[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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                      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.
      
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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).
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    \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.
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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.
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    \3\ The budget also incrementally funds a $14 million Marine Corps 
project.
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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.
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    \4\ Represents about 5 percent of the DON's military and civilian 
workforce.
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    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.
      
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    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.
      
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    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 
        [email protected].

    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).
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    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.
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    \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.
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    \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.
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    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\
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    \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).
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    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.
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    \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).
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    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.
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    \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).
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    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).
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    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.
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    \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).
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    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.
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    \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).
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    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.
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    \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).
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    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.
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    \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).
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    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).
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    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.
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    \37\ GAO, Information Security: Further Efforts Needed to Fully 
Implement Statutory Requirements in DOD, GAO-03-1037T (Washington, DC: 
July 24, 2003).
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         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.
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    \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.
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    \43\ GAO-04-874.
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    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.
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    \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.
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    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.
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    \47\ GAO-04-731R.
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    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.
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    \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).
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    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.
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    \50\ 10 U.S.C. Sec. 222(f).
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    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.]

                                 
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