to minimize redundant acquisition of I&E
    geodata resources. Lastly, we are aggressively working to put into
    operation a DOD registry for physical locations. This registry will
    identify all DOD sites with a unique identifier and will be associated
    with firm boundary information. The registry will be available across
    the DOD enterprise and to potential users include the warfighting
    community and business mission areas. The site registry will allow for
    personnel and weapons system information systems to be linked to DOD's
    sites.
    Competitive Sourcing
        Competition is a driving force within the American economy, causing
    organizations to improve quality, reduce cost, and provide rapid
    delivery of better products and services. The President's Management
    Agenda identifies Competitive Sourcing as one of the five primary
    Federal initiatives. The Department of Defense has long been the
    Federal leader in using public-private competition under the process
    defined by OMB Circular A-76 to decide the least costly and most
    efficient source for commercial functions. It is essential that we
    continue to utilize the process, where it makes good military and
    business sense, to improve support to the warfighter and increase
    readiness. Many important base support functions fall into this
    category. The fiscal year 2006 budget supports continued use of the
    improved process described in the recent revision to OMB Circular A-76
    competitions for functions involving approximately 100,000 full time
    equivalents (FTE). This will allow achievement of the Department's
    targets in the President's Management Agenda.
                                   conclusion
        The Department is transforming its installations and business
    practices through an asset management strategy, and we are now seeing
    the results of that transformation. We are achieving the President's
    goal to provide quality housing for our service members and their
    families, and we have made positive progress toward our goal to prevent
    deterioration and obsolescence and to restore the lost readiness of our
    facilities. We also are transforming our environmental management to
    become outcome oriented, focusing on results. We are responding
    vigorously to existing encroachment concerns and are putting a long-
    term installation and range sustainment strategy into effect.
        The Base Realignment and Closure effort leading to the delivery of
    the Secretary's recommendations to the independent Base Closure
    Commission in May 2005 is a key means to transform our infrastructure
    to be more flexible to quickly and efficiently respond the challenges
    of the future. Together with the Global Defense Posture Review, BRAC
    2005 will make a profound contribution to transforming the Department
    by rationalizing our infrastructure with Defense strategy.
        In short, we have achieved significant accomplishments over the
    past few years, and we are well on our way to achieving our goals
    across the Installations and Environment Community. In closing, Mr.
    Chairman, I sincerely thank you for this opportunity to highlight our
    successes and outline our plans for the future. I appreciate your
    continued support of our installations and environment portfolio, and I
    look forward to working with you as we transform our plans into
    actions.

        Senator Ensign. Mr. Prosch.

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

        Mr. Prosch. Chairman Ensign, Ranking Member Akaka, I am
    very pleased to appear before you today. Accompanying me are my
    installation management partners sitting behind me: 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.
        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 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.
        We have provided a written statement for the record that
    provides details on our Army's fiscal year 2006 military
    construction budget.
        On behalf of the Army installation management team, I would
    like to comment briefly on the highlights of our program.
        We begin by expressing our appreciation for the tremendous
    support that Congress has provided to our soldiers and their
    families who are serving our country around the world. We are a
    Nation and an Army at war, and our soldiers would not be able
    to perform their missions so well without your sustained
    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 which
    encompasses current readiness, transformation, and people. As
    we are fighting the global war on terrorism, we are
    simultaneously transforming to be a more relevant and ready
    Army. We are on a path with the transformation of installation
    management that will allow us to achieve these objectives. We
    currently have hundreds of thousands of soldiers mobilizing and
    demobilizing, deploying and redeploying. More 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.
        On a special note, I would ask that you keep our forward
    deployed soldiers in your thoughts and prayers. New forces have
    rotated recently to Iraq. The 3rd Infantry Division and the 3rd
    Armored Cavalry Regiment have returned for a second tour of
    duty. The 42nd Infantry Division, Army National Guard, from New
    York has deployed, and the enemy will be testing them early on.
        The Army recently identified key focus areas to channel our
    efforts to win the global war on terrorism and to increase the
    relevance and readiness of 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. Soldiers and their families
    who live on and off the installation deserve the same quality
    of life as is afforded the society they are pledged to defend.
    Installations are a key ingredient to combat readiness and
    well-being. Our worldwide installation structure is critically
    linked to Army transformation and the successful fielding of
    the 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 continued
    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 military
    construction (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
    MILCON investment in training ranges; and facilities support
    and improvements for our Stryker brigades.
        With the sustained and balanced funding represented by this
    budget, our long-term strategies 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, we thank you for the opportunity
    to outline our program. As I have visited Army installations, I
    have witnessed progress that has been made. We attribute much
    of this success directly to the longstanding support of this
    committee and your staff. With your 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 this
    subcommittee and answer any questions you may have.
        [The prepared statement of Mr. Prosch follows:]
                    Prepared Statement by Geoffrey G. Prosch
                                  introduction
        Mr. Chairman and members of the subcommittee, it is a pleasure to
    appear before you to discuss our Army's Military Construction budget
    for fiscal year 2006. Our request includes initiatives and sustainment
    of programs of critical importance to our Army, Congress, and the
    global war on terrorism, and we appreciate the opportunity to report on
    them to you. We would like to start by thanking you for your unwavering
    support to our soldiers and their families who serve our Nation around
    the world. Their courage and sacrifices remain the foundation of our
    Army, and they would not be able to perform their global missions so
    successfully without your steadfast support.
                                    overview
        Installations are the home of combat power--a critical component to
    the Nation's force capabilities. The Department of Defense and our Army
    are working to ensure that we deliver cost-effective, safe, and
    environmentally sound capabilities and capacities to support the
    national defense mission.
        Today, U.S. forces are engaged worldwide in a war against global
    terror. Operations Enduring Freedom and Iraqi Freedom clearly
    underscore the need for a joint, integrated military force ready to
    defeat all threats to U.S. interests. To meet the security challenges
    of the 21st century, we require the right blend of people, weapons, and
    support systems. Regarding support systems, we need a global framework
    of Army installations, facilities, ranges, airfields and other critical
    assets that are properly distributed, efficient, and capable of
    ensuring that we can successfully carry out the roles, missions, and
    tasks that safeguard our security at home and overseas.
        The Army's installations framework is multi-purposed. It must
    sustain the regular forward presence of U.S forces as well as their
    emergency deployment in crisis, contingency, and combat. It must have
    the surge capacity to support the mobilization and demobilization of
    our Army Reserve component forces. It must also focus 10 to 20 years
    into the future to develop technologically advanced, affordable, and
    effective joint systems and platforms and develop highly qualified and
    committed installation management personnel who will operate and
    maintain them. Our framework must provide a productive, safe, and
    efficient workplace and offer a decent quality of service and
    facilities for our soldiers and their families (comparable to the
    American citizens off post they are pledged to defend).
        We recognize the enormity of the task to provide the right
    installations framework given the other competing funding programs. We
    are challenged to find the optimum management approach that balances
    the many purposes of our assets. For example, while our installations
    retain their primary military mission to organize, train and equip our
    forces, they also are home to rare species of plants and animals while
    experiencing encroachment from outside civilian communities. Our
    stewardship thus embraces the joint warfighting requirements of the
    combatant commanders with environmental management and stewardship of
    our Earth.
                      defense installations strategic plan
        In August 2001, the Department of Defense issued the first-ever
    Defense Installations Posture Statement along with the initial Defense
    Facilities Strategic Plan. Those concepts and initiatives have guided
    the Department's programs and budgets and enabled substantial
    improvements in the management and sustainability of our installation
    assets. However, the attacks of September 11, 2001, and the ongoing
    global war on terrorism significantly altered our requirement for
    homeland security. The Department of Defense 2004 Installations
    Strategic Plan significantly expands the scope and depth of the initial
    Strategic Plan. The expanded scope reflects the integral relationship
    between natural and manmade assets on our installations. It advances
    the integration of installations and the environmental, safety, and
    occupational health activities to enhance overall support of the
    military mission.
        Our vision is to ensure installation assets and services are
    available when and where needed, with joint capabilities and capacities
    necessary to effectively and efficiently support DOD missions.
        Our mission is to provide, operate, and sustain, in a cost-
    effective and environmentally sound manner, the installation assets and
    services necessary to support our military forces--in both peace and
    war.
        Our goals include the following:

              Right Size and Place: Locate, size, and configure
            installations and installation assets to meet the requirements
            of both today's and tomorrow's force structure.
              Right Quality: Acquire and maintain joint Army installation
            assets to provide good, safe, and environmentally sound living
            and working places, suitable base services, and effective
            support for current and future missions.
              Right Safety and Security: Protect Army installation assets
            from threats and unsafe conditions to reduce risk and
            liabilities.
              Right Resources: Balance requirements and resources--money,
            people, and equipment--to optimize life-cycle investments and
            reduce budget turbulence.
              Right Tools and Metrics: Improve portfolio management and
            planning by embracing best business practices, modern asset
            management techniques, and performance assessment metrics.
                                 the way ahead
        Army installations are the home of U.S. combat power and are an
    inseparable element of the Nation's military readiness and wartime
    effectiveness. From our installations, we generate the combat power
    required today and develop the combat power that will be needed in the
    future. To operate installations effectively and efficiently, we must
    sustain, restore, and modernize all of our installation assets and
    services--all the natural and manmade assets associated with owning,
    managing, and operating an installation, including the facilities,
    people, and internal and external environments.
        Our plan is to deliver a framework of installations, facilities,
    ranges, and other critical assets that is properly distributed,
    efficient, and capable of ensuring that we can successfully carry out
    the roles, missions, and tasks that safeguard our security at home and
    overseas. We have made good progress in many areas, but much remains to
    be done. America's security depends upon installation assets that are
    available when and where needed and with the right capabilities to
    support current and future mission requirements. As the Guardians of
    Army installations and environment, we embrace transformation as the
    only way to guarantee these capabilities are delivered--effectively and
    efficiently.
                          army installation strategies
        To improve our Army's facilities posture, we have undertaken
    specific initiatives to focus our resources on the most important
    areas--Barracks, Family Housing, Revitalization/Focused Facilities,
    Range and Training Land Strategy, and Current to Modular Force.
    Barracks Modernization Program
        Our Army is in the 12th year of its campaign to modernize barracks
    to provide 136,000 single enlisted permanent party soldiers with
    quality living environments. The new complexes meet the Department of
    Defense ``1+1'' or equivalent standard by providing two-soldier suites,
    increased personal privacy, larger rooms with walk-in closets, new
    furnishings, adequate parking, landscaping, and unit administrative
    offices separated from the barracks.
    Army Family Housing
        This year's budget continues our significant investment in our
    soldiers and their families by supporting our goal to have contracts
    and funding in place to eliminate inadequate housing by fiscal year
    2007 in the U.S. and by fiscal year 2008 overseas. For families living
    off-post, the budget for military personnel maintains the basic
    allowance for housing that eliminates out-of-pocket expenses.
    Revitalization/Focused Facilities
        Building on the successes of our housing and barracks programs, we
    are moving to improve the overall condition of Army infrastructure with
    the Focused Facility Strategy. The Installation Status Report is used
    to determine facilities quality ratings of C-1 to C-4 based on their
    ability to support mission requirements.

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        We are a C-1 Army living and working in C-3 facilities. Our goal is
    to reach an overall Army average of C-2 quality by concentrating on
    seven types of C-3 and C-4 facilities. These focus facilities are
    general instruction buildings, Army National Guard Readiness Centers,
    Army Reserve Centers, tactical vehicle maintenance shops, training
    barracks, physical fitness centers, and chapels.
    Army Range and Training Land Strategy
        Ranges and training lands enable our Army to train and develop its
    full capabilities to ensure our forces are relevant and ready. Our Army
    Range and Training Land Strategy supports the Department of Defense's
    training transformation goals, Army transformation, and our Army's
    Sustainable Range Program. The Strategy identifies priorities for
    installations requiring resources to modernize ranges, mitigate
    encroachment, and acquire training land.
    Current to Modular Force
        The fiscal year 2006 budget includes projects to ensure that our
    ``training battlefields'' continue to meet the demands of force
    structure, weapons systems, and doctrinal requirements. As of fiscal
    year 2005, we have constructed or funded 80 percent of the Military
    Construction requirements for the Stryker Brigade Combat Teams.
    Leveraging Resources
        Complementary to these budget strategies, the Army also seeks ways
    to leverage scarce resources and reduce our requirements for facilities
    and real property assets. Privatization initiatives such as Residential
    Communities Initiative (RCI), Utilities Privatization, and build-to-
    lease family housing in Europe and Korea represent high payoff programs
    which have substantially reduced our dependence on investment funding.
    We also benefit from agreements with Japan, Korea, and Germany where
    the Army receives host nation funded construction.
        In addition, Congress has provided valuable authorities to utilize
    the value of our non-excess inventory under the Enhanced Use Leasing
    program and to trade facilities in high cost areas for new facilities
    in other locations under the Real Property Exchange program. In both
    cases, we can capitalize on the value of our existing assets to reduce
    unfinanced facilities requirements.
        Looking toward the immediate future, we are aggressively reviewing
    our construction standards and processes to align with industry
    innovations and best practices. In doing so, we hope to deliver more
    facilities capability at comparable costs and meet our requirements
    faster.
                             military construction
        Our Army's fiscal year 2006 budget request includes $3.3 billion
    for Military Construction appropriations and associated new
    authorizations.

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                       military construction, army (mca)
        The Active Army Fiscal Year 2006 Military Construction request is
    $1,262,719,000 for authorization and $1,479,841,000 for authorization
    of appropriations and appropriation. As was the case last year, we have
    included only minimal, critical, overseas projects in this year's
    budget. These projects will provide the infrastructure necessary to
    ensure continued soldier readiness and family well-being that is
    essential throughout any period of transition.
    People Projects
        The well-being of our soldiers, civilians, and families is
    inextricably linked to our Army's readiness. We are requesting $759
    million or 51 percent of our MCA budget for projects to improve well-
    being in significant ways.
        Our Army continues to modernize and construct barracks to provide
    enlisted single soldiers with quality living environments. This year's
    budget includes 19 barracks projects to provide new or improved housing
    for 5,190 soldiers. With the approval of $716 million for barracks in
    this budget, 85 percent of our requirement will be funded at the
    ``1+1'' or equivalent standard. We are making considerable progress at
    installations in the United States, but will only fund high-priority
    projects at enduring installations in Europe and Korea.
        We are requesting full authorization of $331 million for multi-
    phased barracks complexes, but requesting only $156 million in
    appropriations for these projects in fiscal year 2006. Our plan is to
    award each complex, subject to subsequent appropriations, as single
    contracts to gain cost efficiencies, expedite construction, and provide
    uniformity in building systems.
        We are also requesting the second increment of funding, $21 million
    for a Basic Combat Training Complex that was fully authorized last
    year. This complex will house 1,200 basic trainees and provide company
    and battalion headquarters with classrooms and an exterior physical
    fitness training area. The fiscal year 2006 budget also includes a
    physical fitness center for $6.8 million and a child development center
    for $15.2 million.
    Current Readiness Projects
        Projects in our fiscal year 2006 budget will enhance training and
    readiness by providing arrival/departure facilities, maintenance
    facilities, and the second phase of a library and learning center. We
    will also construct combined arms collective training facilities, shoot
    houses, an infantry platoon battle course, a qualification training
    range, a multipurpose squad course, a digital multipurpose training
    range, urban assault courses, and a modified record fire range. These
    facilities will provide our soldiers realistic, state-of-the-art live
    fire training. We are requesting a total of $424 million for these high
    priority projects.
    Modular Force Projects
        Our budget supports transformation of the Army to a modern,
    strategically responsive force. Projects include a road upgrade, a
    tactical vehicle wash facility, a battle area complex, a modified urban
    assault course, and a vehicle maintenance facility. Our budget contains
    $115 million for these projects.
    Other Worldwide Support Programs
        The fiscal year 2006 MCA budget includes $141 million for planning
    and design of future projects. As executive agent, our Army also
    provides oversight of design and construction for projects funded by
    host nations. The fiscal year 2006 budget requests $20 million for
    oversight of approximately $800 million of host nation funded
    construction in Japan, Korea, and Europe for all Services.
        The fiscal year 2006 budget also contains $20 million for
    unspecified minor construction to address unforeseen critical needs or
    emergent mission requirements that cannot wait for the normal
    programming cycle.
               military construction, army national guard (mcng)
        Our Army National Guard's Fiscal Year 2006 Military Construction
    request for $327,012,000 (for appropriation and authorization of
    appropriations) is focused on Current Readiness, Modular Force, and
    other worldwide and unspecified programs.
    Current Readiness Projects
        In fiscal year 2006, our Army National Guard has requested $71.6
    million for six projects to support current readiness. These funds will
    provide the facilities our soldiers require as they train, mobilize,
    and deploy. Included are one readiness center, two maintenance
    facilities, two training projects, and a training range environmental
    mitigation project.
    Modular Force Projects
        This year, our Army National Guard is requesting $201.7 million for
    37 projects to transform to a Modular Force. There are 13 projects for
    our Army Division Redesign Study, three for Aviation Transformation to
    provide modernized aircraft and change unit structure, four for the
    Army Range and Training Land Strategy, and 17 for the Stryker Brigade
    Combat Team initiative.
    Other Worldwide Support Programs
        The fiscal year 2006 MCNG budget also contains $46.1 million for
    planning and design of future projects, along with $7.6 million for
    unspecified minor military construction to address unforeseen critical
    needs or emergent mission requirements that cannot wait for the normal
    programming cycle.
                   military construction, army reserve (mcar)
        Our Army Reserve's Fiscal Year 2006 Military Construction request
    for $106,077,000 (for appropriation and authorization of
    appropriations) is for Current Readiness and other worldwide
    unspecified programs.
    Current Readiness Projects
        In fiscal year 2006, our Army Reserve will invest $56.4 million to
    construct four new Reserve Centers and the second phases of two other
    Reserve Centers; invest $15.4 million to construct the first phase of a
    three-phase noncommissioned officer academy; and $5.4 million for a
    Public Safety Center--for a total facility investment of $77.2 million.
    Construction of the six Army Reserve Centers will support over 2,700
    Army Reserve soldiers. In addition, our Army Reserve will invest $11.5
    million to construct six training ranges, which will be available for
    joint use by all Army components and military services.
    Other Worldwide Unspecified Programs
        The fiscal year 2006 MCAR budget request includes $14.4 million for
    planning and design for future year projects. The fiscal year 2006 MCAR
    budget also contains $3.0 million for unspecified minor military
    construction to address unforeseen critical needs or emergent mission
    requirements that cannot wait for the normal programming cycle.
                    army family housing construction (afhc)
        Our Army's fiscal year 2006 family housing request is $549,636,000
    (for appropriation, authorization of appropriation, and authorization).
    It continues the successful and well-received Whole Neighborhood
    Revitalization initiative approved by Congress in fiscal year 1992 and
    supported consistently since that time, and our Residential Communities
    Initiative (RCI) program.
        The fiscal year 2006 new construction program provides Whole
    Neighborhood replacement projects at seven locations in support of 709
    families for $231.7 million. In addition, we will replace 709 houses
    and upgrade another 1,112 using traditional military construction.
        The Construction Improvements Program is an integral part of our
    housing revitalization and privatization programs. In fiscal year 2006,
    we are requesting $162.4 million for improvements to 1,112 existing
    units at 3 locations in the United States and 5 locations in Europe, as
    well as $138.0 million for scoring and direct equity investment in
    support of privatizing 3,606 units at 3 RCI locations.
        In fiscal year 2006, we are also requesting $17.5 million for
    planning and design for future family housing construction projects
    critically needed for our soldiers.
    Privatization
        RCI, our Army's Family Housing privatization program, is providing
    quality, sustainable housing and communities that our soldiers and
    their families can proudly call home. RCI is a critical component of
    our Army's effort to eliminate inadequate family housing in the U.S.
    The fiscal year 2006 budget provides support to continue implementation
    of this highly successful program.
        We are leveraging appropriated funds and government assets by
    entering into long-term partnerships with nationally recognized private
    sector real estate development/management and homebuilder firms to
    obtain financing and management expertise to construct, repair,
    maintain, and operate family housing communities.
        The RCI program currently includes 45 installations with a
    projected end state of almost 84,000 units--over 90 percent of the
    family housing inventory in the United States. By the end of fiscal
    year 2005, our Army will have privatized 29 installations with an end
    state of 60,000 homes. We have privatized over 50,000 homes through
    December 2004, and with your approval of the fiscal year 2006 budget,
    we will have privatized over 71,600 homes by the end of fiscal year
    2006.
                     army family housing operations (afho)
        Our Army's fiscal year 2006 family housing operations request is
    $812,993,000 (for appropriation and authorization of appropriations),
    which is approximately 59 percent of the total family housing budget.
    This account provides for annual operations, municipal-type services,
    furnishings, maintenance and repair, utilities, leased family housing,
    demolition of surplus or uneconomical housing, and funds supporting
    management of the Military Housing Privatization Initiative.
    Operations ($138 million)
        The operations account includes four subaccounts: management,
    services, furnishings, and a small miscellaneous account. All
    operations subaccounts are considered ``must pay accounts'' based on
    actual bills that must be paid to manage and operate family housing.
    Utilities ($132 million)
        The utilities account includes the costs of delivering heat, air
    conditioning, electricity, water, and wastewater support for family
    housing units. While the overall size of the utilities account is
    decreasing with the reduction in supported inventory, per-unit costs
    have increased due to general inflation and the increased costs of
    fuel. We continue to make steady progress in the privatization of
    utility systems/infrastructure on our installations.
    Maintenance and Repair ($309 million)
        The maintenance and repair (M&R) account supports annual recurring
    maintenance and major maintenance and repair projects to maintain and
    revitalize family housing real property assets. Since most Family
    Housing operational expenses are fixed, M&R is the account most
    affected by budget changes. Funding reductions results in slippage of
    maintenance projects that adversely impacts on soldiers and family
    quality of life.
    Leasing ($214 million)
        The leasing program provides another way of adequately housing our
    military families. The fiscal year 2006 budget includes funding for
    13,190 housing units, including existing section 2835 (``build-to-
    lease''--formerly known as 801 leases) project requirements, temporary
    domestic leases in the United States, and approximately 8,100 units
    overseas.
    RCI Management ($20 million)
        The RCI management program provides funding for the implementation
    and oversight requirements for procurement, environmental studies, real
    estate support, portfolio management, and operation of the overall RCI
    program.
                      base realignment and closure (brac)
        In 1988, Congress established the Defense Base Realignment and
    Closure Commission to ensure a timely, independent and fair process for
    closing and realigning military installations. Since then, the
    Department of Defense has successfully executed four rounds of base
    closures to rid the Department of excess infrastructure and align the
    military's base infrastructure to a reduced threat and force structure.
    Through this effort, our Army estimates approximately $10 billion in
    savings through 2005.
        Our Army is requesting $93.9 million in fiscal year 2006 for prior
    BRAC rounds ($4.5 million to fund caretaking operations of remaining
    properties and $89.4 million for environmental restoration). In fiscal
    year 2006, our Army will complete environmental restoration efforts at
    four installations, leaving nine remaining BRAC installations requiring
    environmental restoration. We also plan to dispose of an additional
    1,119 acres in fiscal year 2006.
        To date, our Army has disposed of 227,429 acres (88 percent of the
    total acreage disposal requirement of 258,607 acres). We have 31,186
    acres remaining to dispose of at 21 installations. Our Army continues
    to save more than $900 million annually from previous BRAC rounds. To
    date, the Army has spent $2.6 billion on BRAC environmental
    restoration.
                           operation and maintenance
        The fiscal year 2006 operation and maintenance budget includes
    funding for Sustainment, Restoration, and Modernization (S/RM) and Base
    Operations Support (BOS). The S/RM and BOS accounts are inextricably
    linked with our military construction programs to successfully support
    our installations. The Army has centralized the management of its
    installations assets under the Installation Management Agency (IMA) to
    best utilize operation and maintenance funding.
    Sustainment, Restoration, and Modernization
        S/RM provides funding for the active and Reserve components to
    prevent deterioration and obsolescence and restore the readiness of
    facilities on our installations.
        Sustainment is the primary account in installation base support
    funding responsible for maintaining the infrastructure to achieve a
    successful readiness posture for our Army's fighting force. It is the
    first step in our long-term facilities strategy. Installation
    facilities are the mobilization and deployment platforms of America's
    Army and must be properly maintained to be ready to support current
    Army missions and future deployments.
        The second step in our long-term facilities strategy is
    recapitalization by restoring and modernizing our existing facility
    assets. Restoration includes repair and restoration of facilities
    damaged by inadequate sustainment, excessive age, natural disaster,
    fire, accident, or other causes. Modernization includes alteration or
    modernization of facilities solely to implement new or higher
    standards, including regulatory changes, to accommodate new functions,
    or to replace building components that typically last more than 50
    years, such as foundations and structural members.
    Base Operations Support
        This funds programs to operate the bases, installations, camps,
    posts, and stations for our Army worldwide. The program includes
    municipal services, government employee salaries, family programs,
    environmental programs, force protection, audio/visual, base
    communication services and installation support contracts. Army
    Community Service and Reserve component family programs include a
    network of integrated support services that directly impact soldier
    readiness, retention, and spouse adaptability to military life during
    peacetime and through all phases of mobilization, deployment, and
    demobilization.
    Installation Management Agency
        The Installation Management Agency (IMA) is a result of the Army
    leadership's vision to streamline headquarters, create more agile and
    responsive staffs, reduce layers of review and approval, focus on
    mission, and transform the Army. IMA brings together all installation
    support services under one umbrella to promote optimal care and support
    of soldiers and families. IMA is at the center of the Army's initiative
    to mold installation support functions into a corporate structure,
    enabling equitable, efficient, and effective management of Army
    installations worldwide. IMA supports readiness, promotes well-being,
    and preserves infrastructure and the environment.
        In its first 2 years, IMA has been successful in executing the
    tasks associated with growing a new organization, while simultaneously
    supporting the global war on terrorism. In the upcoming year, IMA will
    continue to develop a cadre of leaders to orchestrate excellence in
    installation management; manage installations equitably, effectively,
    and efficiently; support the well-being of the Army's people; practice
    sound stewardship and resource management; deliver improved mission
    support to all organizations; and develop and sustain an innovative,
    team-spirited, highly capable, service-oriented workforce.
                      homeowners assistance fund, defense
        Our Army is the Department of Defense Executive Agent for the
    Homeowners Assistance Program. This program provides assistance to
    homeowners by reducing their losses incident to the disposal of their
    homes when military installations at or near where they are serving or
    employed are ordered to be closed or the scope of operations reduced.
    For fiscal year 2006, there is no request for appropriations and
    authorization of appropriations. Requirements for the program will be
    funded from prior year carryover and revenue from sales of homes.
    Assistance will be continued for personnel at five installations that
    are impacted with either a base closure or a realignment of personnel,
    resulting in adverse economic effects on local communities. The Fiscal
    Year 2006 Homeowners Assistance Program budget does not include
    resources for potential requirements that the new Base Realignment and
    Closure 2005 process may cause.
                  fiscal year 2005 supplemental budget request
        The fiscal year 2005 supplemental request funds facilities that
    directly support the global war on terrorism in both the United States
    and overseas locations. It contains $990.1 million in military
    construction for the Active component Army.
        Within the Central Command area of operations in Afghanistan and
    Iraq, there are $687.3 million for military construction projects.
    Projects in Afghanistan include barracks, a fuel storage tank farm and
    distribution system, joint operations center, power generation plant,
    and an ammunition supply point. Projects in Iraq include barracks, a
    tactical operations building, medical facilities, an overhead cover
    system for force protection, an equipment support activity, a battalion
    and company headquarters, a 60-mile supply route, and a project to
    encapsulate hazardous materials bunkers.
        Within the Southern Command area of operations at Guantanamo Bay,
    Cuba, there is $41.8 million for two military construction projects--a
    detention facility and a radio range security fence.
        Within the United States, there is $261 million for military
    construction relating to modularity. The projects, distributed to seven
    different locations, include site preparation and utility work, an
    aircraft maintenance hangar, an aircraft hangar, and mobilization and
    training barracks.
        Additionally, the fiscal year 2005 supplemental budget includes
    $248 million in Other Procurement, Army for relocatable buildings to
    provide temporary barracks, company operations, and dining and
    maintenance facilities at five locations in the United States. These
    are required to support our soldiers as they prepare for battle.
                                    summary
        Mr. Chairman, our fiscal year 2006 budget is a balanced program
    that supports our soldiers and their families, the global war on
    terrorism, Army transformation, readiness and Department of Defense
    installation strategy goals. We are proud to present this budget for
    your consideration because of what this $3.3 billion fiscal year 2006
    budget will provide for our Army:

             New barracks for 5,190 soldiers
             New housing for 5,800 families
             Management of 71,600 privatized homes
             Operation and sustainment of 48,000 government-owned
            and leased homes
             New or improved Readiness Centers for over 3,300 Army
            National Guard soldiers
             New Reserve Centers for over 2,700 Army Reserve
            soldiers
             Three Aviation Transformation projects
             $292 million investment in training ranges
             Facilities support for two Stryker brigades
             Transfer/disposal of 88 percent of prior Base
            Realignment and Closure acreage

        Our long-term strategies for installations will be accomplished
    through sustained and balanced funding, and with your support, we will
    continue to improve soldier and family quality of life, while remaining
    focused on our Army's transformation.
        In closing, we would like to thank you again for the opportunity to
    appear before you today and for your continued support for our Army.

        Senator Ensign. Secretary Penn.

    STATEMENT OF HON B.J. PENN, ASSISTANT SECRETARY OF THE NAVY FOR
                     INSTALLATIONS AND ENVIRONMENT

        Mr. Penn. Mr. Chairman, members of the subcommittee, it is
    a privilege for me to be here today. Being on the job for a
    little over a month, I 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 programs 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 sale revenue.
        It is important to view the fiscal year 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 or receive any
    appropriations in fiscal year 2005. The sale was delayed by
    unforseen 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 commitments, 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 a conservative estimate
    for land sales revenue to accelerate environmental cleanup.
        Although the auction of the El Toro property has now been
    completed, with the 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 Navy and the buyer complete the
    sales transaction at settlement. I want to emphasize that we
    cannot be absolutely sure of having land sales revenue until
    settlement occurs, which is planned for 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 4 months for the sales proceeds to be processed
    through the Department of Defense 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 the cleanup. That
    would be our first priority for the use of land sales revenue.
    Even with the successful settlement of the El Toro property in
    July, we may still need some fiscal year 2006 appropriated
    funds, to finance first quarter program commitments.
        I look forward to working with Congress on resolving this
    situation, along with the more challenging installations and
    facilities issues.
        [The prepared statement of Mr. Penn follows:]
                      Prepared Statement by Hon. B.J. Penn
        Mr. Chairman and members of the committee, I am pleased to appear
    before you today to provide you with an overview of the Navy and Marine
    Corps team's shore infrastructure and environmental programs.
                        fiscal year 2006 budget overview
        Our bases and stations provide the essential services and functions
    that help us train and maintain our naval forces, and enhance the
    quality of life for our sailors, marines, and their families. Winning
    the global war on terrorism is our number one priority while we
    transform our force structure and business processes to meet the
    readiness needs of today and tomorrow. The Department of the Navy (DON)
    has a considerable investment in shore infrastructure: 104
    installations in the continental United States and 18 overseas
    locations with a combined plant replacement value of about $181
    billion.
        The DON fiscal year 2006 budget request for installations and
    environmental programs totals $9.8 billion \1\ and provides the funds
    to operate, recapitalize and transform our shore installations. In this
    budget, we have focused our efforts on balancing the risks across the
    operational, institutional, force management and future challenges
    identified by the Department and the Department of Defense (DOD).
    ---------------------------------------------------------------------------
        \1\ To avoid double counting in the graph, environmental is shown
    separately from BOS, and MILCON is shown separately from SRM funds
    ---------------------------------------------------------------------------

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        The Base Operations Support (BOS) request of $4.8 billion,
    excluding environmental which is shown separately, provides fundamental
    services such as utilities, fire and security, air operations, port
    operations, and custodial care that enable the daily operations of our
    bases. The increase of $471 million to the fiscal year 2005 enacted
    level is primarily due to functional transfers to properly align Navy
    Marine Corps Internet with Base Operating Support and program growth to
    accomplish utilities privatization preparation, improve overseas
    Morale, Welfare, and Recreation Programs supporting our forward
    deployed forces, and to restore funding required to execute shore
    mission support without degrading quantity or quality of support. We
    believe we have properly priced BOS to avoid execution year adjustments
    as we have experienced in the past. We are also working with the Office
    of the Secretary of Defense and the other components to define common
    standards and performance metrics for managing installations support.
        Our Military Construction Navy and Naval Reserve request is a very
    robust $1,074 million, about the same as the enacted fiscal year 2005
    level of $1,114 million after excluding the $139 million the DON
    received in the Emergency Hurricane Supplemental Appropriations Act,
    2005. This level of funding keeps us on track to eliminate inadequate
    bachelor housing, and provides critical operational, training, and
    mission enhancement projects.
        The Family Housing request of $813 million is about the same as the
    enacted fiscal year 2005 level of $835 million after excluding the $9
    million the DON received in the Emergency Hurricane Supplemental. It
    provides $219 million in family housing construction and improvements
    funds, 80 million above the enacted fiscal year 2005 level of $139
    million. Funds to operate, maintain, and revitalize the worldwide
    inventory of about 33,000 units total $594 million, $103 million less
    than the enacted fiscal year 2005 level (excluding the $9 million in
    the Emergency Hurricane Supplemental), due to a decline of over 18,000
    homes from the fiscal year 2005 level from our housing privatization
    efforts. The DON continues to fund Basic Allowance for Housing (BAH) at
    a level that eliminates average out-of-pocket housing expenses for
    service member. BAH makes finding affordable housing in the community
    more likely for our service members, and it helps our housing
    privatization efforts succeed.
        Sustainment, Restoration, and Modernization (SRM) includes military
    construction and Operation and Maintenance funds. Our fiscal year 2006
    request is $71 million above the enacted fiscal year 2005 level without
    the Hurricane Supplemental. Sustainment funds the necessary maintenance
    and repairs needed to keep a facility in good working order over its
    expected service life. Facilities sustainment requirements are based on
    a DOD model. The fiscal year 2006 budget maintains 95 percent of the
    model requirement for Navy and Marine Corps bases. Restoration and
    Modernization funds regenerate the physical plant either through
    reconstruction or major renovation to keep the facility modern and
    relevant.
        Our environmental program of $1,149 million, comprised of a variety
    of operating and investment appropriations, climbs $123 million above
    the fiscal year 2005 enacted level. Within this broad category,
    compliance accounts decline as a result of fewer one-time projects;
    conservation and pollution prevention funds remain steady; research and
    technology development decline by $15 million as fiscal year 2005
    congressional increases are not continued in fiscal year 2006; cleanup
    of active bases increases by $39 million, primarily to support cleanup
    of the former Vieques training range in Puerto Rico. Of particular
    interest to this subcommittee, we have included $143 million in fiscal
    year 2006 appropriations to cover prior BRAC minimum required
    environmental cleanup and caretaker costs. In preparing the budget, we
    also included $133 million in estimated land sales revenue that would
    be used to accelerate prior BRAC cleanup efforts.
        Here are some of the highlights of these programs.
                                    housing
        Our fiscal year 2006 budget request reflects the DON's continued
    commitment to improve living conditions for sailors, marines, and their
    families. We have programmed the necessary resources and expect to have
    contracts in place by the end of fiscal year 2007 to eliminate our
    inadequate family and bachelor housing.
    Family Housing
        Our family housing strategy consists of a prioritized triad:
             Reliance on the Private Sector. In accordance with
            longstanding DOD and DON policy, we rely first on the local
            community to provide housing for our sailors, marines, and
            their families. Approximately three out of four Navy and Marine
            Corps families receive a BAH and own or rent homes in the
            community.

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             Public/Private Ventures (PPVs). With the strong
            support from this committee and others, we have successfully
            used statutory PPV authorities enacted in 1996 to partner with
            the private sector to help meet our housing needs through the
            use of private sector capital. These authorities allow us to
            leverage our own resources and provide better housing faster to
            our families.
             Military Construction. Military construction will
            continue to be used where PPV authorities don't apply (such as
            overseas), or where a business case analysis shows that a PPV
            project is not financially sound.

        We will be able to eliminate 77 percent of our inadequate inventory
    through the use of public/private ventures. As of 1 March, we have
    awarded 15 projects totaling over 26,000 units. As a result of these
    projects, almost 17,500 homes will be replaced or renovated. An
    additional 2,700 homes will be constructed for Navy and Marine Corps
    families. Through the use of these authorities we have secured almost
    $3.0 billion in private sector investment from $300 million of DON
    funds for these 15 projects. This represents a leverage ratio of 10 to
    1. During fiscal year 2005 and 2006, we plan to award projects totaling
    29,000 homes at ten Navy and Marine Corps locations. This will allow us
    to improve our housing stock and provide more homes to sailors,
    marines, and their families much faster than if we relied solely on
    traditional military construction. By the end of fiscal year 2007, the
    Navy and Marine Corps will have privatized 78 percent and 95 percent,
    respectively, of their worldwide housing stock.

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        Our fiscal year 2006 family housing budget includes $219 million
    for family housing construction and improvements. This amount includes
    $112 million as a government investment in family housing privatization
    projects. It also includes $594 million for the operation, maintenance,
    and leasing of DON family housing.
    Bachelor Housing
        Our budget request of $184 million for bachelor quarters
    construction projects continues the emphasis on improving living
    conditions for our unaccompanied sailors and marines. There are three
    challenges:

        1. Provide Homes Ashore for our Shipboard Sailors. There are
    approximately 18,400 junior enlisted unaccompanied sailors worldwide
    who live aboard ship even while in homeport. The Navy has programmed
    funding through fiscal year 2008 to achieve its ``homeport ashore''
    initiative by providing ashore living accommodations for these sailors.
    We will achieve this goal through a mix of military construction,
    privatization authorities, and, for interim, more intensive use of our
    barracks capacity by housing two members per room. Our fiscal year 2006
    budget includes three ``homeport ashore'' projects: $7.8 million at
    Naval Station Mayport, FL (216 spaces); $50 million at Naval Station,
    Everett, WA (818 spaces); and $13.7 million at Naval Amphibious Base
    Coronado, CA (800 spaces), which is planned for privatization. The
    funds would be used as a Government cash contribution to a public/
    private entity.
        2. Ensure our Barracks Meet Today's Standards for Privacy. We are
    building new and modernizing existing barracks to increase privacy for
    our single sailors and marines. The Navy uses the ``1+1'' standard for
    permanent party barracks. Under this standard, each single junior
    sailor has his or her own sleeping area and shares a bathroom and
    common area with another member. To promote unit cohesion and team
    building, the Marine Corps was granted a waiver to adopt a ``2+0''
    configuration where two junior marines share a room with a bath. The
    Navy will achieve these barracks construction standards by fiscal year
    2016; the Marine Corps by fiscal year 2012. We are pursuing a waiver of
    the ``1 + 1'' standard to allow us to build an enlisted barracks
    project in Norfolk to private sector standards. We believe this will
    reduce construction costs, improve amenities, and facilitate
    opportunities to privatize barracks in the future.
        3. Eliminate gang heads. The Navy and Marine Corps remain on track
    to eliminate inadequate barracks with gang heads \2\ for permanent
    party personnel. The Navy achieves this goal by fiscal year 2007, the
    Marines by fiscal year 2005.
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        \2\ Gang heads remain acceptable for recruits and trainees.
    ---------------------------------------------------------------------------
    BQ Privatization
        We are applying authority provided to us by Congress to proceed
    with three pilot unaccompanied housing privatization projects. We
    issued a solicitation for our first project at San Diego in September
    2004 and received very positive responses from industry. We will soon
    take the next step to narrow the field and invite up to four highly
    qualified offerors to submit detailed technical and financial
    proposals. We plan to select a single proposal by late spring 2005 and
    make an award in January 2006 after notifying Congress.
        We intend to notify Congress of our intent to issue a solicitation
    for our second pilot project--at Hampton Roads, Virginia--in the very
    near future. We have also initiated a concept development for our third
    pilot project to provide unaccompanied housing in the Pacific
    Northwest.
                             military construction
    Military Construction Projects
        The DON fiscal year 2006 Military Construction program requests
    appropriations of $1,029 million, consisting of $830 million for Navy,
    $169 million for Marine Corps, and $30 million for planning and design.
    The authorization request totals $1,078 million. Our fiscal year 2006
    budget uses $92 million in prior year savings identified during budget
    formulation to finance additional military construction needs above the
    fiscal year 2006 appropriation request. Fiscal year 2006 projects were
    properly priced consistent with the analysis that identified the prior
    year savings. The Naval and Marine Corps Reserve Military Construction
    appropriation and authorization request is $45 million.
        The active Navy program consists of:

             $218 million for eight Chief of Naval Operations
            projects for Homeport Ashore, Great Lake Recruit Training
            Command recapitalization and the Naval Academy.
             $215 million for seven waterfront and airfield
            projects.
             $92 million for three special weapons protection
            projects.
             $239 million for 12 projects supporting new weapons
            systems such as F/A 18 E/F, V-22, H60R/S, and VXX.
             $58 million for four mission enhancement projects such
            as the Pacific Warfighting Center at Naval Station Pearl
            Harbor, HI; and
             $9 million for one environmental compliance project at
            Naval Air Station Pensacola, FL.

        The active Marine Corps program consists of:

             $58 million for two barracks, one mess hall and one
            fire safety quality of life project.
             $25 million in a continuing effort to correct
            wastewater environmental compliance violations at Camp
            Pendleton, CA.
             $54 million for three airfield recapitalization
            projects at Marine Corps Air Station Quantico, VA, including
            the second increment of funding to replace 1930's vintage HMX
            maintenance hangars and a parking apron.
             $18 million for four projects to provide maintenance
            facilities, including the new Assault Breacher Vehicle at Camp
            Pendleton, CA and Camp Lejeune, NC; hot refueling for rotary
            wing aircraft at MCAS Yuma, AZ; and critical training for
            Marines with a Multi-Purpose Machine Gun Range at Camp Lejeune,
            NC.
             $14 million for five projects that cover a broad range
            of facility improvements, e.g., main gate access and
            inspection; encroachment remedies; missile storage.

        The Naval and Marine Corps Reserve program consists of two joint
    Reserve centers, a Marine Corps Reserve centers, a Marine Reserve-
    training center, and a hanger modification.
        Fourteen Navy and two Marine Corps \3\ projects have construction
    schedules exceeding 1 year and cost more than $50 million, thus meeting
    the DOD criteria for incremental funding in the fiscal year 2006
    budget. Seven Navy and one Marine Corps projects received full
    authorization in fiscal year 2004 or fiscal year 2005 and are being
    continued or completed in fiscal year 2006. The budget request new
    authorization to start seven Navy and two Marine Corps incrementally
    funded projects in fiscal year 2006.
    ---------------------------------------------------------------------------
        \3\ The budget also incrementally funds a $14 million Marine Corps
    project.
    ---------------------------------------------------------------------------
    Outlying Landing Field, Washington County, North Carolina
        The new F/A-18E/F Super Hornet is replacing F-14 and older F/A-18C
    aircraft. A Navy Environmental Impact Statement (EIS) examined
    alternatives for homebasing these new aircraft on the east coast,
    opting to base eight tactical squadrons and a fleet replacement
    squadron at Naval Air Station Oceana, VA, and two tactical squadrons at
    Marine Corps Air Station, Cherry Point, NC.
        This homebasing decision requires a new Outlying Landing Field
    (OLF) to support fleet carrier landing practice training. The current
    site near Virginia Beach, VA is not as effective for night-time
    training due to ambient light sources, and it lacks the capacity to
    handle a training surge such as experienced for the war on terrorism
    and Operation Iraqi Freedom. The Navy selected a site in Washington
    County, North Carolina, about halfway between NAS Oceana and MCAS
    Cherry Point, as the best alternative from an operational perspective.
        A Federal District Court ruled last month that Navy did not fulfill
    its obligations under the National Environmental Policy Act (NEPA)
    before making the decision to construct the OLF, and has enjoined the
    Navy from taking further actions to plan, develop, or construct the OLF
    until it completes additional NEPA analysis. The Navy continues to
    believe that the EIS that it prepared was based on sound science and
    rigorous analysis, and met all requirements of NEPA. Nonetheless, the
    Navy is carefully examining the court's ruling and considering its
    options on how to respond. The fiscal year 2006 budget includes $23
    million in prior year funds to complete land acquisition in the OLF
    core area and commence horizontal construction. We continue to believe
    that these funds will be required for OLF purposes and will be
    executable in fiscal year 2006.
    VXX
        We are pleased to report significant progress on VXX, the next
    generation helicopter transportation for the President, Vice President
    and heads of state. Marine Helicopter Squadron One (HMX-1), located at
    the Marine Corps Air Facility, Quantico, VA, performs these helicopter
    transportation mission using the VH-3D introduced in 1974 and the VH-
    60N fielded in 1989. These aircraft are approaching the end of their
    service lives, and do not have the growth margin to incorporate the
    improved capabilities required to meet evolving mission needs in the
    post-September 11 environment.
        The Navy awarded a System Development and Demonstration acquisition
    contract to Lockheed Martin in January 2005 to build and deliver eight
    VXX aircraft for test and evaluation and pilot production. The new
    aircraft will provide increased performance; improved mission,
    communication, navigation, and maintainability; and expanded potential
    for future growth. Developmental flight-testing will begin mid-fiscal
    year 2005, with delivery of the first test article by April 2007.
    Initial operating capacity is set for the fourth quarter fiscal year
    2009.
        The Navy also awarded a construction contract in January 2005 to
    build an eight-bay test and evaluation hanger with laboratory,
    maintenance, and office space for a combined Lockheed Martin--Navy
    program management team at Naval Air Station Patuxent River, MD. The
    Navy commissioned an independent study to consider alternate methods of
    providing in-service support for the aircraft. The study concluded that
    a government owned contractor operated facility at Patuxent River
    provided significant life cycle cost savings to the Navy. The $96
    million, incrementally funded design/build facility will also include
    an in-service support capacity for the aircraft once operational. The
    current working estimate for construction is $10 million below the
    authorization request in the fiscal year 2005 budget.
                                   facilities
    Facilities Sustainment, Restoration, and Modernization (SRM)
        Sustainment--The DOD uses models to calculate life cycle facility
    maintenance and repair costs. These models use industry-wide standard
    costs for various types of buildings and geographic areas and are
    updated annually. Sustainment funds in the Operation and Maintenance
    accounts maintain shore facilities and infrastructure in good working
    order and avoid premature degradation. The Navy and Marine Corps
    achieve 95 percent funding of the sustainment model requirements in
    fiscal year 2005 and fiscal year 2006, consistent with the DOD goal.
    The DON funding increases by 1.4 percent from fiscal year 2005 to
    fiscal year 2006.

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        Recapitalization--Restoration and modernization provides for the
    major recapitalization of our facilities using Military Construction,
    Operation and Maintenance, Navy Working Capital Fund, and Military
    Personnel Navy funds. The ``recap'' metric is calculated by dividing
    the plant replacement value by the annual investment of funds and it is
    expressed as numbers of years. The DOD goal is to attain an annual 67-
    year rate by fiscal year 2008. Neither the Navy nor the Marine Corps
    attains the 67-year goal in the current FYDP due to affordability.
        The fiscal year 2006 recapitalization rate has improved
    substantially from that reported last year as a result of DOD allowing
    the military departments to take credit for centrally managed Service
    demolition programs. The Navy has $51 million and the Marine Corps $5
    million for their fiscal year 2006 central demolition programs, which
    combined is expected to demolish over 2.5 million square feet of
    outdated facilities. This approach allows us to consider the
    construction of new facilities as part of the recap metric calculation
    as long as an equivalent square footage of old facilities are
    demolished anywhere else. We believe that this corporate view is a more
    accurate reflection of the age of our inventory and the need for
    recapitalization.
                                  efficiencies
    Naval Safety
        We remain committed to achieving Secretary Rumsfeld's 2-year
    challenge to reduce fiscal year 2002 baseline mishap rates and
    accidents by 50 percent by the end of fiscal year 2005. At the end of
    calendar year 2004, 15 months into the 2-year challenge, the Department
    was on track to meet the SECDEF goal in over 70 percent of the targeted
    areas.

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        The Secretary of the Navy has embraced improving safety as one of
    his top objectives for this fiscal year. Last year Secretary England
    convened the first semi-annual Navy and Marine Corps Safety Council,
    comprised of Senior Flag and General Officers, to review ongoing mishap
    reduction efforts. The DON is pursuing Occupational Safety and Health
    Administration (OSHA) Voluntary Protection Program (VPP) status at our
    shipyards and other industrial activities; over the last 16 months, we
    have achieved an average 31 percent reduction in civilian lost workdays
    due to injuries at our three installations with the highest injury
    rates. Increased command emphasis for safety in Operation Iraqi Freedom
    has played a major role in reducing the percentage of Marine Corps non-
    combat fatalities to combat fatalities from 42 percent in fiscal year
    2003 to less than 9 percent in fiscal year 2004.
        Our fiscal year 2006 budget includes $4.5 million to continue
    development of the Military Flight Operations Quality Assurance
    program. We want to adapt a successful commercial aviation program to
    analyze performance data (i.e., ``black box'' data) after every flight
    and allow aircrew and aircraft maintenance personnel to replay a high
    fidelity animation of the flight and associated aircraft performance
    parameters. That will allow them to recognize and avoid situations
    where flight safety tolerances are exceeded. In addition to the safety
    benefit, we expect significant future savings in reduced maintenance
    costs.
    Commander, Navy Installations
        Commander, Navy Installations Command (CNI) had a productive first
    year in its effort to transform the Navy shore establishment into
    centralized shore services and support structure. The Navy is now
    aligned to permit mission commanders to focus on their core mission to
    deliver combat power, while CNI focuses on shore infrastructure
    support.
        A key CNI accomplishment was to implement a Capabilities Based
    Budgeting (CBB) process. This annual, zero-based analysis links the
    delivery of specific shore functions to their resources, and allows
    managers to predict how varying resource inputs alter the performance
    capability of that shore function. Identifying the risks in delivering
    service at varying output levels allows Navy leadership to select the
    desired level of output and associated resourcing based on an
    evaluation of these risks. This process allows us to better align shore
    support services with mission customers' requirements. CNI is now
    expanding this effort to derive common base support models with the
    other military services.

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    Strategic Sourcing
        The DON continues to seek efficiencies in its business processes.
    We want to focus on finding the most cost efficient means to support
    our warfighters. There are a number of approaches to achieve this goal,
    e.g., eliminating an unnecessary function or one with marginal benefit;
    realigning a function to improve efficiency; or competing a function to
    see if it can be provided more effectively or at a lower cost by
    private industry. We have committed to review approximately 30,000 \4\
    positions using the OMB Circular A-76 process and approved OMB
    alternatives (e.g., military to civilian conversions) by fiscal year
    2008. We are focusing studies on those functions that are not critical
    or core to our military operations, are readily available and can
    potentially be performed more effectively by the private sector.
    ---------------------------------------------------------------------------
        \4\ Represents about 5 percent of the DON's military and civilian
    workforce.
    ---------------------------------------------------------------------------
        We recognize the difficulty these studies have on employee morale.
    However, the gains in clearly defining the government's requirement
    with resulting savings warrant the continued use of A-76 competition
    and approved OMB alternatives to determine the most cost-effective
    service provider. Competition between in-house and contractor work
    force benefits the DON and taxpayer in the long run. OMB Circular A-76
    competitions generate on average 36 percent cost avoidance. Our
    workforce is among the best in the world and has responded to the
    challenge by winning over 80 percent of the A-76 competitions.
    Utility Privatization
        When economical, we are proceeding with efforts to privatize our
    electricity, water, wastewater, and natural gas utility systems. Ten
    USC Sec. 2688 provides the legislative authority to convey utility
    systems where economical. Privatization allows installations to focus
    on core missions, relieving them of activities that can be done more
    efficiently and effectively by others. Privatization can help us reap
    private sector efficiency while upgrading aged systems to industry
    standards without compromising safe and reliable services.
        As of February 1, 2005, DON has privatized 15 of its 645 utility
    systems while exempting 73 utility systems. Approximately half of the
    Source Selections Authority (SSA) decisions have been achieved during
    the past year, with the rest expected by September 30, 2005. When the
    current round of utilities privatization concludes in September 2005,
    DON intends to pursue other alternatives to enlist industry capability.
    In the end, we need safe reliable utility systems that are operated in
    the most economical manner, and that rely on private industry wherever
    practicable.
                             environmental programs
        The DON has a broad array of shore based and shipboard
    environmental compliance, conservation, pollution prevention, and
    cleanup efforts.
    Shipboard Programs
        The Navy is installing suites of pollution prevention equipment
    such as aqueous parts washers, cable cleaners, and paint dispensers on
    16 ship classes at a total cost of $35 million. To date 115 of 152
    planned installations are complete with the remaining installations
    scheduled for completion in fiscal year 2006. Once implemented, this
    equipment is expected to save about $3 million per year in hazardous
    material procurements and disposal costs, while the Fleet will save
    another $12 million per year from improved maintenance processes.
        The Navy is converting nearly 900 CFC-12 and over 400 CFC-114 air
    conditioning and refrigeration plants on its surface ships to eliminate
    ozone depleting CFCs and replace them with environmentally friendly
    coolants. We plan to complete CFC-12 conversions in 2007 and CFC-114
    conversions in 2014. The total program cost is $400 million with $25
    million of that total budgeted for fiscal year 2006. Upon completion,
    this conversion will have eliminated nearly 3 million pounds of CFC
    refrigerant emissions to the atmosphere.
    Operational Range Assessments
        Both the Navy and the Marine Corps are conducting assessments of
    our land based operational range assessments to ensure their long-term
    viability while protecting human health and the environment. The Navy
    has 273 operational ranges grouped into 20 complexes while the Marine
    Corps has 14 ranges. The Navy has completed range condition assessments
    at four range complexes, with assessments underway at six more
    complexes. The Marine Corps expects to complete its first assessment at
    Marine Cops Air Station, Cherry Point, NC this year, while starting two
    more this year and six others in fiscal year 2006. Both Navy and Marine
    Corps expect to complete their assessments by fiscal year 2008. These
    assessments will help the Navy and Marine Corps develop comprehensive
    management plans that balance operational needs and environmental
    concerns.
    Encroachment Update
        The National Defense Authorization Acts for Fiscal Year 2003 and
    Fiscal Year 2004 provided important protections to military readiness.
    The fiscal year 2003 Act directed the Secretary of the Interior to use
    authority under the Migratory Bird Treaty Act to issue a rule that
    would allow incidental takes of migratory birds during military
    readiness activities. This provision responded to a need that became
    apparent when a court enjoined vital military training on a Pacific
    island in 2002 after such training resulted in the accidental death of
    a small number of migratory birds. Congress provided an immediate
    exemption until the Secretary of the Interior could issue a regulation.
    The Departments of Interior and Defense have worked on the regulation
    that should be finalized shortly.
        The Act further preserved military lands for military use by
    precluding designation of critical habitat under the Endangered Species
    Act when the Secretary of the Interior determines that an
    installation's Integrated Natural Resources Management Plan (INRMP)
    provides a benefit to the species for which critical habitat is
    proposed. The Secretary of the Interior also must consider the economic
    impact and other relevant impacts, such as those on national security,
    before designating critical habitat, and may exclude lands from
    critical habitat when there is a determination that the benefits of
    exclusion outweigh the benefits of the designation.
        The Navy has 77 and the Marine Corps 17 installations that require
    INRMPs. All of the Navy plans and 15 of the Marine Corps plans are
    complete, and will now be subject to the 5-year review provisions of
    the Sikes Act. The Marine Corps INRMP for the Goldwater Range in
    Arizona is being prepared jointly with the Air Force, Department of
    Interior, and Arizona Department of Game and Fish, and should be
    completed in September 2005. The Marine Corps recently acquired Blount
    Island in Florida and also expects to complete that INRMP in September
    2005. Both Navy and Marine Corps have funded implementation of their
    INRMPs. Nine Navy and Marine Corps installations have avoided
    designation of critical habitat based on these INRMPs.
        The fiscal year 2004 Marine Mammal Protection Act (MMPA) provisions
    changed the definition of ``harassment'' for military readiness
    activities to focus on science-based, specific criteria, and added a
    national security exemption to the act. The changes do not lessen
    protection for marine mammals, nor do they eliminate the need for
    mitigation and monitoring, but allow us to consider safety,
    practicality, and the potential impact on military readiness. Navy is
    applying the revised authority to the SURTASS Low Frequency Active
    Sonar program and to other agency proposals involving sound in the
    water such as shallow water training ranges. The Navy supports MMPA
    reauthorization during this legislative session provided changes
    adopted as part of the act remain intact.
    Encroachment Partnering
        We are using authority provided in the National Defense
    Authorization Act for Fiscal Year 2003 to acquire land or restrictive
    easements to avoid encroachment on military training activities. Last
    year, the Navy partnered with Escambia County, FL to purchase a 48-acre
    parcel bordering Naval Air Station Pensacola. The County spent $800,000
    to acquire title to the land, while the Navy contributed $500,000 in
    exchange for a development restriction easement on the property. The
    Navy plans to pursue additional partnering opportunities in fiscal year
    2005 and fiscal year 2006.
        The Marine Corps partnered with Beaufort County to acquire a
    restrictive easement on 69 acres beneath the flight path of Marine
    Corps Air Station, Beaufort, NC. The area had been slated for
    residential housing development. The Marine Corps and the county each
    contributed $156,000 for a restrictive easement on the land. This
    benefits the county by retaining the land in its current use as
    farmland, and benefits the Marine Corps by preserving open space next
    to the station to avoid future noise complaints from military aviation
    operations. The Marine Corps is working with other Conservation groups
    to acquire other restrictive easements on properties near Beaufort and
    Marine Corps Camp Lejeune, NC, this year, with plans for several other
    locations next year.
    Alternative Fuel Vehicles
        The Navy and Marine Corps have exceeded the procurement
    requirements of the Energy Policy Act that 75 percent of fleet vehicle
    procurements in EPA established metropolitan areas must be alternative
    fuel vehicles. We recognize the importance and benefits of using
    renewable fuels and directed that all non-deployable Navy and Marine
    Corps diesel vehicles use biodiesel fuel beginning June 2005. We are
    also working toward a future of hydrogen power and fuel cells. As an
    example, a Navy-Marine Corps team is developing a hydrogen fueling
    station for Marine Corps Base, Camp Pendleton, CA as we pioneer the
    early use of fuel cell vehicles in cooperation with industry partners
    such as General Motors Corporation.
    Environmental Research and Development
        The Navy continues to demonstrate its leadership in environmental
    stewardship through investments in research and development activities,
    with a particular focus on marine environmental concerns. There have
    been many technological advances that were developed by the Navy:

             Plastic Waste Processors melt shipboard plastic waste
            into convenient solid disks for easy storage and recycling
            ashore. These devices are now installed on all Navy surface
            ships; installation on submarines will be completed this year.
            About 1,700 tons per year of solid waste are now safely
            disposed of ashore instead of the world's oceans.
             Pulpers and Shredders allow the Navy to dispose in an
            environmentally benign manner other shipboard solid wastes such
            as food, paper, cardboard, metal and glass.
             Non-ozone depleting cooling and refrigeration plants
            are being retrofitted onto Navy surface ships.
             Marine Mammal Research has become a primary focus area
            to develop science-based tools to protect marine mammals and
            comply with the MMPA, ESA, and Executive Order 12114. The Navy
            has budgeted $10 million in fiscal year 2006 for this effort.
            Research efforts conducted in Navy and university labs focus on
            four thrust areas: (1) locating, tracking, and quantifying the
            abundance of marine mammals; (2) establishing criteria,
            thresholds, physiology, and behavior effects of sound in the
            water; (3) identifying and quantifying mitigation
            methodologies; and (4) conducting basic research in sound field
            characterization.

    Uniform National Discharge Standards
        The 1996 Defense Authorization Act required Navy and EPA to develop
    Uniform National Discharge Standards (UNDS) for shipboard wastewater.
    Phase I UNDS regulation was completed and published in 1999. The
    program is admittedly taking longer than originally envisioned because
    development of the regulations was far more complex than anticipated
    and requires cumulative impact analyses. Working with EPA, we have
    agreed on 25 discharges that require control. We must still identify
    best control technologies and practices applicable to warships, conduct
    analyses of environmental effects, cost, operational constraints, and
    ultimately specify the required controls. We have focused our efforts
    to issue proposed regulations for the first five discharges by
    September 2005.
                       active base environmental cleanup
        As of the end of fiscal year 2004, 72 percent of the 3,699
    environmentally contaminated sites at Navy and Marine Corps active
    bases have been completed or have remedies in place and operating. We
    have applied technology opportunities, contracting efficiencies, and
    other management actions that allowed us to shift funds from the
    Installation Restoration Program (IRP) (traditional hazardous sites) to
    the newer Munitions Response Program (MRP) without affecting program
    metrics or projected completion dates. We also have initiatives to
    optimize long-term remedies and reduce costs associated with long-term
    operations and maintenance of cleanup sites. Our fiscal year 2006
    request is $305 million including $45 million for MRP activities.
    Munitions Response Program.
        The DON has identified 231 sites that may require munitions
    response at locations other than operational ranges. Of these 231
    sites, 212 sites are at 56 active installations and 19 sites are at 6
    prior BRAC installations. Preliminary assessments have been completed
    for 82 sites at 9 active installations, and are underway at 25 active
    installations. DON has identified 1,306 acres with munitions and
    estimates a potential of 66,288 acres with munitions when PA are
    completed. We expect to meet the DOD near-term goal of completing these
    preliminary assessments for all known munitions sites by the end of
    2007. Until these assessments are completed, we do not believe there
    are credible estimates for the cost to cleanup.
    Vieques Cleanup
        The Navy closed Camp Garcia support bases and the training ranges
    on Eastern Vieques in 2003 and transferred the property to the U.S.
    Fish & Wildlife Service (FWS). The National Defense Authorization Act
    for Fiscal Year 2002 directs FWS to use the property as a wildlife
    refuge and to manage the live impact area as a wilderness in accordance
    with the Wilderness Act. Vieques remains one of the few unspoiled,
    undeveloped areas in the Caribbean, and was recently listed on the
    National Priorities List (NPL) at the request of the Governor of Puerto
    Rico. We are working with EPA, the Department of Interior, and the
    Puerto Rico Environmental Quality Board to develop a Federal Facilities
    Agreement governing the cleanup. We have budgeted $28 million for
    cleanup in fiscal year 2006.
                     prior brac cleanup & property disposal
        The BRAC rounds of 1988, 1991, 1993, and 1995 were a major tool in
    reducing our domestic base structure and generating savings. The DON
    has achieved a steady state savings of approximately $2.7 billion per
    year since fiscal year 2002. All that remains is to complete the
    environmental cleanup and property disposal on portions of 17 of the
    original 91 bases. We have had significant successes on all fronts.
        Last year DON relinquished over 71,000 acres at the former Naval
    Air Facility Adak, Alaska, to the Department of the Interior, which
    enabled Interior to exchange portions of the property with The Aleut
    Corporation for other lands. Additionally, the Navy achieved a
    significant milestone at the former Hunters Point Naval Shipyard in San
    Francisco by conveying the first parcel of 75 acres to the San
    Francisco Redevelopment Agency. Of the original 161,000 acres planned
    for disposal from all four prior BRAC rounds, we expect to have less
    than 5 percent (about 8,000 acres) left to dispose by the end of this
    fiscal year.
    Property Sales
        We have been very successful using property sales to assist in
    environmental cleanup and property disposal as well as recover value
    for taxpayers. We have used various methods to conduct these sales,
    including General Services Administration (GSA) on-site auctions, GSA
    Internet auctions, and Internet auctions using commercial real estate
    brokers. We used the GSA Internet web site in 2003 to sell 235 acres at
    the former Marine Corps Air Station Tustin, CA, for a net $204 million.
    We also sold 22 acres at the former Naval Air Facility Key West, FL, in
    January 2004 for a net $15 million. The City of Long Beach, CA, opted
    to pre-pay its remaining balance plus interest of $11.3 million from a
    promissory note for the 1997 economic development conveyance of the
    former Naval Hospital Long Beach. We applied these funds to accelerate
    cleanup at the remaining prior BRAC locations.
        Last month the DON completed its largest public sale via Internet
    auction consisting of four large parcels that total 3,720 acres at the
    former Marine Corps Air Station, El Toro in Irvine, CA, with bids
    totaling $649.5 million. The Internet auction of 62 acres at the former
    San Pedro housing site in Los Angeles, CA, received a top bid of $88
    million. We expect to close these sales later this year. We will also
    soon close escrow on the public sale of approximately 20 acres in
    Orlando, FL, which is noteworthy as the first deed conveyance of
    property prior to completion of all environmental cleanup using the
    public sale process.
        Public sales of smaller parcels were completed in Charleston, SC,
    and Novato, CA, and we expect to proceed soon with the sale of property
    at the former Oak Knoll Naval Hospital upon resolution of legal issues
    stemming from a lawsuit by the local redevelopment authority.
    Land Sales Revenue Caution
        A word of caution is necessary regarding land sales revenue.
    Although the auction for El Toro has ended and the auction for San
    Pedro should end soon, it will be several months before these sales
    close escrow, and several additional months until the DON receives the
    sale proceeds in the DON prior BRAC account. Until then, litigation or
    default by the winning bidder can delay or cancel the sale, as happened
    with the sale of the former Oak Knoll Naval Hospital in 2003. The El
    Toro sale, planned to occur last year, was delayed for 1 year due to
    litigation and the need to resolve redevelopment issues with the City
    of Irvine. That required us to conserve cash for fiscal year 2005
    execution.
        Because of our experience with the risks associated with predicting
    future receipt of land sales revenue, our fiscal year 2006 budget
    includes an appropriation request of $143 million to cover minimum
    required environmental cleanup actions under enforceable schedules and
    ongoing program costs for properties not yet disposed. Notwithstanding
    these risks, we are optimistic that the El Toro and San Pedro sales
    will close and the funds will become available for use during fiscal
    year 2006 execution.
    Prior BRAC Environmental Cleanup
        The DON has spent over $2.5 billion on environmental cleanup at
    prior BRAC locations through fiscal year 2004. We estimate the
    remaining cost to complete cleanup at about $559 million for fiscal
    year 2007 and beyond, most of which is concentrated at fewer than 20
    remaining locations and includes long-term maintenance and monitoring
    obligations for remedies already installed and operating at many
    locations. As we have done previously, the DON will use any additional
    land sale revenue beyond that projected in our fiscal year 2006 budget
    to further accelerate cleanup at these remaining prior BRAC locations,
    which are primarily former industrial facilities that tend to have the
    most persistent environmental cleanup challenges.
    Closure of Naval Station Roosevelt Roads, Puerto Rico
        In addition to completing property disposals from the four prior
    BRAC rounds, the Navy closed Naval Station Roosevelt Roads on March 31,
    2004, as directed by section 8132 of the fiscal year 2004 Defense
    Appropriations Act. All military mission activities have been
    relocated. The DOD schools remained open through the completion of the
    2003-2004 school year, as encouraged by the conference report
    accompanying the act. Naval Activity Puerto Rico has been established
    to protect and maintain the property and preserve its value until
    disposal.
        As directed in the act, the closure and disposal is being carried
    out in accordance with the procedures contained in the Defense Base
    Closure and Realignment Act (BRAC) of 1990, as amended. Pursuant to
    these procedures, the Navy has approved property transfers to the
    Department of the Army for use by Reserve components, and the
    Department of Homeland Security. The Commonwealth of Puerto Rico formed
    a Local Redevelopment Authority (LRA). Using grant funding from the DOD
    Office of Economic Adjustment, the LRA prepared a redevelopment plan
    for the property that envisions a mix of commercial, residential, and
    public uses, as well as conservation of large areas of mangrove forest
    and wetlands. As required by BRAC procedures, we are analyzing the
    potential environmental impacts of property disposal in accordance with
    that redevelopment plan. We expect that property disposal process will
    begin in 2006 and that substantial portions of the property will be
    disposed through competitive public sale. We do not expect this process
    to be completed until fiscal year 2007, and have requested $27 million
    in fiscal year 2006 to cover caretaker costs and maintain the property
    in preparation for sale. The Government Accountability Office (GAO)
    recently reviewed Navy plans and progress in disposing of the former
    Naval Station Roosevelt Roads. GAO found that Navy was following
    prescribed procedures and completed their review with no
    recommendations.
                                   brac 2005
    BRAC 2005 Decision Process
        A successful BRAC 2005 is most important to the DON, the DOD, and
    the Nation. It may be our last opportunity in the foreseeable future to
    reduce excess infrastructure, move scarce dollars to areas that result
    in increasingly improved readiness, and transform our infrastructure
    consistent with our defense strategy.
        BRAC 2005 provides a fair process that will result in the timely
    closure and realignment of military installations in the United States.
    All military installations inside the United States must be considered
    equally without regard to whether the installation has been previously
    considered or proposed for closure or realignment. All closure and
    realignment recommendations must be based on certified data, the 20-
    year force structure plan, and the published selection criteria that
    make military value the primary consideration.

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        For BRAC 2005, the Secretary of Defense directed that the analysis
    be divided into two categories of functions. Joint Cross Service Groups
    (JCSGs) are analyzing common business-oriented support functions while
    the military departments are focusing on analysis of service unique
    functions. The following seven JCSGs were established: Education and
    Training; Headquarters and Support; Industrial; Medical; Supply and
    Storage, Technical; and Intelligence. The JCSGs and the military
    departments will make their BRAC recommendations to the Infrastructure
    Executive Council (IEC), the DOD policy making and oversight body for
    the entire BRAC 2005 process. JCSGs were also utilized in BRAC 1995 but
    in a substantially different manner. In BRAC 1995, JCSG analysis and
    recommendations were provided to the military departments for
    consideration in developing their BRAC recommendations. The creation of
    the IEC ensures that DOD senior leadership is directly engaged in
    making these important decisions. Analysis and evaluation by all of the
    BRAC groups are ongoing, with a goal of supporting the Secretary of
    Defense's delivery of a comprehensive set of base closure and
    realignment recommendations by May 16.

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Despite what some may have read in the newspapers, seen on the
    Internet, or heard through the rumor mill, the DOD does not have a list
    of closures or realignments at this time. The number and location of
    such closures or realignments will only be determined after a
    comprehensive and rigorous analytical process that is now underway in
    the military departments and Joint Cross Service Groups.
    BRAC 2005 Implementation Funding
        DOD has programmed funds through the Future Years Defense Plan for
    implementing BRAC 2005 decisions. Discussions are underway as to how
    these funds may be allocated to the military departments for
    implementing BRAC 2005 decisions. Expectations are that BRAC 2005
    implementation costs will be financed by a mix of (1) allocation of the
    DOD funds, realignment of funds from military construction projects and
    SRM funds no longer needed at closing locations, transfers from
    environmental restoration accounts, and if necessary, additional
    military service funds to implement BRAC 2005 decisions.
    Preparing to Implement BRAC 2005
        The DON is building upon its experience in completing cleanup and
    disposal of property from prior BRAC rounds to prepare to implement
    BRAC 2005 decisions. Recently, the Secretary of the Navy approved
    formation of a BRAC Program Management Office (PMO) that reports to the
    Assistant Secretary of the Navy for Installations and Environment. BRAC
    PMO has assumed responsibility for completing cleanup and disposal of
    the remaining property from prior BRAC rounds, and it will become
    responsible for cleanup and disposal of property at installations
    closed or realigned in BRAC 2005.
        The DON has examined lessons learned from cleanup and disposal of
    property at prior BRAC bases, especially recent successes using
    competitive public sales. Much has changed since the last BRAC round in
    1995. Environmental contamination at remaining bases has largely been
    characterized, and cleanup has been completed or is now well underway.
    A close examination of existing statutory authority and Federal
    regulations for property disposal showed there were ample opportunities
    to improve the disposal process without the need for new legislation.
    Private sector capabilities have emerged and matured for brownfield
    redevelopment and insurance industry products to address environmental
    liabilities when there is a CERCLA early transfer of contaminated
    property. The DON expects to take increased advantage of these private
    sector capabilities.
        We will continue to use all of the property disposal authorities in
    the right circumstances, as we have in the case of the disposal of
    Naval Station Roosevelt Roads. Like Roosevelt Roads, however, we
    believe there will be more opportunities to quickly dispose, in
    cooperation with the local community, BRAC 2005 property requiring
    environmental cleanup in its existing condition. The Navy will dispose
    of property using public sale and will include the cleanup of that
    property with it, as is done in ``brownfield'' disposals nationwide.
    This will allow developers with the experience and expertise to
    complete the cleanup as they redevelop the property. That benefits
    communities by getting the property onto local tax rolls and
    redeveloped more quickly, with the local community controlling that
    development through traditional land use planning and zoning. It
    benefits DOD and the Federal taxpayer by divesting unneeded property
    sooner and reducing the environmental cleanup time and expense incurred
    by DOD. The DON goal for implementing BRAC 2005 is that the last sailor
    or marine leaving the closed base hand the deed to the property to the
    new owner. We are convinced that this goal is achievable when we start
    preparations for property disposal as soon as closure decisions are
    final.
                                   conclusion
        In conclusion, we believe we have put forward a very strong fiscal
    year 2006 budget request for our facilities and environmental efforts,
    while still recognizing the compelling needs of the global war on
    terror. We have funded base operating costs to achieve the desired
    capability levels, and funded 95 percent of predicted sustainment
    requirements, while the Navy makes progress on its facility recap
    metric.
        We are funding environmental programs to maintain compliance with
    all environmental standards while accelerating cleanup of past
    contamination and investing in research and development efforts to
    solve emerging environmental concerns.
        We are proceeding with the analysis and scenario development that
    will lead to the Secretary of Defense announcement of BRAC 2005
    recommendations. We have carefully reviewed our implementation
    practices from the previous four BRAC rounds and are establishing, in
    cooperation with DOD, the necessary organizational structures and
    business policies and practices to accelerate closure, environmental
    cleanup, and property disposal.
        That concludes my statement. I appreciate the support of each
    member of this committee, and will try to respond to your comments or
    concerns.

        Senator Ensign. Secretary Gibbs.

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

        Mr. Gibbs. Having been in the job 3\1/2\ years, I will be
    even briefer than Secretary Penn.
        Thank you for the kind words, Senator Akaka. This is an
    unforseen appearance on my part. As you are aware, I had
    intended to leave my position in January, but because of all of
    the other vacancies in the Air Force, I was asked to stay on
    and I have agreed to do so for a short period of time.
        I would just report to you that the Air Force continues in
    the program that was laid out before this and other committees
    in hearings in early 2002. We continue with the privatization
    effort. We continue with the recapitalization of our
    facilities. We continue to ensure that we are providing the
    best and the most realistic training for our forces. As you are
    aware, the Air Force believes that it must train as it fights.
    In fact, the inverse is true; we fight as we are trained. So,
    we provide the most realistic training possible and maintain a
    high state of readiness.
        With that, Senator Cornyn, nice to see you again. Senator
    Thune. Thank you very much for the opportunity and I stand
    ready to attempt to answer any of your questions.
        Senator Ensign. Well, I thank all the witnesses. I
    apologize for the shortness. We are going to do 5-minute rounds
    of questioning to make sure we all get at least one round of
    questions.
        Mr. Grone, I will start with you. I understand that the
    President's budget request of $1.88 billion to start
    implementation of BRAC decisions was derived from an amount
    requested in previous BRAC rounds. I also realize that the
    budget was prepared last year, well before current indications
    of actual impact of what BRAC might be.
        Do you have any updated estimates that would justify the
    need for the $1.88 billion? When exactly does the Department
    plan to inform this committee on how the $1.88 billion will be
    spent?
        Mr. Grone. Mr. Chairman, you are correct. As we tried to
    build the budget for first-year implementation, of course, as
    you are building that budget, you do not know precisely what
    the outcome is going to be because the recommendations are not
    yet fully built. The commission process has not yet occurred,
    and the consideration by the President and the Congress of the
    United States of those recommendations has not yet occurred.
        We tried to take a good, hard look, as we were building the
    budget, in terms of lessons from the past. When we looked at
    the 1993 round and applied the appropriate inflation
    adjustments to it, the first-year implementation money was
    approximately $1.5 billion in current year dollars. The 1995
    round came out to just a little bit over $1 billion. But the
    Government Accountability Office (GAO) had observed on several
    occasions that the Department could have done more with the
    1995 round if it had provided a more robust, up-front framework
    within which to fund implementation of the round.
        So looking at the lessons of the past, and also considering
    the early assessments of what some net costs might be
    associated with early implementation of forces returning from
    abroad to the United States, we came to the determination that
    roughly $1.88 billion was appropriate for the first year. I
    firmly believe and expect that we will expend those funds in
    the first year of implementation.
        With regard to how they will be expended, we plan on
    providing a full justification for that amount of funds, which
    Congress in the first year of implementation has traditionally
    granted some flexibility on in terms of appropriation to
    provide that justification upon the disposition of the
    commission process so that Congress will know how we spend
    those first-year funds.
        For fiscal year 2007 and beyond, of course, we will provide
    a full justification book with the President's budget in that
    year. So, the first year of implementation is really the only
    point in the process at which it will be at least initially
    unclear how precisely those funds would be expended, but as
    soon as we are able, we will provide that report. The Under
    Secretary of Defense, the Comptroller, and I have discussed the
    ways in which we might provide that at the appropriate time.
        Senator Ensign. Mr. Grone, also for you. I appreciate your
    last answer. Dealing with the changes to existing environmental
    laws, could you describe--I realize that there are proposals to
    amend the Comprehensive Environmental Response, Compensation,
    and Liability Act (CERCLA) and Resource Conservation and
    Recovery Act (RCRA). But could you describe what each proposal
    is intended to do and why it is needed and maybe also some of
    the outreach that DOD has done to the States in this process?
        Mr. Grone. Well, Senator and members of the subcommittee,
    there remain from the initial departmental proposals on the
    Readiness and Range Preservation Initiative (RRPI) three
    remaining provisions that are not yet enacted.
        Senator Ensign. Also, if you could address maybe any of the
    environmental community's concerns, what the DOD has done in
    response to those as well.
        Mr. Grone. Yes, sir. One would allow for a 3-year period to
    come into general conformity under the Clean Air Act rather
    than conformity on the day of the actions undertaken. The other
    two, as you have referenced, refer to the Resource Conservation
    and Recovery Act, as well as CERCLA.
        The latter two are intended to codify existing regulatory
    practice of the Federal Government and the States to ensure
    that those existing practices, which are of longstanding and
    have been in a bipartisan way administered, remain in place.
    They are occasionally challenged in the courts.
        Nothing that we would provide or do under RCRA and CERCLA,
    for example, would affect in any way our existing environmental
    obligations. Certainly it would not affect our environmental
    obligations for off-range migration of contaminants. We will
    continue to fulfill those obligations in the way in which we
    are doing now.
        We have had extensive outreach with the States,
    particularly on the latter two of the three provisions, over
    the course of the last 2 or 3 years. We have made modifications
    to the proposals over time to reflect some of their concerns,
    as well as the concerns of some others in the environmental
    community. There remains, I think it is fair to say, a fair
    amount of disagreement over whether those provisions are
    necessary at the present time. We continue to believe that they
    are, but we have not reached complete consensus with the States
    and the environmental community on that. But we remain in
    aggressive outreach on that and the dialogue remains very
    robust on these questions.
        Senator Ensign. I know these are difficult issues.
    Unfortunately, my time is expired. I have several other
    questions that I will submit to all of you in writing, simply
    because the time is short, on the overseas basing plans and the
    burdensharing agreements. I have some questions on that.
        Mr. Prosch. Sir, could I just add one thing? I would like
    to thank Senator Akaka for his leadership using the RRPI to
    help us get maneuver rights back into Makuua Valley. I think
    that it is very wise that we pursue this legislation because it
    allows us to clarify, not roll back existing statutes.
        Senator Ensign. Very good.
        Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Mr. Grone, the fiscal year 2005 supplemental requests $1
    billion for military construction in the Central Command
    region, including $597 million for facilities in Iraq and $158
    million for facilities in Afghanistan. Some of these funds are
    for force protection, which I and, I believe, all members fully
    support.
        However, this substantial investment in permanent
    facilities raises a question. Does construction of permanent
    facilities in Iraq and Afghanistan mean that we intend to
    maintain a long-term military presence in Iraq?
        If not, if we do not intend to continue using any of these
    bases or facilities beyond the period when the security
    situation improves enough for our forces to leave, why, in your
    view, should the U.S. taxpayers invest $597 million in military
    construction funds in Iraq for permanent facilities that will
    not be available for our forces to use until late 2006 and
    which we may use for only a short time?
        Mr. Grone. Senator, the best way that I can answer that
    question, I believe the Secretary of Defense and General
    Abizaid have spoken to this question. The funds that are
    requested in the supplemental are to meet the operational
    requirements as the combatant commander sees his mission today
    and into the near term. The facilities that are required and
    requested for the use of military construction funds do not
    imply permanent basing at all of those locations for United
    States forces over the long term. What they do reflect is the
    judgment of the combatant commander of the needs that he sees
    in terms of his ability to carry out his mission as it is
    currently defined, and at the point at which U.S. forces no
    longer require those facilities, of course, we will not be
    using them. But our ability to execute the mission requires
    some investment in facilities for force protection and other
    means, as you indicated. So the combatant commander's views on
    this are that they are required for his mission.
        Senator Akaka. You can understand the concern here of
    placing that kind of funds there for buildings that seem to be
    permanent.
        Mr. Prosch, thank you for coming to visit with me.
        I should say, Secretary Gibbs, I did call back too late
    last night.
        But Mr. Prosch, what is the Army doing to proactively
    address concerns expressed by the local community pertaining to
    the impact of increased training related to the transformation
    of the 2nd Brigade, 25th Infantry Division to a Stryker brigade
    combat team? How are you addressing the concerns expressed
    related to--and this is the other part--expanded training at
    the Puukohola training area? We did chat about this briefly,
    but for the record, I would like to receive a comment from you
    on those.
        Mr. Prosch. Yes, sir. We fully understand it is very
    important that we work closely with the stakeholders.
    Environmental issues, however, do threaten our readiness. So we
    want to make sure that we work closely with the stakeholders.
    We understand that the environmental program will not be
    relaxed. We must work closely and stay within the laws.
    Involved commanders are the key to the successful part of this.
        I believe we have a good environmental relationship with
    the great people of Hawaii. I believe we have good progress to
    be able to train on the Big Island, and I am confident that we
    will continue to work closely with State, Federal, and local
    people to ensure that the Stryker brigade is able to be combat
    ready and also stay within the boundaries of the statutes.
        Senator Akaka. Mr. Grone, DOD officials have stated that
    they plan to treat the stationing of forces being relocated
    back to the United States as part of the Global Posture Review
    and the permanent stationing of the 10 new modular Army
    brigades being created as part of the BRAC process. Can you
    confirm that this is correct? Or does this mean, in your view,
    that these basing decisions will be subject to the review of
    the Base Closure Commission, or would they still be presented
    to Congress using the normal authorization and appropriations
    process?
        Mr. Grone. Senator, the perspective we took on the use of
    the BRAC process to reset the force globally is critically
    important. The ability of BRAC and the timing of BRAC, along
    with what we are implementing through the global force posture
    realignment--the timing of it is critical. BRAC gives us the
    ability to have the entire installations board open to assess
    all of our missions for the future in terms of where they are
    best positioned.
        When I have spoken to numerous community groups about this
    question, they have asked a similar question. Why are you doing
    it in this way? What I have tried to tell them is that if we
    did not have BRAC and we were to undertake this process
    returning 70,000 uniformed personnel and 100,000 dependents
    back to the United States, we would be compelled to ask and
    answer the question not where can they best be placed, but
    where could they fit.
        Because we have the ability to realign missions to position
    our forces better for the future, BRAC gives us the ability to
    ask and answer that more important and more relevant question--
    where are returning forces better positioned to execute their
    mission. So, we do expect and anticipate that any
    recommendations on the permanent stationing of forces returning
    from abroad would be included in our recommendations to the
    commission and ultimately to Congress.
        Senator Akaka. Thank you very much.
        Senator Ensign. Senator Cornyn.
        Senator Cornyn. Thank you, Mr. Chairman.
        Secretary Grone, in prior BRAC rounds, the Department of
    Defense issued a guide to local communities to help them
    understand this mysterious process that we are going through. I
    strongly urge you to do the same this time. Do you currently
    have those plans in the works?
        Mr. Grone. Senator Cornyn, we have had an extensive policy
    review underway to ensure that we are best positioned to assist
    communities either in the context of a closure or a major
    realignment of the installation or in an environment, frankly,
    where we have growth at an installation due to realignment. It
    is important for us to be well positioned to work with State
    and local government to ensure that we have the best and
    smoothest transition on either end of that spectrum as
    possible. We do expect that we will be issuing an additional
    handbook or manual that would help guide communities and any
    other interested party through the process.
        But as we have undertaken this review, while we are taking
    a good, hard lesson and trying to keep what succeeded from the
    past, we are proceeding from a set of five general principles.
        First is we want to take a good, hard look at doing
    everything we can to move the mission as expeditiously as we
    can so that we can get to the second principle, which is to do
    everything that we can to ensure appropriate community economic
    redevelopment in an expeditious way in the event we have a
    closure environment.
        The third principle is we do want to use a mixed tool kit
    approach. All of our authorities that we have are available. We
    want to be able to guide and use those authorities whether they
    are economic development conveyances, public sale, public
    benefit conveyances in a way that most supports the needs of
    the community, as well as the needs of the Department.
        We want to leverage market forces to the maximum extent we
    can. So, certainly there will be more public sales than we have
    seen recently out of the early parts of the 1995 round, but
    even where the Department of Navy has executed some successful
    sales, they have been of the mixed tool kit variety. It has not
    been all public sale. They have used all the authorities that
    are available to them and, I think, were using them
    successfully. The Army has used conservation conveyances, for
    example.
        Senator Cornyn. It is obvious that the Department has done
    an awful lot of work going into this. I guess my question
    really was addressed toward letting people know, on or about
    May 16, what this means and a little more about the process, so
    that they know that this just was not some edict issued from on
    high that could potentially have a devastating impact to the
    local economy in a lot of towns all around the United States.
        Mr. Grone. We have had a number of useful suggestions from
    a number of external parties. Members of the House and the
    Senate have provided some suggestions to us. The National
    Association of Installation Developers, Governors, local units
    of government have given us some suggestions for how to
    proceed. As I say, we have a policy review that is underway. In
    everything that we do, we are highly supportive and recognize
    that any success that we may have here is entirely dependent
    upon community-based redevelopment, working in partnership with
    the local community. Otherwise it cannot succeed.
        Senator Cornyn. I would like to ask, if time permits, for
    you to comment on the homeland defense component of the BRAC
    process. Secretary Rumsfeld, in questions before the whole
    committee, has told us that homeland defense would be one of
    the criteria that would be considered during this BRAC. Mr.
    Prosch, since I have been picking on Mr. Grone, maybe you can
    take a stab at that first.
        Mr. Prosch. Yes, sir. One of the military criteria that we
    analyze is the capability of that facility to be able to stage,
    accommodate, have air space and support forces that would
    assist in homeland security missions. So that is a viable
    element that we are analyzing with our Army base study group.
    It is a mandatory requirement we have to look at as part of the
    total military value package that we analyze for a facility.
        Senator Cornyn. Secretary Penn, is that also the case for
    the Navy?
        Mr. Penn. Yes, sir, it is.
        Senator Cornyn. Let me quickly, Secretary Gibbs, ask you.
    Brooks city base in San Antonio essentially is a concept which
    provides all the operational costs of the base paid for by the
    city while the Air Force's mission continues on at great
    savings as compared to the traditional arrangement. Can you
    tell me your views of how that concept is working, whether you
    think that has a future, and any other observations you would
    care to make about that approach?
        Mr. Gibbs. I think it has been very successful. It got off
    to a slow start. I was fortunate enough to be there for the
    cutting of the ribbon when the turnover went to the City of San
    Antonio. It has been very successful. The Air Force pays
    basically for the services it receives from the city at
    standard rates, and we believe we have saved a fair amount of
    money.
        We have been a little slow in turning over some of the
    properties to the city. I prod the Air Force fairly regularly
    to get more of the excess turned over for those things that we
    do not need.
        But I think the city base concept, taking some of the
    lessons we have learned there, and some of the lessons we have
    learned in some of the other experimentation that we have been
    doing over the last 3 or 4 years, has excellent possibility for
    the future, both coming out of the next BRAC round for uses
    there, but also in other circumstances. I think we should
    continue to pursue them.
        It is a public-public partnership in that respect, the
    local public with the Federal Government, and it can be very,
    very successful. I am pleased with what has happened there.
        Can I respond to your earlier question about the homeland
    defense?
        Senator Ensign. I need to go to Senator Thune just because
    I want to try to get both of our last two Senators in.
        We have a vote on. I have someone checking with the cloak
    room to see if they will hold the vote open until 10:30 for us
    so both of you could finish your questioning.
        Senator Thune.
        Senator Thune. Thank you, Mr. Chairman.
        Secretary Grone, you mentioned in your written testimony
    that overseas realignments will affect the BRAC process,
    possibly over a period of years, and that you have already
    factored some of those changes into the May 2005 announcement
    and will continue to adjust BRAC as necessary in the future.
    Assuming that many installations will receive new missions and
    units, as a result of realignment in overseas BRAC, does the
    Department of Defense envision a significant trend toward a
    joint basing system in the future to accommodate those
    realignments, in other words, collocating assets together from
    different services?
        Mr. Grone. Senator Thune, without regard to the return of
    forces from abroad, we are looking for a number of ways to
    enhance joint utilization of all of our assets, and so joint
    basing, as you suggest, is one way to do that. We are looking
    very hard at a number of ways that we can enhance the value of
    our installations and their efficiency by finding ways to use
    them on a more effective joint basis. We have an enormous
    amount of joint activity going on out there right now. We could
    do more and we intend to do more.
        Senator Thune. For those installations that will expand as
    a result of BRAC and receive new missions, will the Department
    also provide cooperative planning with those affected
    communities to stand up and support the new mission
    requirements?
        Mr. Grone. Yes. The Office of Economic Adjustment (OEA)
    will provide planning grants on a competitive basis to
    communities, as they have in the past. The staff there, the
    director, Patrick O'Brien, has been recalibrating and retooling
    the staff to get ready for BRAC 2005. So we are in a position
    from the Office of the Secretary of Defense (OSD)/OEA service
    perspective to work jointly with communities to provide the
    appropriate planning assistance, as necessary, to help us work
    in partnership to either support the community in the event an
    installation closes or to work with the communities in the
    event that we have mission growth.
        Senator Thune. One other question. You also mentioned in
    your written testimony that DOD has increased its focus on
    purchasing renewable energy and developing resources on
    military installations. Could you expand on that a little bit,
    what types of renewable energy is being used?
        Mr. Grone. Sir, we are looking at a full array of
    renewables. Just 3 years ago, in the context of the energy
    conservation program that we have, we expended about $5 million
    of a $50 million program on renewable sources. This fiscal year
    we are spending $18 million. So we are looking at things across
    the array, solar, geothermal, wind, and wind power in a number
    of ways. We recently completed a study, which I believe we have
    recently submitted to Congress, and we would be happy to
    provide a copy of that to you, that details a number of
    different options that we have to use renewables on a number of
    our installations. We think it is a potential for significant
    investment in the future and significant efficiency on a going-
    forward basis.
        Senator Ensign. Senator Thune, if I may, we just got word
    that they are not going to hold the vote open for us more than
    another 5 to 7 minutes.
        Senator Thune. I might also suggest ethanol.
        Senator Clinton. I was waiting for that.
        Senator Thune. I know you were waiting for that. The
    Senator from New York is here--I have a couple of questions
    that I would like to submit for the record.
        Senator Ensign. We are all going to submit questions for
    the record.
        Senator Clinton, try to keep it as brief as possible.
        Senator Clinton. Thank you, Mr. Chairman. I will and I will
    talk fast.
        I wanted to thank Senator Cornyn for bringing up the
    homeland defense issue. Mr. Prosch came to Fort Hamilton, the
    only remaining installation within New York City, which was an
    important staging area after September 11.
        I would like to ask just briefly everyone to answer yes or
    no. With the onset of BRAC, I know that a number of communities
    are making promises to finance the construction of facilities.
    However, New York communities since 1995 have already been
    proactive in making investments in their installations prior to
    this BRAC round. During that last BRAC round, we saw many
    offers that never materialized into concrete results once the
    installations were saved. I would like to ask each of you, will
    offers from State and local governments to finance the
    construction of facilities, whether privatized or not, be
    considered as part of the BRAC process. Just yes or no.
        Mr. Grone. It is a complex answer, but no. Generally we are
    dealing with facts on the ground.
        Senator Clinton. Mr. Prosch.
        Mr. Prosch. We have $200 million in military construction
    (MILCON) up at West Point alone that we are going to continue
    to----
        Senator Clinton. But that is public money. I am talking
    about communities coming and saying we are going to put money
    into this, the State is going to put money into this. I think
    Mr. Grone is right. We should take the facts as we find them on
    the ground, especially since in the 1995 round a lot of
    communities came forth and said save this base, we will put $10
    million into this, the State will put $20 million, and it never
    happened. I just want to be sure that the criteria is, as Mr.
    Grone says, for each of the Services.
        Mr. Prosch. Yes, ma'am.
        Senator Ensign. Thank you.
        Secretary Penn.
        Mr. Penn. Ma'am, as stated. No.
        Senator Clinton. Secretary Gibbs.
        Mr. Gibbs. No.
        Senator Clinton. The rationale for the 2005 BRAC round has
    been somewhat of a moving target. We have heard arguments that
    it is designed to achieve jointness, to eliminate encroachment,
    to save money, to reduce capacity, and more recently to reset
    and reposition forces. It is difficult, I think, for a lot of
    us to quite figure out what criteria the Services are using. I
    guess, Mr. Grone, this would be for you. Should an objective
    analysis of a location's military value and costs of operation
    not drive the process as opposed to a more abstract formula
    that somehow this will lead to rearranging the deck chairs in
    some pre-ordained manner?
        Mr. Grone. Well, Senator, the criteria that the Secretary
    published last year to guide the process, a core element of
    foundation of this process lays out the criteria by which the
    Secretary will develop those recommendations. Military value,
    pursuant to congressional direction, as well as departmental
    policy, is the highest consideration. The cost of operations
    and manpower implications of a given potential recommendation
    are also part of that military value equation.
        That said, while we have those selection criteria, the
    Secretary has talked about the importance of utilizing the
    round to enhance force transformation, to improve joint
    utilization of our assets, to convert waste to warfighting in
    terms of the structures that we no longer require, as well as
    to use it as a means by which we can efficiently accommodate
    forces returning from abroad. But all of that will be done
    within the context of the selection criteria and the force
    structure plan provided to Congress.
        Senator Clinton. Well, obviously, our highest hope is that
    is exactly what does happen. We spent a lot of time in both
    Houses of Congress trying to hammer out those criteria. At the
    end of the last BRAC process, as I am sure you have been told
    numerous times by people from New York, we believed that
    inappropriate political considerations were used at the very
    last minute. That left a very bad taste in a lot of people's
    mouths. New York has a great tradition of military service and
    people there I think are under special pressures because of
    terrorism and the continuing understanding that New York is the
    number one target. So military value is the criteria. We do not
    want to see political considerations intervene.
        Thank you.
        Mr. Grone. Senator, I can assure you, the chairman, and the
    ranking member that political considerations are not a factor
    in the Secretary's and the leadership's considerations.
    Military value is the highest----
        Senator Clinton. Thank you.
        Senator Ensign. I want to thank the entire panel and all
    the Senators and, once again, apologize for the briefness of
    this hearing, but the hearing is closed.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Ensign
                         army modularity infrastructure
        1. Senator Ensign. Mr. Prosch, the Army used emergency authorities
    in 2004 to spend over $100 million to procure and install temporary
    facilities to support modularity units preparing for deployments to
    Southwest Asia, and is now asking for another $261 million in the
    fiscal year 2005 supplemental request for the same purpose. Hundreds of
    trailers each at 10 locations around the country will soon be in place
    to house and provide work areas for over 30,000 troops for an
    undetermined amount of time. This is at a time when the Army and all
    the Services have made great strides, with the full support of this
    committee, to meet the Department of Defense (DOD) goal to eliminate
    inadequate permanent party barracks by 2007. Are these trailers
    considered adequate permanent party unaccompanied housing and has the
    Army revised its plan to meet DOD guidance, and if so, what is now the
    goal to meet the guidance?
        Mr. Prosch. Yes, the relocatable buildings provide adequate short-
    term, interim housing for unaccompanied soldiers. However, in the long-
    term, the relocatable buildings will be replaced with permanent
    facilities through the normal military construction process as soon as
    practical once the 2005 Base Realignment and Closure decisions are
    made.

        2. Senator Ensign. Mr. Prosch, how long to do you anticipate Army
    personnel will have to live in temporary trailers?
        Mr. Prosch. In achieving the Army Modular Force, some use of
    relocatable buildings is necessary until permanent solutions can
    satisfy Army requirements. Where the Army houses soldiers in
    relocatable buildings, the duration generally will not exceed 7 years.

        3. Senator Ensign. Mr. Prosch, what is the Army's plan to replace
    the temporary housing trailers?
        Mr. Prosch. There's no intention to maintain relocatable buildings
    indefinitely. Military construction funding to replace relocatable
    buildings will be programmed as soon as the 2005 Base Realignment and
    Closure decisions are made.

        4. Senator Ensign. Mr. Prosch, has an investment strategy been
    developed to provide permanent facilities, and are these costs captured
    either in the fiscal year 2006 Army budget or across the Army Future
    Years Defense Plan?
        Mr. Prosch. The Army is in the process of finalizing its permanent
    facilities strategy. An Installation Facilities Master Planning Task
    Force composed of representatives across the Army Staff will integrate
    Army Modular Force and Integrated Global Presence and Basing Strategy
    facility impacts into a single Army Installation Facilities Master
    Plan. In doing so, the Task Force will develop the investment strategy
    to support Army Campaign Plan initiatives detailing Military
    Construction for future budget submissions.

        5. Senator Ensign. Mr. Prosch, how have families forced on short
    notice to move been accommodated for in housing, child care, and
    schools?
        Mr. Prosch. Installation commanders and garrison commanders have
    notified mayors, schools, city managers, and county commissioners of
    impending military population increases to ensure maximum levels of
    community support with regard to schools, child care, and off-post
    housing. In most cases, sufficient off-post housing is available to
    support increased family populations. Housing market analyses are being
    updated to address temporary stationing impacts. These analyses
    indicate housing is available to support the anticipated families. Care
    for incoming children will be accommodated by supplementing available
    on-post child care service with offpost service, as well as by
    extending child development center hours.

                 migration of operations and maintenance funds
        6. Senator Ensign. Mr. Prosch, Secretary Penn, Secretary Gibbs, I
    want to ask about Facility Sustainment, Restoration, and Modernization
    (FSRM) funding, which is used to maintain the safety, security, and
    adequate condition of military facilities and infrastructure. Your
    prepared comments mention your efforts in fiscal year 2006 to meet the
    DOD budget goals to fund 95 percent of the FSRM requirements. Yet in
    our visits to military installations, we consistently find that, in the
    year of funding execution, only a small fraction of FSRM funds are
    being used for their budgeted and authorized purpose. In most cases,
    funds are diverted to cover budgeted shortfalls in base operations
    accounts. What is each Service doing to limit the extent of migration
    of funds from FSRM?
        Mr. Prosch. To limit migration of funds from SRM to Base Operations
    Support accounts, the Army leadership has committed to work towards the
    ``90/90'' proposal in fiscal year 2007. This proposal will fund 90
    percent of the requirements for both SRM and Base Operations Support
    and should eliminate the need to migrate SRM funds to cover budgeted
    shortfalls in Base Operations Support.
        Mr. Penn. Both the Navy and the Marine Corps want to limit the need
    to migrate funds from FSRM to other accounts.
        The Navy established Commander, Navy Installations (CNI) to
    consolidate installation management functions and provide a single
    entity to assess all shore installation management requirements and to
    budget and execute resources. CNI uses capabilities based models with
    defined metrics and unit costs that are benchmarked against historic
    performance and industry standards. These models are used to generate
    resource requirements and link them to definable outputs. The Navy can
    then decide the desired capability, and budget accordingly with a high
    degree of confidence that the expected outputs will be achieved, thus
    minimizing the need to realign funds out of FSRM to pay execution
    shortfalls in other installation accounts. In addition, while
    previously installation and regional commanders could opt to migrate
    funds out of FSRM, such decisions now require CNI program director
    approval.
        Marine Corps activities are required to request permission from
    Headquarters Marine Corps before any funding is moved from the Facility
    Sustainment, Restoration, and Modernization accounts. The Marine Corps
    executed the Sustainment account in fiscal year 2004 at 96 percent of
    the FSRM requirement model.
        Mr. Gibbs. The readiness of our infrastructure remains an emphasis
    item for the Air Force and we are sensitive to the migration of funding
    from programs such as Sustainment, Restoration, and Modernization.
    However, fiscal demands associated with the global war on terrorism and
    shortfalls in other key installation support programs, require our
    installation commanders to direct funding from programs such as these.
    Supplemental appropriations and our commanders' ability to migrate
    funding back into these accounts at the close of the fiscal year
    generally result in the Air Force obligating more funding than
    originally appropriated. For example, in fiscal year 2004, Congress
    appropriated a total of $2.1 billion for the combination of
    Sustainment, Restoration, and Modernization. At the close of the fiscal
    year, the Air Force obligated a total of $2.4 billion in these
    programs.

        7. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary Gibbs,
    what do you assess are the long-term implications of decisions to defer
    the repair and improvement to facilities and infrastructure?
        Mr. Prosch. Facilities will not last their intended life cycle
    without proper sustainment. Continued underfunding will eventually
    degrade our ability to support mission requirements.
        Mr. Penn. This is admittedly an area that requires more work. The
    Facilities Sustainment Model and the recapitalization metric have gone
    a long way towards establishing credible long term predictive
    standards. However, traditional facility readiness ratings (e.g., C-3
    and C-4) that attempt to reflect current facility conditions to support
    operational needs have been viewed as suspect by many. The Navy and
    Marine Corps are working with the Office of the Secretary of Defense
    and the other Components to establish a more credible metric on current
    facilities readiness condition. We expect this new metric to be
    available next year, and would allow linking current conditions needs
    with longer term sustainment and recapitalization efforts.
        Mr. Gibbs. The long-term implications of deferring repair and
    improvement to facilities and infrastructure is an eventual loss of
    mission capability.

        8. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary Gibbs,
    what do you anticipate would be the impact of building a budgetary
    fence around FSRM funds that would ensure the amount of funding
    authorized by Congress is adequately applied to FSRM requirements?
        Mr. Prosch. The most notable impact would be a significant
    reduction in the Department's flexibility to respond to unforeseen
    contingencies.
        Mr. Penn. While a budgetary fence around FRSM funds would ensure
    the amount of funding authorized by Congress is only spent on FRSM, I
    would oppose this effort because it would unduly restrict Navy and
    Marine Corps flexibility during program execution. We have seen recent
    times when FRSM funds have migrated into other operating accounts to
    support emergency wartime preparations, and conversely, when natural
    disasters have required the migration of other operating funds into
    FRSM.
        Mr. Gibbs. The readiness of our infrastructure remains an emphasis
    item for the Air Force. However, a budgetary fence around FSRM funding
    would decrease our installation commanders' ability to react to
    emerging requirements and/or critical shortfalls in other programs.

                             overseas basing plans
        9. Senator Ensign. Mr. Grone, Mr. Prosch, Secretary Gibbs, with the
    President's release of the Integrated Global Posture Strategy in
    September 2004, a series of military installations around the world
    were identified as having an ``enduring presence.'' These bases and
    sites will support both the permanent presence of U.S. military
    personnel and rotating units for training. The DOD is now in the
    process of negotiating formal agreements with host nations to implement
    the strategy. Many of these moves will require a substantial investment
    of funds for new construction, either to be funded by the host nation
    or by the United States. To ensure a wise use of taxpayer dollars, what
    types of host nation agreements should be completed by the DOD before
    authorization for funds are requested for military construction
    projects in the annual President's budget or supplemental
    appropriations?
        Mr. Grone and Mr. Prosch. Military construction (MILCON) funds are
    obligated overseas in countries where we are reasonably assured that
    our presence will endure. As such, before we obligate MILCON, we
    typically negotiate favorable access arrangements and status
    protections, through Status of Forces Agreements. However, to ensure
    that we are in a position to act quickly, we occasionally request
    funding in advance of the successful conclusion of negotiations. In
    these cases our intention is that once negotiations are completed, the
    funds will be on hand and can be obligated immediately.
        Mr. Gibbs. The initial Host Nation Support (HNS) agreement is the
    general agreement that is negotiated on a bilateral basis between the
    State Department and the comparable ministry of foreign affairs within
    the host nation (HN). This document establishes the legal basis between
    the U.S. and the government for moving ahead on the detailed agreements
    to achieve HNS. The document also provides the political emphasis
    within the HN to ensure that the various national agencies plan and
    provide the support when required. When the general agreement is
    concluded, the commands begin developing the next level of HN
    documentation, the technical agreement or arrangement (TA). The TA
    addresses broad functional areas and includes definitions,
    responsibilities, procedures, etc., to provide guidance to the
    components for detailed HNS planning. The U.S. process explicitly
    restricts the TA negotiations to the U.S. and HN representatives. The
    next step, level of agreement, is conducted by a joint planning
    commission or group (JPC/G), co-chaired by the senior officials of the
    U.S. unified command and the HN ministry of defense (MOD). This group
    codifies the policy and guidance needed to conduct joint bilateral HNS
    planning into a document, annexed by specific subject area, and known
    as the Joint Logistics Support Plan (JLSP). The JLSP guidance
    identifies the type of support the HN is able and willing to provide,
    and the conditions under which the support is made available. The next
    step in planning is for the sending nation to develop and submit to the
    host nation their concept of requirements (CORs). The COR is a
    statement of functional HNS requirements that the components need to
    support deploying U.S. forces. Once the COR is submitted and approved
    (to the extent possible by the HN), the statement of requirements (SOR)
    is submitted. The SOR identifies in detail the type and amount of HNS
    required by the unit to accomplish its tasks. The requirements may be
    time-phased and incorporate facilities, services, and supplies at
    several separate locations. Generally, however, it should be expressed
    as a quantifiable workload that the HN can plan to allocate resources
    against during execution of U.S. operations.

        10. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, does the DOD plan to establish installation development master
    plans that will capture all facility requirements, total estimated
    investment, and anticipated funding sources before requesting
    authorization for funding in the annual President's budget or
    supplemental appropriations?
        Mr. Prosch. Combatant commanders have already developed overseas
    master plans for their respective areas of responsibility, to include
    facility requirements, funding requirements, division of funding
    between U.S. and host nations, and status of facilities being returned
    to host nations. The Department submitted those plans to Congress on
    March 4, 2005, and will update them each year through fiscal year 2009.
        Mr. Penn. The Navy and Marine Corps coordinated on the development
    of the master plans, the Department of Defense submitted those plans to
    Congress in March 2005, and will update them each year through fiscal
    year 2009.
        Mr. Gibbs. Development plans exist for Air Force installations, to
    include overseas locations, in the form of base general plans. The
    Capital Improvements Plan (CIP), a component of the General Plan,
    identifies facility requirements for a 5-year period including proposed
    funding year and the type of funds.
        The cost of the facility requirements typically are not included in
    the General Plan since that would be information a contractor could use
    to gauge their cost estimate. The For Official Use Only version of the
    CIP has line item costs. The costs are used at base and MAJCOM level as
    part of the decisionmaking process.

        11. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, what is the DOD goal to establish burdensharing arrangements
    with host nations in order to minimize the impact to DOD budgets?
        Mr. Prosch. The Department believes that, to the extent it is able,
    a host nation should contribute to the cost of stationing a U.S.
    presence in its country. The goal of maximizing the level of
    burdensharing that host countries provide is one of the key elements in
    our negotiating philosophy.
        Mr. Penn. The Department of Defense has longstanding burdensharing
    arrangements with many of our overseas partners such as Japan, Korea,
    Germany, and the United Kingdom where the vast majority of our overseas
    infrastructure is located. For example, Japan has underway $116 million
    to improve a berthing pier at Naval Base Yokosuka through its Japanese
    Facilities Improvement Program. Negotiations usually involve using
    existing host nation infrastructure to minimize the need for new U.S.
    funded construction, having host nations pay most, if not all, of the
    costs associated with construction and sustainment, or providing
    support in kind to offset the cost of operating in the host nation. In
    some cases, the Department will want to pay for selected costs to
    maintain U.S. control, or for diplomatic concerns.
        Mr. Gibbs. Inquires on burdensharing are more appropriately
    addressed by OSD.

        determination of savings from base realignment and closure round
        12. Senator Ensign. Mr. Grone, pursuant to Base Realignment and
    Closure (BRAC) law, the Secretary of Defense certified to Congress that
    the 2005 round of base closures and realignments would result in annual
    net savings for each of the military departments beginning not later
    than fiscal year 2011. How will the military departments account for
    BRAC decisions intended to move force structure, such as the relocation
    of overseas units and the establishment of new modular brigades, into
    the calculations for net savings?
        Mr. Grone. As required by law, the Secretary's Base Realignment and
    Closure (BRAC) recommendations must be based on a 20-year force
    structure plan and statutory selection criteria that make military
    value the primary consideration. One of these selection criteria
    requires the Department to consider ``the extent and timing of
    potential costs and savings, including the number of years, beginning
    with the date of completion of the closure or realignment, for the
    savings to exceed the costs.'' To the extent a BRAC recommendation
    includes the accommodation of forces returning from overseas or the
    establishment of modular brigades, that recommendation will include all
    the costs of that BRAC recommendation, including the costs associated
    with accommodating the returning forces and establishing modular
    brigades.

        13. Senator Ensign. Mr. Grone, are there costs related to BRAC
    realignments that the military departments will not incorporate into
    the calculation for net savings?
        Mr. Grone. The Department includes all the costs and savings of a
    BRAC action in its payback calculation. As required by law, the
    Secretary's BRAC recommendations must be based on a 20-year force
    structure plan and statutory selection criteria that make military
    value the primary consideration. One of these selection criteria
    requires the Department to consider ``the extent and timing of
    potential costs and savings, including the number of years, beginning
    with the date of completion of the closure or realignment, for the
    savings to exceed the costs.''

                               brac re-use policy
        14. Senator Ensign. Mr. Grone, a major lesson learned from prior
    BRAC rounds is that if the DOD works with affected communities to
    quickly agree on re-use priorities and disposal processes, the
    community benefits from more timely redevelopment and economic
    investment. You have stated in your written statement that ``the
    Department will work to partner with affected communities as we both
    seek opportunities for quick civilian reuse.'' Who, DOD or the local
    community, will take the lead in seeking reuse opportunities?
        Mr. Grone. While having ultimate disposal authority, the Military
    Departments, pursuant to Public Law 101-510, ``shall give substantial
    deference to the redevelopment plan submitted by the redevelopment
    authority for the installation.'' Additionally, the Secretary of
    Defense will consult with the Governor of the State and the heads of
    the local governments concerned for the purpose of considering any plan
    for the use of such property by the local community concerned as called
    for by statute and as a matter of policy.
        The community takes the lead in seeking to identify reuse
    opportunities, and the Military Departments in the disposal of
    property.

        15. Senator Ensign. Mr. Grone, what will be the process to resolve
    differences between DOD and local communities during the identification
    and prioritization of reuse opportunities?
        Mr. Grone. To achieve the maximum redevelopment potential of every
    closing or realigning installation, it is essential that the Military
    Departments and the Local Redevelopment Authorities (LRAs) work
    together and communicate throughout each step of the process. The
    Military Departments will always give substantial deference to the
    LRA's redevelopment plan but the Military Departments retain the
    ultimate responsibility and authority to make property disposal
    decisions. In partnership with the LRA, the Military Departments will
    resolve any conflicting property interests at the time that [final
    disposal decisions are issued.

        16. Senator Ensign. Mr. Grone, what is your interpretation of
    congressional intent in relation to the military departments seeking
    fair market value for the property?
        Mr. Grone. DOD plans to utilize a ``mixed tool kit of options'' for
    disposing of real property that provides flexibility and the use of a
    variety of approaches. The military departments, as the disposal
    agency, will give substantial deference to the community's approved
    redevelopment plan when deciding on a disposal strategy. If the
    disposal strategy calls for the public sale of a portion of the
    installation, then we believe a market-based approach which seeks to
    obtain fair market value, is the most effective means of achieving the
    mutual benefit of rapidly putting the property back into productive use
    by the new owners.

        17. Senator Ensign. Mr. Grone, will DOD's goal to seek a maximum
    financial return conflict with the policy to partner with them on
    economic redevelopment?
        Mr. Grone. No, because the military departments, as the disposal
    agencies, will give substantial deference to the community's approved
    redevelopment plan when deciding on a disposal strategy. The ``mixed
    tool kit'' will provide a great degree of flexibility in determining
    the best disposal method. Options include transfers for use by the
    homeless, public benefit conveyances, conservation conveyances,
    transfers to those willing to pay for environmental remediation,
    economic development conveyances, leasebacks, and negotiated sales.

                           base re-use implementation
        18. Senator Ensign. Mr. Grone, in prior BRAC rounds, the DOD
    published a guide for local communities to understand base closure and
    re-use processes, policies, and opportunities for assistance. When does
    the DOD plan to publish this guidance to communities for the 2005 BRAC
    round?
        Mr. Grone. The Department plans to publish changes to the existing
    rules in the Code of Federal Regulations (CFR) later this summer and
    will request public comment at that time.

        19. Senator Ensign. Mr. Grone, would it help communities to have
    this manual published by May 16, 2005, so that communities affected by
    the Secretary of Defense's recommendations can start to plan for
    potential BRAC decisions?
        Mr. Grone. Any new policies or procedures that are provided in the
    revised BRAC manual should not have a major impact on any actions a
    community wishes to take during the period between announcement of the
    Secretary's recommendations in May and the final recommendations of the
    Commission some months later. Additionally, the Department plans to
    publish changes to the existing rules in the Code of Federal
    Regulations (CFR) later this summer and will request public comment at
    that time.

                    closed base property disposal processes
        20. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, after nearly a decade of debate over the future of former El
    Toro Marine Corps Air Station property in California, which was closed
    as a result of the 1993 BRAC round, the Navy reportedly just recently
    auctioned that property to a developer for $649.5 million for 3,718
    acres. I understand that the Navy plans to sell much of the property
    associated with the now closed Roosevelt Roads Naval Station in Puerto
    Rico in the same manner. To what extent do the military services plan
    to sell property in executing the results of the 2005 BRAC round?
        Mr. Prosch. DOD plans to utilize a ``mixed tool kit of options''
    for disposing of real property that provides flexibility and the use of
    a variety of approaches. The military departments, as the disposal
    agency, will give substantial deference to the community's approved
    redevelopment plan when deciding on a disposal strategy. If the
    disposal strategy calls for the public sale of a portion of the
    installation, then we believe a market-based approach which seeks to
    obtain fair market value, is the most effective means of achieving the
    mutual benefit of rapidly putting the property back into productive use
    by the new owners.
        Mr. Penn. The Department is committed to using all of the available
    real property conveyance authorities in the proper circumstances. The
    Department believes that market based property conveyance using public
    sales is often an effective means of rapidly putting the property back
    into productive uses by new owners and will use public sales where
    appropriate in accordance with that objective.
        Mr. Gibbs. We believe that the quickest and most effective way to
    get surplus BRAC properties into productive economic redevelopment is
    to let the marketplace govern the process, however, decisions on method
    of disposal will be made on a property-by-property basis and in
    consideration of local interests. The Air Force believes that the use
    of fair market value sales is viable tool for future property
    transfers.

        21. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, to what extent would this reduce the time required in returning
    closed property to productive reuse?
        Mr. Prosch. DOD believes that a market-based property conveyance
    using public sale is often an effective means of achieving the mutual
    goal of rapidly putting the property back into productive use by the
    new owners. The private sector, working with local government, is
    incentivized to develop the site and create new jobs to replace those
    that may be lost due to a closure decision. Responsive redevelopment of
    a site will expedite productive reuse and economic recovery.
        Mr. Penn. Every situation is different. However, we believe that in
    the proper circumstances market driven public sale can result in more
    rapid conveyance of property to new owners who have an economic
    incentive to quickly put the property to productive use, which can
    result in more rapid redevelopment and reuse than other methods.
        Mr. Gibbs. We believe that using public sale as the primary method
    for disposing of surplus BRAC 2005 properties will significantly reduce
    the time required to return closed property to productive reuse. The
    ability to incorporate the environmental cleanup into the real estate
    transaction will allow productive reuse to move forward in concert with
    the environmental cleanup.

        22. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, to what extent does DOD plan to use authorities under
    120(h)(3)(C) of the Comprehensive Environmental Response, Compensation,
    and Liability Act (CERCLA) of 1980 to expedite transfer of contaminated
    sites and will transfers to other Federal agencies continue to waive
    fair market value consideration?
        Mr. Prosch. The Department will use all the tools at its disposal
    to expedite the return of property to productive use. Agency requests
    to waive fair market value considerations to other Federal agencies
    will be evaluated on a case-by-case basis considering the best
    interests of the military department, the Federal agency, and the
    overall disposal strategy for the property.
        Mr. Penn. In contrast to previous rounds of BRAC, DOD's
    environmental cleanup program has progressed significantly.
    Environmental cleanup is complete or near completion at many sites and
    the nature and extent of contamination is well defined at remaining
    locations. Consequently, we believe more property can be
    environmentally ready to be conveyed by the time the military missions
    at the base cease. When additional cleanup is required, DOD will use
    the authority in CERCLA whenever possible to convey property to new
    owners in its existing condition. The new owner can combine cleanup
    with redevelopment, which saves time and money and enables the new
    owner to put the property into productive use faster.
        Transfers to other Federal agencies will be made in accordance with
    existing regulations which call for payment of fair market value by the
    requesting agency except when waived in exceptional circumstances with
    the concurrence of the Director of the Office of Management and Budget.
        Mr. Gibbs. First, the Air Force intends to use the authorities
    under CERCLA 120(h)(3)(C) when appropriate to support rapid reuse.
    However, the complex requirements for using this authority have proven
    to be time consuming and costly to meet.
        The Air Force intends to transfer property to other Federal
    agencies ``where is as is'' for fair market value consideration as
    specified in the Federal Management Regulations.

                environmental remediation for brac real property
        23. Senator Ensign. Mr. Grone, a major activity within the disposal
    and re-use of property affected by BRAC decisions will be the
    determination of the acceptable amount of environmental clean-up and
    remediation. Historically in prior BRAC actions, those parties
    receiving the property have always wanted the cleanest site possible,
    while the government has always strived to clean up the site to minimum
    acceptable standards in order to save money. While a difficult problem
    to rectify, the military departments worked diligently in the past
    rounds to come up with a compromise on intended use of the property
    that was acceptable to all parties. Does DOD plan to continue the
    process of working with local communities to determine an acceptable
    agreement use before establishing a environmental remediation plan?
        Mr. Grone. The Department believes that mutual understanding and
    cooperation during transition is key to a successful transfer. Each
    installation's BRAC team will work with the local community to put
    together a package that supports the best result for both the
    Department and the community. As always, the communities' approved
    redevelopment plans will be given substantial deference in determining
    proper disposal and the corresponding environmental restoration. Unlike
    past BRAC rounds, many years have passed and the DOD's established
    environmental restoration program has already begun remedial actions at
    many locations. These actions have already established the cleanup
    standards and installed appropriate equipment. It may be difficult to
    significantly alter these cleanups that are already in progress.
    However, there may also be many sites on installations that have not
    been addressed, perhaps because they did not warrant attention while
    the installation was an industrial facility. These sites will require
    review and a determination on what future cleanup action will be
    required.

        24. Senator Ensign. Mr. Grone, in disposing of surplus BRAC
    property, will there be any change in the government's practice of
    cleaning up the property to planned re-use as opposed to clean-up to a
    current military use standard?
        Mr. Grone. As stated in the answer to Question 23, the Department
    will give substantial deference to the communities' approved
    redevelopment plans when determining proper disposal. The disposal
    plan, including the corresponding land use, will be used by the
    installation BRAC team, in consultation with the LRA and environmental
    regulatory agencies, to determine the appropriate level of
    environmental restoration. The cleanup standard will, of course, be
    determined in complete accordance with the requirements in CERCLA and
    RCRA.

        25. Senator Ensign. Mr. Grone, to what extent do you plan to rely
    on previously authorized ``early-transfer'' authority to transfer
    property to others for re-use before all contaminants have been cleaned
    up?
        Mr. Grone. The Department will use all tools available to expedite
    community redevelopment and recovery. The Military Departments will
    develop a highly tailored approach for each situation. The specific
    approach may include the use of the ``early transfer'' authority. But
    it is premature to try to determine where and how often ``early
    transfer'' will be used.

        26. Senator Ensign. Mr. Grone, to what extent do you envision
    reliance on privatizing environmental clean-up through transfer
    agreements rather than the government itself completing clean-up of
    BRAC sites itself prior to property transfers being made?
        Mr. Grone. The Department believes that leveraging the market and
    using the proven expertise of private developers to concurrently
    conduct environmental restoration and economic development may, in some
    cases, speed the redevelopment and recovery of affected communities
    while ensuring all legally required restoration is fully accomplished.
    The Department will use all the tools at its disposal to expedite the
    return of property to productive use. However, the Department believes
    it is too early to speculate on the extent we will transfer the
    property and allow private entities to conduct environmental
    restoration rather than completing the restoration ourselves.

                   future year military construction funding
        27. Senator Ensign. Mr. Grone, the DOD projects that $5.7 billion
    will be required in fiscal year 2007 to continue the implementation of
    BRAC decisions. How will this level of funding affect the ability of
    the DOD to dispose of property in a timely manner?
        Mr. Grone. The $5.7 billion is built around all anticipated BRAC
    requirements for fiscal year 2007 to include disposal of property.

        28. Senator Ensign. Mr. Grone, given the significant MILCON funding
    that will need to be devoted to implementing the results of the 2005
    BRAC round, what impact will that have on budgeting for non-BRAC
    related MILCON requirements over the next few years given other
    competing pressures for MILCON funding here in the U.S., and overseas
    in implementing rebasing actions there?
        Mr. Grone. The Department will continue to submit an annual MILCON
    program that supports the operational forces, accomplishes the mission
    and provides quality-of-life support to service members. The BRAC
    funding is the amount that is considered necessary to effectively and
    efficiently implement the approved BRAC recommendations.
        In the FYDP submitted with the fiscal year 2006 President's budget,
    non-BRAC MILCON funding, excluding family housing, increases during
    BRAC implementation as shown below:

                                                [In billions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                       Fiscal Year
    -----------------------------------------------------------------------------------------------------------------
                  2007                       2008                2009                2010                2011
    ----------------------------------------------------------------------------------------------------------------
    6.5.............................  8.2...............  9.1...............  9.3...............  10.0
    ----------------------------------------------------------------------------------------------------------------

        29. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, are each of your Services planning to meet the DOD goal to fund
    MILCON by fiscal 2008 at a level that will result in a 67-year
    recapitalization rate? If not, why not, and in what year will you meet
    the DOD goal?
        Mr. Prosch. Under current Army planning, we do not expect to
    achieve a 67-year recapitalization rate until fiscal year 2011. We are
    focusing the majority of our military construction program to enable
    Army transformation in support of the global war on terrorism.
        Mr. Penn. Both the Navy and the Marine Corps show continued
    incremental progress in moving to the DOD 67-year recapitalization rate
    goal by fiscal year 2008, but fall short in the current FYDP. The Navy
    achieves a recapitalization rate of 68 years in fiscal year 2009, while
    the Marine Corps achieves a 72-year recapitalization rate in fiscal
    year 2008. Both the Navy and the Marine Corps opted to meet other
    facility goals, such as the Department of Defense goal to achieve 95
    percent facility sustainment in fiscal year 2006 and 100 percent by
    fiscal year 2008, while accepting greater risk in the facility
    recapitalization rate to meet other pressing needs. The 67 year
    recapitalization by fiscal year 2008 remains a Department of Defense
    goal. Further progress towards meeting that goal will be considered in
    future budget submissions.
        Mr. Gibbs. The Air Force is currently programmed to achieve a
    facility recapitalization rate of 67 years by fiscal year 2008.

                    centralized management of installations
        30. Senator Ensign. Mr. Prosch and Secretary Penn, both the Army
    and Navy decided in recent years to centralize the management of
    installations into one agency for each Service, the Installation
    Management Agency (IMA) for the Army, and Commander, Naval
    Installations for the Navy (CNI). This reorganization removed the
    management of operations and maintenance resources from the local
    installation commander and placed these responsibilities with regional
    offices and a national headquarters. The concern has been raised that
    the commanders charged with accomplishing the mission no longer have
    control of all resources. Furthermore, centralized management has
    resulted in a disparate and disproportionate allocation of resources to
    installations that squeak the loudest, as opposed to where the funds
    are actually needed. What is being done within these two agencies to
    improve the ability of installations and their commanders to support
    mission requirements?
        Mr. Prosch. Before IMA's activation, 15 major Army commands around
    the world managed Army installations. IMA provides the Army with a
    single agency and a corporate structure to help us provide equitable,
    effective, and efficient management of Army installations worldwide.
    Base support dollars are sent directly from IMA to the garrison in
    order to meet the Army's most critical base support needs. IMA has
    leveled the playing field for all installations. Resources are now
    allocated using standard Department of Defense- and Army-approved
    models to distribute resources, versus previous methodologies which
    resulted in unbalanced funding.
        Mission commanders are freed from the day-to-day management of
    installations, which allows them to concentrate on training, producing
    an expeditionary force, and fulfilling the Army's warfighting mission.
    IMA supports mission requirements by continually promoting the well-
    being of soldiers, civilians, and family members; improving and
    preserving infrastructure and the environment; and supporting mission
    readiness and execution. IMA also supports mobilization and
    demobilization; provides relocatable buildings to support the global
    war on terror and the Army Modular Force; vehicle and range
    maintenance; airfield operations; battle simulations; facilities
    maintenance and repair; common levels of support; information
    management services; implementation of standard garrison organizations;
    and much more.
        Mr. Penn. The Navy believes that centralized management under the
    Commander, Navy Installations improves the base commanders' ability to
    support the warfighter and operational mission requirements while
    maintaining or improving installation services and reducing costs. CNI
    is aligning resources to mission based on output driven metrics. For
    example, the Navy had previously been resourcing all Naval Air Stations
    the same way instead of considering their unique mission requirements.
    Under CNI, an air station with less than 24-hour/7-day flight
    operations is resourced to support reduced tempo of flight operations.

        31. Senator Ensign. Mr. Prosch and Secretary Penn, have you
    identified any processes and procedures in the installation management
    processes that could be changed to enhance operational support?
        Mr. Prosch. The Installation Management Agency (IMA) is continually
    reviewing and evolving a number of processes and procedures to enhance
    operational support. The Army established standards for the quality
    services that our Soldiers, civilians, and family members have a right
    to expect in the Installation Status Report. The Common Levels of
    Support program puts in place a mechanism to deliver these services
    consistently at all installations.
        IMA is managing the readiness of our facilities through a
    prioritization process and other programs like the Barracks Improvement
    Program to ensure that soldiers and their families live, train, and
    work in the best possible facilities. The Installation Design Guide
    established standards for our facilities and infrastructure that ensure
    a sense of order, uniformity, community, and completeness to our
    installations. In addition, IMA is also pursuing a number of
    initiatives, such as business process redesign, a standard garrison
    organization, and activity based costing and management to achieve new
    efficiencies and improve effectiveness and consistency in the delivery
    of services.
        Mr. Penn. Commander, Navy Installations has identified numerous
    business process improvement initiatives in place or underway. Examples
    include:

             Development of an overall business management program
            with supporting integrated process teams that develop and
            implement standards, metrics, and service levels for shore
            installation management functions. Most notable of these are
            capability based planning, budgeting and program execution for
            base operations services using output driven metrics.
             Identification of major shore installation management
            efficiency initiatives including joint inter-service and
            interagency initiatives, functional consolidation,
            organizational streamlining and process efficiency.
             Implementation of an annual shore installation
            management stockholders' (performance) report.

                     office of economic adjustment funding
        32. Senator Ensign. Mr. Grone, in your written testimony, you state
    ``The Department recognizes it has an obligation to assist communities
    impacted by BRAC 2005. The Defense Economic Adjustment Program will
    include assistance for communities to plan for the civilian
    redevelopment of available real and personal property; and implement
    local adjustment actions to assist impacted workers, businesses, and
    other affected communities.'' The DOD has requested funds in 2006 to
    carry out BRAC actions that exceed any amounts requested in the first
    year of the previous BRAC rounds, yet the amount requested in the 2006
    President's budget for the Office of Economic Adjustment (OEA) is a 57-
    percent decrease from the adjusted fiscal year 1996 request. This year,
    the Department has requested $30 million after receiving $57 million in
    2004 and $89 million in 2005. In a year where BRAC will have a
    significant impact on local communities, why did the DOD request
    funding for the OEA that is a fraction of previous years and if the OEA
    has a vital mission to assist communities, why is the 2006 budget
    request for this organization well below historic trends?
        Mr. Grone. The President's fiscal year 2006 funding request for the
    Office of Economic Adjustment is based on the need (without the
    recommendations being known) to begin working with communities to
    identify their needs once BRAC decisions are made. Future requests will
    be revised once the breadth of community needs is identified. The
    Department requested an additional $18 million over OEA's base programs
    in the President's fiscal year 2006 budget to initiate its program of
    adjustment assistance. I would also like to clarify the referenced
    fiscal year 2004 and fiscal year 2005 figures actually overstate OEA's
    core program requirements since $46,800,000 and $46,875,000 in line
    itemed projects were also provided in each respective fiscal years.
    Additionally, unlike the previous BRAC rounds where Base Transition
    Coordinators (BTCs) were mandated under statute, BTCs will not be
    funded by OEA in the upcoming round so the request would be less by $1-
    $2 million.

        33. Senator Ensign. Mr. Grone, what will be the impact of the
    services provided by the OEA to communities from the proposed level of
    funding?
        Mr. Grone. The fiscal year 2006 budget proposed to fund OEA and its
    community adjustment program at $30.4 million. Of this figure, $8.7
    million is necessary to directly support OEA staffing and operations,
    and $21.7 million will be available for direct grant and technical
    assistance to state and local governments as well as to conduct
    required outreach to affected jurisdictions and other Federal agencies
    under the President's Economic Adjustment Committee and the Defense
    Economic Adjustment Program. Communities will be funded on the basis of
    need, first-come-first-funded (consistent with 10 U.S.C.
    Sec. 2391(C)(7)), and subject to the availability of appropriations for
    this purpose. fiscal year 2006 will be an important period for
    communities in response to Base Realignment and Closure (BRAC), and
    affected State and local governmental entities will need to organize
    themselves immediately, start redevelopment planning, and initiate
    local adjustment activities.

        34. Senator Ensign. Mr. Grone, to what extent is the administration
    planning to support government-wide assistance to communities to help
    them recover from the adverse impacts of BRAC?
        Mr. Grone. The Department is building upon the effectiveness of the
    Defense Economic Adjustment Program (DEAF) to assist in the alleviation
    of community effects that may result from BRAC actions. As an agency
    whose primary responsibility is national security, DOD relies heavily
    on the domestic Federal agencies to assist local adjustment efforts
    through technical and financial support. Therefore, the Department will
    work through the Office of Economic Adjustment, as it manages the DEAP,
    coordinates Federal adjustment assistance, and assists communities to
    organize and respond to these impacts. Among activities currently being
    undertaken to assist communities that may be impacted by the 2005
    round:

             Reinvigorate the President's Economic Adjustment
            Committee (EAC) by amending Executive Order, 12788 to expand
            its purview to address certain regulatory issues and update its
            membership to include all Federal agencies with programs that
            can assist local economic recovery. This change would also
            designate the Secretaries of Labor and Commerce to be co-Vice
            Chairs.
             Meeting with many Federal agencies to inform them of
            the upcoming BRAC activity, review their programmatic roles in
            assisting communities, and adjust funding requests to address
            demand in implementation.

        35. Senator Ensign. Mr. Grone, is DOD working with pertinent
    cabinet level agencies and the Office of Management and Budget to
    ensure that adequate plans and budget authority are being programmed to
    provide assistance to communities in dealing with the adverse effects
    of BRAC?
        Mr. Grone. Yes, we are working with the pertinent Federal Agencies
    as well as OMB. This will be most important for the fiscal year 2007
    budget year when many communities would likely be entering the
    implementation phases of their programs. For the Department of Labor,
    where an impact on existing program resources may be realized as soon
    as this December, we are coordinating the Department's effective
    personnel transition assistance with Labor's workforce investment
    resources to optimize the support available to potentially affected
    workers.

                     quality of life priorities--child care
        36. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, in a recent hearing, the top enlisted members of each Service
    were asked to name the top concerns they heard from their troops
    relative to quality of life for military members and their families,
    aside from continuing the very successful housing privatization
    program. They all responded that the biggest concern in the rank and
    file is the availability of child care facilities. I guess that makes
    sense in a time of war when so many military personnel are being
    deployed overseas. The DOD estimates that an additional 38,000 spaces
    are needed to meet a total requirement of 215,000 spaces in 2005. Do
    each of your Services have any investment plans to address the issue of
    a lack of child care facilities?
        Mr. Prosch. Yes, the Army has a strategy to ensure increased child
    development center construction consistent with Army Transformation.
    Each installation has a plan that estimates the demand for child care
    and outlines the installation's ability to meet that requirement.
    During this period of transformation, the Army plans to use relocatable
    facilities when permanent construction cannot be accomplished in time
    to meet child care demand. These relocatable facilities will be linked
    to permanent military construction projects. To match facilities with
    requirements in an effective and timely manner, the Army has standard
    designs for child development centers that will be the basis for
    construction of the relocatable facilities and follow-on permanent
    structures. A recently completed prototype relocatable facility at Fort
    Myer, Virginia, was designed, constructed, and available for use in 120
    days.
        Mr. Penn. The Department of Defense goal is to provide childcare
    spaces to meet the need of our military families. As of the end of
    fiscal year 2004, the Navy provides 46,000 spaces towards an estimated
    need of 52,000 spaces. The Marine Corps provides 13,000 spaces towards
    an estimated need of 16,000 spaces. Navy has successfully augmented
    facility-based care by expanding in-home care programs, adding
    approximately 5,000 additional spaces since 2000. To meet the
    requirement of global war on terrorism, Navy has established group
    homes in Norfolk and Hawaii. Theses homes, open 24/7, meet the needs of
    shift workers and watch standers. More recently we entered into
    contracts with the National Association of Child Care Resource and
    Referral Agencies (NACCRRA) and Boys and Girls Clubs of America (B&GCA)
    for community based, subsidized, accredited childcare and youth
    development spaces for military members serving throughout the
    continental United States without installation infrastructure to
    support them.
        Navy and Marine Corps continue to be sensitive to the high OPTEMPO
    in fleet concentration areas by establishing emergency childcare
    strategies to meet the needs of our deployed personnel.
        Navy and Marine Corps are working with the OSD Office of Children
    and Youth and other Services to develop and implement a joint DOD
    investment plan to continue to improve child development and youth
    services for our military members.
        Since 2000, the Marine Corps has invested $13 million in Child
    Development Center construction. Between 1990 and 1999 the Navy has
    invested over $35 million in Child Development Center construction.
    Navy and Marine Corps installations have not identified any near-term
    high-priority requirements for Child Development Center construction.
    Should they do so in the future, the requirements will be considered
    along with other facility needs.
        Mr. Gibbs. The Air Force investment plan takes a two-pronged
    approach to increasing child care availability. First, we continue to
    aggressively pursue military construction projects. There are 14
    projects scheduled for fiscal year 2006-fiscal year 2011 totaling $98
    million and providing 4,000 additional child care spaces. A
    Construction Validation Study was recently completed to assess each of
    these projects plus nine additional sites where child care waiting
    lists are long. Second, the Air Force has established a contractual
    partnership with local and national Child Care Resource and Referral
    agencies to recruit community family child care providers. This
    partnership will supply up to 2,000 quality, affordable spaces near 13
    installations where waiting lists are long or child care costs off
    installation are excessively high. Plans are being developed to expand
    this community family child care initiative to geographically separated
    units, Air Force recruiters, and Reserve Officer Training Corps (ROTC)
    instructors.

        anti-terrorism/force protection standards for leased facilities
        37. Senator Ensign. Mr. Grone, the DOD adopted anti-terrorism/force
    protection standards for all DOD owned and leased facilities in
    September 2002. These standards are required to be applied to all
    facilities newly leased by DOD or by the General Services
    Administration on behalf of DOD by October 1, 2005. The standards must
    apply to all currently leased space by October 2009. These standards
    will require either extensive modifications to existing buildings or
    the movement of DOD personnel to facilities meeting the DOD anti-
    terrorism/force protection criteria. Will lessors to DOD be given
    options to mitigate risk of attack to existing facilities in lieu of
    ensuring strict compliance with DOD facility standards in order to meet
    the 2009 deadline, and can you provide a cost estimate and investment
    strategy required to meet the 2009 DOD goal?
        Mr. Grone. First, the standard only applies to new leases initiated
    after October 1, 2005 and for existing leases where the lease is
    renewed after October 1, 2009. Current leases that are extended prior
    to October 1, 2009 are exempt until after the extension expires.
    Second, DOD must occupy a minimum of 25 percent of the net floor area
    for the standards to apply. Third, only that portion of the building
    that houses DOD people must comply with the standards. In addition, the
    standard includes flexibility on standoff with mitigation. The lessor
    has this option in lieu of strict compliance with standoff
    requirements. It is unknown at this time how the current lease/
    extension structure will develop over the next few years, and all
    buildings will not be affected at the same time with many extensions
    remaining well past 2009.

        38. Senator Ensign. Mr. Grone, what impact will the implementation
    of these standards have on civilian urban areas with a high density of
    DOD personnel, such as Crystal City, Virginia, and Washington, DC?
        Mr. Grone. DOD currently occupies approximately 2.4 percent of the
    office space available for rent in the National Capital Region. It is
    unknown at this time how the current lease/extension structure will
    develop over the next few years, and all buildings will not be affected
    at the same time with many extensions remaining well past 2009.

        39. Senator Ensign. Mr. Grone, will the standards be applicable to
    private/public ventures, such as enhanced leasing initiatives and the
    privatization of unaccompanied barracks?
        Mr. Grone. DOD intends for the standards to apply in all situations
    where DOD personnel occupy buildings. Building type and the number of
    DOD people within the building define the application of the standard.

                       contingency construction authority
        40. Senator Ensign. Mr. Grone, Congress provided the military
    services with a 1-year authority in 2004 that would allow combatant
    commanders to use operations and maintenance funds to carry out MILCON
    projects with certain conditions. Congress extended this temporary
    authority for another year in 2005. One of the conditions is that ``the
    construction is not carried out at a military installation where the
    United States is reasonably expected to have a long-term presence.'' In
    light of the recently released Integrated Global Posture Strategy, how
    does the DOD define ``enduring presence'' and what is the likelihood of
    continued use of this temporary authority?
        Mr. Grone. As the Department transforms its overseas posture, we
    seek to have a mix of permanently stationed and rotational forces that
    can be quickly deployed to crisis areas. Our goal to push relevant
    capabilities forward does not necessarily require us to maintain large
    numbers of permanently stationed forces in enduring locations. We will
    retain, but consolidate, some main operating bases in places like
    Germany, Italy, the U.K., Japan, and Korea for our permanently
    stationed forces. In addition, we will rely on forward operating sites
    with rotational presence and pre-positioned equipment. We also will
    have access to a broad range of cooperative security locations, the
    term we use for facilities with little or no permanent U.S. presence.
        Use of the temporary authority to carry out MILCON projects with
    certain conditions is essential in permitting DOD to react to emergency
    situations and construct facilities that contribute to our success in
    the global war on terror.

                      facilities for major weapon systems
        41. Senator Ensign. Secretary Penn, I have a question about the
    process in which the Navy determines facility requirements and programs
    investment to support a new weapon system or the relocation of a weapon
    system. It is my understanding that, in accordance with the National
    Environmental Protection Act (NEPA) of 1969, an Environmental Impact
    Statement (EIS) must be completed before new facilities and
    infrastructure can be constructed, if the facilities and infrastructure
    will have a significant impact on the environment. You recently
    testified before the House Appropriations Subcommittee on Military
    Quality of Life and Veterans Affairs, and Related Agencies, that the
    Navy would support congressional action to add funding to the fiscal
    year 2006 budget to construct facilities at Mayport, Florida, which
    would support the homebasing of a nuclear aircraft carrier. Has an EIS
    been initiated by the Navy to assess the requirements related to the
    homebasing of a nuclear carrier at Mayport, Florida? If so, on what
    date was the EIS initiated? Has the EIS been completed?
        Mr. Penn. The Navy has not initiated an EIS to assess the
    requirements for homebasing a nuclear carrier at Mayport. The Secretary
    of the Navy will allow adequate time for full consideration of BRAC
    decisions before initiating the EIS for moving a CVN to Mayport.
    Accordingly, the Navy will not consider initiating an EIS for Mayport
    CVN homeporting until after the BRAC 2005 Commission has submitted its
    recommendations to the President.

        42. Senator Ensign. Secretary Penn, can the Navy start construction
    of facilities and infrastructure to support the homebasing of a nuclear
    aircraft carrier at Mayport, Florida, prior to completion of the EIS?
    If so, please explain the process, and if not, how can the Navy support
    the addition of funds into the fiscal year 2006 budget for construction
    of facilities and infrastructure before a decision is made as part of
    the EIS process?
        Mr. Penn. The Navy may not start construction of facilities and
    infrastructure specifically intended to support the homebasing of a
    nuclear aircraft carrier at Mayport, Florida, prior to completion of
    the necessary National Environmental Policy Act (NEPA) documentation,
    which in this case will likely be an Environmental Impact Statement
    (EIS). Doing so would violate NEPA, which directs Federal agencies to
    consider environmental impacts associated with agency actions before
    decisions are made to move forward with those actions. The EIS will
    provide detailed analysis of environmental impacts that will ensure the
    Navy understands those impacts before a decision is made.
        Prior to completion of an EIS, a Federal agency can do design work
    (e.g., developing facility designs and footprints) and studies (e.g.
    water quality, test borings and soil sampling) that help flesh out the
    proposed action and assist in environmental analysis that are a part of
    the NEPA process.
        At the end of the NEPA process, the agency issues a Record of
    Decision (ROD). The ROD identifies alternatives that were considered in
    the analysis, the alternative selected by the agency, and any
    mitigation measures the agency intends to use to lessen environmental
    impacts. The ROD concludes the NEPA process. If military construction
    funds specifically for CVN homeporting were to be provided by the
    Congress in fiscal year 2006, the Navy could not use those funds until
    the NEPA process is complete. Additionally, the Navy could not allow
    the fact that Congress provided such MILCON funding to influence its
    decision regarding whether or not to continue aircraft carrier presence
    at Mayport. The Navy now estimates it will take 24-36 months to conduct
    the EIS and sign a ROD. Thus if the Navy were to decide in the ROD to
    continue an aircraft carrier presence at Mayport by homeporting a CVN
    there, it is likely that award of a CVN-related construction project
    would be deferred to fiscal year 2007 or fiscal year 2008.

                            clean air act amendments
        43. Senator Ensign. Mr. Grone, the Department's proposals to amend
    the Clean Air Act, the Resource Conservation and Recovery Act (RCRA),
    and the Comprehensive Environmental Response, Compensation and
    Liability Act (CERCLA, commonly known as Superfund) were provided to
    this committee late last week. Please describe what each proposal is
    intended to do and why it is needed.
        Mr. Grone. The intent of the RCRA and CERCLA proposals is unchanged
    from last year--to clarify and confirm the longstanding, uniform
    understanding of State and Federal regulators that military test and
    training on operational ranges is not a RCRA waste management activity
    or a CERCLA release. The proposals respond to contrary assertions by
    private litigants. They are needed to preclude the use of RCRA and
    CERCLA to shut down munitions testing and training on operational
    ranges. These changes will reduce the likelihood of range closures or
    restrictions affecting live-fire readiness activities on military
    ranges. The provisions will ensure that critical live-fire training and
    testing opportunities for our service men and women are protected, and
    that the health and welfare of our military personnel on these ranges
    or installations as well as all citizens outside our range boundaries
    will remain secure.
        The intent of the Clean Air Act proposal is also unchanged from
    last year--to give the States and DOD the flexibility to accommodate
    new military readiness activities in a States' Clean Air Act State
    Implementation Plan (SIP). The provision is necessary to facilitate the
    relocation of forces critical to military transformation and the
    efficient use of forces.

        44. Senator Ensign. Mr. Grone, can you provide examples of how
    readiness and training are impacted under current law such that these
    changes are warranted?
        Mr. Grone.
    CAA
        The Department of Defense (DOD) regularly relocates forces among
    installations throughout the United States and the world in order to
    best position them for potential use and to optimize training
    opportunities. The Clean Air Act's ``general conformity'' requirement,
    applicable only to Federal agencies, has threatened deployment of new
    weapons systems and the movement of forces among installations despite
    the relatively minor levels of emissions involved. Without a reasonable
    time period to meet Clean Air Act conformity requirements, the ability
    to operate in Clean Air Act non-attainment or maintenance regions is
    threatened.
        The Department has experienced several ``near-misses'' where the
    Clean Air Act conformity requirement threatened the realignment of
    forces:

             The planned movement of F-14s from Naval Air Station
            (NAS) Miramar to NAS Lemoore in California was only possible
            because of the fortuity that neighboring Castle Air Force Base
            in the same air-shed had closed, creating offsets. The same
            coincidence enabled the home basing of new F/A-18s at NAS
            Lemoore.
             The movement of F/A-18s from Cecil Field, Florida to
            NAS Oceana in Virginia was made possible only by chance, since
            Virginia was in the midst of revising its State Implementation
            Plan and was able to accommodate the new emissions. The Hampton
            Roads area in which Oceana is located will likely impose more
            stringent limits on ozone in the future, reducing the State's
            flexibility.

        As these near-misses demonstrate, under the existing Clean Air Act
    conformity requirement there is limited flexibility to accommodate
    readiness needs, and DOD is barred from even beginning to take
    readiness actions until the requirement is satisfied.
    RCRA and CERCLA
        The main concern addressed by our RCRA and CERCLA proposals is to
    protect against litigation the longstanding, uniform regulatory policy
    that use of munitions for testing and training on an operational range
    is not a waste management activity or the trigger for cleanup
    requirements.
        This legislation is needed because of RCRA's broad definition of
    ``solid waste,'' and because states possess broad authority to adopt
    more stringent RCRA regulations than EPA (enforceable both by the
    states and by environmental plaintiffs). EPA therefore has quite
    limited ability to afford DOD regulatory relief under RCRA. Similarly,
    the broad statutory definition of ``release'' under CERCLA may also
    limit EPA's ability to afford DOD regulatory relief.
        Although its environmental impacts are negligible, the effect of
    this proposal on readiness could be profound. Environmental plaintiffs
    filed suit at Fort Richardson, Alaska, alleging violations of CERCLA
    and an Alaska anti-pollution law they argued was applicable under RCRA.
    Among plaintiffs' assertions were claims that the Army's use of
    munitions on the Eagle River Flats (ERF) range in training its soldiers
    required RCRA permits, as well as initiation of cleanup activities
    under CERCLA. Plaintiffs' lawsuit sought to enjoin further live fire
    training at ERF. Because of ambiguities in current law regarding the
    applicability of environmental regulations, including those under RCRA
    and CERCLA, to critical testing and training on military ranges, the
    Army settled the case as the best way to ensure training could continue
    at ERF. Had the plaintiffs been successful, the case would not only
    have potentially forced remediation of the Eagle River Flats impact
    area and precluded live-fire training at the only mortar and artillery
    impact area at Fort Richardson, but it could have set a precedent
    fundamentally affecting military training and testing at virtually
    every test and training range in the U.S. This was a risk that the Army
    and the Department of Defense could not afford.
        In addition to the Fort Richardson case, the United States was sued
    under RCRA on three occasions regarding Navy operations at the range on
    the island of Vieques, Puerto Rico. Most recently, in Waterkeeper v.
    Department of Defense, plaintiffs sued to stop Navy training on the
    range. The RCRA claims covered ordnance debris and unexploded ordnance
    on the Live Impact Area (LIA) of the Vieques range in addition to
    claims that the actual firing of ordnance onto the LIA constituted a
    disposal of solid or hazardous waste.
        Some critics of these proposals have argued that such suits are not
    a sufficient justification to go forward with the RCRA and CERCLA
    provisions. We believe, however, that the risks inherent in these
    lawsuits provide ample justification for the proposals. This is
    particularly true because the proposals merely clarify longstanding
    regulatory practice and understanding of the Department, the
    Environmental Protection Agency, and the States. Together, the
    provisions simply confirm that military munitions are subject to EPA's
    1997 Military Munitions Rule while on range, and that cleanup of
    operational ranges is not required so long as the material stays on
    range.

        45. Senator Ensign. Mr. Grone, what outreach with the States has
    DOD done and are the States supportive of these changes or do they
    object?
        Mr. Grone. Most of the changes to this year's legislative proposal
    grew out of intensive discussions with State officials and are designed
    to address specific concerns raised by the States. For instance, this
    year's CAA proposal adds a requirement for written state concurrence
    before the 3-year extension to complete conformity planning is
    effective. The language in our RCRA and CERCLA proposals are a direct
    result of discussions with individual state representatives and
    collaboration with state associations, such as the Environmental
    Council of the States, the National Governors' Association, the
    National Association of Attorneys General, and the Conference of
    Western Attorneys General.

        46. Senator Ensign. Mr. Grone, what has DOD done to respond to the
    concerns of environmental groups about amendments to the Clean Air Act,
    RCRA, and CERCLA?
        Mr. Grone.
    CAA
        The Clean Air Act amendment has changed in two ways from the
    provision proposed last year. Both of these changes are in direct
    response to concerns addressed by environmental stakeholders.
        First, in response to concerns expressed by state regulators and
    environmental associations that our proposal forced states to accept
    new readiness activities in areas that were not in compliance with
    Clean Air Act standards, we added an express requirement for written
    state concurrence before the 3-year extension to complete conformity
    planning is effective. The Department never intended that our proposal
    would be interpreted to require the states to accept new readiness
    missions over their objections. By adding the requirement for written
    state concurrence, we have made it clear that the provision is intended
    to offer flexibility, rather than impose new missions on unwilling
    states.
        In addition, this year's proposal expands on the ``hold harmless''
    concept embodied in previous versions of the amendment. In our
    discussions with states, we learned that the proposal in prior years
    had not provided adequate assurances that states would not be penalized
    if a failure to meet air quality standards was a result of the 3-year
    extension in conformity compliance offered by the proposal.
    Specifically, we were asked to add a reference to section 187(g) of the
    Clean Air Act which deals with carbon monoxide non-attainment. We have
    added that reference.
    RCRA and CERCLA
        The Department has actively reached out to stakeholders, listened
    to their concerns regarding our proposals, and addressed those concerns
    by modifying and clarifying our RCRA and CERCLA proposals. The result
    has been an evolution in our proposals that we believe provides
    essential protections for munitions related readiness activities on our
    operational ranges and ensures protection of health and the
    environment. Over the past several years, we have worked with EPA to
    make it absolutely clear that nothing in our proposal alters EPA's
    existing protective authority in section 106 of the Superfund law. In
    our proposal, EPA retains the authority to take any action necessary to
    prevent endangerment of public health or the environment in the event
    such a risk arose as a result of use of munitions on an operational
    range. Further, the proposed amendments were modified to clarify that
    they do not affect our cleanup obligations on ranges that cease to be
    operational. This was in response to the misapprehension by some that
    the proposal could apply to closed ranges. To make this latter point
    even clearer, after submitting our proposal to Congress 2 years ago,
    EPA and DOD continued to refine the RCRA and CERCLA provisions. This
    collaboration produced a further revision designed to underscore that
    our proposals have no effect whatsoever on our legal obligations with
    respect to the cleanup of closed bases or ranges or on bases or ranges
    that close in the future.
        In the summer and fall of 2003, we presented the language we had
    developed in cooperation with EPA to a broad range of stakeholders for
    their consideration. As a result of discussions with individual state
    representatives and at meetings of associations of state officials,
    such as the Environmental Council of the States, the National
    Governors' Association, the National Association of Attorneys General,
    and the Conference of Western Attorneys General, we eliminated the
    ``CERCLA preference'' which had been included in previous versions of
    the proposal. Earlier drafts of the RCRA provision provided that
    munitions or constituents that migrate off range are considered a
    waste, but only if they are not addressed under CERCLA. In response to
    the criticism that this provision went beyond DOD's intent to protect
    our readiness activities on ranges, the Department deleted it from the
    current discussion draft.
        Finally, this year's language has again been modified to address
    concerns raised by environmental stakeholders. In addition to
    renumbering and reorganizing the provisions in response to stakeholder
    concerns regarding clarity, we modified some of the language to address
    concerns that the language could be interpreted to shield munitions
    disposed of off an operational range from the operation of RCRA. As
    noted, since our proposal is intended only to provide protections for
    the use of munitions for their intended purpose in testing and
    training, and only so long as they remain on an operational range, we
    were happy to provide this clarification.

        47. Senator Ensign. Mr. Grone, are any proposed changes to
    environmental laws necessary to carry out this round of BRAC?
        Mr. Grone. No.

                         changes in environmental laws
        48. Senator Ensign. Mr. Grone, in the National Defense
    Authorization Acts for Fiscal Year 2003 and Fiscal Year 2004, Congress
    made changes to environmental laws intended to provide greater clarity
    for the Department and to ensure that the Department could provide
    realistic combat training to our young men and women while also being
    good stewards of the environment. Specifically, Congress modified the
    Migratory Bird Treaty Act in the National Defense Authorization Act for
    Fiscal Year 2003 and the Endangered Species Act and Marine Mammal
    Protection Act in the National Defense Authorization Act for Fiscal
    Year 2004. What has been the impact of those changes?
        Mr. Grone. The changes to all three laws have been positive from
    both a readiness and an environmental. perspective.
        Changes to the Migratory Bird Treaty Act exempting military
    readiness activities from incidental take prohibitions are allowing
    testing and training to proceed, preventing regulatory creep, and
    avoiding new and expensive regulatory burdens. At the same time, DOD
    continues to study impacts of actions on migratory birds and to take
    protective actions, and remains active in partnerships and programs to
    protect migratory birds such as Partners in Flight, a consortium of
    Western Hemisphere partners dedicated to the conservation of
    neotropical migratory birds and their habitats.
        Changes to the Endangered Species Act associated with the use of
    Integrated Natural Resource Management Plans to serve in place of
    Critical Habitat are avoiding fragmenting and reducing test and
    training areas, allowing more realistic training, and avoiding loss of
    lands capable of supporting military missions. These provisions allow
    holistic approaches to natural resource management. The Department
    continues to coordinate INRMP development with U.S. Fish and Wildlife
    Service and is fully compliant with the Endangered Species Act.
        Changes to the Marine Mammal Protection Act redefining the
    definition of ``harassment'' to exclude biologically insignificant
    behavioral changes, adding a national security exemption, and
    clarifying language on small takes and geographic operating limitations
    follow the recommendations of independent scientists and research
    panels. These changes have brought greater certainty to both the
    regulators and DOD, which in turn has provided for greater training
    flexibility and increased realism. DOD remains committed to its
    leadership role in marine mammal research and in developing protective
    measures.

        49. Senator Ensign. Mr. Grone, are there problems that have
    surfaced since those changes that we ought to address and is DOD having
    any problem implementing the changes?
        Mr. Grone. The regulations implementing the relief granted for
    military readiness activities under the Migratory Bird Treaty Act
    (MBTA) have not been finalized. The Department of the Interior has
    drafted a final rule for interagency review, with which DOD has
    informally concurred. Once the rule has been finalized and published in
    the Federal Register, potential plaintiffs have 120 days in which to
    challenge the rule in Federal court. Although we do not expect a need
    for additional legislative relief under the MBTA, it is too soon to
    know for sure, as the need for additional relief depends on whether or
    not the rule is challenged and the outcome of that challenge.
        Reauthorization of the Marine Mammal Protection Act (MMPA) is still
    pending. It is DOD's position that NDAA for Fiscal Year 2004 MMPA
    amendments for military readiness activities must be preserved through
    the reauthorization process. Again, it is too soon for us to know if
    additional congressional assistance will be needed.

                                  perchlorate
        50. Senator Ensign. Mr. Grone, the problem of perchlorate
    contamination of drinking water resources is a major concern in many
    Western states. Last year--despite the fact that the Environmental
    Protection Agency (EPA) had not yet set a drinking water standard--we
    expressed a Sense of Congress that DOD ought to move forward in
    developing a remediation plan for perchlorate contamination caused by
    DOD activities. We also said that DOD should continue the process of
    evaluating and prioritizing perchlorate contamination sites. What has
    DOD done over the last year to address the perchlorate issue?
        Mr. Grone. The Department is committed to fulfilling the public's
    trust for protecting and restoring the natural and cultural resources
    on lands managed by DOD. In September 2004, DOD and the California
    Environmental Protection Agency finalized a procedure for prioritizing
    perchlorate sampling efforts at DOD facilities statewide. The document
    provides guidance to DOD officials and their state of California agency
    counterparts on the steps each party will take to identify and
    prioritize areas on military sites where perchlorate has likely been
    released in close proximity to drinking water sources. This DOD/CA-
    developed agreement is the first of its kind in the country. The
    protocol addresses active and closed installations, non-operational
    ranges, and formerly used defense sites where funding has not already
    been allocated to address perchlorate.
        Even though there is as yet no standard for perchlorate, the
    Department established in 2003 a requirement to sample for perchlorate
    and is in the process of developing policy which will require our
    installations and formerly used defense sites to evaluate the risk
    associated with perchlorate at our sites, and if warranted, initiate
    response actions to reduce or eliminate potential exposures to
    perchlorate. The Department will prioritize funding for remedial
    response activities based on each site's risk relative to other sites
    in our Defense Environmental Restoration Program inventory, to ensure
    our investment decisions bring about the greatest risk reduction.

        51. Senator Ensign. Mr. Grone, what is your sense of when EPA will
    set a drinking water standard for perchlorate?
        Mr. Grone. I cannot speculate on how long it might take EPA to
    establish a drinking water standard. Through the Interagency Working
    Group on perchlorate, the Federal agencies are working on identifying
    and funding studies identified by the National Academy of Sciences to
    further clarify questions about perchlorate. Such studies should help
    EPA's deliberations.

        52. Senator Ensign. Mr. Grone, how does the fiscal year 2006 budget
    address funding perchlorate cleanup?
        Mr. Grone. Perchlorate cleanup will be funded through the DERP
    budget. To ensure our investment decisions bring about the greatest
    risk reduction, the Department prioritizes funding for remedial
    response activities based on each site's risk relative to other sites
    in our Defense Environmental Restoration Program inventory.

        53. Senator Ensign. Mr. Grone, is the funding level for fiscal year
    2006 sufficient given the extent of possible perchlorate cleanup
    required?
        Mr. Grone. Yes, as new contaminants are identified, the Department
    integrates the site characterization, relative risk prioritization, and
    restoration activities into the existing Defense Environmental
    Restoration Program. Each phase of the process is estimated and
    budgeted for, by site, and included in the annual funding requirement
    for the Program. The annual funding requirement is designed to meet the
    Department's goal to have all sites on active Installations cleaned by
    fiscal year 2014 and Formerly Used Defense Sites cleaned by fiscal year
    2020.

        54. Senator Ensign. Mr. Grone, based on your current evaluation of
    potential perchlorate contaminated sites, how long will the cleanup
    take given the funding allocated for that purpose over the Future Years
    Defense Plan?
        Mr. Grone. The Department's goal is to remediate all sites by 2014.
    The Department will have better defined estimates for individual sites
    after we complete all site investigations. The length of cleanup time
    and cost to cleanup perchlorate will vary depending on the extent of
    perchlorate releases, and the type of technology selected for cleanup.
    The Department will update projected completion dates based on cost-to-
    complete information in the Annual Report to Congress when information
    becomes available.

                         drinking water at camp lejeune
        55. Senator Ensign. Secretary Penn, in last year's National Defense
    Authorization Act, we asked the Government Accountability Office to
    review the drinking water contamination issue at Camp Lejeune. Is the
    Department of the Navy and the Marine Corps cooperating in this study
    and has any new information come to light?
        Mr. Penn. Yes, we the are fully prepared to cooperate in the study.
    However, as of this date, the Office of the Comptroller General has not
    contacted anyone in the Department of the Navy or the Marine Corps.
        The impacts to some of Camp Lejeune's drinking water occurred over
    20 years ago. The Marine Corps continues looking for new information to
    better understand this important issue. Recently, Camp Lejeune
    recovered several old utility logbooks dating before 1986. The Marine
    Corps is reviewing the logs and will give copies to the Agency for
    Toxic Substances and Disease Registry, the former Drinking Water Fact-
    Finding Panel for Camp Lejeune, and other investigative agencies. The
    Marine Corps is also going to make the logs available to the public on
    its Web site after removing personal privacy information.

        56. Senator Ensign. Secretary Penn, please describe what the
    Department of the Navy and the Marine Corps has done to address this
    issue and the concerns of marines and their families who believe they
    have health-related impacts due to contaminated drinking water at Camp
    Lejeune?
        Mr. Penn. I want to first assure you that the health and welfare of
    our current and former Marines and their families has been and will
    continue to be our priority. The Agency for Toxic Substances and
    Disease Registry (ATSDR) is conducting a study to evaluate if there are
    specific birth defects and childhood cancers among children who were
    conceived or carried in utero by women who lived in base housing at
    Camp Lejeune any time between 1968 and 1985. The ATSDR expects to
    complete the study in early 2008. Although ATSDR has not determined who
    was exposed to the impacted water, or established an association
    between drinking impacted water and illness, the Marine Corps has
    initiated several actions to address concerns of citizens. that believe
    they have been impacted by the past drinking water at Camp Lejeune.

             The Marine Corps has a toll-free hotline (877-261-
            9782) for the public to ask questions and make comments
            regarding Camp Lejeune's past drinking water;
             A Web site at www.usmc.mil/clsurveywith contains a
            wealth of information related to Camp Lejeune.
             Questions and comments may also be sent by e-mail to
            clsurvey@hqmc.usmc.mil.

        The Marine Corps is assisting ATSDR's to locate individuals to
    participate in the initial survey, and providing logistical support and
    funding. They have provided information and data to support the ATSDR
    health study and water model.
        A brief summary of events follows:
        In 1992, the Agency for Toxic Substances and Disease Registry
    (ATSDR) made its first site visit to Camp Lejeune as part of its
    statutory duty to conduct a public health assessment (PHA). In 1997,
    the ATSDR published its PHA for Camp Lejeune. In the PHA, the ATSDR
    concluded that volatile organic compound (VOC)-impacted water would not
    likely harm adults. However, they recommended an epidemiological study
    of former Camp Lejeune residents to determine what effect, if any, the
    VOCs had on the health of children in the womb, considered by the ATSDR
    to be the most susceptible population. That study began as a health
    survey in September 1999.
        The Marine Corps assisted ATSDR in identifying children eligible
    for the survey through targeted and global notifications. In January
    2000, Camp Lejeune held an open house with base residents and the
    Jacksonville community to discuss issues about the drinking water
    previously discovered to contain VOCs.
        In August 2000, Headquarters Marine Corps sent a message to all
    marines worldwide in an effort to reach potential ATSDR survey
    participants. Articles were published in numerous base newspapers
    including the Quantico Sentry, Camp Lejeune's Globe, and Camp
    Pendleton's Scout, which have a large retired military readership. Camp
    Lejeune also solicited participants for the ATSDR survey by sending a
    press release to other military base publications. In November 2000,
    Headquarters Marine Corps held a press briefing at the Pentagon asking
    media to assist in helping to reach survey participants.
        On January 25, 2001, Headquarters Marine Corps sent a second
    message to all Marines worldwide in an effort to reach potential ATSDR
    survey participants. In February 2001, regional media outreach efforts
    began, and including: (a) TV stations--1,027 outlets; (b) daily
    newspapers--1,373 outlets; and (c) weekly newspapers--1,171 outlets. In
    total, 3,571 media outlets were contacted.
        In 2001, Headquarters Marine Corps requested approval from the
    Department of Defense to release to the ATSDR the Social Security
    numbers of potential survey participants. In July 2001, Headquarters
    Marine Corps received approval from DOD for a limited release of Social
    Security Number information covered by the Privacy Act to the ATSDR.
    Based on extensive data searches by Headquarters Marine Corps, contact
    information for the names of potential survey participants was
    identified and forwarded to the ATSDR.
        In January 2002, the ATSDR closed its survey with 12,598 eligible
    participants and began their analysis. In July 2003, the ATSDR released
    a progress report and concluded that a follow-on case control study was
    warranted. The Marine Corps participated in publicizing this report
    through a press release, a webcast by the Deputy Commandant for
    Installations and Logistics, and by posting survey information on the
    Marine Corps Web page.
        In March 2004, the Commandant of the Marine Corps commissioned a
    panel to learn more about why the Marine Corps closed the affected
    wells in 1985. This panel, chaired by the Honorable Ronald C. Packard,
    released its final report on October 6, 2004. The final report may be
    found on the Marine Corps Camp Lejeune drinking water Web page at:
    www.usmc.mil/clsurvey.
        The panel found the Marine Corps acted responsibly, and saw no
    evidence of Marine Corps attempts to cover up information that
    indicated contamination in Camp Lejeune drinking water.

            low frequency active sonar and marine mammal strandings
        57. Senator Ensign. Secretary Penn, recent news reports and some
    environmental groups have tried to link use of Navy sonar to marine
    mammal strandings in Washington, Hawaii, and along the east coast. What
    is the Navy doing to better understand the impact of sonar on marine
    mammals?
        Mr. Penn. The Navy is committed to the protection of marine mammals
    and is mindful of the potential effects that manmade sound may have on
    marine life. The Navy is a world leader in marine-mammal research,
    spending nearly $10 million per year in this area, which represents 70
    percent of the money spent on this type of research in the U.S. and
    approximately 50 percent spent worldwide. Additional information
    regarding the U.S. Navy's use of sonar can be found at
    www.whalesandsonar.navy.mil.
        Researchers at Navy laboratories such as the Space and Naval
    Warfare Systems Center San Diego (SSC SD), Naval Undersea Warfare
    Centers, and Naval Surface Warfare Centers have investigated marine-
    mammal bioacoustics, the potential effects of sound, marine-mammal
    distribution and abundance, and passive acoustic detection of marine
    mammals. The Navy also collaborates with universities, institutes and
    technical companies, conservation agencies, and independent researchers
    around the world to better understand what combinations of ocean
    conditions, geography, and sonar usage patterns may lead to marine-
    mammal disturbances. Over 30 organizations are supported by Navy
    research and development funds for this purpose, primarily through
    grants from the Office of Naval Research, including: Advanced Acoustics
    Concepts Inc., Boston University, Cornell University, Duke University,
    Marine Acoustics Inc., Marine Mammal Research Consultants, Mount Sinai
    Medical College, National Marine Mammal Laboratory, New England
    Aquarium, Scripps Institute of Oceanography, University of California
    San Diego, and University of Hawaii. Research includes: (1)
    investigating marine mammal locations, abundance, and movement at sea;
    (2) developing criteria and thresholds to estimate the effects of sound
    on the physiology and behavior of marine mammals; (3) developing
    mitigation methods and new technologies for risk assessment; and (4)
    characterizing manmade underwater sound fields. Additional research
    includes auditory psychophysics, anatomy and physiology, field
    monitoring of behavioral response to manmade sound, tools for the
    assessment and mitigation of adverse effects from manmade sounds on the
    marine environment, and modeling and simulation tools for impact
    assessment and risk management. The Navy is also participating in the
    Federal Advisory Committee on the Effects of Anthropogenic Noise on
    Marine Mammals and in the Marine Mammal Commission's Beaked Whale
    Workshop.

        58. Senator Ensign. Secretary Penn, the Navy used an outside panel
    of experts to study and evaluate the impact of its Low Frequency Active
    (LFA) sonar system on marine mammals. Has the Navy considered such a
    review of its mid-frequency sonar?
        Mr. Penn. Current environmental planning efforts for Navy's use of
    mid-range active sonar do not incorporate the same approach used in the
    environmental analysis of SURTASS LFA. Navy's ongoing environmental
    analysis of mid-range sonar, relying on best available science as
    required by Federal law , uses a methodology that is better suited to
    the characteristics of this particular class of active sonar. This
    methodology is been implemented with the support of NMFS, and was
    independently used by NMFS in assessing the potential effects of U.S.S.
    Shoup's use of active mid-range sonar in Puget Sound on 5 May 2003.
    This methodology focuses on the cumulative exposure effects to marine
    mammals that could result from exposure to mid-range active sonar.

        59. Senator Ensign. Secretary Penn, some foreign nations, including
    some of our allies, are being urged to place limits on use of military
    sonar. How would this impact the U.S. Navy's operations?
        Mr. Penn. The global proliferation of extremely quiet submarines
    poses a critical threat to the maritime interests of NATO, its member
    states, and allies. The military use of sonar, and the ability to test
    and train with it, is critical to U.S. operational readiness and our
    national defense. Indeed, the National security interests of many
    nations require that naval forces be able to train with, test, and
    employ active sonar. The U.S. Navy recognizes that active sonar testing
    and training to defend against this threat must be accomplished in an
    environmentally sound manner that is science-based and protective of
    marine life. U.S. domestic legislation attempts to achieve this goal by
    weighing ocean environment interests with national security
    imperatives. The international regulation of military use of active
    sonar is problematic for the U.S. because of the potential to restrict
    the ability of the U.S. to balance the relevant national security and
    environmental interests.

                     encroachment on military installations
        60. Senator Ensign. Mr. Prosch, Secretary Penn, and Secretary
    Gibbs, does encroachment due to urban growth and environmental
    regulation remain a problem? If so, what are you doing about it?
        Mr. Prosch. Yes, encroachment as a result of both urban growth and
    environmental regulation remains a problem. Land in the vicinity of
    military installations is often attractive to development and land uses
    that are negatively impacted by noise, dust, and other results of
    routine military training, testing, and operations. In 2004 the Army
    surveyed installations to quantify the impact of encroachment on
    training proficiency. The results showed that restrictions and work-
    arounds decrease the quality of training by segmenting training,
    reducing realism, and decreasing desired proficiency.
        Environmental regulations and natural resource management
    responsibilities also restrict our ability to train. Endangered species
    management and critical habitat designation still remain the Army's
    number one challenge with regard to environmental regulations. Urban
    sprawl contributes to natural resource consumption and degradation. The
    Army is also vulnerable to litigation from National Pollution Discharge
    Elimination System permitting requirements under the Clean Water Act
    (CWA). The Comprehensive Environmental Response Compensation and
    Liability Act and the Resource Conservation and Recovery Act as they
    are applied to munitions on our operational ranges also potentially
    impact our ability to train.
        The Army is addressing encroachment in several ways. The Army has
    implemented the Army Compatible Use Buffer (ACUB) program, which seeks
    to protect lands and habitat for rare species in the vicinity of our
    installations, from incompatible development. This reaps benefits for
    our compliance requirements on installations and mission elements along
    the perimeter. Furthermore, the Army is encouraging its installations
    to become engaged members of their surrounding communities. Mechanisms
    for doing so include attending public meetings as well as participating
    in Joint Land Use Studies sponsored by Office of the Secretary of
    Defense's Office of Economic Adjustment.
        Mr. Penn. Yes, encroachment of all types remains a continuing
    challenge. Our goal is to mange and operate our ranges and
    installations for their long-term viability while protecting human
    health and the environment. Both the Navy and Marine Corps have
    programs for range sustain ability, which include the development of
    comprehensive range management plans and range assessments. The range
    assessments will analyze contamination from military munitions on
    operational ranges, including the potential hazards from off-range
    migration of munitions constituents. Actions will be taken to address
    threats to human health. The Navy and Marine Corps are also exploring
    ways to partner with states and communities to obtain "buffer" areas
    around ranges and airfields.
        Mr. Gibbs. The potential problem of urban development around Air
    Force installations was identified as far back as the late 50s and it
    remains a potential problem to this day. The Air Installation
    Compatible Use Zone (AICUZ) program is our primary strategy to try to
    encourage compatible development near our installations. However,
    through the years the Air Force has employed a number of strategies to
    enhance the AICUZ program. These include intergovernmental/interagency
    coordination, and OSD's Joint Land Use Program. In recent years
    additional strategies and tools have been developed that allowed the
    Air Force to match the tool with the circumstances in order to obtain
    the greatest level of success. The Air Force continually evaluates
    these tools and strategies to determine if they need to be modified to
    meet today's needs, as well as identify new tools.
        Encroachment from environmental laws remains an issue. Our mission
    is to train, equip and organize airpower assets for the combatant
    commander. At the same time, we must comply with a myriad of
    environmental laws and regulations. We are now treating the natural
    infrastructure used by our forces as an asset, and managing it as we do
    built infrastructure. Regulatory compliance is essential, and the
    protection of human health and the environment is mandatory in our
    resource management activities. Compliance activities and their
    attendant metrics, however, do not provide an adequate measure of
    program management effectiveness absent a clear linkage to operational
    requirements. By quantifying the various subcomponents of this natural
    infrastructure (i.e., air shed availability, wastewater discharge
    availability, etc.) we will be better able to manage the natural
    infrastructure and maximize the operational mission.
                                     ______

                   Questions Submitted by Senator John Thune
                        air force base force protection
        61. Senator Thune. Secretary Gibbs, many Air Force bases across
    this country were fairly open to their neighboring communities and
    possessed minimum security prior to September 11. What emphasis is the
    Air Force putting on improving base security through its military
    construction projects?
        Mr. Gibbs. The Air Force places a very high emphasis on improving
    base security within our military construction program. All military
    construction facility projects now include funds to incorporate the
    latest facility protection standards necessary for anti-terrorism/
    force-protection (AT/FP). Furthermore, the Air Force has several
    military construction projects that are solely AT/FP related such as
    gate enhancements and fencing upgrades to protect our installations.
        In terms of chemical/biological/radiological protection, up to 64
    Air Force installations worldwide will receive the highest level of
    protection through the Guardian Installation Protection Program. By
    fiscal year 2011, the Guardian Joint Program Manager will protect the
    ability of up to 200 DOD installations worldwide to carry out their
    critical missions of national significance. The Guardian program will
    install a grid of chemical/biological/radiological detectors, provide
    additional response equipment and protective gear for first responders,
    install collective protection in the most critical facilities, and
    revise the installation's concept of operations to incorporate the
    Guardian capabilities.

                             air force base runways
        62. Senator Thune. Secretary Gibbs, what is the current operational
    state of our Air Force runways and taxiways at our bases?
        Mr. Gibbs. Air Force (AF) runways and taxiways are in good shape.
    In the fiscal year 2003 Installations Readiness Report, Major Commands
    (MAJCOMs) indicated that on average, runways and taxiways at AF bases
    were C2, which means there were some pavement deficiencies with limited
    negative mission impact. Air Mobility Command (AMC), Pacific Air Forces
    (PACAF), and the United States Air Force Academy (USAFA) were the only
    three MAJCOMs to rate their runways and taxiways C3 (i.e. significant
    deficiencies prevent the performance of some missions), which is
    primarily due to failing pavements and foreign object debris (FOD). All
    three MAJCOMs have projects either under construction or programmed for
    construction. These projects will bring the deficient pavements to C2
    or better.

        63. Senator Thune. Secretary Gibbs, many of our Air Force runways
    were built decades ago. What is the average life cycle of these runways
    and are there plans and/or projects underway to upgrade or rebuild some
    of those that are showing signs of deterioration?
        Mr. Gibbs. Many of our airfield pavements in the continental United
    States were constructed in the 1950s and 1960s. The Air Force has
    conducted a vigorous maintenance and repair program to include thick
    pavement overlays, slab replacement, joint replacement, and crack
    sealing to provide runways that last 50-60 years. The Edwards and
    Langley AFB runways are good examples of lasting runways. The actual
    pavement life realized will be impacted by the quality of construction,
    how the actual aircraft traffic experienced compares to the design
    criteria (i.e., more operations and/or higher operating weights will
    reduce pavement life), and the rate at which environmental factors
    attack the pavement (i.e., freeze-thaw cycles, oxidation of asphalt,
    exposure to deicing agents, fuel spills, etc.). Maintenance and repair
    activities on runways and other airfield pavements are underway, or
    planned and programmed at virtually every Air Force installation.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka
                   applicability of brac to modular brigades
        64. Senator Akaka. Mr. Prosch, last year the Army started using
    emergency authorities to buy temporary buildings to station the first
    of the new so-called ``modular'' brigades. The Army provided a series
    of information papers to this committee on July 28, 2004, stating that,
    with respect to these 10 new brigades, ``Permanent stationing for all
    units will be fully addressed through the BRAC 2005 process.'' Can you
    confirm that this is correct and does this mean that these basing
    decisions will be subject to the review of the base closure commission,
    or would they still be presented to Congress using the normal
    authorization and appropriation process? If the latter, when does the
    Army plan to submit such proposals to Congress?
        Mr. Prosch. Yes, the stationing of the 10 new Army Modular Force
    Brigade Combat Teams (BCT) will be reviewed as part of the 2005 Base
    Realignment and Closure (BRAC) process. The Army portion of the BRAC
    Report will indicate whether the temporary stationing of a particular
    BCT is valid and therefore considered permanent. If necessary, the
    report will provide specific recommendations on relocating particular
    BCTs. These basing recommendations will be presented to Congress
    through the BRAC Commission.

                                modularity costs
        65. Senator Akaka. Mr. Prosch, the Army has used emergency
    authorities and supplemental funding to temporarily station new
    ``modular'' brigades on an expedited basis to help reduce the stress on
    the force by creating a bigger base of deployable units. While this is
    a short-term goal Congress has supported, unfortunately for the
    taxpayers it means that over the long term, we will end up paying twice
    to station many of these brigades, once on a temporary basis and then a
    second time to build permanent facilities. At what point will MILCON
    funds to station these modular brigades be programmed in the regular
    brigades?
        Mr. Prosch. Temporary facilities were required because Military
    Construction funds could not be made available in time to meet the
    Army's rotation/deployment cycle to support Operation Enduring Freedom
    and Operation Iraqi Freedom. Military Construction funding for
    permanent facilities will be programmed as soon as the 2005 Base
    Realignment and Closure recommendations are announced and permanent
    stationing decisions finalized.

        66. Senator Akaka. Mr. Prosch, will we be able to go straight to
    permanent funding for some of these brigades to avoid paying twice? If
    so, for how many of these 10 brigades could we avoid building temporary
    facilities?
        Mr. Prosch. Based on the unit activation dates and the time
    required to build permanent facilities, we are not able to go straight
    to permanent construction.

        67. Senator Akaka. Mr. Prosch, what is the estimated cost of
    temporary and permanent facilities for stationing these 10 new
    brigades?
        Mr. Prosch. The temporary cost of stationing the 10 new modular
    brigades is approximately $1 billion.
        The cost of permanent facilities for the 10 brigades will be
    determined and programmed as soon as the Base Realignment and Closure
    (BRAC) 2005 decisions are made and permanent locations known.

       purpose of military construction project at muthanna bunkers, iraq
        68. Senator Akaka. Mr. Prosch, the supplemental requests $11.3
    million to encapsulate ammunition bunkers at Muthanna, Iraq. Prior to
    Operation Desert Storm, this was an Iraqi chemical weapons site where
    artillery shells containing sarin were stored. Is this project intended
    to encapsulate both conventional and unconventional weapons?
        Mr. Prosch. All of the artillery rounds in the bunker have been
    destroyed and cannot be reused for munitions purposes. Any materials
    that could have been used to convert these rounds into unconventional
    munitions have been mitigated and the bunkers are now considered
    hazardous material sites. The bunkers are being encapsulated to contain
    the hazardous material and protect the local populace.

                               kaho'olawe cleanup
        69. Senator Akaka. Secretary Penn, what is the status of the
    negotiations between the Navy and the State of Hawaii with respect to
    newly discovered, unexploded ordnance found on Kaho'olawe?
        Mr. Penn. The Navy and the State of Hawaii concluded a 10-year
    joint effort to clear unexploded ordnance (UXO) and debris in 2004. The
    Navy spent $460 million to clean up 22,114 acres and improve the
    infrastructure of the island. The Navy will respond to newly
    discovered, previously undetected ordnance on Kaho'olawe in accordance
    with an agreement signed by the Navy and State.
        The Kaho'olawe Island Reserve Commission (KIRC), acting as the
    representative for the State of Hawaii, provided in March 2005 the
    first notification to the Navy since conclusion of the clean-up effort
    that they had found newly discovered ordnance on Kaho'olawe. The Navy
    and the KIRC have been meeting on procedural issues and protocols to
    respond to the ordnance.

         air force withholds on fiscal year 2005 construction projects
        70. Senator Akaka. Mr. Grone, the Air Force is withholding
    execution of funds for fiscal year 2005 MILCON projects added by
    Congress until after the Secretary of Defense announces his BRAC
    recommendations on May 16, but the Army and the Navy are not. Is there
    any DOD-wide policy directing Services not to execute fiscal year 2005
    projects?
        Mr. Grone. No, DOD has not issued such a policy.

        71. Senator Akaka. Secretary Gibbs, why is the Air Force
    withholding execution of funds for fiscal year 2005 MILCON projects
    added by Congress until after the Secretary of Defense announces his
    BRAC recommendations on May 16, but the Army and the Navy are not, and
    what is your intent with respect to such projects after the BRAC list
    is made public?
        Mr. Gibbs. The decision was made in order to not further expose the
    Air Force to new construction costs until after BRAC recommendations
    are announced. The hold applies to all Air Force installations within
    the continental U.S. and U.S. territories, and does not indicate
    prejudice for any installation through the BRAC process. This is a
    temporary measure and all actions short of contract awards such as
    advertising, bid openings and bid evaluations can proceed to ensure
    expeditious award after May 16, if it is determined the project will
    not be impacted by the BRAC process.
                           brac and army end strength
        72. Senator Akaka. Mr. Grone, the DOD force structure report
    submitted last month assumes a long-term Army end strength of 482,000,
    which is much smaller than the actual Active-Duty Force structure
    today. Many Members of this committee believe the Army end strength
    should and must be increased above this level. Does DOD's force
    structure report mean that DOD intends to ignore this increased current
    Army end strength level?
        Mr. Grone. The Army was authorized by the President and Secretary
    of Defense to temporarily increase active Army operating strength by up
    to 30,000 additional soldiers. The increase is partly used to increase
    the number of Army modular Brigade Combat Teams (BCTs) to 43 BCTs, and
    all are included in the BRAC analysis. However, the Army has maintained
    the surge capacity in those facilities with maneuver training land in
    CONUS to support an additional five modular BCTs if necessary. This
    unclassified information is consistent with the classified force
    structure plan, which was followed in the course of the BRAC analysis,
    and which was provided to Congress on March 15, 2005.

        73. Senator Akaka. Mr. Grone, because both DOD and the commission
    are supposed to adhere to the force structure report, I am concerned
    that DOD is requiring themselves and then the commission to only leave
    enough facilities to support an active Army of 482,000 if they are to
    strictly follow the law. Is that the case and how will BRAC allow for
    the possibility that the Army may exceed 482,000?
        Mr. Grone. The Army was authorized by the President and Secretary
    of Defense to temporarily increase active Army operating strength by up
    to 30,000 additional soldiers. The increase is partly used to increase
    the number of Army modular Brigade Combat Teams (BCTs) to 43 BCTs, and
    all are included in the BRAC analysis. However, the Army has maintained
    the surge capacity in those facilities with maneuver training land in
    CONUS to support an additional five modular BCTs if necessary. This
    unclassified information is consistent with the classified force
    structure plan, which was followed in the course of the BRAC analysis,
    and which was provided to Congress on March 15, 2005.

                   cost of relocating forces back to the u.s.
        74. Senator Akaka. Mr. Grone, is the $1.88 billion requested in
    fiscal year 2006 intended to fund all or part of the cost of stationing
    forces being relocated from overseas at bases back in the United
    States? If not, when and how will those costs be funded?
        Mr. Grone. The budget request of $1.88 billion is an estimate of
    the costs to be incurred in fiscal year 2006 as a result of BRAC 2005,
    and would cover costs for moving the mission, including costs related
    to people and equipment, U.S. severance pay, military construction, and
    environmental remediation at U.S. bases. A portion of the $1.88 billion
    requested would fund military construction at locations in the United
    States to accommodate forces returning from overseas locations. We
    expect future requests beginning in fiscal year 2007 to also include
    funds for this purpose.

        75. Senator Akaka. Mr. Grone, does the Department have a current
    estimate of the cost of implementing the global posture review,
    including the cost of restationing these forces back in the United
    States?
        Mr. Grone. We anticipate the net cost of implementing the global
    basing strategy will be between $9 and $12 billion.

                   brac--impact on fiscal year 2006 projects
        76. Senator Akaka. Mr. Grone, what are DOD's plans with respect to
    revising the fiscal year 2006 budget request for MILCON projects to
    reflect the results of the base closure process?
        Mr. Grone. DOD will stop design/procurement on projects at closure
    bases unless it fixes an immediate life/safety or health issue. We will
    request reprogramming of fiscal year 2006 funds from projects at
    closure bases to fund other requirements.

                   base re-use procedures for the 2005 round
        77. Senator Akaka. Mr. Grone, if DOD does not intend to use the
    same re-use procedures to work with affected communities for the 2005
    BRAC round as those that were used in 1995, what changes are intended,
    and when will DOD issue a new Base Re-use Implementation Manual to
    guide the Services and local communities?
        Mr. Grone. The Base Reuse Implementation Manual (BRIM) is being
    updated to reflect lessons learned from implementation of prior BRAC
    rounds and to incorporate changes in the law since the last publication
    in 1997. This updated handbook is intended to provide the Services and
    local communities alike with a blueprint for working through 2005 BRAC
    actions.
        DOD plans to publish changes to the existing rules in the Code of
    Federal Regulations (CFR) later this summer and will request public
    comment at that time.

               applicability of brac to national guard facilities
        78. Senator Akaka. Mr. Grone, what is the Department's position on
    the applicability of the base closure process to National Guard
    facilities?
        Mr. Grone. The Department does not believe that any statute limits
    its authority to make recommendations pursuant to the Defense Base
    Closure and Realignment Act. To the extent a National Guard facility is
    a military installation as defined in the BRAC statute, the Secretary
    of Defense may close or realign that installation within BRAC. The
    Department's BRAC recommendations are in accordance with all applicable
    legal requirements and are consistent with actions taken in prior BRAC
    rounds.

                       size of overseas basing reductions
        79. Senator Akaka. Mr. Grone, last August the President announced
    that as a result of the Global Posture Review, 60,000 to 70,000 troops
    would be returned to the United States. None of the information
    provided to Congress thus far shows a DOD plan to reduce our overseas
    presence by that many troops. Please provide a plan that supports this
    figure of 60,000 to 70,000 troops, or alternatively provide the revised
    targets.
        Mr. Grone. Global Defense Posture changes will return 60,000 to
    70,000 servicemembers over the period fiscal year 2005 through fiscal
    year 2017. Some of these changes are currently being implemented (such
    as moving a brigade from Korea to Fort Carson, and the Navy, Europe
    (NAVEUR) consolidation); some will be implemented during fiscal year
    2006-2011; and still others will be implemented fiscal year 2011-2017
    pending further refinement and negotiations.
        Information on this subject has regularly been provided to
    Congress. The Department submitted the Integrating Global Defense
    Posture Report to Congress in September 2004 which detailed personnel
    changes as of that date. Subsequently, the Department provided detailed
    infrastructure master plans with the fiscal year 2006 budget
    submission.

                       brac--internet access to materials
        80. Senator Akaka. Mr. Grone, does DOD plan to take advantage of
    internet technology and post its BRAC recommendations and data on a
    website so that interested parties around the country will be able to
    access and review this material?
        Mr. Grone. Yes.

                     environmental concerns regarding c-17s
        81. Senator Akaka. Secretary Gibbs, what is the Air Force doing to
    proactively address concerns of the local community around the Big
    Island's Kona International Airport regarding the noise levels
    generated by the C-17s that will be conducting short takeoff and
    landing combat practice there in preparation for the eight C-17 cargo
    jets slated for Hickam AFB?
        Mr. Gibbs. The C-17 aircraft is one of the quietest aircraft in the
    Air Force inventory, and often can be quieter than commercial aircraft
    depending on local conditions. The C-17 training at Kona Airport would
    slightly increase, less than 4 percent, overall air traffic volume
    which will have little effect on the noise exposure contours the
    airport developed and uses as part of their land use compatibility
    program. The use of the existing long runway for take-offs, will allow
    use of reduced take-off power, making it consistent with current
    commercial aircraft operations. Additionally, the training activities
    will be scheduled to minimize noise impacts, especially during
    nighttime, weekends, and holidays.
        We currently do not have a project funded or approved. However, the
    Air Force has actively engaged state agencies, local officials and
    local organizations to address the Kona Airport related issues and
    concerns. We will continue to reach out to the community through
    newspaper articles, and other media to address their concerns on noise
    and other issues.

                             new basing agreements
        82. Senator Akaka. Mr. Grone, Mr. Prosch, Secretary Penn, and
    Secretary Gibbs, last September, Secretary Rumsfeld testified before
    this committee on DOD's ``Strengthening U.S. Global Defense Posture''
    report to Congress. This global posture review envisions new operating
    locations for our forces around the world, including locations in
    Eastern Europe, Asia, and North Africa. Agreements to build or use any
    new facilities would normally be funded through the budgets of the
    military departments. Will your departments notify the congressional
    defense committees when any such agreements are reached, and that we
    will be notified in advance before your funds are used for entering
    into any contracts, leases, or other agreements for the construction or
    use of such facilities?
        Mr. Grone and Mr. Prosch. The Department will use available
    mechanisms to provide notification, and request funding and
    authorization approval for projects at new facilities.
        Mr. Penn. The Department of the Navy will follow standard
    established procedures in congressional notification involving use of
    funds for any new contracts, leases, or construction.
        Mr. Gibbs. The Air Force will comply with existing legislation
    regarding construction notifications and requirements levied by OSD.

                  proposed changes to dod environmental policy
        83. Senator Akaka. Mr. Grone, Mr. Prosch, Secretary Penn, and
    Secretary Gibbs, on December 17, 2004, the Los Angeles Times reported
    that the DOD was planning to issue a new environmental policy
    directive, which would replace the existing policy directive. According
    to the article, the new directive would eliminate language which
    commits the Department to:

             ``Protecting, preserving and, when required, restoring
            and enhancing the quality of the environment.'';
             ``Reducing risk to human health and the environment by
            identifying, evaluating and, where necessary, remediating
            contamination resulting from past DOD activities.'';
             ``Preventing pollution and minimizing adverse
            environmental consequences.''; and
             ``Complying with applicable U.S. statutes,
            regulations, executive orders, binding international
            agreements, other legal requirements, and U.S. environmental,
            safety, occupational health, explosives safety, fire and
            emergency services and pest management policies.''

        Are you familiar with an effort to issue a new environmental policy
    directive for the Department of Defense? If you are, can you tell me
    whether or not the Los Angeles Times article is accurate in its
    description of the proposed directive?
        Mr. Grone and Mr. Prosch. DOD's new directive ``Environment,
    Safety, and Occupational Health'' represents an evolution of department
    policy from the era of compliance-only to a forward-looking focus on
    compatibility and sustainability. As we go forward, we will continue to
    meet all of our legal requirements in safety and occupational health,
    compliance, conservation, pollution prevention, cleanup, and
    restoration. The new policy more effectively integrates these programs
    with the department's national security mission. DOD has long
    recognized that national security and environmental protection are
    complementary, not antagonistic goals. We remain more committed than
    ever to advancing both.
        The new directive takes a more business-like approach using
    management systems and risk analysis to make prudent decisions to get
    beyond compliance to sustainability-based investments. The directive's
    integrated approach will more effectively increase environmental
    awareness across all of the Department's programs. It is an overarching
    policy document that does not delete requirements, but rather provides
    a more holistic approach to managing the environment, safety, and
    occupational health. If anything, the new directive deleted old program
    stovepipes. The health and safety of our people, our neighbors, and the
    environment remain paramount.
        Mr. Penn. I am familiar with the new directive. The Los Angeles
    Times article is based on an incorrect interpretation. The directive
    attempts to better integrate the protection of the environment with our
    military mission. The Directive states the following as a key policy
    element (emphasis added):
        ``To evaluate all activities for current and emerging Environment,
    Safety and Occupational Health (ESOH) resource requirements and make
    prudent investments in initiatives that support mission accomplishment,
    enhance readiness, reduce future funding needs, prevent pollution,
    prevent illness and injury, ensure cost-effective compliance, and
    maximize the existing resource capability.''
        Mr. Gibbs. DOD's new directive ``Environment, Safety, and
    Occupational Health'' represents an evolution of department policy from
    the era of compliance-only to a forward-looking focus on compatibility
    and sustainability. As we go forward, we will continue to meet all of
    our legal requirements in safety and occupational health, compliance,
    conservation, pollution prevention, cleanup, and restoration. The new
    policy more effectively integrates these programs with the department's
    national security mission. DOD has long recognized that national
    security and environmental protection are complementary, not
    antagonistic goals. We remain more committed than ever to advancing
    both.
        The new directive takes a more business-like approach using
    management systems and risk analysis to make prudent decisions to get
    beyond compliance to sustainability-based investments. The directive's
    integrated approach will more effectively increase environmental
    awareness across all of the Department's programs. It is an overarching
    policy document that does not delete requirements, but rather provides
    a more holistic approach to managing the natural (i.e., air, water, and
    land) and workforce assets. If anything, the new directive deleted old
    program stovepipes and created a comprehensive approach to asset
    management. The health and safety of our people, our neighbors, and the
    environment remain paramount. DOD has long recognized that national
    security and environmental and human health protection are
    complimentary, not antagonistic goals. We remain committed more than
    ever to advancing all three.

        84. Senator Akaka. Mr. Grone, Mr. Prosch, Secretary Penn, and
    Secretary Gibbs, does the DOD remain committed to protecting and
    preserving the quality of the environment, reducing risk to human
    health and the environment, remediating past contamination, preventing
    pollution, and complying with applicable U.S. statutes, regulations,
    and other applicable environmental requirements, and are you committed
    to these objectives?
        Mr. Grone and Mr. Prosch. DOD is committed and the new directive
    ``Environment, Safety, and Occupational Health'' represents an
    evolution of department policy from the era of compliance--only to a
    forward-looking focus on compatibility and sustainability. As we go
    forward, we will continue to meet all of our legal requirements in
    safety and occupational health, compliance, conservation, pollution
    prevention, cleanup, and restoration while instituting a program of
    comprehensive asset management to include our natural (i.e., air,
    water, and land) and workforce assets. Focusing on comprehensive asset
    management more effectively integrates these programs with the
    department's national security mission. DOD has long recognized that
    national security and environmental and human health protection are
    complementary, not antagonistic goals. We remain more committed than
    ever to advancing all three.
        Mr. Penn. Yes. The DON budget submission reflects these priorities.
        Mr. Gibbs. DOD is committed and the new directive ``Environment,
    Safety, and Occupational Health'' represents an evolution of department
    policy from the era of compliance--only to a forward-looking focus on
    compatibility and sustainability. As we go forward, we will continue to
    meet all of our legal requirements in safety and occupational health,
    compliance, conservation, pollution prevention, cleanup, and
    restoration while instituting a program of comprehensive asset
    management to include our natural (i.e., air, water, and land) and
    workforce assets. Focusing on comprehensive asset management more
    effectively integrates these programs with the department's national
    security mission. DOD has long recognized that national security and
    environmental and human health protection are complementary, not
    antagonistic goals. We remain more committed than ever to advancing all
    three.
                                     ______

                   Questions Submitted by Senator Bill Nelson
       funding required for recovering from hail damage at whiting field
        85. Senator Bill Nelson. Secretary Penn, storms in West Florida 2
    weeks ago resulted in significant hail damage to equipment and
    buildings at Naval Air Station (NAS) Whiting Field. Unofficial reports
    that I have received indicate repairs may cost up to $2.5 million for
    aircraft and $3.5 million for facilities. I am eager to use the fiscal
    year 2005 supplemental appropriation before the Senate now to ensure
    that the Navy has the authority and/or money to make these repairs
    without impacting other operational requirements and activities.
    Unfortunately, I have not received an official damage cost estimate
    from the Navy. Does the Navy have the necessary authority and funds to
    make facilities repairs at NAS Whiting Field from money already
    provided in supplemental appropriations this fiscal year for hurricane
    recovery? If not, what help do you need?
        Mr. Penn. The Navy lacks authority to repair Whiting Field from the
    March 2005 hailstorms using the Supplemental funds. The Emergency
    Supplemental Appropriations for Hurricane Disasters Assistance Act,
    2005 is specific for costs incurred due to natural disasters in fiscal
    year 2004. We are making repairs using existing Sustainment,
    Restoration, and Modernization (SRM) O&M dollars.

                          test and training evaluation
        86. Senator Bill Nelson. Secretary Penn, I applaud the actions of
    the Department of the Navy to develop plans and procedures to ensure
    that Navy and Marine Corps test and training ranges and installations
    take full advantage of the authority provided by Congress in section
    2684a of title 10, United States Code, to ensure the long-range
    sustainability of those installations and ranges. Are the Navy and the
    Marine Corps developing plans and procedures to prioritize and resource
    requirements for actions under this authority? If so, please provide
    information concerning those plans and policies.
        Mr. Penn. Yes, the Navy and Marine Corps have developed specific
    programs to execute section 2684a.
        The Navy initiated an Encroachment Partnering (EP) Program as a
    part of its overarching Encroachment Management Program. The Navy's
    Tactical Training Theater Assessment and Planning (TAP) initiative
    seeks to develop a comprehensive investment strategy to ensure
    sustainability of Navy ranges, operational areas, and special use
    airspace. TAP integrates operations, training, facilities,
    environmental, planning, legal, and public outreach.
        Navy executed one EP project in fiscal year 2004 at Naval Air
    Station, Pensacola, Florida and has one project in development for
    fiscal year 2005 at the La Posta Mountain Warfare Training Facility in
    California. For fiscal year 2006, Navy is developing a priority list of
    EP projects that will be coordinated with the Fleets and Navy Regions.
    Navy has developed CNO guidance on nomination and preparation of EP
    projects and has conducted regional workshops with nongovernmental
    organizations (NGOs) and local and state government agencies interested
    in conservation efforts.
        The Marine Corps is assisting environmental organizations and State
    agencies to establish ``Conservation Forums'' to identify common goals,
    geographical area of interest, real estate acquisition procedures and
    funding opportunities.
        Examples of Marine Corps successes include acquisition in 2003 of a
    2,400 acre parcel adjacent to the Marine Corps Base (MCB) Camp Lejeune
    rifle and tank ranges in partnership with the North Carolina Wildlife
    Resources Commission, and acquisition in 2004 of a restrictive easement
    on a 69-acre parcel adjacent to Marine Corps Air Station (MCAS)
    Beaufort, South Carolina, in partnership with the County of Beaufort.
    Acquisition of an approximately 400-acre parcel adjacent to MCB Camp
    Lejeune in partnership with the North Carolina Wildlife Resources
    Commission nears completion. An additional acquisition of approximately
    200 more acres adjacent to MCB Camp Lejeune is being considered, as
    well as land adjacent to MCAS Beaufort, MCB Quantico, and MCB Camp
    Pendleton, California.

        87. Senator Bill Nelson. Secretary Penn, what procedures are in
    place within the Department of the Navy to ensure that the range
    sustainability requirements of Navy test and evaluation ranges are
    fully considered along with such requirements for training ranges?
        Mr. Penn. On 1 December 2003, the Navy directed establishment of a
    Navy Ranges and Fleet Training Branch (OPNAV N-433) to provide a single
    focus point under the Chief of Navy Operations. This new office is
    responsible for:

              a. Navy range policy (including range sustainment) for
            training and test and evaluation ranges;
              b. Resource consolidation for institutionally-funded ranges
            and Navy target development/procurement;
              c. Fleet training capability development; and
              d. Ensuring that range sustainability requirements for Navy
            test and evaluation ranges are considered along with all other
            training ranges.

        Environmental Impact Statements (EISs) covering Major Range Test
    Facility Base (MRTFB) range complexes have been completed. NAVSEA is
    developing a Range Complex Management Plan to support dual-purpose use
    (test and training) of MRTFB assets at Atlantic Undersea Test and
    Evaluation Center (AUTEC) for Fleet Forces Command. These actions
    ensure that T&E Range sustainability requirements are fully understood
    and funding requirements are addressed.
        The Navy's Tactical Training Theater Assessment and Planning (TAP)
    program seeks to better manage Navy ranges and operational areas and
    airspace to support national security objectives and maintain a high
    state of readiness essential to Navy and Marine Corps force while
    ensure the long-term viability of these assets by protecting human
    health and the environment.
        The Marine Corps does not have test and evaluation ranges.

        88. Senator Bill Nelson. Secretary Penn, what procedures are in
    place to coordinate Department of the Navy range sustainment planning,
    including planning for actions pursuant to section 2684a of title 10,
    United States Code, with the plans of the other military departments
    with regard to their ranges within the vicinity of Department of the
    Navy ranges or where there is shared use of critical airspace?
        Mr. Penn. One forum for coordination across the Department of
    Defense is the Sustainable Ranges Integrated Product Team (IPT)
    process. The IPT process coordinates DOD efforts required to sustain
    the necessary test and training range infrastructure required for
    readiness. Deputy Under Secretary of Defense (Installations and
    Environment (DUSD(I&E)) and Deputy Under Secretary of Defense
    (Personnel and Readiness) (DUSD(P&R)) lead discussion of range
    Sustainment issues that cross Departmental lines. One example of a
    success that resulted from joint planning associated with
    implementation of section 2684a authority is the creation of the Hawaii
    Open Space Conservation Forum benefiting both the Army and Marine
    Corps.
        As part of Navy and Marine Corps range complex management,
    installations develop. Range Air Installations Compatible Use Zones
    (RAICUZ) plans that address aircraft noise, range safety associated
    with weapons delivery, and land use recommendations to promote long-
    term compatibility of range operations with use of lands in the
    vicinity of the range. The RAICUZ program includes potential use of
    ranges by other military Services; hence, potential buffer projects
    under section 2684a will include the range requirements of multiple
    Services (example: Cherry Point/Camp Lejeune, North Carolina Range
    Complex Management Plan includes both Navy and Marine Corps ranges).
    Similarly, Navy is working with the other Services to identify our
    operational requirements at their ranges (example: Air Force Avon Park
    Range).
        The Navy's Tactical Training Theater Assessment includes data
    collection to identify other service requirements within individual
    Range Complex Management Plans. Both the Hawaii RCMP and Marianas RCMP
    are being developed in coordination with the other services. The Navy
    PACOM has established a joint training requirements group to consider
    all ranges and requirements under their command.

        89. Senator Bill Nelson. Secretary Penn, I applaud your actions to
    take action to preclude incompatible development in the vicinity of
    Pensacola Naval Air Station. Given the great degree of overlap and
    sharing of airspace in the area with various elements of the Department
    of the Air Force, what actions have you taken to ensure that the two
    military departments are fully coordinating efforts to address range
    sustainability needs in northwest Florida?
        Mr. Penn. The Navy engages with the Air Force through many
    mechanisms to provide for the safe and coordinated use of airspace and
    training capability in the region. In a strict sense, the Navy does not
    operate any training ranges in Northwest Florida. However, we do
    operate and train across a network of Warning Areas, Special Use
    Airspace, and Air Force ranges in this region.
        Sustaining availability and access to local airspace for Navy users
    is built on cooperation between various airspace users in the area.
    Navy and Air Force commands coordinate through an Airspace Liaison
    Officer covering NAS Pensacola, NAS Whiting Field, and Eglin Air Force
    Base. Representatives from Navy and Air Force also engage in quarterly
    coordination. conferences to identify and resolve potential airspace
    conflicts that would prevent optimal and efficient use of airspace
    assets. At these conferences, attendees also address any issues that
    arise where military and civil aviation interests operate in close
    proximity or share airspace.
        Regional military airspace authorities regularly train in local
    course rules that must mesh in order to maintain safe use of the
    airspace and enable cross-service use of training capabilities. Also,
    the military users of Northwest Florida airspace recently updated a
    letter of agreement that establishes a cooperative atmosphere and
    defines responsibilities for joint use of regional airspace and ranges.

                 range and environment preservation initiative
        90. Senator Bill Nelson. Secretary Penn, please provide detailed
    information concerning the policies, procedures, and evaluation
    criteria used by the Department of the Navy in identifying and
    prioritizing potential Range and Environment Preservation Initiative
    (REPI) projects. In particular, please address the policies and
    procedures of the Department to ensure that the requirements of Navy
    test and evaluation ranges are given full consideration along with the
    requirements of Army training installations and ranges.
        Mr. Penn. Navy developed specific guidance for Encroachment
    Partnering (EP) project development to include project description and
    rationale, the encroachment issue the project will address, potential
    partners, project costs, and any other supporting information such as
    maps of the project area. Commander, Navy Installations Command plans
    to request Navy Region nominations by June 2005. All nominated range
    and installation projects will be prioritized based on the severity of
    the encroachment challenge, impact on readiness, identification of
    potential partners, and estimated project costs.
        The Marine Corps evaluates projects based on the ability to execute
    a transaction and the importance of the property to maintaining and
    improving the ability of the installation or range to support military
    training activities. The nature of real estate acquisition is such that
    several projects are prepared for execution so that if one project is
    withdrawn, another may take its place. An example would be if
    unrealistic landowner expectations impede progress at one location, the
    Marine Corps would be ready to pursue the next highest priority
    project.
        The Assistant Secretary of the Navy (I&E) will submit a coordinated
    priority list of EP projects, including ranges, to OSD in support of
    Range Environment Preservation Initiative (REPI) projects.

                           range sustainment program
        91. Senator Bill Nelson. Mr. Grone, I applaud your leadership and
    efforts through the Range Sustainment Program to address the need to
    ensure that our test and training installations and ranges can fully
    support not only today's mission requirement but those of the future as
    well. In particular, I commend you for taking the lead in developing
    the Compatible Land Use Partnering Program to take full advantage of
    the authority Congress provided the Department in 2002 when we enacted
    section 2684a of title 10, United States Code. The effective working
    partnerships among the Department of Defense, the States, and private
    conservation groups is an example of government at its best, uniting
    the Federal, State, and private sectors in a collaborative effort to
    achieve multiple shared objectives. I would cite in particular the
    tremendous initiative you spearheaded in 2003 in my State of Florida
    that resulted in the formal Memorandum of Partnership among your
    office, the State of Florida, and The Nature Conservancy of Florida to
    work together to create the Northwest Florida Greenway. That
    Partnership has already produced significant results, and I note with
    satisfaction the growing participation by other Federal agencies such
    as the U.S. Fish and Wildlife Service in bringing their conservation
    programs to the table to join in the effort. Nonetheless, I do have
    some concerns and questions about the Range Sustainment Program. Are
    the requirements for actions pursuant to section 2684a fully integrated
    into planning, programming, and budget plans and models for
    installations and ranges, such as the Defense Installation Strategic
    Plan and the Facilities Sustainment Model? If not, what are your plans
    for such integration or for developing specific plans and models so
    that this requirement can be fully addressed concurrently with the
    other requirements of test and training ranges and installations?
        Mr. Grone. The Department continues to refine its planning process
    for efforts undertaken as part of the Range Sustainment Program
    including use of the authority granted us under section 2684(a). The
    Defense Installation Strategic Plan lays the groundwork by calling for
    us to manage our land resources to preserve and improve range
    capabilities while preventing encroachment. It offers the 2684(a)
    authority as one of the tools to that end. To compliment this, an
    analysis of the effects of encroachment on range capabilities and
    methods of prevention has been set as an objective. In addition, as
    part of the Department's response to reporting requirements pursuant to
    section 366 of the National Defense Authorization Act for Fiscal Year
    2003, the Sustainable Ranges Working Integrated Product Team (WIPT)
    formed a Funding Subgroup comprised of members of the Services and the
    Office of the Secretary of Defense (OSD). The Funding Subgroup's
    primary purpose is to develop a common construct for consistent and
    accurate reporting and discussions of range funding among the Services.
    The construct under examination takes into account both the acquisition
    and sustainment of lands that would be acquired pursuant to section
    2684(a). If instituted, it will be used by the WIPT to help monitor the
    status of Sustainable Ranges programs throughout the Planning,
    Programming, Budgeting, and Execution (PPBE) process.

        92. Senator Bill Nelson. Mr. Grone, what are your current policies
    and procedures to ensure that the requirements of test and evaluation
    ranges such as Eglin Air Force Base are fully considered along with the
    requirements of training installations and ranges in the resourcing of
    and prioritization for actions pursuant to section 2684a of title 10,
    United States Code?
        Mr. Grone. The Integrated Product Team (IPT), which oversees DOD's
    Range Sustainment Initiative, is co-chaired by the Deputy Director,
    Operational Test and Evaluation, along with the Under Secretary of
    Defense for Readiness and the Deputy Under Secretary of Defense for
    Installations and Readiness. As a co-chair, the Test and Evaluation
    Office has been, from the start, an active participant in the IPT and
    the policies and procedures that have developed from this coordinating
    group, including actions pursuant to section 2684(a) of title 10.

        93. Senator Bill Nelson. Mr. Grone, what policies and procedures
    are in place to ensure that planning and resourcing within the Range
    Sustainment Program take fully into account the return of forces to the
    United States and, with respect to test and evaluation ranges, the
    range and airspace availability requirements of emerging weapons
    systems?
        Mr. Grone. Department of Defense Directive 3200.15, Sustainment of
    Ranges and Operating Areas (OPAREAs), sets DOD policy for the planning
    of ranges to, ``Identify current and future operational air, ground,
    sea, and/or undersea, space and frequency spectrum range and OPAREA
    requirements necessary to meet test and training needs.'' This includes
    changes in mission requirements brought about by emerging weapons
    systems and returning forces. The Directive goes on to call for the
    programming and budgeting of the resources necessary to fulfill such
    plans. This direction was further reiterated in the Department's
    program guidance and elaborated on in guidance to the Services for
    their 2006-2011 Sustainable Ranges Programs. The Services' through
    their various planning efforts identify requirements associated with
    global rebasing and emerging weapons systems. Requirements associate
    with Sustainable Ranges are then vetted through a program review
    conducted by the Integrated Product Team as a check and balance
    measure.

                     compatible land use partnering program
        94. Senator Bill Nelson. Mr. Grone, it would seem that the
    Compatible Land Use Partnering Program would benefit enormously by more
    effective integration of the Department's efforts with the land and
    water conservation programs of other Federal agencies such as the U.S.
    Fish and Wildlife Service, the U.S. Forest Service, and other Federal
    agencies, not to mention the various relevant State agencies. I am
    aware that your office is spearheading an effort in the Southeast
    United States to more fully engage States and other Federal agencies in
    landscape scale and regional efforts to work collaboratively to
    identify and address common objectives through coordinated actions.
    Please provide additional information on this initiative. While I
    applaud your efforts to date in engaging those agencies and programs as
    full partners, it would seem that there is more that could be done.
    What are your other plans and initiatives to more fully engage those
    agencies and partners, and what can this Committee do to assist in that
    effort?
        Mr. Grone. DOD has a highly cooperative relationship with other
    Federal land management agencies, such as U.S. Fish and Wildlife, the
    National Park Service, the Bureau of Land Management, the Forest
    Service, and others. We all share common land management issues and
    concerns, and are increasingly working together to try to address these
    from a more regional or landscape perspective. Where appropriate for
    our respective missions, we have begun to work together in assessing
    opportunities for partnerships. For example, DOD is working closely
    with its Federal land use partners on the Compatible Land Use
    Partnering program in a number of ways. The Army in April announced a
    new Fort Hood Regional Cooperative Conservation Partnership, which
    includes the Department of Interior as a full partner. At the same
    time, the U.S. Fish and Wildlife Service recently awarded its first
    Sustainable Military Installation Award to Fort Carson with special
    credit given to its compatible land use partnering program. DOD
    continues to build on and strengthen its many collaborative
    relationships with other agencies.

                               range restrictions
        95. Senator Bill Nelson. Mr. Grone, without going into specific
    locations, how many installations and ranges are now experiencing
    operational restrictions (such as the need to curtail operations or to
    employ ``work arounds'') as a result of incompatible development or
    loss of habitat in the vicinity of those locations or with regard to
    critical airspace associated with those installations and ranges?
        Mr. Grone. As we have assessed the issue of encroachment over the
    past 5 years, it has become clear that there really are no
    installations or ranges that are entirely unaffected by encroachment.
    In some cases, the encroachment is extensive, and can produce
    significant operational impacts. In other cases, minor workarounds can
    mask the concerns with little disruption in military activities. But
    all are affected by at least some of the forms of encroachment you
    reference. Depending on the installation or range's mission, the
    effects of such encroachment produce varying degrees of impairment. But
    anything that disrupts access or reduces the realism of our live
    testing or training activities is a significant concern.

        96. Senator Bill Nelson. Mr. Grone, given projected future military
    requirements and growth and demographic trends, how many additional
    installations and ranges are expected to experience such restrictions
    within the next 6 years?
        Mr. Grone. It is difficult to say with any certainty at this time.
    There are a number of decisions such as BRAC and global repositioning
    that have not yet been made that will affect our military requirements.
    These requirements need to be viewed in terms of growth and demographic
    trends for an assessment of encroachment impacts on mission. So,
    although we do know that mission requirements will change, it is not
    yet fully evident how. Therefore, it is all the more important that we
    minimize the effects of encroachment on the lands we have now, and look
    for opportunities to better utilize the land, air, sea space, and
    frequency access available to us. Since almost all ranges are
    experiencing some encroachment limitations already, I can only answer
    that encroachments affecting all our ranges tends to be increasing at a
    significant pace. As development around ranges continues, competition
    for natural resources and access to Federal land for economic use,
    recreation, utilities, and other purpose intensifies. Accordingly, the
    associated habitat loss aggravates endangered species and other
    environmental concerns. Most, if not all, DOD ranges will face more
    encroachment pressures 6 years from now than they do today,
    particularly if we do not act accordingly. We hope to mitigate many of
    these encroachments through departmental actions, and we greatly
    appreciate the continuing support of Congress in addressing these
    concerns.

        97. Senator Bill Nelson. Secretary Gibbs, one of the more
    significant problems facing Air Force test and training installations
    and ranges now and in the future would appear to be increasing
    operational restrictions resulting from incompatible development and
    loss of habitat, current or anticipated. In recognition of this
    significant problem, and at the request of the DOD, Congress provided
    authority in 2002, codified as section 2684a of title 10, United States
    Code, for the military services to enter into agreements with State and
    local governments and with private conservation groups to take
    cooperative actions to address both incompatible development and loss
    of habitat. Under the overall guidance of the Senior Readiness
    Oversight Committee (SROC), and under the leadership of the Deputy
    Under Secretary of Defense (Installations and Environment), the
    Department has developed a comprehensive Range Sustainment Program. One
    of the key elements of that program is the Range and Environment
    Preservation Initiative, designed to take full advantage of the new
    authority Congress provided. The Office of the Secretary of Defense and
    the Departments of the Army and Navy are all, to one degree or another,
    taking actions and allocating resources to take advantage of this
    authority. One of the very first projects undertaken, the Northwest
    Florida Greenway, has as one of its major objectives protecting the
    operational capability of two key Air Force installations, Eglin and
    Tyndall Air Force bases. However, to date the Department of the Air
    Force does not appear to be participating in this program, either in
    Florida or anywhere else in the country. Is that accurate, and if so,
    why is the Department not participating?
        Mr. Gibbs. The Air Force is committed to protecting the operational
    capability of all its installations and ranges by using the full array
    of strategies/tools available to us, including Title 10 Section 2684a.
    Because the BRAC process has the potential to significantly change the
    Air Force installation and range ``landscape'' the AF position was to
    refrain from actively pursuing projects that would commit funding
    authority until after the initial BRAC list was made public. Although
    we did not solicit projects for use with this authority, we ensured Air
    Force Major Commands were aware of the workshops that OSD and the Navy
    conducted and encouraged them to participate in order to gain a better
    understanding of the new authority.
        Current Air Force procedures allow any installation that determines
    that their mission is being inherently threatened to define the
    requirement, including the authority and funding source (which can
    range from MILCON, Urgent Land Acquisition, direct acquisition of
    easements, the use of 2684a authority, etc), and present it through
    their Major Command for validation. Validated requirements are then to
    be forwarded to the service headquarters for consideration within the
    appropriate program.

        98. Senator Bill Nelson. Secretary Gibbs, is the Department of the
    Air Force developing plans and procedures to take advantage of this
    authority? If so, when are those plans and procedures expected to be
    finalized? If not, why not?
        Mr. Gibbs. The Air Force is currently preparing guidance that will
    allow us to take advantage of this authority. The guidance should be
    completed by 1 July 05.

        99. Senator Bill Nelson. Secretary Gibbs, in the programs and
    policies of the Department of the Air Force designed to ensure the
    sustainability of Air Force installations and ranges, what policies and
    procedures do you have to ensure that the needs of test and evaluation
    ranges are fully considered?
        Mr. Gibbs. The requirements of test and evaluation ranges are
    treated identically to the requirements of other types of ranges.
    Requirements are identified by the advocating range offices, vetted and
    validated by the installation/range staff, staffed to the Major
    Commands, where they are again reviewed to determine validity, and then
    moved to U.S. Air Force Headquarters for inclusion in the appropriate
    programs for funding. At that point they are prioritized against the
    other requirements within those programs. The National Defense
    Authorization Act of Fiscal Year 2003 changed the way Major Range and
    Test Facility Base (MRTFB) test ranges will be funded beginning in
    fiscal year 2006. The driver for this legislation was the need for
    better stewardship and resourcing of our test and evaluation (T&E)
    infrastructure, to include sustainment of existing capabilities and
    modernization for the future. Institutional and overhead costs of
    facilities or resources within the MRTFB will be fully funded through
    the major T&E investment accounts.

        100. Senator Bill Nelson. Secretary Gibbs, which office or official
    within the Air Force has particular responsibility to ensure that Air
    Force test and evaluation ranges receive full consideration within Air
    Force sustainability programs?
        Mr. Gibbs. HQ USAF/IL, HQ USAF/TE, HQ USAF/XO, and SAF/IE, with
    support from the Major Commands and Major Range and Test Facility Base
    (MRTFB) test ranges for requirements definition, have responsibility
    for ensuring that Air Force test and evaluation (T&E) ranges receive
    full consideration within Air Force sustainability programs.

        101. Senator Bill Nelson. Secretary Gibbs, increasingly, Department
    of Defense test and training ranges are being used by organizations
    from more than one armed service. I understand that one of the
    objectives of Secretary Rumsfeld's transformation program is to
    facilitate and increase joint use of the ranges and installations of
    the various military departments. Do you consider it the obligation of
    your Department to ensure that Air Force ranges and installations are
    resourced adequately to accommodate appropriate joint requirements?
        Mr. Gibbs. The Air Force provides resources to support Air Force
    missions at our installations and ranges. The ranges are available for
    joint use, as scheduled. Marginal costs associated with other Services
    or agencies using Air Force installations and ranges are charged to the
    user. We do not anticipate this policy changing as a result of
    increased joint use.

        102. Senator Bill Nelson. Secretary Gibbs, please provide detailed
    information concerning the policies, procedures, and evaluation
    criteria used by the Department of the Air Force in identifying and
    prioritizing potential Range and Environment Preservation Initiative
    projects. In particular, please address the policies and procedures of
    the Department to ensure that the requirements of Air Force test and
    evaluation ranges are given full consideration along with the
    requirements of Army training installations and ranges.
        Mr. Gibbs. The Air Force is currently preparing guidance for
    projects to be submitted for consideration under OSD's Range and
    Environmental Preservation Initiative funding. These guidelines will be
    based on the criteria OSD includes in their call for projects. Projects
    forwarded for consideration will be validated by the respective Major
    Command. Any project justified to support multiple Air Force
    installations will require support statements from all installations
    and respective Major Commands. All installations and ranges will be
    treated equally and considered on the merits of the proposed projects.
    OSD will ensure that Air Force test and evaluation range proposals are
    given full consideration along with the Army's proposals.

        103. Senator Bill Nelson. Secretary Gibbs, in February 2003, the
    Commander's Council of the Joint Gulf Range Complex published a Joint
    Gulf Range Complex Strategic Plan. Do you consider it a valid
    obligation of the Department of the Air Force to address the resourcing
    and capabilities requirements identified in that plan with regard to
    Air Force installations and ranges that are part of the Joint Gulf
    Range?
        Mr. Gibbs. The Joint Gulf Range Complex plan is strategic in nature
    and is not overly specific. The goal of the strategic plan is to ensure
    all of the member organizations of the Joint Gulf Range Complex are
    working toward the same goals, and to assess and adjust the range's
    direction in response to a changing environment. It identifies what the
    range is, what it does (mission), and why it does it. The focus is
    toward future requirements rather than providing detailed information
    that allows validation of projects or requirements for resourcing. Any
    projects or requirements defined in a Joint Gulf Range Complex
    operating plan or action plan will be validated at the appropriate
    installation/range level, and subsequently submitted through the Major
    Command, and at Headquarters Air Force levels for prioritization and
    inclusion in the appropriate funding program.

        104. Senator Bill Nelson. Secretary Gibbs, what steps has the
    Department of the Air Force taken and what steps does the Department
    plan to take to implement the Northwest Florida Greenway project, a
    project incorporated within the Joint Range Complex Strategic Plan?
        Mr. Gibbs. Before pursuing any efforts that may result in a
    significant cost, an installation or range identifies requirements
    through the Major Command(s) and Headquarters Air Force for
    consideration. To date Air Force Materiel Command has not identified a
    requirement that validates the Northwest Florida Greenway.

        105. Senator Bill Nelson. Mr. Prosch, I note that the Army took the
    lead back in the mid-1990s, specifically at Fort Bragg, North Carolina,
    to address restrictions on Army operations resulting from incompatible
    development and loss of habitat by partnering with State agencies and
    private conservation groups to protect lands and habitat in the
    vicinity of Fort Bragg. I further note with approval that the
    Department of the Army has recently adopted a well thought out and
    comprehensive sustainability program for its installations and ranges.
    Please provide information regarding how the Army's Compatible Use
    Buffer program is or will be integrated as an element of the larger
    sustainability program.
        Mr. Prosch. The Army sustainability effort is an approach that
    better ensures the long-term viability of the military mission by
    minimizing resource needs, reducing environmental impacts, and managing
    resources to provide realistic military training and testing
    environments. The sustainability concept is integrated across
    functional lines and organizations within the Army. Long-term
    sustainable goals are developed and included in installation strategic
    plans, with full stakeholder involvement, including local communities.
    Mission focused, yet environmentally conforming considerations are
    essential components of these plans which help drive tangible results.
        The Army has responded to encroachment by implementing the
    Sustainable Range Program (SRP) Plan as the Army's roadmap to designing
    and managing its ranges. SRP is part of the larger Army sustainability
    program that helps the Army ensure we are able to maximize the
    capability, availability, and accessibility of ranges and training
    lands to support doctrinal requirements through timely consideration of
    environmental impacts and mitigation actions. As a result, the Army is
    pursuing a number of initiatives that will not only help us identify
    encroachment trends but also support sustainability.
        The Army Compatible Use Buffer (ACUB) program is the Army's newest
    tool to sustain training and testing by partnering with states, local
    governments, and private conservation organizations to establish buffer
    areas outside of our installations. In the National Defense
    Authorization Act for Fiscal Year 2003 the services received
    authorities affirming and expanding the Sikes Act authority used in the
    implementation of the Army's Private Lands Initiative at Fort Bragg.
    Subsequently, the Army produced a joint policy guidance memorandum
    dated May 19, 2003 ``Army Range and Training Land Acquisitions and Army
    Compatible Use Buffers.'' This memorandum defines ACUBs and sets forth
    procedures (or proposal development, coordination of proposals, as well
    as review and approval of ACUB proposals.
        Currently, the processes by which ACUB proposals are developed,
    coordinated, reviewed, and ultimately approved is what insures
    integration of the ACUB program into the larger Sustainable Range
    Program.
        ACUBs are a powerful sustainability tool and provide a unique
    opportunity for the Army to work in partnership with states, other
    governments, and public or private environmental and conservation
    groups to achieve a common goal of sustain ability. Encroachment is a
    key sustainability issue and by addressing incompatible land use and
    unconstrained development, ACUBs contributes to managing suburban
    sprawl and growth management which enables an installation to become
    sustainable for future generations.

        106. Senator Bill Nelson. Mr. Prosch, please provide detailed
    information concerning the policies, procedures, and evaluation
    criteria used by the Department of the Army in identifying and
    prioritizing potential Army Compatible Use Buffers. In particular,
    please address the policies and procedures of the Department to ensure
    that the requirements of Army test and evaluation ranges are given full
    consideration along with the requirements of Army training
    installations and ranges.
        Mr. Prosch. The Army produced a joint policy guidance memorandum
    dated May 19, 2003, ``Army Range and Training Land Acquisitions and
    Army Compatible Use Buffers'' that defines Army Compatible Use Buffers
    (ACUBs) and sets forth procedures for proposal development,
    coordination of proposal, as well as review and approval of ACUB
    proposals. Furthermore, the February 11, 2004 Army publication, ``Army
    Range and Training Lands Strategy'' was developed for the purposes of
    supporting the Sustainable Range Program, the Office of the Secretary
    of Defense and Army Transformation. It identifies priorities for
    installations needing resources to modernize ranges, mitigate
    encroachment through the acquisition of buffers, and acquire training
    land. A review and update for the Range and Training Land Strategy is
    currently in progress, in light of Army Transformation, Integrated
    Global Posture and Basing Strategy, Base Realignment and Closure, and
    changing encroachment factors.
        Prioritizing ACUB potential was accomplished using a matrix
    methodology described in the Army Range and Training Land Strategy.
    This exercise identified installations with high potential to reverse
    or stabilize encroachment impacts that should therefore be of
    importance to the ACUB program. Specifically, installations were ranked
    using the sum of encroachment, reversibility, and community factors.
    These three categories were further broken down into sets of variables
    that compose each factor. Each installation was scored for each
    variable and their sums produced a ranked list. The ACUB matrix in and
    of itself does not account for an installation's mission in determining
    its ACUB potential and, therefore, does not distinguish between testing
    and training installations. This added level of analysis helped produce
    a list of 12 ACUB priority installations for the Army Range and
    Training Lands Strategy.
        We do not differentiate between ACUBs at test and evaluation ranges
    versus training ranges. ACUBs are considered an effective tool to
    support both training and testing facilities. It is the Army's intent,
    regarding the review and approval of ACUB proposals, that test and
    evaluation ranges receive the same consideration as training ranges. To
    promote the use of ACUBs at test and evaluation ranges, the Army
    recently approved the addition of a testing community representative on
    the Army Range Sustainment Integration Council ACUB Sub-Working Group
    to ensure that all ACUB proposals receive equal support and
    consideration for approval.

        107. Senator Bill Nelson. Mr. Prosch, without addressing particular
    installations and ranges, please provide detailed information
    concerning the policies, procedures, and evaluation criteria used by
    the Department of the Army in identifying and prioritizing potential
    Army Compatible Use Buffers. In particular, please address the policies
    and procedures of the Department to ensure that the requirements of
    Army test and evaluation ranges are given full consideration along with
    the requirements of Army training installations and ranges.
        Mr. Prosch. The Army produced a joint policy guidance memorandum
    dated May 19, 2003, ``Army Range and Training Land Acquisitions and
    Army Compatible Use Buffers'' that defines Army Compatible Use Buffers
    (ACUBs) and sets forth procedures for proposal development,
    coordination of proposal, as well as review and approval of ACUB
    proposals. Furthermore, the February 11, 2004 Army publication, ``Army
    Range and Training Lands Strategy'' was developed for the purposes of
    supporting the Sustainable Range Program, the Office of the Secretary
    of Defense and Army Transformation. It identifies priorities for
    installations needing resources to modernize ranges, mitigate
    encroachment through the acquisition of buffers, and acquire training
    land. A review and update for the Range and Training Land Strategy is
    currently in progress, in light of Army Transformation, Integrated
    Global Posture and Basing Strategy Base Realignment and Closure, and
    changing encroachment factors.
        Prioritizing ACUB potential was accomplished using a matrix
    methodology described in the Army Range and Training Land Strategy.
    This exercise identified installations with high potential to reverse
    or stabilize encroachment impacts that should therefore be of
    importance to the ACUB program. Specifically, installations were ranked
    using the sum of encroachment, reversibility, and community factors.
    These three categories were further broken down into sets of variables
    that compose each factor. Each installation was scored for each
    variable and their sums produced a ranked list. The ACUB matrix in and
    of itself does not account for an installation's mission in determining
    its ACUB potential and, therefore, does not distinguish between testing
    and training installations. This added level of analysis helped produce
    a list of 12 ACUB priority installations for the Army Range and
    Training Lands Strategy.
        We do not differentiate between ACUBs at test and evaluation ranges
    versus training ranges. ACUBs are considered an effective tool to
    support both training and testing facilities. It is the Army's intent,
    regarding the review and approval of ACUB proposals, that test and
    evaluation ranges receive the same consideration as training ranges. To
    promote the use of ACUBs at test and evaluation ranges, the Army
    recently approved the addition of a testing community representative on
    the Army Range Sustainment Integration Council ACUB Subworking Group to
    ensure that all ACUB proposals receive equal support and consideration
    for approval.

        [Whereupon, at 10:24 a.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2006

                                  ----------

                           WEDNESDAY, APRIL 13, 2005

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

         HIGH RISK AREAS IN THE MANAGEMENT OF THE DEPARTMENT OF DEFENSE

        The subcommittee met, pursuant to notice, at 10:05 a.m., in
    room SR-232A, Russell Senate Office Building, Senator John
    Ensign (chairman of the subcommittee) presiding.
        Committee members present: Senators Ensign and Akaka.
        Committee staff member present: Leah C. Brewer, nominations
    and hearings clerk.
        Majority staff members present: William C. Greenwalt,
    professional staff member; Gregory T. Kiley, professional staff
    member; and Kristina L. Svinicki, professional staff member.
        Minority staff member present: Peter K. Levine, minority
    counsel.
        Staff assistants present: Andrew W. Florell and Catherine
    E. Sendak.
        Committee members' assistants present: Alexis Bayer,
    assistant to Senator Ensign; Erik Raven, assistant to Senator
    Byrd; and Richard Kessler and Darcie Tokioka, assistants to
    Senator Akaka.

           OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

        Senator Ensign. The Readiness and Management Support
    Subcommittee meets this morning to receive testimony on the
    high risk areas in the management of the Department of Defense
    (DOD). We are honored to have with us today the Comptroller
    General of the United States, David Walker; the Under Secretary
    of Defense for Acquisition, Technology, and Logistics, Michael
    Wynne; and the Principal Deputy Under Secretary of Defense
    (Comptroller), Robert Henke. I welcome you all.
        In the past year, this committee has held two hearings on
    the status of the financial management policies and reform of
    the Department of Defense, on March 23, 2004, and November 17,
    2004. This hearing continues this subcommittee's promise to
    partner with the Department to improve financial management and
    to provide for more frequent oversight hearings.
        At the November hearing, I asked the Department to provide
    this subcommittee with a list of items it hoped to accomplish
    within the next 6 months in the areas of financial reform. I
    would like both Mr. Walker and Mr. Henke to address the plans
    that this subcommittee received.
        Mr. Walker, I would hope that you would give us your
    impression of the thoroughness of these plans. Mr. Henke,
    please provide us with a status update on where the Department
    is with respect to implementing these plans.
        Since the hearing last November, the Government
    Accountability Office (GAO) released its biannual report on
    government operations it identifies as high risk. GAO
    identified eight areas within the DOD that it labeled high
    risk. While the number of areas is troubling, it is even more
    disturbing that some of these areas have been labeled high risk
    for more than a decade.
        For example, GAO first designated the DOD financial
    management a high-risk area in 1995, and DOD acquisition was
    first designated high risk in 1990, which by the way was the
    first year that GAO began identifying high-risk areas.
        This is the hearing transcript from 1997. [Indicating] The
    Senate held hearings in 1997 on the areas GAO identified as
    high risk within the DOD. Those areas and the underlying
    problems have not changed appreciably.
        The testimony of 1997 bears a very strong resemblance to
    today's testimony, both in describing the problems the
    Department faces and in the recommendations for improvement. As
    they say, the more things change, the more they stay the same.
        The continued persistence of these management problems pose
    many questions for our witnesses today. Why has the Department
    not made significant progress in these high-risk areas? What
    confidence can you provide this subcommittee that the Senate
    will not meet 8 years from now holding up a book like this and
    saying basically what I just said? What do you think about
    GAO's recommendations to create a full-time chief management
    officer position within DOD? What other actions do you feel are
    needed in order to ensure improvement in these eight high-risk
    areas within DOD?
        One area that has changed over the years is the increased
    reliance by the Department on jointly-managed programs,
    programs shared between multiple Services. These programs pose
    significant management challenges, and most of DOD's high-risk
    areas will require joint solutions. Mr. Wynne, we want to know
    what are you doing to ensure such joint programs are properly
    managed and funded.
        Gentlemen, thank you again for taking time to prepare
    written testimony and to appear before the subcommittee today.
    As previously agreed, we will hear opening statements from the
    Comptroller General, Mr. Walker, then the Under Secretary of
    Defense, and then the Deputy Comptroller of the Department of
    Defense. To our witnesses, your full written statements will be
    made part of the record, and so keep your oral statements
    brief.
        I'd now like to call on my colleague and ranking member,
    Senator Akaka.

                  STATEMENT OF SENATOR DANIEL K. AKAKA

        Senator Akaka. Thank you very much, Mr. Chairman. I want to
    add my welcome to Comptroller General Walker, Secretary Wynne,
    and Mr. Henke. I thank you for calling this hearing, Mr.
    Chairman, on high-risk areas in the management of the DOD.
        Since 1990, the GAO has identified high-risk programs
    throughout the Federal government that are in need of urgent
    management attention. I am disappointed that so many areas
    within the DOD remain on the updated high-risk list. Out of 25
    high-risk areas on this year's list, 8 are unique to the DOD,
    and several more are government-wide issues that directly
    impact DOD.
        As far as I am aware, no DOD problem area has ever shown
    enough improvement to be taken off the high-risk list. This
    subcommittee has worked hard to improve the efficiency of DOD
    programs and operations. In the 4 years that I've served as
    chairman or ranking member of the subcommittee, we have enacted
    legislation addressing each of the DOD high-risk areas.
        For example, we have required DOD to develop a
    comprehensive financial management enterprise architecture to
    address the Department's chronic inability to produce reliable
    financial information or clean financial statements; establish
    specific goals for the use of competitive contracts and
    performance-based contracting to improve the management of the
    $100 billion DOD spends annually in the purchase of services.
        Despite these reforms, as the GAO update shows, we continue
    to see the fundamental deficiencies in the management of the
    DOD. I am increasingly convinced that we will not see
    significant lasting improvement in DOD management until the
    Department undertakes two fundamental reforms.
        First, we have too many bosses at the DOD, but there is no
    one person below the level of the Secretary and the Deputy
    Secretary who is accountable for the management of the
    Department. We have a chief financial official, a chief
    information official, a chief acquisition official, and a chief
    personnel official. But we do not have a chief management
    official to bring them together and get things done.
        The Comptroller General has recommended that we create a
    new Deputy Secretary of Defense for Management. I support that
    recommendation and look forward to working with our chairman to
    enact implementing legislation.
        Second, DOD has innumerable hard-working, highly-qualified
    employees. But it simply does not have the right people in the
    right places to effectively manage the Department. For example,
    the Department has never done a comprehensive review and
    assessment of the personnel that are needed to manage the
    billions of dollars of purchases that it makes every year.
        The Comptroller General has recommended that the Department
    develop a comprehensive strategic workforce plan to guide his
    human capital efforts. I support that recommendation and look
    forward to working with members of the subcommittee to enact
    appropriate legislation.
        The bottom line is--we need sound management practices in
    place so that the DOD spends taxpayer money wisely. We need
    sound financial systems in place so that taxpayer dollars can
    be tracked. We need the right people and the right skills in
    place so that DOD can carry out its mission successfully.
        Mr. Chairman, I look forward to the testimony of our
    distinguished panelists. Secretary Wynne, this is likely to be
    the last time that you testify on these issues before our
    subcommittee. I want to thank you for your testimony today and
    for the huge commitment of time and effort that you have made
    to the management of the DOD over the last 4 years.
        Mr. Chairman, at this time I would also like to submit a
    statement for the record from Senator Byrd, who could not be
    here with us today. Thank you very much, Mr. Chairman.
        [The prepared statement of Senator Byrd follows:]
                  Prepared Statement by Senator Robert C. Byrd
        Thank you, Mr. Chairman and Senator Akaka, for calling this hearing
    on the management problems at the Department of Defense. At a time when
    our troops are deployed in Iraq and Afghanistan, risking life and limb
    in service to our country, there are few issues more important for
    Congress to examine than how the Defense Department manages the
    taxpayer's money.
        I am particularly concerned about the continuing failure of the
    Department of Defense to account for the funds that Congress
    appropriates to it. In 2001, at his confirmation hearing, I asked
    Secretary Rumsfeld what he intended to do to fix the accounting systems
    that resulted in $2.3 trillion in faulty accounting entries during
    fiscal year 2000. He made a commitment to fix this massive problem.
        Congress has invested nearly $200 million to fixing these problems.
    But 4 years later, the solution to these accounting problems remains a
    mirage: an illusion in the distance which remains continually beyond
    our grasp, no matter how much progress is made.
        The Government Accountability Office has proposed that Congress
    create a new position to oversee management reform efforts at the
    Defense Department, including the Department's accounting systems. The
    time is ripe to shake up the upper strata of the Pentagon's management.
    These accounting problems have gone on for far too long.
        There is no reason to expect the Department of Defense to pass an
    audit unless Congress takes the initiative in forcing the Pentagon to
    reform its accounting systems. The GAO has made a reasonable proposal
    to accelerate reform at the Department of Defense, and I urge the Armed
    Services Committee to adopt this proposal in the Defense Authorization
    bill that will be marked up in May.

        Senator Ensign. Thank you, Senator Akaka. We'll first hear
    from Mr. Walker.

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

        Mr. Walker. Thank you, Senator Ensign, Mr. Chairman, and
    Senator Akaka. I appreciate the opportunity to be before you
    and I want to thank you at the outset for continuing your
    commitment to hold these periodic hearings dealing with
    management issues associated with the DOD.
        As you mentioned, Mr. Chairman, my entire statement has
    been entered into the record, so therefore I'll move to
    summarize some key points.
        Given its size and mission that we have to recognize, the
    DOD is one of the largest and most complex organizations in the
    world. While the DOD maintains military forces with significant
    capabilities, it continues to confront pervasive, decades-old
    management problems relating to its business operations,
    including its systems and processes, that provide vital support
    to our forces.
        Of the 25 areas on GAO's 2005 high-risk list, 8 are DOD-
    specific programs or operations and DOD also shares 6--all 6 of
    the government-wide high-risk areas. Therefore, 14 of 25
    government-wide high-risk areas relate to the DOD.
        DOD's failure to effectively address these high-risk areas
    results in billions of dollars of wasted resources each year
    and inadequate accountability to Congress and the American
    people. Let me say, it is not because of the lack of ability of
    commitment of the individuals involved. However, we must take
    an institutional and persistent approach to these longstanding
    problems. We cannot rely upon individuals or personalities. We
    must deal with this in a much more structured and systematic
    fashion in order to be successful.
        In some cases, such as DOD's financial management and
    weapons systems acquisition areas, we've been highlighting
    high-risk challenges for a decade or more. To its credit, the
    Office of Management and Budget (OMB) has recently worked
    closely with a number of agencies that have high-risk areas.
    But historically, OMB has not been very involved with regard to
    DOD-related matters, and that spans many administrations. That
    is not a recent practice.
        Recently I met with Clay Johnson, who is OMB's Deputy
    Director for Management, and recently Clay Johnson testified
    along with me before another Senate Subcommittee of Homeland
    Security and Governmental Affairs. He committed that OMB would
    become more involved with regard to the management issues
    associated with the DOD. He also committed to work with DOD to
    develop action plans for all of the high-risk areas. Earlier
    this week, the White House announced that it had added three
    new areas for emphasis under the President's management agenda
    for the second term of this administration, one of which was
    their desire to work constructively and ``in partnership with
    GAO to try to help deal with some of the longstanding
    management challenges at DOD.''
        I think it is critically important that in addition to the
    consistent and persistent efforts of the people within the DOD,
    OMB has to be actively engaged on these management issues. With
    14 of 25 high-risk areas associated with the DOD, it would be
    inappropriate and imprudent for OMB not to be actively engaged
    on these areas as well. I take some encouragement from the fact
    that Clay Johnson has stated his intention to do so.
        Regarding the way forward, there are three essential
    elements that DOD must incorporate into its business
    transformation efforts if it is to effectively address the
    systemic and longstanding management problems related to the
    high-risk areas. First, it is our experience that successful
    business transformation efforts must include a comprehensive,
    integrated, strategic action plan with results-oriented
    performance measures that link institutional, unit, and
    individual goals, measures and expectations. Such a plan does
    not exist within DOD.
        Second, we recognize that there is a need to have
    additional centralized control over certain resources,
    especially with regard to the business systems modernization
    effort.
        Finally, last but not least, due to the complexity, the
    longstanding, cross-cutting, and systemic nature of the
    business transformation challenges that the DOD faces, we
    believe that it would be prudent and appropriate for the DOD to
    create a new chief management officer. This would be a full-
    time level two executive that would report to the Secretary of
    Defense, and would be the third ranking person within the DOD,
    behind the current Deputy Secretary position. This person would
    serve as the Deputy Secretary of Defense for Management.
        We believe that this new position should be filled by an
    individual appointed by the President and confirmed by the
    Senate, for a term of 7 years, with the potential for
    reappointment. Why do I say 7 years? Because there are numerous
    studies that have been conducted about change management
    efforts in the private sector, the public sector, and the not-
    for-profit sector. There is clear and compelling evidence that
    in order to effectuate a transformation, a fundamental change
    in how you do business in a manner that cannot only be
    successful, but can be sustained beyond the tenure of a
    particular individual, that it takes 7-plus years in order to
    make that happen.
        The fact of that matter is, that at DOD you don't have
    somebody there long enough to see things through, or at least
    to accomplish enough to where there is sustainable momentum
    that can extend beyond that person's term unless things change,
    I don't know that DOD will ever effectively be able to address
    all of these very complex and interrelated challenges.
        It's important to recognize that this position, while being
    a political appointee, would be a professional business
    executive position, not a policy-oriented position. This type
    of person is necessary no matter who is the President of the
    United States, no matter which party controls the White House,
    and no matter who the Secretary of Defense might be.
        We believe that this position could serve to elevate,
    integrate, and institutionalize the attention necessary to
    address these key high-risk areas and to exercise key
    stewardship responsibilities. We also believe that it's
    important to move beyond individuals and to look at
    institutional approaches that are not personality-dependent.
        In that regard, let me say for the record: I had the
    greatest degree of respect for Gordon England. I've dealt with
    him quite a bit and, I commend the President for his nomination
    of Gordon England to be the Deputy Secretary of Defense subject
    to Senate confirmation. He's a very capable professional. He
    could be the Deputy Secretary of Defense, the Deputy Secretary
    for Management, or even the Secretary of Defense. He's that
    capable an individual.
        My concern is, is there a single human being on this planet
    that could effectively do what all needs to be addressed right
    now at the DOD at a time of war, recognizing that we have
    military transformation ongoing while we're trying to fight a
    global war on terrorism, and we have longstanding systemic
    business transformation challenges that are going to require
    the sustained attention of a person for 7-plus years? Even
    after you make the transformation happen, running arguably one
    of the largest enterprises in the world is going to require
    sustained attention from a top business executive with a proven
    track record to be successful.
        In closing, let me say that while we did not raise this
    last area to a high-risk area, it is clearly relevant to the
    DOD. As both of you know, our Nation's financial condition is
    worse than advertised. We face large and growing structural
    deficits due primarily to known demographic trends and rising
    health care costs. The bigger crunch is coming to DOD. It's
    only a matter of time.
        It is critically important that additional steps be taken
    within DOD, the Department of Homeland Security (DHS), as well
    as other departments and agencies to develop a more risk-based
    strategic approach to determining how we ought to be allocating
    what will become increasingly limited resources. Every dollar
    that we spend on a want today, every dollar that we waste today
    is a dollar that will not be available to meet critical needs
    tomorrow. It's critically important that we take steps now to
    stop the bleeding.
        Thank you very much.
        [The prepared statement of Mr. Walker follows:]
                     Prepared Statement by David M. Walker
        Mr. Chairman and members of the subcommittee: Thank you for the
    opportunity to discuss the Department of Defense's (DOD) ``high-risk''
    programs and operations summarized in GAO's 2005 high-risk series
    update report.\1\ During my tenure as Comptroller General, our high-
    risk series has increasingly focused on those major government programs
    and operations that need urgent attention and transformation to ensure
    that our national government functions in the most economical,
    efficient, and effective manner possible. We also emphasize those
    Federal programs and operations that are at high risk because of their
    greater vulnerabilities to fraud, waste, abuse, and mismanagement. Some
    of these high-risk programs and operations are in need of
    transformation, and several will require action by both the executive
    branch and Congress for successful transformation to occur.
    ---------------------------------------------------------------------------
        \1\ GAO, High-Risk Series: An Update, GAO-05-207 (Washington, DC:
    January 2005), issued for the 109th Congress.
    ---------------------------------------------------------------------------
        Given its size and mission, DOD is one of the largest and most
    complex organizations to effectively manage in the world. While DOD
    maintains military forces with significant capabilities, it continues
    to confront pervasive, decades-old management problems related to its
    business operations, including systems and processes, that support
    these forces. Of the 25 areas on our 2005 high-risk list, 8 are DOD
    programs or operations and 6 are government-wide high-risk areas for
    which DOD shares some responsibility. These high-risk areas touch on
    all of DOD's major business operations. DOD's failure to effectively
    address these high-risk areas results in billions of dollars of wasted
    resources each year and inadequate accountability to Congress and the
    American people. In some cases, such as DOD's financial management and
    weapon systems acquisition areas, we have been highlighting high-risk
    challenges for a decade or more. To its credit, the Office of
    Management and Budget (OMB) has worked closely with a number of
    agencies that have high risk issues, but to-date has been less involved
    with DOD. Recently, Clay Johnson, OMB's Deputy Director for Management
    reaffirmed plans to refocus on GAO's high risk list in order to make as
    much progress as possible during the Bush administration's second term.
    He also committed to place additional emphasis on DOD's high-risk
    areas, including working to help ensure that DOD has action plans for
    addressing all new ``high-risk'' areas. Given the magnitude of DOD's
    problems and the stakes involved, I believe it is critical that OMB
    actively collaborate with the Department to ensure it establishes the
    action plans and milestones needed to address its high risk areas.
    Continued oversight by Congress, such as this hearing, is key to
    achieving change at DOD and, in the case of some areas, legislative
    action will be needed.
        Today, I will provide my perspectives on: (1) DOD's high-risk
    areas, including those for which it shares responsibility with other
    Federal agencies; (2) an emerging challenge that merits close
    attention, involving the need for DOD and other Federal agencies to
    develop comprehensive approaches for risk management; and (3) three key
    elements to successfully address these high-risk areas and achieve
    needed reforms. In particular, I will emphasize two suggestions for
    legislative consideration--the need for central control of systems
    investment funding and a chief management official--that I have
    previously testified about.\2\ Implementation of these two suggestions
    would provide the sustained toplevel leadership and accountability
    needed by DOD to better permit the effective use of transition plans,
    processes, systems, people, and tools and thereby increase the
    likelihood of successful business transformation.
    ---------------------------------------------------------------------------
        \2\ GAO, Department of Defense: Further Actions Are Needed to
    Effectively Address Business Management Problems and Overcome Key
    Business Transformation Challenges, GAO-05-140T (Washington, DC: Nov.
    18, 2004).
    ---------------------------------------------------------------------------
        My statement is based on previous GAO reports and our work was
    performed in accordance with generally accepted government auditing
    standards.
                                    summary
        While DOD began the new millennium with military forces second to
    none, it has not been effective in managing its business operations. At
    a time when DOD is challenged to maintain a high level of operations
    while competing for resources in an increasingly fiscally constrained
    environment, weaknesses in DOD's business operations continue to result
    in reduced efficiencies and effectiveness. The Secretary of Defense has
    estimated that improving business operations could save 5 percent of
    DOD's annual budget. This represents a savings of about $22 billion a
    year, based on the fiscal year 2004 budget.
        Continuing problems within DOD's business operations and
    transformation initiatives have resulted in our designation of eight
    DOD-specific programs and operations to our 2005 high-risk list, which
    includes two new areas and the expansion of a third area. First, we
    added DOD's overall approach to business transformation to the high-
    risk list because of our concern over DOD's lack of adequate management
    accountability and the absence of a strategic and integrated action
    plan for the overall business transformation effort. Unless DOD makes
    progress in its overall business transformation effort, we believe that
    it will continue to have difficulties in confronting the other seven
    DOD-specific high-risk areas in an integrated, departmentwide approach.
    Second, we added DOD's personnel security clearance program to the list
    because the increased delays and growing backlogs of security
    clearances for DOD personnel, contractors, and others present a range
    of risks in today's security environment. Finally, we expanded our
    prior high-risk area of inventory management to include DOD's
    management of certain key aspects of its supply chain, including
    distribution, inventory management, and asset visibility, because of
    issues related to supporting the warfighter during Operation Iraqi
    Freedom. The remaining DOD-specific high-risk areas cover other major
    business operations such as support infrastructure management, business
    systems modernization, financial management, weapon systems
    acquisition, and contract management. Although the Secretary of Defense
    and senior leaders have shown commitment to business management
    transformation, little tangible evidence of actual improvement has been
    seen in DOD's business operations to date. In addition, DOD has not
    taken the steps necessary to achieve and sustain business reform on a
    broad, strategic, departmentwide, and integrated basis.
        In addition to the DOD-specific high-risk areas, DOD shares
    responsibility for six other high-risk areas that are government-wide
    in scope. A first and critical government-wide high-risk area,
    strategic human capital management, has remained high risk because some
    Federal human capital strategies are still not appropriately
    constituted to meet current and emerging challenges or drive the
    transformations necessary for agencies to meet these challenges. The
    National Defense Authorization Act for Fiscal Year 2004 \3\ has given
    DOD significant authorities to address the way in which defense
    civilian employees are hired, compensated, promoted, and disciplined,
    and proposed regulations to implement these authorities have been
    jointly released by the Secretary of Defense and the acting Director of
    the Office of Personnel Management (OPM). The remaining five
    government-wide high-risk areas include managing Federal real property,
    protecting Federal information systems and the Nation's critical
    infrastructure, establishing appropriate and effective information-
    sharing mechanisms to improve homeland security, modernizing Federal
    disability programs, and managing interagency contracting more
    effectively.
    ---------------------------------------------------------------------------
        \3\ Pub. L. No. 108-136, Sec. 1101, 117 Stat. 1392, 1621 (Nov. 24,
    2003) (amending subpart I of part III of title 5, United States Code).
    ---------------------------------------------------------------------------
        There are other important broad-based challenges facing our
    government that we will be closely monitoring even though we have not
    yet categorized them as high risk. One emerging area of concern
    involves the need for DOD along with other agencies to develop and use
    a strategic risk-based approach for establishing goals, evaluating and
    setting priorities, and making difficult resource decisions.
    Strategically managing risks and investment decisions across the
    Department is crucial for DOD as it faces growing questions about the
    affordability and sustainability of the rate of growth in defense
    spending and the shift in focus from conventional threats posed by the
    Cold War era to more unconventional and asymmetric threats evidenced in
    the events of September 11, 2001. To its credit, we understand that DOD
    is attempting to implement a risk management framework for making
    broad, strategic investment decisions across the Department, and we are
    monitoring this effort.
        Regarding the way forward, there are three essential elements that
    DOD must incorporate into its business transformation efforts if it is
    to successfully address the systemic management problems related to its
    high-risk areas. First, in our experience, a successful business
    transformation effort must include a comprehensive, integrated business
    transformation strategic and action plan with results-oriented
    performance measures that link institutional, unit, and personnel
    goals, measures, and expectations. Second, we propose that those
    responsible for business systems modernization control the allocation
    and execution of funds for DOD business systems. Finally, due to the
    complexity and long-term nature of these efforts, strong and sustained
    executive leadership is needed if they are to succeed. We believe one
    way to ensure this strong and sustained leadership over DOD's business
    management reform efforts would be to create a full-time, executive-
    level II position for a Chief Management Official (CMO), who would
    serve as the Deputy Secretary of Defense for Management. We believe
    that the new CMO position should be filled by an individual appointed
    by the President and confirmed by the Senate, for a set term of 7 years
    with the potential for reappointment. Articulating the role and
    responsibilities of the position in statute and establishing a term
    that spans administrations underscores the importance of a
    professional, nonpartisan approach to this business management-oriented
    position. This position would elevate, integrate, and institutionalize
    the attention essential for addressing key stewardship
    responsibilities, such as strategic planning, enterprise architecture
    development and implementation, information technology management, and
    financial management, while facilitating the overall business
    management transformation within DOD.
    DOD's High-Risk Areas, Including Government-wide High-Risk Areas
        Numerous systems problems, inefficiencies, and wasted resources
    continue to trouble DOD's business operations, resulting in our
    designation of 14 high-risk areas that are either DOD-specific programs
    or government-wide high-risk areas for which DOD shares some
    responsibility. As shown in table 1, we have designated two new high-
    risk areas for DOD this year. The first, DOD's approach to business
    management transformation, represents an overarching high-risk area,
    encompassing the other seven key DOD-specific business operations that
    we have designated as individual high-risk areas. The second, DOD's
    personnel security clearance program, was added to our 2005 high-risk
    list because of delays in completing hundreds of thousands of
    background investigations and adjudications (a review of investigative
    information to determine eligibility for a security clearance). Many of
    the remaining DOD-specific areas have been on the list for a decade or
    more. In addition to the DOD-specific high-risk areas shown in table 1,
    I will later discuss the six government-wide areas, such as human
    capital management, for which DOD shares responsibility with other
    Federal agencies.

    TABLE 1: YEARS WHEN SPECIFIC DOD AREAS ON GAO'S 2005 HIGH RISK LIST WERE
                          FIRST DESIGNATED AS HIGH RISK
    ------------------------------------------------------------------------
                       Area                      Year designated high risk
    ------------------------------------------------------------------------
    DOD approach to business transformation..                          2005
       DOD personnel security                                  2005
       clearance program.....................
       DOD support infrastructure                              1997
       management............................
       DOD business systems                                    1995
       modernization.........................
       DOD financial management......                          1995
       DOD weapon systems acquisition                          1990
       DOD contract management.......                          1992
       DOD supply chain management a.                         1990
    ------------------------------------------------------------------------
    Source: GAO.
    a This area was formerly entitled DOD inventory management.

    DOD's Approach to Business Transformation
        DOD's approach to business management transformation represents an
    overarching high-risk area, encompassing several other key business
    operations. Over the years, DOD has embarked on a series of efforts to
    reform its business management operations, including modernizing
    underlying information technology (business) systems. However, serious
    inefficiencies remain. As a result, the areas of support infrastructure
    management, business systems modernization, financial management,
    weapon systems acquisition, contract management, and supply chain
    management remain high-risk DOD business operations. We now consider
    DOD's overall approach to business transformation to be a high-risk
    area because: (1) DOD's business improvement initiatives and control
    over resources are fragmented; (2) DOD lacks a clear strategic and
    integrated business transformation plan and investment strategy,
    including a well-defined enterprise architecture to guide and constrain
    implementation of such a plan; and (3) DOD has not designated a senior
    management official responsible and accountable for overall business
    transformation reform and related resources.
        Unless DOD makes progress in overall business transformation, we
    believe it will continue to have difficulties in confronting other
    problems in its business operations. DOD spends billions of dollars to
    sustain key business operations intended to support the warfighter,
    including systems and processes related to support infrastructure,\4\
    finances, weapon systems acquisition, the management of contracts, and
    the supply chain. We have previously testified on inefficiencies in
    DOD's business operations, such as the lack of sustained leadership,
    the lack of a comprehensive and integrated business transformation
    strategic and action plan, and inadequate incentives.\5\ Moreover, the
    lack of adequate transparency and accountability across DOD's major
    business areas results in billions of dollars of wasted resources
    annually at a time of increasing military operations and growing fiscal
    constraints.
    ---------------------------------------------------------------------------
        \4\ Support infrastructure includes categories such as force
    installations, central logistics, the defense health program, and
    central training.
        \5\ GAO-05-140T; GAO, Department of Defense: Longstanding Problems
    Continue to Impede Financial and Business Management Transformation,
    GAO-04-907T (Washington, DC: July 7, 2004), and DOD Business Systems
    Modernization: Billions Continue to Be Invested with Inadequate
    Management Oversight and Accountability, GAO-04-615 (Washington, DC:
    May 27, 2004).
    ---------------------------------------------------------------------------
        Business transformation requires long-term cultural change,
    business process reengineering, and a commitment from both the
    executive and legislative branches of government. Although sound
    strategic planning is the foundation on which to build, DOD needs
    clear, capable, sustained, and professional leadership to maintain the
    continuity necessary for success. Such leadership would provide the
    attention essential for addressing key stewardship responsibilities--
    such as strategic planning, performance management, business
    information management, and financial management--in an integrated
    manner, while helping to facilitate the overall business transformation
    effort within DOD.
        Personnel Security Clearance Program
        The second high-risk area is DOD's personnel security clearance
    program. Delays in completing hundreds of thousands of background
    investigations and adjudications (a review of investigative information
    to determine eligibility for a security clearance) have led us to add
    the DOD personnel security clearance program to our 2005 high-risk
    list. Personnel security clearances allow individuals to gain access to
    classified information. In some cases, unauthorized disclosure of
    classified information could reasonably be expected to cause
    exceptionally grave damage to national defense or foreign relations.
    DOD has approximately 2 million active clearances as a result of
    worldwide deployments, contact with sensitive equipment, and other
    security requirements. While our work on the clearance process has
    focused on DOD, clearance delays in other Federal agencies suggest that
    similar impediments and their effects may extend beyond DOD.
        Since at least the 1990s, we have documented problems with DOD's
    personnel security clearance process, particularly problems related to
    backlogs and the resulting delays in determining clearance
    eligibility.\6\ Since fiscal year 2000, DOD has declared its personnel
    security clearance investigations program to be a systemic weakness
    \7\--a weakness that affects more than one DOD component and may
    jeopardize the Department's operations. An October 2002 House Committee
    on Government Reform report also recommended including DOD's
    adjudicative process as a material weakness.\8\ As of September 30,
    2003 (the most recent data available), DOD could not estimate the full
    size of its backlog, but we identified over 350,000 cases exceeding
    established time frames for determining eligibility.\9\
    ---------------------------------------------------------------------------
        \6\ GAO, DOD Personnel: Inadequate Personnel Security
    Investigations Pose National Security Risks, GAO/NSIAD-00-12
    (Washington, DC: Oct. 27, 1999).
        \7\ Department of Defense Annual Statement of Assurance, Fiscal
    Year 2000 and Fiscal Year 2001; Department of Defense Performance and
    Accountability Report, Fiscal Year 2002 (Jan. 31, 2003) and Fiscal Year
    2003 (Dec. 23, 2003).
        \8\ Committee on Government Reform, Defense Security Service: The
    Personnel Security Investigations (PSI) Backlog Poses a Threat to
    National Security, H.R. Rep. No. 107-767 (Washington, DC: Oct. 24,
    2002).
        \9\ GAO, DOD Personnel Clearances: DOD Needs to Overcome
    Impediments to Eliminating Backlog and Determining Its Size, GAO-04-344
    (Washington, DC: Feb. 9, 2004).
    ---------------------------------------------------------------------------
        DOD has taken steps to address the backlog--such as hiring more
    adjudicators and authorizing overtime for adjudicative staff--but a
    significant shortage of trained Federal and private-sector
    investigative personnel presents a major obstacle to timely completion
    of cases. Other impediments to eliminating the backlog include the
    absence of an integrated, comprehensive management plan for addressing
    a wide variety of problems identified by us and others. In addition to
    matching adjudicative staff to workloads and working with OPM to
    develop an overall management plan, DOD needs to develop and use new
    methods for forecasting clearance needs and monitoring backlogs,
    eliminate unnecessary limitations on reciprocity (the acceptance of a
    clearance and access granted by another department, agency, or military
    service), determine the feasibility of implementing initiatives that
    could decrease the backlog and delays, and provide better oversight for
    all aspects of its personnel security clearance process. The National
    Defense Authorization Act for Fiscal Year 2004 \10\ authorized the
    transfer of DOD's personnel security investigative function and over
    1,800 investigative employees to OPM. This transfer took place in
    February 2005. While the transfer eliminated DOD's responsibility for
    conducting the investigations, it did not eliminate the shortage of
    trained investigative personnel needed to address the backlog. Although
    DOD retained the responsibility for adjudicating clearances, OPM is now
    accountable for ensuring that investigations are completed in a timely
    manner.
    ---------------------------------------------------------------------------
        \10\ Pub. L. No. 108-136 Sec. 906 (Nov. 24, 2003).
    ---------------------------------------------------------------------------
        Support Infrastructure Management
        The third high-risk area is DOD's support infrastructure
    management, which we first identified as being high risk in 1997. DOD
    has made progress and expects to continue making improvements in its
    infrastructure management, but much work remains to be done. DOD's
    support infrastructure includes categories such as force installations,
    central logistics, the defense health program, and central training.
    DOD's infrastructure costs continue to consume a larger-than-necessary
    portion of its budget than DOD believes is desirable, despite
    reductions in the size of the military force following the end of the
    Cold War. For several years, DOD also has been concerned about its
    excess facilities infrastructure, which affects its ability to devote
    more funding to weapon systems modernization and other critical needs.
    DOD reported that many of its business processes and much of its
    infrastructure are outdated and must be modernized. Left alone, the
    current organizational arrangements, processes, and systems will
    continue to drain scarce resources.
        DOD officials recognize that they must achieve greater efficiencies
    in managing their support operations. DOD has achieved some operating
    efficiencies and reductions from such efforts as base realignments and
    closures, consolidations, organizational and business process
    reengineering, and competitive sourcing. It also has achieved
    efficiencies by eliminating unneeded facilities through such means as
    demolishing unneeded buildings and privatizing housing at military
    facilities. In addition, DOD and the services are currently gathering
    and analyzing data to support a new round of base realignments and
    closures in 2005 and facilitating other changes as a result of DOD's
    overseas basing study.
        Despite this progress, much work remains for DOD to transform its
    support infrastructure to improve operations, achieve efficiencies, and
    allow it to concentrate resources on the most critical needs.
    Organizations throughout DOD need to continue reengineering their
    business processes and striving for greater operational effectiveness
    and efficiency. DOD needs to develop a plan to better integrate, guide,
    and sustain the implementation of its diverse business transformation
    initiatives in an integrated fashion. DOD also needs to strengthen its
    recent efforts to develop and refine its comprehensive long-range plan
    for its facilities infrastructure to ensure adequate funding to support
    facility sustainment, modernization, recapitalization, and base
    operating support needs. DOD generally concurs with our prior
    recommendations in this area and indicates it is taking actions to
    address them. A key to any successful approach to resolving DOD's
    support infrastructure management issues will be addressing this area
    as part of a comprehensive, integrated business transformation effort.
        Business Systems Modernization
        The fourth high-risk area is DOD's business systems modernization
    program, which we first designated as high risk in 1995. We continue to
    categorize DOD's business systems modernization program as a high-risk
    area because of a lack of an enterprise architecture to guide and
    constrain system investments and ineffective management oversight,
    system acquisition, and investment management practices. As a result,
    DOD's current operating practices and over 4,000 systems function in a
    stovepiped, duplicative, and nonintegrated environment that contributes
    to DOD's operational problems. For years, DOD has attempted to
    modernize these systems, and we have provided numerous recommendations
    to help guide its efforts. For example, in 2001 we provided DOD with a
    set of recommendations to help it develop and implement an enterprise
    architecture (or modernization blueprint) and establish effective
    investment management controls.\11\ Such an enterprise architecture is
    essential for DOD to guide and constrain how it spends billions of
    dollars annually on information technology systems. We also made
    numerous project-specific and DOD-wide recommendations aimed at getting
    DOD to follow proven best practices when it acquired system
    solutions.\12\ While DOD agreed with most of these recommendations, to
    date the department has made limited progress in addressing them.
    ---------------------------------------------------------------------------
        \11\ GAO, Information Technology: Architecture Needed to Guide
    Modernization of DOD's Financial Operations, GAO-01-525 (Washington,
    DC: May 17, 2001).
        \12\ GAO-04-615 and Department of Defense: Further Actions Needed
    to Establish and Implement a Framework for Successful Financial and
    Business Management Transformation, GAO-04-551T (Washington, DC: Mar.
    23, 2004); DOD Business Systems Modernization: Important Progress Made
    to Develop Business Enterprise Architecture, but Much Work Remains,
    GAO-03-1018 (Washington, DC: Sept. 19, 2003); DOD Financial Management:
    Integrated Approach, Accountability, Transparency, and Incentives Are
    Keys to Effective Reform, GAO-02-497T (Washington, DC: Mar. 6, 2002);
    Defense Management: New Management Reform Program Still Evolving, GAO-
    03-58 (Washington, DC: Dec. 12, 2002); Information Technology:
    Architecture Needed to Guide Modernization of DOD's Financial
    Operations, GAO-01-525 (Washington, DC: May 17, 2001); and DOD
    Financial Management: Integrated Approach, Accountability, and
    Incentives Are Keys to Effective Reform, GAO-01-681T (Washington, DC:
    May 8, 2001).
    ---------------------------------------------------------------------------
        In May 2004, we reported that after 3 years and over $203 million
    in obligations, DOD had not yet developed a business enterprise
    architecture containing sufficient scope and detail to guide and
    constrain its department-wide systems modernization and business
    transformation.\13\ One reason for this limited progress is DOD's
    failure to adopt key architecture management best practices that we
    recommended, \14\ such as developing plans for creating the
    architecture; assigning accountability and responsibility for
    directing, overseeing, and approving the architecture; and defining
    performance metrics for evaluating the architecture. Under a provision
    in the Ronald W. Reagan National Defense Authorization Act for Fiscal
    Year 2005, \15\ DOD must develop an enterprise architecture to cover
    all defense business systems and related business functions and
    activities that is sufficiently defined to effectively guide,
    constrain, and permit implementation of a corporatewide solution and is
    consistent with the policies and procedures established by the Office
    of Management and Budget (OMB). Additionally, the act requires the
    development of a transition plan that includes an acquisition strategy
    for new systems and a listing of the termination dates of current
    legacy systems that will not be part of the corporatewide solution, as
    well as a listing of legacy systems that will be modified to become
    part of the corporatewide solution for addressing DOD's business
    management deficiencies.
    ---------------------------------------------------------------------------
        \13\ GAO, DOD Business Systems Modernization: Limited Progress in
    Development of Business Enterprise Architecture and Oversight of
    Information Technology Investments, GAO-04-731R (Washington, DC: May
    17, 2004).
        \14\ GAO-01-525.
        \15\ Ronald W. Reagan National Defense Authorization Act for Fiscal
    Year 2005, Pub. L. No. 108-375, Sec. 332, 118 Stat. 1811, 1851 (Oct.
    28, 2004) (codified, in part, at 10 U.S.C. Sec. Sec. 186, 2222).
    ---------------------------------------------------------------------------
        In May 2004, we also reported that the Department's approach to
    investing billions of dollars annually in existing systems had not
    changed significantly.\16\ As a result, DOD lacked an effective
    investment management process for selecting and controlling ongoing and
    planned business systems investments. While DOD issued a policy that
    assigns investment management responsibilities for business systems, in
    May 2004 we reported \17\ that DOD had not yet defined the detailed
    procedures necessary for implementing the policy, clearly defined the
    roles and responsibilities of the business domain owners (now referred
    to as core business mission areas), established common investment
    criteria, or ensured that its business systems are consistent with the
    architecture. To address certain provisions and requirements of the
    Ronald W. Reagan National Defense Authorization Act for Fiscal Year
    2005, \18\ on March 24, 2005, the Deputy Secretary of Defense directed
    the transfer of program management, oversight, and support
    responsibilities regarding DOD business transformation efforts from the
    Office of the Under Secretary of Defense, Comptroller, to the Office of
    the Under Secretary of Defense for Acquisition, Technology, and
    Logistics (OUSD(AT&L)). According to the directive, this transfer of
    functions and responsibilities will allow the OUSD(AT&L) to establish
    the level of activity necessary to support and coordinate activities of
    the newly established Defense Business Systems Management Committee
    (DBSMC). As required by the act, the DBSMC, with representation
    including the Deputy Secretary of Defense, the designated approval
    authorities,\19\ and secretaries of the military services and heads of
    the defense agencies, is the highest ranking governance body
    responsible for overseeing DOD business systems modernization efforts.
    While this committee may serve as a useful planning and coordination
    forum, it is important to remember that committees and task forces do
    not lead, people do. In addition, DOD still needs to designate a person
    to have overall responsibility and accountability for this effort for a
    sustained period of time. This person must have the background and
    authority needed to successfully achieve the related objectives for
    business systems modernization efforts.
    ---------------------------------------------------------------------------
        \16\ GAO-04-731R.
        \17\ GAO-04-731R.
        \18\ 10 U.S.C. Sec. 2222.
        \19\ The designated approval authorities are the Under Secretary of
    Defense for Acquisition, Technology, and Logistics for business systems
    related to acquisition, logistics and installations and environment;
    the Under Secretary of Defense (Comptroller) for business systems
    related to financial management and strategic planning and budgeting;
    the Under Secretary of Defense for Personnel and Readiness for business
    systems related to human resource management; and the Assistant
    Secretary of Defense for Networks and Information Integration/Chief
    Information Officer of the Department of Defense for business systems
    related to information technology infrastructure or information
    assurance.
    ---------------------------------------------------------------------------
        On March 19, 2005, the Deputy Secretary of Defense delegated the
    authority for the review, approval, and oversight of the planning,
    design, acquisition, development, operation, maintenance, and
    modernization of defense business systems to the designated approval
    authority for each business area.\20\ However, according to DOD's
    annual report to congressional defense committees on the status of the
    department's business management modernization program, DOD has not yet
    established investment review boards below the DBSMC for each core
    business mission. The statutory requirements enacted as part of the
    Ronald W. Reagan National Defense Authorization Act for Fiscal Year
    2005 \21\ further require that the DBSMC must agree with the designated
    approval authorities' certification of funds exceeding $1 million for
    the modernization of business systems before funds can be obligated.
    More importantly, the obligation of these funds without the requisite
    approval by the DBSMC is deemed a violation of the Anti-Deficiency
    Act.\22\
    ---------------------------------------------------------------------------
        \20\ Approval authorities include the Under Secretary of Defense
    for Acquisition, Technology, and Logistics; the Under Secretary of
    Defense (Comptroller); the Under Secretary of Defense for Personnel and
    Readiness; and the Assistant Secretary of Defense for Networks and
    Information Integration/Chief Information Officer of the Department of
    Defense. These approval authorities are responsible for the review,
    approval, and oversight of business systems and must establish
    investment review processes for systems under their cognizance.
        \21\ Pub. L. No. 108-875, Sec. 332, 118 Stat. 1811, 1854 (Oct. 28,
    2004) (codified at 10 U.S.C. Sec. 2222(a)(2)).
        \22\ 31 U.S.C. Sec. 1341(a)(1)(A); see 10 U.S.C. Sec. 2222(b).
    ---------------------------------------------------------------------------
        As DOD develops a comprehensive, integrated business transformation
    plan, such a plan must include an approach to resolve the business
    systems modernization problems. We were recently briefed on the
    department's conceptual framework for business system modernization.
    While the framework has merit and is a good first step, the department
    will need to translate its framework into a comprehensive and
    integrated plan of action. This plan should include priorities, key
    stakeholders, timeframes, and accountability and it should be linked to
    institutional, unit, and individual reward systems. To this end, it is
    critical that DOD provide the implementation of our many business
    systems modernization-related recommendations in this plan.
        Financial Management
        The fifth high-risk area is DOD's financial management program,
    which we first designated as high risk in 1995. As I testified before
    the House Committee on Government Reform in February 2005,\23\ and as
    discussed in our report on the U.S. Government's consolidated financial
    statements for fiscal year 2004,\24\ DOD's financial management
    deficiencies, taken together, represent a major impediment to achieving
    an unqualified opinion on the U.S. Government's consolidated financial
    statements. DOD continues to face financial management problems that
    are pervasive, complex, longstanding, and deeply rooted in virtually
    all of its business operations. DOD's financial management deficiencies
    adversely affect the department's ability to control costs, ensure
    basic accountability, anticipate future costs and claims on the budget,
    measure performance, maintain funds control, prevent fraud, and address
    pressing management issues.
    ---------------------------------------------------------------------------
        \23\ GAO, Fiscal Year 2004 U.S. Government Financial Statements:
    Sustained Improvement in Federal Financial Management Is Crucial to
    Addressing Our Nation's Future Fiscal Challenges, GAO-05-284T
    (Washington, DC: Feb. 9, 2005).
        \24\ For our report on the U.S. Government's consolidated financial
    statements for fiscal year 2004, see U.S. Department of the Treasury,
    Financial Report on the United States Government (Washington, DC:
    December 2004), 33-53, which can be found on GAO's Web site at
    www.gao.gov.
    ---------------------------------------------------------------------------
        Our recent reports and testimonies on Army Reserve and National
    Guard pay issues clearly illustrate the impact deficiencies in DOD's
    financial management have had on the very men and women our country is
    depending on to perform our military operations. For example, in
    February 2005, we reported that the Army's process for extending active
    duty orders for injured soldiers lacks an adequate control environment
    and management controls \25\--including: (1) clear and comprehensive
    guidance, (2) a system to provide visibility over injured soldiers, and
    (3) adequate training and education programs. The Army also has not
    established user-friendly processes--including clear approval criteria
    and adequate infrastructure and support services.
    ---------------------------------------------------------------------------
        \25\ GAO, Military Pay: Gaps in Pay and Benefits Create Financial
    Hardships for Injured Army National Guard and Reserve Soldiers, GAO-05-
    125 (Washington, DC: Feb. 17, 2005).
    ---------------------------------------------------------------------------
        Poorly defined processes for extending active duty orders for
    injured and ill Reserve component soldiers have caused soldiers to be
    inappropriately dropped from their Active-Duty orders. For some, this
    has led to significant gaps in pay and health insurance, which has
    created financial hardships for these soldiers and their families.
    Based on our analysis of Army manpower data during the period from
    February 2004 through April 7, 2004, almost 34 percent of the 867
    soldiers who applied for extension of active duty orders--because of
    injuries or illness--lost their active duty status before their
    extension requests were granted. For many soldiers, this resulted in
    being removed from active duty status in the automated systems that
    control pay and access to benefits such as medical care and access to a
    commissary or post exchange that allows soldiers and their families to
    purchase groceries and other goods at a discount. Many Army locations
    have used ad hoc procedures to keep soldiers in pay status; however,
    these procedures often circumvent key internal controls and put the
    Army at risk of making improper and potentially fraudulent payments.
    Finally, the Army's nonintegrated systems, which require extensive
    error-prone manual data entry, further delay access to pay and
    benefits.
        The Army recently implemented the Medical Retention Processing
    (MRP) program, which takes the place of the previously existing process
    in most cases. The MRP program, which authorizes an automatic 179 days
    of pay and benefits, may resolve the timeliness of the front-end
    approval process. However, the MRP program has some of the same
    problems as the existing process and may also result in overpayments to
    soldiers who are released early from their MRP orders.
        DOD's senior civilian and military leaders have taken positive
    steps to begin reforming the department's financial management
    operations. However, to date, tangible evidence of improvement has been
    seen in only a few specific areas, such as internal controls related to
    DOD's purchase card and individually billed travel card programs.
    Further, we reported in September 2004 \26\ that while DOD had
    established a goal of obtaining a clean opinion on its financial
    statements by 2007, it lacked a written and realistic plan to make that
    goal a reality. DOD's continuing, substantial financial management
    weaknesses adversely affect its ability to produce auditable financial
    information as well as provide accurate and timely information for
    management and Congress to use in making informed decisions.
    ---------------------------------------------------------------------------
        \26\ GAO, Financial Management: Further Actions Are Needed to
    Establish Framework to Guide Audit Opinion and Business Management
    Improvement Efforts at DOD, GAO-04-910R (Washington, DC: Sept. 20,
    2004).
    ---------------------------------------------------------------------------
        Overhauling the financial management and related business
    operations of one of the largest and most complex organizations in the
    world represents a daunting challenge. Such an overhaul of DOD's
    financial management operations goes far beyond financial accounting to
    the very fiber of the department's wide-ranging business operations and
    its management culture. It will require: (1) sustained leadership and
    resource control, (2) clear lines of responsibility and accountability,
    (3) plans and related results-oriented performance measures, and (4)
    appropriate individual and organizational incentives and consequences.
    DOD is still in the very early stages of a department-wide overhaul
    that will take years to accomplish. DOD has not yet established a
    framework to integrate improvement efforts in this area with related
    broad-based DOD initiatives, such as human capital reform. However,
    successful, lasting reform in this area will only be possible if
    implemented as part of a comprehensive and integrated approach to
    transforming all of DOD's business operations.
        Weapon Systems Acquisition
        The sixth high-risk area is DOD's acquisition of weapon systems. We
    designated this as a high-risk area in 1990, and it remains so today.
    While DOD's acquisition process has produced the best weapons in the
    world, it also consistently yields undesirable consequences--such as
    cost increases, late deliveries to the warfighter, and performance
    shortfalls. Such problems were highlighted, for example, in our reviews
    of DOD's F/A-22 Raptor, Space-Based Infrared System, Airborne Laser,
    and other programs. Problems occur because DOD's weapon programs do not
    capture early on the requisite knowledge that is needed to efficiently
    and effectively manage program risks. For example, programs move
    forward with unrealistic program cost and schedule estimates, lack
    clearly defined and stable requirements, use immature technologies in
    launching product development, and fail to solidify design and
    manufacturing processes at appropriate junctures in development.
        When programs require more resources than planned, the buying power
    of the defense dollar is reduced and funds are not available for other
    competing needs. It is not unusual for estimates of time and money to
    be off by 20 to 50 percent. When costs and schedules increase,
    quantities are cut and the value for the warfighter--as well as the
    value of the investment dollar--is reduced. In these times of
    asymmetric threats and netcentricity, individual weapon system
    investments are getting larger and more complex. Just 4 years ago, the
    top five weapon systems cost about $281 billion; today, in the same
    base year dollars, the five weapon systems cost about $521 billion. If
    these megasystems are managed with traditional margins of error, the
    financial consequences--particularly the ripple effects on other
    programs--can be dire.
        While weapon systems acquisition continues to remain on our high-
    risk list, DOD has undertaken a number of acquisition reforms over the
    past 5 years. Specifically, DOD has restructured its acquisition policy
    to incorporate attributes of a knowledge-based acquisition model and
    has reemphasized the discipline of systems engineering. In addition,
    DOD recently introduced new policies to strengthen its budgeting and
    requirements determination processes in order to plan and manage weapon
    systems based on joint warfighting capabilities. While these policy
    changes are positive steps, implementation in individual programs will
    continue to be a challenge because of inherent funding, management, and
    cultural factors that lead managers to develop business cases for new
    programs that over-promise on cost, delivery, and performance of weapon
    systems.
        It is imperative that needs be distinguished from wants and that
    DOD's limited resources be allocated to the most appropriate weapon
    system investments. Once the best investments that can be afforded are
    identified, then DOD must follow its own policy to employ the
    knowledge-based strategies essential for delivering the investments
    within projected resources. Making practice follow policy is not a
    simple matter. It is a complex challenge involving many factors. One of
    the most important factors is putting the right managers in their
    positions long enough so that they can be both effective and
    accountable for getting results.
        Contract Management
        The seventh high-risk area is DOD's contract management program,
    which we designated as a high-risk area in 1992. DOD, the government's
    largest purchaser at over $200 billion in fiscal year 2003, is unable
    to assure that it is using sound business practices to acquire the
    goods and services needed to meet the warfighter's needs. For example,
    over the past decade DOD has significantly increased its spending on
    contractor-provided information technology and management support
    services, but it has not yet fully implemented a strategic approach to
    acquiring these services. In 2002, DOD and the military departments
    established a structure to review individual service acquisitions
    valued at $500 million or more, and in 2003 they launched a pilot
    program to help identify strategic sourcing opportunities. To further
    promote a strategic orientation, however, DOD needs to establish a
    departmentwide concept of operations; set performance goals, including
    savings targets; and ensure accountability for achieving them. In March
    2004, we reported that if greater management focus were given to
    opportunities to capture savings through the purchase card program, DOD
    could potentially save tens of millions of dollars without sacrificing
    the ability to acquire items quickly or compromising other goals.\27\
    ---------------------------------------------------------------------------
        \27\ GAO, Contract Management: Agencies Can Achieve Significant
    Savings on Purchase Card Buys, GAO-04-430 (Washington, DC, Mar. 12,
    2004).
    ---------------------------------------------------------------------------
        DOD also needs to have the right skills and capabilities in its
    acquisition workforce to effectively implement best practices and
    properly manage the goods and services it buys. However, DOD reduced
    its civilian workforce by about 38 percent between fiscal years 1989
    and 2002 without ensuring that it had the specific skills and
    competencies needed to accomplish current and future DOD missions, and
    more than half of its current workforce will be eligible for early or
    regular retirement in the next 5 years. We found that inadequate
    staffing and the lack of clearly defined roles and responsibilities
    contributed to contract administration challenges encountered in
    Operation Iraqi Freedom (OIF).\28\ Further, we have reported that DOD's
    extensive use of military logistical support contracts in OIF and
    elsewhere required strengthened oversight.\29\ Just recently, we
    identified surveillance issues in almost a third of the contracts we
    reviewed. We also noted that some personnel performing surveillance had
    not received required training, while others felt that they did not
    have sufficient time in a normal workday to perform their surveillance
    duties.\30\ DOD has made progress in laying a foundation for reshaping
    its acquisition workforce by initiating a long-term strategic planning
    effort, but as of June 2004 it did not yet have the comprehensive
    strategic workforce plan needed to guide its efforts.
    ---------------------------------------------------------------------------
        \28\ GAO, Rebuilding Iraq: Fiscal Year 2003 Contract Award
    Procedures and Management Challenges, GAO-04-605 (Washington, DC: June
    1, 2004).
        \29\ GAO, Military Operations: DOD's Extensive Use of Logistics
    Support Contracts Requires Strengthened Oversight, GAO-04-854
    (Washington, DC: July 19, 2004); and Defense Logistics: High-Level DOD
    Coordination Is Needed to Further Improve the Management of the Army's
    LOGCAP Contract, GAO-05-328 (Washington, DC: Mar. 21, 2005).
        \30\ GAO, Contract Management: Opportunities to Improve
    Surveillance on Department of Defense Service Contracts, GAO-05-274
    (Washington, DC. Mar. 17, 2005).
    ---------------------------------------------------------------------------
        DOD uses various techniques--such as performance-based service
    contracting, multiple-award task order contracts, and purchase cards--
    to acquire the goods and services it needs. We have found, however,
    that DOD personnel did not always make sound use of these tools. For
    example, in June 2004, we reported that more than half of the task
    orders to support Iraq reconstruction efforts we reviewed were, in
    whole or in part, outside the scope of the underlying contract.\31\ In
    July 2004, we found that DOD personnel waived competition requirements
    for nearly half of the task orders reviewed.\32\ As a result of the
    frequent use of waivers, DOD had fewer opportunities to obtain the
    potential benefits of competition--improved levels of service, market-
    tested prices, and the best overall value. We also found that DOD
    lacked safeguards to ensure that waivers were granted only under
    appropriate circumstances. Our work has shown that DOD would benefit by
    making use of commercial best practices, such as taking a strategic
    approach to acquiring services; building on initial efforts to develop
    a strategic human capital plan for its civilian workforce; and
    improving safeguards, issuing additional guidance, and providing
    training to its workforce on the appropriate use of contracting
    techniques and approaches.\33\ DOD is undertaking corrective actions,
    but because most efforts are in their early stages, it is uncertain
    whether they can be fully and successfully implemented in the near
    term. A key to resolving DOD's contract management issues will be
    addressing them as part of a comprehensive and integrated business
    transformation plan.
    ---------------------------------------------------------------------------
        \31\ GAO-04-605.
        \32\ GAO, Contract Management: Guidance Needed to Promote
    Competition for Defense Task Orders, GAO-04-874 (Washington, DC: July
    30, 2004).
        \33\ GAO, Best Practices: Improved Knowledge of DOD Service
    Contracts Could Reveal Significant Savings, GAO-03-661 (Washington, DC:
    June 9, 2003); and Best Practices: Taking a Strategic Approach Could
    Improve DOD's Acquisition of Services, GAO-02-230 (Washington, DC: Jan.
    18, 2002).
    ---------------------------------------------------------------------------
        Supply Chain Management
        The eighth high-risk area is DOD's supply chain management program.
    In 1990, we identified DOD's inventory management as a high-risk area
    because inventory levels were too high and the supply system was not
    responsive to the needs of the warfighter. We have since expanded the
    inventory management high-risk area to include DOD's management of
    certain key aspects of its supply chain, including distribution,
    inventory management, and asset visibility, because of significant
    weaknesses we have uncovered since our 2003 high-risk series was
    published. For example, during OIF, the supply chain encountered many
    problems, including backlogs of hundreds of pallets and containers at
    distribution points, a $1.2 billion discrepancy in the amount of
    material shipped to--and received by--Army activities, cannibalized
    equipment because of a lack of spare parts, and millions of dollars
    spent in late fees to lease or replace storage containers because of
    distribution backlogs and losses. Moreover, we identified shortages of
    items such as tires, vehicle track shoes, body armor, and batteries for
    critical communication and electronic equipment. These problems were
    the result of systemic deficiencies in DOD's supply chain, including
    inaccurate requirements, funding delays, acquisition delays, and
    ineffective theater distribution.
        While DOD reports show that the Department currently owns about $67
    billion worth of inventory, shortages of certain critical spare parts
    are adversely affecting equipment readiness and contributing to
    maintenance delays. The Defense Logistics Agency (DLA) and each of the
    military services have experienced significant shortages of critical
    spare parts, even though more than half of DOD's reported inventory--
    about $35 billion--exceeded current operating requirements. In many
    cases, these shortages contributed directly to equipment downtime,
    maintenance problems, and the services' failure to meet their supply
    availability goals. DOD, DLA, and the military services each lack
    strategic approaches and detailed plans that could help mitigate these
    critical spare parts shortages and guide their many initiatives aimed
    at improving inventory management.
        DOD's continued supply chain problems also resulted in shortages of
    items in Iraq. In an April 8, 2005, report, we reported that demands
    for items like vehicle track shoes, batteries, and tires exceeded their
    availability because the department did not have accurate or adequately
    funded Army war reserve requirements and had inaccurate forecasts of
    supply demands for the operation.\34\ Furthermore, the Army's funding
    approval process delayed the flow of funds to buy them. Meanwhile,
    rapid acquisition of other items faced obstacles. Body armor production
    was limited by the availability of Kevlar and other critical materials,
    whereas the delivery of up-armored High Mobility Multi-Purpose Wheeled
    Vehicles and armor kits was slowed by DOD's decisions to pace
    production. In addition, numerous problems, such as insufficient
    transportation, personnel, and equipment, as well as inadequate
    information systems, hindered DOD's ability to deliver the right items
    to the right place at the right time for the warfighter. Among the
    items the department had problems delivering were generators for
    Assault Amphibian Vehicles, tires, and Meals Ready-to-Eat.
    ---------------------------------------------------------------------------
        \34\ GAO, Defense Logistics: Actions Needed to Improve the
    Availability of Critical Items during Current and Future Operations,
    GAO-05-275 (Washington, DC: Apr. 8, 2005).
    ---------------------------------------------------------------------------
        In addition to supply shortages, DOD also lacks visibility and
    control over the supplies and spare parts it owns. Therefore, it cannot
    monitor the responsiveness and effectiveness of the supply system to
    identify and eliminate choke points.\35\ Currently, DOD does not have
    the ability to provide timely or accurate information on the location,
    movement, status, or identity of its supplies. Although total asset
    visibility has been a department-wide goal for over 30 years, DOD
    estimates that it will not achieve this visibility until 2010. DOD may
    not meet this goal by 2010, however, unless it overcomes three
    significant impediments: developing a comprehensive plan for achieving
    visibility, building the necessary integration among its many inventory
    management information systems, and correcting longstanding data
    accuracy and reliability problems within existing inventory management
    systems.
    ---------------------------------------------------------------------------
        \35\ GAO, Defense Inventory: Improvements Needed in DOD's
    Implementation of Its Long-Term Strategy for Total Asset Visibility of
    Its Inventory, GAO-05-15 (Washington, DC: Dec. 6, 2004).
    ---------------------------------------------------------------------------
        DOD, DLA, and the Services have undertaken a number of initiatives
    to improve and transform DOD's supply chain. Many of these initiatives
    were developed in response to the logistics problems reported during
    OIF. While these initiatives represent a step in the right direction,
    the lack of a comprehensive, department-wide logistics reengineering
    strategy to guide their implementation may limit their overall
    effectiveness. A key to successful implementation of a comprehensive
    logistics strategy will be addressing these initiatives as part of a
    comprehensive, integrated business transformation.
    DOD Management Weaknesses Contribute to Governmentwide High-Risk Areas
        I would now like to spend a few minutes discussing the six
    government-wide high-risk areas where DOD shares responsibility with
    other Federal agencies. First, I would like to provide our preliminary
    observations on DOD's attempt to address a critically important
    government-wide high-risk area--strategic human capital management--
    through its new human resources management system, the National
    Security Personnel System (NSPS). I also will briefly discuss DOD's
    need to address five additional government-wide high-risk challenges as
    part of the transformation of its business management practices.
        Strategic Human Capital Management
        Successful implementation of NSPS is essential for DOD as it
    attempts to transform its military forces and defense business
    practices in response to 21st century challenges. In addition, this new
    human resource management system, if properly designed and effectively
    implemented, could serve as a model for government-wide human capital
    transformation. DOD is one of several Federal agencies that has been
    granted the authority by Congress to design a new human capital system
    as a way to address the first government-wide high-risk area, strategic
    human capital management. This effort represents a huge undertaking for
    DOD, given its massive size and geographically and culturally diverse
    workforce. As I recently testified on DOD's proposed NSPS
    regulations,\36\ our ongoing work continues to raise questions about
    DOD's chances of success in its efforts to effect fundamental business
    management reform, such as NSPS. I would like to acknowledge, however,
    that DOD's NSPS regulations take a valuable step toward a modern
    performance management system as well as a more market-based and
    results-oriented compensation system.
    ---------------------------------------------------------------------------
        \36\ GAO, Human Capital: Preliminary Observations on Proposed DOD
    National Security Personnel System Regulations, GAO-05-432T
    (Washington, DC: Mar. 15, 2005).
    ---------------------------------------------------------------------------
        On February 14, 2005, the Secretary of Defense and the acting
    Director of OPM released the proposed NSPS regulations for public
    comment. Many of the principles underlying those regulations are
    generally consistent with proven approaches to strategic human capital
    management. For instance, the proposed regulations provide for: (1)
    elements of a flexible and contemporary human resources management
    system, such as pay bands and pay for performance; (2) rightsizing of
    DOD's workforce when implementing reduction-in-force orders by giving
    greater priority to employee performance in its retention decisions;
    and (3) continuing collaboration with employee representatives. (It
    should be noted, however, that 10 Federal labor unions have filed suit
    alleging that DOD failed to abide by the statutory requirements to
    include employee representatives in the development of DOD's new labor
    relations system authorized as part of NSPS.)
        Despite this progress, we have three primary areas of concern about
    the proposed NSPS regulations. DOD's proposed regulations do not: (1)
    define the details of the implementation of the system, including such
    issues as adequate safeguards to help ensure fairness and guard against
    abuse; (2) require, as we believe they should, the use of core
    competencies to communicate to employees what is expected of them on
    the job; and (3) identify a process for the continuing involvement of
    employees in the planning, development, and implementation of NSPS.
        DOD also faces multiple implementation challenges once it issues
    its final NSPS regulations. Given the huge undertaking NSPS represents,
    another challenge is to elevate, integrate, and institutionalize
    leadership responsibility for this large-scale organizational change
    initiative to ensure its success. A chief management official or
    similar position can effectively provide the continuing, focused
    leadership essential to successfully completing these multiyear
    transformations. Additionally, DOD could benefit if it develops a
    comprehensive communications strategy that provides for ongoing,
    meaningful two-way communication to create shared expectations among
    employees, employee representatives, managers, customers, and
    stakeholders. Finally, appropriate institutional infrastructure could
    enable DOD to make effective use of its new authorities. At a minimum,
    this infrastructure includes a human capital planning process that
    integrates DOD's human capital policies, strategies, and programs with
    its program goals, mission, and desired outcomes; the capabilities to
    effectively develop and implement a new human capital system; and a set
    of adequate safeguards--including reasonable transparency and
    appropriate accountability mechanisms--to help ensure the fair,
    effective, and credible implementation and application of a new system.
        We strongly support the need for government transformation and the
    concept of modernizing Federal human capital policies within both DOD
    and the Federal Government at large. There is general recognition that
    the Federal Government needs a framework to guide human capital reform.
    Such a framework would consist of a set of values, principles,
    processes, and safeguards that would provide consistency across the
    Federal government but be adaptable to agencies' diverse missions,
    cultures, and workforces.
        Other Related Governmentwide High-Risk Areas
        In addition to the government-wide human capital high-risk area,
    DOD shares responsibility for five other high-risk areas. These areas
    are managing Federal real property, protecting Federal information
    systems and the Nation's critical infrastructure, establishing
    appropriate and effective information-sharing mechanisms to improve
    homeland security, modernizing Federal disability programs, and
    managing interagency contracting more effectively.

             Managing Federal real property: In January 2003, we
            designated Federal real property as a high-risk area due to
            longstanding problems with excess and underutilized property,
            deteriorating facilities, unreliable real property data, and
            costly space challenges. To better manage Federal real
            property, DOD is preparing for a round of base realignments and
            closures (BRAC) in 2005 to eliminate excess physical capacity
            and rationalize its infrastructure with the defense strategy.
            For BRAC 2005, we will continue to serve as an independent and
            objective observer of the process and will assess and report on
            DOD's decisionmaking processes leading up to the proposed
            realignment and closure recommendations. From our vantage
            point, we will determine to what extent DOD follows a clear,
            transparent, consistently applied process--one where we can see
            a logical flow between DOD's analysis and its decisionmaking.
            Although we do not attend or participate in deliberative
            meetings involving BRAC, we are permitted access to the minutes
            of these meetings and to officials involved in the process.
             Protecting Federal information systems and the
            Nation's critical infrastructure: Although DOD has made some
            improvements, significant information security weaknesses at
            DOD as well as other Federal agencies continue to place a broad
            array of Federal operations and assets at risk of fraud,
            misuse, and disruption. In November 2002, for example, a
            British computer administrator was indicted on charges that he
            accessed and damaged 98 computers in 14 states from March 2001
            through March 2002, causing some $900,000 in damage to the
            computers. The attacks rendered the networks of the Earle Naval
            Weapons Station in New Jersey and the Military District of
            Washington inoperable. We reported in 2003 that DOD had
            undertaken a defensewide information assurance program to
            promote integrated, comprehensive, and consistent practices
            across the Department to prevent similar attacks on its
            information systems and had recently issued policy guidance and
            implementation instructions.\37\ However, we found that DOD did
            not have mechanisms in place for comprehensively measuring
            compliance with Federal and department information security
            policies and ensuring that those policies are consistently
            practiced throughout DOD. In fact, DOD reported several
            material control weaknesses, which included needing to decrease
            the time necessary for correcting reported weaknesses and
            ensuring that computer security policies were enforced and
            security capabilities were tested regularly.
    ---------------------------------------------------------------------------
        \37\ GAO, Information Security: Further Efforts Needed to Fully
    Implement Statutory Requirements in DOD, GAO-03-1037T (Washington, DC:
    July 24, 2003).
    ---------------------------------------------------------------------------
             Establishing appropriate and effective information
            sharing mechanisms to improve homeland security: Recent events
            and changes in the overall security environment have served to
            reinforce the importance of having appropriate and effective
            information and knowledge-sharing mechanisms in place that
            cross organizational, geographic, and sectoral boundaries.
            Progress has been made since the tragic events of September 11,
            2001, but much remains to be done. Achieving success in this
            area will involve the combined efforts of many agencies,
            including DOD, as well as a range of other key players.
             Modernizing Federal disability programs: Our work
            examining Federal disability programs has found that these
            programs are neither well aligned with 21st century realities
            nor positioned to provide meaningful and timely support for
            Americans with disabilities. Since GAO designated this area as
            high risk in 2003, the Department of Veterans Affairs (VA) and
            the Social Security Administration (SSA) have made some
            progress toward improving their disability programs. However,
            both VA and SSA still have difficulties managing their
            disability programs. They experience lengthy processing times
            for disability claims and lack a clear understanding of the
            extent of possible inconsistencies in their disability
            decisions. Furthermore, these programs remain grounded in
            outmoded concepts of disability that have not been updated to
            reflect the current state of science, medicine, technology, and
            labor market conditions.

        The U.S. Government is faced with the return of more than 10,000
    servicemembers who have sustained combat-related injuries in the
    current conflicts in Afghanistan and Iraq. Reassessing the impact of
    disabilities on their work capacity is especially important in light of
    recent advances in medicine and improved prosthetics, which have
    enabled some servicemembers to return to active duty. This example
    illustrates the potential for better aligning Federal disability
    programs with social changes that focus on supporting the work
    capacities of all people with disabilities. In light of the projected
    shrinkage of the workforce, focusing on work capacity is becoming
    increasingly important for the U.S. economy. The last two National
    Defense Authorization Acts afford us an opportunity to develop
    information and analysis that could be used to reassess the basis for
    current Federal disability policies. The National Defense Authorization
    Act for Fiscal Year 2004 established the Veterans' Disability Benefits
    Commission.\38\ This commission is charged with studying the benefits
    provided to compensate and assist veterans who suffer disabilities
    attributable to military service, and their survivors.\39\ The law
    requires the commission to study, among other things, the
    appropriateness of such benefits, the appropriate standard for
    determining whether a veteran's disability should be compensated, and
    the appropriateness of a schedule for rating disabilities based on
    average impairment of earning capacity. The Ronald W. Reagan National
    Defense Authorization Act for Fiscal Year 2005 mandated a GAO study of
    the disability benefits that are payable under Federal, State, and
    local laws to Federal, State, and local government employees.\40\ To
    the extent feasible, the study is to focus on benefits for disabilities
    incurred in the performance of jobs in which employees perform tasks
    with risks that are analogous to the risks associated with the
    performance of military tasks by members of the armed forces. In
    addition, DOD is mandated to study the adequacy of current and
    projected disability benefits that are available to disabled members
    and former members of the armed forces for service-connected
    disabilities,\41\ including a comparison of the disability benefits for
    members of the Armed Forces with commercial and other private sector
    disability benefits. We believe these studies should provide important
    information and analysis for deliberations on more fundamental reform
    of the design, cost, and feasibility of Federal disability programs.

        \38\ Pub. L. No. 108-136, Sec. 1501, 117 Stat. 1392, 1677 (Nov. 24,
    2003).
        \39\ Sec. 1502.
        \40\ Pub. L. No. 108-375, Sec. 666(d).
        \41\Sec. 666(a).

             Managing interagency contracting: In recent years,
            Federal agencies have been making a major shift in the way they
            procure many goods and services. Rather than spending a great
            deal of time and resources contracting for goods and services
            themselves, they are making greater use of existing contracts
            already awarded by other agencies, in particular for buying
            services. These contracts are designed to leverage the
            government's aggregate buying power and provide a much-needed
            simplified method for procuring commonly used goods and
            services. These contract vehicles offer the benefits of
            improved efficiency and timeliness; however, they need to be
            effectively managed. Our work and that of some agency
            inspectors general has revealed instances of improper use of
            interagency contracts. For example, we recently reviewed
            selected DOD contracts and task orders for Iraq reconstruction
            and found some task orders under the General Services
            Administration (GSA) schedules program that did not satisfy
            legal requirements for competition because the work was not
            within the scope of the underlying contracts.\42\ More broadly,
            the GSA Inspector General conducted a comprehensive review of
            the contracting activities of GSA's Federal Technology Service,
            an entity that provides contracting services for agencies
            across the government, and reported that millions of dollars in
            fiscal year 2003 awards did not comply with laws and
            regulations.
    ---------------------------------------------------------------------------
        \42\ GAO-04-605.

        Administration officials have acknowledged that the management of
    interagency contracting needs to be improved. As the largest customer
    for interagency contracts, it is particularly important that DOD
    successfully tackle the challenge of better managing its use of
    interagency contracts. We have reported on challenges DOD has faced in
    using interagency contracts. For example, we found that DOD waived
    competition requirements for a significant percentage of supply
    schedule orders we reviewed, frequently based on an expressed
    preference to retain the services of incumbent contractors.\43\ DOD
    concurred with our recommendations to develop guidance for the
    conditions under which waivers of competition may be used, require
    documentation to support waivers, and establish approval authority
    based on the value of the orders.
    ---------------------------------------------------------------------------
        \43\ GAO-04-874.
    ---------------------------------------------------------------------------
        In conjunction with the OMB and GSA, DOD is taking a number of
    steps--including developing new skills assessments, setting standards
    for the acquisition workforce, and coordinating training programs aimed
    at improving the capacity of the Federal acquisition workforce--to
    properly handle the growing and more complex workload of service
    acquisitions. DOD also has recently issued a new policy designed to
    improve oversight of its use of other agencies' contracts.
    Need for Risk Management Approaches Is an Emerging Concern
        In addition to specific areas that we have designated as high risk,
    there are other important broad-based challenges facing our Government
    that are serious and merit continuing close attention. One emerging
    area of concern involves the need for instilling a disciplined approach
    within DOD, as well as other agencies, for identifying and managing
    risk across a wide range of programs, operations, and functions. As a
    framework for decision making, we have advocated a comprehensive threat
    and risk management approach that fully links strategic goals to plans
    and budgets, assesses the values and risks of various courses of action
    as a tool for setting priorities and allocating resources, and provides
    for the use of performance measures to assess outcomes.
        Emerging requirements from the changing security environment,
    coupled with increasingly limited fiscal resources across the Federal
    Government, emphasize the need for DOD to develop and use a risk-based
    strategic framework for establishing realistic goals, evaluating and
    setting priorities, and making difficult resource decisions.
        In its strategic plan, the September 2001 Quadrennial Defense
    Review, DOD outlined a new risk management framework consisting of four
    dimensions of risk--force management, operational, future challenges,
    and institutional--to use in considering trade-offs among defense
    objectives and resource constraints. According to DOD, these risk areas
    are to form the basis for DOD's annual performance goals. They are to
    be used to track performance results and link to planning and resource
    decisions. We recognize what a large undertaking developing a
    department-wide risk management framework will be and understand that
    DOD is still in the process of implementing this approach. However, it
    remains unclear how DOD will use this risk management framework to
    measure progress in achieving business and force transformation. It
    also remains unclear how the framework will be used to correct
    limitations we have previously identified in DOD's strategic planning
    and budgeting, including the use of overly optimistic assumptions in
    estimating funding needs, which often result in a mismatch between
    programs and budgets. We are currently monitoring DOD's efforts to
    implement its risk management framework.
      sound strategic planning, centralized control over business systems
         investments, and sustained leadership are key to successfully
                        addressing dod's high-risk areas
        Although DOD has a number of initiatives to address its high-risk
    areas, we believe that DOD must fundamentally change its approach to
    the overall business transformation effort before it is likely to
    succeed. We believe there are three critical elements of successful
    transformation--developing and implementing an integrated strategic and
    action plan along with an enterprise architecture to guide and
    constrain implementation of such a plan, establishing central control
    over systems investment funds, and providing sustained leadership. To
    ensure these elements are incorporated into the department's overall
    business management, we believe Congress should legislatively create a
    full-time, high-level executive with long-term ``good government''
    responsibilities that are professional and nonpartisan in nature. This
    executive should have appropriate authority over all of DOD's business
    operations, as well as central control of all business transformation-
    related funding with the designated approval authorities assigned
    responsibility for transformation activities within their specific
    business process areas.
    Reform Efforts Must Include an Integrated, Comprehensive Strategic Plan
        Our prior work indicates that agencies that are successful in
    achieving business management transformation undertake strategic
    planning and strive to establish goals and measures that align at all
    levels of the agency.\44\ The lack of a comprehensive and integrated
    strategic and action plan linked with performance goals, objectives,
    and rewards has been a continuing weakness in DOD's business management
    transformation. Since 1999, for example, we have recommended that a
    comprehensive and integrated strategy and action plan be developed for
    reforming DOD's major business operations and support activities.\45\
    In 2004, we suggested that DOD clearly establish management
    accountability for business reform.\46\ While DOD has been attempting
    to develop an enterprise architecture for modernizing its business
    processes and supporting information technology assets for the last 4
    years, it has not developed a comprehensive and integrated strategy or
    action plan for managing its many business improvement initiatives. Nor
    has DOD assigned overall management responsibility and accountability
    for such an effort. Unless these initiatives are addressed in a unified
    and timely fashion, DOD will continue to see billions of dollars, which
    could be directed to other higher priorities, wasted annually to
    support inefficiencies in its business functions.
    ---------------------------------------------------------------------------
        \44\ GAO, Defense Management: Tools for Measuring and Managing
    Defense Agency Performance Could Be Strengthened, GAO-04-919
    (Washington, DC: Sept. 13, 2004).
        \45\ GAO, Defense Reform Initiative: Organization, Status, and
    Challenges, GAO/NSIAD-99-87 (Washington, DC: Apr. 21, 1999).
        \46\ GAO-04-551T.
    ---------------------------------------------------------------------------
        At a programmatic level, the lack of clear, comprehensive, and
    integrated performance goals and measures has handicapped DOD's past
    reform efforts. For example, we reported in May 2004 \47\ that the lack
    of performance measures for DOD's business management transformation
    initiative--encompassing defense policies, processes, people, and
    systems--made it difficult to evaluate and track specific program
    progress, outcomes, and results. As a result, DOD managers lacked
    straightforward road maps showing how their work contributed to
    attaining the department's strategic goals, and they risked operating
    autonomously rather than collectively.
    ---------------------------------------------------------------------------
        \47\ GAO-04-731R.
    ---------------------------------------------------------------------------
        Finally, DOD has not established a clear linkage among
    institutional, unit, and individual results-oriented goals, performance
    measures, and reward mechanisms for undertaking large-scale
    organizational change initiatives that are needed for successful
    business management reform. Traditionally, DOD has justified its need
    for more funding on the basis of the quantity of programs it has
    pursued rather than on the outcomes its programs have produced. DOD has
    historically measured its performance by resource components, such as
    the amount of money spent, people employed, or number of tasks
    completed. Incentives for its decisionmakers to implement behavioral
    changes have been minimal or nonexistent. The establishment of an
    integrated, comprehensive strategic plan could help DOD address these
    systemic management problems.
    Central Control over Business Systems Investment Funds Is Crucial
        DOD's current business systems investment process, in which system
    funding is controlled by DOD components, has contributed to the
    evolution of an overly complex and error-prone information technology
    environment containing duplicative, nonintegrated, and stovepiped
    systems. We have made numerous recommendations to DOD to improve the
    management oversight and control of its business systems modernization
    investments. However, as previously discussed, a provision of the
    Ronald W. Reagan National Defense Authorization Act for Fiscal Year
    2005,\48\ consistent with the suggestion I have made in prior
    testimonies,\49\ established specific management oversight and
    accountability with the ``owners'' of the various core business mission
    areas. This legislation defined the scope of the various business areas
    (e.g., acquisition, logistics, finance, and accounting), and
    established functional approval authority and responsibility for
    management of the portfolio of business systems with the relevant Under
    Secretary of Defense for the departmental core business mission areas
    and the Assistant Secretary of Defense for Networks and Information
    Integration (information technology infrastructure). For example, the
    Under Secretary of Defense for Acquisition, Technology, and Logistics
    is now responsible and accountable for any defense business system
    intended to support acquisition activities, logistics activities, or
    installations and environment activities for DOD.
    ---------------------------------------------------------------------------
        \48\ Pub. L. No. 108-375, Sec. 332.
        \49\ GAO-04-551T; and GAO, Department of Defense: Further Actions
    Needed to Establish and Implement a Framework for Successful Business
    Transformation, GAO-04-626T (Washington, DC: Mar. 31, 2004).
    ---------------------------------------------------------------------------
        This legislation also requires that the responsible approval
    authorities establish a hierarchy of investment review boards, the
    highest level being the DBSMC, with DOD-wide representation, including
    the military services and defense agencies. The boards are responsible
    for reviewing and approving investments to develop, operate, maintain,
    and modernize business systems for their business-area portfolio,
    including ensuring that investments are consistent with DOD's business
    enterprise architecture. However, as I pointed out earlier, DOD has not
    yet established the lowerlevel investment review boards as required by
    the legislation.
        Although this recently enacted legislation clearly defines the
    roles and responsibilities of business systems investment approval
    authorities, control over the budgeting for and execution of funding
    for systems investment activities remains at the DOD component level.
    As a result, DOD continues to have little or no assurance that its
    business systems modernization investment money is being spent in an
    economical, efficient, and effective manner. Given that DOD spends
    billions on business systems and related infrastructure each year, we
    believe it is critical that those responsible for business systems
    improvements control the allocation and execution of funds for DOD
    business systems. However, implementation may require review of the
    various statutory authorities for the military services and other DOD
    components. Control over business systems investment funds would
    improve the capacity of DOD's designated approval authorities to
    fulfill their responsibilities and gain transparency over DOD
    investments, and minimize the parochial approach to systems development
    that exists today. In addition, to improve coordination and integration
    activities, we suggest that all approval authorities coordinate their
    business systems modernization efforts with a chief management official
    (CMO) who would chair the DBSMC. Cognizant business area approval
    authorities would also be required to report to Congress through a CMO
    and the Secretary of Defense on applicable business systems that are
    not compliant with review requirements and to include a summary
    justification for noncompliance.
    Chief Management Official Is Essential for Sustained Leadership of
            Business Management Reform
        As DOD embarks on large-scale organizational change initiatives,
    such as business management transformation, the complexity and long-
    term nature of these initiatives requires the development of an
    executive position capable of providing strong and sustained
    leadership--over a number of years and various administrations. One way
    to ensure sustained leadership over DOD's business transformation
    efforts would be to create a full-time executive-level II position for
    a CMO, who would serve as the Deputy Secretary of Defense for
    Management. This position would elevate, integrate, and
    institutionalize the attention essential for addressing key stewardship
    responsibilities, such as strategic planning, human capital management,
    performance and financial management, acquisition and contract
    management, and business systems modernization, while facilitating the
    overall business management reforms within DOD.
        The day-to-day demands placed on the Secretary of Defense, the
    Deputy Secretary, and others make it difficult for these leaders to
    maintain the oversight, focus, and momentum needed to resolve the
    weaknesses in DOD's overall business operations. This is particularly
    evident given the demands that the Iraq and Afghanistan postwar
    reconstruction activities and the continuing war on terrorism have
    placed on current leaders. Likewise, the breadth and complexity of the
    problems and their overall level within the department preclude the
    under secretaries, such as the DOD Comptroller, from asserting the
    necessary authority over selected players and business areas while
    continuing to fulfill their other responsibilities. A CMO could provide
    the sustained and focused leadership that these other top officials are
    unable to provide.
        If created, the new CMO position could be filled by an individual
    appointed by the President and confirmed by the Senate, for a set term
    of 7 years with the potential for reappointment. Articulating the roles
    and responsibilities of the position in statute would help to create
    unambiguous expectations and underscore Congress's desire to follow a
    professional, nonpartisan approach to the position. In that regard, an
    individual appointed to the CMO position should have a proven track
    record as a business process change agent in large, complex, and
    diverse organizations--experience necessary to spearhead business
    process transformation across DOD and serve as an integrator for DOD's
    needed business transformation efforts. Further, to improve
    coordination and integration activities, we suggest that all business
    systems modernization approval authorities designated in the Ronald W.
    Reagan National Defense Act of 2005 \50\ coordinate their efforts with
    the CMO, who would chair the Defense Business Systems Management
    Committee that DOD recently established to comply with the act.
    Cognizant business area approval authorities would also be required to
    report to Congress through the CMO and the Secretary of Defense on
    applicable business systems that are not compliant with review
    requirements and include a summary justification for noncompliance. In
    addition, the CMO would enter into an annual performance agreement with
    the Secretary that sets forth measurable individual goals linked to
    overall organizational goals in connection with the department's
    business transformation efforts. Measurable progress toward achieving
    agreed-upon goals would be a basis for determining the level of
    compensation earned, including any related bonus. In addition, the
    CMO's achievements and compensation would be reported to Congress each
    year.
    ---------------------------------------------------------------------------
        \50\ 10 U.S.C. Sec. 222(f).
    ---------------------------------------------------------------------------
        Mr. Chairman and members of the subcommittee, this concludes my
    prepared statement. I would be happy to answer any questions you may
    have at this time.

        Senator Ensign. Thank you, Mr. Walker.
        Secretary Wynne.

    STATEMENT OF HON. MICHAEL W. WYNNE, UNDER SECRETARY OF DEFENSE
               FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS

        Mr. Wynne. Chairman Ensign and Senator Akaka, members of
    the subcommittee, thank you for the opportunity to appear
    before you today and discuss the Government Accountability
    Office's high-risk determinations, and thank you for your kind
    comments.
        Management guru Peter Drucker said, unless commitment is
    made, there are only promises and hopes, but no plans. Well,
    let me assure you, Senators, that we at the Department of
    Defense are committed. We're committed to improving the way we
    do business. We're committed to reducing risk. But most
    importantly, we are committed to supporting the warfighter, and
    this is paramount.
        In fact, I believe you will see that we are much more
    efficient and effective than the GAO photograph and subsequent
    report would have you believe. Fundamental changes in the way
    these high-risk areas are addressed at DOD are underway and
    will become evident in the very near future.
        We have been working not just on the surface but at the
    very foundations of management where data strategies get
    converted into actual management information. This effort has
    taken the better part of 3 years to architect and condition the
    infrastructure to the changes we need. Our capacity for change
    is now at its peak, and we're making ourselves felt throughout
    the supply chain, in the maintenance area, real property area,
    and in the area of transparent financials, which we believe is
    the key to the much-desired clean audit.
        This is not where the GAO is focused, but it is the
    solution to the surface issues that they have addressed. We
    have accomplished not by organizational edict, but by
    partnering across the Department, inviting participation from
    the Services and combatant commanders, as well as other
    innovative functional managers who make up the Office of the
    Secretary of Defense (OSD) principal staff assistants.
        American industry is moving to flatter, leaner
    organizations with standards set at the policy level, and with
    more responsibility and more accountability at all levels of
    management. We need to follow their example. In order to be
    successful with a leaner organization, we need to change our
    management culture at DOD and that is what we are about.
        We are putting in several foundational knowledge elements,
    such as the use of Unique Identification for linking our data
    elements, Radio Frequency Identification for total asset
    visibility, and the Defense Acquisition Management Information
    Retrieval (DAMIR) capability for information transparency
    across the Department.
        In regards to DAMIR we are also involving other government
    activities and Congress because we're doing it via an Internet
    system. The reinvigoration of systems engineering, as well, is
    adding to our stable of tools, and it is really assisting our
    overstretched workforce within the acquisition area.
        Along the way, elements of DOD are winning awards for e-
    government and e-commerce, but it all relates to knowledge
    enablement and transparency. With this foundation poured, we
    are now building on it the basic structure by having our
    functional managers managed by metrics that are rooted in
    meeting warfighter expectations and debated by senior
    Department leadership. This goes to the Defense Logistics
    Agency (DLA) reducing its overhead from 35 percent to 15
    percent, and by reducing delays to the warfighter
    substantially.
        These metrics are not only for individual projects and
    programs, but also on areas such as ethics. In addition, we are
    including ethical training in Lean Six Sigma that is the
    hallmark of competitive corporations. This foundation and basic
    framework are making our management stronger every day.
        We are providing end-to-end knowledge and allowing our
    empowered people to manage the best practices. We don't need to
    make any dramatic management changes. What we need to make is
    cultural changes, and that is, again, what we are about.
        I read with great interest the proposal for a Deputy
    Secretary for Management. I believe this proposed second
    Department Secretary would be just adding layers and players to
    an already burdened organization, and further remove the
    Secretary of Defense from vital and timely information on the
    workings of the Department, and that is the last thing we need.
        Instead, we need to remain an agile and flexible
    organization that moves faster and not slower. Enabling
    knowledge across the organization to allow individuals who are
    motivated to make better choices is the better answer.
        We need, and we have in place, management organized around
    a task. Everyone involved needs to be a problem-solver.
    Management and oversight of the Department's financial
    acquisition personnel systems should not be readily pulled out
    and placed in the lap of one person.
        By the way, this has been tried once before. It was in
    1972, and the job went unfilled for several years. Congress
    finally repealed the statute after some organizational
    dysfunction during the time it was filled, which was, I
    believe, for the first 2 years of Secretary Rumsfeld's first
    tour of the Secretary of Defense. So he is well aware of this
    position. I'm sure your staff can fill you in on the details of
    that experiment. I would ask that you carefully consider this
    history before reaching again for this solution. This solution
    did not and will not help the warfighter fight the next war.
        I am also disappointed that the proposal as tabled would
    seek to overturn the long-inspired requirement for a private
    sector executive being the alter ego of the Deputy Secretary as
    it is today with the Under Secretary of Defense for
    Acquisition, Technology, and Logistics. It also combines four
    disparate functions, that currently and separately have great
    access to the Secretary, into a hierarchal offset to the single
    deputy that we now all look to in the Secretary's absence. To
    what end? So that we can better resolve this mix of identified
    specific issues? Where's the warfighter?
        We were disappointed to see our management structure shaken
    up just as we're making dramatic improvements to integrate all
    of our functional elements, service responsibilities, and
    warfighter needs together. Another layer in management will
    only foster more delays than ever with new relationships and
    priorities potentially hurting, in fact, the very thing that
    you, I'm sure, seek to improve.
        In addition, this new layer of management would further
    hurt our access to cutting-edge technology by pushing the
    leadership of technology, the Director of Defense Research and
    Engineering, further down in the organization. This would
    happen just when we desperately need to promote research and
    development and to excel in this area. This is an area that has
    been highlighted in the global war on terror as we seek
    technological solutions, and yet this proposal would
    essentially discredit this area.
        The science and engineering fields are fading quickly in
    the United States, and it hits DOD hardest. In fact, I seek
    your support, sir, on the Smart and National Defense Education
    Act that's before you today.
        In closing, Mr. Chairman, I'd like to reiterate the great
    strides we are making in addressing the GAO's concerns in the
    areas they define as high risk, as well as every other area of
    the Department. The GAO and the Office of Management and Budget
    are partnering to provide us a set of metrics to prove our
    forward progress.
        I invite you and your fellow committee members to receive
    our briefings on the changes we've made to the foundation in
    supplying the warfighter from factory to foxhole. You might
    also be interested in hearing the recent release of rules from
    the Office of Management and Budget as applied to Unique
    Identification and Radio Frequency Identification, and where we
    are headed in the near future with those release.
        We're bringing the Department well forward in financial
    transparency, using standards and delegated accountability. In
    this way, you and the committee members can check things out
    yourself, and I think you're going to agree with my assessment.
        Again, thank you for the opportunity to testify before this
    subcommittee. I'd be happy to answer any questions you all
    might have.
        [The prepared statement of Mr. Wynne follows:]
                     Prepared Statement by Michael W. Wynne
        Chairman Ensign, Senator Akaka, and members of the subcommittee:
    Thank you for the opportunity to appear before you and discuss the
    Government Accountability Offices' (GAO) high risk determinations that
    come under my purview. Since arriving at the Department of Defense, I
    directed action to resolve the longstanding GAO high risk areas of
    Weapons Systems Acquisition; Contract Management and Interagency
    Contracting; Supply Chain Management; Support Infrastructure Management
    and Managing Federal Real Property; and Business Systems Modernization.
    As noted by my friend David Walker and my GAO colleagues, our high
    level focus and associated initiatives have resulted in tangible
    progress in the weapon systems, contract management and infrastructure
    areas. Earlier this year, the Deputy Secretary gave me responsibility
    for the management and oversight of DOD business transformation. I look
    forward to working closely with the Comptroller as we make this
    transition and set the course for supporting the Department's future
    business operations. While we have made great progress in making
    acquisition more efficient, in moving capabilities to the warfighter
    faster, and in the transformation of our defense establishment, I
    recognize we must make even greater progress in the future. I thank the
    Committee for your leadership in providing both the authority and
    guidance for our efforts to date and ask for your continued support.
                                     ethics
        While I intend to provide an update of the actions underway to
    address GAO's high risks, I want to first discuss the steps I have
    taken to reinforce the Department's cultural emphasis on ethics in the
    wake of Darleen Druyun's pleadings and to briefly address the size and
    responsibilities of DOD's acquisition workforce. For many years, there
    has been a robust framework of statutes and regulations that demand
    strict adherence to ethical standards generally, and to principles of
    procurement integrity in particular. The vast majority of the
    Department's workforce holds these principles to be sacrosanct.
    Likewise, integrity is at the forefront of my Acquisition, Technology,
    and Logistics (AT&L) goals as my first goal continues to be Acquisition
    Excellence with Integrity. Over the past several months, I have
    launched a series of initiatives to underscore the fundamental role of
    ethics in acquisition. The ethical behavior of our procurement
    officials not only ensures that the acquisition process is fair and
    legitimate, but also serves the objectives of fiscal restraint and
    operational effectiveness so critical to the national defense.
        It is essential that we continue to cultivate ethical values across
    the Department not only because ethics are important, but because an
    effective ethics program largely depends on self-enforcement. We must
    articulate the Department's commitment to ethics, so that each employee
    understands that commitment and makes a similar commitment, and we must
    organize the acquisition community to promote oversight and minimize
    the risk of abuse.
        Beginning last fall, I announced a series of measures designed to
    augment the Department's ethics program, and to improve oversight and
    sound decisionmaking. In addition to the annual statutory training
    requirement, I called for the development of a mandatory ethics-
    training module for acquisition officials, to review standards of
    conduct in dealing with defense contractors. Every member of the
    acquisition community is to complete the training program by the end of
    this year. In November 2004, I established a Defense Science Board task
    force to study the process by which we make decisions regarding
    acquisition, and the checks and balances necessary to preserve the
    integrity of those decisions. Prior to finalizing their
    recommendations, the task force submitted preliminary recommendations
    in February. In response to those recommendations, I issued two
    memoranda to the senior acquisition executives of the Department's
    components: first, a directive that they establish policy, for my
    review, requiring that the authority to oversee acquisitions, make
    source-selection decisions, and negotiate or award contracts, does not
    reside in one person; and second, a request for reactions to the task
    force's recommendation that key leaders in the acquisition community
    undergo a thorough annual review by not only higher officials, but also
    by peers and staff.
        These measures will build upon the solid base of an ethical culture
    already in place within the Department's acquisition community. The
    Defense Integrity Initiative is an ongoing effort of the Defense
    Industry that we have drawn upon for some of our ideas. As we move
    forward, I will call on companies across the defense industry to share
    best practices from their ethics programs and the way in which they
    impart corporate values to their employees. We must send the message
    that we expect ourselves and our contractors to reflect the highest
    ethical standards. The vitality of the procurement system depends on
    it.
                             acquisition workforce
        I also want to address, right up front, the size of the AT&L
    workforce. I believe we are at the point where any further reductions
    beyond the levels of this workforce, consistent with the President's
    2006 budget request, will adversely impact our ability to successfully
    execute a growing workload. The numbers are startling. The Defense
    acquisition workforce has been downsized by roughly half since 1990
    while the contract dollars have roughly doubled during the same time
    period. Specifically, the DOD-wide AT&L workforce shrank by 10 percent
    from 149,439 in March 1998 to 134,539 in September 2004. During this
    same time period contract actions increased significantly both in
    dollars and in the number of contract actions. Using 2004 constant year
    dollars, the contract dollars have increased from $118 billion in
    fiscal year 1998 to $241 billion in fiscal year 2004, a 105 percent
    increase. The greatest amount of work for acquisition personnel occurs
    on contracting actions over $100,000, and those action have increased
    from 101,663 in fiscal year 1998 to 160,388 in fiscal year 2004, a 58
    percent increase.
        A study conducted by the Office of the Inspector General [IG Audit
    Report Number D-2000-80, DOD Acquisition Workforce Reduction Trends and
    Impacts, February 29, 2000] indicates that such reductions have led to
    significant impacts to the acquisition community, to include: increased
    backlog in closing out completed contracts; increased program costs
    resulting from contracting for technical support versus using in-house
    technical support; insufficient personnel to fill-in for employees on
    deployment; insufficient staff to manage requirements; reduced scrutiny
    and timeliness in reviewing acquisition actions; personnel retention
    difficulty; increase in procurement action lead time; skill imbalances;
    and lost opportunity to develop cost savings initiatives.
        The global war on terrorism and increasing Defense budget places
    greater demands on acquisition workers ability to support the
    warfighter. I appreciate the leadership that the Senate has provided in
    prior years in ensuring that DOD has a sufficient acquisition
    workforce, that is well-trained. We need to continue to renew and
    restore the defense acquisition workforce. We need to ensure that we
    have the right people in the jobs to perform the functions required to
    support our warfighters. Now more than ever, I believe we need to
    increase the size of the acquisition workforce to handle the growing
    workload, especially as retirements increase in the coming years.
        I will now address the specific high risk areas under my purview
    beginning with Weapons Systems Acquisition.
                        dod's weapon systems acquisition
        GAO continues to assess weapon systems acquisition as high risk,
    but it acknowledges some of the positive steps we have taken. I want to
    be clear that we have made excellent progress in changing how we think
    about what I call ``big acquisition,'' including how we develop and
    manage our requirements as well as the acquisition programs to meets
    those needs. DOD has changed its requirements processes and the
    acquisition processes in significant ways that emphasize the
    identification of joint network-centric capabilities while employing an
    evolutionary approach to rapidly acquire advanced warfighting
    capability. Our evolutionary acquisition programs are divided into
    increments of capability based on stable, well defined requirements;
    mature technology; and full funding. The anticipated results are
    reduced cycle time and programs that are delivered on time and within
    budget. Let me give you some specific examples of the thought process,
    and how it relates to some of the larger acquisition programs.

             Future Combat System (FCS). The budget delays fielding
            of the initial FCS Unit of Action by 4 years, while providing
            for the introduction of advanced technologies developed for the
            FCS into the current force. Rather than wait for the ``final
            product'', we have taken an approach that reduces overall risk
            to the FCS program, while still allowing the current force to
            benefit from many of the near-term possibilities flowing out of
            the program development activities.
             Shipbuilding. The new DD(X) destroyer, the CG(X)
            cruiser, and the Littoral Combat Ship (LCS) are representative
            of evolutionary acquisition in the context of a family of
            systems employing common technologies. DD(X) development is the
            baseline for CG(X) and technologies developed for DD(X) will be
            installed on CVN-21 and LHA(R) platforms. The fully open
            architecture Combat Systems Suite of the DD(X) will be the
            backbone for all future surface forces. In these cases, the
            budget maintains the integrity of the evolutionary acquisition
            process, keeping each program in its appropriate place in the
            development and initial construction cycle.

        We are also taking a more corporate view of our acquisition process
    through the initiation of Capability Area Reviews. These reviews allow
    me and other senior department officials to review our capability areas
    from the 50,000-foot level to ensure we are seeing individual programs
    and systems-of-systems in the integrated and networked operating
    context for which they are intended. These reviews allow us to identify
    disconnects and inconsistencies more quickly than we would with an
    individual program approach and to facilitate early and effective
    corrective action. We believe this is key to ensuring a comprehensive
    and integrated approach to achieving the transformed warfighting
    capabilities that we need. We are re-establishing systems engineering
    which fell through the crack of previous reform efforts.
        Part of our overall approach includes responding to joint
    warfighting requirements in an even more effective manner. Beginning in
    fiscal year 2006, I will initiate transformation of our very successful
    Advanced Concept Technology Demonstration (ACTD) effort into the Joint
    Capabilities Technology Demonstration (JCTD) program. The JCTDs
    acknowledge our commitment to support the joint warfighter, and they
    explicitly take into account the funding challenges associated with the
    rapid fielding of new technology. The new program will be based on
    suggestions we have received from Congress and the GAO, and I believe
    it will help us to maintain our department-level focus on important
    joint capabilities and to accelerate acquisition and fielding.
        To meet the urgent operational needs of the warfighters, we created
    a Joint Rapid Acquisition Cell (JRAC). The JRAC is responsible for
    assisting in the resolution of immediate warfighting needs of combatant
    commanders' and/or the military departments' certified and prioritized
    Urgent Operational Needs that have been validated by the Chairman,
    Joint Chiefs of Staff. The JRAC has already had a favorable impact on
    16 critical programs and the reprogramming of over $400 million to
    enhance intelligence gathering and dissemination, quickly identify
    terrorists, safely explode IEDs, and protect our warfighters.
        Another of my initiatives is the Defense Acquisition Management
    Information Retrieval (DAMIR) which streamlines acquisition program
    management reporting. We are re-engineering the very processes by which
    we gather and report management information concerning acquisition
    programs. The DAMIR ultimately will enable the OSD, the Military
    Services, and other participating communities to access information
    relevant to their missions regardless of the agency or where the data
    resides. Also, beginning this month, I am happy to say that this
    committee will have access to Purview, DAMIR's presentation layer.
    Right on your desktop, Purview will provide unclassified acquisition
    information that you typically receive in the annual paper copy of the
    Selected Acquisition Reports (SARs). Future releases over the next year
    will add additional information. By supplementing this with a hard copy
    classified annex, we can eliminate the hard copy annual SARs.

             Systems Engineering Emphasis--Increase the Knowledge
            Base: While mentioning these process improvements, I should
            note that we have reinvigorated our approach to systems
            engineering by issuing comprehensive and well designed policy,
            revamping our education and training programs, and implementing
            a robust outreach program to ensure the policies are
            institutionalized throughout the department and with our
            industry partners. The primary outreach emphasis is on
            individual programs to establish a sound initial and total life
            cycle program management structure. We expect this to lead to
            much improved control over our design and manufacturing
            processes, enhance our analysis of program status, and create
            an improved knowledge base for management decisionmaking. As
            Chairman of the Defense Acquisition Board, I have reviewed many
            programs where a lack of systems engineering has contributed to
            cost, schedule, and technical problems. Sound systems
            engineering practices are critical to our ability to field
            affordable weapon systems, on time, and that provide the
            capabilities we need on the battlefield.
             AT&L's Scientist and Engineers: My focus on systems
            engineering extends to our science and engineering workforce
            today and in the future. Since 1999 more than 12 major studies
            warn of the deteriorating situation within the U.S. science and
            engineering workforce. Last year Congress provided the Science,
            Mathematics and Research for Transformation (SMART) legislation
            that authorized the Department to carry out a scholarship
            program with an employment payback component. To ensure we
            maintain an effective workforce, I propose making the SMART
            Pilot a permanent program. I also seek your support in
            providing additional authorities that will would improve
            substantially our ability to develop, recruit, develop, and
            retain individuals who will be critical in fulfilling the
            Department's national security mission.

        In sum, the Department has taken many substantive steps toward
    improving the effectiveness, focus, and transparency of our weapons
    system acquisition process. We have no intention of stopping here, and
    we will do all that we can to support the needs of our warfighters
    using the most efficient, responsive systems we can design.
                 managing federal contracting more effectively
        Next I would like to address the High Risk area of DOD Contract
    Management including Services, Management of Interagency Contracting,
    Payments, and Contract Closeout as well as update you on our Spend
    Analysis efforts. The Department has made great strides in improving
    contract management. Numerous activities have been completed and many
    more are ongoing to improve our ability to award, monitor performance
    and ensure that payments are made timely and accurately.

             Services: In our acquisition of services, the
            Department has met all of the essential statutory requirements
            of implementing Section 801 of the National Defense
            Authorization Act for Fiscal Year 2002, which required the
            Department to establish and implement a management structure
            for the procurement of services comparable to the management
            structure that applies to the procurement of products. The
            Department continues to enhance the management structures and
            processes beyond the basic implementation of the law through a
            variety of activities. To date we have implemented services
            contracts oversight processes for each of the Military
            Departments to ensure service acquisitions are of the highest
            quality, support DOD objectives, are performance based and are
            planned and administered to achieve the intended results. We
            are actively engaged in reviewing and modifying our processes
            modeled upon industry best practices including strategic
            sourcing at both the individual military department and at the
            joint service level. Through our efforts to model our entire
            acquisition function we can better understand where process
            improvements can and should be made to affect the greatest
            increases in efficiency. These managerial processes and
            acquisition process changes will greatly strengthen our ability
            to manage complex service actions.
             Management of Interagency Contracting: GSA and DOD
            have worked closely to make significant improvements in the
            manner in which GSA contracts and other Interagency Contracting
            is conducted. We continue to make improvements in our
            interagency acquisitions to ensure that contracts are utilized
            properly and comply with all fiscal requirements.

        On October 29, 2004, DOD issued a new policy on the ``Proper Use of
    Non-DOD Contracts.'' The policy was jointly signed by me and by my
    counterpart in the USD(C). The policy became effective on January 1,
    2005. It requires the Military Departments and Defense Agencies to
    establish a process to ensure that, for actions greater than $100,000,
    minimum standards be met before a non-DOD contract can be utilized to
    meet a DOD need.
        The policy requires a specific determination be made that the
    requirements are within the scope of the intended contracts and a
    review of the proposed funding to ensure that it is compliant with all
    regulations. Our policy requires that DOD provide any unique
    requirements and clauses to a non-DOD contracting office issuing a
    contract on our behalf. We also are developing training on our policy.
        In support of our policy, we have been working especially closely
    with the GSA in support of their ``Get It Right'' campaign and with the
    National Business Center (NBC) and ``GOVWORKS'' organizations of the
    Department of the Interior. We will be visiting other non-DOD
    organizations, such as the Department of Treasury and Veterans Affairs
    and NASA, to demonstrate our resolve.
        Our recent policy changes and training emphasis are designed to
    instill discipline within the Department when utilizing a non-DOD
    contract to meet our needs. I would like to reaffirm the DOD's
    commitment to working closely with all the Assisting Agencies to
    improve the interagency acquisition process.

             Payments: The DOD acquisition community continues to
            partner closely with the finance community to improve the
            payments process. One of the areas of improvement is the
            matching process where invoices are compared to contracts and
            receipts/acceptances to ensure timely and correct payments are
            made. An electronic business solution called Wide Area Workflow
            (WAWF) is the DOD solution to standardize this process. WAWF
            lets vendors electronically submit invoices and receiving
            reports through a central point for all of DOD. In turn,
            Government users are able to electronically receive the
            information, digitally sign the documents, and process for
            payment. Within this process, WAWF is also the central point of
            electronic collection of the Unique Identication (UID), a key
            enabler of financial information, and AT&L transformation. The
            Defense Contract Management Agency (DCMA) has led the
            deployment of WAWF to the Department's top vendors with the
            greatest volume of monthly receiving reports and invoices. The
            results to date show the use of WAWF virtually eliminates late
            payments and associated interest penalties. The next version of
            WAWF will be released shortly and provides the ability to
            process receiving reports from local inventory systems, such as
            the Defense Logistics Agency (DLA) in particular, allowing for
            destination acceptance activities to utilize WAWF. At the DLA,
            this will allow WAWF to process high volumes of transactions in
            addition to the processing of Radio Frequency Identification
            (RFID) information for asset tracking from the factory to the
            warfighter. RFID is different than UID as the RFID can be used
            again but the UID, is unique to the system for its life. This
            will transform maintenance and government property.

        We believe that these efforts will allow the Department to improve
    its ability to strategically plan the acquisition of services from
    which performance goals can be developed and to properly manage them
    throughout their life cycle.

             Contract Closeout: As part of our efforts to improve
            contract management, we have focused on reducing the number of
            overage contracts. This involved a systemic review of the
            reasons for overage contracts, as well as a concentrated effort
            to identify overage contracts and the actions necessary to move
            them expeditiously through the closeout process. This has
            resulted in a greater than 50 percent reduction in the number
            of overage contracts over the last 3 years, from close to
            20,000 to just over 9,000. We expect further reductions as a
            result of the contract closeout authority provided by the
            National Defense Authorization Act of 2005. The Act enables us
            to close out contracts that have an unreconciled balance of
            less than $100,000. In addition to reducing the number of
            overage contracts, DOD has also undertaken a review of the
            systemic reasons for the existence of overage contracts. This
            review includes both an internal assessment and a request for
            public input on how to improve the contract closeout process.
            The internal assessment has revealed a number of areas for
            which improvements have already been made, including actions to
            facilitate receipt of contractor annual indirect cost
            submissions and final vouchers. The public input includes a
            public meeting that will provide a full and open discussion of
            how DOD can improve the contract closeout process. By taking
            actions to eliminate and/or mitigate these systemic issues, the
            number of overage contracts can be reduced even further.
             Smart Buyer/Spend Analysis/Strategic Sourcing: In
            response to several GAO reports the Department established a
            joint-level integrated product team to conduct a commercial
            type spend analysis of DOD's service acquisitions (excluding
            research and development). We analyzed contract award data,
            stratified our Services spending into 52 distinct commodity
            categories, and identified the top categories offering
            potential benefits through strategic sourcing. We established
            two joint-level commodity teams; administrative clerical
            services led by the Navy and wireless communication services
            led by the Army. The initial commodity analyses are complete
            and strategic acquisition plans are being developed for these
            two categories. The analysis and therefore strategy for the
            administrative clerical services commodity revealed that 100
            percent of this acquisition will be set aside for small
            businesses; aligning the Department's goals for maximizing
            small business participation with strategic sourcing tenets. A
            third commodity team has just been established to review the
            acquisition of medical services (doctors, nurses,
            technologists) and is being led by the Army. A proposed joint-
            level concept of operations for conducting strategic sourcing
            efforts was approved by senior OSD, Military Department, DLA
            and DCMA procurement officials on January 14, 2005. The concept
            of operations outlines a governance structure, spend analysis
            concepts, as well as the establishment and conduct of commodity
            teams. Additionally, key representatives from the Department
            (that is, the Directorate of Defense Procurement and
            Acquisition Policy and our Defense Acquisition University) are
            participating in the OFPP working group for strategic sourcing
            and assisting in the development of the Federal-wide concept of
            operations and communications strategy.

        The Department has recently completed a pilot program to automate
    the collection and analysis of essential, Department-wide spend data.
    Enabled by the Wide Area Work Flow and Unique Identification concepts,
    data was obtained and organized through the use of commercial off-the-
    shelf (COTS) business intelligence software into a Common Data Model
    directly from the Air Force and Army business intelligence systems,
    which capture a wealth of information about existing contracts. For the
    initial pilot, and as a cost savings measure, Navy spend data was
    incorporated into the Air Force system, and spend data from the Missile
    Defense Agency was incorporated into the Army system. In this initial
    pilot, we gained visibility into approximately 43 percent of the
    Department's spend for fiscal year 2004. Technical issues identified
    during the pilot phase are being resolved in conjunction with the CIO's
    office to further prove and evaluate the concept, with a plan to
    incrementally improve upon the pilot and deliver a spend analysis/
    business intelligence system to the acquisition and contracting
    community. The overarching goal is to provide a streamlined method by
    which managers at all levels can gain access to the relevant
    department-wide or component level spend data necessary to make smart
    acquisition decisions.
      dod's approach to business transformation addressing challenges in
                          broad-based transformations
        I appreciate GAO's acknowledgement of the Department's senior
    leadership commitment to improving our business operations and their
    recommendations on significant transformation. I am currently pursuing
    DOD Business Enterprise-level capabilities that will serve as
    transformation catalysts to accelerate broader, Department-wide
    improvements in business processes and information systems, while
    enabling financial accountability. My leadership thrust relies on three
    principles: clear standards, clear lines of authority, and tiered
    accountability. Specific details on Supply Chain Management, Support
    Infrastructure Management, and Business Systems Modernization follow.
                            supply chain management
        In the supply chain area, I want to first compliment Dave Walker
    and his staff for their assessments of DOD logistics and supply
    operations, dating back to the 1990s. I believe GAO has conducted more
    than 60 studies in this area since 1990--with 13 completed in 2003 and
    2004--and the DOD has generally endorsed and implemented their
    recommendations.
        The overall effectiveness of the total supply chain was
    demonstrated in Operation Enduring Freedom (OEF), which began less than
    a month after the September 11 attacks and removed the Taliban from
    power in short order. In support of Operation Iraqi Freedom (OIF),
    which led to the overthrow of Saddam Hussein in a matter of weeks, we
    moved and sustained a ground force farther and faster than ever before.
    Those accomplishments would not have been possible without an effective
    total supply chain.
        The GAO report notes that DOD currently owns about $67 billion in
    inventory in 2002. It should also be noted that when inventory
    management was added to the High-Risk Series in 1990, DOD inventory was
    over $100 billion and the initial GAO focus was on efforts to reduce
    the inventory in the wake of the Cold War. When military readiness
    concerns surfaced in the late 1990s, DOD undertook steps to bolster
    inventories for critical spare parts. Budgetary limitations and the
    extended lead times for critical parts--up to 3 years for some aviation
    spares--posed significant challenges, but the supply chain was able to
    respond well enough to effectively support OEF and OIF. The foundation
    elements for inventory tracking was radio frequency ID.
        The DOD supply chain has been a focus item of mine from the day I
    interviewed with the Secretary in 2001. I have sponsored several
    efforts to move towards Knowledge Enabled Logistics. Knowledge Enabled
    Logistics means asset tracking, conditioned based maintenance,
    performance based support from our industry providers, lean maintenance
    in all of the Depots, and integrating the Supply and Distribution folks
    to focus fully on factory to fighter. The introductions of Joint
    Deployment and Defense Distribution Operations Centers (JDDOCs) into
    Central Command in January 2004, and more recently into Korea, Pacific
    Command (PACOM), European Command (EUCOM), and Southern Command
    (SOUTHCOM), led to better-synchronized theater distribution and greatly
    reduced the goods in flow, while putting warfighter customer needs
    first. This means Trusted Logistics from the customer perspective, an
    end to duplicate ordering, and paying attention to retrograding repairs
    back to the U.S. with the same intensity as getting warfighting
    capability into theater. I have introduced Unique Identification and
    introduced changes to the International Standards Organization as a
    foundation element to knowing the stock, and also Radio Frequency
    Identification in partnership with commercial industry to manage
    inventory levels throughout the system, and throughout the theater when
    fully deployed. Over time all of our purchases that meet certain
    criteria will come to us both marked and tagged. I think the latest
    statistics demonstrate positively that we are very close to Trusted
    Logistics with the performance we have fostered.
        Clearly ongoing operations demonstrate both the effectiveness of
    the DOD supply chain and some areas for continued improvement. Recent
    achievements include:

             We have integrated and focused the 500 initiatives
            which Dave's staff identified (and we found when I joined DOD)
            into four specific strategic initiatives: (1) achieve Joint
            Theater Logistics Management; (2) transform weapon system
            support; (3) compress our organically managed supply chain and
            achieve asset visibility; and (4) modernize our business
            systems.
             Industry continues to provide exceptional performance
            based support to our weapon systems. We are realizing 30 to 40
            percent increases in materiel availability, a 70 to 80 percent
            reduction in lead times, and historically high readiness levels
            for systems deployed in Iraq today.
             Responded as rapidly as possible (given lead time) to
            improve materiel availability. Today, materiel availability for
            the DLA is 88 percent (versus a target of 85 percent) and
            backorders hit a historic low in March 2004.
             Through aggressive partnering with industry, DLA's
            cost recovery rate is at a historic low of 15 percent this
            year.
             Increased the number of recoverable items returned
            from theater for repair each quarter by a factor of 20 in the
            past year.
             Established a new contractor-operated distribution
            depot using a commercial warehouse system in Kuwait in
            September 2004.

        Even with these accomplishments, we have some areas for
    improvement, including further reducing our response time and
    variability in that response time. To address those areas DOD will
    continue to aggressively implement joint theater logistics, performance
    based weapon system sustainment, lean organic procedures, radio
    frequency identification, and an integrated end-to-end distribution
    process. We published our strategy for achieving Knowledge Enabled
    Logistics on December 10, 2004 and we are currently documenting
    specific actions and milestones to implement that strategy. I expect to
    publish those actions and milestones as a ``Logistics Roadmap'' in July
    2005.
        In summary, the Department has done much to improve the management
    of its supply chain, but much remains to be done. I firmly believe in
    continuous improvement, that we can always improve, always find ways to
    do better. So, I welcome the assistance of the Office of Management and
    Budget and the Government Accountability Office to focus the
    Department's efforts in this and other areas on GAO's High-Risk list. I
    fully agree with the OMB formula for effective management: top
    management commitment, a clear definition of what must be accomplished,
    a clear action plan, and a process for holding people accountable for
    results.
       support infrastructure management & managing federal real property
        In January 2003, GAO designated Federal real property as a high-
    risk area due to longstanding problems with excess and underutilized
    property, deteriorating facilities, unreliable real property data, and
    costly space challenges. In their most recent update of the high-risk
    series, GAO concluded that the underlying conditions continue and that
    more remains to be done to address the problems and obstacles that
    prevent agencies from solving them.
        In February 2004, Executive Order 13327, Federal Real Property
    Asset Management, was issued by the President to promote the efficient
    and economical use of Federal real property assets and to assure
    accountability for implementing management reforms. The EO established
    the Federal Real Property Council, which has been instrumental in
    establishing guiding principles, asset management plan requirements,
    performance measurements, and inventory management direction. DOD has
    been actively leading the inventory management efforts in support of
    the EO.
        For the past several years, the Department of Defense has been pro-
    active in its efforts to manage the Department's facilities and
    infrastructure. In 1998, the Department set out on a 6-year program to
    eliminate 80 million square feet of obsolete and excess facilities, and
    subsequently exceeded the target. In 2001, the Department issued its
    first ever Defense Facilities Strategic Plan. In September 2004, we
    issued a comprehensive, capabilities-based, performance-oriented
    Defense Installations Strategic Plan. Our infrastructure investment
    strategy rigorously utilizes key metrics such as sustainment and
    recapitalization, to provide support for the facilities that directly
    support mission and readiness. To improve the accuracy and usability of
    the inventory, in 2004 the Department undertook an extensive review and
    re-engineering of its real property inventory system and process. In
    the course of re-engineering, we have developed the concept of
    assignment of unique identifiers to real property assets. This enables
    linkage of related real property data across business areas, achieving
    the AT&L vision of linking people to real and personal property--any
    place, any time, anywhere.
        The President's Management Agenda recently started including Real
    Property Asset Management as one of its key scorecards. As of December
    2004, the Department's progress in its real property management
    improvement efforts was scored green, reflecting the aggressive efforts
    being taken. Our practices are being adopted at many of the other
    Federal agencies, such as DOE and NASA. We have taken GAO high-risk
    very seriously, and are working to ensure our real property asset
    management practices provide the infrastructure needed to enhance the
    operational force capabilities and missions.
                         business systems modernization
        Although recently designated by GAO as a ``High Risk Area'' in its
    January 2005 report, the Department's approach to Business
    Transformation is moving in the right direction. On February 7, 2005,
    the Deputy Secretary established the Defense Business Systems
    Management Committee (DBSMC) and designated me as its Vice Chairman.
    The Committee will oversee business transformation and ensure funds are
    obligated for defense business systems modernization in accordance with
    the requirements of the National Defense Authorization Act (NDAA) for
    Fiscal Year 2005. Additionally, I have assumed direct responsibility
    for the Business Management Modernization Program (BMMP). I have
    assumed this new responsibility as it has become evident that the BMMP
    was not achieving its objectives, as evidenced by the recent
    downgrading in its progress rating in the President's Management
    Agenda. To get BMMP back on track, I have appointed a Special Assistant
    for Business Transformation who will be my full-time Senior Executive
    overseeing the Defense Business Systems Modernization efforts.
        As described in our March 15, 2005 Annual Report to the
    Congressional Defense Committees, we are on track with establishing a
    strategic and integrated plan for business transformation with specific
    goals, measures and accountability mechanisms. Our efforts to ensure
    effective control and accountability over the Department's business
    transformation address many of the concerns and recommendations
    identified in the recent draft GAO report (GAO-05-381, March 16, 2005),
    titled ``DOD Business Systems Modernization: Billions Being Invested
    Without Adequate Oversight.''
        These actions make sense because most of the processes that support
    financial management and the Department's goal of financial
    transparency reflected in clean audits are AT&L processes.
    Additionally, having the Deputy Secretary of Defense and the Under
    Secretary for AT&L overseeing this program sends a clear message
    regarding senior leadership involvement. Placing the program under
    acquisition oversight will instill program discipline as we move from
    focus on architecture development to rapid implementation of business
    capabilities.
        We have also delegated responsibility for review, approval, and
    oversight of defense business systems to the approval authorities
    specified in the 2005 NDAA. As part of the investment review board
    process, we are defining a management structure that clearly defines
    the relationship between OSD and the components for investment review
    responsibilities. I believe these steps will ensure the management
    accountability and sustained engagement by senior DOD leadership
    recommended by GAO in the report I mentioned earlier.
        We have made significant progress to date on creating data
    standards and strategies, translating over 145,000 requirements into
    business rules for financial compliance, developing an initial Business
    Enterprise Architecture, and improving control of IT spending.
    Additionally, we have made great gains in defining processes and
    standards for Unique Identification as a means of achieving Total Asset
    Visibility, developing a Standard Financial Information Structure
    (SFIS) that will enable financial transaction traceability, and
    creating a single face to industry for all components using information
    technology.
        As you are aware, a number of DOD components are making substantial
    investments in ERP systems. In addition to ensuring that we provide the
    Services with data standards and business rules to ensure
    interoperability among these systems, and complying with DOD-wide
    Business Enterprise capability requirements, I am working closely with
    the ASD(NII) and the business mission area owners to ensure that these
    transformational systems are acquired properly and that their potential
    benefits are achieved as soon as possible. Our initiatives in this area
    include: (1) establishing Blanket Purchase Agreements for COTS/ERP
    software and associated system integration services under the
    Enterprise Software Initiative; (2) publication of a Defense
    Acquisition Guidebook section on best practices in acquiring COTS
    software; and (3) mapping the decision points and information
    requirements of the DOD Acquisition Framework to the natural decision
    points of the COTS/ERP acquisition process. Finally, as part of the
    realignment of the BMMP into AT&L, we are establishing an ERP center of
    expertise. This team of subject matter experts will work with the
    components to further encourage sharing of best practices, reuse of
    capabilities already developed, and rapid implementation of DOD rules
    and data standards.
        We are working to address GAO concerns with the DOD's business
    system inventory and enterprise architecture. As we stated in our March
    15 report, DOD has improved the accuracy of its business system
    inventory. A standard definition of a system is being used to ensure a
    consistent inventory and business systems are now being recorded in a
    single repository, the DOD Information Technology Portfolio Data
    Repository (DITPR). We are on track to complete a Business Enterprise
    Architecture sufficient to clearly define the DOD Business Enterprise
    and its associated capabilities and systems, as well as the component
    Business Enterprises and their capabilities and systems, by this fall
    as required by the 2005 NDAA.
        While significant work remains, I am confident that the strategy we
    have adopted and the steps we have taken will achieve the
    transformation we desire and account for shortcomings identified by GAO
    in their recent reviews.
                                   conclusion
        Before closing, I would like to note how extremely proud I am of
    the world-class AT&L workforce. One metric of their ability and
    dedication can be found in the awards they win. Some highlights of
    these are: The Defense Acquisition University was recently recognized
    by the American Society for Training and Development at the #1 training
    organization for 2004 in America. Our efforts to transform business
    processes and practices won recognition as well. Ms. Lisa Romney, one
    of our procurement analysts, was selected as a Fed 100 winner, and two
    enterprise programs managed by DOD recently won recognition: The
    Federal Technical Data Solutions (FedTeDS) was a finalist for the 2005
    Excellence.gov Award, and the DOD E-Mall received the David Packard
    Excellence in Acquisition Award.
        In closing Mr. Chairman, thank you for the opportunity to testify
    before the subcommittee about our acquisition programs, policies,
    processes, and, especially, our people. I would be happy to answer any
    questions you and the members of the subcommittee may have.

        Senator Ensign. Thank you, Secretary Wynne.
        Mr. Henke.

    STATEMENT OF ROBERT J. HENKE, PRINCIPAL DEPUTY UNDER SECRETARY
                        OF DEFENSE (COMPTROLLER)

        Mr. Henke. Mr. Chairman, Senator Akaka, good morning. I
    appreciate this opportunity to discuss the progress we are
    making in improving the management of the business mission area
    of the Department of Defense, including the specific
    improvements we are deriving in the area of financial
    management.
        Since I arrived at the Department last fall, I have been
    extremely impressed with the level of effort and focus that DOD
    employees have dedicated to the improvement of the Department's
    business capabilities. Our organization is complex, but we are
    working to drive best business practices, to improve financial
    accountability, and most importantly, to provide better support
    to our warfighters as they fight the global war on terror.
        We recognize that our challenges are not exclusively caused
    by systems, processes, culture, or even bureaucracy. We
    understand that it is a combination of these factors that must
    be addressed with great energy in order to make progress.
    Initiatives that enhance our financial management capabilities
    are being pursued with an appreciation for the broader business
    management transformation that is necessary.
        We are leading these efforts from the top, but our success
    is the direct result of broad cooperation, collaboration, and
    cultural change across the Department. From this perspective, I
    should note how appropriate it is that I appear today with my
    colleague, Under Secretary Mike Wynne. Shortly after Secretary
    Tina Jonas testified to this committee last November, the
    Office of the Under Secretary for Acquisition, Technology, and
    Logistics (AT&L) and the Comptroller joined with the Under
    Secretary for Personnel and Readiness (P&R) to direct necessary
    changes to the next phase of the Business Management
    Modernization Program (BMMP).
        Both Ms. Jonas and Mr. Wynne designated senior DOD
    officials, Tom Modly, Deputy Under Secretary of Defense for
    Financial Management, and Paul Brinkley, Special Assistant to
    the Under Secretary for AT&L for Business Transformation, with
    the direct responsibility for shifting the BMMP program from
    its previous phases to an implementation phase. The program is
    now focusing on the delivery of DOD enterprise systems and
    standards.
        Under Mr. Modly's and Mr. Brinkley's leadership over the
    last several months, the program has developed an interim
    transition plan detailing our plans for enterprise systems
    evolution and migration. More importantly, the program has
    established a set of clear DOD-level enterprise capabilities
    and priorities for new systems, and it has established a tiered
    approach with the components for governance to guide the
    further development of the enterprise architecture.
        A final transition plan and the release of the architecture
    will be delivered to Congress in September of this year.
    Details about the program alignment were delivered to our BMMP
    report to Congress on March 15.
        Further reinforcing our efforts to drive, from the top, an
    enterprise approach to business transformation and financial
    improvement, we established the Defense Business Systems
    Management Committee (DBSMC) as required by legislation last
    year. As chairman of the committee, the Deputy Secretary
    designated AT&L as the vice chair. At the same time, AT&L has
    assumed direct responsibility for program management of BMMP.
    This will facilitate centralized tracking of cost, schedule,
    and performance data for the critical DOD enterprise business
    systems.
        We also established Investment Review Boards (IRB), that
    are required to approve investments in excess of $1 million.
    These IRBs will be led by the Under Secretaries of AT&L,
    Comptroller, and P&R. Standard procedures that streamline the
    current certification process will be established by the DBSMC
    later this month, and we will implement them immediately.
        In the interim, we have continued to certify systems
    investments through the Comptroller and the main certification
    process. To date this year, we have already reviewed 116
    systems against our plan of reviewing 148 systems this year. A
    shift to the new investment review process will facilitate
    rapid completion of our remaining systems reviews this year.
        Turning to the area of DOD financial management progress,
    the successful implementation of BMMP enterprise priorities
    will have a significant long-term impact on the business
    operations of the Department. BMMP, however, is not the sole
    focus of our day-to-day efforts to improve DOD financial
    management. We are committed to eliminating the DOD financial
    management deficiencies identified as high risk by the GAO. We
    have raised our professional standards for financial
    management. It is inspiring to see the work that our financial
    management professionals do on a daily basis, despite the
    organizational complexities, setbacks, and system challenges of
    our current environment.
        We are building upon the accomplishments of the past and
    moving ahead with initiatives that will further improve
    financial performance and accountability. In December, we
    provided this committee our planned financial improvement
    objectives and milestones through June. We organized these
    objectives along four main financial management improvement
    areas: correcting reporting deficiencies; cleansing data;
    improving business process; and modernizing defense business
    systems.
        Under each area, we identified specific measurable
    objectives to be accomplished by June. I'm happy to report
    today that we are on track to meet these objectives, although
    we had been impeded in some ways by language in the National
    Defense Authorization Act for Fiscal Year 2005. Specifically,
    section 352 prohibits spending to advance financial audit work
    until our systems transition plan is complete.
        While we fully agree that an integrated systems transition
    plan is important, we have a responsibility and indeed an
    obligation to promote good financial management practice
    wherever and whenever we can, including better internal
    controls, more credible asset and liability valuations, and
    business process improvements, regardless of the current state
    of systems transformation.
        Limited and specific relief from the restrictions of 352
    would allow us to continue to pursue sustainable, repeatable
    improvements that are not in conflict with our current plan for
    new systems. More importantly, it helps us maintain our
    momentum.
        Gentlemen, we are on track to complete each of our 27
    objectives for June. Several of them have already been
    completed, and I'd like to report to you on our accomplishments
    as follows. In the area of correcting reporting deficiencies--
    --
        Senator Ensign. Mr. Henke, if you could sum up please so we
    can get to some questions.
        Mr. Henke. Yes, sir. Sir, I'd like to emphasize that our
    business improvement challenges are not one-dimensional. These
    system improvements are critical, but we take our management
    responsibilities seriously to improve the Department. Improved
    financial management leads to accurate financial reporting.
    It's a priority in itself, but the real results are the
    business improvements that are seen and realized by the
    warfighters through more reliable, accurate, and timely
    information.
        This subcommittee's and your personal continued support and
    interest in this area is deeply appreciated, sir, and I look
    forward to further opportunities to discuss our important work
    with you.
        [The prepared statement of Mr. Henke follows:]
                     Prepared Statement by Robert J. Henke
        Mr. Chairman, members of the subcommittee, I appreciate this
    opportunity to discuss the progress we are making in improving the
    management of the business mission area of the Department of Defense,
    including the specific improvements we are driving in the area of
    financial management. Since I arrived in the Department last fall, I
    have been extremely impressed with the level of effort and focus DOD
    employees have dedicated to the improvement of the Department's
    business capabilities. Our organization is complex, but we are working
    to drive best business practices, to improve financial accountability,
    and most importantly, to provide better support to our warfighters as
    they fight the global war on terror.
        We recognize that our challenges are not exclusively caused by
    systems, or processes, or culture, or bureaucracy. Therefore, we
    understand that it is the combination of these factors that must be
    addressed with great energy in order to make progress. As a result,
    improvement initiatives that enhance our financial management
    capabilities are being pursued with an appreciation for the broader
    business management transformation that is necessary. We are leading
    these efforts from the top, but our successes are a direct result of
    broad cooperation, collaboration, integration, and cultural change
    across Department.
        From this perspective, I should note how appropriate it is that I
    appear today with my colleague, Michael Wynne. Shortly after Under
    Secretary Tina Jonas's testimony to this committee last fall, the
    office of the Under Secretary of Defense (USD) for Acquisition,
    Technology, and Logistics and the Comptroller joined with the Under
    Secretary for Personnel and Readiness (P&R) and the acting Assistant
    Secretary for Network Integration and Information (NII) to direct
    necessary changes to the next phase of the Business Management
    Modernization Program (BMMP). Both Ms. Jonas and Mr. Wynne designated
    senior DOD officials (Mr. Tom Modly, Deputy Under Secretary of Defense
    for Financial Management, and Mr. Paul Brinkley, Special Assistant to
    the Under Secretary (AT&L) for Business Transformation) with the direct
    responsibility for shifting the BMMP program from its previous phases
    to an implementation phase. The program is now focusing on the delivery
    of DOD enterprise systems and standards. Under Mr. Modly's and Mr.
    Brinkley's leadership over the last several months, the program has
    developed an interim Transition Plan detailing the Department's current
    plans for enterprise systems evolution and migration. More importantly,
    the program has established a set of clear DOD enterprise priorities
    for new systems and capabilities, and it has established a tiered
    approach with the Components to guide the further development of the
    enterprise architecture. A final Transition Plan and release of the
    architecture will be delivered to Congress in September 2005. Details
    about the program realignment were delivered in our report to Congress
    on BMMP on March 15.
        Further reinforcing our efforts to drive from the top an enterprise
    approach to business transformation and financial improvement, we have
    established the Defense Business Systems Management Committee (DBSMC).
    As chairman of the committee, the Deputy Secretary of Defense
    designated the Under Secretary of Defense (AT&L) as the vice chair.
    Concurrent with that designation, the Under Secretary of Defense (AT&L)
    has assumed direct responsibility for the program management of BMMP.
    This will facilitate centralized tracking of cost, schedule, and
    performance for the critical DOD enterprise business systems programs.
        Concurrent with the formation of the DBSMC, we also established
    Investment Review Boards (IRBs) that will be required to approve
    investments in excess of $1 million. These IRBs will be led by the
    Under Secretaries for AT&L, Comptroller, and P&R. Standard procedures
    that streamline the current certification process will be established
    by the DBSMC later this month, and we will implement them immediately.
    In the interim, we have continued to certify systems investment through
    the Comptroller and Domain certification process. To date we have
    reviewed 116 systems against our plan of reviewing 148 systems in
    fiscal year 2005. A shift to the new streamlined investment review
    process will facilitate a rapid completion of the remaining system
    reviews required for this year.
                       dod financial management progress
        The successful implementation of BMMP enterprise priorities will
    have a significant long term impact on the business operations of the
    Department. The BMMP, however, is not the sole focus of our day-to-day
    efforts to improve DOD financial management. We are committed to
    eliminating all DOD financial management deficiencies identified as
    ``high-risk'' areas by the Government Accountability Office. We have
    raised our professional standards for financial management. It is
    inspiring to see the work financial management professionals are doing
    despite the organizational complexities and systems challenges of our
    current environment. We are building upon accomplishments from the past
    4 years and moving ahead with critical initiatives that will further
    improve financial performance and accountability.
        In December, we provided to this committee our planned financial
    improvement objectives and milestones through June. We organized these
    objectives along four main financial management improvement areas:
    correcting reporting deficiencies, cleansing data, improving business
    processes, and modernizing defense business systems. Under each area we
    identified specific objectives to be accomplished by June. We are on
    track to meet these objectives, although we have been impeded in some
    areas by the language of section 352 of the National Defense
    Authorization Act for Fiscal Year 2005. Specifically, section 352
    prohibited spending to advance financial audit work until our systems
    transition plan was complete. While we agree that an integrated systems
    transition plan is important, we have a responsibility to promote good
    financial management practices, including better internal controls,
    more credible asset and liability valuations, and business process
    improvements regardless of the current state of systems transformation.
    Limited relief from the restrictions of section 352 would allow us to
    continue to pursue sustainable improvements that are not in conflict
    with our current understanding of our plan for new systems. More
    importantly, it would help sustain the momentum of previous progress in
    this area.
        We are on track to complete each of our 27 objectives for June.
    Several of the specific objectives have been completed, and only two
    (professional accounting certification policy and audit assertion for
    Navy ``other assets'' category) require some mitigating action at this
    time to ensure a June completion. We have accomplished the following:
        Correcting Reporting Deficiencies-improving how we report financial
    information:

             Standard Financial Information Structure (SFIS). By
            May we will have a final financial coding structure for the
            Department. This is the standard financial language that will
            be required to ensure all DOD financial transactions/
            information are coded consistently across all components. Our
            current environment has multiple financial languages that
            require translation at various levels before being rolled up to
            the Department's financial statements.
             Fund Balance with Treasury Assertions. Two of the
            military departments (Air Force and Army) are ready for audit
            confirmation of the ``Fund Balance with Treasury'' line items
            on their respective balance sheets. This represents 12 percent
            of the Department's assets. (Section 352 of the NDAA for Fiscal
            Year 2005 has restricted us from completing this work.)

        Cleansing Data-establishing a baseline understanding of the value
    significant balance sheet line items prior to integration into new
    systems:

             Military Equipment Valuation. Since December, we have
            completed an initial valuation of an additional 281 military
            equipment programs, bringing our total to 661 programs. We are
            well on our way to completing valuations for all 1,086 military
            equipment programs. This is critical to developing a baseline
            valuation for our military equipment to accurately report the
            largest asset category on our balance sheet (27 percent of
            assets).
             Reconciliation of Personnel Pay Records. We have
            completed a detailed review of over 600,000 military pay
            records to ensure the accuracy of records being migrated into
            the new pay system (Forward Compatible Pay).

        Improving Business Process--implementing best practices across the
    core business missions of the Department:

             BEA/EBPM Revisions. The BMMP has completed revisions
            to the Enterprise Business Process Models to reflect a greater
            emphasis on horizontal, end-to-end business processes aligned
            with the new governance of the program. This is a critical
            element of the September 2005 architecture deliverable.

        Modernizing Defense Business Systems--implementing anew,
    interoperable business systems environment that reduces manual
    dependencies and increases human resource, materiel, and financial
    visibility:

             Defense Business Systems Management Committee (DBSMC).
            Established the DBSMC as the governing body for business
            transformation chaired by the Deputy Secretary of Defense, and
            vice chaired by the Under Secretary of Defense (AT&L).
             Investment Review. Established Investment Review
            Boards (IRBs) to review all spending in excess of $1 million on
            business systems.
             Interim Transition Plan. Completed an interim systems
            transition plan and program baseline for BMMP as a roadmap for
            systems migration and the development of DOD enterprise-level
            capabilities. A final plan will be delivered in September 2005.

        We are currently developing our key objectives for the June through
    December timeframe, and we look forward to reporting similar successes
    to you.
                                    closing
        In closing, I would like to emphasize that our business improvement
    challenges in DOD are not one-dimensional. Systems improvements are
    critical to this effort, but we also take seriously our management
    responsibility to improve the accountability and efficiency of our
    business operations regardless of today's systems environment. Our
    military forces are transforming themselves to adapt to a changing
    security environment that requires speed, agility, and flexibility. We
    are focusing our work to ensure the business mission of the Department
    is transformed as well.
        Improved financial management that leads to accurate financial
    reporting is a high priority objective of the senior leadership of the
    Department because it provides tangible measures of accountability to
    the taxpayers. The process and business improvements that accrue to the
    warfighter through more reliable, accurate, and timely financial
    information, however, are the real value of this work.
        This subcommittee's continued support and interest in this area is
    deeply appreciated. I look forward to further opportunities to discuss
    this important work with you.

        Senator Ensign. I want to thank all of you. We have what
    seems like a little bit of a difference of opinion on what Mr.
    Walker has reported and his people have found. The GAO is set
    up, because they have some expertise in being able to do some
    oversight and to report back to Congress. That's the whole
    purpose.
        I see the role of our job here as the subcommittee and the
    committee in general and Congress is to provide those
    warfighters what they need. But we also have a very solemn
    responsibility to the taxpayer to make sure that the dollars
    that we provide have oversight, that they aren't wasted, that
    there are the best management practices put into place so that
    those dollars actually get to the warfighter, that they are not
    wasted.
        That's really the purpose of these hearings. The problems
    that have been within the DOD, and, for that matter, throughout
    many parts of our Government deserve examination. I appreciate
    what the DOD has reported today about the metrics that you are
    using--that you are attempting to improve.
        But, as I mentioned in my opening statement, we have a lot
    of the same promises that have been made every year for the
    last, at least, 8 years before this subcommittee, and not a lot
    as far as results, tangible results, seem to have been made. We
    keep hearing promises that, well, just wait, it's coming, just
    wait, it's coming, and then there's a new person. We just have
    different people reporting the same thing basically year after
    year.
        That's one of the frustrations for this subcommittee. We
    want to see results. So, Mr. Walker, I'd like you to respond to
    some of those observations. We can have a back and forth here.
        Mr. Walker. Sure.
        Senator Ensign. We want to have some discussion on the idea
    of why you think the Chief Management Officer is a good idea.
    Is it system-correcting? In other words, as you mentioned, no
    matter how good the personalities are, if they're dealing with
    a bad system, then it really doesn't matter.
        But I would also say, Mr. Walker, that the individuals are
    responsible for the systems. If I'm the CEO of a company and I
    say they are good people, but they have bad systems, it's up to
    the people to change the systems.
        So with that in mind, if you could just address some of the
    comments that have been made by Secretary Wynne and Mr. Henke.
        Mr. Walker. If I can, Mr. Chairman, let me start off by
    saying, GAO is in the business of providing independent,
    professional, objective, fact-based, nonpartisan,
    nonideological, fair, and balanced information. I believe that
    I've met those criteria this morning.
        Number two, I agree with Secretary Wynne that there are way
    too many layers, way too many players, way too many hardened
    silos in DOD. But there's nobody in charge of business
    transformation and there is no plan. I totally agree that we
    ought to eliminate a lot of these extra layers. We ought to
    reduce the number of players that get involved and we ought to
    reduce the number of silos and try to de-harden the silos.
        But that takes leadership, and it takes somebody who's
    responsible and accountable, who's persistently focusing on
    these things at the right level with the right players over a
    considerable period of time.
        I would respectfully suggest that the issue of a Chief
    Management Officer has to be dealt with by Secretary Rumsfeld,
    by the Director of OMB, and by the President, because everybody
    below them has a conflict of interest with regard to any
    opinion that they might give, no matter how sincere they are.
        Senator Ensign. Mr. Walker, could you address the idea of
    the authority with a level two. Especially the budget authority
    and that conflict of interest that you were talking about.
        Mr. Walker. Sure. I've seen a draft of the legislation that
    the committee is considering, and I can understand that, on the
    surface, how somebody would be concerned about. This is a new
    player and what does this mean? What are the reporting lines?
    Is this a new layer? What's the division of responsibilities
    going to be between the current Deputy and the new Deputy
    Secretary for Management?
        Frankly, I think the drafters of what I've seen did a great
    job in making it very clear that this is not a new layer. The
    new position is basically trying to provide responsibility and
    accountability for things that need to get done at the right
    level of the organization recognizing that the current Deputy
    Secretary is the number two official within the Department.
    That job is very much needed. That job is the alter ego to the
    Secretary. That job also focuses more on policy-related issues,
    military transformation issues, and budget issues. What
    resources are you going to ask for is a policy issue. The
    Deputy Secretary for Management is a business executive,
    hopefully with both public and private sector experience, who
    focuses on operational issues. I'm not talking about military
    operations. I'm talking about business operations dealing with
    things like financial management, information technology, human
    capital strategy, knowledge management, and change management.
    This person would end up working in partnership with the
    Secretary, the Deputy Secretary, and others, but who would be
    focused on management issues, not policy issues, and who would
    not be intended to keep, for example, the Under Secretary for
    AT&L and others from being able to do their job. It's frankly,
    to try to facilitate a more strategic, integrated, and
    persistent approach to dealing with these issues.
        One last thing, Mr. Chairman, if I may----
        Senator Ensign. Mr. Walker, while you're addressing that--
    --
        Mr. Walker. Yes.
        Senator Ensign. Could you address some of the differences?
        Mr. Walker. Sure.
        Senator Ensign. DOD has reported that they made great
    progress and within a couple months we would be even more
    impressed with the progress that they'd made. Can you just
    address----
        Mr. Walker. Sure. I'd be happy to.
        Senator Ensign.--whether you think they have made progress,
    and percentage-wise what that progress is?
        Mr. Walker. Mr. Chairman, a typical GAO report says some
    progress has been made, but much remains to be done. Such is
    the case here. I'm not saying that progress has not been made
    at the Department of Defense, but let me give you several
    examples.
        Number one, with regard to BMMP, which is the enterprise
    architecture and the related information technology effort,
    several hundred million dollars has been spent on that. I
    haven't seen the product. I've seen within the last week a
    conceptual framework for a way forward which I believe has
    merit and I believe is a positive step forward. It is clearly
    an improvement from where the Department was before, but it's
    not a plan. I don't know what the results of the several
    hundred million dollars effort have been and what even product
    will result from that effort.
        Second, financial management. I've recently been briefed on
    a new tool that can be used as a way to facilitate progress
    with regard to financial management. I still haven't seen a
    plan. The goal for 2007 is totally unrealistic. It's not
    credible on its face. In addition, we're doing work for
    Congress right now with regard to trying to track what happened
    with the supplemental money.
        The Department doesn't have a system to be able to
    determine with any degree of reliability and specificity how we
    spent those tens of billions of dollars, I have absolutely no
    question that they were spent. But trying to figure out what
    they were spent on is like pulling teeth.
        Yes, in the area of supply chain management, progress has
    been made--in that we have gotten information back from the
    front where things are getting there quicker than has been the
    case in the past, and there are a number of positive things.
    But we also have evidence where there are problems with regard
    to certain spare parts, and situations where DOD uses
    transportation modes that are totally uneconomical, where we
    are sending things via air rather than via ship, and where
    we're losing visibility over inventory.
        Yes, progress has been made in certain regards, but serious
    problems still remain. Now, don't get me wrong, I have great
    respect for the individuals to my left and the other people in
    the Department of Defense. I don't think this is a personal
    issue or an individual issue. I think it's an institutional
    problem.
        I've run three agencies, including two in the executive
    branch. I've run a worldwide consulting operation. I've spent a
    lot of my life doing change--management work. The DOD culture
    is one of the most difficult cultures that exists on this
    planet. It is a very hierarchical, very turf-conscious entity.
    My view is, I believe that it's highly unlikely that the
    Department will be successful in dealing with these high-risk
    areas unless you end up addressing the issues that I raised.
        In the end, somebody has to be responsible and accountable,
    and somebody has to be there long enough to be able to increase
    the likelihood of success.
        Senator Ensign. Senator Akaka, if you wouldn't mind just
    allowing the other two witnesses to respond a little bit to
    what Mr. Walker has said. Also maybe in your comments, if you
    could address specifics, first of all, about pay. Mr. Henke, we
    talked about pay with Ms. Jonas last year, and could you
    address whether you think the pay system has improved, and if
    not, why not?
        But also, Secretary Wynne, if you could address this
    cultural issue that Mr. Walker has talked about, and what is
    being done to change the culture at the Pentagon to try to make
    it more accountable and to try to change some of the management
    practices.
        Mr. Wynne. It is interesting that the change proposed to
    change a hierarchical organization is to add a hierarchy.
        Mr. Walker. It's not.
        Mr. Wynne. I'm relatively objective here in the sense that
    I am a departing, if you will, according to Senator Akaka, who
    is far more in charge of this than I am, Under Secretary for
    Acquisition, Technology, and Logistics. I am also the other
    level two at this present juncture in the Department of
    Defense. I came from business, which is a requirement of that
    statute, and I have the business at heart in the Department.
        Here's what I have done over this time. Besides, as he has
    given me, I think, grateful credit and I appreciate the fact
    that he's looked into it, we are delivering goods to the
    warfighter a lot quicker. We have actually partnered with the
    Transportation Command. They are using GTN21, which is an
    information-based enabling system. We are linked all the way
    into theater. We've conquered the joint theater logistics
    problem by creating a Defense Logistics Executive, which I am
    also the Defense Logistics Executive.
        In doing all this, we have reduced the cost of
    transportation dramatically over the course of the last 7
    months by, in fact, inflicting, if you will, knowledge
    enablement on out to the field for the people who are actually
    doing the determinations.
        In the area of item control, I am requiring now unique
    identification to be applied to everything we buy, which links,
    by the way, to the cost of the item and to the age of the item
    and to the maintenance of the item. This is being applied not
    just to individuals, which is the Social Security number, but
    to automotive products, which is the vehicle identification
    number. But we're going to apply it to helicopter parts,
    engines, aircraft parts, things that we buy and supply for all
    of our wheeled vehicles, track vehicles, and ground systems.
    Then we can really track the management of those items
    throughout their life cycle.
        We're also applying it to real property and government-
    furnished property. We have put in place a wide-area work flow
    system that connects using unique identification, and we, sir,
    now, relative to the Prompt Payment Act, have to wait to pay
    because we have increased the process flow so quickly that
    we've reduced errors dramatically.
        Senator Ensign. In the use of the Radio Frequency
    Identification (RFID), the bar codes, what percentage of your
    inventory--whether it's tanks, ships, bullets, whatever you're
    tracking--of the military is now accurately being tracked?
        Mr. Wynne. I just got permission from the Office of
    Management and Budget to release the RFID tag below the carton
    level. I have been applying it on behalf of the combatant
    commander for the last year and a half, and it's demanded by
    the combatant commanders to increase the flow of goods. But I
    still do not have the last mile, which is what I'm going to get
    after the use of passive radio frequency IDs.
        But radio frequency IDs are different from unique
    identification of each item that I buy, because with the unique
    identification, I can track it through its life cycle. Radio
    frequency IDs are tags. In fact, just to talk about the culture
    a little bit, we had some soldiers actually shoot them off of
    the container thinking they were a placed bomb. So that culture
    had to be revitalized so they understood that this was an
    active tag that stored all the information in the container.
        We're expanding this to 43 additional agencies across the
    government to try to institutionalize radio frequency
    identification as a use for Customs, as a use for the Coast
    Guard, as a use for the Postal Service, as a use for each of
    the items that we buy. The National Aeronautics and Space
    Administration (NASA) is in on it. We went to the Air Transport
    Association to get them to change their actual data structure
    to allow our data structure to become paramount.
        I have an International Organization for Standardization
    (ISO) standard under way. I have 31 countries that are
    supporting me in putting this in so that when I buy an item, it
    doesn't matter from where, it will come in with a unique
    identification hand-stamped on it. Now if they're over $5,000,
    they're going to come in with a radio frequency ID.
        We process 80 percent of our goods through four Defense
    Logistics Agency (DLA) warehouses. They are now set up to
    receive and dispatch radio frequency identified stock. This is
    80 percent of our goods that are now going to be required with
    the release of this regulation, which has been pending for a
    little while, but I have notified the industries. I have about
    probably 10 percent of them now, including Dell Computer,
    believe it or not, that are signed up for passive ID.
        I'm partnering with Wal-Mart and I'm parterning with
    Proctor & Gamble through their new Gillette Division, who are
    wanting to increase the use of passive radio frequency ID to
    protect themselves against fakes. Let me tell you something,
    sir, we have a problem with fakes. We have a problem with gray
    market. Using the unique identification that we've put in
    place, we're going to protect ourselves from fakes. There was a
    huge Business Week article on this that was about 3 weeks old.
        Now, all of these things are foundational elements in
    knowledge enablement. I'm a big proponent of knowledge-enabled
    warfare, meaning situation awareness. I'm a huge proponent of
    knowledge-enabled logistics, which means prognostics, and
    forecasting demand rather than stepping up when you discover
    that the rocket just went through your plastic device here, and
    now asking for 10 times the amount. How about forecasting the
    maintenance on ships so I can have your parts available to you
    when you get on there? All of these things are in fact being
    absorbed and addressed by the Services.
        Let me talk for just a minute on BMMP, which I have just
    really in the last 6 months, partnering with Ms. Jonas and Mr.
    Henke here, got an architecture that I like. That architecture
    consists of rewriting the standards, which they are going to
    complete by May, of the standard financial infrastructure
    system. We are delegating to the Services, which have all
    bought, by the way, using the money that David described,
    enterprise resource planning (ERP) systems.
        My discovery, which I call sometimes a blinding flash of
    the obvious, is there is no ERP system that's ever sold
    commercially that does not have, as its foundation, an
    accounting system. Because you could not, in a corporation, buy
    an enterprise resource planning system if it did not comply
    with the tax authorities and the Securities and Exchange
    Commission.
        With this blinding flash of the obvious, I realized that if
    we put out a standard financial information system and force
    them by audit, which is one of the reasons that my colleague
    here is asking for relief from that audit process, to just
    become our financial system, I can literally use Microsoft
    Excel and add things across. I can, I think, get a breakthrough
    on our way to transparent financials.
        Now let me tell you where we are on that. Of the 59
    different entities that are supposed to report, I have actually
    organized right now 25 that are starting to ask questions about
    why can't we get audited, we think we can pass. If we pass,
    then we can pass this to you. I can't audit them right now
    because I'm restricted.
        So here is the way I'm approaching this thing, I'm
    approaching it the same way a conglomerate approaches new
    business. When, for example, General Motors either divests or
    acquires a new corporation, they don't demand that they accept
    their accounting system structure. They actually just send them
    out their accounting policies and their standard information
    and their gap statement that they made the previous year,
    because within 1 year, they have to pay taxes and they have to
    state their whole corporation to the Federal Trade Commission
    (FTC), not leave this division out.
        That division then essentially combines their financial
    statement and aligns it to the corporation's financial
    statement and passes the data up. Therefore, I call it tiered
    accountability. I like my management to set policies. I like to
    set goals for my organization and I like to manage by
    objectives, and that is the cultural change we're putting into
    place. The Services are totally embracing it.
        Not addressed here, by the way, the relationship between
    DOD and the Services, but it's one of the most fragile things
    you can address. I will tell you, we are now partnering across
    the board to service the warfighter and they are loving it.
        Mr. Henke. Sir, let me, if I may, address the issue of pay.
    Paying soldiers and our servicemembers the right amount at the
    right time is the only answer, and I could address this from a
    personal perspective. I happen to be a reservist. I was
    mobilized in 2001-2002, before I came to the Department. I know
    that having a pay problem distracts from your mission. I know
    that it puts financial burdens on our servicemembers.
        I can assure you that getting pay right has the personal
    attention of the Comptroller, myself, and many of the folks
    behind me here today supporting me. Last year, GAO reported in
    detail on the problems that we've had. We've implemented 27 of
    their 39 recommendations fully. The remaining 12 are system
    solutions with a forward compatible payroll system that is
    coming out. But some of the work that we've done has been, in
    terms of fixing the pay process, in terms of training pay
    technicians. As one example, before Afghanistan started, we
    mobilized Reserve and Guard soldiers from two locations in the
    United States. Now we mobilize them from 26 locations. That
    caused a huge surge in our ability, a huge challenge in our
    ability to train pay technicians correctly.
        We have since fully trained every mobilization site and
    certified them to enter pay transactions. We actually developed
    detailed internal controls to make sure pay is done right. One
    of the things we're doing is not systems-dependent, we now
    electronically receive the flight manifest for all flights
    coming and going in and out of theater and we enter those
    transactions in the system up front to prevent problems
    downstream.
        We have reviewed 600,000 pay records in the last year, sir,
    to find those problems and fix them. We have seen a dramatic
    decrease in the number of pay complaints that are coming into
    our customer service offices and from commanders. Senator, I
    assure you that we've been tenacious and focused on getting pay
    right because it's the only right answer.
        Senator Ensign. Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman. I was
    glad to hear the word training here, and want to get into the
    human capital area.
        Problems in the Department of Defense acquisitions systems
    account for no fewer than four of the high-risk areas in your
    latest update. DOD weapons systems acquisition, DOD business
    systems modernization, DOD contract management, and management
    of interagency contracting, these four high-risk areas cover
    virtually everything that the Department of Defense purchases.
        I can't help but link the problems in these areas to what
    has happened to our defense acquisition workforce over the last
    15 years. We have cut our acquisition workforce in half over
    this period. These cuts continued even after the procurement
    holiday of the early 1990s came to an end and even after the
    global war on terrorism brought record level of procurement
    expenditures. They continued even as we took on new procurement
    challenges with vastly increased purchases of services and
    information technology.
        Moreover, we have made these cuts in a haphazard way,
    without giving consideration to the recruitment, training, and
    career building needed to ensure the ongoing vitality of our
    acquisition organizations. It seems to me that what is really
    needed is a comprehensive approach to human capital planning,
    which has been sorely lacking in the management of DOD's
    civilian workforce.
        Mr. Walker, would you agree that the Department of Defense
    is unlikely to successfully address all of its acquisition
    problems without making fundamental changes in the way we
    recruit, train, and manage our acquisition workforce? Can these
    problems be addressed without comprehensive capital planning?
        Mr. Walker. I'm sure Secretary Wynne would probably have
    some comments on the acquisition workforce. There are serious
    challenges with regard to the acquisition workforce. It's not
    just with regard to the size, but it's also with regard to
    skills and the percentage of employees eligible for retirement.
    There are a variety of other issues there.
        Second, I do believe that it's important that, as Secretary
    Rumsfeld has stated on more than one occasion, we need to take
    a total force approach to conducting our planning with regard
    to the DOD workforce. The total force approach includes the
    military, civilian workforce, and contractors, and the lines
    between these are moving all the time.
        As the Secretary has noted, we have a number of people in
    uniform who are doing things that theoretically civil servants
    should be doing. We have people now who are contractors who are
    doing things that civil servants used to do. So I think it's
    very important that, while the National Security Personnel
    System (NSPS) has designed a deal with a critically important
    need to modernize our human capital policies and practices for
    the civilian workforce, ultimately we need to look towards
    taking a more strategic total force planning approach in order
    to ultimately achieve what needs to be accomplished.
        Senator Akaka. Mr. Wynne, I appreciate the statement that
    you have made about the acquisition workforce in your prepared
    testimony. Do you agree with Mr. Walker's views on the need for
    comprehensive capital planning to ensure that we have the
    acquisition workforce we need for the future?
        Mr. Wynne. Sir, both Mr. Walker and I absolutely agree that
    the acquisition workforce is too small and it's overstressed.
    We have continuously shifted resources to address high-risk
    problems, but I have been working for the past 4 years to
    emphasize systems engineering. I was absolutely shocked to find
    out that we had almost eliminated systems engineering, over the
    course of the last 2 decades, from program offices and from our
    major buying commands.
        The result of that was we almost eliminated systems
    engineering from the companies that service our account. We
    essentially have thrown over this thing, this comprehensive
    nature of looking at problems holistically. Over the course of
    these last 3 years, I have been continuously beating the drum
    that we need to hire back competent systems engineers, both in
    our industry and in our government circles, to provide
    competent systems engineering advice to senior leadership in
    the buying offices and in the command structure.
        That having been said, I've actually addressed this by
    again going ``E.'' I have taken Defense Acquisition University
    from a functional university into a virtual university. We have
    actually allowed our contract professionals more time on target
    by making all the courses at Defense Acquisition University
    available on the web.
        This has actually assisted us as we've gone across and
    taught Afghanis and Iraqis how to be more competent contract
    professionals. We actually pipe in courses from the Defense
    Acquisition University into the theater to provide our people
    opportunities for that.
        Now, there's another area that Mr. Walker did not mention,
    which I'd like to bring up, and that is out in the field the
    age of our workforce is not getting younger. Now, I've taken
    aggressive action at headquarters by essentially opening up,
    for the last 3 years, opportunities for retirement to all of
    our workforce in a very aggressive manner, allowing them to
    move on with their careers so that I could, if you will, hire
    different talent, hire new talent, and reshape the
    organization.
        One of the results of this is I actually took out about 20
    percent of the employees and restored that 20 percent of the
    employees with about 15 percent, making essentially a 35
    percent shift in the organizational structure and content. This
    is trying to drive more current knowledge of systems and
    engineering structure into our system.
        Senator Akaka. I have a question for Mr. Wynne and Mr.
    Henke. GAO has long taken the position that the only way DOD
    will be able to successfully address its financial management
    problems is by developing sound business systems linked through
    an effective business enterprise architecture. DOD endorsed
    this approach in 2001 and we codified this requirement and
    established this series of deadlines in law.
        DOD has been working on a business enterprise architecture
    for more than 3 years now with few tangible results. In the
    last few months, the Department has appointed a new team to
    manage the effort. The new team, again, promises to produce an
    effective architecture and transition plan.
        Mr. Wynne and Mr. Henke, why do you believe the Department
    still doesn't have an effective business enterprise
    architecture 4 years after we were promised one by then-
    Comptroller Zakheim?
        The second part to that question is, why should we believe
    that the current team will be more successful in developing a
    business enterprise architecture than the last one? Mr. Wynne?
        Mr. Wynne. I go to Mr. Walker's comment that it takes about
    7\1/2\ years to really infuse a change, and I look to my own
    enterprise as I've tried to re-architecture how we buy goods
    and services using transaction identifiers. That's been 3\1/2\
    years to put that into place.
        It doesn't stagger me that we've been 4 years trying to
    build a foundation. That having been said, architectures do not
    have to be complex. They actually should be relatively easy.
    They should be visionary in policy and set goals for
    organizations to get to.
        You've asked me a good question, which is why do I think
    this team's going to do better than the last team. The reason
    is, they have motivated and cooperated with the rest of the
    organization that was moving smartly to put in enterprise
    resource planning systems throughout the Department. Now, they
    all don't have to be the same.
        This is the point, this was the blinding flash of the
    obvious, this was the epiphany that I had at one time, that
    they do not have to be the same. In fact, when I merge a
    corporation, they have very disparate accounting systems,
    sometimes very disparate auditors. But yet, I can congeal their
    financials within a context of 1 year, and why is that? Because
    I have a very simple architecture. I have the generally
    accepted accounting principles, which in our parlance converts
    to the standard financial information structure, and they
    adhere to it.
        I then audit them both with internal and external auditors
    to make sure they adhere to my standard financial information
    structure. I've talked to them. They're willing to do it.
    They've waited for us to ask. They're hungry for that
    leadership. Once we give them that leadership and put them in
    harness, I've always said if you can get an organization as
    large as the Department of Defense to begin all moving in the
    same direction, you see that we can have devastating results. I
    think we're going to have sharply devastating results in trying
    to conquer the fears, if you will, of transparent financials.
        Senator Akaka. Thank you.
        Mr. Henke. Senator, in terms of our financial management
    challenges, some of the solutions to auditability will require
    changes, just fundamental changes to our own processes or our
    own policies. Some of them will require new systems, and I'll
    give you an example of that in a minute. Some will require a
    combination of both of those.
        In the area of pay, the fundamental answer is implementing
    a new system and replacing a 1960s vintage Common Business-
    Oriented Language (COBOL)-based system that currently processes
    pay. What the fundamental approach that we're taking to BMMP
    now is defining those capabilities, those core functions that
    are essential at the DOD enterprise, defining what those are,
    having a standard language where we talk to each other in the
    same way about depreciation or capital assets.
        But very fundamentally, we had built the interim transition
    plan. It was released last week. It's on my desk for review.
    We're on track to provide the architecture, a federated
    architecture approach to the committee in September, and we're
    implementing the legislation that created the Defense Business
    Systems Management Committee and the Investment Review Boards
    as required in last year's authorization act.
        Senator Akaka. Thank you. Mr. Walker, do you still believe
    that the Department of Defense is capable of developing an
    effective business enterprise architecture, and what do we need
    to do to get this program on the right track?
        Mr. Walker. I think they can do it, and I think they must
    do it. First, as I mentioned earlier, I was just briefed within
    the last week on a new approach for trying to develop the
    enterprise architecture. I would call it a framework, I
    wouldn't call it a plan. I believe that the framework has great
    conceptual merit and I think it's clearly superior to where
    they were headed before.
        Where they were headed before, was a more one-size-fits-
    all, command-and-control, and way more detailed approach than
    needed to be the case. As Secretary Wynne mentioned, you need
    to have an enterprise-wide set of policies and standards that
    you can apply, recognizing that we're not trying to create one
    super system here. There will still be many different systems,
    but they must comply with certain enterprise-wide requirements.
        The approach that they're talking about taking now is one
    that would pull up to the Department-wide level certain
    particular areas, functional areas, if you will, and the
    responsibility for them. I think it has a greater chance of
    success.
        I do, however, believe that DOD needs more in-house talent
    with expertise in this area. I believe that they've relied way
    too much on contracting out these types of functions without
    having enough expertise in-house to manage cost, quality, and
    performance of the contractors. Quite candidly, I think a lot
    of their several hundred million dollars of expenditures may
    not generate much of a return on the investment.
        However, rather than looking back, I'm looking forward, I
    think the approach that they're talking about taking now is
    clearly superior. They clearly need more people within DOD who
    have expertise to be able to manage cost, quality, and
    performance in order for this to be successful.
        Second, I would respectfully suggest that Secretary Wynne
    made many good points--but one of the good points that he made
    was that this is not just an effort involving the Under
    Secretaries. This is also an effort involving the Service
    Secretaries and many other players.
        That's why I believe that it's important to have somebody
    at the right level, the level two level, to focus on a more
    strategic and integrated approach to these business
    transformation efforts, because the Service Secretaries are
    level two as well. The fact of the matter is level matters at
    DOD. It matters more within DOD than about any organization
    that exists.
        I think that you have to keep that in mind, you have to
    employ a matrixed approach. You have to employ a networked
    approach. You have to employ a partnership approach, not only
    involving the Unders, but also involving the Service
    Secretaries as well as other key parties.
        Senator Akaka. Mr. Chairman, you've been very generous. May
    I just make a comment here? Secretary Wynne, and I'm glad you
    mentioned it here earlier, I'm concerned that the way DOD has
    set up the Office of Corrosion Prevention does not comply with
    the spirit or intent of the legislation Congress enacted.
        I believe the office should report directly to you and not
    be buried in a bureaucracy. I think we may need to take
    additional steps in our markup to address this issue. So I just
    wanted to mention that, and if you have a comment on that, I'd
    certainly appreciate hearing it.
        Mr. Wynne. Sir, what I've done is I've made it functionally
    report to me while allowing day-to-day activities to be managed
    below that, because my span of control is relatively large,
    especially as I've taken over the responsibilities for the
    acquisition executive for the Air Force and for the Space
    assets.
        Because I do not have a deputy at this present time, the
    span of control that I am attempting is relatively large, not
    quite as large as the proposed level two, but relatively large.
    I can't imagine the time sink which would be to essentially
    manage supplementals from the warfighters straight through
    while I'm attempting to manage such items as corrosion and all
    of the acquisition and the workforce that is associated with
    it.
        But I have spoken to my colleague here about some things
    that are a natural fit. It just so happens that I don't think
    that my managing civilian personnel and my managing the
    Comptroller effort, especially in the face of these rush-
    through supplementals and the many meetings that you all would
    call, to have that person, if you will, testify because they
    would be the top person reporting to the Secretary.
        It would just boggle my mind because my span is relatively
    enormous, and even taking on the implementation aspects of the
    BMMP, I actually left my colleague in the Comptroller shop in
    the right place. They then became the requirements people and
    they laid the requirements for what we had to satisfy on me,
    and then I can go and I can now manage a program, set it up,
    and execute it. In fact, I have the two individuals, one from
    the Comptroller and one from my shop, that are going to partner
    to do this. I wanted them to hear both my colleagues, David
    Walker's comments, and your comments, because I wanted them to
    get a sense of mission even above what I pounded into them. I
    think you have done that. Thank you.
        Senator Ensign. I would like to just take a couple of
    minutes to talk about the auditing, the restrictions that
    Congress has put on DOD. I'd like to hear from Mr. Walker on
    this as well. It's a large amount of money, a billion dollars
    over a few years, how that is actually going to help us account
    for dollars, save us money, account for some of the waste and
    does that help us improve the systems in the future.
        Mr. Wynne. Please don't release the sluice all at once.
        Senator Ensign. Right.
        Mr. Wynne. What we need to do is we need pilot programs,
    and we need a structured approach so that the Services don't
    get immediately overwhelmed. But as soon as this standard
    financial information structure is released, I don't want to
    lay it on the Services. Then I would like to use the auditors
    essentially as helpers because they know the system and they
    can help the Services, if you will, match their accounting
    system to our accounting system. I have a feeling, I have the
    world's greatest budgeters. I have the world's greatest
    financial managers. As Mr. Walker says, they can tell you when
    they spent the money.
        I do not have accountants. We are, through Mr. Henke,
    starting an accounting department, but accounting is different
    than finance and it is different than budgeting. While I
    compliment the Department on many years of great budgeting and
    great financials, in fact, as we do, especially in the
    Department, we use accounting terms to describe functions that
    have nothing to do with accounting.
        This point I turn over and I need a cultural transition
    down at the lowest levels of the Department so that people
    become accountants. The only place I have accountants truly is
    in Defense Finance and Accounting Service that are actually
    paying individuals and they know T-accounts pretty well.
        Within the budgeting and financial management area, I have
    a few that know T-accounts, not many. That's kind of one of the
    structural changes that frankly a pilot program, not an
    overwhelming bunch, but a pilot program of auditing
    professionals can really help me get to.
        Senator Ensign. Just so I get this right, and maybe you can
    address this also, Mr. Henke, you're saying that because it
    seems like the auditing that would be going on is a small
    percentage of what DOD is involved in as far as the number of
    programs that you would be actually auditing. In the total
    budget you're not going to get great accounting numbers for the
    total amount of money that you spend percentage-wise. So are
    you saying though these programs will then help to get to those
    total dollars?
        Mr. Wynne. Yes, I basically have 59 financial statements
    that need to be audited. Those financial statements, when
    racked up, actually comprise the total entity. I think it's 59.
        Mr. Henke. Yes, sir.
        Mr. Wynne. That comprises the total financial structure of
    the Department of Defense, surprisingly enough. Three of them
    are the huge ones, right, which are the Services. Then we get
    all the way down to some small ones like the Defense Contracts
    Management Agency (DCMA) with 10,000 people and it's all
    people.
        That having been said, I can start right now converting the
    DCMA, because it is all people, and that part of the standard
    financial information structure is done. It hasn't been
    released because we've had this all-or-nothing mentality. I
    don't have to have an all-or-nothing mentality. People are
    eagerly waiting for leadership, and we're trying to provide it
    to them.
        Now, this is not a criticism, when you shut the sluice
    gate, and I have that same weapon, by the way, on programs.
    When I shut the sluice gate, I get a lot more attention than if
    I were to let it trickle or not. So it's unfortunate that it's
    a management tool that you kind of have a binary decision on.
        In this particular instance, if we could get a modest
    amount of that money released, I think we could really leverage
    it well to advance and accelerate our schedule.
        Senator Ensign. What would that number be?
        Mr. Henke. Sir, let me give you an example of our current
    status. Right now we have 16 percent of our assets with a clean
    opinion and 49 percent of our liabilities. We have just defined
    four focus areas this year to improve that number, and that is
    the military equipment line on the balance sheet. Army and Air
    Force fund balance with Treasury, the real property line, and
    in terms of liabilities we're working hard on environmental
    liabilities to improve those numbers.
        If we are able to audit, get a clean audit on our military
    equipment line, that alone is 27 percent of our assets. What we
    are doing there is we are getting baseline valuations for 1,086
    military equipment programs. To date, we've completed 661 of
    those evaluations and we are on track to finish the rest of
    them this year.
        After those four focus areas, we're going to move into
    fixing our inventory line, and that is $213 billion on our
    balance sheet, 18 percent of DOD's assets. Let me give you an
    example of the challenge, the magnitude of the problem we're
    dealing with here. The Defense Logistics Agency has 5.2 million
    different types of items, not items, but different types of
    items. By comparison, Wal-Mart has approximately 11,000
    inventory items and Home Depot about 50,000. Each of those
    companies has one system.
        We in the Department have 60 systems reporting inventory.
    Only 11 of those are compliant with accounting rules. So where
    we can make progress through systems, that's the long-term
    solution. Where we can make progress today with process
    changes, that's the right answer.
        Let me give you one more example, sir. I mentioned the Air
    Force and Army already assert their fund balance with Treasury
    line is ready for audit. That alone would audit 12 percent of
    our assets on the balance sheet.
        They're unable to do that because of the restrictions that
    have been placed on the mid-range financial improvement plan.
    We hear you. We get the message about Herculean efforts or
    extraordinary resources, but where we can make progress in
    those areas, we must make that progress.
        Setting aside the systems transition plan, where we can
    audit today, we need to make those improvements.
        Mr. Wynne. Could I just give you an estimate?
        Senator Ensign. Sure.
        Mr. Wynne. You asked for an estimate. I used to be a cost
    estimator, so maybe I can help my colleague. I probably need
    about $50 million this year, and I need to come back in
    September and tell you what I need next year. I don't think I
    need more than that. If I got more than that, I'd probably have
    a lot of people standing around.
        Mr. Walker. Mr. Chairman, can I add something?
        Senator Ensign. Just real briefly, Mr. Walker, because I
    want to get into one other area.
        Mr. Walker. We haven't looked at the legal issue. However,
    I'm perplexed as to why this is a problem. I'm also concerned
    about what the goal is here. An audit is one thing that needs
    to get done. There's a more important and fundamental thing
    that needs to get done at the Department of Defense. We need to
    make sure that we have modern, effective, credible, and
    integrated financial management information and control systems
    so we can ensure the economy, efficiency, transparency, and
    accountability of the Department.
        That is number one. They have an ongoing responsibility to
    do that whether they're audited or not.
        Second, I agree that in approaching the improvement to
    financial management, and ultimately an audit, you should focus
    on both entities, of which there are many, and line items. You
    should take a matrixed approach and try to set priorities that
    way. That's what the plan has to be, I believe.
        The last thing that I think has to be clarified is there's
    been an inference here that the Chief Management Officer (CMO)
    is supposed to be somehow doing the job of the Under
    Secretaries. That is clearly not the case in the legislation
    that I saw. The Comptroller still does the Comptroller's job
    and all the Under Secretaries still do their respective jobs.
        The CMO job is a strategic integrator focused on business
    transformation initiative, not on day-to-day activites, not on
    supplementals, or dealing with rust problems associated with
    particular platforms. That is not what this job is. It would be
    a waste of time and money to have somebody come in to do that.
    It's what's not getting done, not what is getting done, that
    has to be addressed by the CMO.
        Senator Ensign. Secretary Wynne, I would like to further
    explore this. You can see the frustration that we have up here
    because there have been promises and promises and promises, and
    calling the progress a snail's pace would be generous.
        So what I want to address with you is the idea behind
    giving somebody the authority. Within the Pentagon and all the
    Services, there's all these stovepipes. Do you have the
    authority in your current position to deal with all of the
    stovepipes to make the kind of changes, the cultural changes
    that was talked about?
        Mr. Walker suggested a 7-year term. You've agreed with that
    7-year number. Obviously we have people changing in the way
    that the current system works, they're political appointees.
    Try to explore with us and debate the merits pro and con of
    what we have suggested here.
        Also you've said that you don't want to add another layer
    of bureaucracy. You're very familiar with this, that American
    business has been forced, because of overseas competition, to
    streamline the bureaucracy. Does anybody have the authority to
    be able to do that at DOD? What progress has been made at
    streamlining bureaucracy so that even if a person was put in
    there, they can eliminate a lot of various layers down below?
        Mr. Wynne. Well, in fact, I've had experience with
    streamlining, sir, because I've had no deputy for the last 3
    years. So my span of control turns out to be all right.
    Actually, I do, in fact, manage through people. That's just my
    management method. I believe that managers are supposed to
    remove barriers from their subordinates to make great strides,
    and that's what we do.
        Now, the problem is that there are things that go on that I
    don't need to get involved in right away. Now, I will tell you,
    I immediately partner with the Comptroller when I have a
    discipline problem in one of my programs, and they hold money
    for me just on a phone call. I don't need a rationale, I don't
    need anything.
        I partnered with David Chu, who's the Under Secretary of
    Defense for Personnel and Readiness (P&R), because I was
    running the acquisition demonstration the NSPS is basically
    modeled on. So he and I partnered with training teams and it
    didn't need a hierarchical structure to allow that to happen.
    It was Department need and understanding the mission.
        The essence of a flat organization is communicating the
    central mission and have everybody in harness pulling together.
    That's exactly what we're doing today. I would just tell you
    that as the level two counterpart to the Deputy Secretary, I
    try very hard not to rain on, and not to place operational
    constraints on, the Deputy Secretary's ability to, if you will,
    move money around, to buy up-armored high-mobility multipurpose
    wheeled vehicles (HMMWV) when he feels like he has to buy them.
    I work with him very closely to make sure we have the right
    equipment in the right place.
        You've given me, if you will, authority to go spend money
    relatively quickly through the joint requirements acquisition
    council. I have one of my people and one of Mr. Henke's people
    and they move money in a heartbeat. As we've been over here
    many times, and this committee, and, by the way, the House have
    been just incredibly cooperative moving money around.
        I would like to address one area, and that's joint
    programs.
        Senator Ensign. Good.
        Mr. Wynne. Joint programs are a real issue. I've asked the
    committee for some additional authority to make joint programs
    available through the Joint Capability Technology
    Demonstrations (JCTD) process. These are usually brought to me
    by combatant commanders who have lost their uniform and have
    taken on a purple suit.
        These are uniformly disliked and are usually the first to
    go in a budget crunch. The reason they are is they just didn't
    come through the system, and so they are a little bit of ``not
    invented here'' and there's not much cross-selling going on
    between the combatant commanders who think they have an issue
    and the result and rest of the organization.
        I have asked the Secretary to essentially give budget
    priority to joint programs, because I've felt like if they had
    budget priority, they would not suffer the same consequences.
    Every time there's a budget cut, the first thing we do is, I'll
    cut a joint program, thinking that my partner will make it up.
    Well, that doesn't happen.
        In fact, a departing Air Force Secretary once related to
    me, he said, ``I feel like the name joint really means the
    other Service won't pay. If we show some desire for the
    product, they fade like flowers and leave the bill to us.''
        Well, I say, if I gave it budget priority and I said your
    budget is safe if this is a joint program, well, straighten me
    up and hit me with a fish, but by gosh, that would really
    straighten out the corporation. So I'm for more budget
    authority in joint area.
        Senator Ensign. I'm glad you addressed that. It is a
    concern that the committee has. In meeting with all the
    different Services, everybody agrees that many things need to
    be done jointly today. We live in a different military world.
    Everybody recognizes that, but nobody, like you said, wants to
    fund it because they feel like it comes out of their pot of
    money. But if they're forced to fund it, their fair share, I
    think it'll be much more widely accepted, so I'm glad that
    you're seeing things the same way.
        Mr. Walker, do you want to comment?
        Mr. Walker. Mr. Chairman, Secretary Wynne----
        Senator Ensign. This will be the last comment. I want to be
    sensitive to your time and we have other questions we want to
    submit in writing.
        Mr. Walker. Absolutely, Mr. Chairman. Secretary Wynne
    mentioned several examples of where he has tried to partner
    with his colleague in order to get things done, and to his
    credit, I think that's great and important.
        But I would respectfully suggest that the answer to your
    question is, no, he doesn't have the authority. The problem is
    not with regard to the individual. It's the institution. It's
    particularly a problem when you're dealing with the Services,
    when you're trying to get things done across the entire
    Department, not just dealing with the domains of the Under
    Secretaries, but also with regard to the Services.
        Second, there's no question we have to de-layer and de-silo
    DOD. Not much progress has been made on that, quite frankly. I
    recently, within the last 2 years, had the opportunity to
    participate in Capstone, which is for new flag officers. During
    that course I was briefed on a number of the standard operating
    procedures within the Pentagon.
        I found out that to activate and deploy 10 people, 20-plus
    units had to sign off, approve, not for your information,
    approve such an action. That is a minor example of the
    challenges. Yes, we need to de-layer, we need to de-silo. But
    somebody must be in charge, and they have to be there long
    enough in order to get the job done. Thank you, Mr. Chairman.
        Senator Ensign. I want to thank the entire panel. I think
    it's been a very healthy discussion this morning and we
    obviously look to continue our partnership with DOD and we all
    have the same goal here. The warfighter does have to come
    first, but we also have to be good stewards of the dollars,
    those precious dollars that the taxpayers send us.
        So thank you, and this hearing is adjourned.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Ensign
               defense integrated military human resources system
        1. Senator Ensign. Mr. Henke, to address the Department's pay
    problems, the Department is developing the Defense Integrated Military
    Human Resources System (DIMHRS), an integrated joint military personnel
    and pay system for all the military services. Committee staff have
    learned that the DIMHRS program is underfunded in both fiscal years
    2005 and 2006. Is the Comptroller still supportive of this program and,
    if so, what are you doing to ensure adequate resources are dedicated to
    its success?
        Mr. Henke. Yes, the Under Secretary of Defense (Comptroller) is
    supportive of the DIMHRS and is identifying resources to address the
    cost growth that this program has experienced.

                                transition plan
        2. Senator Ensign. Secretary Wynne, when does the Department expect
    to be able to present to Congress a comprehensive, detailed plan that
    covers current systems, the future state whereby accurate, consistent,
    and auditable data is produced, and how that transition will be
    accomplished?
        Mr. Wynne. The Department is still on schedule to deliver a
    transition plan in September of this year, consistent with the
    direction of the National Defense Authorization Act for Fiscal Year
    2005. The plan will show how we will guide and track the business
    transformation of DOD by highlighting capabilities needed, identifying
    known system and non-system solutions, and resourcing the needed
    solutions. The plan will also provide a description of the iterative
    and tiered approach we will use to make this transformation manageable.

           office of the secretary of defense comptroller roles and
                                responsibilities
        3. Senator Ensign. Mr. Henke, recently the Department transferred
    responsibility for its Business Management Modernization Plan (BMMP)
    from the Office of the Comptroller to the Under Secretary of Defense
    for Acquisition, Technology, and Logistics. Given the transfer in
    responsibility for the BMMP from you to the Under Secretary of Defense
    for Acquisition, Technology, and Logistics, what are your roles and
    responsibilities in the Department-wide transformation initiative?
        Mr. Henke. The Under Secretary of Defense (Comptroller) is
    providing joint leadership of the BMMP and is a member of the Defense
    Business Systems Management Committee (DBSMC). Additionally, all
    enterprise business transformation priority programs and initiatives
    related to financial visibility are being led by the Office of the
    Under Secretary of Defense (Comptroller). The Comptroller is also the
    signing official on behalf of the DBSMC for all business systems
    investments in excess of $1 million as reviewed and approved through
    the new Investment Review Board process.

        4. Senator Ensign. Mr. Henke, do you have any recommendations that
    Congress may consider acting upon to ensure that the progress made in
    the BMMP endures?
        Mr. Henke. Section 332 of the National Defense Authorization Act
    for Fiscal Year 2005 has provided BMMP with significant senior
    leadership involvement. These actions, combined with your continued
    support of our funding requests included within the President's budget
    request for fiscal year 2006, will ensure that BMMP continues to make
    measurable progress in transforming the Department's business systems
    and processes.

                        logistics modernization program
        5. Senator Ensign. Mr. Wynne, the committee understands there are
    problems with the Army's Communications Electronic Command Logistics
    Modernization Program (LMP). Is this program meeting its stated goals
    and has the Army established a set of requirements for the LMP? Also,
    please provide the schedule for full implementation of the Logistics
    Modernization Program.
        Mr. Wynne. The Army's goals and objectives for the Logistics
    Modernization Program (LMP) are being met. The overall requirement has
    been, and still is, to enable transformation of Army logistics by
    replacing antiquated legacy systems and processes with commercial
    software solutions and best business processes. Below this level,
    specific business processes and metrics guide LMP.
        LMP has replaced the Commodity Command Standard System (CCSS) and
    the Standard Depot System (SDS) at one of Army Materiel Command's (AMC)
    Major Subordinate Commands and will continue to build on that
    implementation throughout the rest of the AMC and the Army. We
    anticipate that this will take place over the next 2 fiscal years (2006
    and 2007). LMP is the cornerstone to the Army's logistics
    transformation effort and is a key enabler to achieving a single Army/
    DOD logistics enterprise capability.
        The Army is already seeing some significant advantages over the
    legacy environment.

             LMP is using state-of-the-art commercial technology to
            replace Army unique legacy systems that have been in place for
            30 years, reducing the risk of unanticipated failures,
            limitations of batch processing, and non-integrated databases.
             The Army has transformed to an architecture and
            infrastructure that is fully DOD Information Technology
            Security Certification and Accreditation Process compliant,
            reducing the risk of security intrusions/compromises.
             There is now a single source of logistics and
            financial data vs. the disparate and previously stovepiped
            legacy applications, reducing reconciliations and providing a
            common view of information.
             Service availability is over 99 percent and operating
            24 hours 7 days a week with full disaster recovery, versus the
            limitations of the legacy systems.
             LMP uses web-based, open, and scalable architecture
            and is therefore positioned for Net Centric computing, which
            could not be achieved in legacy system architecture.

        The Army, like others in the private sector, has encountered
    implementation challenges.
        LMP is one of the largest, complex ERPs and these challenges are
    not unexpected. Over the last 18 months the Army has made great
    progress in resolving the primary problems working to complete the
    resolution of remaining issues in order to expand implement of LMP.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
                                pentagon audits
        6. Senator Byrd. Mr. Henke, the previous Comptroller for the
    Department of Defense, Dov Zakheim, told congressional committees on a
    number of occasions that he expected the Department to be able to pass
    an audit by 2007. Does the Secretary of Defense still expect to receive
    a clean audit opinion for the Department in 2007?
        Mr. Henke. We continue to evaluate our progress to date and the
    likelihood of DOD-wide success in achieving the fiscal year 2007 goal.
    Our evaluation efforts are focusing not only on the likelihood that we
    can achieve an unqualified opinion in fiscal year 2007, but also the
    cost and sustainability of achieving that opinion. Should we conclude
    that the goal requires extraordinary and costly measures that do not
    result in a sustainable audit capability, we will then revise the goal
    appropriately. While we evaluate this goal, we are focusing efforts on
    improving controls and the fundamental processes critical to obtaining
    reliable financial information.

                             reporting on war costs
        7. Senator Byrd. Mr. Henke, in the October 2003 supplemental for
    the war in Iraq, Congress required that the Department of Defense
    produce semiannual reports that include, among other elements, a
    detailed breakdown of costs of the wars in Iraq and Afghanistan. This
    exact same reporting requirement was included again in the Fiscal Year
    2005 Defense Appropriations Act. As Ranking Member of the
    Appropriations Committee, I have been told that the Department has only
    submitted one of these reports, which are required by law. Even when
    the Department of Defense reports on other appropriations matters--such
    as the quarterly reports on the Iraq Freedom Fund--these reports often
    lack sufficient detail for the Appropriations Committee's oversight
    responsibilities. I know that until recently, you served as a staff
    member of the Senate Appropriations Committee, so I hope you can
    appreciate the seriousness of this matter. Where are the semiannual
    reports that Congress first required in the October 2003 supplemental
    appropriations bill?
        Mr. Henke. Section 1120 of the Emergency Supplemental
    Appropriations Act for Defense and for the Reconstruction of Iraq and
    Afghanistan, 2004 (P.L. 108-106) and Section 9010 of the Department of
    Defense Appropriations Act, 2005 (P.L. 108-287) directed the Secretary
    of Defense to submit a report on the military operations of the Armed
    Forces and the reconstruction activities of the Department in Iraq and
    Afghanistan. The first of these reports was forwarded to Congress on
    March 15, 2005. The April 30, 2005 report is now being finalized and
    will be forwarded to Congress shortly.

        8. Senator Byrd. Mr. Henke, when the Department submits its next
    report on the cost of the wars in Iraq and Afghanistan, will you make a
    point to distinguish between the funds spent for the war in Iraq, on
    one hand, and the funds spent for the war in Afghanistan, on the other?
        Mr. Henke. Yes. The report that the Department provides to Congress
    in accordance with Section 1120 of the Emergency Supplemental
    Appropriations Act for Defense and for the Reconstruction of Iraq and
    Afghanistan, 2004 (P.L. 108-106) and Section 9010 of the Department of
    Defense Appropriations Act, 2005 (P.L. 108-287) reports obligations by
    operation (Operation Iraqi Freedom (OIF); Operation Enduring Freedom
    (OEF) and Operation Noble Eagle (ONE)). Obligations in support of
    operations in Iraq are listed under OIF. Obligations reported under OEF
    are primarily in support of operations in Afghanistan, but also include
    obligations in support of OEF operations in the Horn of Africa and in
    other locations.

        9. Senator Byrd. Mr. Henke, what specific steps are you taking to
    include greater detail in the reports that the Department is required
    to submit to the Appropriations Committee?
        Mr. Henke. We believe that the Department's cost reporting system
    provides sufficient financial execution information for decisionmaking
    purposes. The Department has been working closely and cooperatively
    with the Government Accountability Office to resolve specific questions
    about some of the details in these reports. If any committee has
    questions about a DOD report to Congress or requires additional detail,
    the Department will be responsive to these requests.

                           faulty accounting entries
        10. Senator Byrd. Mr. Henke, when I raised the issue of accounting
    problems with Secretary Rumsfeld at his confirmation hearing, the
    Department of Defense Inspector General had reported that the
    Department could not justify $2.3 trillion in accounting entries. That
    is a staggering sum for a government agency that had a budget of
    ``only'' $300 billion at that time. Now, total spending for the
    Pentagon is quickly approaching half a trillion dollars each year, once
    the costs of the wars in Iraq and Afghanistan are included. What is the
    status of efforts to eliminate the problem of trillions of dollars in
    faulty accounting entries and is the Defense Department still tracking
    these figures, and if so, where do they stand right now?
        Mr. Henke. The Department has reduced the $2.3 trillion in
    unsupported accounting entries identified by auditors in fiscal year
    1999 by 93 percent to $172 billion as of December 31, 2004. The
    auditors have not yet validated the December 31, 2004 amount. The
    Department accomplished this reduction through increased management
    oversight, implementing new policies and procedures, and developing
    metrics to monitor the Department's progress to reduce unsupported
    accounting entries. We are continuing to develop new processes and
    systems that provide adequate audit trails and supporting documentation
    for our accounting entries.

                         government issued credit cards
        11. Senator Byrd. Mr. Henke, in past years, the Department of
    Defense has had a serious problem with the abuse of government issued
    credit cards. As the Government Accountability Office reported, some
    Department of Defense employees severely abused these cards, bypassing
    contracting regulations to rack up large bills for wasteful purchases.
    What's more, some of these credit cards were improperly used for
    personal purchases, like buying televisions or family vacations. As a
    result of this abuse, I included legislation in several Defense
    Appropriations Acts to require the Department of Defense to conduct
    credit checks on Pentagon employees before they can be issued a
    government-backed credit card. This requirement was later codified into
    permanent law. Is the Pentagon now conducting a credit check on any
    employee before giving him or her a government-backed charge card and
    what can you report about efforts to clean up the government charge
    card program?
        Mr. Henke. The Department conducts credit checks before issuing
    government credit cards to military personnel. However, current statute
    prohibits credit checks on civilian personnel without their consent.
    The Department is in the process of implementing an alternative process
    to comply with these statutes and also identify cardholders who pose a
    financial risk due to questionable histories in their personal
    financial affairs. Our past practice was and continues to be that
    individuals who decline a credit check may only receive a restricted
    card.
        Since the Government Accountability Office issued their reports on
    the purchase card and travel card programs, we have implemented the
    recommendations of the GAO, the DOD Inspector General, and a DOD Charge
    Card Task Force. Specific actions include:

             Implemented mandatory salary offset and mandatory
            split disbursement for the travel card.
             Developed and published an overall DOD Charge Card
            Guidebook.
             Implemented mandatory web based training for all
            purchase cardholders and billing officials.
             Reviewed and reduced card limits, cardholder to
            approving official ratios and closed accounts that were not
            being used.
             Published recommended guidelines for disciplinary
            actions for both military and civilian personnel who misuse a
            charge card.
             Vigorously pursued the prosecution of officials
            criminally accountable for purchase card fraud.

        We believe that the management oversight and controls put into
    place have brought about significant improvement in the charge card
    programs. For example, in March 2005, our delinquency rate for
    individually billed travel cards dropped below 4 percent, which is
    below the rate generally reported for consumer credit cards.

                          national guard pay problems
        12. Senator Byrd. Mr. Henke, in January of this year, members of
    the 201st Field Artillery Battalion of the West Virginia National Guard
    contacted me from Iraq with a serious pay problem. Last year, the
    Government Accountability Office reported that members of the 19th
    Special Forces Group of the West Virginia National Guard came under
    enemy fire during a trip from Afghanistan to Qatar to fix the rampant
    pay problems in that unit. I understand that the accounting system used
    to process pay for reservists in other military services does not have
    the same problems as those for the National Guard. Why do these
    problems persist with the National Guard, and when will they be fixed?
        Mr. Henke. The Department of Defense takes all pay problems
    seriously and is working hard to correct all the root causes of
    incorrect pay. Many of the pay problems with the Army National Guard
    are human error problems that were exacerbated by the large number of
    soldiers mobilized for the global war on terror. The Defense Finance
    and Accounting Service has partnered with the Army and the National
    Guard to develop and implement a 65-item corrective action plan to
    address pay problems of mobilized soldiers. The action plan includes a
    modern system to consolidate Active, Guard, and Reserve pay systems
    into one system.

        13. Senator Byrd. Mr. Henke, why can't the Department of Defense
    get rid of the accounting systems that don't work for the National
    Guard, and simply adopt the computer systems that pay other troops
    fairly and accurately?
        Mr. Henke. Many of the pay problems with the Army National Guard
    are human error problems that were exacerbated by the large number of
    soldiers mobilized for the global war on terror. The Defense Finance
    and Accounting Service, the Army, and the National Guard have partnered
    to resolve over 65 action items to improve the pay of mobilized
    soldiers. The action plan includes a modern system to consolidate
    Active and Reserve pay systems into one system.

        [Whereupon, at 11:36 a.m., the subcommittee adjourned.]

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2006

                                  ----------

                           WEDNESDAY, APRIL 20, 2005

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

    THE READINESS OF MILITARY UNITS DEPLOYED IN SUPPORT OF OPERATION IRAQI
                     FREEDOM AND OPERATION ENDURING FREEDOM

        The subcommittee met, pursuant to notice, at 2:11 p.m. in
    room SR-222, Russell Senate Office Building, Senator John
    Ensign (chairman of the subcommittee) presiding.
        Committee members present: Senators Ensign, Inhofe, Cornyn,
    Akaka, Bill Nelson, and Clinton.
        Committee staff member present: Judith A. Ansley, staff
    director.
        Majority staff members present: Ambrose R. Hock,
    professional staff member; Gregory T. Kiley, professional staff
    member; Elaine A. McCusker, professional staff member; and
    Joseph T. Sixeas, professional staff member.
        Minority staff members present: Evelyn N. Farkas,
    professional staff member; Peter K. Levine, minority counsel;
    and Michael J. McCord, professional staff member.
        Staff assistants present: Andrew W. Florell and Benjamin L.
    Rubin.
        Committee members' assistants present: Arch Galloway II,
    assistant to Senator Sessions; D'Arcy Grisier and Alexis Bayer,
    assistants to Senator Ensign; Russell J. Thomasson, assistant
    to Senator Cornyn; Bob Taylor and Matt Zabel, assistants to
    Senator Thune; Darcie Tokioka, assistant to Senator Akaka;
    William K. Sutey, assistant to Senator Bill Nelson; and Andrew
    Shapiro, assistant to Senator Clinton.

           OPENING STATEMENT OF SENATOR JOHN ENSIGN, CHAIRMAN

        Senator Ensign. Good afternoon, everyone. Welcome. The
    Subcommittee on Readiness and Management Support meets today to
    conduct our third hearing in review of defense authorization
    requests for fiscal year 2006. Today, our focus is on the
    readiness of military units deployed in support of Operation
    Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF).
        Before we begin, I would like to take a moment to thank the
    subcommittee's ranking member, Senator Akaka, who I just saw on
    the floor--and I know he's on his way back over--for all of his
    support--as well as his staff's support during the hearings
    this year. This is the final hearing of the Readiness and
    Management Support Subcommittee before we mark up the defense
    authorization bill for the coming year. I believe that our
    meetings this session have been particularly informative, and I
    credit the experience and wisdom of Senator Akaka in making
    these meetings so productive.
        Over the last year, we have witnessed remarkable changes in
    Iraq and Afghanistan. Last June, national sovereignty was fully
    restored to all of the people of Iraq. Seven months later, over
    8 million Iraqi citizens participated in fully democratic
    elections. Last October, the men and women of Afghanistan
    eagerly participated in national presidential elections. These
    important historical milestones confirm President Bush's belief
    that people around the world, when given the chance, will
    choose liberty and democracy over enslavement and tyranny. We
    recognize that absolutely essential to sustaining these two
    beacons of freedoms and democracy is the selfless dedication
    and commitment of the American soldier, sailor, airman, and
    marine. Twenty-four hours a day, 7 days a week, they are there
    providing security, helping to rebuild schools and hospitals,
    and simply offering a helping hand.
        Today, we are interested in learning more about the
    readiness of the men and women serving in Operation Iraqi
    Freedom and Operation Enduring Freedom. Specifically, we will
    focus on two key areas: the training and equipping of military
    units for deployment to the Central Command region and the
    sustainment of those units during deployment.
        We are very privileged to have appearing before the
    subcommittee military leaders who are each experienced veterans
    of deployments to the Central Command region. All are
    exceptionally qualified officers, who know from firsthand
    experience the challenges of preparing and sustaining deployed
    forces. Each has traveled from their respective bases from
    around the country to be with us here today, and we look very
    much forward to hearing their observations and opinions.
        Joining in the subcommittee today are: from Fort Hood,
    Texas, Lieutenant General Thomas F. Metz, United States Army,
    Commanding General, III Corps and Fort Hood; from Camp
    Pendleton, California, Lieutenant General John F. Sattler,
    United States Marine Corps, Commanding General, 1st Marine
    Expeditionary Force; splitting his time between Shaw Air Force
    Base, South Carolina, and air bases throughout the Central
    Command region, Lieutenant General Walter E. Buchanan III,
    United States Air Force, Commander, 9th Air Force and U.S.
    Central Command Air Forces; from Fort Drum, New York, Major
    General Lloyd J. Austin III, United States Army, Commanding
    General, 10th Mountain Division and Fort Drum; and, from
    Mayport, Florida, Rear Admiral Barry McCullough, United States
    Navy, Commander, Carrier Strike Group Six, the U.S.S. John F.
    Kennedy Carrier Strike Group.
        Gentlemen, each of you, and the men and women that you
    lead, are patriots, and I'm very honored to be able to meet
    with you here today, and thank you.
        As soon as Senator Akaka gets here, we will defer to him
    for an opening statement. Senator Cornyn, do you have an
    opening statement?
        Senator Cornyn. I'd be glad to just go to the witnesses,
    Mr. Chairman. Thank you. Thanks, as always, for being here.
        Senator Ensign. Before proceeding, I want to note that we
    will only be discussing topics today at an unclassified level.
    There is much that can be discussed in an open setting, and I
    believe that it's important that we do so. I would ask each of
    the witnesses exercise appropriate discretion in their
    responses.
        Without objection, your full prepared statements will be
    made part of the record. So keep your comments as pertinent and
    sum them up so that Senators may be able to absorb them.
        General Metz, the Army leads.

     STATEMENT OF LTG THOMAS F. METZ, USA, COMMANDING GENERAL, III
                          CORPS AND FORT HOOD

        General Metz. Mr. Chairman, Senator Cornyn, thank you for
    this opportunity to appear before you today. I hope my
    perspective as a joint warfighter in OIF and Commander of the
    Multinational Corps Iraq, and currently the Commander of the
    III Corps and Fort Hood, Texas, will be useful to you.
        Sixty-five percent of the III Corps deployed to OIF I. I
    took the headquarters and 35 percent to OIF II. Today, in OIF
    III, I have two brigade combat teams and several combat support
    and combat service support units that are there for the second
    time.
        I've been back from Iraq for 2 months, during which time I
    focused on the preparation of the 4th Infantry Division to
    return in the fall, and the reset of the 1st Calvary Division,
    who just returned 3 weeks ago.
        I report to you, sir, that our training strategy works, and
    it continues to improve, based on the lessons learned that are
    shipped back from Iraq to home station. The quality and
    quantity of our equipment is superb, and the soldiers have
    confidence in it. A coalition corps of 165,000 soldiers,
    marines, sailors, and airmen requires a massive logistics
    effort. The high tempo places heavy burdens on equipment and
    people, and our wonderful maintenance, quartermaster,
    transportation, ordnance, medical soldiers are up to the
    challenge. Our personnel systems were good, and ever-improving,
    especially with respect to the Reserve and National Guard
    replacements. Reset and reconstitution of returning units are
    resource and manpower intensive, and challenges are tackled
    daily.
        Leading soldiers, marines, sailors, and airmen for 13
    months in Iraq confirmed for me that they are men and women of
    character who are confident in their buddies, equipment,
    training, and leaders. These young Americans are dedicated,
    skilled, and courageous. Nevertheless, some did not return,
    because they were determined to do their duty and paid the
    ultimate sacrifice. I am humbled to have been their commander,
    and proud that we were able to advance the cause of freedom for
    the people of Iraq, and to make free nations more secure.
        Sir, I look forward to your questions.
        [The prepared statement of General Metz follows:]
                   Prepared Statement by LTG Thomas Metz, USA
        Mr. Chairman, distinguished members of the subcommittee, thank you
    for this opportunity to appear before you. I am pleased to report to
    you today on the readiness of the military units I was privileged to
    command in support of Operation Iraqi Freedom (OIF), and give you my
    thoughts on the future readiness challenges I will have as the III
    (U.S.) Corps Commander.
        I come before you today as the former commander of Multi-National
    Corps-Iraq (MNC-I) and the current commander of III Corps and Fort
    Hood. I hope my perspective as a joint warfighter in theater, where I
    fought and allocated the resources given us by the Department will be
    useful to you. Additionally, as commander of III Corps and Fort Hood,
    it is now my job to train, equip, and deploy the next set of forces
    General Casey and other joint commanders will employ on the
    battlefield. Let me first say a little about the III Corps.
        Over the past year, III Corps has deployed or redeployed nearly
    every one of its 75,000 soldiers and 24,000 combat vehicles and
    aircraft to OIF from Fort Hood, Fort Carson, Fort Riley, Fort Sill, and
    Fort Bliss. These forces represent over 35 percent of all the United
    States Army active component ground combat power. We have just returned
    home one of the deployed III Corps major subordinate commands, one I am
    very proud of--the 1st Cavalry Division--whose soldiers secured Baghdad
    and provided much needed armor, mechanized infantry, attack aviation,
    and artillery for the major battles in Najaf and Fallujah. Their
    protection of the Interim Iraqi Government leadership and security in
    the greater Baghdad area set the conditions for the Iraqis to hold
    their first free elections in over 40 years. The other major units of
    the Corps, which have all participated in the global war on terror over
    the past year, are as follows:

        1. The 4th Infantry Division, which operated in the Sunni Triangle
    and captured Iraqi Dictator Saddam Hussein in OIF I, is now resetting
    in preparation for deployment to OIF IV this fall.
        2. The 3rd Armored Cavalry Regiment, which occupied Al Anbar
    province along the Syrian border, returned and reset in 2004, and has
    just redeployed to southern Baghdad for OIF III.
        3. III Corps has two separate heavy brigades, 1st Brigade, 1st
    Infantry Division and 3rd Brigade, 1st Armored Division, that are
    stationed at Fort Riley, Kansas. Both deployed to Iraq during OIF I,
    and one of them, the 3rd Brigade, 1st Armored Division, has also reset
    and redeployed to Iraq for OIF III.
        4. Elements of III Corps Artillery, 13th Corps Support Command
    (COSCOM) and the Corps Separate Combat Support Brigades (Intelligence,
    Signal and Military Police) have all deployed in support of OIF I, II,
    and III--some for a second or even a third time--and are currently
    resetting their units.

        As the Commander of MNC-I, I experienced first hand the wide
    ranging demands placed on each of my units and saw how these superb
    young soldiers, marines, airmen, and sailors met every challenge. The
    units I commanded were superbly led, ready for the relentless demands
    of combat, and were as trained and ready as any unit in this nation's
    history. I would like to briefly discuss several key components of that
    readiness that were critical to the MNC-I's success during OIF II--
    training, equipping, maintenance and logistics, and personnel and
    family support.
                                    training
        The Army's training strategy produced soldiers, leaders, and units
    that were well prepared for the intense demands of counter-insurgency
    operations in Iraq. Our training strategy relies on a building block
    approach that first emphasizes sound application of basic skills, and
    then increases the complexity of the tasks and demands of the
    environment. Everything begins with the individual soldier, who must be
    ready to fight anytime, anywhere. No rear area exists in Iraq, only
    frontlines, and every soldier knows it. They have to be ready from the
    moment they cross the berm into Iraq, and they were.
        The training strategy we use reinforces individual soldier skills
    which are then combined to build well-trained crews and small units.
    Units work up to company and battalion-level training through maneuvers
    at their home station and the use of computer simulations, training a
    broad range of missions that support its wartime mission essential
    tasks. The tasks performed during OIF were generally a subset of these.
    After a unit was alerted for deployment, we refined its training to
    focus in on critical theater tasks. In some cases, we trained units for
    roles outside their normal specialty by leveraging the base of
    fundamental soldier skills common to all branches. For example, during
    OIF II, we employed field artillery units in lieu of military police
    (MP) for convoy security and external guard at detention facilities.
    The capstone exercises for deploying units were conducted in the most
    realistic environments we could create at the Combat Training Centers
    at Fort Irwin; Fort Polk; and Hohenfels, Germany. The Division and
    Corps staffs were exercised through simulation-driven command post
    exercises, which Joint Forces Command and the Army's Battle Command
    Training Program monitored and mentored. Our training strategy works.
    Leaders, soldiers, and units were well-prepared for the rigors of
    combat in Iraq.
        I am especially proud of is the way our home station training is
    continually adapted to the evolving tactical situation in theater.
    Operational assessments and intelligence reports feed directly back
    into the way we train. Multinational Corps Iraq and Army organizations
    like the Improvised Explosive Device (IED) Task Force continuously
    assess operations to detect changing trends in enemy weapons and
    tactics. This information is shared with the headquarters responsible
    for training and validating both Active (AC) and Reserve Component (RC)
    units. The IED Task Force, for example, adapts the training it provides
    to deploying units based upon changes in the way the enemy employs IEDs
    in Iraq. Further, units preparing to deploy remain digitally linked to
    the unit they will relieve in order to maintain situational awareness
    of their future mission and area of operations. Members of division and
    corps staffs who are serving in Iraq participate in the Mission
    Rehearsal Exercise of the units that will replace them in order to make
    this training as realistic and current as possible. Consequently, these
    staffs are completely ready to assume the duties of their predecessors,
    and we can transition in as little as 5 to 10 days. This feedback loop
    between ongoing operations in Iraq and the conduct of training at home
    station has allowed deploying units to rapidly assimilate the lessons
    learned by the units in the fight.
        I should note, however, that training does not stop when a unit
    deploys. Once in Kuwait, soldiers receive theater-specific training on
    ranges run by Third Army, culminating in a very realistic convoy live-
    fire exercise. This training reinforces individual, crew, small-unit,
    and leader training before deployment. By the time soldiers cross into
    Iraq, they are confident in themselves, their leaders, and their
    equipment. They are well-prepared for the challenges they will face in
    combat.
        The procedures for mobilizing, training, and validating Reserve
    component units are also working well. During our deployment we found
    the greatest success came from linking an RC unit's training to its AC
    counterparts. The 39th Enhanced Separate Brigade (ESB) from Arkansas
    trained at Fort Hood with the 1st Cavalry Division, to which it was
    attached in Baghdad. This allowed the 39th to train as it would fight
    and they became an integral part of the 1st Calvary Division's Task
    Force Baghdad. Since Reserve soldiers have limited time to mobilize,
    train, and deploy, we must identify their specific role and task
    organization as early as possible to use their available training time
    wisely.
        I am convinced our training strategy enhanced our combat power and
    survivability in combat. Operations in Najaf, Samarra, Fallujah, and
    Mosul are good examples. We operated in the most challenging terrain
    any soldier faces--cities, where insurgents have the significant
    advantage in knowing the terrain. Historically, urban operations can
    take a heavy toll in casualties. However, our units took comparatively
    few casualties while involved in fierce urban combat. Our soldiers
    fought side-by-side with marines and airmen, employing a wide variety
    of joint firepower. Yet, even as we conducted some of our fiercest
    engagements, our warriors followed strict rules of engagement to
    minimize civilian casualties and collateral damage. Our precise and
    disciplined use of firepower, especially air power, allowed us to
    destroy insurgents while avoiding damage to important religious and
    cultural sites, such as the Imam Ali Mosque in Najaf, and minimizing
    non-combatant deaths--a true mark of our warriors' discipline and
    professionalism.
        Our training also made our units flexible and thus able to adapt to
    missions beyond their normal specialization. Field artillerymen,
    infantrymen, and tank crewmen served in roles normally performed by
    military police. Logisticians became infantrymen as they engaged
    insurgents during convoys. Some units had to rapidly deploy out of
    their sector in response to a spike in violence elsewhere. They had to
    quickly adapt to operations under different Army or Marine
    headquarters, often in close coordination with coalition partners, and
    no loss of momentum.
        No matter how large the operation--and the fight for Fallujah, for
    example, was a massive operation--success starts with the skill,
    courage, and discipline of the individual soldier or marine and their
    leaders stepping into harm's way. The Marines state it as, ``Every
    marine a rifleman.'' The Army states it as, ``Every soldier a
    warrior.'' The principle is the same. The emphasis on basic combat
    skills was fundamental to our success. Whether a cook, an engineer, a
    helicopter crew chief, or a mechanic, first every soldier is a warrior
    and every marine is a rifleman. Everyone is on the front line--no safe
    rear areas exist. I expect future wars, whether conventional or
    unconventional, will have this characteristic. Out training does and
    must always reflect this reality.
        Finally, I gained a renewed appreciation for the training and
    education system that produces our young battalion and brigade
    commanders. I watched them act with decisiveness, confidence, and skill
    in the most demanding circumstances. These leaders do not come about by
    accident; they have spent years being trained and educated through our
    professional education and development system, have numerous training
    and operational deployments under their belts, and have been mentored
    by the Army's best leaders. It takes a substantial investment to grow
    one of these young leaders, but it is worth every bit of effort we put
    into it. When you combine that degree of leader preparation with the
    high-quality soldiers and equipment--we have well-trained, equipped,
    and disciplined units capable of almost anything.
                                   equipping
        The success of our soldiers was also testimony to the high quality
    of our equipment. Today, I will focus my comments on our individual
    equipment and our vehicles.
        When III Corps deployed to Iraq in January 2004, almost every
    soldier deployed with Individual Body Armor (IBA). We identified some
    spot shortages of Small Arms Protective Insert (SAPI) plates, and some
    soldiers did deploy without complete IBA. These shortages, however,
    were rapidly filled, and within a few months every soldier had IBA and
    SAPI plates. This exemplifies how the Army quickly reacted to theater
    operational assessments and provided our soldiers with the best
    equipment.
        Similarly, through the Rapid Fielding Initiative, we issued
    ballistic eye glasses and improved helmets, Camelback hydration
    systems, moisture wicking t-shirts and socks, and better boots to every
    soldier. This program allowed commanders to set policies mandating wear
    of this protective gear whenever soldiers left their forward operating
    bases (FOBs) and helped our soldiers perform in a high-threat
    environment and 125 degree temperatures. Other critical equipment,
    including optical sights for weapons and fiber optic viewers, enhanced
    force protection by allowing our soldiers to observe the enemy from
    distant and protected positions.
        One of the key initiatives that contributed immensely to our force
    protection was the ongoing effort to harden our wheeled vehicle fleet.
    I want to extend my thanks to this subcommittee for the support they
    have given the Army in this effort. While the enemy did intensify his
    attacks on us using IEDs or roadside bombs, we reacted to this threat.
    As the enemy situation changed, the Army responded first with
    additional applique armor plating kits for high mobility multipurpose
    wheeled vehicles (HMMWVs) and cargo trucks, known as Level II armor,
    and eventually with a steady supply of up-armored HMMWVs (UAH). In
    January 2004, less than 10 percent of light wheeled vehicles in Iraq
    were hardened with Army-procured applique armor kits. Where we
    experienced shortfalls, units worked to apply locally fabricated armor
    plates, also known as Level III armor. By August 2004, MNC-I was
    receiving approximately 20-30 UAHs every week, and by the end of our
    deployment, over 90 percent of our HMMWVs were armored. The combination
    of additional fielding of UAHs, applique armor--both Level II and Level
    III--and the vehicles that remained in theater as part of the Stay
    Behind Equipment (SBE) policy, we were able to achieve our goal by mid-
    February 2005 of every vehicle leaving a forward operating base having
    armor protection. From my perspective, the energy and resources
    expended to harden the fleet resulted directly in saved lives. I think
    it speaks well of Congress, the Department, and our civilian and
    military leadership that everyone has worked tirelessly to save lives
    of our young men and women. As a commander, I am grateful.
        Our efforts to harden the fleet must continue as more up-armored
    HMMWVs and applique armor kits are required. The hardened vehicles,
    often with their weapons and communications systems, must stay behind
    in theater for the next unit. This in turn means the equipment is no
    longer available to the unit when they return to home station and
    resume training. Thus soldiers, especially from the RC, may lack some
    critical equipment needed for home station training in preparation for
    their next deployment. I am confident in our ability to continue to
    address this concern, but it is a fact of life we have to be aware of.
        I would also like to say a word about our armored force. I found I
    needed tanks, infantry fighting vehicles, and helicopters in all major
    engagements and that these systems played an important role on every
    battlefield, especially cities. Our division commanders called for more
    armor soon after we arrived, especially when the enemy situation
    changed in April 2004. These assets were quickly dispatched from
    Germany and Fort Hood. The quality of our combat systems--their
    firepower, protection, and situational awareness they provide through
    digital command and control systems--is unmatched. New equipment for
    the Abrams, including better protection of the tracks, the crew-served
    machine guns, and the engine compartment, will make the tank even more
    survivable in urban combat. New anti-personnel rounds for its main gun
    will make it more lethal against infantry at the short ranges common to
    urban operations. These improvements, further installation of
    digitization, and a field telephone for coordination with dismounted
    riflemen will make our infantry-armor team more deadly and survivable
    in cities.
        We are now in the second iteration of the Stryker brigade Combat
    Team in Iraq, and their performance has been superb. Based upon my
    experience in Iraq, the operational mobility, survivability, and
    flexibility of the Stryker is simply beyond dispute. This vehicle
    repeatedly proved its worth, and the Stryker brigade was one of my most
    effective and responsive units. On several occasions they were able to
    self-deploy several hundred miles across Iraq in response to a sudden
    outbreak of violence in another sector. Using their digital command and
    control suite, they were able to go directly from the march into the
    fight with superb situational awareness and control. Once in the fight,
    their unique combination of capabilities--a high degree of situational
    awareness, well-trained infantry, tactical mobility, and remarkable
    survivability--made them more than a match for anything the enemy could
    throw at them.
        Finally, I would like to mention our digital command and control
    systems. The ability to see ourselves--in real time, without manual
    input, across the battlefield proved to be absolutely invaluable. It
    allowed us to quickly clear fires, make coordination, and synchronize
    the fight often with little or no radio discussion. This situational
    awareness means faster, more accurate and safer application of our
    immense firepower as we destroy the enemy.
        Now that I am back at Fort Hood, I recognize that resetting and
    reconstituting our units that deployed to OIF I is a resource and labor
    intensive program. The trends we have seen with III Corps equipment
    returning from OIF I indicate the equipment has been subject to
    intensive use during the deployment. After a 1-year deployment in OIF
    I, wheeled fleets returned with an average of 5 to 6 years of
    operational miles on them and the track fleet averaged 4 to 5 years.
    Initial assessments from the 1st Cavalry Division indicate that they
    have exceeded even this tempo of operations (OPTEMPO) and have operated
    some of their combat systems up to the equivalent of 10 to 15 years.
    These trends are evidenced by the significant number of man-hours
    required to reconstitute redeploying equipment, which far exceed a
    unit's available man-hours to repair equipment themselves within our
    180 day timeline goal. Our Army invested $435.4 million in parts and
    contracted service providers at Fort Hood alone since fiscal year 2003
    for units that have deployed to Southwest Asia. With an even higher
    OPTEMPO for units who just redeployed from OIF II, our current estimate
    for remaining reconstitution costs for OIF II units is at least $292
    million. We will continue to capture lessons learned and serve as good
    stewards of our resources to ensure our units are adequately
    reconstituted, trained, and equipped to meet our Nation's future
    requirements.
                  in-theater maintenance and logistics support
        The U.S. logistics operation in Iraq was one of the most complex
    and challenging missions in our history. Our combat logisticians proved
    successful in supporting a force of approximately 165,000 coalition
    soldiers, airmen, marines, and civilians serving in a country the size
    of California. On a daily basis, logisticians distributed an average of
    1.2 million gallons of fuel, 55,000 cases of bottled water, 13,000
    cases of Meals Ready to Eat, 60 short tons of ammo, and 200 pallets of
    repair parts. As a commander, I was pleased and proud of the monumental
    logistics operations and accomplishments during our deployment.
        Early in the tour, the April 2004 uprising and interdiction of our
    supply lines from Kuwait served as a significant milestone and
    influenced the future approach of logistics support in theater. We
    adjusted and improved logistics operations by shifting from a
    centralized distribution system to decentralized regional hubs
    increasing the system's flexibility and redundancy. This modification
    also helped us better assess civilian convoy routes on the battlefield
    and avoid risk when possible through the highest threat areas.
    Nevertheless, every convoy, whether a recovery mission or a mail
    delivery, must be executed as a combat mission and logisticians must
    have the training, confidence, and weapons skills to conduct supply
    missions in this high-threat environment.
        I want to highlight the Air Force's contribution to the safety and
    success of our resupply efforts. Not only did the Air Force play a
    major role in our logistics command and control and overhead security
    along major supply routes, their support for the establishment of
    additional strategic air hubs in Iraq, and for more frequent flights,
    helped keep approximately 40 additional trucks off the road per day.
    This meant at least 80 soldiers every day were kept out of harm's way.
    This endeavor also streamlined deliveries from the U.S. directly to
    remote locations like Quyarrah-West and Al Taqaddum for critical repair
    parts and essential non-bulk items. I appreciated the support for these
    initiatives to minimize risk to soldiers whenever possible.
        Daily patrol missions and intense battles continued to generate
    massive logistics requirements during the deployment. Collectively,
    logistics providers from the U.S., Germany, and Kuwait did a tremendous
    job in supporting the Corps, and despite a high OPTEMPO, operational
    rates for our fleets were generally on par with Army averages. As I
    mentioned before, in many cases, tracked vehicles experienced over 12
    times the programmed OPTEMPO. 1st Cavalry Division tanks that deployed
    from Baghdad to An Najaf, Fallujah, and other hot spots accumulated up
    to 12,000 miles during the deployment, far beyond the 800-mile annual
    programmed projection. Similarly, some Infantry Fighting Vehicles far
    exceeded the 300-mile annual projection and accumulated up to 3,000
    miles in operations. OPTEMPO also affected our aircraft flying hours,
    which more than doubled during OIF II. Again, supportive organizations
    such as the Aviation and Missile Command played an important role in
    getting us necessary repair parts and special tools which helped us
    remain at or above DA readiness averages throughout the deployment.
    However, this support effort required additional assets to maintain our
    fleets. Clearly, aviation contracts, Logistics Civilian Augmentation
    Program (LOGCAP) maintenance augmentation teams and Army Materiel
    Command's Forward Repair Activities were critical combat multipliers.
    Additionally, LOGCAP and other contractors provided essential services
    throughout Iraq such as dining facility and housing operations at base
    camps, fuel delivery, and movement control, to mention just a few.
        Our logisticians supported not only U.S. forces, but also supported
    our coalition partners and the emerging Iraqi security forces. We found
    that some coalition partners benefited from programs such as LOGCAP,
    particularly in the operation of dining facilities. Combat units in the
    Iraqi security forces are being successfully employed and rapidly
    built, but the logistics infrastructure to support these units is a
    much slower process. Therefore, support from contractors and from our
    forces was essential to sustainment of the Iraqi security forces during
    their training and security missions. Towards the end of our
    deployment, the Iraqi Ministrie's of Defense and Interior were
    developing the capability to take on the sustainment mission for the
    Iraqi security forces, but supporting these forces will remain a
    challenge for a period of time.
        I was very proud of the soldiers who provided our logistics support
    in Iraq. We really are One Army, and our logistics team demonstrated
    that every day. Eighty-nine percent of the Corps Support Command
    consisted of Reserve units, and these soldiers demonstrated courage,
    flexibility, and determination every day as they supported the demands
    of a growing force. Every night and day they traveled the dangerous
    roads to make sure our units had what they needed, and they never let
    us down.
                     personnel and family support programs
        As MNC-I Commander in Iraq, I was pleased with our ability to
    maintain personnel readiness across our combat forces for 13 months.
    All combat units deployed to theater were manned at 90 percent or
    better and maintained that strength despite combat losses. Our AC and
    RC Combat Service Support (CSS) units deployed at 80-89 percent
    strength, and occasionally we had some challenges in maintaining these
    units at their desired strength, but at no time did that threaten to
    impact our operations.
        I was very pleased with the AC personnel replacement system, as we
    had solid systems in place to reach back to home station in order to
    support combat units forward. We did experience some challenges with RC
    replacements. When we first arrived in theater, RC personnel
    requisitions were being filled at approximately 15 percent, but this
    rate improved to over 70 percent by the time we departed Iraq. The Army
    worked very hard to fill RC shortages, and continues to do so in a high
    OPTEMPO environment.
        Other personnel programs that were highly successful during our
    tenure in theater included: our casualty notification system; medical
    care; and our morale, welfare, and recreation (MWR) programs. The
    casualty notification system from foxhole to family members in the
    continental United States (CONUS) was accurate, timely, and responsive.
    Like every Service, the Army cannot fail in such a sensitive area, and
    we were proud of our success. Medical care in theater was second to
    none and unparalleled in military history. I was continually amazed at
    the speed with which we evacuated our wounded from the battlefield and
    had them on their way to medical facilities in the U.S. and Europe.
    Soldiers knew that if wounded, they would be evacuated with speed and
    professionalism and supported with exceptional medical care all the way
    back to home station. Our MWR programs ensured the best possible
    quality of life for soldiers and connectivity with their families
    during extended deployments. MWR in theater, such as the rest and
    recreation (R&R) leave program, commercial telephone banks, internet
    cafes, United States Organization (USO) and Red Cross all helped our
    service men and women cope with a long and difficult combat deployment.
        An important Army initiative in 2004 was the addition of the Family
    Readiness Group (FRG) Paid Assistance Program. This initiative helped
    us properly care for and manage family issues during our deployment.
    The growing experience of FRGs in handling various family situations
    paid huge dividends in support of unit Command Teams and families. This
    critical resource, which assists and coordinates at all levels the
    requirements involved in taking care of families, allows the commander
    to focus on training and soldier readiness while providing a conduit
    for families who need assistance from the Command Team or installation
    support agencies.
        While our families did well during this deployment, as I resume my
    duties as III Corps Commander in CONUS, I continue to be alert to the
    impact of continued high OPTEMPO of the force. In some cases, we have
    soldiers who will experience less than 12 months at home station
    between year-long deployments. We will continue to work hard at
    mitigating these circumstances, and I am confident that our soldiers
    will continue to stand ready to meet any future missions in the global
    war on terror.
                                   conclusion
        I can tell you from having spent a year with our soldiers, marines,
    sailors, and airmen; they are men and women of character who are
    confident in their training, their leaders, and their equipment. They
    are confident that their families are cared for back home when they are
    deployed. As the Commander of Multi-National Corps-Iraq, I have had the
    privilege of commanding these brave men and women in combat. As many of
    you have seen first-hand in your visits to Iraq, and I witnessed every
    day, these young Americans are as dedicated, skilled, and courageous as
    their predecessors whom we honor and emulate. They did their duty
    exactly as they were trained--some did not return because they were
    determined to do their duty. I am humbled to have been their commander
    and I pray for them every day.
        I hope I have clearly described how we manned, trained, and
    equipped a superbly capable force. I have no doubt that challenges
    still lie before us. As the III Corps Commander at Fort Hood, I am
    alert to the strain on our force, our equipment, and our families. I am
    deploying many young men and women to Iraq for their second tour of
    duty, some in less than a year's time. While our soldiers remain ready
    and willing, we have to recognize what frequent deployments mean to
    families, support services, and employers. The leadership of the Army
    is in touch with these challenges and has encouraged an open dialog
    among commanders to address these concerns. We must address these
    concerns to ensure we mitigate their impact on our readiness. My
    commanders and I will do just that. Adequate quality of life programs
    such as family housing and health care, along with strong Family
    Readiness groups, are crucially important in determining the ability of
    soldiers and families to make it successfully through long deployments.
    When our support to the family is solid, our soldiers and families are
    equal to the challenge.
        I have been given a great privilege to serve our country for almost
    39 years and most recently in Iraq. I am proud of what we have done to
    advance the cause of freedom for the people of Iraq and the security of
    the free nations of the world. I look forward to your questions.

        Senator Ensign. Thank you.
        Before the rest of the witnesses, Senator Akaka, would you
    like to make an opening statement?

                  STATEMENT OF SENATOR DANIEL K. AKAKA

        Senator Akaka. Yes. Well, thank you very much, Mr.
    Chairman. I do have an opening statement. Since you have
    started, I'd ask that it be placed in the record.
        Senator Ensign. Without objection, it will be.
        [The prepared statement of Senator Akaka follows:]
                 Prepared Statement by Senator Daniel K. Akaka
        Thank you, Mr. Chairman. I want to welcome our witnesses and thank
    them for coming today and for sharing their insights on the readiness
    of our deployed forces.
        I would also like our witnesses to know how much we appreciate what
    you and the brave men and women of our Armed Forces are doing for our
    country. All of you have put your lives on the line to protect our
    country. Our servicemembers are in our thoughts and prayers, and they
    have our sincere gratitude for their dedication and their sacrifices.
        We in Hawaii know firsthand of these sacrifices, from the time away
    from home and families to the ultimate sacrifice of giving one's life
    in service to our Nation. In January, over 30 marines lost their lives
    in a helicopter crash in the Anbar province of western Iraq. Most of
    them were stationed at the Marine Corps Base in Kaneohe, Hawaii.
        I have every confidence in our U.S. Armed Forces and their ability
    to excel at whatever we might ask of them. But I am concerned about the
    strains we are placing on them, and the long-term implications of this
    sustained high tempo of operations.
        I am also concerned that this committee and the Department of
    Defense are so consumed by the many important policy issues arising
    from our operations in Iraq and Afghanistan that we are not devoting
    sufficient time and attention to the impact of these operations on the
    readiness of our forces for other missions, or the long-term impact the
    wear and tear of these operations places on our people and equipment.
        While today's hearing is a worthy undertaking, I still think more
    is needed. It has been many years since we conducted a full committee
    hearing on the readiness of our forces. Last fall, I sought a
    subcommittee hearing to fill that gap, but unfortunately, the
    subcommittee was unable to hold such a hearing. I hope that the
    subcommittee or the full committee will be able to hold such a hearing
    this year with our service chiefs or vice chiefs to examine issues such
    as the readiness of our forces, the pace of operations, and plans to
    ``reset'' our equipment as they affect our four Services.
        Soon our committee will turn to our markup of this year's budget
    request. I hope we will do our best to ensure that our committee
    strongly supports the readiness of our forces. Part of ensuring
    readiness is funding it. As Secretary of the Navy Gordon England wrote
    to our committee earlier this week:

            ``Readiness is a direct function of Operation and Maintenance
            (O&M) dollars available. Under funding O&M adversely affects
            readiness.''

        I hope our discussion today will shed additional light on how we
    can best accomplish this shared goal of keeping our forces trained and
    ready.
        Once again this year, we start with a President's budget request
    that provides no funding for these ongoing operations in Iraq and
    Afghanistan. Once again this year, both the House and the Senate have
    added funds--$50 billion this year--to our budget resolutions to remedy
    this defect.
        Not only does this make our budgets more realistic and more honest,
    but it helps our military. This year, the Services are once again
    dependent on supplemental funding. Again the Army is extremely affected
    by this underfunding. It is my understanding that the Army has already
    borrowed $1.9 billion against its military personnel accounts through
    reprogrammings that have to be paid back in the pending supplemental.
    In order to meet certain financial obligations, the Army may shortly be
    taking extraordinary steps to meet its payroll. Even the Air Force,
    which is not as affected has informed us that at current operating
    rates they will run out of money before the end of the fiscal year.
        I do not believe it is in anyone's best interest to continue the
    process we have used in the last 3 years where 20 percent of our annual
    defense budget is funded through supplementals, outside the normal
    authorization and appropriation process.
        Our challenge is to provide the strongest possible foundation for
    the readiness of our forces in this year's authorization act. I hope to
    gain a deeper appreciation for your short- and long-term readiness
    concerns and any help that we may be able to provide. Again, I welcome
    our witnesses and I look forward to their testimony. Thank you, Mr.
    Chairman.

        Senator Ensign. Thank you.
        We will now go to General Sattler.

        STATEMENT OF LT. GEN. JOHN F. SATTLER, USMC, COMMANDING
                 GENERAL, I MARINE EXPEDITIONARY FORCE

        General Sattler. Thank you, Mr. Chairman, Senator Akaka,
    and Senator Cornyn. Thank you for the opportunity to appear
    before the subcommittee, sir. I would also like to thank you
    for the strong support, on behalf of all of the men and women
    who wear the uniform that had the tools of war that were
    necessary to fight this battle to ensure that the thugs, mugs,
    murderers, and intimidators who would steal the country of Iraq
    away from the Iraqi people were held in check and will, in
    fact, eventually be defeated.
        The men and women engaged in this fight alongside our Iraqi
    security forces and our partners, they are making a very
    positive difference. The security forces become more capable
    each and every day. In my opinion, the security, the
    governance, and the economic lines of operation are all moving
    in a positive direction. There is more work to be done. The
    Iraqi people, along with us at their side, are on the long,
    bumpy, windy road to democracy. The good news, sir, is that
    they are moving in the right direction.
        The warriors of I Marine Expeditionary Force (I MEF) are
    back now at Camp Pendleton completing their Warrior Transition
    Program and reuniting with their family and their friends. Once
    they return from some well-deserved leave, we will commence our
    preparations to return to Iraq, in February 2006.
        The reconstitution of our forces, and the equipment that
    will go along with those forces, is our major focus at this
    time. Some of the equipment, as you well know, sir, is well
    worn--it's worn well beyond its years. You can read the
    studies, anywhere between 10 to 12 years, depending on the type
    of equipment, the amount of years that are put on it for 1 year
    inside the country of Iraq.
        Our near-term focus is on ensuring we have sufficient
    equipment to train with to prepare to go back. Of course, our
    long-term focus is the reconstitution of that equipment after
    another year in Iraq as it continues to age at an 8- or a 10-
    to-1 rate, so that when this fight is over, that we will have
    equipment in our ranks to sustain us for future endeavors.
        Lastly, sir, I would just like to tell you thank you so
    much for your strong support in the past, and I'd like to thank
    you in advance for your support in the future, on behalf of not
    only the marines within I MEF, but, as General Metz said, the
    soldiers, the sailors, the airmen, and the marines that made up
    the approximately, at one point, almost 44,000 warriors that
    were out in the west of Iraq.
        Thank you very much, sir, and I look forward to your
    questions.
        [The prepared statement of General Sattler follows:]
              Prepared Statement by Lt. Gen. John F. Sattler, USMC
                                    opening
        Chairman Ensign, Senator Akaka, distinguished members of the
    subcommittee; it is my privilege to report to you on I Marine
    Expeditionary Force's (I MEF) current state of readiness. I MEF marines
    and sailors have answered our Nation's 911 calls and rapidly deployed
    in support of the global war on terror. Our number one priority is
    prosecuting the global war on terror and sustaining our readiness in
    order to meet all future challenges and serve as our Nation's premier
    expeditionary force-in-readiness.
        The men and women of I MEF remain committed to warfighting
    excellence and the support of Congress and the American people has been
    paramount to our successes in Afghanistan and Iraq. On behalf of all of
    I MEF, I thank you for your sustained and indispensable support.

      Since September 11, 2001, I Marine Expeditionary Force has rapidly
      deployed into remote, isolated, and landlocked locations that were
       previously viewed as safe havens for terrorist activities, fought
                    against tyranny and aided those in need.

        Operation Enduring Freedom demonstrated our speed and flexibility
    when we task organized two forward-deployed Marine Expeditionary Units
    (Special Operations Capable) (MEU(SOC)) into Task Force 58 and
    projected the first major conventional units more than 350 miles from
    its amphibious shipping into Afghanistan. Operation Iraqi Freedom I
    witnessed the flexibility of our Marine Air Ground Task Force (MAGTF)
    when over 70,000 I MEF marines and sailors deployed and arrived in less
    than 60 days at their Kuwait staging areas and attacked more than 500
    miles rendering 10 Iraqi divisions combat ineffective, seizing half of
    Baghdad, and occupying key areas to the north. When major combat
    operations concluded, strategic plans called for marine forces to
    redeploy and reset for any future contingencies and/or requirements
    from the regional combatant commanders. I MEF redeployed to home
    stations in October 2003.
        Late in 2003, I MEF received a short-notice tasking to deploy a
    force of approximately 25,000 marines and sailors back to Iraq to
    assume responsibility for the Multi-National Force-West Region. I MEF
    arrived in February 2004 to accelerate a Relief in Place with units
    pending redeployment. In response to emergent requirements, three
    MEU(SOC)s deployed to the Central Command area of responsibility (AOR)
    during the summer and fall of 2004. Each MEU(SOC) was subsequently
    employed ashore under I MEF in support of combat operations in Iraq.
    Their addition to I MEF brought the total USMC strength in OIF II to
    slightly over 30,000. During Operation Iraqi Freedom II, I MEF marines
    and sailors with a truly Joint/Coalition Force liberated An Najaf and
    Fallujah and facilitated free elections in four Iraqi provinces.
    Finally, a I MEF MEU(SOC) provided tsunami relief in South Asia as it
    transited to Iraq in order to conduct stability operations until April
    2005. Today these MEU(SOC) marines and sailors remain forward deployed
    and serve as the theater reserve within the Central Command AOR.

     The challenge to train and equip I MEF marines and sailors for OIF II
     began in October 2003, even before all I MEF personnel and equipment
      were back in CONUS from OIF I. I MEF'S notice to return to Iraq for
    Stability and Support Operations (SASO) resulted in compressed planning
    timelines and required the utmost speed and flexibility in identifying
    forces, preparing equipment, and building capabilities deemed critical
    to the mission. Preparations for SASO focused on equipping and training
          marines and sailors for an environment believed to be more
          unpredictable and dangerous than we had experienced in the
      predominantly Shia regions of Southern Iraq in the summer and early
                                 fall of 2003.

        In the training arena, each major subordinate command (MSC) of I
    MEF developed comprehensive plans to build individual and collective
    readiness geared for what was foreseen as a unique blend of civil-
    military operations--what has been aptly called the ``three block
    war.'' Moreover, the increased staff and subject matter expertise
    support required to meet the heightened demands of information
    operations, multi-source intelligence collection, force protection,
    Iraqi security force training and development, civil affairs and
    engineering projects, cross-cultural communications, and political
    engagement could not have been met without individual augmentees
    globally sourced across the Marine Corps. Marine and Navy reservists
    proved instrumental to I MEF's efforts in the global war on terror and
    they remain ready and willing.
        These and other aspects of our approach to SASO missions were based
    not only on our own experiences but also drew heavily on the successes
    of the British Army in southeast Iraq. The 1st UK Division's tactics,
    techniques, and procedures reflected many years of hard-won experiences
    in low intensity conflicts and peacekeeping operations around the world
    and were adapted wherever practical to the integrated Marine Air Ground
    Task Force. To this end, great emphasis was placed on language and
    cultural training with 10 to 12 marines per maneuver battalion
    receiving language emersion training. SASO collective skills were
    developed through conferences in Camp Pendleton, CA, with visiting
    experts on Iraq and counter-insurgency operations, immediate actions
    for MAGTF convoys, crowd and riot control, cordon and knocks, counter-
    ambushes, offensive mining and improvised explosive device employment,
    and rear area security. Readiness for asymmetric warfare was further
    refined and tested through the creation of Revised Combined Arms
    Exercises (RCAX) at the Marine Air Ground Combat Center (MCAGC) at
    Twentynine Palms, CA; SASO field training exercises (FTX) in urban
    terrain at March AFB, CA; and air-ground concept of operations
    integration training at Marine Corps Air Station (MCAS) Yuma, AZ.
        Finally, I MEF's predeployment training included a reintroduction
    of the Combined Action Program (CAP)--similar to that used by marines
    in South Vietnam from 1966 to 1971--where each deploying infantry
    battalion was required to have a specially trained CAP platoon. The CAP
    approach promises the highest returns on our investment as local
    security conditions improve and Iraqi leadership remains committed to
    the mission. Improving readiness and training for greater effectiveness
    in SASO and Counter Insurgency Operations (COIN) remained a constant
    concern. Thus, a concerted effort was made within I MEF and indeed, in
    a collaborative spirit across all major subordinate commands (MSC's) of
    Multi-National Corps-Iraq to share experiences in order to profit from
    those of others. Communications technology was a critical enabler.
    Enemy adaptations or new techniques, tactics, or weapons were
    immediately posted on classified web sites, passed through message
    traffic, or otherwise shared between headquarters. For example, every
    applicable lesson learned in the urban fighting in Najaf by the 11th
    MEU(SOC) under the operational control of the MEF in August 2004, was
    passed to the 1st Marine Division as it prepared for combat operations
    in Fallujah in November 2004.

     The lives of our marines and sailors are our most precious asset and
    their preservation through better equipment has and will always be one
    of our primary concerns. Accordingly, in preparation for our return to
    Iraq, force protection efforts were focused on equipment and technology
        to better detect, collect, interrupt, and mitigate the weapons,
      techniques, and tactics favored by the enemies of Iraq. In November
    2003, the Marine Corps established the Urgent Universal Needs Statement
       (UUNS) to rapidly translate mission-essential needs of marines in
                     theater to fielded materiel solutions.

        No single Marine Corps program had a greater impact on I MEF's
    readiness than the Rapid Acquisition or UUNS process. The UUNS process
    provided an effective method for I MEF to identify and forward new
    requirements for review and approval (normally in less than 90 days) at
    the Service Headquarters. The UUNS process was an unqualified success
    in its ability to deliver equipment when it was needed. Coupled with
    pre-existing initiatives, this effort helped obtain adequate body armor
    (with front and rear plates) for every deployed I MEF Marine and
    Sailor. The results were clear throughout the MEF's area of operations.
    The UUNS process allowed us to armor our individual marines, sailors,
    High Mobility Multi-purpose Wheeled Vehicles (HMMWVs) and Medium
    Tactical Vehicle Replacement (MTVR) trucks serving outside of all
    Forward Operating Bases.
        Upgrades of Aviation Survivability Equipment (ASE) that included
    interior ballistic armor, advanced radar detections systems, improved
    defensive weapons systems, and missile countermeasures were developed
    for our rotary wing fleet and for our KC-130s. Both the size of I MEF's
    area of responsibility and the character of the SASO missions
    necessitated a larger number of tactical mobility assets than existing
    tables of equipment could support. Although tactical vehicle
    augmentation was possible by a selective off-load of our maritime
    prepositioning squadron (MPSRON-2) in Kuwait, there was simply not
    enough adequate armor protection across the board for the threat
    conditions in Iraq. Thus, a major effort to provide flank and frontal
    armor for I MEF's entire tactical wheeled vehicle fleet commenced prior
    to the deployment. In spite of the time constraints, an impressive
    array of armor, locally fabricated steel, and other protective measures
    were rapidly attained and installed prior to departure from Camp
    Pendleton or while in Kuwait to meet the small arms and fragmentation
    threat posed by ambushes and mine strikes of tactical vehicles in Iraq.
    By the time I MEF had fully deployed in March 2004 to relieve the 82nd
    Airborne in the Sunni dominated Al Anbar Province, the Marine Corps had
    provided first generation armor for 100 percent of its 3,000+ vehicles.
    As the security situation deteriorated further in the wake of the
    Blackwater murders in Fallujah, this force protection program expanded
    to the procurement of the much-improved M1114 and M1116 (factory
    armored) HMMWV as well as improving the protection levels of armor kits
    on all other tactical vehicles. As a result of this ongoing effort, the
    Marine Corps currently has 4,299 hardened vehicles in the CENTCOM AOR.
    These materiel solutions and ongoing efforts are designed to provide
    protection while still providing marines the ability to rapidly
    dismount and provide offensive capability wherever needed.
        Wherever possible, we team up with our joint partners to gain
    synergy in effort and economies of scale while ensuring appropriate
    stewardship of limited resources. As we address the challenges of the
    current fight, we look to exploit the opportunities of the future. We
    understand that willingness is a mindset but readiness is a statement
    of fact. To this end, close coordination and constant feedback from the
    field to the Marine Corps supporting establishment throughout I MEF's
    deployment--particularly the Combat Development Command in Quantico,
    VA--allowed rapid identification of emerging requirements that led to
    new equipment and training that saved lives and increased mission
    readiness. The flexibility borne of these changes enhances the
    lethality of the Marine Air Ground Task Force and positions the Marine
    Corps for future operations.
        With respect to logistics preparations and support for OIF II, a
    plan was developed to move over 25,000 marines and sailors and tens of
    thousands of principal end items to Iraq in under 60 days. Equipment
    was resourced from various continental United States (CONUS) and
    overseas stations and locations, and by March 2004, I MEF conducted the
    successful off-load of a combination of 17 commercial black bottom,
    Navy amphibious, and Maritime Prepositioning Squadron (MPSRON) ships,
    and the reception and staging of all required personnel and equipment
    into the USCENTCOM AOR. I MEF's onward movement from Kuwait to its area
    of operations in the Al Anbar Province of western Iraq involved the
    detailed organization and scheduling of some 6000 vehicles into more
    than 100 convoys that moved through enemy territory.
        With a mature logistics theater already established by Combined
    Joint Task Force Seven (CJTF-7), I MEF was able to further task
    organize its combat service support (CSS) organizations thereby
    reducing some of the equipment and personnel costs associated with a
    more austere, expeditionary environment such as encountered during OIF
    I. As such, heavy emphasis was placed on logistical planning for
    Theater and Corps level sustainment, contingency contracting, base camp
    infrastructure, and integration into Logistics Civil Augmentation
    Programs (LOGCAP), as well as for the reception, staging, and onward
    movement of forces and equipment flowing through Kuwait into Iraq.

     Regarding maintenance in theater, the ground equipment usage rates in
    the Iraqi theater of operations were much higher than those experienced
                       during normal peacetime training.

        These higher usage rates, combined with extreme environmental
    conditions, unusually demanding operating criteria, and additional
    armoring of mobility assets, served to increase supply and maintenance
    demands. Despite these factors and as a testament to the ingenuity of
    our marines, contracted logistics support, contingency contracting, and
    continual reach back to CONUS-based resources, the ground equipment
    readiness rates for I MEF while deployed continually hovered in the low
    90-percentile range.
        In an effort to leverage additional logistical support, I MEF was
    in the early stages of capitalizing on the Army's forward deployed
    ground depot maintenance capability in order to reduce, and in some
    cases eliminate, long lead times for equipment requiring retrograde
    from theater for depot level maintenance. Further mitigating the large
    numbers of equipment having been destroyed beyond repair, initiatives
    were developed, known as forward in-stores (FIS), to establish a pool
    of ground equipment to expedite the replacement of major end items.
        With regards to aviation assets, I MEF's inventory of legacy fixed
    and rotary wing aircraft performed their combat missions and held up
    extremely well under increased usage rates. Operating from austere
    former Iraqi air bases and deployed throughout multiple forward
    operating bases (FOBs) throughout the MEF AOR, these aircraft flew
    thousands of sorties in extreme environmental conditions and under an
    extraordinarily demanding operating criteria. While utilization rates
    have dramatically increased, the overall trend for our deployed
    aircraft readiness remained fairly constant in the low 70-percentile
    range. Initiatives to further improve aircraft readiness rates in
    theater are continually being developed such as the creation of a
    limited, forward-deployed aircraft depot maintenance capability.

    I MEF is a strong proponent of the ``marine family'' and our commanders
    devote a great deal of attention to family readiness in preparation for
        the uncertainty inherent in combat operations. Recognizing that
     information flow and family readiness are critical to unit morale and
    combat readiness, we developed and nurtured a family readiness program
     second to none. The front-end investment in family readiness programs
      and the key volunteer network in preparation for these deployments
    served as force multipliers and enhanced the combat readiness of I MEF.

        In pursuit of this, I MEF sponsored Marine Corps Family Team
    Building (MCFTB). This program provided critical support while commands
    aboard Marine Corps Base Camp Pendleton, CA, Marine Corps Air Ground
    Combat Center (MCAGC) in Twentynine Palms, CA and Marine Corps Air
    Stations Miramar, CA and Yuma, AZ were deployed. MCFTB programs for
    educating family readiness officers, key volunteer coordinators,
    advisors, and spouses provided continuity and sustained Family
    Readiness. One of the most important services has and continues to be
    the Return and Reunion Briefs. This is in depth instruction designed to
    prepare both families and servicemembers, for their reunion through
    education and reflection on the different experiences each has had
    during the deployment. Finally, a program known as Lifestyles,
    Insights, Networking, Knowledge and Skills (LINKS) also serves to
    educate our spouses on what it means to be a military spouse. This has
    proven to be especially helpful during extended deployments when many
    new spouses are becoming familiar with the Marine Corps lifestyle.
        Even though the operational tempo of the global war on terror took
    the men and women of I MEF to distant lands far from their friends and
    family, our marines and sailors established a little bit of home. They
    celebrated holidays, set up daily routines and remembered loved ones
    left behind. To this end, our personnel morale and family support
    programs included both quality of life and recreation programs in
    Afghanistan and Iraq. Connectivity through e-mail, mail services, and
    phone calls were a source of constant concern for commanders throughout
    Iraq and every effort was made to make these services readily
    available, as combat operations would permit. To reach across the
    miles, Unit Family Readiness Hotlines and Websites were established;
    updated messages from unit commanders were routinely recorded and
    posted; family members had ready access to voice recordings in order to
    remain informed on the current situation and events; and Family
    Readiness Web sites provided information and access to solutions to
    challenges before they became problems. Marines were more focused
    knowing that their families were being cared for on the home front.

            Fighting the war and resetting the force for the future, is the
            commandant's focus.

        Lieutenant General James N. Mattis, Commanding General of the
    Marine Corps Combat Development Command/Deputy Commandant for Combat
    Development United States Marine Corps testified before the House Armed
    Services Committee on March 16, 2005. While it depends on the
    individual item of equipment selected, in general, our ground equipment
    is experiencing roughly eight times the use normally experienced during
    peacetime operations. The decision to replace, rather than repair,
    major equipment items is, in most cases, cost-effective due to
    transportation costs to and from the Central Command's area of
    responsibility, accelerated aging due to high operational tempo,
    environmental degradation and the need to keep up-armored vehicles in
    theater to support future rotations. In this vein, the Marine Corps
    will rely on future programs to replace existing legacy systems--such
    as the Expeditionary Fighting Vehicle replacing the current amphibious
    assault vehicle in use in Iraq and lightweight 155mm howitzer to
    replace legacy howitzers. The administration requested funding for
    Marine Corps reset in the fiscal year 2005 supplemental. As operations
    proceed in Iraq and global war on terrorism, we will continue to study
    requirements to fully reset the force.
        As we address the challenges of the current fight, we look to
    exploit the opportunities of the future. Newly formed active and
    Reserve component units will address conventional and irregular threats
    as existing units retrain to assume additional duties such as civil
    affairs, SASO, and COIN. The flexibility borne of these changes
    enhances the effectiveness of the Marine Air Ground Task Force in the
    global war on terrorism and postures the Marine Corps for success in
    future operations. Marines and their families greatly appreciate the
    unwavering support of Congress in achieving this end.

        Senator Ensign. General Buchanan.

    STATEMENT OF LT. GEN. WALTER E. BUCHANAN III, USAF, COMMANDER,
           9TH AIR FORCE AND U.S. CENTRAL COMMAND AIR FORCES

        General Buchanan. Thank you, sir.
        Chairman Ensign, Senator Akaka, Senator Cornyn, and Senator
    Clinton, thank you for giving me the opportunity to appear
    before you today to present the status of our Air Force in
    Operations Enduring Freedom and Iraqi Freedom. As the Commander
    of the United States Central Command Air Force, it is my
    distinct pleasure to report on our readiness and sustainment
    efforts. On behalf of Acting Secretary Dominguez and General
    Jumper, thank you for your continued strong support of the more
    than 18,000 airmen deployed to fight the global war on
    terrorism in the Central Command area of responsibility.
        On the ground and in the air, our airmen are performing
    exceptionally well in often hostile conditions. On the ground,
    our security forces have provided air-base defense outside the
    base perimeter for the first time since Vietnam. Air Force
    joint tactical air controllers are excelling under fire,
    providing that critical link between tactical ground commanders
    and overhead air support. From the air, whether we are over
    Tarin Kowt, in Afghanistan, or Fallujah, or Baghdad, in Iraq,
    we are leveraging intelligence, surveillance, and
    reconnaissance assets to uncover and track insurgent activity
    for coalition forces to engage.
        At the same time, our fighter air crews continue to fly top
    cover for their brave brothers and sisters on the ground, and
    doing a superb job, when required, engaging the enemy, and
    minimizing collateral damage while dropping munitions in close
    proximity to friendly forces and civilians. I could not be more
    proud of the professionalism and commitment of our airmen.
    Their successes on the battlefield are the best evidence that
    they are well prepared for the operations they are called to
    perform.
        A critical enabler in their success has been the Air
    Expeditionary Force cycle, which establishes a solid foundation
    for the readiness and sustainment of airmen deployed to the
    theater. This 20-month cycle prepares them for deployment
    through focused training prior to departure, and reconstitutes
    personnel and equipment upon return. This predeployment
    training, combined with daily operations in the field, ensures
    critical mission qualifications do not lapse during the
    rotation.
        Not only are the forces well trained, deploying units are
    also fully equipped and supplied. Individual airmen arrive in
    theater with all the personal gear they need to sustain them
    through their deployment. Depending on the specific mission,
    units either deploy with a full complement of equipment
    required for their tour or to locations that already are
    equipped through our War Readiness Material Program.
        Our standard logistics channels keep our forces supplied,
    requiring as little as 4 days to get critical parts. The robust
    logistics capability enables airmen to conduct much of the
    requirement equipment maintenance while in the field.
        On the personal side of readiness, deployed locations
    provide a wide variety of activities outside the work
    environment to refresh the force, giving airmen a break from
    their daily routines. Additionally, home stations offer a
    multitude of support services to equip families for the
    stresses of life while their loved ones are away.
        As we continue to prosecute the global war on terrorism,
    our ability to prepare and deploy our forces remains critical
    to our success. Maintaining well-equipped and trained airmen
    through sustained congressional backing will help secure
    victory in the future.
        Chairman Ensign, Senator Akaka, distinguished members of
    the subcommittee, it has been my distinct honor to serve
    alongside my fellow commanders here and the exceptional airman
    in U.S. Central Command Air Force (CENTAF) over the past 3
    years. On their behalf, thank you for your continued support. I
    look forward to your questions.
        [The prepared statement of General Buchanan follows:]
          Prepared Statement by Lt. Gen. Walter E. Buchanan III, USAF
                                  introduction
        Chairman Ensign, Senator Akaka, and distinguished members of the
    subcommittee, thank you for giving me the opportunity to appear before
    you today to present the status of our Air Force in Operations Enduring
    Freedom (OEF) and Iraqi Freedom (OIF). As the Commander of United
    States Central Command Air Forces, it is my privilege to report on our
    readiness and sustainment efforts. On behalf of Acting Secretary
    Dominguez and General Jumper, thank you for your continued strong
    support of the more than 18,000 airmen deployed to fight the global war
    on terror in the Central Command AOR.
                                force readiness
        Air forces deploying in support of OEF and OIF arrive in theater
    well-trained and properly equipped to conduct their assigned missions.
    On the ground and in the air, our airmen are performing exceptionally
    well in often hostile conditions. On the ground, our security forces
    have provided airbase defense outside the wire base perimeter for the
    first time since Vietnam. During a 60-day deployment to Balad AB early
    this year, they captured over 100 weapons and significantly reduced the
    number of attacks on the base. Air Force Joint Tactical Air Controllers
    (JTACs) are excelling under fire, providing the critical link between
    tactical ground commanders and overhead air support. From the air, we
    are leveraging intelligence, surveillance, and reconnaissance assets to
    uncover and track insurgent activity for Coalition forces to engage.
    Our aircrews continue to do a superb job minimizing collateral damage
    while dropping munitions in extremely close proximity to friendly
    forces and civilians, in support of coalition and Iraqi security
    forces. I could not be more proud of the professionalism and commitment
    of our airmen, and their successes on the battlefield are the best
    evidence that they are well prepared for the operations they are called
    to perform.
        The Air Expeditionary Force (AEF) cycle provides a solid foundation
    for the readiness and sustainment of airmen deployed in support of the
    global war on terror. Designed primarily for sustainment, this
    mechanism provides fresh forces to the field on a frequently rotating
    basis in accordance with a predictable schedule, enabling us to conduct
    long-term operations like the ones in which we are currently engaged.
    Most airmen can expect to deploy for 120 days in every 20-month cycle,
    though there are certain stressed career fields that are exceptions to
    this rule--most notably security forces, which typically deploy for 179
    days. During the preparation period between AEF deployments, our forces
    hone their readiness skills with a variety of training tools. To ensure
    airmen are equipped with the latest tactics, techniques and procedures,
    we often incorporate fresh lessons learned from combat operations into
    peacetime exercises during the preparation period. For example,
    Exercise Able Archer last November included urban Close Air Support
    (CAS) scenarios from OIF and provided both the participating JTACs and
    aircrews with instruction on new techniques used in Iraq.
        Given the counter-insurgent nature of today's combat environment in
    both Iraq and Afghanistan, collateral damage mitigation has drastically
    increased in importance. Not only are ground forces calling for fire
    support closer to friendly positions, most of today's targets are
    interspersed in civilian areas requiring supreme diligence and care in
    weapon selection and employment. Under these conditions, even a minor
    tactical error can have strategic consequences, providing a basis for
    the enemy's propaganda campaigns. Our robust peacetime training cycle
    ensures our aircrews can employ their ordnance to meet this ever
    increasing requirement for precision.
        Not only are our forces well-trained, deploying units are also
    fully-equipped. All airmen arrive in theater with the individual
    equipment needed to sustain them through the deployment, regardless of
    their deployment location or conditions. Our airmen can find themselves
    in widely varying field conditions, from very austere camps where
    you'll find our JTACs, combat communication teams and special
    operators; to forward operating locations in hostile territory, such as
    Balad Air Base in Iraq and Bagram Air Base in Afghanistan; to vital
    enduring bases with robust support on the Arabian Peninsula, such as Al
    Udeid Air Base in Qatar and Al Dhafra Air Base in the United Arab
    Emirates.
        Every flying unit deploys with 100 percent mission capable aircraft
    and a tailored package of maintenance equipment and parts designed to
    keep them light, lean and fit to fight for their entire rotation.
    Likewise, Red Horse and special operations units deploy with the full
    compliment of equipment required for their missions.
                               force sustainment
        While operational units deploy with their gear, equipment for
    support units, and various combat expendables are prepositioned through
    the War Reserve Material (WRM) program. Our five WRM storage locations
    in theater give us a capability to rapidly deploy equipment during a
    contingency, but they are also an exceptional tool for force
    sustainment. Through a USCENTAF contract, DynCorp manages our $4.2
    billion WRM inventory and provides accountability and storage for all
    the equipment, to include vehicles, munitions, fuel mobility support
    equipment, medical rations and aerospace ground equipment. As equipment
    in the field wears out, we leverage WRM inventories for expeditious
    replacements, minimizing the impact to force readiness.
        In addition, we reconstitute supplies not available in WRM through
    our standard logistics channels. Supplies from U.S. mainland arrive on
    average in just over 12 days from the time of order. In the event we
    need supplies faster, we have methods to expedite the process and ship
    material in only 4 days.
        Our robust logistic support is a key enabler to equipment
    maintenance in the field. With parts readily available, we perform
    routine maintenance at our deployed air bases or at WRM maintenance
    facilities in theater. Flight line crews conduct day-to-day and phase
    level maintenance as they would at home station. For aviation equipment
    repairs that cannot be accomplished in the field, we utilized repair
    facilities in Europe and the continental U.S., depending on the level
    of maintenance required.
        In addition to equipment availability, training currency is a
    critical aspect of readiness. For most airmen, training currency spans
    the deployment duration without lapsing. In the cases where currencies
    are shorter than the deployment duration, airmen maintain qualification
    through daily mission activities or in-theater training. When training
    is required, it is done on a non-interference basis. For instance, we
    support JTAC training with on-call close air support sorties if
    available. Proficiencies not required in the area of responsibility
    (AOR), however, are not maintained. As an example, a pilot's air-to-air
    skills may lapse, but since there is no air-to-air threat in Iraq there
    is no mission impact.
        While the professional side of readiness and sustainment is highly
    regimented, the personal side varies greatly from airman to airman. To
    meet these varying needs, each air base within the AOR provides a wide
    assortment of MWR activities. Fitness and recreation centers at each
    base provide a location to work out and relax. Food operations such as
    Burger King and Subway, give airmen a taste of home. Morale phones and
    computers allow airmen to stay in touch with family. Learning resource
    centers allow airmen to continue their education or to progress in
    their Professional Military Education (PME). Resale operations such as
    on-base bazaars allow airmen to experience the local culture and share
    it with family and friends through gift purchases. The availability of
    activities outside the work environment refreshes the force by giving
    airmen a break from their daily routines.
        Family support before, during, and after deployment is also a
    significant part of force readiness and sustainment. The Air Force
    provides support to the families of deployed airmen through the
    Integrated Delivery System (IDS). The primary components of the
    installation-level IDS are the Family Support Center, Life Skills
    Support Center, Family Advocacy Program, Family Member Programs Flight,
    Health Promotion and the Chapel. These agencies support families with
    education, childcare, counseling, spiritual and practical support. In
    short, they train and equip our families in the tactics, techniques,
    and procedures required to thrive at home while a member of the family
    is deployed.
                                 reconstitution
        Following deployments the Air Force utilizes the AEF cycle to
    reconstitute its airmen. Upon return, airmen take leave in accordance
    with home station policies to rest, recuperate, and reconnect with
    their families. Units slow their operational tempos to allow
    maintainers time to refurbish equipment. Finally, unit commanders
    establish training programs to return their airmen to deployment ready
    status.
                                    summary
        As we continue to prosecute the global war on terrorism, our
    ability to prepare and deploy our forces remains critical to our
    success. Using the AEF cycle, the Air Force has done an excellent job
    of training and equipping our young airmen to fight. Our prepositioned
    WRM inventories and supporting logistics and maintenance systems ensure
    airmen maintain a high level of readiness during combat operations. Our
    MWR and family support programs do a phenomenal job of maintaining the
    personal aspects of readiness for our members and their families. The
    AEF cycle quickly reconstitutes our equipment and airmen to deployment
    ready status upon return. Sustained congressional support of these
    programs will help secure our victory in the future. Chairman Ensign,
    Senator Akaka, and distinguished members of the subcommittee, on behalf
    of our Nation's airmen, thank you for your continued support.

        Senator Ensign. Thank you.
        General Austin?

     STATEMENT OF MG LLOYD J. AUSTIN III, USA, COMMANDING GENERAL,
         10TH MOUNTAIN DIVISION (LIGHT INFANTRY) AND FORT DRUM

        General Austin. Mr. Chairman, Senator Akaka, Senator
    Cornyn, Senator Clinton, thank you for the opportunity to
    appear before you today representing the Army's most deployed
    division.
        The 10th Mountain Division is stationed at Fort Drum, New
    York. It includes a newly-formed brigade combat team, which is
    headquartered at Fort Polk, Louisiana. We have 19,000 soldiers,
    and are organized as a modular brigade-centric force, whose
    capabilities span the full range of military operations.
        In the past 12 months, we have successfully redeployed the
    division from Afghanistan. We've also deployed a brigade to
    Iraq. In addition to that, we supported the 42nd Infantry
    Division of the New York Army National Guard as it mobilized
    and deployed to Iraq. We currently have approximately 2,300
    soldiers of our 2nd Brigade Combat Team engaged in combat
    operations in Iraq. I returned from a visit with them 2 weeks
    ago, and can report to you that they are doing a wonderful job.
        One of our brigade combat teams will replace them in the
    next few months, and our division headquarters and remaining
    brigade combat teams are currently scheduled to deploy to
    Afghanistan next winter and assume the mission for the Combined
    Joint Task Force 76. We owe our success to the men and women
    who daily carry out the mission of defending America's
    interests in both Afghanistan and Iraq. These soldiers continue
    to perform magnificently as one of the Nation's key fighting
    forces in the war on terror, while maintaining the highest
    operational tempo anywhere in the world. This operational tempo
    includes increasing the size and scope of home-station
    operations, transformation to the new modular force, deployment
    training, the reset of units, and it also includes the
    sustainment of units currently serving overseas.
        Our readiness is enhanced by our steadfast commitment to
    leverage experience gained from operations in both Iraq and
    Afghanistan, and several lessons are indisputable.
        First, although technology cannot win wars by itself, it
    continues to play an essential role. As we experienced in
    Afghanistan and Iraq, network leaders are bolder and have
    greater situational awareness, even when conducting operations
    across vast geographic distances.
        Second, our experience proves that skilled and disciplined
    soldiers remain indispensable to our combat success. Even our
    most sophisticated satellites and computers cannot peer into
    the mind of an enemy commander, they cannot cultivate trust
    with coalition partners, nor can they make the instant life-
    and-death decisions that win battles. We must, therefore,
    strike the balance between a technical and a human approach to
    winning the war on terror, and beyond.
        Ultimately, our fighting men and women are the key to
    mission readiness. Our soldiers personify the American spirit,
    and embody its values. Their individual readiness is a metric
    by which all else must be measured.
        Soldiers and equipment are at the forefront of our
    transformation to a brigade-centric force that is more modular,
    more versatile, more adaptive, and more efficient. A crucial
    part of our transformation experience includes reset, the
    process of replenishing worn-out combat equipment as units
    return from overseas. The challenge for the future is to
    develop capabilities that provide overwhelming dominance for
    the individual soldier at the point of the spear. Those are the
    soldiers who conduct the brutal, and often deadly, close
    tactical fight. We must put American technology, America's
    intellect, and America's resources to work to ensure the
    success and safety of the young people who perform those
    difficult tasks.
        The 10th Mountain Division is aggressively reshaping to
    achieve greater joint and expeditionary capabilities while we
    prepare and posture for the future. As we wage war and
    transform the Army, I cannot emphasize enough the fundamental
    importance of the men and women who are at the center of all
    that we do. Their values and their commitment are the
    cornerstone of the wars we fight, and the peace that we will
    ultimately win. I appreciate your strong support on their
    behalf, and, once again, thank you for the opportunity to
    appear before you today, and I look forward to answering your
    questions.
        [The prepared statement of General Austin follows:]
               Prepared Statement by MG Lloyd J. Austin III, USA
        Senator Ensign, Senator Akaka, distinguished members of the
    subcommittee, thank you for the opportunity to appear before you today
    representing America's most deployed Army division. On behalf of the
    tremendous soldiers, civilians, and families of the 10th Mountain
    Division and Fort Drum, I am pleased to report that the division is
    proudly answering the Nation's call to duty in support of America's
    strategic interests abroad and the war on terror.
        The 10th Mountain Division is stationed at Fort Drum, New York, and
    includes a newly formed Brigade Combat Team headquartered at Fort Polk,
    Louisiana. We have 19,000 soldiers and are organized as a modular,
    brigade-centric force whose capabilities span the full range of
    military operations and spectrum of conflict. Over the last 15 years,
    the 10th Mountain Division has been involved in more deployments than
    any other division in the United States Army. We currently have
    approximately 2,300 soldiers of our 2d Brigade Combat Team engaged in
    combat operations in Iraq. I returned from a visit with them 2 weeks
    ago and can report to you they are doing an outstanding job. One of our
    Brigade Combat Teams will replace them in the next few months, and the
    division headquarters and remaining Brigade Combat Teams are currently
    scheduled to return to Afghanistan next winter to assume the mission
    for Combined Joint Task Force-76.
        Our success, past and present, would not be possible without the
    dedicated team of nearly 2,000 civilians who manage and lead the
    garrison operations of Fort Drum, New York. They play a crucial role in
    Fort Drum's mission as a key mobilization center and power projection
    platform. In the past 12 months, Fort Drum successfully redeployed the
    division from Afghanistan, deployed a brigade to Iraq, and supported
    the 42nd Infantry Division, New York Army National Guard, as it
    mobilized and deployed to Iraq.
        The 10th Mountain Division owes its current operational success to
    the men and women who daily carry out the mission of defending
    America's interests in both Afghanistan and Iraq, and who continue to
    perform magnificently as one of the Nation's key fighting forces in the
    war on terror. Their accomplishments come amidst the challenge of Army
    transformation and a dramatic expansion in the size and scope of home
    station operations, while also maintaining one of the highest
    operational tempos anywhere in the world.
        On behalf of these remarkable young men and women, I thank the
    members of the committee for their resolute concern and commitment to
    America's fighting force and providing the support they require to
    succeed wherever and whenever the Nation calls them.
        Today, I would like to provide you with an overview of our
    experience with personnel, deployment training, reset of units,
    modularity, and training and equipment as they relate to the 10th
    Mountain Division over the past 22 months.
        Our readiness is enhanced by our steadfast commitment to leverage
    the insights gained from operations in Afghanistan and Iraq. Drawing
    rigid lessons from ongoing operations would be imprudent; however, we
    strive to incorporate the enduring experience while avoiding the case-
    specific issues. Several lessons are indisputable:
        First, although technology cannot win wars by itself, it plays an
    essential role. For example, our growing joint network-centric
    capability is revolutionizing how we fight. As we experienced in
    Afghanistan and Iraq, networked leaders are bolder and less risk-
    adverse even when conducting distributed operations across vast
    geographic distances. In Iraq, it is just as important for a patrol to
    have information as it is for a division commander. In fact, it may be
    more important. Ultimately, we want to extend this network-centric
    capability down to our most junior leaders--allowing them to make
    better decisions, quicker, with greater tactical and even strategic
    consequences.
        Second, although technology is important, experience in Afghanistan
    and Iraq proves that skilled and disciplined soldiers are indispensable
    to our success in modern warfare. Technology plays a useful, but
    distinctly secondary role. We tend to elevate technology above people
    because the human dimension can be troublesome, undependable, and
    frustrating. But even our most sophisticated satellites and computers
    cannot peer into the mind of an enemy commander, interact with local
    populaces, cultivate trust with coalition partners, negotiate with
    tribal leaders, understand societal and cultural norms, or make the
    instantaneous life or death decisions that win battles. Thus, we must
    strike the appropriate balance between a technological, network-centric
    and a human-cultural approach to winning the war on terrorism and
    beyond.
        Ultimately, our fighting men and women are the key to mission
    readiness. 10th Mountain Division soldiers, past and present, personify
    the American spirit and embody its values. Far from receding in
    importance they are ever more clearly the key to victory. Our soldiers
    continue to accomplish spectacular things, overcome enormous
    challenges, and continually prove themselves worthy of America's trust
    and confidence. The measure of their individual readiness is the metric
    by which all else must be measured.
        We must never forget the human dimension of soldiering. America's
    sons and daughters deserve the very best military training, but they
    also deserve world-class health care, reasonable compensation,
    educational opportunities, decent housing options, and a network of
    support services for themselves and their families. I am fortunate to
    be a part of a military community that embraces the quality of life of
    our soldiers as its primary mission. Fort Drum is among the very best
    installations in the world for soldiers and their families.
        Success stories include the Army Well-Being programs that
    contribute to the Army's ability to provide trained and ready forces.
    These include child care, youth programs, schools, recreational
    opportunities, and healthcare improvements. The Fort Drum Army Family
    Team Building program, recently recognized as the best in the Army,
    plays a particularly vital role for families undergoing present and
    future separations due to operations overseas. Another is the
    Residential Communities Initiative, which holds the promise for greater
    availability and quality of housing for military families.
        Consistent with the Army Campaign Plan, the 10th Mountain Division
    is rapidly transforming into a modular, capabilities-based force while
    simultaneously supporting ongoing operations in Afghanistan and Iraq.
    The success of the modular force is apparent from a series of recent
    command post exercises at Fort Drum and the first of two brigade-level
    training rotations at the Joint Readiness Training Center, Fort Polk,
    Louisiana. I am confident that our experience with modular conversion
    fully supports the Army's goal for an increasingly versatile, adaptive,
    and efficient fighting force.
        An integral part of our transformation experience includes
    ``reset,'' a parallel process of replenishing worn-out combat equipment
    as units return from Afghanistan and Iraq. Reset is a priority--a bill
    that we must pay. Otherwise, we risk our readiness for sustained
    campaigning in the war on terror and beyond.
        Consequently, resetting the force will not be a one-time event. In
    some cases equipment from previous deployments is left behind in
    theater for follow-on units to use, or otherwise requires
    reconstitution due to combat operations in some of the most
    inhospitable conditions found anywhere in the world. As equipment ages
    and wears it requires reset or replacement, often on very short time-
    lines as units train and prepare to re-deploy to Iraq or Afghanistan.
    High operational tempo and the environment in which we conduct
    operations cause accelerated degradation of equipment. This requires a
    sustained commitment if combat capability and readiness are to be
    maintained.
        But just as there are challenges to resetting, there are also
    opportunities. The process of transforming a unit following a recent
    deployment is facilitated by the momentum and focus that comes from the
    deployment experience. In this environment leaders are able to see the
    value of the modular force initiative and its promise of enhanced joint
    interdependence capability.
        Soldiers returning from overseas deployments often share a joint
    and expeditionary mindset that conditions them for future campaigns.
    This future is assisted by reenlistment incentives that play an
    invaluable role in retaining a force that is tailored, trained, and
    motivated. The Army's new stability initiatives, especially Life Cycle
    Manning, allow us to retain their precious combat experience and remain
    in a high state of readiness for extended periods of time.
        As we work to transform and reset units returning from overseas, we
    are also leveraging their experience in order to better train and equip
    them in the future. Ongoing operations in Afghanistan and Iraq, for
    example, make clear that the logistical support needed to conduct
    sustained operations is more challenging than ever. In particular, we
    are operating across noncontiguous, nonlinear areas of operation
    involving complex multinational and interagency support relationships.
        In both Afghanistan and Iraq, the security situation and
    compromised or limited local transportation infrastructure have created
    a situation where coalition forces do not always control contiguous
    supply routes. There are areas of relative calm and security, but the
    process of moving between and among them often creates extraordinary
    management and planning challenges.
        In Afghanistan, for example, there are situations where soldiers
    and units are primarily dependent upon solitary supply routes
    stretching hundreds of miles. Security precautions add an imposing
    planning and resource requirement that hinders an otherwise optimal use
    of available logistics assets, including coordinated ground convoys and
    aerial resupply.
        The challenge for logisticians is being met by increased
    connectivity, particularly satellite-based communications that
    facilitate reliable information flow across the battle space or provide
    reachback to the United States. Satellite technologies allow real-time
    requests for equipment and supplies that cut response times and
    increase overall efficiency.
        Other focus areas for logisticians include development of an
    accurate, responsive, and timely distribution network; the ability to
    move equipment and supplies from transportation centers at ports and
    airfields; and an integrated supply network. As in all such challenges,
    the success of the mission is directly attributable to the selfless
    dedication and hard work of our people--soldier, civilian, and
    contractor, who make up the energetic team that ultimately gets the job
    done. Nothing would move without them.
        In terms of training the force for current and future operations,
    our observation is that America has the finest trained fighting force
    in the world. Every effort continues to prepare our young men and women
    for the challenges they will face in Iraq, Afghanistan, and elsewhere.
    This preparation includes leadership development designed to foster a
    culture of innovation and increased institutional agility. Our goal is
    to train soldiers who are confident in themselves, their equipment,
    their leaders, and fellow soldiers. The Soldier's Creed, Army Values,
    and the Warrior Ethos are reinforced in all we do.
        Unit training is an extension of the focus on the soldier. It is
    designed to instill mental and physical rigor while engendering a
    refusal to accept failure. This is particularly important in the
    context of the new modular force, where key training and education will
    focus on developing an expeditionary capability to deploy and fight
    interdependently with our joint partners in complex terrain with little
    or no notice. We have seen the value of our efforts to continually
    capture, study, and leverage lessons learned from recent operations
    across the joint force. Individuals and units are trained using
    realistic scenarios, both at Fort Drum, the Combat Training Centers,
    and the recently implemented Joint National Training capability
    developed by Joint Forces Command and the Services.
        Transformation has afforded the 10th Mountain Division the
    opportunity to translate many lessons from Iraq and Afghanistan into
    critical training opportunities for our soldiers. These include
    valuable language and cultural programs that provide our soldiers with
    the sensitivity and linguistic skills to understand and converse with
    the populace. This capability enables an ``every soldier a sensor''
    approach in gathering information and developing intelligence.
        Soldier acculturation is too important to be relegated to last-
    minute briefings before deployment. The Fort Drum Language Training
    Facility is an important response to these new training requirements.
    The goal of our cultural and language awareness program is a full
    spectrum approach to language and cultural training encompassing
    maintenance for Army linguists, specific training for small unit
    leaders, and fully resourced courses designed to support qualified
    linguists for future mission requirements.
        With three full time language trainers, the 10th Mountain Division
    has a command language training program and cultural awareness library
    in one consolidated training center. Here, the language training
    programs are complimented by a cultural awareness library containing
    materials pertaining to theater specific cultures, including a digital
    library accessible by all soldiers on Fort Drum. By fusing both the
    digital and physical training environments together, and stressing the
    importance of cultural awareness and language capabilities, 10th
    Mountain Division soldiers are better prepared to understand the
    operational environment today and into the future.
        Similarly, we are currently working on a system of modular
    structures that can be arrayed in different configurations to replicate
    urban areas, road blocks, and forward operating bases. The idea is to
    train units and soldiers in way that develops familiarity and
    confidence with what they will face in Afghanistan, Iraq, or elsewhere.
    Other key initiatives include increased ammunition allocations to
    improve soldier live-fire training, a focus upon key battle drills, and
    an emphasis on effects-based operations employing lethal and nonlethal
    capabilities from across the Joint team. The 10th Mountain Division has
    also instituted a number of programs to help our combat veterans deal
    with Post-Traumatic Stress Disorder, including a unique partnership
    with Yale University.
        In terms of equipping the force, our soldiers deserve the very best
    protection and equipment money can buy. Our challenge in this area has
    been twofold. First, the process of equipping the force for current and
    future operations is conditioned on our ability to rapidly recapitalize
    old equipment; and second, to acquire needed upgrades to existing
    stocks and systems.
        The 10th Mountain Division has directly benefited from a number of
    recent programs that help us fill unit and soldier equipment
    shortfalls. These include the Rapid Fielding Initiative, which
    leverages commercially available ``off the shelf'' technology to fill
    needed requirements rather than waiting for traditional acquisition
    programs to address the shortages. Another, similar program is the
    Rapid Equipping Force that typically uses commercial and field-
    engineered solutions to quickly meet operational needs. The critical
    contribution such programs have on mission and unit readiness cannot be
    overstated.
        The challenge for the future is to develop capabilities that
    provide overwhelming dominance for the individual soldier at the point
    of the spear, specifically our soldiers who conduct the brutal, often
    deadly, and close tactical fight. We must put American technology,
    intellect, and resources to work to ensure the success and safety of
    the young people who perform this difficult task. This means rapid
    spiraling of new and promising technologies into the current modular
    force, integration of current combat lessons in areas of doctrine,
    organization, equipment, and other key elements, and eventual
    incorporation of advanced capabilities developed in the Future Combat
    Systems program. The goal is to enable our soldiers to see first,
    understand first, act first, and finish decisively.
        The 10th Mountain Division is aggressively reshaping to achieve
    greater joint and expeditionary capabilities, winning the war today as
    we prepare and posture for the future. We also remember the ultimate
    sacrifice made by soldiers on behalf of our Nation. For them, and those
    who will follow, we remain committed to maintaining the finest possible
    fighting force with essential capabilities for the fight we face today,
    and tomorrow.
        Our young men and women represent the best of their generation, and
    continue to exceed every expectation for courage, dedication,
    adaptability, and selfless service. As we wage war and transform the
    Army, I cannot emphasize enough the fundamental importance of the men
    and women who are at the center of all we do. Their values and
    commitment are the cornerstone for the wars we fight, and the peace we
    will ultimately win. I appreciate your continued strong support on
    their behalf.
        Once again thank you for the opportunity to appear before you
    today. I look forward to answering your questions.

        Senator Ensign. Thank you, General.
        Admiral McCullough.

      STATEMENT OF RADM BARRY McCULLOUGH, USN, COMMANDER, CARRIER
                            STRIKE GROUP SIX

        Admiral McCullough. Yes, sir.
        Mr. Chairman, Senator Akaka, distinguished members of this
    subcommittee, I am extremely pleased to be here today and have
    the opportunity to testify before you on the readiness of the
    John F. Kennedy Carrier Strike Group.
        This strike group enjoyed an extremely successful 6\1/2\-
    month deployment to the U.S. Central Command area of operations
    from June to December 2004. During this deployment, our
    aircraft flew a total of 1985 combat sorties in support of
    Operation Iraqi Freedom, including 67 strike events that
    delivered 74 weapons. U.S.S. John F. Kennedy and Carrier Air
    Wing 17 conducted flight operations for 16 to 18 hours a day,
    for 16 straight days, in support of Operation Al Fajr, the
    liberation of Fallujah from international terrorists and anti-
    Iraqi forces.
        In addition to the air mission over Iraq, the John F.
    Kennedy Strike Group provided a visible presence in the
    vicinity of the Central and Southern Arabian Gulf oil
    infrastructure to deter and, if necessary, destroy
    international terrorist organizations, enabling unhindered
    commerce throughout the Arabian Gulf, and contributing to
    theater security cooperation efforts.
        I address the following in my testimony: the key training
    and equipping factors and events that prepared our units for
    the 2004 deployment; in-theater maintenance and logistics;
    personnel morale and family-support programs; the state of
    readiness upon our return from the deployment; and requirements
    to again deploy to a forward theater in support of the Navy's
    Fleet Response Plan, if necessary.
        Mr. Chairman, on behalf of the United States Navy and the
    John F. Kennedy Carrier Strike Group, I appreciate your
    continued support, and I stand ready to answer your questions.
        [The prepared statement of Admiral McCullough follows:]
                Prepared Statement by RADM Barry McCullough, USN
        Senator Ensign, Senator Akaka, and distinguished members of this
    subcommittee, I am extremely pleased to have the opportunity to testify
    before you on the readiness of John F. Kennedy Strike Group (JFKSG)
    prior to and during its 2004 deployment (07 June-13 December 2004), and
    on the state of the group's readiness upon return to the Continental
    United States (CONUS).
        JFKSG returned from a 6\1/2\ month deployment to the U.S. Central
    Commmand Area of Operations (CENTCOM AO) on 13 December 2004. The JFKSG
    consisted of Carrier Air Wing 17 (CVW 17), U.S.S. John F. Kennedy,
    Comdesron 24, U.S.S. Vicksburg, U.S.S. Seattle, U.S.S. Spruance, U.S.S.
    Roosevelt, and U.S.S. Toledo. The 69 aircraft of CVW 17 consisted of a
    mix of fixed and rotary wing aircraft, including 44 strike aircraft (34
    F/A 18Cs and 10 F14 B+), representing nearly 40 percent of the strike
    and 47 percent of the electronic warfare assets in the CENTCOM AO last
    summer and fall. Additionally, CVW 17 deployed with some of the most
    advanced capabilities in the fleet including Hawkeye 2000 with
    Cooperative Engagement Capability (CEC), F/A 18C Hornets with Advanced
    Technology Forward Looking Infra-Red (ATFLIR) and Multifunction
    Information Display System (MIDS), and EA-6B Prowlers with Single
    Channel Ground and Air Radio System (SINCGARS) radios and USQ-113
    communications jamming in the EA-6B Prowlers.
        The Cruiser/Destroyer ships completed their scheduled maintenance
    availabilities prior to November 2003 and U.S.S. John F. Kennedy
    completed an extensive predeployment maintenance availability in
    November 2003. The carrier's work included repairs to main steam
    piping, flight deck catapults, main boilers, critical C4I equipment,
    and ship's air conditioning. An important factor is that the Target
    Configuration Date (lockdown date for system baseline) for all Command,
    Control, Communications, Computers, Intelligence, Surveillance, and
    Reconnaissance (C\4\ISR) equipment upgrades in JFKSG was before the
    Intermediate Phase of predeployment training, allowing us to identify
    and correct any potential problems that arose with these systems prior
    to the advanced phase of training and deployment. It also allowed us to
    train with the equipment, with which we deployed. CVW 17 received the
    majority of its planes and associated equipment by February 2004. The
    Band 2/3 Pods that provided required EA-6B jamming capability were
    received as a turnover item in theater from the George Washington
    Strike Group in July 2004. The F/A-18C Advanced Technology Forward
    Looking Infrared (ATFLIR) capability was received just prior to
    deployment. This was problematic from a training perspective and is
    being worked hard by the OPNAV staff and the technical community. There
    are currently 14 Band 2/3 Pods in the Navy inventory, three more will
    be procured this year. These will be replaced by the Low Band
    Transmitter that will be installed in the EA-6Bs and the follow on F/A-
    18G. Initial Operational Capability for the Low Band Transmitter is in
    2007. Inventory objective for this capability is 195. ATFLIR pods are
    now being produced at the rate of about one a week and entering the
    fleet in a steady stream. 34 will enter service this fiscal year.
        Anytime a Carrier Strike Group (CSG) deploys, we work to prepare
    our dependents for this lengthy separation period. Fleet and Family
    Service Center and representatives from the Family Advocacy Program
    conduct seminars for our servicemembers and their families to discuss
    issues associated with lengthy deployments (e.g. Money Management, Navy
    and Marine Corps Relief Society, American Red Cross, Chaplain Services,
    Suicide Prevention, Anger Management, Single Sailors, Operational
    Security, Hurricane Preparedness, and Wills and Powers of Attorney).
    JFKSG completed this predeployment preparation in April and May 2004.
        From a training perspective, leading up to the 2004 deployment
    (originally scheduled for July 2004) we knew from extensive Navy
    commitments to Operations Enduring Freedom (OEF) and Iraqi Freedom
    (OIF) that we could be required to deploy earlier. As such, we
    structured the predeployment training schedule to be ready to go as
    early as April 2004. Central to this commitment was the theme of
    bringing forward in the schedule as many key training evolutions as
    possible. Our goal was to complete the equivalent of all intermediate
    phase training requirements in the January 2004 CSG underway period and
    leverage off of every resource and service we could obtain. The JFKSG
    coupled all Carrier Unit Level Training (ULT) events (Tailored Ships
    Training Availability (TSTA) Phases I, II, and III and the Final
    Evaluated Problem (FEP)) into one at sea period for the first time. CVW
    17 embarked and completed Pilot/Flight Deck Crew Carrier Qualification
    prior to these ULT evaluations. In the same underway period JFKSG
    conducted a self-designed, integrated, joint and combined exercise we
    called Surge Exercise. We used 47 opposition force aircraft and 2
    submarines, gained joint experience with U.S. Air Force tactical
    aircraft and in-flight refueling capability, and coalition exposure
    operating with a Canadian Task Group. This enabled the CSG to enter the
    actual intermediate level training period at a higher than average
    proficiency level in most warfare areas (e.g. Air Warfare, Strike
    Warfare, Anti Submarine Warfare).
        Our success in preparing for deployment was built on early
    integration of the team as often as possible at sea, weapons delivery
    repetitions, and training to standardized tactics. Our focus on
    flexibility, adaptability, and disciplined adherence to Rules Of
    Engagement (ROE) proved critical in combat. Early exposure to coalition
    forces in the training cycle meant our force was comfortable in a
    coalition environment on arrival in theater. The CSG completed what we
    now call Fleet Response Plan (FRP) sustainment training in the 84 days
    between completion of Intermediate Level Training and Deployment, and
    conducted Coalition Joint Task Force Exercise (CJTFEX), our deployment
    certification event, enroute to the CENTCOM AO. Effective sustainment
    training, especially during the period following the Intermediate
    Training Phase prior to deployment, was critical to success. While no
    in-theater mission ever replicates exactly what we experience during
    our predeployment training phases, this training taught all warfare
    commanders to think through potential missions and develop plans to
    execute operations. Through these efforts, JFKSG deployed to the
    CENTCOM AO fully manned, trained, and equipped to accomplish our
    mission.
        During deployment, JFKSG aircraft flew a total of 1,985 OIF combat
    sorties, including 67 strike events in which there were 74 ordnance
    deliveries. JFK/CVW 17 conducted flight operations for 16-18 hours per
    day for 16 straight days during Operation Al Fajr (Liberation of
    Fallujah), flying up to 84 extended sorties per day (160 sortie
    equivalents) and missing only one combat sortie. At any given time
    during Operation Al Fajr, CVW 17 aircraft were simultaneously over
    Fallujah, patrolling the Syrian border area, and flying cover for
    coalition forces in Mosul. Insurgent activity was prevalent all over
    Iraq, and U.S. Navy Forces were called upon as part of the Joint Force
    to terminate this activity. Navy Carrier Aviation was required in the
    CENTCOM AO to execute the Air Tasking Order (ATO) produced by the
    Coalition Force Air Component Commander (CFACC) at the Combined Air
    Operations Center (CAOC).
        In addition to the air mission over IRAQ, JFKSG provided a visible
    presence in vicinity of the Central and Southern Arabian Gulf oil
    infrastructure to deter, and if necessary, destroy International
    Terrorist Organizations, enabling unhindered commerce throughout the
    Arabian Gulf and contributing to Theater Security Cooperation efforts.
    Additionally, JFKSG assumed the North Arabian Gulf Maritime Security
    Operations mission following the departure of the Expeditionary Strike
    Group Three (ESG-3) staff in early November. This mission protects the
    Iraqi Oil Infrastructure around Al Basra Oil Terminal (ABOT) and Khor
    Al Amaya Oil Terminals (KAAOT) in the Gulf, and oil distribution
    systems from Al Basra, down the Al Faw Peninsula, south to the Gulf.
        I would now like to discuss logistics and maintenance while
    deployed to the CENTCOM AO.
        There were no mission-impacting equipment casualties during JFKSG's
    deployment. Although the high Operational Tempo in support of OIF and
    OEF placed normal wear and tear on our equipment, we achieved 100
    percent operational availability utilizing our own maintenance
    capabilities and superb sailors.
        The Strike Group Intermediate Maintenance Activity concept provided
    organic maintenance and technical support for 13 aircraft squadrons, 11
    ships, and Naval Support Activity Bahrain. JFKSG Sailors conducted
    depot level voyage repairs that in the past would have been contracted
    out to the private sector. U.S.S. John F. Kennedy alone saved an
    estimated $10 million in repair costs by stressing self-sufficiency.
    JFK sailors expended 41,000 man-hours making these repairs. The payoff
    was extraordinary flexibility in meeting mission requirements.
        Improvements made to JFK's avionics maintenance facility
    (Consolidated Automated Support System (CASS)) prior to deployment
    increased repair success rate to 84.8 percent. This represents a 9.2
    percent increase from JFK's 2002 deployment average. JFK was the first
    aircraft carrier to successfully deploy with these improved processes,
    paving the way for future CSG deployments.
        In addition to using our organic experts, Distance Support (daily
    e-mail and chat access to the CONUS technical community) assisted our
    sailors in technical investigation of and repairing malfunctioning
    critical systems. Years ago we would have immediately flown these
    technical experts from CONUS into the forward theater to assist in
    repairs. Technology has enabled us to be better stewards of the funds
    that taxpayers provide, by applying maximum effort to fix material
    casualties without the added cost of moving a technician into a forward
    theater. While we must continue to balance length of time for repairs,
    criticality of the system, mission impact, and overall cost, JFKSG's
    measure of success was zero mission impacting material casualties
    during deployment.
        The results from our aggressive self-sufficiency and the superb
    technical support from CONUS experts, mostly via Information Technology
    (IT) reach-back, enabled us to return from deployment in outstanding
    material condition. There were no immediate maintenance requirements
    upon our arrival in CONUS following our deployment that would have
    precluded our ability to deploy again, to go forward to any regional
    combatant commander's area of operations to conduct the full spectrum
    of Naval Operations, under the Fleet Response Plan.
        Logistic support in theater was very good. While heavy lift
    capability can be adequately provided by Logistics Task Force (CTF 53)
    ships, using ships alone lengthens resupply time and delays getting
    critical equipment to the fight. To expedite heavy repair part
    delivery, CSGs deployed to the Gulf use in-theater Sea Stallion
    Helicopters (MH-53) to move oversized material (e.g. aircraft engines).
    This enables Non Mission Capable (NMC) aircraft to be returned to Fully
    Mission Capable (FMC) status as soon as practical. MH-53's were also
    used to deliver similar materials to our helicopter detachments ashore
    and for repair of CVW 17 aircraft diverted ashore.
        However, MH-53s in the Fifth Fleet Area of Operations are deployed
    as Mine Warfare assets and they must balance supporting CTF 53 logistic
    missions with maintaining training and readiness for their Mine Warfare
    mission. Additionally, the aging MH-53 airframe resulted in some
    periods of non-availability due to maintenance and repairs, which
    delayed delivery of critical parts. Procurement of MH-60S helicopters
    and the Navy's Helicopter Master Plan will address this in the future.
    In the near term MH 53s and CLF ships will continue to have to provide
    this capability.
        I would now like to talk about Intra-Strike Group Logistics and
    Helicopter Flight Hours. Our varied missions in CENTCOM AO require our
    ships to be dispersed over a large area--the entire Arabian Gulf, the
    Horn of Africa, and the Red Sea. Only a small number are in close
    proximity to the aircraft carrier. A surface combatant may only
    rendezvous with a CLF ship every 10 days, which significantly lengthens
    the supply lines for critical support. For those surface combatants in
    close proximity to the aircraft carrier, utilization of organic
    helicopters for logistics alleviates this support problem.
        There are restraints on our ability to use helicopters for
    logistics missions. First, the helicopter squadron embarked on the
    aircraft carrier and the helicopter detachments embarked on our surface
    combatants are essential warfighting assets and must use the allocated
    flight hours primarily for warfighting missions. Second, the Fatigue
    Life Maintenance Program limits quarterly airframe flight hours. The
    only sea-based helicopter squadrons dedicated for logistics missions
    are those onboard our CLF ships. As a result, Intra-Strike Group
    movement of critical parts and supplies to support our ships and
    squadrons is problematic. Again, the Navy's Helicopter Master Plan will
    address this issue in the future.
        The only fixed wing organic logistics asset is our Carrier Onboard
    Delivery (COD) detachment. However, the C-2 Greyhound is an older
    airframe and maintaining both the planes in our detachment in a FMC
    status for extended periods is difficult due to the high OPTEMPO and
    the extreme summer temperatures. While we often used them for logistics
    delivery, including some heavy lift, we always had contingency plans to
    move high priority parts/personnel via non-organic assets (MH-53s) in
    the event of primary aircraft malfunction.
        I would now like to discuss a couple aircraft equipping issues
    while we were in the Arabian Gulf. The limited number of ATFLIR pods
    presents a significant challenge in the CENTCOM AO. While there is an
    expectation that every strike aircraft flying over IRAQ will have a
    third generation Forward Looking Infrared Reactor (FLIR) pod, CVW 17
    was only able to provide one pod per section of strike aircraft. As
    ATFLIR capability is just now being fielded for operational use, we
    were required to turn our four pods over to U.S.S. Harry S. Truman
    (HST) upon our departure from the Arabian Gulf. While our ATFLIR pods
    performed exceptionally well, maintaining them required 100 percent
    technical representative (TECH REP onboard entire deployment) support
    to sustain readiness levels. This TECH REP was also transferred to HST
    on our departure. ATFLIR capability is essential in limiting collateral
    damage while executing Urban Close Air Support (CAS) missions,
    especially at night.
        Additionally, the three Electronic Attack Band 2/3 Pods for the EA-
    6B Prowler were turned over to us on our arrival in theater. This
    capability is used in critical Stoplight (a specific jamming technique
    in support of ground forces) missions. Our EA-6B aircrew and
    maintainers had no experience with these pods prior to actual combat
    operations.
        Finally, regarding Airwing flight hours, we were augmented to meet
    all operational tasking without any major maintenance requirements
    above those directly associated with routine flight hour based
    maintenance. Operational flight hours were augmented to specifically
    meet air coverage requirements.
        Turning now to personnel, morale was high and remained high during
    JFKSG's deployment. The JFKSG enjoyed record setting advancements this
    deployment due to an aggressive mentorship and training program.
    Additionally, JFKSG sailors achieved superb numbers for Warfare
    Qualifications; a testament to the professionalism of today's Sailors.
    Due to the highly successful deployment, the high September 2004
    advancement rate, strong warfare qualification numbers, Zone A
    retention (0-6 years of service), while slightly below average in
    fiscal year 2004, improved significantly in fiscal year 2005 and is
    currently above Navy average. Our sailors were fully trained, properly
    equipped, and fully believed in the mission they were executing, and it
    showed.
        As I previously mentioned, due to its routine deployment cycle, the
    Navy has established an outstanding support network for its sailors and
    families, both ashore and at sea. While deployed the Navy Morale,
    Welfare, and Recreation Organization provided services to both the
    sailors at sea and the family members at home (e.g. reduced
    entertainment ticketing prices, reduced tour prices, USO services).
    Each sailor also has his own internet e-mail account and access to
    telephones through the Sailor Phone Program. These paths allow
    communications between sailors and their families at unprecedented
    levels. On a not to interfere basis, Video Teleconferencing was made
    available to sailors for special events, like the birth of a child.
    Additionally, Navy and Marine Corps Relief Society provided a financial
    and psychological safety net for the sailors and families at home. In
    the weeks prior to our return from deployment, the Fleet and Family
    Support Center sent four members to JFKSG and conducted Return and
    Reunion Training on board each ship (e.g. New Parents, Reunion and
    Intimacy, Automotive Purchase, Anger Management, Suicide Prevention,
    Domestic Violence Prevention). Similar training was conducted for the
    family members back home. Additionally, a Virginia State Trooper
    augmented JFKSG individual unit safety standdowns prior to return to
    CONUS.
        Following deployment, JFKSG completed a comprehensive training
    package to ensure readiness was maintained. This training included a
    week long Multi-Battle Group Inport Exercise (MBGIE) that included
    ships and staffs in Norfolk, VA, Mayport, FL, and the UK, plus a week
    of underway sustainment training during which JFK/CVW 17 maintained
    certification for Blue Water Operations and the ships completed
    required ULT. This additional underway time proved critical in
    maintaining JFK's flight deck readiness at deployment levels of
    proficiency.
        Following our post deployment sustainment period, our ships will
    enter routine, scheduled maintenance availabilities. The ships do not
    require these maintenance periods to redeploy on short notice; they are
    simply part of the Navy's continuous maintenance approach, ensuring our
    ships remain surge ready under FRP.
        Mr. Chairman, on behalf of the United States Navy and the John F.
    Kennedy Strike Group, I appreciate your continued support and I thank
    you for this opportunity to testify. I stand ready to answer any
    questions you may have.

        Senator Ensign. I want to thank each of you for being here
    today, and, once again, thank you for your service, especially
    in combat zones, but, in general, your service to this country.
        We will begin 6-minute rounds of questioning.
        I think something that's on all of Americans' minds, and if
    any of you could kind of give us a quick summary, comment on
    body armor and up-armoring of vehicles, where we are at this
    point. If we could go down the line, and if you could give a
    quick, at least from your perspective, what you saw and where
    we are, as far as what is necessary for up-armoring.
        Yes, General?
        General Austin. Sir, I can tell you that, from my
    perspective in the 10th Mountain Division--and, once again, we
    have a brigade combat team that's deployed to theater right
    now--all of our soldiers are equipped with adequate body armor
    to protect themselves as they conduct combat operations. We're
    grateful for all the efforts of the members of this committee
    to ensure that we not only take care of the soldiers that are
    in theater, but also forge ahead to outfit the entire force
    throughout the Army. That is continuing on as we speak. The
    results, the positive results, have cascaded back to our home
    station at Fort Drum, where have sufficient body armor to
    outfit all of our folks back in training. I'm confident that
    the units that we deploy to theater in the upcoming days will
    be outfitted, to the man and woman, without question.
        Senator Ensign. Remember convoy vehicles, as well, I'd like
    to hear, as far as--not just, obviously, high mobility
    multipurpose wheeled vehicles (HMMWVs) and personnel, but also
    on convoy vehicles, as well.
        General Austin. Yes, sir. The follow-up to that, just over
    in Iraq here 2 weeks ago, and every vehicle that left the
    forward operating bases that were part of the 10th Mountain
    Division and 3rd Infantry Division formations were armored. So
    they've made great progress in theater, and that's a positive
    slope that continues to improve. The soldiers have great
    confidence in their equipment, sir.
        Senator Ensign. General Buchanan.
        General Buchanan. Senator, first off, I would echo General
    Austin's comments, but I would tell you, as a component with
    the fewest number that actually operate outside the wire in
    Iraq and Afghanistan, all of ours are very confident in the
    individual protection equipment that they are, in fact,
    wearing. Those of us that are operating vehicles, the gun
    trucks, as part of the convoy ops, are very thankful for all of
    the efforts that have been done, and all of those are, in fact,
    now armored.
        All of the HMMWVs that we operate outside of the wire in
    both fields are either--one, are up-armored or they have the
    bolt-on kits, except for, I will tell you, there are a couple
    of locations in the southern part of Iraq where I have had to
    authorize unarmored for the very reason that they would sink in
    the mud, quite honestly, but we have taken that with a very
    careful view toward the risk itself in making that happen. But
    all of our airmen are extremely confident. I know that we are
    moving forward to ensure they are protected as much as possible
    in this dangerous environment.
        Senator Ensign. General Metz.
        General Metz. Sir, as we moved into Operation Iraqi Freedom
    II, we were challenged to get every soldier moving in the
    country with body armor. As the rotation continued, we had
    every soldier in body armor. Today, like at Fort Drum, at Fort
    Hood, and across the Corps, all soldiers have the body armor.
        I visited hospitals, and soldiers and marines in the field,
    that can attest that body armor saved their life, and they are
    confident in that body armor. They wear it with discipline and
    with the knowledge that it will protect them.
        When we began Operation Iraqi Freedom II, we were moving
    formations in, based on a mission analysis that said we needed
    about one-third armor and two-thirds motorized. In that
    particular time, we were beginning to field those up-armored
    HMMWVs. When General Casey arrived, he challenged me to get to
    the point where no soldier or marine left a forward operating
    base without up-armor. Shortly thereafter, the summer and fall
    of last year, battalion-commander level leadership, were making
    conscious decisions and doing risk analysis if anyone left a
    forward operating base without an up-armored HMMWV. We achieved
    the goal of no one leaving those bases without up-armored
    vehicles on February 15, just after I departed. But, those
    vehicles that up-armor--whether it's an up-armored HMMWV or
    add-on armor to larger trucks and transportation vehicles, has
    saved lives, and it has been a successful program to protect
    our soldiers, marines, airmen, and sailors that are driving in
    many of the convoys across the country.
        Senator Ensign. Okay. Just so I have it right, the convoys,
    nobody leaves now without--even on the convoy trucks--they're
    all fully armored.
        General Metz. Yes, sir.
        Senator Ensign. Okay, thank you.
        General Sattler. Sir, I'd just chime in on what everyone
    else said--the body armor is 100 percent right now. The Small
    Arms Protection Inserts (SAPI) plates that are out there, as
    General Metz said, constant stories of courage and valor for
    those SAPI plates going on, mano a mano, saved the lives of
    warrior soldiers, sailors, airmen, and marines in the fight.
    The enhanced SAPI plates that are being developed right now
    will take that to an even higher level, and I thank you very
    much for the funding to go ahead and procure those enhanced
    SAPI plates.
        On the vehicles, when the MEF was told to go back, it was
    evident that the MEF was going to go back--this would be over a
    year and a half ago, a little over a year ago, in the late
    fall--we did not have all of our vehicles up-armored at that
    point, because the initial fight did not display the improvised
    explosive devices that were starting to come on during the
    insurgency. When funding was made available, and the ingenuity
    of industry, we were able to up-armor every vehicle before the
    MEF came in, in February or March a year ago. It was first-
    generation. It was three-sixteenth-inch armor, but that was
    what was available, 100 percent of the vehicles, both HMMWVs
    and seven-ton trucks.
        Over the course of the year, thanks to additional funding,
    we were able to put a second generation of \3/8\-inch armor on
    those vehicles where we improvised our own kits. We all started
    the flow the M1114 up-armored HMMWV, built from the factory.
        General Metz cross-leveled across the force as our boss, he
    took the HMMWVs from those who maybe weren't quite as critical
    a need for them and cross-leveled when we brought our two
    Marine Expeditionary Forces in, giving us over 100 up-armored
    HMMWVs to go ahead and give to the marines that were come in
    with those into the Najaf and Karbala area, and we kept those
    for the entire time they were there, and then they were
    transferred to the 155 Army--the Army Enhanced Separate Brigade
    that came in that replaced them. So it was oriented towards the
    area it was needed. Once again every vehicle that would leave a
    compound was, in fact, up-armored.
        The last part of that is, as the additional Mark-1114s
    (M1114s) come off the line, General Metz set it up, and General
    Vines executed it, that the Marines received 100 of the Army's
    delivery coming off the line because of the shortage that we
    had. So it's truly been a joint solution.
        But, I will close by saying that we've had armor since the
    day we got there. We've made it better, over time, as
    production and technology improved it. It's been shared across
    the force to make sure that the warrior, on the darkest, most
    dangerous road, the most frequent, received it first. So it was
    prioritized by need, not by Service parochialism. I'm proud to
    say that, sir.
        Thank you very much, sir.
        Admiral McCullough. Mr. Chairman, we obviously have much
    less requirement for this capability than my land-service
    brethren. The sailors we put out on our maritime intercept
    operations are currently protected with Kevlar jackets, which
    are susceptible to penetration by small arms. The Navy is in
    the process of purchasing--and, in fact, we've outfitted our
    first two crews with improved jackets that are not susceptible
    to that capability, for operations in maritime intercept
    operations during noncompliant boardings. We appreciate the
    funding for that, and we're quite satisfied with that
    capability.
        Senator Ensign. Senator Akaka.
        Senator Akaka. Thank you very much, Mr. Chairman. I want to
    thank you for holding this hearing. Our hearings have been
    meaningful and helpful in our work here in the U.S. Senate. Mr.
    Chairman, I want to thank you so much for your efforts towards
    ensuring that our troops are, and continue to be, the best
    trained and the best equipped. Mr. Chairman, you know that you
    have my support in doing this.
        I want to add my welcome to the panel here. I would like to
    tell our witnesses that we do appreciate what you and the brave
    men and women of our Armed Forces are doing for our country.
    All of you have put your lives on the line to protect our
    country. Our servicemembers are in our thoughts and in our
    prayers, and they have our sincere gratitude for their
    dedication and their sacrifices.
        We, in Hawaii, know firsthand of these sacrifices from the
    time away from home and families through the ultimate sacrifice
    of giving one's life in service to our Nation. In January, over
    30 marines lost their lives in a helicopter crash in the Anbar
    province of western Iraq, and most of them were stationed at
    the Marine Corps Base in Kaneohe, Hawaii. So, I have every
    confidence in our U.S. Armed Forces and their ability to excel
    at whatever we might ask of them, but I'm concerned about the
    strains we are placing on them and the long-term implications
    of this sustained high tempo of operations.
        General Sattler, I understand that your forces are having
    readiness problems today because of the shortage of equipment
    left back in the United States when so much of our equipment is
    needed for the units currently deployed to Central Command.
    Obviously, we need equipment for our forces to train with, but
    we also need to get into our depots to repair and reset it
    after all the wear and tear of operations in the desert. But,
    the same piece of equipment cannot be in two places at once.
    Any equipment you don't have is going to have to be taken from
    someone else, who will then be short.
        The question is, how are the marines allocating equipment
    among stateside units? I know this affects all the Services to
    one degree or another, so our other witnesses may also wish to
    respond to this question.
        General Sattler. Senator, when we came back, when the II
    Marine Expeditionary Force moved in behind us, a conscious
    decision was made to leave the equipment in place. It would not
    have made sense to load up the equipment and push it all back
    to the States, paying the transportation and the delay costs,
    doing the same thing with the unit coming in, especially in the
    area of communications, where, to set up the delicate
    communications gear and get the architecture and the backbone
    situated, to tear that down and rebuild it to take ours back
    would not have made sense.
        The timing for the other unit to train before coming over
    required them to hold their gear, mainly in the Camp Lejeune
    and the Cherry Point, North Carolina, arena. So where we stand
    right now, sir, the agreement was, we would leave everything
    that was required for the forces coming in. As we came home, we
    are now in the process of cross-leveling the equipment within
    the Marine Corps. We're taking some equipment from units that
    are in the Pacific to bring it out towards Camp Pendleton, and
    some of the equipment that was left in Camp Lejeune there at
    North Carolina is, in fact, now moving towards Camp Pendleton
    and towards Twentynine Palms.
        Just yesterday, a trainload of 156 pieces of principle land
    items and numerous containers of communications and electronics
    gear just arrived at Camp Pendleton. It's being broken out
    right now.
        So, you're right, sir, you can't have a set at Camp
    Lejeune, a set at Camp Pendleton, and a set in Iraq, because
    it's a shell game; someone doesn't have a pea under their
    shell, if you'd excuse the analogy there.
        What we will do, though, is we will cross-level the gear
    over so that--we're coming back at a--as you can imagine, sir,
    at a very high proficiency level. But, that'll start to atrophy
    as we fell off the gear. When the equipment moves in, we will
    be able to identify, by this coming Friday, any shortages that
    can't be neutralized by the cross-leveling, and then those will
    be brought forward to our headquarters here in Washington to
    facilitate another possible solution. There are other options
    that we could go ahead and go to, sir.
        So, to answer your question, it is a problem right now, as
    I sit here. We do not have the necessary equipment if you sent
    us to war tomorrow, but we have the capability, and we know we
    could get the gear there to meet up with us. It's just getting
    that training set in place. Hopefully, sir, within 30 days,
    I'll be able to tell the committee that that is, in fact, taken
    care of.
        Senator Akaka. General Metz?
        General Metz. Sir, the Army's in a very similar situation
    as described by General Sattler. We focus on, first of all,
    ensuring that units going into theater are fully equipped. The
    next focus is to ensure that those units have the equipment to
    train with--in this case, in Iraq.
        It will be a continued problem as we, I think wisely, leave
    that equipment. We just discussed up-armored vehicles; they
    need to stay, for the protection of those soldiers in the
    theater. But I think, as we continue to grow the force, there
    will be training sets available, and we will ensure that units
    going into theater have full complements of equipment going in
    at--that they need to take, and then fall in on the stay-behind
    equipment.
        Senator Akaka. General Buchanan?
        General Buchanan. Sir, from our aircraft units we are
    actually in good shape. The only place that we're running into
    problems, quite honestly, is, as new technologies come onboard,
    designed to assist us in a very precise application of air
    power in the war on terrorism, we are finding we cannot field
    the capability fast enough.
        A very good example are the targeting pods. Our fighter air
    crews across all Services, all of us have the older-generation
    Low Altitude Navigation and Targeting Infrared for Night
    (LANTIRN) pods, and we are now fielding the new, more up-to-
    date LITENING and Sniper pods, but we don't have them in the
    near numbers. So, I would tell you right now, today if you were
    talking to my air crews, they would tell you that, as the new
    pods come onboard, what's happening is, about 6 months prior to
    their deployment, we deliver some pods to them for them to then
    practice with them directly, although it is a directly
    transferrable skill from LANTIRN to Sniper, or LITENING-
    Advanced Technology (AT), before they, in fact, deploy, because
    it's--I want to make sure that, as we apply air power in
    support of our brothers and sisters on the ground, that we can
    do it as precisely as possible, and the new technology coming
    onboard can allow us to do that.
        The system is in place to acquire and produce these new
    pods as they come onboard. That is the only place, quite
    honestly, where I'm running into some difficulty, as you
    described.
        Senator Akaka. Admiral?
        Admiral McCullough. Yes, sir. I'll just add on to what
    General Buchanan said. Our shortage was in advanced-technology,
    forward-looking infrared (FLIR) devices, the third-generation
    FLIR pods. My strike group deployed with four of those. We
    received those just prior to our deployment. It's an
    expectation of the Combined Forces Air Component Commander
    (CFACC) that each aircraft section will have a third-generation
    FLIR pod when it goes over to the beach. The Navy is addressing
    that issue. We will purchase 34 more of these Advanced
    Targeting Forward Looking Infrared (ATFLIR) pods in fiscal year
    2005, and the production rate has gone up to about one a week.
    In the out years, there will be about 55 per year.
        The other issue we had was with jamming pods for our EA-6B
    Prowlers. I received three of those as a turnover item in
    theater. There are 14 of those, Navy-wide. We will procure
    three more of those this year, and they will be replaced by
    low-band transmitters. It'll be backfitted into the Prowlers,
    and will go into the Prowler replacement, the F-18Gs.
        Other than that, we were in really great shape.
        Senator Akaka. General Austin?
        General Austin. Yes, sir.
        Sir, there's no question that, you're absolutely right,
    continuous engagement does present us with some challenges, in
    terms of personnel and equipment. The Army's meeting the
    personnel challenge by transforming and creating more modular
    brigades that will eventually have the effect of slowing down
    the OPTEMPO, because we'll have more brigades to enter the
    rotation.
        In terms of the equipment, the Army's reset program has
    enabled us to quickly refurbish equipment and return it back
    for use to the soldiers. That's a program that's working well,
    and I think it's a bill that we must continue to pay in the
    future.
        We are also prioritizing our equipment to those soldiers
    that are going to combat next, and that has been a success
    story for us, thus far. We don't have any major issues with
    that. But, once again, we front-load the soldiers and the units
    that are going next into combat.
        Senator Akaka. Thank you, Mr. Chairman.
        Senator Ensign. Before I go to Senator Cornyn, General
    Sattler, I just wanted to revisit something that you said, real
    quick, just to maybe clear it up, about if you go to war
    tomorrow, having the necessary assets to do that. From what I
    understand, you would have the necessary assets from the
    prepositioned assets that you have, is that correct?
        General Sattler. Mr. Chairman, there are prepositioned
    assets. There's a complete--we have normally three complete
    brigades sets of gear that are afloat at sea that can be
    vectored into any theater to link up with the forces that are
    moved in by Strategic Aircraft (STRATAIR) with the
    preponderance of the heavy equipment being there.
        Without getting into too much detail, sir, some of the
    communications and electronics equipment is not prepositioned
    because of its delicacy, because of its constant change;
    therefore, it's brought in with the warriors. The
    communications and electronics gear that was left in the
    theater is one of the key items which we're cross-leveling
    right now.
        So, sir, we would be able to go. It would be somewhat not
    our normal movement, because the unit would normally pack up
    and take it and meet up. They'd still pack up, but we'd bring--
    push in the Communications-Electric (Com-Elec) gear in from one
    side, the principal end items coming in off the ships, and the
    warriors coming in by air. So, we'd still bring it all
    together, but it's not the way we like to do business, sir.
    Some of the Com-Elec gear, because, to be totally candid, when
    we got into the counterinsurgency fight, our normal table of
    equipment had to be expanded, what you needed to fight. What we
    thought we would need to fight, over time, because we're all an
    adaptable force, we changed to adapt, to stay one step ahead of
    the enemy. So, some of the equipments that would have a
    battalion may have gone in with X, we found out over a course
    of time they needed X-plus-Y, so the plus-Y, the production
    lines weren't running, so we--as General Metz said, and General
    Austin, we pushed that to the ground forces that need it. So
    you really have more than just a MEF set of equipment in the
    theater.
        So those shortages are being counterbalanced, also. As
    Senator Akaka said, sir, we're pushing some stuff back through
    the maintenance cycle, and it may require some just flat-out
    new procurements, sir, because some of the gear is stretched to
    the point where it cannot be in two--in some cases, three--
    places at one time.
        Senator Ensign. Just really quickly, this subcommittee
    would make the request to any of the Services, since you've
    returned, if there is anything that you need. We're doing an
    emergency supplemental right now, and if there are items that
    you've identified since that time that were not included in
    there, the quicker that you could get those lists to us, the
    better chance that we have of getting those items to you.
        I need to recognize Senator Cornyn.
        Senator Cornyn, thank you.
        Senator Cornyn. Thank you, Mr. Chairman.
        General Metz, you noted in your written testimony that the
    feedback loop between ongoing operations in Iraq and the
    conduct of training at home has allowed deploying units to
    rapidly assimilate the lessons learned by the units in the
    fight. Could you comment on how well you think we are doing
    that and what some of the benefits that you've seen are? If
    there are areas we need to do better in, we'd like to hear
    about those, too.
        General Metz. Yes, sir.
        On the top end, I would use the Stryker brigades as an
    example. One was there in country when I arrived, and while we
    were in Operation Iraqi Freedom II, we changed out the Stryker
    brigade. Those two brigades have the latest command-and-control
    equipment. The incoming brigade at Fort Lewis, Washington, was
    able to, in almost realtime, to watch the fight that its sister
    brigade was conducting in Iraq. They would listen to, and be
    able to pull down off of Web pages, the orders for the in-
    theater fighting unit and use those actual orders and terrain
    in simulation to fight and train. So they were doing what we
    call ``left- and right-seat rides,'' virtually for almost 6
    months. So I watched the second Stryker brigade come in and
    make a very smooth transition because of that training. That's
    on the top end.
        For individual soldiers, there are all sorts of lessons
    learned. The sharing of those lessons learned, those are formal
    programs that are piped through Fort Leavenworth. The Center
    for Army Lessons Learned helps manage that. So, that's there on
    the individual side.
        The collaborative communications that's available to units
    now lies somewhere in between that individual collaboration and
    the top end, as I just mentioned, the Strykers.
        We have extensive predeployment site surveys, where leaders
    come in and understand the fight and are able to take the
    lessons learned back. So, sir, across the spectrum, that
    information is flowing that assists the next generation to be
    able to fight the fight better, because it's an ever-changing
    fight. In their training programs, they're constantly revamping
    the training program to be ready for the kind of fight that
    they'll face once they're out of the country.
        Senator Cornyn. General Sattler, would you care to comment
    on that?
        General Sattler. Sir, the lessons learned are also shared
    across all Services. General Metz had a program while we were
    in country that any of the divisions--Army, Marine, didn't
    matter, or coalition partners--any tactics, techniques, and
    procedures, you either identified the enemy as using or you
    came up with a counter to it that worked, those were shared on
    our video-teleconferences nightly, plus they were shared at the
    operation-and-training officer level. So it was totally open
    for anyone who had a great idea, they got it on the table, and
    everyone grabbed it and they ran with it.
        The same with our training back here, same as General Metz
    indicated, we change our training package to get the warriors
    ready. As we come up with new tactics, techniques, procedures,
    new equipment, it's integrated back here before it goes over
    into the theater.
        I will tell you that there's a process that came to be
    known as the Urgent Universal Needs Statement (UUNS), which
    permitted the warriors forward to identify a problem, but not
    come up with a solution. That was pushed back to our
    warfighting labs, and then it came back, where the U.S.
    Congress gave the service chiefs the discretion to go ahead and
    buy commercial off-the-shelf equipment that would solve the
    problem at hand. I will tell you that in some cases in less
    than 90 days, the problem was identified, the solution was
    found, the--I'd say 90 percent--maybe some cases higher--
    solution was found to already exist in industry, and the item
    was pushed back over and in the hands of the warrior, and it
    was either savings lives or it was taking the enemy on in ways
    the enemy didn't know, with capabilities they didn't know we
    had. So, I would say, sir, that has been a tremendous help.
        It's a combination of that technology with the well-
    trained, well-honed warrior who knows how to use it that is
    keeping us a step, hopefully two steps, ahead of the enemy.
        Senator Cornyn. Thank you very much.
        Since time is somewhat limited, let me go to another
    question, and maybe, General Austin, can you give us a sense of
    how much better improved our response to the improvised
    explosive device (IED) threat has been over the last, say, year
    or so? Are we doing a better job about finding those before
    they go off, and could you, sort of, give us your sense of
    where we are now?
        General Austin. Sir, I think we're doing a much better job.
    I think that that's an issue that is continually worked, both
    in theater and back here at home station, by all of the land
    forces.
        Your comment, or your question, about lessons learned,
    earlier, I think, improvised explosive devices is one of the
    areas where we've really capitalized on the ability to move
    lessons learned across the military very rapidly. I think what
    we see now is that we see fewer soldiers being killed by these,
    which means that we've learned to protect ourselves better.
    We've also learned to discover IEDs better. I think that both
    the Army and the Marine Corps continue to work that issue.
        It's a success story for us, sir. We're nowhere near where
    we need to be, but I think that what I saw last--2 weeks ago in
    Iraq was great improvement over what I saw when I left the
    theater earlier.
        Senator Cornyn. General Buchanan, I've been impressed by
    what I've seen, in terms of what the Services have been able to
    do for wounded soldiers, airmen, marines, and sailors, in terms
    of those who were actually injured and the relatively small
    percent of soldiers, sailors, marines, and airmen who actually
    die of their wounds. I think a lot of that is attributable not
    only to good-quality medicine, but to the medical evacuation
    (MEDEVAC) provided by the Air Force. Could you speak to that,
    in your experience, what changes you've seen that have improved
    in the quality of survival?
        General Buchanan. Yes, sir. First off, you're absolutely
    right, but I think it's multifaceted. I think part of it goes
    back to what General Metz was talking about earlier, about the
    body armor is protecting the torso area from a lot of what
    would have been lethal wounds. I think what you're finding
    right now is the self-aid buddy care that the soldiers,
    marines, and airmen that are on the ground at the time that an
    individual is wounded, they are giving immediate care that is
    very critical, that golden-arrow, lifesaving. At the same time,
    too, I would have to give great credit to the Army and Marine
    MEDEVAC helicopters that go into the hostile hot zones, pulling
    folks out, and getting them back to level-two, level-three care
    very quickly.
        At that point, it has been amazing to me, and I think to
    all of us, to see what the medical community of all Services
    have been able to do in a very dirty, dusty, expeditionary
    environment, literally doing brain surgery in tents and
    stabilizing individuals and getting them ready. Then, as you
    say, as soon as we possibly can, and we have them stabilized
    and able to fly, then we will put them on a C-17 and get them
    back to Landstuhl as quickly as possible, out of harm's way.
        I think it truly has been a joint effort, and many parts
    and pieces that go into this. It does, in fact, make you feel
    awful good to walk through the hospital at Balad or someplace
    else and see those young kids in the wards, and knowing that,
    had that system not been in place, the body armor been in
    place, the up-armored HMMWVs been in place, the training been
    in place for the buddies who were right there, and the MEDEVAC
    crews of both helo and fixed-wing, and then the docs that we
    have in place, they would not be in those wards today.
        Senator Cornyn. Thank you very much. My time has expired.
        Senator Ensign. Senator Clinton.
        Senator Clinton. Thank you, Mr. Chairman. Thank you for
    holding this hearing.
        I welcome all of you here. I'm especially pleased to see
    General Austin, the commanding general of the 10th Mountain
    Division in Fort Drum, New York. He has done a fabulous job
    leading the 10th Mountain Division, which, for the record, is
    the most deployed division in, I think, not just the Army, but
    any part of our armed services.
        I'm also pleased to see General Sattler. I had a very
    informative and inspiring visit to Fallujah and appreciated
    very much the briefing that General Sattler and his team gave
    us about the action in Fallujah and the eventual victory over
    the insurgents.
        I wanted to start by asking General Austin, the 10th
    Mountain Division has been at the forefront of the Army's
    transformation to modular brigades. With the change to modular
    brigades, as you pointed out, we have two additional brigades,
    one at Fort Drum, one at Fort Polk, and I know that this
    transition creates certain challenges for both leadership and
    for the soldiers themselves. How would you assess the change
    that's occurred to modular brigades? Do you have any advice or
    any lessons as that modularity is unfolding that we need to be
    learning from and perhaps responding to.
        General Austin. Senator Clinton, I think that we are,
    indeed, learning from ourselves as we go through this
    transformation process. The 3rd Infantry Division was the first
    to transform. We went to school on the 3rd Infantry Division,
    and, therefore, were able to avoid some of the issues that they
    were faced with, because we learned from them. They were great
    in sharing their lessons.
        In terms of challenges, I think anytime you move to a new
    formation, there will be some challenges, because there are
    some unknowns. I think our force has dealt with that very
    effectively.
        But I think the real issue with transformation is that we
    will be more capable, we'll have brigades that are highly
    deployable, that are self-contained, and all brigades will be
    standardized. So, I think, in the end, we will provide a great
    capability to the joint commander, joint force commander.
        In the 10th Mountain Division, we're about three-quarters
    of the way through our transformation. One of the transformed
    brigades is going to deploy to Iraq here in July. They've done
    a magnificent job of getting themselves set, training up their
    leaders. I think that they will be much value-added once they
    get on the ground.
        But, to answer your question, Senator Clinton, I think
    we've handled the challenge very well, principally because
    we've learned from those units that have gone through the
    transformation process earlier.
        Senator Clinton. Thank you.
        I listened carefully as all of you responded to the
    chairman's question about the body armor and the armored
    vehicles--the HMMWVs, the convoy vehicles--and the one thing
    that I'm not sure any of you can address, but perhaps, General
    Metz, you might be in the best position, we continue to hear
    stories, mostly from the field, that our Guard and Reserve
    units are not as well equipped as active-duty. We have 40
    percent over our overall force in Iraq being Guard and Reserve,
    and at least, if you were to check my e-mails and my letters
    and the comments I get from parents and spouses, we still
    aren't there yet. Do you have any assessment that you could
    share with us about the state of equipment for the Guard and
    Reserve troops that are either there or on their way to being
    deployed?
        General Metz. I think we mapped the challenges back into
    the mobilization process, so that when the Guard and Reserve
    units arrive at the mobilization station, we owe them a good
    look at their equipment so that we identify right away what
    they may be short, because, as we know, they could very well be
    short. As they go through that training process and that
    identification, our goal is to ensure they don't go north of
    the berm in Kuwait without the right equipment and are trained
    to use that equipment. My experience was that those enhanced
    separate brigades that were combat brigades, in the combat
    support and service support units, once in Kuwait and coming
    north, were correctly outfitted with the equipment and had the
    training to conduct themselves successfully. Once in country, I
    saw no difference in the performance of those brigades than any
    other brigade. They were one of, at one point, 23 U.S. brigades
    in country, and we task them and use them just as they were
    active. The performance of those soldiers was equal to the
    active-duty soldiers.
        It's a process all along the continuum to ensure--and we
    owe them that--to ensure that they are trained and equipped
    before we put them into harm's way.
        Senator Clinton. General Sattler?
        General Sattler. Senator Clinton, if I might. First of all,
    ma'am, I--lest the 1st Marine Division association hunt me down
    like a dog, I must say that, as much as I love Lloyd Austin,
    the climb-to-glory 10th Mountain Division, the 1st Marine
    Division has also done two complete pumps into Iraq. I don't
    want to split hairs on it, but I have to at least get that on
    the table, because----[Laughter.]
        I have to go back to my family when this is all said and
    done. [Laughter.]
        But on the Guard, the one 155 Enhanced Separate Brigade out
    of Mississippi came in to replace the two Marine Expeditionary
    Units that were ashore. Those were two full-up Marine units
    that had Najaf and Karbala. When General Metz brought them in,
    they were fully trained up, they did the predeployment site
    survey. When they showed up, we did about an almost 3-week
    right-seat/left-seat ride, where they married up with the two
    Marine units, and they traded tactics, techniques, procedures,
    and environmental as assessment--things you can only pick up
    from being on the ground. When they left, when the Marines
    pulled out, the National Guard brigade had that throat to
    Baghdad for two major events, the Ashura, which is the big
    pilgrimage, followed by the Arbaeen. They did marvelous in
    both.
        So, I will tell you that there's a little bit of training
    that needs to be done, as General Metz indicated. When they
    came onboard, we embedded some of our marines, mainly in the
    high-tech areas of communications. They had the enthusiasm and
    the energy. They just needed a little bit of tweaking on it,
    and they were off and running. So, I would second what General
    Metz said, ma'am.
        Senator Clinton. Thank you very much, General.
        Admiral, I just wanted to ask you, in your statement, you
    say your strike group deployed to the CENTCOM AOR fully trained
    and equipped. I know there have been some changes in the Navy's
    east coast training in the last few years. Could you elaborate
    on whether the Navy's current training locations and procedures
    on the east coast allow our naval forces to prepare and train
    for the assigned missions they're being given?
        Admiral McCullough. Yes, ma'am.
        Our training on the east coast is very good to prepare us
    for deployment. We used to use the range at Vieques, in Puerto
    Rico, to qualify our surface ships and naval surface fire
    support. When we left Vieques, we've developed, using acoustic
    devices and timing and synthetic geography that's put in our
    combat systems to enable our ships to qualify in that tactic at
    sea. We have no use for a live-fire range, per se, for naval
    gunfire support. We've used the ranges at Pinecastle and Avon
    Park, in Florida--and we thank the State of Florida very much
    for making those available to us--that have enhanced our
    capability to get our air wings ready to go. We also deploy the
    air wing to Fallon to undergo its strike training in the State
    of Nevada. So, I can unequivocally say that our forces are more
    ready today to deploy than they ever have been in the past.
        Senator Clinton. Thank you.
        Thank you, Mr. Chairman.
        Senator Inhofe [presiding]. Since I'm the last Republican
    left, I guess I'm chairman here. [Laughter.]
        First of all, let me say to you, General Sattler, I don't
    know how you're doing it, but you're doing a great job of
    selling the Iraqis on your marines. I had an occasion, just a
    couple of weeks ago, to be with General Mahdi, who was actually
    a brigade commander for Saddam Hussein, who hated Americans.
    Once he started training with your marines at Fallujah, and
    then went into this embedded training concept, they became so
    close that he looked me in the eyes and said, ``When they
    rotated the marines out, we actually cried.'' Is there anything
    in particular you're doing that is causing that kind of an
    allegiance with the Iraqis?
        General Sattler. Senator Inhofe, I think we found--and
    General Metz was all part of this--our initial concept to train
    the Iraqis was to train them, to come up with a program of
    instruction to train them, to teach them tactics, techniques,
    and procedures. But, the piece we were missing was the
    mentoring. The mentoring comes with embedding. I think when we
    failed, or some of the Iraqi security forces out in the west
    failed, last April, it truly came down to a total breakdown in
    failure in leadership. Our warriors are, I believe, are
    extremely well led, from the noncomissioned officer all the way
    up through the senior officers. When the first gunshot is
    fired, all heads turn towards the next senior leader. If the
    squad leader does not have the confidence of his squad, the
    house will start to come apart at that point. Sir, and that's
    what we ran into.
        So, the focus became embedding, get the leaders beside us,
    spend time with them, live with them, teach them through our
    actions, become more paragons, rather than just instructors and
    teachers. That is what the embedding is doing. General Casey
    and General Metz, starting on 1 February, drove the embedding
    process down across all forces, Army and Marine, sir. I think
    that is a tremendous positive step, and it's why I am extremely
    optimistic about the Iraqi security forces coming online even
    faster--with capability, not just numbers, sir.
        Senator Inhofe. Well, I think it's working, and it's
    working very well. I don't want to sell the Army short. That
    was me, I was in the Army. Up at Tikrit, we saw very much the
    same thing. In fact, we were there about the time that the
    headquarters was bombed. Ten Iraqis died, 30 were injured.
    That's when all 40 of the Iraqi families, each one substituted
    a member of their own family to take up the training, the void
    that was left by the death or injury of the other members of
    the family. So, we've done a great job there.
        The reason I spent all that time in the Sunni Triangle, I
    thought that's where things were supposed to be the toughest.
    But, in terms of relations it's working out very well.
        I am a little bit concerned about where we go in the
    future. Normally it's after a conflict and, in this case, after
    the OIF and the OEF, there is a period of time when people are
    not as concerned about it. Somehow they think it's over. I
    chaired this subcommittee, Mr. Chairman, back during the 1990s,
    after the first Gulf War, and there was this kind of this
    euphoric attitude that, ``Well, the Cold War is over, and this
    war is behind us; therefore, we don't need a military.'' We had
    the downsize. We had a lot of our modernization programs just
    abruptly stopped, or at least slowed down. That always seems to
    happen.
        Now, on the other side of that, you see, in looking at,
    historically, where we've been, I can recall when Secretary
    Rumsfeld came in for his first confirmation. I said, ``How are
    we going to handle this when we look at the ups and downs and
    what seems to happen after a conflict.'' He came out with this
    thing, saying, ``Well, you know, for a hundred years in the
    20th century, the amount of money spent on defense amounted to
    an average of 5.7 percent of gross domestic product (GDP). Late
    in the 1990s, it got down to 2.8 percent. Now we're about 3.4
    percent.'' I said, ``Where should it be?'' He said, ``Probably
    around 4\1/2\ percent.''
        So, it's a two-part question I'd like to have all of you
    comment on. I'd like to have your ideas on where you think we
    should be, looking out? Are we going to have a problem, after
    this particular operation is over, of going through the same
    thing that we did after the first Gulf War?
        General Metz. Sir, I'd like to take that one on, initially,
    here. The first thing I would call everyone's attention to is
    that this joint team that we have learned to fight, especially
    in the battles over the past 3 years, continues to share the
    lessons learned, and really understands how to fight the fight.
    I'm confident that we have learned the lesson from history that
    we should not prepare for the last battle; we should think our
    way through for the future battle. I know, in the case of the
    Army, redesigning itself into a modular force that would be
    able to deploy into future battles under new formations. Using
    the Information Age technology, we will be getting ready for
    those future battles, as I'm sure the other Services are doing.
        So, I'm confident we will work, intellectually, to do that.
    I think it's important to note that to grow the battalion
    squadron and ship commanders of the battle a decade from now,
    we have to continue to give them the robust training
    experiences and education experiences that allow them to know
    what to think, in the case of training, and how to think, in
    the case of education.
        It will be a challenge, because we do, indeed, have an
    enormous--in the case of the Army, and I think it's true of the
    other Services, too--requirement to reset the force. We have
    used almost all of our equipment extensively now for 2 years.
    So, that equipment will need to be recapitalized, and, in most
    cases, brought back to just about new states in order to train
    with it and have it ready for future fights.
        So, again, we saw that procurement bathtub in the 1990s.
    There's a potential for that as we come out of this conflict.
    If we can avoid that and keep the Services' equipment reset,
    regenerated, and we can use it for training and then it's ready
    for war, we can escape the problems we had in the early 1990s.
        Senator Inhofe. All right. Well, there's going to be
    pressure on you, I mean, after this is over, because there
    always is. You can downsize now, the war's over. We've gone
    through so many of these, we should know better. But we look to
    you, as the professional people who will be the leaders at that
    time, to come out and be outspoken. Any other comments on that?
        Yes?
        General Sattler. Sir, just very quickly. I agree with
    General Metz, the resetting of the force--the supplemental is
    going to be crucial here, because there's a lot of things that
    you can't predict on a 5-year budget when you get into a
    counterinsurgency-type operation. So, I agree, and I think all
    the Service Chiefs will stand tall and say, ``This equipment
    has to be replaced.'' You can only rebuild something so many
    times. When you're putting 10 years every year on your gear,
    sir, that's going to be a big one we're going to have to own up
    to.
        The second one is that we must continue to bring in the
    high-quality recruit, the bar steel that comes into our recruit
    depots, which can then be forged into, in our case, United
    States Marines that are adaptable, that think on their feet and
    can cover the entire spectrum of war from full-out kinetic
    operations all the way across the spectrum to rebuilding, to
    stability and support operations.
        So, those are going to be two challenges that, if we lose
    our eye on those two, I believe we will be in trouble down the
    road, sir.
        Senator Inhofe. That's good, because it's coming at a time
    when we're going in--as, General Metz, you and I talked about
    the future combat system, and transitioning into whole new
    concepts. They're better concepts. I don't like to have things
    slide. But, right now we're looking at deployment at 2008 for
    certain parts of these systems, and we should have learned that
    we can't really anticipate the future--where the battle's going
    to be, what type it's going to be. I remember once, Mr.
    Chairman, when I was serving in the House--on the House Armed
    Services Committee and this was probably about 15 years ago--
    somebody was saying, and testified, that in 10 years we won't
    need ground forces anymore. I mean, so it just goes to show and
    I'm talking about smart people. So, we need to be prepared. I'd
    like to have all of you be looking into the future when this
    thing's over and thinking, ``You know, it's not over. We just
    need to transition. We need to keep it up.''
        Thank you, Mr. Chairman.
        Senator Ensign [presiding]. Senator Nelson.
        Senator Bill Nelson. Thank you, Mr. Chairman.
        Gentlemen, thank you for your service to our country.
        Admiral, in your statement you talk about the U.S.S. John
    F. Kennedy group returning, and you say ``The results enabled
    us to return from deployment in outstanding material condition.
    There was no immediate maintenance requirements upon our
    arrival in the continental United States (CONUS) following our
    deployment.''
        Admiral McCullough. Yes, sir.
        Senator Bill Nelson. Admiral, is the U.S.S. John F. Kennedy
    seaworthy?
        Admiral McCullough. Yes, sir. The ship is seaworthy. The
    way the Navy has organized its maintenance and deployment
    schedules under the Fleet Response Plan, when a carrier strike
    group returns from deployment, it is a sustainment phase to be
    able to redeploy, if necessary, to support a contingency
    operation. Kennedy strike group was in a sustainment phase
    until 1 April 2005. During that period, the carrier went to sea
    and performed carrier qualifications for the training command.
    We participated in a multiple battle-group in-port exercise
    that was followed by a sustainment-underway period in which we
    embarked about 75 percent of the air wing and conducted
    operations at sea to maintain our readiness, to maintain our
    capability to operate under no-divert certification
    environment.
        That said, the carrier requires extensive work, as all of
    our older aircraft carriers do, to remain in service. There's
    something that deal with boilers and in-shafting, catroff
    sheathing, underwater haul tanks and voids that are required to
    maintain that aircraft carrier. In no way would that have
    affected our ability to deploy again to a forward theater, if
    called upon during our sustainment phase.
        Senator Bill Nelson. Thank you, Admiral. You don't know how
    your comments are going to help me in the next 12 hours.
        General Sattler. He does know. [Laughter.]
        Admiral McCullough. Yes, sir. I'd submit to you that that
    my focus, as a carrier strike group commander, is operational
    readiness to forward-deploy a group of ships and airplanes to a
    forward theater to use as the regional combatant commander and
    the component commander dictate. I'd defer to the Chief of
    Naval Operations' (CNO) testimony and the Secretary's testimony
    on force-structure issues.
        Senator Bill Nelson. Now you're giving all kind of
    qualifiers. [Laughter.]
        Just answer my question, and you already have.
        Admiral McCullough. Yes, sir.
        Senator Bill Nelson. That she's seaworthy. Okay.
        General Metz, the National Guard and Reserve units aligned
    in your commands--I'm concerned that the Guard and the Reserves
    are not getting the resources necessary to reset their units,
    and, therefore, are not capable of achieving a level of
    readiness necessary to prepare them for another deployment.
    What is your responsibility for monitoring the readiness of
    your aligned or affiliated Guard and Reserve units?
        General Metz. Sir, the III Corps does not have an alignment
    with a Reserve component or particular units. We have, in the
    past, and continue some relationships, especially with those in
    Texas, around Fort Hood. The 24th Division, at Fort Reilly,
    does have a relationship with three enhanced separate brigades
    (ESBs) in the east coast, and the 7th Infantry Division at Fort
    Carson does have a relationship with light enhanced separate
    brigades.
        The tough part about their equipment is, the stay-behind
    equipment that we have asked them to leave, and we will need to
    work carefully, as they return, from an Army point of view, to
    replenish that equipment. I'm not familiar with the
    programmatics of how the Department will replace that
    equipment, but I do know that, as we restructure our force into
    modular formations, the Reserve component, to include the
    National Guard enhanced separate brigades, will go under that
    restructuring and receive the equipment to make them combat-
    ready as we bring them back on the force. Sir, I just don't
    have the knowledge of the programmatics that the Department
    has. But, I can report that across the Corps footprint, when we
    are required to help in the mobilization process, we get
    extensively involved in checking that equipment to ensure that
    when they deploy, they are outfitted and trained correctly.
        Senator Bill Nelson. Are you concerned that you're not
    getting the re-enlistments in the Guard and the Reserves to
    give you the supply that you need?
        General Metz. Yes, sir, I am concerned. In the Corps, the
    Active-Duty side, we have exceeded our mid-term and career re-
    enlistments, and, for the year, are 8 percent under right now
    on the first-termers. But, I'm confident we will make that up
    as the year goes on. Where we are having difficulty is, a
    soldier that wanted to get out of the active service, we could
    re-enlist them for the Reserve components, either U.S. Army
    Reserve or the National Guard. Those soldiers exiting are doing
    that at a much slower rate, and I think that the Reserve
    components depended on them over the past years. So, there's
    going to be some challenges ahead with our Guard and Reserve
    units because of that.
        Senator Bill Nelson. Admiral, when you are training, you
    have a carrier out in the Atlantic or in the Gulf, and they are
    going in to train over Pinecastle or Avon Park. What's a
    typical training mission? How many bombing runs will they make
    on a typical training mission?
        Admiral McCullough. Well, they'll make a target
    identification pass, and then, dependent on the range and what
    you're allowed to drop in a range, whether it's inert or it's
    live, they'll make a pass on that target. So, typically, each
    air crew will make one pass per day. I'd have to go back into
    the training and readiness metrics and tell you how many
    individual passes a pilot has to make for his squadron to
    achieve a certain level of readiness. I don't have that in
    front me. But, it's more than one. I can't tell you what the
    exact number is.
        Senator Bill Nelson. What is the typical regimen for
    training? A carrier would go so that their flight crews could
    go and do this training over Pinecastle or Avon Park, how
    frequently during a year?
        Admiral McCullough. The typical cycle for a strike group is
    about 27 months, so that'll encompass one set of work-ups,
    sustainment training, as required, prior-to- and post-
    deployment. So, I could envision where you have one set of
    requirements to certify the air wing to deploy. So that would
    be one set of training. There could be some follow-on training
    as part of a sustainment prior to deployment, depending on the
    time when the air wing was certified and when the actual
    deployment date was. Then, dependent on the length of time the
    air wing was in sustainment following the deployment, there may
    be another time. So, in the course of 27 months, I could see
    that there may be three iterations of this required.
    Historically, we've done it once. But, as we develop the Fleet
    Response Plan, I could see where you may end up with three sets
    of this, potentially.
        Senator Bill Nelson. You mentioned the--I don't remember
    the words that you used, but what, in effect, was a virtual
    target that you create, by image or telemetry or whatnot, and
    it's out in the middle of the ocean.
        Admiral McCullough. Yes, sir.
        Senator Bill Nelson. Talk to us about that.
        Admiral McCullough. It's a set of acoustic sonobuoys. I
    think it's about six. You lay them in a pattern in the water,
    and, dependent upon where the fall of shot is, and the time
    delay of getting to each one of the sonobuoys in the array, you
    can tell where geographically, that particular round fell. On
    top of the radar system and the combat system of the ship,
    they'll inlay a synthetic geography that corresponds with the
    sonobuoy field. Then, depending on where the sonobuoys said the
    shot fell, you can put that in the synthetic geography to tell
    whether the shot fell in the right place or whether the ship
    was in error.
        Senator Bill Nelson. Yes, that was the term used, synthetic
    geography. So, theoretically, you could train that way, over
    the water, instead of having to train over land.
        Admiral McCullough. Are you referring to aircraft, Senator?
        Senator Bill Nelson. Yes.
        Admiral McCullough. In that I don't fly, I don't really
    feel qualified to answer that. I'd tell you that I don't think
    it's beyond technical ability that we could develop something
    like that.
        Senator Bill Nelson. Thank you.
        Senator Ensign. I want to thank the panel. I had a whole
    second round of questions that I--and I think all of us would,
    but we wouldn't have time to have another full round of
    questions. So, I think, instead of doing that, I had a lot of
    questions on morale, logistics, the safety of the aircraft, and
    the grounding of the C-130s, and the increased use of airlift
    instead of ground transportation, and what that's doing with
    our fleet. So, if, as quickly as possible, we could get all of
    you to respond to the written questions that any of the panel
    has, we'd very much appreciate it.
        Once again, I want to thank all of you for your great
    testimony today and answering of questions with forthrightness.
    This committee looks at our role with you as a partnership. It
    is our job to supply you with what you need to make sure that
    those warfighters on the front lines have the tools that they
    need to, not only defend our country, but also to liberate
    people, when it is their job to do so. They are doing an
    unbelievable job.
        General Sattler and I sat down yesterday and heard some
    just incredible stories. I've been over to Iraq twice, myself,
    and I keep getting amazed. Where do we find the men and women
    in uniform that we have? We don't deserve them, and all I can
    tell you is, I feel very blessed by our Creator to be living in
    this country, with the freedoms that we have, and all of us owe
    that debt of gratitude to those of you who are willing to don
    that uniform. For that, from the American people, from the U.S.
    Senate, I say thank you to all of you, and God bless you.
        [Questions for the record with answers supplied follow:]
                   Questions Submitted by Senator John Ensign
                                   logistics
        1. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, ensuring that the men and women
    under your command receive the resources to fully enable them to
    conduct their missions while deployed remains a paramount concern of
    this subcommittee. The Defense Department has a supply management goal
    of delivering ``the right items to the right place at the right time.''
    Few would argue that logistics operations are a key element of these
    contingencies operations and mission success. Have the supply chains in
    Afghanistan and Iraq matured so that deployed units are getting ``the
    right items at the right place at the right time?''
        General Metz. The supply chain in Iraq has matured significantly
    since the end of the first rotation in support of Operation Iraqi
    Freedom (OIF); although insurgent activity on the road network and
    against base camps continue to cause delays in the delivery of
    supplies, the impact is negligible, and units receive their required
    support in a timely manner. The logistics infrastructure inside Iraq
    has increased from one general supply hub to four, which has stockage
    redundancy and the flexibility to provide support from multiple
    locations. Additionally, the increased use of strategic sources of
    supply from countries other than Kuwait (Jordan and Turkey, for
    example) has built flexibility into the supply chain. For example, the
    delivery of fuel initially came solely from Kuwait; with requirements
    in excess of one million gallons of fuel per day, we faced significant
    challenges in keeping fuel moving on the battlefield when insurgents
    interdicted the main route between Kuwait and locations in the heart of
    Iraq. The addition of bulk fuel sources of supply in Jordan and Turkey
    allowed us to adjust delivery schedules, routes, and locations to
    offset or neutralize temporary delays on other routes.
        Improvements in strategic and operational air routes and airfields
    also contributed significantly to the maturity of the supply system in
    Iraq; the increased throughput of supplies via intra- and inter-theater
    airlift drastically reduced customer wait time, as many supplies are
    now flown directly into critical logistics nodes rather than being
    delivered by surface transportation. The extensive employment of Air
    Force C-17s, Army CH-47 helicopters and C-23 ``Sherpa'' airplanes,
    Marine CH-46 helicopters, and commercial air companies such as National
    Air Cargo and DHL have taken numerous trucks off of the dangerous roads
    in Iraq, keeping soldiers out of harm's way and increasing the speed at
    which supplies reach the units that need them.
        Finally, the establishment of the Defense Logistics Agency's (DLA)
    wholesale warehouse in Kuwait has significantly improved the timeliness
    of supply distribution within the Iraqi Theater. Previously, the
    majority of bulk supplies came into Theater from the United States via
    sealift or from Germersheim, Germany via ground delivery; the shipment
    time was over 30 days from the U.S. and over 2 weeks from Germany.
    Currently, Defense Logistics Agency's forward positioned stocks in
    Kuwait allow supplies to reach units within 3 days of request; the only
    bulk supplies still coming from the U.S. or Germany are low-demand
    items that are not time-sensitive to the conduct of combat operations.
        General Sattler. Our experiences in Operation Enduring Freedom and
    Operation Iraqi Freedom once again brought home the fact that the
    greatest logistics challenges we face are in the realm of tactical
    distribution of material. Our ability to see and control the movement
    of supplies and equipment on the battlefield is paramount as we wage
    the global war on terror. Although the supply chains in Afghanistan and
    Iraq have matured significantly, enhancements are still being made to
    further improve logistics support to deployed units. When we deployed
    in February 2004, our Supply Management Unit (SMU) was augmented with
    transportation and packaging experts to establish a single process
    owner to manage the supply chain. Distribution Liaison Cells from the
    SMU were placed at key distribution nodes to include the Theater
    Distribution Center and Corps Distribution Center to manage and
    expedite cargo from the strategic through operational to the tactical
    distribution pipeline. The pure pallet packaging process initiated by
    DLA and TRANSCOM was a great success and saved countless man-hours in
    sorting, and dramatically reduced Order Ship Time (OST). The direct
    channel route cut down the requirement to put convoys on the road,
    reduced OST and provided us with the capability to deliver logistical
    support where and when our marines and sailors needed it.
        General Buchanan. Senator Ensign, we have worked diligently to
    improve supply support to our deployed forces. In the early days of
    OEF, deployed forces relied on satellite communications to relay
    consolidated resupply requests. This was both time-consuming and
    costly. However once telecommunications were established, normally less
    than 5 days, supply support is significantly improved and computer
    systems are immediately set-up to manage resupply of our Expeditionary
    Forces. (All current contingency locations have computer support in-
    place).
        Supply support, for both combat support and combat service support,
    has improved, in part, due to the vigilant efforts of our Regional
    Supply Squadron (RSS), monitoring supply requisitions daily from the
    origin to the final destination. In conjunction with units and the Air
    Combat Command RSS, we have established High-Priority Mission Support
    Kits to ensure high priority/high demand assets are on hand or on the
    shelf when needed. Deployed commanders are provided daily updates which
    enable them to make informed decisions regarding the prioritization of
    maintenance schedules as well as sortie generation. Additionally, the
    coordinated efforts of aircrews from Air Mobility Command and
    established contracts with commercial carrier such as Federal Express,
    DHL, and UPS, high priority assets are sourced and delivered by the
    most expeditious means possible. These coordinated efforts have greatly
    enhanced our Supply Chain Management, warfighting capability and
    provided each contingency location with the means to execute their
    designated missions.
        General Austin. There has been a marked improvement in the
    logistics situation in Afghanistan and Iraq over the last year, in
    large measure due to the systems and innovations developed by soldiers
    and leaders on the ground. The Joint Logistics Command in Afghanistan
    is doing an outstanding job in this regard.
        Overall, the evidence indicates that ground logistics in
    Afghanistan and Iraq have improved, and that soldiers are getting the
    important supplies they need. But there is no denying that non-
    contiguous lines of communication, security, and communications are a
    continuing challenge. In 2003, the reliability of host nation
    transportation and limitations on the placement of radio frequency tags
    on civilian trucks, were a particular challenge since they limited our
    ability to track or predict the delivery of supplies. Integrated
    technologies that allow logisticians to anticipate supply demands
    represent a key solution as we look to cut response times from supplier
    to soldier.
        Admiral McCullough. As the Navy has been operating in the U.S.
    Central Command Area of Responsibility for decades, Navy supply chains
    to the Arabian Gulf are mature, enabling deployed Navy units to receive
    parts, people, fuel, and mail without significant delays. Ship's
    operating outside the Arabian Gulf, in the Horn of Africa (HOA) and the
    Red Sea areas, have the longest supply lines. Ships operating there
    depend largely on Combat Logistics Force (CLF) ships for critical
    support. HOA and Red Sea ships may only rendezvous with a CLF ship
    every 10 days, which significantly lengthens supply lines, but does not
    significantly degrade the Navy's ability to operate effectively and
    meet all operational requirements.

        2. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, what can this committee do to
    further enhance logistics operations and what technologies or operating
    concepts are demonstrating to be particularly useful?
        General Metz. The committee can enhance logistics operations by
    supporting the following:

        1. Ammunition production must be increased at factories that supply
    our munitions. The worldwide shortages of 5.56mm, 7.62mm sniper rounds,
    artillery illumination, aircraft countermeasure flares, and HELLFIRE
    significantly challenge the resupply of units in combat. This often
    forces the use of ammunition not specifically designed for the task or
    significant redistribution between combat forces. In some cases
    ammunition expenditures are higher because of sustained enemy activity.
    In other cases national munitions providers were not prepared or funded
    for the increased requirement. Increasing the funding for ammunition
    will ensure national providers can put the right munitions into units'
    hands at the right time.
        2. Funding new equipment for logistics units. Combat units have the
    most modem, survivable vehicles on the battlefield. However, logistics
    units continue to use decades-old vehicles and technologies, which
    often degrade their survivability. Up-armored vehicles have provided
    logisticians with improved survivability, but the requirement remains
    an organic light-armored convoy security vehicle since ground convoys
    will continue to be the primary means of resupply on the battlefield.
    In Iraq, we used Strykers to escort supply convoys, which substantially
    improved convoy survivability. However, this prevented us from using
    some of the Strykers for other combat missions. Several prototypes of
    light-armored vehicles exist that are comparable to the Stryker, and
    would meet the needs of logistics units.
        3. Continued funding for improvements to current logistics vehicle
    systems. Similar to uparmoring HMMWVs and the crew cabs of other
    vehicles; this program should be extended to support armament
    enhancement on the cargo and bulk fuel tanker trailers. Current
    technology does not allow for the up-armoring of bulk fuel tankers; the
    weight of an up-armored fuel tanker is too heavy to haul. Fuel is the
    most critical battlefield supply and is the number one target for
    insurgents. We must pursue a reengineering of fuel hauling assets that
    maximizes protection while retaining speed and mobility.
        4. Logistics vehicles lack communications. Unlike combat vehicles,
    only one third of logistics vehicles is equipped with a radio, and one
    out of five has satellite tracking technology--the ``Movement Tracking
    System (MTS).'' As a minimum, every vehicle should have a radio, and
    satellite communications systems (MTS or other technology) available in
    sufficient numbers to provide greater coverage for convoys. The pursuit
    of greater funding for communications assets by this committee would
    significantly enhance logistics operations on the battlefield.

        General Sattler. Lessons learned from OIF I identified the lack of
    asset visibility and in-transit visibility to be significant
    contributing factors to the overburdening of the supply pipeline and
    general lack of confidence in the supply system. The accelerated
    fielding of Radio Frequency Identification (RFID) capability to enhance
    In-transit Visibility (ITV) has been a huge success. The presence of
    existing infrastructure allowed Marine Corps assets to be positioned
    farther forward, supporting the link between operational and tactical
    levels of support. Further, the acquisition and employment of RFID
    infrastructure at all major USMC installations, coupled with existing
    Army/DOD infrastructure within the theater, has allowed Marine Corps
    units to benefit from enhanced nodal visibility through the Army's ITV
    servers. Headquarters Marine Corps focused on extending this capability
    forward to provide the same visibility beyond the Theater and Corps
    Distribution Centers (TDC/CDC) to Marine Corps Combat Service Support
    nodes. In those cases where RFID infrastructure is non-existent,
    satellite tracking devices have been placed on convoys to track supply
    deliveries. The Logistics Common Operating Picture (LCOP) I MEF
    initially used was called Joint Deployment Logistics Module, now known
    as Battle Command Support Sustainment System (BCS3), to monitor ITV
    information. The ability to make decisions, prioritize and redirect
    cargo based on accurate information widely available from LCOP resulted
    in greatly improved supply support less than a year after the humbling
    experience of OIF I; however, there still exists a requirement to
    further integrate the LCOP into a single Common Operating Picture.
    Continued support of Marine Corps logistics modernization efforts is
    critical to our success in enhancing logistics operations. A key
    enabler to logistics modernization is the Global Combat Support System-
    Marine Corps (GCSS-MC). By implementing GCSS-MC we will attain world-
    class logistics command and control capabilities. GCSS-MC is a
    deployable, integrated logistics solution for the Marine Air Ground
    Taskforce that win facilitate centralized order management and
    integrated capacity management capabilities for all elements of
    logistics. We expect GCSS-MC to reduce legacy, stove-piped logistics
    systems from over 300 to about 68. GCSS-MC is compliant with Joint
    Requirements Oversight Council standards to ensure seamless integration
    with other DOD systems. It will provide a shared data environment for
    in-transit, in-stores, and in-maintenance asset visibility that will
    ultimately provide the warfighter confidence in the logistics system.
        General Buchanan. Senator Ensign, there are several technologies
    and processes that we are using successfully including aggregation of
    personnel movements, radio frequency identification (RFID) and the use
    of the Acquisition and Cross-Servicing Agreements (ACSA) program.
        To the maximum extent possible, the Air Force is putting contract
    lift airlift directly into Air Force installations. Large groups of
    personnel are aggregated at stateside installations based on their
    required deployment dates and final destinations and are flown en masse
    directly to the final destination. The process has proven to be very
    successful at aligning theater airlift with strategic airlift and
    reducing wait times, especially at transportation hubs. The average
    time spent at hubs was previously 24 hours-2 weeks, but is now at 12-36
    hours. The aggregation process is still being fine tuned, but the
    process has already decreased deployment stressors on airmen, decreased
    travel time, increased visibility of forces, and maximized the use of
    theater airlift assets.
        ACSAs are rapidly becoming the method of choice for providing or
    receiving support to/from foreign forces. The use of ACSA by USCENTAF
    and USCENTAF-gained units has skyrocketed from zero transactions in
    2001 to more than $5.8 million in transactions for fiscal year 2004 and
    has often proved invaluable in meeting emergent needs of deployed
    forces. Despite some statutory/regulatory issues associated with ACSA
    authorities, the USCENTAF staff, and most especially our young men and
    women deployed to forward locations along with their coalition
    counterparts, have made huge strides in program management. Many of
    these initiatives have been adapted by other services or the ``industry
    standard'' throughout USCENTCOM. Additionally, we have seen growing
    confidence in our ability to accurately track and collect
    reimbursements due from foreign forces.
        Additionally, the use of RFID has provided improved intransit
    visibility (ITV), and reduced manpower. RFID readers are set to
    automatically inventory cargo at designated chokepoints at our forward
    operating locations, eliminating the time-consuming manual inventory
    upon arrival.
        The RFID tag provides item level data and location data,
    facilitating deployed commanders' visibility into cargo status and
    enabling informed decisions.
        While RFID technology provides better ITV than USCENTAF had during
    OEF and OIF, we are now benefiting from commercial use of other ITV
    technologies that are now emerging. One of these is satellite tracking
    which provides true in-transit visibility vice the point-to-point
    location updates available with our current RFID system. During OEF/OIF
    the majority of our prepositioned assets moved by surface
    transportation (95 percent) primarily through commercial truck
    companies. Visibility of these shipments was lost. Recently, the
    contractor maintaining our prepositioned assets required commercial
    trucking companies moving our equipment to employ satellite tracking.
    This provides near real time data as assets move between sites. Beta
    testing is currently underway with positive results. We believe
    satellite tracking is the best way to provide ITV for all surface
    movements as RFID only provides point-to-point location updates and
    request your continued support which allows us to capitalize on
    technological advances.
        General Austin. As we continue to look forward, an important key
    for successful logistics will remain advanced communication equipment
    and the connectivity it provides. The modern battlefield is less rigid
    and far less linear than it once was, and therefore what is required is
    a dynamic system that provides users with a capability to better
    predict requirements, and to communicate those requirements to
    suppliers. A good example is the Global Combat Support System, which
    provides commanders with web-based access to selected Service and
    Agency authoritative/preferred logistics and transportation databases.
    Improved satellite communications allow logisticians to better
    anticipate supply demands and coordinate that information with
    manufacturers, and assist with automated order and reorder of supplies.
    This is a critical enabler to our logistic operations. We must continue
    to push the satellite capability and related technology down to the
    lowest unit level.
        Admiral McCullough. Improving logistical support to ships at sea in
    the Horn Of Africa and Red Sea remains a difficult issue. As discussed
    in my testimony, movement of oversized materials (e.g. aircraft
    engines, engine stands) is currently accomplished by use of
    intratheater Sea Stallion Helicopters (MH-53). MH-53 helicopters were
    crucial to the emergent movement of large aircraft parts and support
    equipment when embarked resources were nearing depletion or in the
    event of aircraft diverts. This near immediate response enabled U.S.S.
    John F. Kennedy Strike Group to return aircraft to Fully Mission
    Capable status as soon as practical. The aging MH-53 is being phased
    out and replaced by the MH-60S helicopter. MH-60S helicopters are
    currently embarked onboard our Combat Logistics Force (CLF) ships,
    being integrated into air wings on the west coast and are expected to
    be incorporated throughout the Navy by 2008. The MH-60S does not have
    the internal lift capacity of the MH-53 and therefore our capacity to
    conduct emergent movement of oversized material over large distances
    will be strictly limited to our Combat Logistics Force. In the near
    term, MH-53 and CLF ships complement each other in providing logistics
    support to our ships. In the future, sole dependence on CLF assets will
    likely increase supply lines for over-sized materials. Funding an
    additional capability for heavy lift to Navy ships would be
    particularly useful.

        3. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, from your experience, what more
    can be done to enhance logistics support?
        General Metz. The Department of Defense must establish a joint
    ammunition management and accounting system. Currently, each service
    maintains independent systems; this lack of consolidation limits the
    flexibility to meet service-specific requirements for unique munitions,
    and causes confusion and delay in the cross-service issue of
    ammunition. For example, the Army and Marine Corps use different
    calculations for determining Ammunition Basic Load (ABL); in Iraq, this
    led to misunderstandings between Army and Marine logisticians, as the
    Army filled ABLs to a lower level than the Marines.
        Additionally, sustained funding for the Defense Logistics Agency's
    Prime Vendor Program will enhance logistics support to units in combat.
    This program allows for the rapid acquisition of non-standard supply
    items to support ongoing missions. Many of these non-standard items are
    regionally purchased, meaning that they are often in the logisticians'
    hands within 10 days from the time an order is placed with a DLA
    program manager. The best example of this program in action was the
    rapid procurement of lumber, generators, and other life-support
    equipment required for an on order mission to establish several
    displaced civilian (DC) camps prior to the battle of Fallujah. The Army
    supply system does not contain many of the items required to build DC
    camps, and is not responsive enough to meet the requirements for those
    items it does carry; the Prime Vendor program was critical to the
    success of the post-operational mission in Fallujah, as it allowed us
    to obtain the materials required to build facilities and provide
    sanctuary for Iraqi civilians displaced by the combat operations.
        General Sattler. We must continually examine our logistics tactics,
    techniques and procedures to ensure we are optimizing support options
    to deployed forces. We must fully integrate Global Combat Support
    System-Marine Corps (GCSS-MC) throughout the Marine Air Ground
    Taskforce to encompass aviation, ground, and combat service support
    logistics operations. Radio Frequency Identification must be expanded
    to include 100 percent of full pallets and containers moving throughout
    the strategic, operational, and tactical levels of distribution,
    worldwide. Joint common intermodal packaging will enhance the movement
    of material throughout the supply chain. By maintaining packaging
    integrity as long as possible, we improve in-transit visibility,
    prevent damage and greatly improve the velocity of material moving
    through distribution channels. We are also looking hard at autonomic
    logistics initiatives. We are currently programmed to provide the
    independent transmission of critical system data for ground tactical
    equipment, which will provide information such as vehicle location,
    fuel levels, and overall vehicle health. As technology moves forward,
    autonomic logistics solutions could provide proactive diagnostics
    information and automatically generate requisitions for repair parts
    before actual failure.
        General Buchanan. Senator Ensign, our coalition friends provide an
    outstanding amount of mutual support, some of which we are unable to
    capitalize on due to current regulatory guidance.
        We would urge you to carefully consider upcoming Department of
    Defense legislative proposals to alter and expand the authorities
    provided under ACSA statutes in Title 10 U.S. Code. These proposals,
    initiated by U.S. European Command (EUCOM) are based on critical
    lessons learned from OEF and OIF and would allow for mutual support
    agreements with international organizations of which the U.S. is not a
    member (e.g., European Union, Economic Community of West African
    Nations). This would instantly expand our capability to support multi-
    national global war on terror efforts.
        We would also urge adoption of clearly defined procedures for
    international/multinational operations, similar to what Goldwater-
    Nichols did for joint operations. Political-military pressures (real or
    imagined) to expand Coalition presence in response to urgent
    operational requirements sometimes interfere with Services ability
    properly navigate the cumbersome transactions required by law with some
    partners.
        We seek to continuously assess the capability of USCENTAF agencies
    to meet statutory, regulatory, and fiscal requirements associated with
    management of the ACSA program and conduct of international logistics
    operations under the auspices of Title 10 USC.
        In order to answer these and other questions, we would urge you to
    support continuous efforts to review tactics, techniques and procedures
    related to employment of foreign forces in support of U.S. military
    objectives.
        Increased reliance on coalition partnership and Host Nation support
    to meet U.S. operational requirements, coupled with the wide variance
    in political-military considerations between and among U.S. Forces and
    potential partner nations, complicate USCENTAF efforts to comply with
    statutory, regulatory, and fiscal guidance pertaining to international
    and multi-national operations. The combatant commands coalition
    participation initiatives are often at odds with Service components
    capabilities to support, or gain support from, foreign forces in the
    field. Much of the disconnect results from disparities between
    combatant command goals, foreign forces expectations, and the
    statutory/regulatory limitations imposed on U.S. forces. Political-
    military pressures, real or imagined, to expand coalition force
    presence in response to urgent operational requirements sometimes
    interfere with the Services components ability to appropriately
    conclude required documentation of support and transactions with some
    coalition partners. The resulting tension would decrease if the
    tactics, techniques, and procedures for international/multinational
    operations were as clearly defined and closely adhered to as those for
    inter-service/joint operations.
        Political-military pressures, real or imagined, to expand coalition
    force presence in response to urgent operational requirements sometimes
    interfere with the Services components ability to appropriately
    conclude required documentation of support and transactions with some
    coalition partners. The resulting tension would decrease if the
    tactics, techniques, and procedures for international/multinational
    operations were as clearly defined and closely adhered to as those for
    inter-service/joint operations.
        General Austin. First and foremost, we must continue to develop,
    resource, and field new technologies that better communicate logistics
    requirements between the user and the supplier. An example would be the
    Global Combat Support System. This is critically important. Logistics
    support improves dramatically as customers and the supplier share real-
    time information and are able to accurately project requirements and
    track the status of goods and equipment. Second, given continued
    security concerns for transport across long, noncontiguous supply
    routes, we must continue to train our forces in secure convoy
    operations. We must also continue to leverage alternatives to ground
    transportation, including containerized shipments via military and
    contract air.
        Admiral McCullough. Continue to support the MH-53 replacement, MH-
    60S, and the Navy's helicopter master plan.

                            supply chain visibility
        4. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, one of the early reports
    received from units deployed in support of Operation Iraqi Freedom and
    Operation Enduring Freedom was that units did not have adequate
    visibility over the status of requisitions and supplies in theater. How
    effectively have your units been able to track their requests for
    supplies?
        General Metz. Asset visibility improved significantly during my
    tour in theater and continues to improve. With the help of Defense
    Logistics Agency, Army Material Command and hundreds of contractors on
    the battlefield we were able to provide improved asset visibility and
    improve the order ship time for CL IX urgent repair part, CL I ration,
    CL V ammunition and all other classes of supply.
        As we assumed authority for operations in Iraq in January, the
    order ship time for supplies was closing on 45 days with very little
    visibility of the supplies in transit due to the small number of
    interrogators in theater and the infrequent sue of Radio Frequency (RF)
    tags used to identify and track the movement of supplies. By the end of
    our tour, February 2005, the number of interrogators in theater had
    tripled and the use of RF tags had improved significantly. The
    responsiveness of the industrial base and the item mangers contributed
    to our improved customer wait time from 45+ days to just under 20 days
    in early March 2005.
        General Sattler. In an effort to capitalize on all stocks available
    within the area of responsibility, the Marine Corps Logistics Command
    developed an electronic connectivity bridge by modifying existing USMC
    retail-level legacy system to feed directly into the Army's Theater
    Logistics System known as the Standard Army Retail Supply System. As a
    result, during our deployment, approximately 14 percent of our
    requirements were filled with U.S. Army forceheld stocks. I MEF also
    used the Joint Deployment Logistics Module, now known as Battle Command
    Support Sustainment System (BCS3) to monitor In Transit Visibility
    information. BCS3 is the Logistics Common Operating Picture (LCOP) that
    was used by Commander, Joint Task Force (CJTF)-7 (now Multi-National
    Corps-Iraq) and Theater Support Command. Additionally, ITV data
    illustrating the last known shipment locations was extracted from the
    ITV server to create shipping status transactions that posted on
    supported units Due And Status File (DASF) that is part of the Marine
    Corps standard supply system.
        General Buchanan. Senator Ensign, the Air Force has made great
    strides towards its goal of Total Asset Visibility. All requisitions
    from the initial request to delivery of assets to the warfighter are
    visible at both the Regional Supply Squadron as well as at the intended
    destination, through the use of the AF Portal and Standard Base Supply
    System (SBSS connectivity). This visibility extends to all Air Force
    assets in the Supply Chain no matter the priority or point of origin.
        Since September 11, we have enhanced our asset tracking
    capabilities and are confident we know the exact location of 99 percent
    of our shipments at any given time. My staff and the ACC Regional
    Supply Squadron have received very few complaints and have been lauded
    hundreds of times for tracking and support of our diverse missions. Our
    folks track everything from base operating support assets like dog food
    to runway repair assets to mission critical aircraft parts.
        General Austin. At the onset of Operation Enduring Freedom in 2002,
    10th Mountain Division units had virtually no visibility over the
    status of supply requisition. As the theater of operations expanded and
    improved, receipt of critical equipment parts and supplies improved but
    remained problematic. Normally, a Corps Support Command complete with a
    Corps Materiel Management Center provides asset visibility as dedicated
    customer support. This was not available in Afghanistan, and therefore
    our units had limited ability to track supply requests. To the credit
    and hard work of soldiers and civilian contractors, we were able to
    manage under those circumstances. It was clear, however, that there is
    still work to be done in the tracking of requests for supplies.
    Improved satellite communications and networked supply systems are
    improving the situation, and will continue to do so as these
    technologies are fielded and integrated into the logistics system.
        Admiral McCullough. We were able to effectively track our requests
    for supplies. Information technology has provided greater visibility
    over the entire logistics process. The U.S.S. John F. Kennedy Strike
    Group effectively used established commercial means (e.g. DHL, FEDEX)
    to quickly move high priority parts to theater. Web-based tracking
    mechanisms enabled logistics planners to track parts from the state-
    side source into theater, enabling quicker movement of required
    materials to our ships at sea. The greatest challenge we face in this
    area is the high demand for statically allocated bandwidth to access
    these and other web-based information.

        5. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, what actions have been taken to
    increase visibility over supplies delivered to Iraq and Afghanistan and
    are new technologies, like Radio Frequency Identification tags, helpful
    in tracking requisitions?
        General Metz. Radio Frequency Identification (RFID) technology is
    extremely useful in providing in-transit visibility of supplies on the
    battlefield; it is used to track trucks, containers, and air-palletized
    cargo throughout Iraq. However, the U.S. military's RFID technology is
    outdated and insufficient when compared to the RFID technology
    currently in use by major commercial retailers such as Wal-Mart, FedEx,
    and UPS; the military's system is not nearly as integrated as these
    commercial systems, as it requires significantly more human interaction
    to provide the optimal level of detail required to effectively and
    efficiently track the movement of supplies. An example of this lagging
    technology is the relatively limited availability of hand-held tag
    burners; these burners allow soldiers to rapidly create RFID tags to
    accommodate changes in shipments, provide customized listings of
    supplies for shipments going to multiple locations, etc. Currently,
    hand-held tag burners are only available at wholesale-level supply
    depots, some general support hubs, and on a limited number of airfield
    flight lines. The increased availability of these burners for all
    supply units would greatly enhance the ability of these units to
    accurately identify items in shipment, and thereby increase the
    visibility of supplies on the battlefield. The Department of Defense
    needs to invest funding in modernizing our RFID technology, so that we
    can gain the same capabilities enjoyed by civilian retailers and become
    as proficient as they are in terms of maintaining visibility of
    supplies.
        General Sattler. In-Transit Visibility (ITV) was considered the
    largest contributor to the lack of timely and consistent supply support
    capability during OIF I. In August 2003, I MEF began in earnest to fix
    the problems of ITV, specifically using Radio Frequency Identification
    (RFID) tags and satellite tracking devices with the intent for all
    items moving in-transit through the supply chain will be visible down
    to document number detail and the physical location of that materiel as
    it moves from node to node until final delivery to the supported unit.
    Visibility from port to port was not enough.
        RFID technology provided unprecedented levels of ITV over the
    movement of supplies to Marine Forces deployed for Operation Iraqi
    Freedom IT and has applicability to both deployment of units and
    movement of sustainment. The visibility of supplies on the shelf and
    in-transit dispelled fears and generated confidence in the supply
    chain. The ability to make decisions, prioritize and redirect cargo
    based on accurate information widely available from Logistics Common
    Operating Picture (LCOP) resulted in greatly improved supply support
    less than a year after the humbling experience of OIF I however, there
    still exists a requirement to further integrate the LCOP into a single
    Common Operating Picture.
        General Buchanan. Senator Ensign, the Air Force has made great
    strides towards its goal of Total Asset Visibility. All requisitions
    from the initial request to delivery of assets to the warfighter are
    visible at both the Regional Supply Squadron as well as at the intended
    destination, through the use of the AF Portal and Standard Base Supply
    System (SBSS connectivity). This visibility extends to all Air Force
    assets in the Supply Chain no matter the priority or point of origin
    (this includes resupply from our Air Logistics Centers, Defense
    Logistics Agency, and Government Services Administration and contractor
    or local purchase vendors.) The institution of web-based tracking
    allows all concerned to be able to maintain visibility of supplies.
        Technologies such as RFID have significantly improved in-transit
    visibility (ITV) and reduced manpower. RFID readers are set to
    automatically inventory cargo at designated chokepoints at our forward
    operating locations, eliminating the time-consuming manual inventory
    upon arrival. The RFID tag provides item level data and location data,
    facilitating deployed commanders' visibility into cargo status and
    enabling informed decisions.
        While RFID technology provides better ITV than USCENTAF had during
    OEF and OIF, we are now benefiting from commercial use of other ITV
    technologies that are now emerging. One of these is satellite tracking
    which provides true in-transit visibility vice the point to point
    location updates available with our current RFID system. During OEF/OIF
    the majority of our prepositioned assets moved by surface
    transportation (95 percent) primarily through commercial truck
    companies. Visibility of these shipments was lost. Recently, the
    contractor maintaining our prepositioned assets required commercial
    trucking companies moving our equipment to employ satellite tracking.
    This provides near real time data as assets move between sites. Beta
    testing is currently underway with positive results. We believe
    satellite tracking is the best way to provide ITV for all surface
    movements as RFID only provides point to point location updates and
    request your continued support which allows us to capitalize on
    technological advances.
        General Austin. The Global Combat Support System was intended to
    provide a common operational picture for all logistics operations
    ranging from the ordering of supplies at the company level and receipt
    of requests at Army Depots to tracking supplies along supply routes and
    final receipt at the unit of request.
        The Combined Arms Support Command at Fort Lee, Virginia, has the
    lead in developing the Battle Command Service Support System (BCS3)
    which may further link all logistics automation tools into one all-
    encompassing database. These technologies have proven extremely helpful
    in meeting logistics challenges, and are important today and for the
    future.
        Due to limited supply routes and unfavorable terrain, Army heavy
    tactical vehicles and most light tactical vehicles are precluded from
    conducting end-to-end supply logistics. Therefore, in many areas, a
    majority of supplies continue to be delivered to units via host nation
    transportation which is precluded from using Radio Frequency tags.
    Where this is the case, the tracking that tags afford is simply
    unavailable. It is a challenge we must continue to work through.
        Admiral McCullough. Information technology has enabled government
    logistics organizations (both CONUS and OCONUS) as well as commercial
    companies to provide the end-users increased visibility on the
    availability of required materials, as well as the shipping status and
    current location of these materials as they are moved to theater. The
    fidelity of information provided enabled John F. Kennedy Strike Group
    logistics planners to anticipate arrival of material in theater, plan
    logistics movements to our ships, and provide warfighters accurate
    estimated repair status as an input to the warfighting planning
    process. New technologies, such as Radio Frequency Identification tags
    were not visible to the end-user, as they were not used to feed the
    web-based logistics information previously discussed.
        Combatant Commanders (COCOMs) have stated significant benefit from
    the use of (active) Radio Frequency Identification (RFID) for In
    Transit Visibility (ITV). This benefit is documented in several
    studies, including ``Lessons learned from Operation Iraqi Freedom.''
    However, as noted by Commander, Fleet Forces Command (CFFC), forces
    afloat relied less on technology enablers such as RFID due to inherent
    advantages that the fleet has in supply chain visibility.

                             home station training
        6. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, I am curious to learn the
    impact of your experiences in the Central Command region on your
    training at home station. I noted on page 8 of General Austin's
    testimony his efforts to develop a simulated urban terrain at Fort
    Drum. How has your homestation training evolved with lessons learned
    from your deployments to the Central Command region? For example, how
    have you adapted your convoy training?
        General Metz. Our home station training is continually adapted to
    the evolving tactical situation in theater. Operational assessments and
    intelligence reports feed directly back into the way we train.
    Multinational Corps Iraq and organizations like the Improvised
    Explosive Device (IED) Task Force assess changes in enemy weapons and
    tactics, which is shared with the headquarters responsible for training
    and validating both Active component (AC) and Reserve component (RC)
    units.
        Before III Corps deployed, we modified training to address the
    lessons learned and critical tasks identified by central command and
    units in theater. My own experiences have convinced me that home
    station training is, and needs to remain, an evolving process. Units
    preparing to deploy remain digitally linked to the unit they will
    relieve in order to maintain situational awareness of their future
    mission and area of operations.
        The training regimen within III Corps has evolved over a fairly
    short period of time to include an increased emphasis on urban
    operations, complete with Arabic-speaking role-players and translators/
    interpreters; more training on IEDs using realistic training devices;
    greater attention to individual and crew-served weapons training--
    including convoy live-fire training and reflexive fire; culture-centric
    training that includes basic language, customs and traditions, and
    increased situational awareness; more soldiers trained as combat
    lifesavers; and an additional emphasis on Support Operations/Stability
    Operations (SOSO) above and beyond our training in high-intensity
    conflict in our collective and staff training exercises.
        Members of division and corps staffs serving in Iraq participate in
    the Mission Rehearsal Exercise, as subject matter experts, for the
    units that will replace them in order to make this training as
    realistic and current as possible. Consequently, these staffs are
    completely ready to assume the duties of their predecessors, and we can
    transition in as little as 5-10 days. This feedback loop between
    ongoing operations in Iraq and the conduct of training at home station
    has allowed deploying units to rapidly assimilate the lessons learned
    by the units in the fight. I continue to emphasize the updating of key
    tasks, incorporating lessons learned and tactics/techniques/procedures,
    and situational awareness reports from units currently in Iraq into our
    home station training. One of the tools available to disseminate
    lessons learned is the corps' Digital Reference Center, a Web site
    which serves as a repository for lessons learned, both as a source of
    downloads for any unit to access, or as a link to other pertinent
    sites.
        General Sattler. [Deleted.]
        General Buchanan. Senator Ensign, our homestation training has been
    continually evolving in response to the emerging requirements of the
    various AORs in which we are engaged. Our semi-annual Combat Air Forces
    Realistic Training Review Boards, annual Tactics Review Boards, and
    Weapons and Tactics Conferences are but a few of the forums where we
    address and make adjustments to our training programs.
        One of the first steps we took to better support training for
    operations in support of both OEF and OIF was to provide guidance in
    each fighter/bomber aircraft Ready Aircrew Program (RAP) tasking
    message (the guidance document that squadrons use to build their
    aircrew training program), adding requirements for Flexible Air
    Interdiction (AI) sorties (definition from the RAP tasking message:
    Flexible AI missions consist of sorties primarily flown in support of
    nonpreplanned target sets. Tasking is generally via C2 agency (JST ARS,
    AWACS, JTAC, GFAC FAC-A, etc). SCAR, CAS, and TST all fall under this
    general category. Tasking agency can be simulated by an instructor or
    flight lead when actual C2 assets are not available to support.)
        We added Dynamic Air-to-Ground targeting events to each of the RAP
    tasking messages, with the following requirements: complete an air-to-
    ground attack/engagement against a target/TST relayed/passed by an
    appropriate command and control (C2) asset. Track information should be
    datalinked if possible, otherwise via normal radio communications (C2
    asset and relay/passing of track information can be simulated).
        Strafe has been moved from a familiarization only (FAM) to a
    qualification required (QUAL) event in both the F-15E and F-16 RAP
    tasking messages (it was already QUAL for the A-10). This means crews
    will have more practice/experience in employing the gun in the air-to-
    ground environment prior to deploying.
        Increased emphasis has been placed on composite force, joint, and
    coalition training. Our quarterly Integrated Training Conference (ITC)
    has seen an explosive increase in mutually beneficial training
    opportunities for our fighter/bomber forces with command and control
    assets, Air Support Operations Squadrons, Tactical Air Control Parties,
    and Special Operations Forces. Our Flag exercises have also made
    scenario adjustments to increase flexible AI, and TST training.
        We currently have multiple locations that support training in the
    urban environment. Avon Park, Nellis Test and Training Range, Utah Test
    and Training Range, Mountain Home Range Complex, Melrose, Holloman, and
    Dare County all either have urban training complexes in place, or in
    the process of being built. We continue to expand these areas to
    provide more realistic urban environment training for our crews.
        Last November, USCENTAF sponsored a pre-AEF deployment exercise
    (now called Atlantic Strike) to train and prepare joint air assets for
    urban CAS and Remote Operated Yideo Enhanced Receiver (ROYER)
    operations. We invited deploying units from all components to ``train
    like we fight'' in an urban CAS environment; USAF, USSOCOM, USN, and
    USMC units participated in this first-ever training. The exercises
    utilized actual OIF/OEF scenarios and focused on joint precision
    targeting, enabled by cross-cueing full motion video from targeting
    pods with ground-based Joint Terminal Air Controllers (JTACs). The
    ability of JTACs to see what the fighter pilot sees compressed the kill
    chain dramatically . . . in some cases to less than 1 minute from
    aircraft check-in through target acquisition to strike. These exercises
    generated practical lessons learned which we have used to develop
    formal tactics, techniques, and procedures for urban CAS operations.
    Continued JTAC and pilot familiarization with new targeting pod
    symbology and ROYER operations will continue to expedite target
    acquisition and identification, significantly shortening the kill
    chain. Spin-up exercises like Atlantic Strike are excellent tools to
    incorporate new lessons learned from OIF/OEF and provide joint
    training.
        We are providing increased opportunities for our crews to practice
    strikes on moving targets with target sets now in use at the Utah Test
    and Training Range, Nellis Test and Training Range, and Air Warrior II,
    with more locations being looked at for additional target sets.
        Flying units currently train for convoy escort operations at both
    Air Warrior and Air Warrior II. Tactics, techniques, and procedures
    (TTPs) are constantly evolving to counter new enemy tactics and
    incorporate new technologies. These TTPs are discussed at weapons and
    tactics conferences and are documented in aircraft tactics manuals and
    Mutli-Service TTP publications. We require ground convoy training for
    our airmen deploying into Iraq, elements of which include: weapons
    qualification, weapons employment, individual and team movements, land
    navigation, troop leading procedures, convoy operations, and urban
    warfare through realistic training scenarios.
        Air Combat Command (ACC) has recently begun a ready-to-deploy
    training program required of all airmen deploying to the CENTAF AOR,
    now being converted into an emerging Air Staff Predeployment Training--
    Expeditionary Combat Skills Training program. The program will
    eventually transition to cover skills required to meet the emerging
    threat encountered in deployments into any of our AORs. Elements of the
    new predeployment training include: weapons issue/turn-in procedures,
    load bearing equipment/body armor, M-16 maintenance, use of force ROE,
    combat skills (challenging, cover and concealment, movement techniques,
    action on contact, reaction to fire (direct/indirect), ill/reaction to
    IEDs, Salute reporting, fighting positions, air base defense,
    Integrated Base Defense, rifle fighting, and practical field exercises.
        We have accelerated the incorporation of datalink capability onto
    targeting and reconnaissance pods. ROVER transmit capability is being
    installed on Litening AT and Sniper pods to provide a real-time
    targeting pod video link with JTACs. A datalink capability is being
    developed for TARS pods to provide near-real time imagery dissemination
    to intelligence analysts, exponentially increasing the relevance and
    utility of this system to prosecute fleeting high-value targets.
        General Austin. The 10th Mountain Division has captured and studied
    the lessons learned from the CENTCOM AOR, and modified our home station
    convoy, marksmanship, first aid, and cultural awareness training as a
    result. Our units operate principally in a motorized manner, and
    therefore we now conduct convoy operations and convoy live fire
    training as part of every major battalion-sized training event. The
    short range and quick reflexive marksmanship needed primarily in urban
    environments like Iraq, and the long range mountainous marksmanship
    needed in Afghanistan have led us to develop an advanced rifle
    marksmanship program for our combat arms leaders. The dispersed nature
    of the battlefield, particularly in Afghanistan, led us to train and
    equip our soldiers to conduct medical self-aid. We have also trained
    and equipped soldiers throughout our formations as combat lifesavers--
    capable of performing many Army medic functions above and beyond first
    aid.
        In addition, our medics attend Emergency Medical Technician (EMT)-
    level training prior to deployment to elevate and enhance their skills.
        Our experience in the CENTCOM AOR has also taught us the importance
    of understanding all aspects of our operating environment, including
    our cultural environment. Based on this, we developed a cultural
    awareness and language training lab at Fort Drum to enhance our
    soldiers' and leaders' capabilities in these areas. We also incorporate
    cultural awareness training and role players into our major training
    events, and provide similar training to individual soldiers as a
    deployment prerequisite.
        Admiral McCullough. Carrier Strike Group training is supported by
    numerous commands, including Tactical Training Group Atlantic (TTGL)
    and Strike Force Training Atlantic (SFTA). SFTA provides the Fleet
    Response Plan (FRP) Surge Certification Event, Composite Training
    Exercise (C2X), for the Strike Groups. I briefed SFTA on current
    Central Command operations towards the end of our deployment in
    November 2004 to assist SFTA in updating the C2X scenario to most
    accurately reflect current operational missions and tasking. This
    included emphasis on Maritime Security Operations (MSO), such as those
    around Iraqi oil pumping platforms, and details on the urban close air
    support (CAS) that Carrier Airwing 17 (CVW-17) provided to the
    warfighters on the ground. This information was also provided to Second
    Fleet in order to appropriately update the FRP Deployment Certification
    Event, Joint Task Force Exercise (JTFEX), scenario. The C2X scenario
    traditionally includes surge operations where the maximum number of
    sorties is desired. Real world operations instead call for sustained
    operations with fewer sorties. JFK/CVW 17 conducted flight operations
    for 16-18 hours per day for 16 straight days during Operation Al Fajr
    (Liberation of Fallujah), flying up to 84 extended sorties per day (160
    sortie equivalents).
        TTGL and Second Fleet provided JFK Strike Group sustainment
    training 3 months after our return from deployment with the Multi-
    Battle Group Inport Exercise (MBGIE) 05-1. This exercise was
    specifically designed to reflect Arabian Gulf operations, and included
    such elements as Maritime Security Operations, fast boat attacks and
    coalition operations.
        Although East Coast Carrier Strike Groups benefit from corporate
    knowledge of Arabian Gulf deployments, current operations are vastly
    different from the decade of Operation Southern Watch. Our training has
    continued to evolve as operations have shifted from major combat
    operations to urban close air support and MSO. Our future training
    plans will be adapted to reflect our projected operational environment,
    whether that is current urban CAS and MSO or more robust littoral
    operations.

        7. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, what training initiatives and
    technologies are you leveraging to implement operational lessons
    learned in training?
        General Metz. Our training strategy works and continues to improve
    based on the lessons learned from Iraq and integrated into home station
    training. For example; a Stryker brigade was in Iraq when I arrived and
    it transitioned smoothly with another brigade--both had the latest
    command and control equipment. The incoming brigade at Fort Lewis,
    Washington, watched the fight of its sister brigade in Iraq. It would
    listen to the radio traffic and read the orders of the unit in contact
    and use them to train. They conducted a virtual ``left seat ride'' for
    almost 6 months.
        Additionally, most units conduct predeployment site surveys.
    Leaders visit the unit they will replace, observe operations, and take
    lessons learned back to home station. Across the spectrum, information
    is flowing that assists the next generation to fight better. Because
    the situation constantly changes, we revamp our training to be ready
    for the kind of fight that units will face when they arrive in the
    country.
        Finally, the Army proponent for collection and dissemination of
    lessons learned--the Training and Doctrine Command's (TRADOC) Center
    for Army Lessons Learned (CALL)--has unit embedded teams in theater
    since the war began and have extensively surveyed returning units to
    collect lessons learned. CALL makes both classified and unclassified
    lessons learned available to all military organizations via secure and
    unsecured Web sites whose web addresses are disseminated in forces
    commands training guidance for deploying forces.
        My intent is that III Corps will remain a major player in the live-
    virtual-constructive training arena, fully integrated within the Joint
    National Training Capability (JNTC) initiative. As a part of that
    larger effort, we are using state-of-the-art technologies as training
    enhancers. Our joint distributive constructive simulations (JANUS,
    BattleSim, and others) address a broader scope of capabilities allowing
    us to tie into subordinate commands that will deploy with us during
    collective/staff training exercises and rehearsals, including air-
    ground operations training. Some initiatives at Fort Hood include
    virtual convoy training and IED simulators; and fully instrumented
    urban sites that provide real-time performance feedback as well as an
    expanded array of options for targets and tactical situations. We
    employ a multipurpose battle simulations center, a battle command
    training center, close combat tactical trainers, warrior skills
    trainer, aircraft survivability equipment trainers, and other digital/
    simulation training capabilities to train and sustain both individual
    and collective task skill training within the Corps. We are using these
    technologies to link our units-in-training to actual events occurring
    in theater, thus ensuring that our training is conducted within a
    scenario that incorporates continuously updated situational awareness.
        General Sattler. [Deleted.]
        General Buchanan. Senator Ensign, our homestation training has been
    continually evolving in response to the emerging requirements of the
    various AORs in which we are engaged. Our semi-annual Combat Air Forces
    Realistic Training Review Boards, annual Tactics Review Boards, and
    Weapons and Tactics Conferences are but a few of the forums where we
    address and make adjustments to our training programs.
        One of the first steps we took to better support training for
    operations in support of both OEF and OIF was to provide guidance in
    each fighter/bomber aircraft Ready Aircrew Program (RAP) tasking
    message (the guidance document that squadrons use to build their
    aircrew training program), adding requirements for Flexible Air
    Interdiction (AI) sorties (definition from the RAP tasking message:
    Flexible AI missions consist of sorties primarily flown in support of
    nonpreplanned target sets. Tasking is generally via C2 agency (JST ARS,
    AWACS, JTAC, GFAC FAC-A, etc). SCAR, CAS, and TST all fall under this
    general category. Tasking agency can be simulated by an instructor or
    flight lead when actual C2 assets are not available to support.)
        We added dynamic air-to-ground targeting events to each of the RAP
    tasking messages, with the following requirements: complete an air-to-
    ground attack/engagement against a target/TST relayed/passed by an
    appropriate command and control (C2) asset. Track information should be
    datalinked if possible, otherwise via normal radio communications (C2
    asset and relay/passing of track information can be simulated).
        Strafe has been moved from a FAM to a QUAL event in both the F-15E
    and F-16 RAP tasking messages (it was already QUAL for the A-10). This
    means crews will have more practice/experience in employing the gun in
    the air-to-ground environment prior to deploying.
        Increased emphasis has been placed on composite force, joint, and
    coalition training. Our quarterly Integrated Training Conference (ITC)
    has seen an explosive increase in mutually beneficial training
    opportunities for our fighter/bomber forces with command and control
    assets, air support operations squadrons, tactical air control parties,
    and Special Operations Forces. Our Flag exercises have also made
    scenario adjustments to increase flexible AI, and TST training.
        We currently have multiple locations that support training in the
    urban environment. Avon Park, Nellis Test and Training Range, Utah Test
    and Training Range, Mountain Home Range Complex, Melrose, Holloman, and
    Dare County all either have urban training complexes inplace, or in the
    process of being built. We continue to expand these areas to provide
    more realistic urban environment training for our crews.
        Last November, USCENTAF sponsored a pre-AEF deployment exercise
    (now called Atlantic Strike) to train and prepare joint air assets for
    urban CAS and Remote Operated Video Enhanced Receiver (ROVER)
    operations. We invited deploying units from all components to ``train
    like we fight'' in an urban CAS environment; USAF, USSOCOM, USN, and
    USMC units participated in this first-ever training. The exercises
    utilized actual OIF/OEF scenarios and focused on joint precision
    targeting, enabled by cross-cueing full motion video from targeting
    pods with ground-based Joint Terminal Air Controllers (JTACs). The
    ability of JTACs to see what the fighter pilot sees compressed the kill
    chain dramatically . . . in some cases to less than 1 minute from
    aircraft check-in through target acquisition to strike. These exercises
    generated practical lessons learned which we have used to develop
    formal tactics, techniques, and procedures for urban CAS operations.
    Continued JTAC and pilot familiarization with new targeting pod
    symbology and ROVER operations will continue to expedite target
    acquisition and identification, significantly shortening the kill
    chain. Spin-up exercises like Atlantic Strike are excellent tools to
    incorporate new lessons learned from OIF/OEF and provide Joint
    training.
        We are providing increased opportunities for our crews to practice
    strikes on moving targets with target sets now in use at the Utah Test
    and Training Range, Nellis Test and Training Range, and Air Warrior II,
    with more locations being looked at for additional target sets.
        Flying units currently train for convoy escort operations at both
    Air Warrior and Air Warrior II. Tactics, techniques, and procedures
    (TTPs) are constantly evolving to counter new enemy tactics and
    incorporate new technologies. These TTPs are discussed at Weapons and
    Tactics conferences and are documented in aircraft tactics manuals and
    Mutli-Service TTP publications. We require ground convoy training for
    our airmen deploying into Iraq, elements of which include: weapons
    qualification, weapons employment, individual and team movements, land
    navigation, troop leading procedures, convoy operations, and urban
    warfare through realistic training scenarios.
        ACC has recently begun a ready-to-deploy training program required
    of all airmen deploying to the CENTAF AOR, now being converted into an
    emerging Air Staff Predeployment Training--Expeditionary Combat Skills
    Training program. The program will eventually transition to cover
    skills required to meet the emerging threat encountered in deployments
    into any of our AORs. Elements of the new predeployment training
    include: weapons issue/turn-in procedures, load bearing equipment/body
    armor, M-16 maintenance, use of force ROE, combat skills (challenging,
    cover and concealment, movement techniques, action on contact, reaction
    to fire (direct/indirect), ID/reaction to IEDs, SALUTE reporting,
    fighting positions, air base defense, Integrated Base Defense, rifle
    fighting, and practical field exercises.
        We have accelerated the incorporation of datalink capability onto
    targeting and reconnaissance pods. ROVER transmit capability is being
    installed on Litening AT and Sniper pods to provide a real-time
    targeting pod video link with JTACs. A datalink capability is being
    developed for TARS pods to provide near-real time imagery dissemination
    to intelligence analysts, exponentially increasing the relevance and
    utility of this system to prosecute fleeting high-value targets.
        General Austin. The 10th Mountain Division leverages available
    technologies to better simulate the OIF and OEF operating environments
    in our training environment. Our recently expanded Engagement Skills
    Trainer (EST) provides our soldiers 50 firing lanes with access to
    virtual direct and indirect fire weapons training devices for all of
    our common weapons platforms. The firing scenarios replicate threat
    forces, civilians on the battlefield, and the urban, mountainous, and
    desert terrains found in OIF and OEF. Additionally, we have virtual
    convoy combat trainers that enables our soldiers to train to fight
    effectively while mounted in vehicles. The 10th Mountain Division also
    leverages its recently completed Battle Command Training Center to
    conduct company thru division--level command post exercises in
    simulated joint and combined OIF and OEF operating environments. These
    high-fidelity simulations, provided by the National Simulations Center,
    replicate most aspects of the CENTCOM operating environment including
    insurgent factions, Iraqi and Afghan army and police forces, coalition
    forces, border nation military forces (e.g., Pakistani Forces),
    civilian populations, media groups, NGOs, and even contractors.
        Admiral McCullough. The Navy's FRP is the key to our operational
    readiness, which is the end goal of all our training. By changing the
    mindset from cyclic training and deployment operations to one of
    continuous maintenance, training and readiness, the strike group will
    be better prepared for each stage of training and deployment or surge
    operations. Our ships have a core set of certifications covering the
    complete range of missions. Prior to implementation of the FRP, the
    deployment cycle mindset led to a sizable drop in training and
    readiness following deployment as experienced personnel rotated out and
    the unit started over in its training cycle. FRP requires maintaining
    our readiness, which allows us to focus training resources on our
    identified weak areas, rather than spreading them out across the
    training continuum. Currency is now maintained in key certification
    areas such as Antiterrorism/Force Protection, Damage Control, and
    Maintenance and Material Management (3M). Readiness will be increased
    as we build from established baselines. Our emphasis is on unit level
    training teams, allowing each unit to continually train and maintain
    readiness after the unit level training phase where those training
    teams are evaluated and certified.
        Fleet Synthetic Training (formally Battle Group Inport Exercises)
    is a key technology we are leveraging to train to current operational
    requirements. This distributed training capability allows the strike
    group to train combat systems operators and tactical action officers in
    port to a high degree of fidelity, from the unit level (single ship) to
    the strike group or multi-strike group level. This training can be
    supported from Tactical Training Group Atlantic or our local Afloat
    Training Group. Inport training saves underway costs, while keeping our
    sailors focused on their tactical mission. Inport training also
    improves underway training by reducing the amount of transition time
    needed between inport upkeep operations and underway steaming
    evolutions.

                         army rapid fielding initiative
        8. Senator Ensign. General Metz and General Austin, last year this
    subcommittee recommended an additional $262.0 million for the Army's
    Rapid Fielding Initiative to expedite providing individual equipment
    items like the advanced combat helmet to soldiers. What is the status
    of III Corps units and 10th Mountain with respect to receiving all of
    their Rapid Fielding equipment?
        General Metz. III Corps units that deployed in support of OIF II
    received Rapid Fielding Equipment just as quickly as the industrial
    base could support the demand. DAs priorities for issue were executed
    prior to deployment with Reserve and National Guard units receiving
    their RFI issue in CONUS and shortages issued as they completed
    deployment preparations in Kuwait. Several changes to the issue plan
    impacted on the availability of supplies to source all deployed active
    duty units, 1st Armor Division was extended in theater and approved to
    receive RFI before returning to Germany. Additionally, DA approved
    issuing to OIF 2.5 units that were not on the initial fielding plan
    until a later date. This resulted in an increased material requirement
    and a shift to the right for 1st Cavalry Division, 13th Corps Support
    Command and Corps separates. All units received their issues in theater
    but due to production shortfalls for such items as the ballistic
    helmet, boots and ballistic goggles, there were a number of soldiers
    that were not issued complete sets.
        III Corps units that deployed during OIF I are just now receiving
    their RFI issue. Fourth Infantry Division received their full RFI issue
    last month, with only minor shortages as a result of unique sizing
    shortfalls. PEO-soldier has provided outstanding support to the Corps
    and continues to fill shortages not previously filled. Percentage wise,
    III Corps is about 83 percent filled for RFI, and we expect to be fully
    resourced before the end of the calendar year.
        General Austin. The Rapid Fielding Initiative (RFI) is providing
    our soldiers with the enhanced individual and unit equipment needed to
    enhance survivability and lethality prior to deployment. All deploying
    elements associated with the 10th Mountain Division receive RFI prior
    to OIF/OEF deployments. The 1st BCT and 1-10th AVN BN received
    approximately $26 million worth of equipment in RFI in April 2005 to
    support their OIF deployment. Our 3rd BCT, 4th BCT, 10th Multi-
    Functional Aviation Brigade, 10th Sustainment Brigade, and remainder of
    10th Mountain Division are scheduled to receive RFI fielding in July
    and August 2005 in support of their OEF deployment beginning this
    winter.

                                     morale
        9. Senator Ensign. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, the American people are
    justifiably proud of the accomplishments of the men and women in
    uniform today. There is no question that we all understand the level of
    responsibilities that they have been entrusted with, and for many, at a
    young age. With all of the requirements that your troops and sailors
    are managing, such as repairing equipment or training for deployment,
    how is morale and what programs foster and sustain morale for your
    service men and women?
        General Metz. Morale continues to remain high. Soldiers are focused
    on the professional performance of their duties and missions.
        From a deployed perspective, a soldier's morale is sustained
    through communications. The Internet cafes and the commercial phone
    centers throughout the numerous coalition camps in Iraq allow soldiers
    to foster and maintain relationships with families and loved ones.
    Correspondence through the U.S. Postal System is still an important
    medium for soldiers to receive updates from home, but the instantaneous
    electronic data and voice communication between a soldier and family is
    invaluable. Digital photos transmitted via the Internet provide instant
    updates on important family events and, in some cases, streaming video
    allow a soldier to talk face to face with loved ones.
        Additionally, time away from the hostile environment provides a
    morale boost for our soldiers who are engaged in the day-to-day mission
    of a year-long deployment. The Rest and Recuperation (R&R) Leave
    Program and the Rest and Recuperation Pass Program provide a much
    needed respite from the rigors of a hostile combat environment. The
    goal for these programs is to provide each servicemember, on a 1-year
    deployment, a 2-week R&R leave period and a 4-day R&R pass. The R&R
    pass can be taken every 6 months.
        Other quality-of-life programs within the deployed theater that
    also foster and sustain morale for the deployed servicemember include
    free Stars and Stripes newspapers, Armed Forces Network radio and
    television transmissions, Army/Air Force Exchange Service (AAFES)
    retail sales and name brand fast food operations, United Services
    Organization (USO) and Armed Forces Entertainment (AFE) sponsored
    entertainment groups and celebrities, and morale, welfare, and
    recreation (MWR) operations such as fitness facilities and recreation
    centers.
        At Fort Hood, the Directorate of Community Activities/Morale,
    Welfare, and Recreation enhances quality of life and morale by
    providing numerous recreation and services to military personnel,
    family members, retirees, and civilian employees which encourages
    growth and a feeling of self reliance within the military community.
    Army MWR includes clubs and dining, recreation and leisure services,
    sports programs, religious programs and fitness centers, counseling and
    assistance services, parent and youth services, and seasonal and
    special events.
        General Sattler. The marines of I MEF are justifiably proud of
    their accomplishments in Iraq. The destruction of the Muqtada Militia
    in Najaf and the clearing of Fallujah are battles that will be added to
    the long list of noteworthy Marine Corps victories. Pride is one of the
    primary reasons that the morale of our marines remains high. Training
    and preparing for the next deployment are part of the normal routine
    for Fleet Marine Force units. These tasks in and of themselves do not
    strain morale.
        In CONUS, the morale of the marines in I MEF is high. Camp
    Pendleton offers a variety of services through MCCS. These include
    swimming pools, movie theaters, bowling alleys, beaches, gymnasiums,
    playing fields, vehicle hobby shops, improved family housing, and beach
    cottage rentals. Recently, MCCS held a large free concert at Del Mar
    Beach, which included a variety of popular entertainers. In addition to
    the amenities offered by MCCS, the Southern California area offers a
    variety of attractions. These include miles of beaches, snow skiing in
    nearby mountains, major amusement parks within a few hours drive,
    professional sporting events, and the San Diego Gaslamp Quarter.
        Marines returning from deployment are given a 96-hour liberty upon
    their return and then work half days for the first week. Additionally,
    every Marine is afforded the opportunity to take annual leave. This
    allows them to spend some time taking care of personal issues that may
    have arisen during the deployment. The liberty period, half days and
    annual leave are intended to assist the marine with the transition from
    the rigors of the long hours, harsh conditions and structured routine
    of the deployed environment to shorter hours and stateside living
    conditions. Interacting with family members or socializing with
    civilian friends can be stressful for marines who have just returned
    from a deployment. This transition period helps the marine get used to
    being home again.
        Marines are also encouraged to take advantage of programs offered
    by MCCS. These include Marine Corps Family Team Building, Lifestyles,
    Insights, Networking, Knowledge, and Skills (L.I.N.K.S.), Chaplains
    Religious Enrichment Development Operation (CREDO), and the Return and
    Reunion briefs.
        In order to mitigate the stress associated with long deployments, I
    MEF employed a variety of measures to sustain the morale of our
    deployed forces. Among these measures were, internet cafes, fitness
    centers, free phone cards, telephone centers, exchange facilities, and
    mobile exchanges, 15-day R&R program for servicemembers assigned for a
    year or more (free trip home), 4-day R&R program in Qatar (hotel,
    swimming, alcohol, recreation center), chow facilities with hot meals,
    including fresh fruits, vegetables, ice cream, desserts, etc., barber
    shops, free laundry service, sports tournaments with prizes, movies,
    DVD libraries, libraries, game centers, video teleconferences with
    family members, hot showers/bathroom facilities, MWR concerts and
    outstanding mail service/MOTO mail. In addition, the USO celebrity
    tours were very well received by the marines and sailors of I MEF.
        General Buchanan. Senator Ensign, morale is high with our deployed
    airman, thanks in no small part, to our Air Force Services personnel,
    who provide our forward operating locations with the very best quality
    of life in the AOR. These airmen serve as the backbone of support and
    are going above and beyond daily to improve the living conditions for
    their fellow airmen. There are 500 of them on every AEF rotation who
    provide outstanding programs in food service, billeting, fitness,
    recreation, and other support areas. Some of their accomplishments
    include operating learning resource centers to offer college classes,
    formal military and civilian educational opportunities. They ensure
    that morale phones and computers are available for all airmen to reach
    loved ones on a regular basis. They facilitate an average of over two
    Armed Forces Entertainment tours per month for our personnel.
    Additionally there are countless general recreation programs, which
    differ by location, but include fun runs, sports days, Bingo, Spades
    tournaments, pool and ping-pong tables. Special events are planned
    periodically and for holidays. At locations where conditions permit,
    cultural and shopping tours are available.
        General Austin. My experience and observations are that the morale
    of our young men and women is outstanding. They continue to accomplish
    remarkable things both at home and overseas, and are motivated to
    serve, dedicated to the mission, and appreciative of the support they
    receive from their communities, the Army, and the country. Evidence of
    this can be found in our division reenlistment rates, which in 2004
    averaged 128 percent and have averaged 131 percent and 117 percent for
    the 1st and 2nd quarters of 2005, respectively. I attribute much of
    this success to the outstanding leadership of our noncommissioned
    officer corps.
        Army Well-Being programs also play an important role. A soldier's
    morale is deeply affected by his family's quality of life, and by the
    perception that the military cares about them. This includes quality
    child care, youth programs, schools, recreation, college tuition
    assistance, healthcare, and housing. The continued success of the Army
    Well-Being programs contributes to a trained and ready force. The Fort
    Drum Army Family Team Building program was recently recognized as the
    best in the Army, and has played a particularly vital role for families
    during current and future separations due to deployments.
        The best thing we can do for morale is to continue to provide
    soldiers with the resources they need to do missions we ask of them,
    acknowledge the sacrifices they make through fair compensation and
    benefits, and to continually seek ways to sustain and improve their
    quality of life and that of their families.
        Admiral McCullough. The morale of our sailors is high. Proper
    training builds confidence and enables them to successfully perform at
    a high level in our demanding environment. Increased opportunity for
    professional development also helped sustain high morale. The U.S.S.
    John F. Kennedy Carrier Strike Group (JFKSG) enjoyed record setting
    advancements this deployment due to an aggressive mentorship and
    training program. Additionally, JFKSG sailors achieved superb numbers
    for Warfare Qualifications, a testament to the professionalism of
    today's sailors.
        The morale of sailors and families remains high due in large part
    to the efforts of many organizations and programs that provide personal
    support prior, during, and after extended deployments. The following
    organizations were available to sailors and their families: Command
    Ombudsman, Command Family Support Group, Fleet and Family Support
    Center, Morale, Welfare, and Recreation, Chaplain services, Naval Legal
    services, On base day care, Navy Exchange and Commissary, Navy and
    Marine Corps Relief Society, American Red Cross, United Through
    Reading.
        Predeployment programs provided to sailors and their families
    included family and single sailor predeployment briefs and training on:
    hurricane preparedness, voluntary education programs, Operational
    Security (OPSEC), Financial Planning and Budgeting, Wills and Powers of
    Attorney, and Suicide Prevention.
        The ability to keep families connected during separations is
    critical to maintaining high morale. Sailors at sea have unprecedented
    methods to connect with their families at home including regular mail,
    personal e-mail accounts, telephone lines using the sailor phone
    program, and video teleconference capability on several ships.
        In addition, the JFKSG Beach Detachment provided a new level of
    invaluable support and reassurance to the families of our deployed
    sailors. Spouses and children had a concerned command representative;
    available 24 hours a day, in the local area who was there to help them
    resolve a wide variety of issues. Simple tasks that used to take days
    to accomplish, such as getting the necessary paperwork back from
    deployed ships to re-register a car on base, or get a replacement ID
    card were quickly taken care of by the Beach Detachment.
        Significant post-deployment training was also conducted. These
    post-deployment seminars included training for new parents,
    reestablishing intimacy, car buying, domestic violence, anger
    management, drug and alcohol abuse, and vehicle safety.
        This continuum of programs and leadership fostered and sustained a
    high level of morale not only during our deployment, but also during
    the important months before and after.

                               reserve components
        10. Senator Ensign. General Metz, General Sattler, General
    Buchanan, General Austin, and Admiral McCullough, each of your written
    testimonies highlighted the role of the Reserve components in your
    organizations during deployment. Please elaborate on those
    contributions. Please note particular challenges of integrating
    reservists into your organization and issues associated with training
    and sustaining reservists.
        General Metz. Eighty-nine percent of the units assigned to the 13th
    Corps Support Command during OIF II were Reserve component (RC). This
    certainly embodies the One Army concept. As I stated in my written
    testimony, the logistics mission in Iraq was one of the most
    challenging and complex missions in our history. All three components
    were vital and equally important to mission accomplishment. To
    elaborate on the total integration, command and control was not limited
    to active component (AC) units. Our forces were organized by echelon
    and function, not by component. For example, it was not unusual for an
    active component unit to work for a National Guard unit who worked for
    an Army Reserve unit.
        One particular challenge my staff experienced during OIF II was
    mitigating the 2-year limit on mobilization for Reserve Forces. Several
    soldiers had been mobilized previously to support the global war on
    terrorism, and would have exceeded their 2 years prior to completion of
    their rotation to Iraq. Many of those soldiers volunteered to remain in
    Iraq to finish the rotation with their units. Those that did not
    volunteer were returned to the mobilization station and released from
    active duty; this reduced the operational capability of their unit. Our
    RC organizations now identify this situation before a soldier even
    reports to the mobilization station, and the soldier either volunteers
    to complete the entire rotation, or he does not mobilize.
        One of the training challenges is obvious. RC units have,
    essentially, 39 days each year to train individual and collective
    tasks. This is barely adequate time to sustain basic soldier skills--
    all remaining training must be completed after unit mobilization but
    prior to unit deployment. Allocation of training resources must be
    choreographed carefully to insure each soldier and unit receives the
    right training at the right time, and the unit arrives in theater when
    the commander needs them.
        Another training challenge RC soldiers face is maintaining adequate
    physical fitness during peacetime. Each soldier must discipline himself
    to exercise at a frequency and level of intensity that will sustain him
    in combat without the benefit of the resources that are available to
    his active duty counterparts.
        General Sattler. The contributions of Marine Reserves are a
    critical component of the Marine Corps total force. At the height of
    Operation Iraqi Freedom II (OIF II), over 12,000 marines from the
    Reserve component were mobilized in support of I MEF. These Reserve
    mobilizations came from several different sources. These included,
    Select Marine Corps Reserve (SMCR) units and detachments, Individual
    Mobilization Augmentees (IMAs), Individual Ready Reserve (IRR), and
    retirees. The majority of the combat replacements provided to I MEF for
    OIF II were from the IRR. Entire SMCR infantry battalions were
    activated and attached to 1st Marine Division where they fought
    alongside the active duty battalions. SMCR units were also attached to
    3rd Marine Air Wing, 1st Force Service Support Group and I MEF
    Headquarters Group.
        Overall, there were minimal challenges in integrating Reserve
    marines into the force. Pay problems can be the biggest challenge for a
    mobilized Reserve marine. In order to alleviate these problems, I MEF
    has a Reserve Liaison Office (RLO). This section specializes in
    resolving pay and orders problems for Reserve marines at I MEF. In
    addition, because the Marine Corps uses the Marine Corps Total Force
    System (MCTFS) for both the active component and Reserve component
    administration, mobilized marines can be joined to a unit with a unit
    diary entry. MCTFS encompasses all of a marines personnel information
    and is used for payroll, family information, training status, awards,
    and service commitment information. MCTFS allows the admin personnel at
    the gaining force command to handle any payor allowance problems that
    may occur. The IMA marines already belong to the gaining force command,
    so that they can be mobilized and deploy with a minimal amount of time.
    SMCR units attach and detach in the same manner that the Marine Corps
    uses when task organizing any force, so the process is already well
    understood, and their mobilization processing has become second nature
    also. Training challenges varied depending upon what source the Reserve
    marine came from. IMA marines are trained by their sections during
    drill periods and annual training periods. They require little in the
    way of additional training upon deployment. SMCR units have instruction
    and inspection staffs that are responsible for maintaining the training
    and readiness of those units. IRR marines were sent to division schools
    for Security and Stability Operations (SASO) training prior to being
    deployed. This training included refresher courses for infantry skills.
    Due to the increased deployment tempo for SMCR units since September
    11, 2001, Marine Forces Reserves initiated efforts to increase the
    procurement of equipment for SMCR units. The results of these efforts
    were evident when SMCR units arrived in theater with adequate
    quantities of gear and equipment. IMA marines are equipped by their
    parent commands. IRR marines are equipped by the mobilization
    processing centers prior to being sent on to the gaining force
    commands. Once attached to I MEF, Reserve marines and units were
    sustained in the same manner and from the same sources as the active
    duty marines.
        General Buchanan. Senator Ensign, in the past year the Air Reserve
    Component (ARC) has stood shoulder to shoulder with the active duty,
    joint, and coalition forces filling over 40,000 deployment requirements
    in support of both OEF and OIF. The high experience level of the
    reservists has been invaluable in filling critical expeditionary combat
    support requirements, especially in the civil engineering, aerial port,
    medical, communications and security forces career fields. ARC members
    often serve in key leadership positions to include vice wing and group
    commander positions. In addition, ARC airlift, refueling, J-STARS,
    fighter and bomber aircrew have flown over 35,000 combat and combat
    support missions in support of OEF/OIF.
        Challenges of training and integrating reservists are almost non-
    existent. They are able to seamlessly integrate into the Air
    Expeditionary Force structure due to their normal home station training
    programs. ARC members accomplish the same training events, maintain the
    same currencies and adhere to the same standards as their active duty
    counterparts, making it difficult to distinguish between deployed ARC
    and active duty members.
        General Austin. The Reserve component has been a key multiplier in
    our success. They are an important and integral part of the total
    force. It has been my privilege to serve with them in both Iraq and
    Afghanistan, and I am continually impressed by their dedication and
    eagerness to serve. In Afghanistan, for example, we had a significant
    number of Reserve component engineer, aviation, and civil affairs units
    that integrated well and were critical to mission success. They did a
    marvelous job.
        It is clear that the active component cannot fulfill its mission
    without the support and participation of the Reserve component.
    Integrating reservists, both individually and at the unit level, is a
    matter of leadership. The challenges lie in communication, cooperation,
    culture, and configuration. For example, one of the challenges will be
    the transformation of the Reserve component as part of the modular
    force. It is critical that this happen, and that these units be
    afforded the same opportunities, including Combat Training Center
    rotations, as the Active Force. Integration works best when reservists
    are trained, educated, and equipped to meet the mission, and when
    leaders at all levels of both components reach out to one another as
    they seek solutions across the full spectrum of operations.
        Admiral McCullough. A deploying Carrier Strike Group normally
    leaves behind a number of personnel that are due to rotate soon or
    retire shortly after deployment. This group is normally in a transitory
    status and provides no benefit to the deployed strike group. My strike
    group stood up a Beach Detachment for our 2004 deployment whose goal
    was to keep these transitory personnel employed in their rate to
    benefit the deployed units or the home base, as well as more closely
    integrate Reserve support with active duty operations. This detachment
    had at its core six reservists on Active Duty for Special Work (ADSW)
    orders. Using reservists in this role prevented the strike group from
    having to leave behind senior qualified personnel. This detachment
    revolutionized the nature of the strike group home front. Over 480
    incoming personnel (prospective gains) were provided small arms
    training, fire fighting, first aid and rate training, providing the
    deployed units a much better trained servicemember upon their arrival
    to the forward deployed ships and squadrons. The small arms training
    received enroute was invaluable in meeting overseas Anti-terrorism/
    Force Protection requirements. Transitory personnel also provided over
    4,500 man-hours of support to the naval base and local commands.
    Additionally, the Beach Detachment provided a new level of invaluable
    support and reassurance to the families of our deployed sailors.
    Spouses and children now had a concerned command representative;
    available 24 hours a day, in the local area who was there to help them
    resolve a wide variety of issues. Simple tasks that used to take days
    to resolve such as getting the necessary paperwork back from deployed
    ships to reregister a car on base, or get a replacement ID card were
    quickly taken care of by the Beach Detachment.
        FRP requirements split the Strike Group into three separate groups
    (the Carrier Strike Group (CSG), Expeditionary Strike Group (ESG)
    support units, and a Surface Strike Group (SSG)) which deployed at
    three separate times. The Beach Detachment provided Sustainment
    Training support and oversight to the late deployers (ESG and SSG), as
    well as exercise observers and support. This support is critical and a
    model for future deployments as the Strike Group continues to fulfill
    sustainment and surge requirements.
        The ADSW reservists, plus other reservists on additional training
    or drill, provided invaluable support to the deployed strike group,
    late deploying strike group assets, and the home base. Their Navy and
    civilian experience enabled the reservists to very capably fulfill this
    role without additional training. We are currently implementing a
    training plan for our Reserve Carrier Group to fully qualify eligible
    personnel for Tactical Flag Command Center watch duties. One challenge
    is providing training resources during drill weekends. We are
    addressing that with duty personnel and great support from our local
    training activities.
        The Navy is currently reviewing Active component-Reserve component
    integration as part of our servicewide Human Capital Strategy. This
    will ensure our Reserve component is properly sized and organized to
    support our Navy in the 21st century.

                         army modularity implementation
        11. Senator Ensign. General Metz and General Austin, one of your
    challenges since returning from Iraq and Afghanistan is implementing
    the Army's modularity transformation plan. Given that you are also
    repairing and replacing equipment, allowing soldiers well-deserved rest
    and recovery, and training for future deployments to Iraq and
    Afghanistan, I would imagine that meeting the requirements of
    implementing the modularity plan--such as creating new brigades,
    increasing equipment inventories, et cetera--is significant. My
    understanding is that the modularity implementation plan was for the
    new brigades to be manned and ready in about 6 months. General Austin,
    adding to your challenge, I understand is that one of your new brigades
    is at Fort Polk, Louisiana, 1,500 miles away from you at Fort Drum.
    What is the status of implementing modularity at III Corps and 10th
    Mountain and how can this committee support your efforts to continue
    modularization?
        General Metz. Modularizing the force is an ambitious program that
    involves thousands of soldiers, an enormous effort in terms of planning
    and equipment transactions, and increased amounts of funding, all while
    repairing and replacing equipment and giving soldiers time to rest and
    recover. Modular conversions are not just creating new brigades; it is
    also reorganizing existing brigades. The new units are much more self-
    sufficient in all-arms and more appropriate to future requirements.
        We continue to implement transformation in accordance with Chief of
    Staff of The Army guidance and direction. 4th Infantry Division is well
    into its training cycle in preparation for Iraq, while at the same
    time, 1st Cavalry Division, the Corps Support Command and the Corps
    Artillery are all in the midst of recovery and modular conversion
    planning. The soldiers of III Corps are extremely busy converting to
    modular organizations, while simultaneously accomplishing all
    operational missions.
        You asked what this committee can do to support modularization
    effort, but I would classify it more as support to our great soldiers
    and civilians during this period of change. Currently, programmed
    funding is not in synch with modular conversion timelines. For example,
    OMA funding is programmed 5 years out. The decision to transform
    occurred less than 5 years ago. Thus, on several of our posts, there
    are not enough permanent facilities--offices and barracks--to support
    the modularized units. This leads to funds being used for temporary
    facilities; then-when the programmed funds are available--the
    construction of permanent facilities. A more flexible system would
    allow for movement of funds to cover permanent cost of modularization,
    thereby saving money and providing better facilities for our soldiers.
        General Austin. Army transformation to modular, brigade-centric
    units will provide enhanced warfighting capabilities. Units will be
    highly deployable, self-contained, and standardized across the Army.
    The 10th Mountain Division is fortunate to be one of the first units to
    undergo transformation to the new structure. Understand that the
    Modular Conversion is an incremental process based on the available
    resources at the time of each unit's conversion, complete conversion to
    the modular design with all the new systems will be achieved over time.
    We are approximately 75 percent of the way through the process with the
    current conversion. Our aviation brigade and 2nd Brigade Combat Team,
    currently deployed to Iraq, will begin the transformation process in
    September. The transformation of our Sustainment Brigade, 1st, 3rd, and
    4th Brigade Combat Teams nears completion. The 1st Brigade Combat Team
    recently completed a successful rotation to the Joint Readiness
    Training Center (JRTC) in the new transformed structure in preparation
    for its pending deployment this summer to Iraq. The 3rd and 4th Brigade
    Combat Teams are scheduled to complete their training rotations to JRTC
    later this year in preparation for deployment to Afghanistan. As you
    point out, the 4th Brigade Combat Team is located at Fort Polk,
    Louisiana. The geographic separation, however, has not hindered our
    ability to provide the brigade with training and readiness support. We
    have been successful in translating lessons learned from the
    transformation of our brigades located at Fort Drum to the 4th Brigade
    Combat Team at Fort Polk because, in large measure, the new brigade-
    centric units are standardized.
        Anytime an organization faces change, there are challenges
    associated with change. Transformation to brigade-centric units is no
    different. One of the challenges we have faced in the process is
    equipment shortage. The Army's reset program, however, has provided the
    way-ahead to meet these challenges. We must replenish combat equipment
    as it returns from both theaters of operation and distribute it to
    newly transformed units. Reset is an ongoing process that must be
    sustained and a bill we must pay. Fortunately, the reset program is a
    priority in the Army and it is meeting the challenges of
    transformation. I am confident that 10th Mountain Division is a more
    lethal, more flexible, more agile fighting force.

                         army modularity infrastructure
        12. Senator Ensign. General Metz and General Austin, in July 2004,
    the Army announced the temporary stationing of 10 newly formed brigades
    at various installations in conjunction with the implementation of the
    Army's new modular force. At Fort Drum, my understanding is that Army
    is spending over $180 million to procure and install temporary
    facilities for housing, administrative space, and motor pools to
    support the new brigade there. I also understand that this is typical
    at each at the other locations, including Fort Hood, where hundreds of
    trailers will soon be in place to house and to provide work areas for
    over 30,000 troops for an undeterminable amount of time. In your
    opinion, are these trailers considered adequate permanent party
    unaccompanied housing and what is the plan to replace these trailers?
        General Metz. The relocatable modular facilities are adequate to
    house permanent party soldiers. They are constructed at the Army's
    1+1+1 criteria to provide three soldiers a separate bedroom and closet
    each while a kitchen area and latrine is shared by all three soldiers.
    These facilities are not constructed using typical mobile home industry
    standards. The high volume of soldier and unit rotations caused by
    mobilizations, deployments, redeployments, and normal PCSs, requires
    these facilities to be constructed using commercial grade standards.
    Each facility has a designed lifespan of 5-7 years without having to
    perform major type renovations. The current Army plan is to replace the
    relocatable modular facilities starting in the order of the
    transformation of Divisions. An additional cost for typical maintenance
    and repair of the existing 4th Infantry Division relocatables during a
    7-year lifespan is estimated to be over $1.6 million annually. The Army
    will look towards the Military Construction Army (MCA) program to
    provide permanent replacement facilities starting in fiscal year 2007.
        General Austin. We have experienced a population growth of
    approximately 33 percent at Fort Drum as a result of transformation.
    Our soldiers and Department of the Army civilians have done incredible
    work to plan and accept this growth. We are currently utilizing two
    types of interim facilities to support the newly transformed brigades.
    First, we have renovated existing buildings to provide soldiers
    barracks space. Second, we have constructed modular buildings to
    accommodate unit headquarters, supply rooms, and classrooms. Both
    facility types are intended to be used for only as long as it takes to
    build permanent facilities, which are projected to be constructed in 5
    to 7 years. We look forward to the end state of transformation where we
    will see state-of-the-art facilities for our soldiers and units.

                     commander's emergency response program
        13. Senator Ensign. General Metz, General Sattler, and General
    Austin, the Commander's Emergency Response Program (CERP) provides
    commanders in Iraq and Afghanistan with funds for use in small scale
    humanitarian and reconstruction projects, such as providing food and
    health care or repairing schools, hospitals, and bridges. What are your
    views on the utility and effectiveness of the CERP and how important
    was the CERP for you to accomplish your mission?
        General Metz. CERP was absolutely essential for establishing
    democracy in Iraq and fighting the insurgency. From the beginning of
    the Iran-Iraq War through the U.N. embargo, the Baathist regime had
    neglected Iraq's national infrastructure in a quest for military
    hardware and creature comforts for the party faithful. Many pieces of
    large machinery like generators, pumps, and harbor derricks are now
    obsolete, and either cannibalized for parts or poorly maintained. The
    capacity of critical public utilities was insufficient--like the
    national power grid--and in some cases non-existent--like sewer systems
    in Sadr City. Agriculture had also declined; Iraq, which had formerly
    been a net exporter of foodstuffs within the Middle East, did not grow
    enough food to feed its own people. Finally, many cities faced high
    rates of unemployment, especially with Iraq's army disbanded and its
    military-industrial complex closed. Consequently, two of our lines of
    operation were restoring the economy and rebuilding essential services.
        Large national-level projects will address many of the existing
    problems, but these projects often have such size and scope that they
    require a long lead time and the effects are delayed and not
    appreciated by the Iraqi population. For example, coalition forces get
    little credit for fixing a high-tension power line across an
    uninhabited part of Iraq when power in Baghdad is routinely disrupted.
    The good will generated by a restored power line will not be realized
    until the project is complete, which takes months.
        Moving among the Iraqi people near their bases, unit commanders
    were more aware of local concerns. CERP gave them the capability to
    immediately address local concerns with projects that improved the
    Iraqi economy and local infrastructure. Since they hired local workers
    and performed the work in local neighborhoods, these projects were
    visible to nearby residents and gave them a tangible benefit. These
    projects enhanced support for the coalition and reduced tensions in
    hostile neighborhoods. Greater support for the coalition led to more
    intelligence tips about the insurgents and fewer attacks on Coalition
    and Iraqi Security Forces. CERP projects also enhance the legitimacy of
    the new Iraqi government, offering Iraqis a hope of a better life.
    Conversely, it limits the appeal of the insurgents, whose success
    relies upon despair and fostering the belief that the government is
    illegitimate.
        General Austin. The Commander's Emergency Response Program (CERP)
    has been a significant combat multiplier in both Afghanistan and Iraq.
    The program provides tactical commanders with the means to affect
    immediate and tangible assistance to Afghan and Iraqi civilians for
    urgent humanitarian and reconstruction requirements, and thereby
    engenders goodwill among local communities. That goodwill is enormously
    important as we continue to work to stabilize these areas while at the
    same time actively engaging an insurgent enemy seeking to destroy
    democratic institutions. Without CERP, ground tactical commanders would
    have little if any ability to facilitate rudimentary reconstruction
    projects, purchase emergency generators, or obtain supplies to ensure
    the humane and secure detention of criminal suspects. The program's
    relative simplicity and potent contribution to stabilization efforts
    have had a profound influence on our military operations. This is a
    critically important tool for our commanders, and on their behalf I
    thank the members of the committee for their continued support of the
    program.

                            prepositioned stockpiles
        14. Senator Ensign. General Metz, General Sattler, General
    Buchanan, and General Austin, the Army, Marine Corps, and Air Force
    used land-based and sea-based prepositioned stockpiles for major combat
    operations in Iraq. To what extent are your Services continuing to rely
    on prepositioned assets?
        General Metz. Third Corps has relied significantly on prepositioned
    stocks in order to deploy rapidly, sustain the fight and defeat the
    enemy in Iraq and we will continue to need them in the future.
    Equipping, maintaining and sustaining the force will continue to be a
    challenge because of competing demands for the limited and finite pool
    of equipment available for prepositioning. Major claimants to the pool
    include replacements for battle losses, regeneration of Stay Behind
    Equipment (SBE) sets and the seed program required to rebuild the
    depleted prepositioned stocks. Additional external stress is placed
    upon the prepositioned stocks by the enormous requirement to reset
    redeploying forces. We have used almost all of our equipment
    extensively now for 2 years and so that equipment will need to be
    recapitalized, and in most cases, brought back to just about new states
    in order to train with it and have it ready for future fights. But, we
    are not relying solely on existing prepositioned sets. The Army
    Material Command is actively moving toward the establishment of an
    Equipment Support Activity--Iraq which will enable us to not only rely
    on new procurement and existing prepostioned stocks, but to continue to
    build a more robust capability in theater to meet equipping needs as we
    reset, regenerated, and redeploy III Corps.
        General Sattler. Maritime Prepositioning Squadron-2 (MPSRON-2)
    equipment and supplies were used to help equip I Marine Expeditionary
    Force during the return to Iraq for OIF II. These assets remain in use
    supporting Marine forces in Iraq. Headquarters, Marine Corps has
    initiated actions to reconstitute MPSRON-2 capability.
        General Buchanan. Senator Ensign, prepositioned War Reserve
    Materiel (WRM) assets are, and will continue to be a vital part of the
    expeditionary warfighters' planning. Without bare base equipment stored
    at arms reach, the quick response for OEF/OIF could not have been
    accomplished.
        Ongoing contingencies have created challenges within the USCENTAF
    WRM program because of the need to sustain deployed sites with
    equipment and supplies while reconstituting assets returning to the
    storage sites. When a priority one tasking is received, storage
    contract employees must refocus their reconstitution efforts to
    preparing the tasked asset(s) for shipment, thus hindering the ongoing
    production effort. USCENTAF WRM tasking average is three per day
    equating to over 21 short tons of cargo per month. The majority of
    taskers involve multiple pieces of equipment with the preponderance of
    WRM tasked being power production, special purpose vehicles or
    munitions related assets. Over a 6-month period from September 2004-
    March 2005, the USCENTAF WRM contractor prepared and shipped 127,000
    short tons of cargo throughout the AOR of which 27 percent were
    munitions, 26 percent were vehicles and the remainder was spread among
    other WRM assets.
        General Austin. 10th Mountain Division units did not use any
    prepositioned equipment or supplies upon deployment to Operation
    Enduring Freedom. The Division relied totally on deploying contingency
    stocks of food, fuel, barrier materiel, ammunition, vehicles, medical
    supplies, and repair parts. As we prepare 10th Mountain Division units
    to deploy to both OIF and OEF, the Department of the Army has dedicated
    units presently deployed to keep equipment forward as Stay Behind
    Equipment (SBE) for the unit they transfer authority to. Left Behind
    Equipment (LBE) stocks do not preclude deploying units from the
    requirement of taking no supplies or equipment. Deploying unit
    equipment densities have been drastically reduced.

               joint repair facilities in central command region
        15. Senator Ensign. General Metz, General Sattler, General
    Buchanan, General Austin, and Admiral McCullough, I read on page 8 of
    General Sattler's testimony that the Marine Corps was working on using
    the Army's repair facilities for ground vehicles. To what extent is
    there this type of cooperation between the Services with respect to
    maintenance facilities for ground equipment and other assets, like
    aviation, in Iraq?
        General Metz. When and where appropriate and feasible services
    provided maintenance support to each other. It was routine practice if
    one service had vehicles or equipment geographically away from its
    organic support and another service had the required capability they
    would provide support. Within Iraq the maintenance facilities
    (primarily Army Material Command (AMC)) at Logistics Support Area (LSA)
    Anaconda provided maintenance support to other services. It is also my
    understanding that AMC facilities belonging to CFLCC in Kuwait would
    routinely work on other services vehicles. As for aviation, the Army
    and Marine Corps used the same contractor to augment our organic
    maintenance capability but to the best of my knowledge there were no
    shared facilities. When I left I am not aware of any facilities that
    were built or occupied with the intent of joint use. However, as stated
    above we routinely supported each other.
        General Sattler. The Marine Corps and the Army are partnering to
    leverage heavy maintenance support for ground vehicles in Iraq. The
    first facility to implement this partnership is the Army's HMMWV
    Service Center. The Service Center will provide preventive, collective,
    and heavy maintenance support in several locations throughout the area.
    In addition to the HMMWV, 13 systems that are common to both the Marine
    Corps and Army have been identified as candidates for joint repair
    capability. Currently the Marine Corps units in theater have the
    resident maintenance capability and expertise to sustain its units less
    depot level repairs. We will continue to expand this partnership and
    leverage common repair facilities where at all possible.
        Due to co-location of aviation Intermediate Maintenance Activity/
    Marine Aviation Logistics Systems (IMA/MALS) with the Marine Corps Air
    Combat Element, all repairs within MALS capability are accomplished
    onsite. Those repairs beyond MALS capability are returned to CONUS for
    depot or manufacturer repair. Locations of Army facilities are not
    conducive to immediate turn around of components nor does the Army have
    commonality of repair for the vast majority of aviation assets.
        General Buchanan. Senator Ensign, USCENTAF works with its sister
    services and its coalition partners to the greatest extent possible to
    maximize cooperation with respect to maintenance facilities. For
    example, at Al Udeid Air Base the Navy and our coalition partners use
    Air Force aircraft maintenance back shops to help maintain their
    fleets. Likewise, at Balad and Bagram Air Bases, the Air Force uses the
    joint ammunition supply point (Army run) for supply of common
    ammunition (mostly small arms and airbase defense items) with great
    success. In addition, USCENTAF tasked a mobile team of Airmen to attach
    Add-on-Armor kits to predetermined HMMWVs within theater in November
    2004. While this team was traveling to improve the protection of Air
    Force assets and personnel, they used Army facilities at both Baghdad
    and Balad AB to complete the installation for HMMWVs at those sites.
        General Austin. We experienced a great deal of cooperation between
    Services with respect to sharing ground maintenance facilities in
    Afghanistan. The nature of this type of cooperation was necessary due
    to the limited space on the base camps we had to operate with at that
    time. Units were responsible for the first echelon of maintenance in
    regards to their equipment. If the equipment required a higher echelon
    of maintenance repair the equipment was evacuated to the Joint
    Logistics Command and placed into the maintenance facility for repair
    regardless of service. Overall, this is a good news story, and yet
    another fine example of how the Services have ground together in a
    joint culture emphasizing cooperation and mission accomplishment.
        Admiral McCullough. The Navy has significant organic repair
    facilities onboard aircraft carriers and large deck amphibious ships.
    The afloat nature of these facilities lends natural support to Navy
    ships and aircraft. During the U.S.S. John F. Kennedy Strike Group's
    deployment, U.S.S. John F. Kennedy (CV-67) repair facilities provided
    support to other Navy ships, Navy aircraft stationed both afloat and
    ashore, and Naval Support Activity Bahrain. U.S.S. John F. Kennedy's
    Air Intermediate Maintenance Depot also maintained aircraft used to
    support Marine and Special Forces in Iraq. While U.S.S. John F. Kennedy
    Strike Group did not provide support for the other Services during our
    deployment; this was in part due to our location (afloat).

           use of unmanned aerial vehicles in central command region
        16. Senator Ensign. General Metz, General Sattler, General
    Buchanan, General Austin, and Admiral McCullough, it is fascinating for
    me to think that unmanned aerial vehicles controlled by operators in
    Nevada are flying missions in the Central Command region. How have
    unmanned aerial vehicles, such as Predator and others, supported the
    readiness of your units in the Central Command region?
        General Metz. Unmanned Aerial Vehicles (UAV) greatly enhanced
    commanders' ability to fight and win in Iraqi. UAV supported command
    posts at several echelons have the ability to view ongoing actions in
    real time. As a result, commanders and staffs are making more timely
    and informed decisions. As the commander of Multi-National Corps-Iraq
    (MNC-I), I was able to watch the fight on the ground and make decisions
    based on what I was seeing and discussions with subordinate commanders
    who were watching the same video. When commanders did not have the
    capability to view videos, UAV operators would provide direction via
    voice or collaborative chat communications.
        UAV operations shortened engagements and saved lives on numerous
    occasions. It is used for reconnaissance of target areas and early
    warning for potential enemy actions. It also proved itself in the
    counter-insurgency fight, with the ability to track insurgent teams
    without their knowledge, supporting subsequent targeting efforts by
    follow-on forces. In the case of the armed Predator, we had the
    capability to destroy a target when sighted with pinpoint accuracy with
    commanders on the ground communicating with the pilots back in Nevada.
        Technology allows us to remotely control collection platforms from
    safe areas far removed from the battlefield. I believe this is an
    inevitable evolution in applying technology that we should commit
    ourselves to and fully exploit. To date, the coordination and systems
    used to synchronize these remote collection efforts have not failed,
    and are constantly being improved.
        The UAV is the most requested intelligence asset in theater due to
    its ability to provide real time information and its intelligence,
    surveillance, and reconnaissance role is the most important to the
    commander. As we continue to deploy and arm more UAVs, their primary
    effort should remain intelligence, surveillance and reconnaissance
    first then as a target designator or firing platform.
        The unmanned aerial vehicle is an asset we must continue to procure
    and field to commanders at all levels. We are experiencing a shortage
    of UAVs across the services and we need to make a concentrated effort
    to provide the appropriate quantity of UAVs to the appropriate echelon
    of command. In Iraq, and throughout the Army, the Division Commander
    does not have a dedicated UAV capability; any support he receives comes
    from Corps or is taken from his subordinate commanders. My experience
    is commanders at all levels require dedicated UAV support to meet their
    intelligence requirements.
        General Sattler. [Deleted.]
        General Buchanan. Senator Ensign, while UAVs vary extensively in
    size, shape, and capability, the one constant theme is they can provide
    real time information direct to the ground forces while retaining the
    capability to exploit imagery for traditional intelligence gathering.
        Predator UAV is uniquely suited for the global war on terror for a
    variety of reasons including a highly trained ``pilot in the loop''
    able to exert persistence over a target and is necessary to provide
    lethal effects with extreme precision. Predator also is low observable
    and can distribute its video worldwide via satellite.
        Global Hawk is another USAF high altitude UAV that can perform a
    variety of missions including signals intelligence, radar and optical
    surveillance. Its mission is very similar to the U2 without risk to the
    pilot.
        In December 2003, the USAF introduced Remotely Operated Video
    Enhanced Receiver (ROVER) to conventional ground forces in OIF and OEF.
    This mobile laptop can receive Line of Sight video from all USAF, USMC
    and U.S. Army UAVs that have streaming video capability. ROVER has
    revolutionized the way airpower is employed in the global war on
    terror. This capability enables dissemination of streaming video to any
    echelon deemed appropriate by ground forces. As a result, ground forces
    can view the battlefield remotely from the air at distances outside
    enemy engagement range-saving lives. Additionally, the connectivity
    closes the sensor to shooter loop to less then 90 seconds.
        ROVER has had an impact beyond UAVs. The Air Force has modified
    many fighter targeting pods to allow downlink direct to the ground
    forces via the ROVER. Additional USAF assets, such as the C-130s Scathe
    View, can also link full motion video to ground-based ROVER kits.
        The USAF's plan to activate up to 10 Air National Guard Predator
    Squadrons fits well. Once established, the Air Guard Predator units
    will be capable of conducting world-wide operations from their home
    State, greatly enhance readiness.
        General Austin. The UAV is a great example of how we leverage
    American technology for the benefit of ground commanders. UAVs provided
    our forces with very effective surveillance of far reaching targets
    across Afghanistan, enabling commanders to gain information required to
    make critical decisions. As a surveillance platform, the UAV is
    versatile, effective, and provides a persistent stare capability. With
    intelligence gained through this surveillance and other intelligence
    assets, commanders have greater battlefield visibility. Further, the
    long duration collection provided by UAVs such as Predator, proves to
    be highly valuable for command and control during enemy engagements or
    to see a location prior to forces being committed to a region. The
    capabilities provided to commanders by technology advances demonstrated
    by UAVs cannot be overstated.
        Admiral McCullough. UAVs over Iraq provided us with excellent
    situational awareness. We received a direct Predator feed onboard
    U.S.S. John F. Kennedy (CV-67), which allowed us to evaluate the
    effectiveness of Carrier Air Wing 17 strikes and compare our analysis
    with that of analysts at the Combined Force Air Component Commander,
    the Joint Force Commander for air operations over Iraq. Furthermore,
    UAVs are an indispensable source of intelligence and real-time
    targeting information in a war against insurgents operating in urban
    environments.
        We could also have made good use of UAVs in our maritime mission to
    ensure Situational Awareness (SA) in the vicinity of the CSG during
    operations and prior to our arrival on station. Through their
    contribution to a Common Operating Picture (COP), I see UAVs as a
    capability to enhance our knowledge of the maritime environment
    resulting in an improved Force Protection posture. A UAV could also act
    as a supporting capability to deter a terrorist attack against high
    value targets such as the Arabian Gulf Petroleum infrastructure. UAVs
    provide the essential ``long-dwell'' persistent surveillance capability
    necessary for these types of missions.

              safety of aircraft as a result of increased airlift
        17. Senator Ensign. General Buchanan, I was pleased to see
    highlighted on page 12 of General Metz's statement a strong endorsement
    of the increased use of intratheater airlift as a means to reduce the
    number of truck convoys on the roads in Iraq. My understanding is that
    this increased airlift support is primarily provided by C-130s and C-17
    flights, and has kept as many as 350 trucks per day off of the roads.
    This appears to be a very practical solution to decrease the risk of
    exposure to attack to truck convoys. The concern, however, shifts to
    the safety of the aircraft and aircrews. How are the aircraft equipped
    for defense against threats such as shoulder-launched missiles?
        General Buchanan. Senator Ensign, all C-17 and C-130 aircraft
    performing airlift missions in the CENTCOM Area of Responsibility are
    equipped with defensive systems designed to mitigate small arms and
    shoulder-launched missile threats. In order to minimize damage from
    small arms, these aircraft are hardened with armor and our aircrews
    wear body armor. Our aircrews employ night tactics using Night Vision
    Goggles in order to minimize visual detection while enhancing the
    aircrew's ability to see and react to missile launches. These aircraft
    are also equipped with automatic missile defense systems optimized to
    decoy shoulder-launched missiles with flares. Additionally, some C-17s
    have a laser-based jamming system to defeat these same missiles without
    the use of flares.

               impact of c-130 groundings and flight restrictions
        18. Senator Ensign. General Buchanan, as you are aware, the Air
    Force announced recently that there is advanced structural fatigue in
    C-130 wings--specifically in the center wing box of the C-130s. This
    has led to the grounding of 30 aircraft, and imposed flight
    restrictions on at least 60 others, with more C-130 aircraft being
    added to the flight restriction list every month. How has the C-130
    wing condition impacted airlift operations in Central Command and how
    are you managing intratheater lift in light of the C-130 situation?
        General Buchanan. Senator Ensign, though we initially lost a small
    number of sorties due to C-130 grounding, the center wing box issue in
    the C-130 fleet does not currently impact our intratheater lift
    operations. When the center wing box issue surfaced, force providers
    aggressively sent unrestricted C-130s to the theater to replace
    aircraft requiring center wing box maintenance. Now force providers
    only send unrestricted aircraft to the theater. Our deployed
    maintainers work closely with home station schedulers to ensure
    unrestricted C-130 availability in the AOR on a continuous basis. As a
    result of this excellent support, we're able to manage our intratheater
    airlift on an ``ops normal'' basis.

                              fleet response plan
        19. Senator Ensign. Admiral McCullough, the Kennedy Strike Group
    was the first carrier strike group to start its training and employment
    cycle from the beginning in accordance with the Fleet Response Plan. It
    was also the first carrier strike group to utilize the Navy's Training
    Resource Strategy and the Florida ranges for its training. What is your
    assessment of the training paradigm under the Fleet Response Plan and
    has strike group training significantly changed under the Fleet
    Response Plan? Also, what were the benefits and limitations of using
    the Florida ranges for strike group training?
        Admiral McCullough. Actually, U.S.S. John F. Kennedy Strike Group
    was not the first to undergo predeployment training under the FRP,
    U.S.S. Harry S. Truman Strike Group was. Our Strike Group reviewed the
    lay down of Navy force structure globally in the spring of 2003 and we
    knew we needed to be ready to deploy early, to ``surge'' in today's
    vernacular. We built our training plan accordingly. FRP was not fully
    developed or explained until later in calendar year 2003. The concept
    of Strike Group Training has not significantly changed under the FRP,
    however it has had the effect of providing more ready forces earlier,
    and for a longer period of time than under the old paradigm. By
    changing the mindset from cyclic training and deployment operations to
    one of continuous maintenance, training and readiness, the Strike
    Groups are better prepared for each stage of training, and for
    deployment or surge operations. Our ships have a core set of
    certifications to achieve covering their range of missions. The
    deployment cycle mindset led to a sizable drop in training and
    readiness following deployment as experienced personnel rotated out and
    the unit started over in its training cycle. The FRP requires
    maintaining continuous readiness, which allows us to focus training
    resources on our identified weak areas, rather than spreading them out
    across the training continuum.
        In response to your question on Florida ranges, our air wing used
    Florida ranges extensively during our predeployment training and
    certification and during our post deployment sustainment period. The
    various ranges provide a wide variety of target simulations and allowed
    us to develop and execute realistic training scenarios. Additionally,
    we preserved 3-4 flying days that were typically lost in the lengthy
    transit to the Puerto Rican Operating Area. The Florida ranges are
    currently limited to 500-pound weapons and only pinecastle target and
    Eglin ranges allow live ordnance deliveries. The requirement exists to
    release live weapons of all sizes, including GPS guided munitions, and
    currently that cannot be accomplished in the Florida range complex.
    Altitude reservations are established for aircraft transiting to and
    from the ranges that are also very restrictive. Larger altitude blocks
    and wider routes would permit more realistic strike package composition
    and target area tactics, and would allow the use of opposition force
    aircraft, required for most of our training scenarios. Overall, the
    strike warfare training objectives of FRP were successfully
    accomplished using the Florida ranges. Coordination efforts are ongoing
    to address the training limitations mentioned above for future carrier
    strike groups.

                         aerospace expeditionary force
        20. Senator Ensign. General Buchanan, 5 years ago the Air Force
    fully implemented the Aerospace Expeditionary Force program. I
    understand that part of the intent of implementing the program was to
    provide greater stability in training and cycles patterns and greater
    integration of the Reserve components. What are you learning about the
    Aerospace Expeditionary Force program as a result of its use in
    contingency operations and is the program measuring up to expectations?
        General Buchanan. Senator Ensign, over the past 5 years, our
    contingency operations have taught us that our Air and Space
    Expeditionary Force (AEF) program works. We're meeting our mission
    requirements while maintaining the highest levels of personnel
    readiness. This enables the Air Force to be ready to place forces
    anywhere in the world within 72 hours. We've seen the program does
    provide greater stability in training for the vast majority of our
    airmen. It also enables full integration of our Reserve components. The
    AEF has met and exceeded our expectations. It not only provides
    predictability and consistency, but also allows the Air Force to
    present forces to the combatant commanders in a planned and structured
    fashion. Predictability boosts quality of life for our airmen and helps
    maintain solid retention levels. Consistent training cycles ensure that
    we're continuously fielding the best trained force possible.
                                     ______

                 Questions Submitted by Senator James M. Inhofe
                                force rebuilding
        21. Senator Inhofe. General Metz and General Sattler, can you
    assess how serious you see issues associated with rebuilding our Army
    and Marine Corps after we bring them back at the conclusion of
    Operation Enduring Freedom and Operation Iraqi Freedom? Is there an
    acceptable level of risk we undertake with our forces and our equipment
    as we prepare our military for the next contingency?
        General Metz. There will continue to be risk because of the dynamic
    nature of the global war on terrorism. This is a complicated and
    challenging campaign that is far from being over. The risks at the
    operational level are going to be higher during the Army's
    transformation period and while tactical units are being reorganized
    and refitted with personnel and equipment. However, the benefits of
    modularity and the increased flexibility that it provides to the
    combatant commanders in the future far exceed the risk taken during the
    transitional period. Modularity provides a tailorable and adaptable
    menu of options for combatant commander's to employ in future
    conflicts. As modularity progresses the operational and tactical risk
    for readiness to future contingencies diminish. I think that the
    greater risks during this near term period and looking at future
    contingencies are at the strategic level. The strategic risks and
    implications of building and conducting coalition operations for the
    next battle are very broad and will require synchronization and
    planning at the highest levels of national power (Diplomatic,
    Informational, Military, and Economic) to be effective.
        General Sattler. [Deleted.]

        22. Senator Inhofe. General Metz, General Sattler, General
    Buchanan, General Austin, and Admiral McCullough, with regard to the
    rebuild of our forces given the heavy use of our military since
    September 11, what message would you deliver to Congress and have this
    committee hold close as we consider the fiscal year 2006 budget and the
    Future Years Defense Plan and budgets? For example, would you tell us
    not to repeat the mistakes of the past, that of decreasing defense
    spending as soon as we begin to leave Iraq?
        General Metz. Whether the U.S. Army is able to disengage from Iraq
    in the near future or not, robust Defense funding will still be needed
    in non-global war on terrorism programs such as:
    Training
        The Army needs to maintain its' current training strategy
    (individual, collective, incorporation of lessons-learned, Combat
    Training Centers (CTC), simulations, and joint training). We must
    maintain our ability to keep RC units trained and prepared (CTCs,
    linked training with AC).
    Equipping
        The Army needs to continue the Rapid Fielding Initiative and force
    protection efforts (Integrated Body Armor (IBA) and up-armoring of
    vehicles). Stay Behind Equipment (SBE), which is equipment left in
    Iraq, impacts training at home station for both AC and RC units.
    Funding is needed to mitigate those shortfalls. We will need funding to
    continue modernization of digital command and control abilities and
    collaborative communications for situational awareness. Continue
    funding of Stryker brigades--we have learned that they are successful.
    Reset and reconstitution will be necessary for some time after troops
    begin to leave Iraq to reset the force. High theater OPTEMPO affects
    vehicle lifespans; procurement actions need to be considered. The Army
    will need funding for modular force conversions, for all components in
    the out years. Modularity is currently a major funding concern for
    active component Army commanders.
    Personnel and Family Support Programs
        These programs were critically important to our soldiers and
    families during the long deployment and should receive continued
    funding. Effective casualty notification, medical care and Morale
    Welfare Recreation (MWR) programs are essential. The Family Readiness
    Group (FRG) paid assistance program has been an important success. The
    strain of high OPTEMPO on families and soldiers can be mitigated by
    adequate family housing, health care and strong FRGs. Finally, we need
    to continue recruiting and retaining high-quality soldiers.
        General Sattler. The Commandant of the Marine Corps has stated that
    we will require an additional 2 years to recover after operations cease
    in the Middle East. It is absolutely critical that Congress continue to
    provide the support necessary to maintain our Marine Corps in an
    operational state of readiness, equipped and trained to respond to any
    crisis or contingency.
        The current global war on terror being fought in Iraq and elsewhere
    throughout the globe has consumed our equipment at a rate of as much as
    10 to lower normal peacetime operations in some cases. The sustainment
    during and regeneration after deployments demand sufficient funding to
    reset our forces. To effectively fight the wars we fight today
    continues to require procurement of the best equipment and services
    available to assist our warfighters, the brave men and women who
    confront our enemies face to face. This includes funding not only for
    our normal operating equipment that is being consumed through a high
    operational tempo, but includes commercial off-the-shelf items,
    innovative technology, and new initiatives as we adapt to the changing
    battlefield environments in which we fight today. This procurement
    requires that funding support is provided not only initially, but is
    capitalized on in the FYDP and budgets.
        The Marine Corps, as our great Nation's ``force in readiness,''
    continues to provide the best training and resources to our most
    precious asset, our marines. Our marines deserve realistic training in
    combating a determined enemy, development of critical skill sets to
    understand, operate, and leverage new technology, and a support
    structure that recognizes the crucial necessity of recruiting and
    retaining the best and the brightest of our young Americans who are
    dedicated to serving their Corps and country in this time of great
    peril. To this end, Congress has been very generous in the past and we
    hope that the Members of Congress will continue to provide this level
    of support. Knowing that the Marine Corps must continue to be `most
    ready when our Nation is least ready', we trust that Congress will not
    decrease defense spending when we begin to leave Iraq. We must remain
    resolute in our understanding that the global war on terrorism is being
    fought on many fronts, that there are still adversaries that wish our
    Nation harm, and we must ensure that defense spending recognizes this
    reality.
        General Buchanan. Senator Inhofe, readiness will be the key to the
    ``Expeditionary Air Force'' of the future. In order for Air Forces to
    be ready, they must be equipped both operationally and logistically.
    Operation Desert Shield/Storm and OEF/OIF taught us that in order to
    deploy a large force to a foreign location you must be prepared to
    house, feed, provide transportation and work space for the deployed
    forces. Continued budgeting for the prepositioning of assets at or near
    the site of intended use has and will continue to be paramount in the
    effort to equip these forces in an expeditious and cost effective way.
    All of the aerospace technology we employ will be useless without the
    boots on the ground to operate, maintain, and support the entire
    operation.
        Funding also presents a challenge when you consider the different
    allocations associated with the largest WRM program in the USAF. If a
    deployed asset is destroyed or condemned after supporting an operation,
    contingency funds are not allocated to replace the asset. Contract
    operation and maintenance (O&M) dollars must be spent to recover the
    asset which creates shortfalls in other contract areas. Construction
    and maintenance for the five prepositioning sites is also absorbed in
    this O&M funding allocation. To meet the increased demands associated
    with reconstituting assets returning from the field, prepositioning
    sites are expanding and upgrading maintenance and storage areas.
    Historically, a request for MILCON dollars for these enhancements has
    been sent to the bottom of the priority list. If we are to meet future
    requirements, money will have to be reprogrammed and allocated to the
    WRM program to eliminate the need to budget O&M dollars for
    construction projects. The global war on terrorism has placed
    substantial strain on our people, weapon systems and support equipment.
    Many of our aircraft are showing signs of this wear and tear (example:
    C-130 wing box cracks). In addition, a lot of our support equipment is
    wearing out due to its extended use in the AOR. To help with this, my
    logistics division has contracted with a company in Warner Robins
    Georgia to rebuild some of the worst aerospace ground equipment (AGE),
    and our bases at Al Udeid and Al Dhafra have instituted refurbishment
    programs. This will help, but more will be required. Funding will be
    crucial to enable us to continue the global war on terrorism as well as
    the drawdown and reconstitution of our forces.
        General Austin. As a commander, my focus is providing soldiers and
    leaders with the equipment, training, facilities, and manpower needed
    to win the wars we face today, and to prepare for the ones we may face
    tomorrow. We have derived great efficiencies by using Stay Behind
    Equipment, for example, but at the end of our fight we will need to
    refurbish that equipment in order to preserve availability for future
    operations. This process will incur a significant bill to pay, and we
    cannot pay that bill from our current operations budget, nor should we
    jeopardize transformation to pay for this. Similarly, the Future Combat
    System will provide the country with a rapid, decisive capability to
    respond across the full spectrum of operations including lighter, more
    lethal, more survivable, and more sustainable ground forces. These
    programs provide soldiers and commanders a decisive and overmatching
    capability against any opponent. The decisions we make should be driven
    by the capabilities needed to defend the country's interests, now and
    in the future, and questions regarding funding should flow from that
    discussion.
        Admiral McCullough. While the Navy's operational tempo has been
    high the past 4 years, Navy ships, planes and equipment have not been
    ``depleted'' in the sense that they will need to be ``rebuilt'' or
    replaced following the completion of operations in Iraq or Afghanistan.
    The Navy's continuous maintenance approach ensures approximately two-
    thirds of the force is surge ready and capable of deploying, if
    necessary, on short notice under the FRP. In an unpredictable world, it
    is important the Navy receives the funding for maintenance and
    operations necessary to ensure FRP remains a viable operational
    readiness construct.
        Regarding the Navy's force structure through the Future Years
    Defense Plan, fleet recapitalization and acquisition of new and/or
    improved capabilities are well articulated in the President's budget
    proposals and are consistent with what the Navy needs to execute FRP
    and meet future requirements for Sea Strike, Sea Shield, and Sea
    Basing. The JFKSG deployed in 2004 under the FRP and, as the JFKSG
    Commander, I cannot emphasize enough how important it is for the Navy
    to have the funding necessary to be surge ready with full combat
    capability, prepared to answer the President's call within 30 days. A
    significant reduction in the Navy's total obligation authority
    following operations in Iraq could potentially jeopardize our Navy's
    ability to execute the FRP and limit the Nation's effectiveness in
    responding to the next crisis.

        23. Senator Inhofe. General Metz, General Sattler, General
    Buchanan, General Austin, and Admiral McCullough, what effect is the
    state of readiness having on the soldier, the marine, the airman, and
    the sailor as you stretch to rebuild your forces and their systems,
    what do you expect to see in their morale, and how do you plan to deal
    with any negative morale effects given these strained wartime
    conditions?
        General Metz. Soldiers returning from deployments mention OPTEMPO
    as the most significant factor in deciding to separate from the Army.
    For those that are not deployed, the anxiety of long-term separation
    from family during probable future deployments is a significant factor
    affecting reenlistment decisions. In the long run, I believe that
    modularization will help reduce OPTEMPO resulting in more soldiers
    deciding to stay with the Army team. The short term fact, however, is
    that the current turbulence of transition coupled with OPTEMPO is
    impacting retention.
        We continue to work very hard at mitigating any circumstances that
    would result in shorter stays for soldiers at home station, back-to-
    back deployments, and unnecessary prolonged separation from family. We
    have programs and policies in place to allow as much family time as
    possible for our troops while at home station such as a very flexible
    policy for extensive block leave before and after deployment; Morale,
    Welfare and Recreation (MWR) opportunities; individual and family
    retreats; and close attention to extended duty hours realizing all are
    driven by the reset mission and training requirements.
        Additionally, the Deployment Cycle Support (DCS) program is a part
    of the reconstitution process upon redeployment. Soldier and family
    member training sessions, briefings and the half day work schedule for
    the first 7 days after return are part of the process. Fort Hood has
    gone over and above the baseline Army program to ensure maximum benefit
    to its soldiers.
        We continue to resource quality of life programs, family programs,
    and health care programs to support our soldiers' every need. I believe
    our commanders at every level are very aware of the strain on their
    soldiers and make every effort to alleviate that to the best of their
    ability.
        General Sattler. Readiness and training have a direct correlation
    to unit morale, to this end, I MEF units are busy with predeployment
    training for the next rotation in support of Operation Iraqi Freedom.
    Proper training leads to personal and unit confidence, which in turn
    helps to maintain morale.
        In order to ensure a smooth transition between outgoing and
    incoming units, in Iraq, the commandant directed that some of the I MEF
    equipment remain in theater. Leaving equipment in theater has had a
    direct negative impact on the ability of I MEF forces to train and
    prepare for immediate and future deployments in support of the global
    war on terrorism. In order to lessen the impact on training and
    readiness, actions were initiated by the commandant to transfer
    equipment between CONUS units throughout the Marine Corps. This
    transfer of equipment involved both the Reserve and Active components.
    Supplemental appropriation is also being used to procure new equipment
    to replace some of the equipment left behind in Iraq and to provide
    armor kits for deployed equipment. These equipment shortages are a
    challenge; however, I MEF commanders are creating solutions to
    accomplish the necessary training. Right now, morale among the marines
    is good. A strong indicator of morale is retention. The USMC fiscal
    year 2005 first-term retentions are at approximately 93 percent of this
    year's goal with 5 months remaining. The career retentions (Marines on
    their second or subsequent re-enlistments) are at approximately 86
    percent of this year's goal with 5 months remaining.
        I MEF constantly monitors morale and retention in order to be
    proactive.
        General Buchanan. Senator Inhofe, quality of life for the deployed
    airman has always been a priority issue. History has proven that the
    physiological state of the fighting force plays a vital role in how he/
    she performs in a wartime environment. USCENTAF has taken strides to
    provide Morale Welfare and Recreation (MWR) activities at deployed
    locations such as morale phone lines, libraries, worship opportunities,
    and Base Exchange services, but there is still opportunity for
    improvement.
        A deployed wing commander's morale obligation starts with the basic
    needs mentioned above. However, more enhanced MWR packages are needed.
    For example, in addition to the generic WRM housekeeping set UTC, we
    could create an integral library or Internet cafe UTC. In other words,
    don't make commanders ``create'' these services by using assets
    designated for administration or billeting and make it a library or
    internet tent. These are options that will enhance a deployed bare base
    and eliminate the need for commanders to choose between sufficient work
    space and creation of a morale building asset. Your continued support
    will be need for such efforts.
        General Austin. The American soldier is the best trained, best
    educated, best lead fighting force in the world. Their resilience to
    adversity and ability to rise to challenges are truly amazing. The
    strength of their morale is reflected, in part, in the 10th Mountain
    Division's successful reenlistment rates, which in 2004 averaged 128
    percent, and have averaged 131 percent and 117 percent for the 1st and
    2nd quarters of 2005, respectively. Our young men and women recently
    returned from Afghanistan, transformed to a modular force, reset the
    force, and trained in anticipation for new deployments to Iraq and
    Afghanistan that begin this summer. Through all this hard work and
    turbulence, our reenlistment rates remain high, there is little
    evidence of compromised readiness, and our Army families are strong.
        The Fort Drum community has made the quality of life for military
    families its first priority, having a direct impact on soldiers and
    families. Our Army Family Team Building program is staffed with close
    to 70 volunteers, and has been recognized as the best in the Army. We
    continually address the needs of the soldiers and family members
    through installation and unit outreach programs that emphasize
    communication, community services, and personal and family readiness.
        Admiral McCullough. Our sailors work extremely hard to maintain
    personal readiness and the readiness of their equipment at a high
    level. Our sailors understand that more effort will be required during
    periods of higher operational tempo and they are more than willing to
    work longer hours when necessary to ensure readiness is maintained.
    However, they will naturally become frustrated if forces outside of
    their control effect readiness, such as shortage of funding for
    training or repair parts.
        Our ongoing efforts to reduce negative morale on strained wartime
    conditions include: 1) To the best extent possible, provide sailors
    with the proper level of training and equipment support. 2) Keep
    sailors informed about schedule changes, progress of the mission, and
    future plans so they are truly part of the team. 3) Tell sailors what
    they do is important and vital to the success of each mission. 4) Set
    command goals providing a common focus for all hands. 5) Ensure that
    each sailor is appropriately compensated with the right amount off duty
    time to support his/her family.

                               end strength needs
        24. Senator Inhofe. General Metz, there have been a lot of reports
    since the advent of Operation Iraqi Freedom and Operation Enduring
    Freedom about the expanded use of women in our military. Recently,
    there have been concerns that the U.S. Army has circumvented the letter
    of the law with its assignment of women into potential combat
    situations. I am concerned and have expressed this concern in the past
    that our end strength is not sufficient to allow our military
    leadership the flexibility needed for our combat forces. The new
    modular Army presents some interesting challenges when it comes to
    combat coding of positions for female soldiers. Is the Army not able to
    keep women out of potential combat situations because the end strength
    does not permit us cover of all necessary areas without stretching the
    law's intent or are we unable to recruit enough male soldiers?
        General Metz. I don't think that it is either. The rules of the
    battlefield have changed. The era of the Euro-centric, Cold War
    construct of close, deep, and rear operations has passed. The
    battlefield is non-linear, noncontiguous, and asymmetric. The enemy
    fights throughout the depth of our operations, and all soldiers
    regardless of rank, occupation or gender are at risk of finding
    themselves in potential combat situations.
        The preponderance of our females serve in our special branches
    (Judge Advocate, Chaplain, and Medical) and our Combat Service Support
    career fields (Personnel, Finance, Ordnance, Quartermaster, and
    Transportation). These occupations are generally found in units that
    under the Army's Air Land Battle Doctrine supported the fight from a
    rear area, generally considered to be out of the enemy's reach (i.e.,
    the close fight). These rear areas no longer exists on today's
    battlefield and soldiers in these units often find themselves in the
    middle of, if not waging the close fight. As Iraq and Afghanistan have
    shown, a truck driver, a nurse or a postal clerk is at much at risk
    from the enemy as an infantryman or tanker.
        As of 15 September 2004, according to the Defense Manpower Data
    Center there are over 164, 931 females serving in our total Army. They
    are trained, prepared, and dedicated professionals who have volunteered
    to serve their country during peace and war. In order to keep our women
    out of potential combat situations, in this day of asymmetric warfare,
    we would have to leave them at home. The ramifications of such an act
    would completely change the face of the Army and all that has been
    achieved over the last several decades for women in the Armed Forces.
                                     ______

                 Questions Submitted by Senator Daniel K. Akaka
                            reserve component issues
        25. Senator Akaka. General Metz and General Austin, please provide
    your assessment of how the Reserve units in your command performed,
    including the integration of active and Reserve units under your
    command, and the policies in place with respect to deployment of
    Reserves as individual augmentees versus units.
        General Metz. As I stated in my written and verbal testimony,
    integration of RC forces has been a success. As we apply the lessons
    learned from each deployment, the process and level of communication
    improves. RC units are apportioned an equivalent number of
    Predeployment Site Survey (PDSS) opportunities as their active duty
    counterparts. This allowed the incoming commander and staff direct,
    face to face coordination with the unit being replaced in the
    deployment location and environment. Another example is the integration
    of the 39th Enhanced Separate Brigade (Arkansas National Guard). This
    unit mobilized at Fort Hood and trained side by side with the First
    Cavalry Division, then deployed as a subordinate of the Division.
        My exposure to the deployment of Guard and Reserve soldiers as
    individual augmentees was limited to those assigned to the Multi
    National Corps-Iraq staff The III Corps staff filled the bulk of the
    MNC-I positions--those requirements above what the Corps could provide
    were tasked to the Reserve components. Those soldiers performed
    difficult jobs under demanding conditions right beside my traditional
    staff, and component was neither distinguishable nor an Issue.
        I attribute the overwhelming successes and achievements during
    Operation Iraqi Freedom II to all soldiers working toward a common
    goal. Concerns and issues with the RC forces assigned to MNC-I were
    only a few exceptions to the commendable norms during the deployment.
        General Austin. Reserve component units and individuals continue to
    play an increasingly important role in our operations and planning.
    They are an integral part of the total force. During our last rotation
    in support of OEF, the Reserve component comprised a significant
    portion of our engineer, aviation, and medical assets. The Reserve
    component comprised nearly all of the civil affairs presence. In each
    case, they did a superb job, and integrated well. Integration of the
    Reserve component works best when units and individuals are properly
    trained, educated, and equipped for the mission. When that happens the
    performance of Reserve units is often indistinguishable from the Active
    Force.
        My experience has been that units that train together are a more
    coherent, ready, and unified fighting force. While I understand the
    need for Individual Military Augmentees, and their value, as a general
    rule there are tremendous advantages to deploying soldiers, as part of
    a unit rather than individually. The continuity of common training and
    procedures, personal familiarity, and the sense of belonging that come
    from deploying as part of a known team contribute greatly to unit
    readiness.

                                 family support
        26. Senator Akaka. General Metz, General Sattler, General Buchanan,
    General Austin, and Admiral McCullough, each of your Services has some
    type of support to the families of servicemembers who have been
    deployed. I strongly believe that the readiness of our forces is
    directly related to how well family members are being cared for back
    home. I believe that it is a necessity to provide a program that
    addresses balancing work and family responsibilities, prioritizing
    whole family life issues such as budgeting time and finances with the
    daily demands of military life, and building meaningful family
    relationships and developing parenting skills to raise emotionally
    healthy and empowered children. My understanding is that the
    installation commanders who have participated in such programs at Fort
    Bragg and Schofield Barracks have reported great success in terms of
    readiness and quality of life. Do you agree that these types of
    programs which help servicemembers and their families to manage both
    everyday challenges as well as the added demands of deployment help to
    increase readiness of the troops?
        General Metz. Soldier and family programs assist in developing
    self-reliant, prepared families when their military spouse deploys.
    They provide peace of mind and confidence in the family's ability to
    manage challenges during a soldier's absence, allowing the soldier to
    focus on their tactical mission. Army Community Service provides
    programs which contribute to this capability:

        1. Mobilization and Deployment Readiness provides predeployment
    briefings and reintegration training, Rear Detachment personnel
    training, assistance to Family Readiness Groups, and operates Family
    Assistance Centers to provide emergency services to families.
        2. Family Advocacy and Prevention Education provides services to
    develop relationship and parenting skills and improve their quality of
    life. Sessions focus on conflict resolution, communication skills,
    stress management, parent education, New Parent Support Services,
    spouse and child abuse prevention, relationship support, and respite
    care.
        3. Financial Readiness provides training to prevent family
    financial problems. Emphasis is placed on money management, proper use
    of credit, financial planning for deployment, transition and
    relocation, insurance; check writing principles, and consumer rights.
        4. Army Family Team Building (AFTB) provides families with
    information, knowledge, and skills needed to gain self-reliance and to
    better utilize the community support programs provided to assist them
    throughout their spouse's career. AFTB has been implemented at all U.S.
    Army, U.S. Army Reserve and Army National Guard installations
    throughout the world.
        5. Finally, commanders are responsible for soldiers and family
    well-being. One of the most useful programs is the Family Readiness
    Group (FRG) assistant's program implemented by Forces Command in May
    2004. It provides critical support services for commanders, Rear
    Detachment Commander's (RDC) and FRG Leaders during mobilization and
    deployment. The paid FRG Assistant is a mission asset facilitating
    trained, responsive RDCs, effective FRG Leaders, and linking RDCs and
    FRGs to existing community resources.

        General Sattler. Family readiness is a continuous and key component
    of the Marine Corps' readiness process. Commanders at all levels
    understand the ramifications for deployed marines when family problems
    arise. To that end, the Marine Corps has employed a variety of methods
    to ensure family readiness. The Family Readiness Officers play a key
    role in helping Marines and their families prepare for the upcoming
    deployments and also with planning for the re-union upon completion of
    the deployment. A critical component of these efforts is Marine Corps
    Family Team Building (MCFTB).
        MCFTB provided critical support while most of the I MEF commands
    aboard Camp Pendleton were deployed. MCFTB programs for educating
    Family Readiness Officers, Key Volunteer Coordinators, Advisors, and
    spouses provided continuity and sustained Family Readiness. Three key
    programs provided by MCFTB are Lifestyles, Insights, Networking,
    Knowledge, and Skills (L.I.N.K.S.), Return and Reunion Brief, Chaplains
    Religious Enrichment Development Operation (CREDO).
        MCFTB educates spouses on what it means to be a military spouse.
    This is especially helpful during time of extended deployment when many
    new spouses were barely indoctrinated into the Marine Corps lifestyle
    before their servicemember deployed.
        Return and Reunion Brief is an in depth brief designed to prepare
    spouses for reunion with a deployed Marine through education and
    reflection on what family has been through and what the marine has been
    through. The brief encourages proper prior planning for a smooth
    readjustment phase.
        CREDO is a spiritual based program administered by the Chaplain
    Corps. CREDO retreats are offered to enable Marines, their families,
    and other authorized personnel to develop personal and spiritual
    resources and grow toward increased functional ability, religious
    maturity, and accept responsibility.
        General Buchanan. Senator Akaka, the Air Force agrees these
    programs are effective in preparing our troops and their families to
    manage both everyday challenges and the added demands of deployments.
    To fulfill these needs, our bases are equipped with Family Support
    Centers and Family Advocacy Programs. These activities provide a
    variety of support services including Family Life Education and
    Personal Financial Management classes. Our Family Life Education
    Classes enhance the well-being of our families by helping them develop
    skills related to good parenting, communication, conflict resolution,
    and problem-solving, which will enable them to balance family
    responsibilities with the unique challenges of military life. Personal
    Financial Management classes are provided to increase financial
    awareness and money management skills. Together, these activities work
    as part of our Integrated Delivery System, our network of Air Force and
    community helping agencies which assist our families with education,
    childcare, counseling, spiritual and practical support.
        General Austin. I firmly agree that strong families are a core
    readiness issue. A soldier cannot fully focus on the mission if he is
    concerned about the family he left behind, and whether they are being
    cared for. At the 10th Mountain Division and Fort Drum, we have been
    committed to developing and resourcing family readiness programs
    designed to help families succeed. The Army Family Team Building
    program, for which Fort Drum has been recognized as the Army's best, is
    a good example of this. It is a structured program that educates and
    trains military families in a wide variety of knowledge, skills, and
    behaviors that foster personal and family readiness. The program also
    provides training for individual unit Family Readiness Groups, and
    others. A key goal of the program is to support families in ways that
    facilitate self-reliance and resiliency during deployments. Other
    programs include chaplain-sponsored marriage enrichment initiatives and
    programs for building strong and ready families. In all, family-focused
    support has proven a tangible combat multiplier that improves readiness
    and retention. It remains one of our highest priorities.
        Admiral McCullough. Yes, I agree. The training and support for Navy
    families is critical to readiness. These programs provide key
    information for our families throughout the year.

                       security and stability operations
        27. Senator Akaka. General Metz, General Sattler, and General
    Austin, what ``lessons learned'' do you have with regard to the conduct
    of security and stability operations, based on your experiences in Iraq
    and Afghanistan and are we on the right track?
        General Metz. I firmly believe our Nation is headed in the right
    direction in executing the global war on terror. Additionally, there
    are numerous lessons learned that must be addressed to increase our
    effectiveness. Here are some of my thoughts based on my 13 months in
    Iraq:

        1. Fundamentals that focus on basics are the keys to success--every
    soldier is a warrior and a marksman; force protection and safety;
    maintain values and ethics; cultural awareness; and an enforced ROE.
    Our learning strategy works from individual through Corps formations;
    joint fires, logistics, effects based operations; balanced experiences
    through training and education; and in theater focus on operations,
    maintenance, rest and training. Dividends come from leading from the
    front, discipline, endurance; patience, not rushing to failure, study
    and think; precise use of lethal and non-lethal force; and using all
    the tools in the joint and coalition kitbag.
        2. Insurgencies are not defeated by Security Operations and a will
    to win alone. Lines of Operations must be balanced to be effective and
    must support an agreed upon endstate. My experience in OIF was that a
    60 percent Iraqi effort always beat a 100-percent coalition solution.
    Interagency synchronization continues to be a challenge. The evolution
    of the Goldwater-Nichols Act must continue to address and improve
    interagency roles and the contributions.
        3. Actionable intelligence is extremely difficult to attain in a
    complex environment such as Iraq. Sensor to shooter link is cumbersome
    and a decentralized fight complicates intelligence collection and
    coordination. Coordination between intelligence agencies are
    complicated by competing interests. Human Intelligence (HUMINT) must
    focus more on source development rather than just targeting.
    Additionally, the Abu Ghraib prisoner abuse negatively impacted
    interrogations. UAVs at Corps and below are scarce and the current
    intelligence systems were designed for the Cold War, not the global war
    on terrorism; this impacts our ability to gain actionable intelligence
    on terrorist and other non-state sponsored enemy entities.
        4. War occurs real-time in Cyber-space. Successful information
    operations are essential to sealing the strategic victory--we should
    engage the media and treat them as trusted professionals. Units must
    conduct transparent Public Affairs and be proud of the military's high
    standards. Information Operations require a through understanding of
    the integration between it, Public Affairs and Corps operations as they
    link tactical success to the strategic endstate.
        General Sattler. The I Marine Expeditionary Force (I MEF) has drawn
    a wealth of lessons learned at all levels from our recent deployment.
    These lessons provide the basis for the adaptation of our training,
    force structure, and doctrine. We freely share these lessons with other
    Marine and sister service units through the Marine Corps Lessons
    Learned Program. While many of our lessons learned are focused at the
    squad and individual marine level, several are applicable to the
    defense establishment as a whole.
        First, and foremost, HUMINT is essential to destroying terrorist
    networks and defeating an insurgency. The collection of HUMINT requires
    linguists. The linguists we currently have are doing back-to-back
    deployments to meet the requirements. We need more linguists to
    alleviate this shortage and provide our forces with this critical
    skill. The Marine Corps has instituted an aggressive plan to increase
    the number and variety of linguists in the force. In conjunction with
    this long-range service led solution, I MEF is partnering with the
    Defense Advanced Research Projects Agency to leverage the latest
    language training technology. If successful, this effort will
    significantly raise the language capability of the I MEF during our
    next deployment to Iraq.
        Much of our tactical success derived from our partnering with our
    Iraqi counterparts. Iraqi forces provided vital manpower and HUMINT
    collection capability. They are from the same cultural and religious
    background, and can intuitively identify (instinctive profiling)
    foreigners who do not belong, or are otherwise suspicious in nature.
    Their employment multiplies our operational effectiveness and U.S.
    forces cannot replicate their inherent cultural and language
    capabilities. The establishment of close working relationships between
    Iraqi and coalition forces is a major factor in improving the
    effectiveness of the former. Iraqi units display greater resolve and
    receive better training when either coalition forces are integrated
    into those units or when those units are integrated into a Coalition
    force unit.
        The presence of coalition forces in urban areas is essential to
    suppressing the insurgency. This presence entails saturation
    patrolling, targeted (intelligence-driven) raids, and emergency control
    measures (curfews, entry control points, vehicle check points,
    identification cards). The strength of insurgent intimidation in Sunni-
    dominated areas translates into an inability to use home grown forces.
    Locally recruited Sunni-Iraqi forces are generally ineffective due to
    their susceptibility to intimidation. The employment of Iraqi forces
    coming from other provinces into Sunni-dominated provinces is required.
        The insurgents have proven themselves to be very creative and
    adaptive in adjusting to coalition TTPs. In turn, we continue to need
    the support of Congress to fund new equipment that is required to fight
    an asymmetric enemy who is constantly changing his TTPs in an attempt
    to inflict casualties among coalition forces. The Marine Corps has
    shown tremendous institutional adaptability in responding to the
    tactical needs of our marines at the `tip of the spear.' The service
    implemented Urgent Universal Needs Statement (UUNS) process has
    provided the warfighter a responsive means to rapidly identify new
    equipment requirements and field to the warfighter. For example, this
    process was used to fill shortfall for an UAV that was needed to
    supplement existing capabilities. In 6 short months, the UUNS process
    provided this capability and we employed the UAV with devastating
    effect.
        The insurgents must not see our national resolve waiver. The
    insurgency did not abate until the coalition had sent several strong
    signals of its firm resolve, particularly in Najaf, Operation Al Fajr
    (second Battle of Fallujah), successfully conducting national
    elections, and firmly declaring its intent to remain in Iraq as long as
    necessary. Political engagement of the Sunnis is very important to
    undercutting popular support for the insurgency. The Sunnis require
    greater political representation and economic assistance. The
    reconstruction of Fallujah can serve as a model for the entire Al Anbar
    Province, and open up new venues for political engagement with the
    Sunnis.
        We are on the right track in Iraq. We are focusing on developing
    the capability of the Iraqi forces to meet their own internal security
    requirements and to successfully combat the insurgency. We continue to
    improve our HUMINT by leveraging the capabilities of our Iraqi forces
    which enables us to increasingly target the leadership of insurgent and
    terrorist cells. The anticipated introduction of two full Iraqi
    divisions into the Al Anbar Province by next summer will provide us
    with a force not subject to insurgent intimidation and with whom we can
    embed coalition forces to help train and mentor their counterparts.
    These will be important steps on the road to the eventual turnover of
    all security operations to Iraqi forces and a corresponding withdrawal
    of U.S. forces.
        General Austin. Security and stability operations are diverse in
    nature and extremely challenging. We have learned valuable lessons
    regarding the conduct of such operations in Iraq and Afghanistan, and
    applied these lessons to how we train basic soldier skills and develop
    adaptive leaders. Our training now emphasizes the basics of physical
    and spiritual fitness, advanced rifle marksmanship, live fire training
    and fighting with special operations and coalition forces. We focus on
    developing adaptive junior leaders who are capable of rapid
    decisionmaking, independent action, and can appreciate the human
    aspects of the environment such as culture, religion, history, and
    language. Our experience with security and stability operations has
    highlighted the fact that even in a more technologically dependant
    environment, soldiers are still the focal point. Therefore, we train
    the individual soldier and leader to be flexible, adaptable, and
    decisive.

        28. Senator Akaka. General Metz, General Sattler, and General
    Austin, do we have adequate training, personnel, and equipment for the
    missions in Iraq and Afghanistan or do we need forces dedicated to
    these missions?
        General Metz. We do not need dedicated forces for these operations.
    The goal of Army transformation is that our forces will have the
    capability to engage in many different types of operations. Modularity
    should enhance the flexibility of the new organizations, giving them
    more capabilities. They will be easier able to adapt to a broad range
    of operations along the spectrum of conflict, ranging from peace
    keeping operations to full-scale conventional warfare.
        However, we may need to temporarily increase the numbers of troops
    and units in certain specialties. These specialties are in high demand
    now because of the particular nature of the fight in Iraq and
    Afghanistan. Shortages exist within specific high-demand specialties,
    such as civil affairs, interrogators, truck drivers, and internment
    officers. For several of these specialties, transportation and civil
    affairs for example, the bulk of their force structure exists within
    the Reserve components. Most of these soldiers have already been
    mobilized for homeland defense, Iraq, or Afghanistan, and are no longer
    available.
        Note that the dynamics of future wars will impose a stress on a
    different set of specialties. Therefore, the stress of OIF and OEF does
    not necessarily require a permanent change in the Army's structure, but
    rather a temporary adaptation to current requirements.
        We have sufficient equipment for OIF and OEF. However, managing the
    pool of equipment that remains in theater is a challenge, particularly
    in the context of simultaneously transforming redeployed units. For
    example, vehicles that have add-on-armor become stay behind equipment
    (SBE), and do not redeploy with the unit that brought them into
    theater. When this unit arrives back at its home station, it must
    transform and train without them. Leaving equipment that has been
    modified for OIF or OEF in theater is the right thing to do, but it
    does complicate reorganization and training at home station as a unit
    prepares for a second rotation.
        Transformation imposes its own challenges on equipping the force.
    Because we are increasing the number of brigades, there is a greater
    requirement for certain types of equipment that exist in finite stocks
    and are no longer under production. I appreciate Congress' support,
    allowing the Army to reopen SINCGARS radio production; this is one
    example of equipment that existed in satisfactory stocks in our old
    organizations, but the quantity is not sufficient for the new modular
    organizations.
        General Sattler. I MEF conducts training for our forces supporting
    OIF and OEF. For deployed units and units preparing to deploy, training
    is extensive and continuous. Lessons learned from both Iraq and
    Afghanistan are incorporated at every level, from individual to unit to
    higher headquarters. Marines are given language and cultural classes in
    addition to preparing for the tactical challenges of the operating
    environment. I MEF is confident that it has the necessary training
    programs to sustain operations in Iraq and Afghanistan in place at this
    time.
        With two notable exceptions, Fallujah and Najaf, I MEF had adequate
    U.S. and Iraqi forces to conduct Security and Support Operations in our
    area of operations. The short-term addition of Coalition and, more
    importantly, national Iraqi forces provided the manpower necessary to
    control the insurgency in both Najaf and Fallujah. The tactical
    mobility of MNC-I forces and the surgical use of the MNC-I Strategic
    Reserve allowed MNC-I to meet potential threats with the requisite
    force while keeping the overall number of forces at the current level.
    The eventual deployment of additional Iraqi forces over the course of
    the next year will both increase tactical options and decrease
    dependency on U.S. forces within Iraq. As long as Iraqi forces continue
    to grow and improve in effectiveness, more coalition forces should not
    be required and the insurgency should be gradually suppressed in most
    of Iraq. On the other hand, any premature withdrawal of coalition
    forces over the near term would be detrimental to security.
        Specialized counterinsurgency troops should not be developed
    outside of Special Forces. The majority of U.S. forces need the
    flexibility to adapt to fighting across the spectrum of conflict. While
    the current tactical situation requires increased counterinsurgency
    training, conventional warfighting training must continue as well. I
    MEF units displayed the flexibility required in the dynamic tactical
    environment of Iraq by repeatedly and seamlessly shifting between
    counterinsurgency and conventional warfighting.
        Marine Corps equipment in both Iraq and Afghanistan is currently
    adequate to support the respective missions. While the equipment is
    being used at rates much higher than during peacetime operations, the
    equipment remains in a high state of readiness due to an aggressive and
    proactive maintenance effort. Congressional supplemental spending
    authorizations have been critical in supporting the MEF in its efforts
    to move as rapidly and effectively as possible to reconstitute our
    combat capabilities. Marines continue to find innovative ways to
    maintain their gear. The marines of I MEF stand ready to meet the full
    spectrum of potential world-wide contingencies.
        General Austin. [Deleted.]

                                reset of forces
        29. Senator Akaka. General Metz, General Sattler, and General
    Austin, do you have a specific plan and timeline for when your forces
    will be trained and ready for any and all missions, with all your
    equipment back and refurbished? If so, please describe those plans,
    your progress to date in implementing those plans, and when you expect
    to have all your equipment on hand in refurbished condition.
        General Metz. III Corps has developed, published, and executing
    Operation Phantom Vortex. This plan focuses on the redeployment,
    demobilization, reconstitution, reconfiguration, training, deployment,
    and mission execution support processes. It is fully nested with the
    Army's Expeditionary Cycle and will be conducted in a very deliberate
    manner to ensure the proper execution of required tasks and the
    appropriate recognition and reintegration of soldiers and their
    families, while ensuring the force is re-set and postured for future
    missions within 12 months of return from deployment. All units will
    train to standard and deploy when so ordered. This plan and its'
    execution is designed to balance a soldiers return, mobilization and
    demobilization against installation capacity and throughput, while
    simultaneously continuing other ongoing missions.
        The mission statement for Operation Phantom Vortex: III Corps
    establishes and executes the expeditionary cycle to redeploy units and
    soldiers; reintegrate them into the home station environment;
    reconstitute soldiers and equipment in reconfigured units; train
    soldiers and units to standard; o/o deploys units in support of future
    operations in support of OIF, OEF, and the global war on terrorism;
    and, supports soldiers, units and families remaining in CONUS while
    forces are deployed.
        General Sattler. [Deleted.]
        General Austin. [Deleted.]

                               readiness concerns
        30. Senator Akaka. General Metz, General Sattler, and General
    Austin, what are your primary readiness concerns for the coming year
    and what are you keeping your eye on?
        General Metz. Readiness is always a primary concern for a
    commander. Transformation and the dynamics inherent to any type of
    change directly impact my concern for readiness. Army Transformation is
    essential and must be accomplished to shape the force for the future.
    It is the right thing and now is the right time. However, the dynamic
    of regenerating and reconfiguring unit formations directly impact unit
    readiness during this transformational period. Making sure that units
    have the required equipment and personnel are leader responsibilities
    and must be attained in order to have prepared and ready units for
    worldwide deployment.
        To address my concern, III Corps has developed, published and
    executing Operation Phantom Vortex. This plan focuses on the
    redeployment, demobilization, reconstitution, reconfiguration,
    training, deployment, and mission execution support processes. It is
    fully nested with the Army's Expeditionary Cycle and will be conducted
    in a very deliberate manner to ensure the proper execution of required
    tasks and the appropriate recognition and reintegration of soldiers and
    their. families, while ensuring the force is re-set and postured for
    future missions within 12 months of return from deployment. All units
    will train to standard and deploy when so ordered. This plan and its'
    execution is designed to balance a soldiers return, mobilization, and
    demobilization against installation capacity and throughput, while
    simultaneously continuing other ongoing missions. This plan addresses
    my broad readiness concerns and is focused on maintaining a high state
    of readiness in III Corps.
        General Sattler. [Deleted.]
        General Austin. [Deleted.]

        31. Senator Akaka. General Metz, General Sattler, and General
    Austin, how ready are your forces, as of the date of this hearing, to
    take on additional missions, such as a contingency in North Korea?
    Please provide a classified response.
        General Metz. III Corps is conducting transformation and preparing
    forces to deploy in support of multiple operations. With ongoing
    transformation and reset actions, III Corps will assume varied levels
    of risk associated with the assumption of multiple missions. III Corps
    is prepared to execute ongoing missions and continues to develop plans
    in support of various contingency missions. The redeployment,
    demobilization, reconstitution, reconfiguration, and training of
    subordinate units all impact the Corps overall readiness to deploy and
    execute contingency missions. As transformation and modularity
    progress, III Corps units will increase their overall state of
    readiness and be fully prepared to deploy in support of any future
    contingency.
        General Sattler. [Deleted.]
        General Austin. [Deleted.]

               impact of long-term basing in u.s. central command
        32. Senator Akaka. General Buchanan, how would reaching agreements
    on a long-term presence at certain bases in the Central Command region
    impact our capability in the region, the way we do our missions, or the
    way Air Force personnel are deployed to these bases?
        General Buchanan.

                             predeployment training
        33. Senator Akaka. General Metz, General Sattler, and General
    Austin, how well did you feel our combat training centers at Fort
    Irwin, Fort Polk, and Twenty-Nine Palms prepared your forces for their
    deployments?
        General Metz. In my view, our CTCs met their training challenges
    admirably, and they have been invaluable in helping prepare our forces
    for duty in Iraq.
        The training strategy we use reinforces individual soldier skills
    which are then combined to build well-trained crews and small units.
    Units work up to company and battalion-level training through maneuvers
    at home station and the use of computer simulations, training a broad
    range of missions that support its wartime mission essential tasks.
        The capstone exercises for deploying units were conducted in the
    most realistic environments we could create at the CTCs. Both Fort Polk
    and Fort Irwin re-oriented their scenarios to include noncontiguous
    areas of operations and both symmetrical and asymmetrical threats;
    incorporated more civilians-on-the-battlefield in unit operations;
    increased the emphasis on small-unit engagements; added additional MOUT
    sites; and have placed more emphasis on convoy operations (including
    live-fire). The CTCs actively solicit feedback from units deployed in
    theater to update their scenarios and training events to further ensure
    that the training is timely and relevant to the mission.
        The Division and Corps staffs were exercised through simulation-
    driven command post exercises, which Joint Forces Command and the
    Army's Battle Command Training Program monitored and mentored. Members
    of division and corps staffs who are serving in Iraq participate in the
    Mission Rehearsal Exercise of the units that will replace them in order
    to make this training as realistic and current as possible.Our training
    strategy works.
        General Sattler. [Deleted.]
        General Austin. The CTCs are critical to unit readiness. The
    centers have prepared, and continue to prepare our forces extremely
    well for the challenges they face in Iraq and Afghanistan. The Joint
    Readiness Training Center (JRTC) at Fort Polk has been the primary CTC
    that 10th Mountain Division has utilized. The JRTC provides crucial
    training to our soldiers because it replicates the operational
    environment and threat we face in Iraq and Afghanistan. JRTC continues
    to provide the most realistic training based on relevant training
    scenarios which reflect the specific threats and conditions of the
    deploying units' operational areas. One of our brigades recently
    completed a successful training rotation at JRTC. The soldiers of the
    brigade are fully trained and prepared to meet the challenges they will
    face upon deployment to Iraq this summer.

        34. Senator Akaka. General Metz, General Sattler, and General
    Austin, how well did your units' predeployment training, both at the
    combat training centers and at home station, prepare them for the
    challenges of operating in Iraq or Afghanistan, such as cultural and
    language issues, the impact of the climate on personnel and on
    equipment maintenance needs, and countering improvised explosive
    devices?
        General Metz. The Army's training strategy produced soldiers,
    leaders, and units that were well prepared for the intense demands of
    counterinsurgency operations in Iraq. Our strategy relies on a building
    block approach emphasizing sound application of basic skills, and then
    increases the complexity of the tasks and demands of the environment.
    Everything begins with the individual soldier, who must be ready to
    fight anytime, anywhere. No rear area exists in Iraq, only front lines,
    and every soldier knows it. They have to be ready from the moment they
    enter Iraq, and they were.
        The procedures for mobilizing, training, and validating RC units
    also works well. We found the greatest success came from linking an RC
    unit's training to its AC counterparts. The 39th Enhanced Separate
    Brigade (ESB) from Arkansas trained at Fort Hood with the 1st Cavalry
    Division. This allowed the 39th to train as it would fight and they
    became an integral part of the 1st Calvary Division's Task Force
    Baghdad. I am convinced our training strategy enhanced our combat power
    and survivability in combat. Operations in Najaf, Samarra, Fallujah,
    and Mosul are good examples. Our training also made our units
    flexible--able to adapt to missions beyond their normal specialization.
    Some units had to rapidly deploy out of their sector and had to quickly
    adapt to operations under different Army or Marine headquarters, often
    in coordination with coalition partners, with no loss of momentum. By
    adapting our training to changes in theater, generated by a thinking,
    adaptive adversary, we will continue to deploy highly trained and ready
    units. We are constantly receiving feedback on lessons learned and new
    TTPs and incorporating that feedback into our training plans. Our
    situational awareness training--language, customs, traditions, history,
    etc.--is good and continues to improve. Aggressive maintenance
    programs, increasing numbers of up-armored/appliqued vehicles, and
    equipment modifications driven by our experiences in the field all
    served to lessen the impact of climate and terrain on our equipment.
    Our soldiers were prepared to handle the physical challenges they faced
    and as acclimatized as they could be prior to deployment. Insofar as
    countering IEDs was concerned, the predeployment training received was
    effective. It has gotten better over time as our experience widened and
    our training aids improved. By the time soldiers cross into Iraq, they
    were confident in themselves, their leaders, and their equipment. They
    were well-prepared for the challenges they were going to face in
    combat.
        General Sattler. [Deleted.]
        General Austin. The 10th Mountain Division's training at home
    station, and at the Combat Training Centers, has evolved over the past
    3 years to incorporate crucial lessons learned. This training includes
    theater specific Mission Readiness Exercises (MRE) at the Joint
    Readiness Training Center as well as training exercises at Fort Drum;
    both of which incorporate and replicate the conditions our soldiers
    face in combat. Realistic scenarios are replicated by using role
    players who are fluent in the Arabic language and local dialects, as
    well as extensive training in detection and counter measures for
    improvised explosive devices and vehicle borne improvised explosive
    devices. We have incorporated these requirements into our mandatory
    Theater Specific Individual Training Requirements. Every soldier
    deploying from Fort Drum completes these training requirements prior to
    deployment. Further, deploying soldiers receive instruction in basic
    introduction to the Arabic language and local dialects as well as
    cultural awareness briefings. Our soldiers' experiences in both
    Afghanistan and Iraq have provided a wealth of knowledge that we now
    infuse across the division as we train for future deployments.

                             treatment of detainees
        35. Senator Akaka. General Metz, on April 19, the Washington Post
    contained an article that cited Army investigative documents about the
    treatment of detainees in Iraq. The article said, in part:

              ``A previously disclosed Aug. 14, 2003, e-mail from the joint
            task force headquarters in Baghdad to top U.S. human-
            intelligence gatherers in Iraq is cited as a potential
            catalyst. Capt. William Ponce wrote that `the gloves are coming
            off' because casualties were mounting and officers needed
            better intelligence to fight the insurgency. Ponce solicited
            `wish lists' from interrogators and gave them 3 days to
            respond. That message was forwarded throughout the theater,
            including to officials at Abu Ghraib, where notorious abuse
            followed.''
              ``At the 4th Infantry Division's detention facility in
            Tikrit, the e-mail caused top intelligence officials to develop
            a list including open-hand strikes, closed-fist strikes, using
            claustrophobic techniques and a number of `coercive' techniques
            such as striking with phone books, low-voltage electrocution
            and inducing muscle fatigue.''

        During your deployment in Iraq, did you understand what the rules
    were on how detainees should be treated, did you discuss these rules
    with your subordinate commanders, and did you monitor what techniques
    were being used on detainees in your area of operations?
        General Metz. Throughout my tenure during OIF II, I emphasized the
    proper treatment of Iraqi detainees, not as a result of the public
    release of the Taguba or any other report, but because it was the
    correct thing to do and was in keeping with the Army core values. The
    rules governing how detainees were to be treated during OIF II were
    consolidated in the CJTF-7 Interrogation and Counter Resistance Policy
    Letter dated 12 October 2003 as updated by the 13 May 2004 policy
    letter. Commanders were aware of the policies and responsible for
    implementing the policies and reporting violations. Reported violations
    were investigated by the Judge Advocate General, the Inspector General,
    and Criminal Investigative Division as appropriate.
        I maintained considerable attention on the issue of detainee
    operations and treatment throughout OIF II, ensuring my subordinate
    commanders understood and followed the requirements as prescribed in
    the 12 October 2003 and then the 13 May 2004 policy letter.

        [Whereupon, at 3:28 p.m., the subcommittee adjourned.]