[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                        THURSDAY, APRIL 19, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Jack Reed presiding.
    Present: Senators Reed, Nelson, Hutchison, and Allard.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF HON. KEITH E. EASTIN, ASSISTANT SECRETARY 
            OF THE ARMY, INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
        LIEUTENANT GENERAL ROBERT WILSON, ASSISTANT CHIEF OF STAFF FOR 
            INSTALLATION, UNITED STATES ARMY
        MAJOR GENERAL DAVID P. BURFORD, ASSISTANT TO THE DIRECTOR, ARMY 
            NATIONAL GUARD
        BRIGADIER GENERAL RICHARD J. SHERLOCK, DEPUTY CHIEF, ARMY 
            RESERVE

                     STATEMENT OF SENATOR JACK REED

    Senator Reed. Good morning. Let me call the hearing to 
order and recognize my colleagues who are here, particularly 
the ranking member, Senator Hutchison. Her leadership over the 
last several years in this committee has put us in excellent 
position to consider the proposals that we're considering 
today, with respect to the Army and to the Navy.
    I'm very pleased to welcome Secretary Eastin, Generals 
Wilson, Burford, and Sherlock to testify today before the 
subcommittee. I thank you for appearing and also thank you for 
your service to the country. Thank you very much.
    The purpose of today's hearing is to receive testimony 
regarding this year's President's budget request for military 
construction for the Army, the Army National Guard, and the 
U.S. Army Reserve. This year's request shows significant change 
from previous years. The Army request has nearly doubled from 
$2 billion to $4 billion. Much of this is to accommodate the 
Army's Grow the Force Initiative.
    The Reserve component request, on the other hand, are both 
seeing a significant decrease in infrastructure funding, all 
this at a time when the Reserve Forces are fully engaged with 
its Active Duty counterparts in Iraq, Afghanistan, and 
throughout the world. And, I intend to address this further 
during the questioning period.
    Again, let me thank you for appearing before our committee. 
I look forward to the testimony and let me recognize the 
ranking member, Senator Hutchison.
    Senator.

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Thank you, Mr. Chairman. I am pleased to 
be able to talk to two of the Services that are going to 
experience the most growth in the next few years. And, it's a 
growth that I certainly support. In addition to this growth, 
the marines are also preparing to undertake a massive move, 
relocating 8,000 marines from Japan to Guam. This will be 
enabled through military construction and with the help of our 
Japanese partners. I will say that the Japanese have been very 
good partners in this regard, and we appreciate that very much. 
The Navy is currently tasked with overseeing all of these 
efforts on Guam to ensure that the move is done in a joint way.
    The Army's initiative to grow by 65,000 Active Duty 
soldiers, 8,200 National Guard soldiers and 1,000 Reservists 
over the next 5 years--has caused, of course, an increase in 
Army military construction. Many of the soldiers that are 
coming back from overseas or are part of the increase will be 
stationed at Fort Bliss and Fort Hood, in my home State of 
Texas. I believe the increase in end-strength is absolutely the 
right thing to do. And, I think it is important that our 
military installations be able to plan appropriately for the 
increase in end-strength and the move from overseas.
    At the end of BRAC and the global re-stationing, 90 percent 
of the U.S. Army will be based in the United States. This will 
provide more operational freedom of action, better training, 
and better family support for the Army than would be possible 
otherwise. I am pleased the Department of Defense and the Army 
have stayed on course for the restructuring, re-stationing, as 
well as increasing the end-strength of the Army. Along with 
BRAC, it will produce a stronger, more deployable, and more 
efficient Army, in which the vast, but constantly stretched, 
resources of our Army can be used in the most efficient manner.
    The new San Antonio Military Medical Center at Fort Sam 
Houston, developed through the BRAC process, will serve as an 
excellent example of how consolidation can benefit the Army and 
the larger Department of Defense and Veterans' community 
through the synergies and expertise developed.
    The Navy and Marine Corps increase will be used, in part, 
to support the growth of the Marine Corps by 22,000 Active Duty 
Marines over the next 4 years. The Navy and Marine Corps 
request will also support several other initiatives, including 
the Home Port Ashore Program, which gets sailors off ships and 
into barracks. This program will provide great quality of life 
improvements for our sailors and will be fully funded in 2008. 
I'm very pleased with this initiative of the Navy.
    I'm somewhat concerned about the downward trend in military 
construction for our Guard and Reserve components. These brave 
citizen-soldiers are making huge contributions in the global 
war on terror, and yet, their facilities are often in the worst 
shape. The overall funding level is down 19 percent from last 
year's request and 18 percent from the fiscal year 2007 enacted 
level.
    I understand there is funding for Guard and Reserve in the 
BRAC account, but I'm also interested in seeing that we keep up 
with the normal military construction funding to improve these 
facilities.
    I thank you for all the work that you are doing in the 
military construction area and certainly, in the main, you will 
have the support of this committee. Thank you.
    Senator Reed. Thank you very much, Senator Hutchison. And, 
all of those statements of my colleagues were made part of the 
record, but if Senator Nelson, Senator Allard, you'd make brief 
opening comments.
    Senator Nelson.
    Senator Nelson. I'll wait until----
    Senator Reed. Senator Allard.
    Senator Allard. Mr. Chairman, I do have some comments and 
I'll, I'll put them in the record----
    Senator Reed. Thank you.
    Senator Allard [continuing]. So we can proceed with the 
hearing. Thank you.
    Senator Reed. Thank you very much.
    Mr. Secretary.

                      STATEMENT OF KEITH E. EASTIN

    Mr. Eastin. Good morning. Thank you, Mr. Chairman, Senator 
Hutchison, and other members. I have a written statement. I ask 
that you would include it in the record.
    Senator Reed. All written statements will be made part of 
the record. You can summarize. In fact, we prefer you 
summarize.
    Mr. Eastin. I will try to be short. We have a lot to do 
today and I know my colleagues in the Navy are following right 
behind.
    I have with us today, Lieutenant General Robert Wilson, who 
is the Commander of the Installation Management Command, Major 
General Dave Burford, who is here representing the Army 
National Guard, and Brigadier General Rich Sherlock, who will 
be talking to you about the Reserves.
    The Army has a very ambitious program, as you can see, not 
only monetarily, but ambitiously in terms of its operations. We 
are converting from a division-centric force to a brigade-
centric force. We're calling that transformation. We're in the 
middle of a BRAC operation that will be moving some 50,000 
people--civilians and military--around the country. We'll be 
moving some soldiers back from Germany and from Korea, another 
45,000 or 50,000 there. And then, to top it all off, we decided 
to grow the active Army about 65,000, of which, give or take 
37,000 will hit in the early years. So, we have a lot people 
moving around and where people move they have to have places to 
reside, raise their families, train, deploy from, and keep 
their equipment. So, with each of these moves comes a rather 
hefty military construction requirement.

                           PREPARED STATEMENT

    So, but what we have in the BRAC, in the BRAC moves, we are 
doing 13 closures of installations, 53 realignments of various 
installations and operations, closing 387 Guard and Reserve 
centers, but at the same time, building 125 new centers for 
them to take place. All in all, in the BRAC world alone, we 
have 1,300 discrete moves that are required by the BRAC 
Commission. So, it's an ambitious program and one that, that we 
hope you will support financially because it's required to keep 
our all-volunteer Army alive, keep their families well 
situated, and keep the fight progressing.
    With that, I'll pass this over to General Wilson, and he 
can make a statement.
    [The statement follows:]

Prepared Statement of Keith E. Eastin, Robert Wilson, David P. Burford 
                        and Richard J. Sherlock

                              INTRODUCTION

    Mr. Chairman and members of the subcommittee, it is a pleasure to 
appear before you to discuss the Army's Military Construction budget 
request for fiscal year 2008. We have a robust budget that is crucial 
to the success of the Army's new initiatives and sustains vital, 
ongoing programs of critical importance to the Army. 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 serving our Nation around the world. They are and will 
continue to be the centerpiece of our Army, and they could not perform 
their missions so successfully without your steadfast support.

                                OVERVIEW
          TRANSFORMING INSTALLATIONS WHILE THE ARMY IS AT WAR

    Installations are the home of combat power--a critical component of 
the Nation's force capabilities. Your Army is working hard to ensure 
that we deliver cost-effective, safe, and environmentally sound 
capabilities and capacities to support the national defense mission.
    The tremendous changes in our national security environment since 
the terrorist attacks on our Nation clearly underscore the need for a 
joint, integrated military force ready to defeat all threats to U.S. 
interests. To meet these security challenges, we require interrelated 
strategies centered on people, forces, quality of life, and 
infrastructure. Regarding infrastructure, 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 our assigned roles, 
missions, and tasks that safeguard our security at home and abroad.
    Army infrastructure must enable the force to fulfill its strategic 
roles and missions to generate and sustain combat power. As we 
transform our operational forces, so too must we transform the 
institutional Army and our installation infrastructure to ensure this 
combat power remains relevant and ready. We will accomplish these 
efforts by the combined stationing efforts of Base Realignment and 
Closure (BRAC) 2005, Global Defense Posture Realignment (GDPR), Army 
Modular Force Transformation, and the President's ``Grow the Force'' 
initiative.

                               STATIONING

    The stationing initiative is a massive undertaking, requiring the 
synchronization of base realignments and closures, military 
construction and renovation, unit activations and deactivations, and 
the flow of forces to and from current global commitments. Our 
decisions to synchronize activities associated with stationing and 
realigning our global basing posture continue to be guided by the 
following key criteria:
  --Meeting operational requirements
  --Providing economic benefits
  --Using existing infrastructure to reduce cost and excess capacity
  --Funding critical requirements to achieve unit mission
  --Compliance with applicable laws
  --Minimizing the use of temporary facilities
  --Giving facility priority to ranges, barracks, housing, vehicle 
        maintenance shops, headquarters and operations, dining and 
        instruction facilities
    Completion of this combined set of initiatives will result in an 
Army that is better positioned to respond to the needs and requirements 
of the 21st Century security environment, with our soldiers and 
families living at installations that are truly ``Flagships of Army 
Readiness''.

                         INFRASTRUCTURE QUALITY

    In addition to mission support, our installations provide the base 
of support for soldiers and their families. The environment in which 
our soldiers train, our civilians work, and our families live plays a 
key role in recruiting and retaining the high quality people the Army 
needs. Through efforts such as Barracks Modernization and Residential 
Communities Initiative (RCI) housing privatization, the Army has made 
tremendous progress in improving the quality of life for soldiers and 
their families. These efforts will combine with the Army's 
stabilization of the force to forge greater bonds between units, 
soldiers, families, and the communities in which they live.
    The quality of our installations is critical to support the Army's 
mission, its soldiers, and their families. Installations serve as the 
platforms we use to train, mobilize, and rapidly deploy military power. 
When forces return from deployments, installations enable us to 
efficiently reset and regenerate combat power for future missions. In 
the past year, the Army has made tremendous progress in enhancing 
training and improving its ability to generate and reset the force.

               GLOBAL DEFENSE POSTURE REALIGNMENT (GDPR)

    The United States' global defense posture defines the size, 
location, types, and roles of military forces and capabilities. It 
represents our ability to project power and undertake military actions 
beyond our border. Together with our overall military force structure, 
our global defense posture enables the United States to assure allies, 
dissuade potential challengers, deter enemies, and, if necessary, 
defeat aggression. The new global defense posture will be adjusted to 
the new security environment in several key ways: (1) expand allied 
roles, build new partnerships, and encourage transformation, (2) create 
greater operational flexibility to contend with uncertainty (3) focus 
and act both within and across various regions of the world, (4) 
develop rapidly deployable capabilities, and lastly, the United States 
and its allies and partners will work from a different paradigm than in 
the past: GDPR will relocate approximately 45,500 soldiers and their 
families from Europe and Korea to the United States over the next 5 to 
6 years. These moves are critical to ensure Army forces are properly 
positioned worldwide to support our National Military Strategy. The new 
posture will yield significant gains in military effectiveness and 
efficiency in future conflicts and crises and will enable the U.S. 
military to fulfill its many global roles. The new posture will also 
have a positive effect on our military forces and families. While we 
will be moving toward a more rotational and unaccompanied forward 
presence, these rotations will be balanced by more stability at home 
with fewer overseas moves and less disruption in the lives of spouses 
and dependents.

                           ARMY MODULAR FORCE

    The Army Modular Force initiative transforms the Army from units 
based on the division organization into a more powerful, adaptable 
force built on self-sufficient, brigade-based units that are rapidly 
deployable. These units, known as Brigade Combat Teams (BCTs), consist 
of 3,500 to 4,000 soldiers. BCTs increase the Army's combat power while 
meeting the demands of global requirements without the overhead and 
support previously provided by higher commands. The main effort of Army 
transformation is the Army Modular Force, which reorganizes the Total 
Army: the Active Component, Army National Guard, and Army Reserve into 
modular theater armies, theater support structure, corps and division 
headquarters, BCTs, and multi-functional and functional support 
brigades. The Army is reorganizing from a division-based to a modular 
brigade-based force to achieve three primary goals:
    First, increase the number of available BCTs to meet operational 
requirements while maintaining combat effectiveness equal to or better 
than previous divisional brigades. Second, create brigade-size combat 
support and combat service support formations of common organizational 
designs that can be easily tailored to meet the varied demands of the 
geographic combatant commanders and reduce the complexities of joint 
planning and execution. Third, redesign organizations to perform as 
integral parts of the joint force, making them more effective across 
the range of military operations and enhancing their ability to 
contribute to joint, interagency, and multinational efforts. By 
implementing the Army Modular Force, the Army is transforming to be 
better prepared to meet the challenges of the new security environment 
characterized by continuous full-spectrum operations against adaptive 
enemies in complex environments.
    The fiscal year 2008 budget includes projects to ensure that our 
facilities continue to meet the demands of force structure, weapons 
systems, and doctrinal requirements. As of fiscal year 2006, we have 
funded 93 percent of the military construction requirements for the 
Stryker Brigade Combat Teams, including Army National Guard 
requirements in Pennsylvania. Remaining construction funding for both 
the Active Army and Army National Guard will be requested in future 
budget requests.
    New facility requirements for transforming units are being 
provided, where feasible, through the use of existing assets. Where 
existing assets are not available, the Army is programming high-
priority projects to support soldiers where they live and work. The 
Army is requesting $414 million for fiscal year 2008 to provide 
permanent facilities in support of the BCTs. The remaining Army Modular 
Force requirements will be addressed in future budget requests.

                             GROW THE ARMY

    The President's recent Grow the Force initiative announced on 
January 10, 2007, will increase the Army by 74,000 soldiers over the 
next 5 years. Part of this year's request, $2.363 billion, supports 
this initiative. Grow the Army projects include essential facilities 
required to support the increase in end strength such as brigade 
complexes and associated combat support, combat service support, 
training, and quality of life facilities worldwide. Funding is 
requested for planning and design and military construction projects in 
the active Army, Army National Guard, and for Army Family Housing. 
Details for these projects will be provided separately.

                             THE WAY AHEAD

    To improve the Army's facilities posture, we have undertaken 
specific initiatives or budget strategies to focus our resources on the 
most important areas--Range and Training Lands, Barracks, Family 
Housing, and Workplaces.
    Range and Training Lands.--Ranges and training lands enable our 
Army to train and develop its full capabilities to ensure our soldiers 
are fully prepared for the challenges they will face. Our Army Range 
and Training Land Strategy supports Army transformation and the Army's 
Sustainable Range Program. The Strategy identifies priorities for 
installations requiring resources to modernize ranges, mitigate 
encroachment, and acquire training land.
    Barracks.--Providing safe, quality housing is a crucial commitment 
the Army has made to its soldiers. We owe single soldiers the same 
quality housing that is provided to married soldiers. Modern barracks 
are shown to significantly increase morale, which positively impacts 
readiness and quality of life. The importance of providing quality 
housing for single soldiers is paramount to success on the battlefield. 
The Army is in the 15 year of its campaign to modernize barracks to 
provide 134,500 single enlisted permanent party soldiers with quality 
living environments. The new complexes meet DOD ``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.
    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 remaining inadequate 
housing at enduring overseas installations by the end of fiscal year 
2009. The United States inadequate inventory was funded for elimination 
by the end of fiscal year 2007 through privatization, conventional 
military construction, demolition, divestiture of uneconomical or 
excess units and reliance on off-post housing. For families living off 
post, the budget for military personnel maintains the basic allowance 
for housing that eliminates out of pocket expenses.
    Workplaces.--Building on the successes of our family housing and 
barracks programs, we are moving to improve the overall condition of 
Army infrastructure by focusing on revitalization of our workplaces. 
Projects in this year's budget will address requirements for 
operational, administration, instructional, and maintenance facilities. 
These projects support and improve our installations and facilities to 
ensure the Army is deployable, trained, and ready to respond to meet 
its national security mission.

                          LEVERAGING RESOURCES

    Complementary to these budget strategies, the Army also seeks to 
leverage scarce resources and reduce our requirements for facilities 
and real property assets. Privatization initiatives such as 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 exchange 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 un-financed facilities requirements.
    The Army is transforming military construction by placing greater 
emphasis on installation master planning and standardization of 
facilities as well as planning, programming, designing, acquisition, 
and construction processes. 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 
expect to deliver quality facilities at lower costs while meeting our 
requirements more expeditiously. By encouraging the use of manufactured 
building solutions and other cost-effective, efficient processes, the 
Army will encourage non-traditional builders to compete. Small business 
opportunities and set-aside programs will be addressed, as well as 
incentives for good performance. Work of a repetitive nature coupled 
with a continuous building program will provide the building blocks for 
gaining efficiencies in time and cost.

                                              MILITARY CONSTRUCTION
----------------------------------------------------------------------------------------------------------------
                                                                             Authorization of
          Military Construction Appropriation              Authorization      Appropriations     Appropriation
                                                              Request            Request            Request
----------------------------------------------------------------------------------------------------------------
Military Construction Army (MCA).......................     $3,385,329,000     $4,039,197,000     $4,039,197,000
Military Construction Army National Guard (MCNG).......                N/A        404,291,000        404,291,000
Military Construction Army Reserve (MCAR)..............                N/A        119,684,000        119,684,000
Army Family Housing Construction (AFHC)................        419,400,000        419,400,000        419,400,000
Army Family Housing Operations (AFHO)..................        742,920,000        742,920,000        742,920,000
BRAC 95 (BCA)..........................................         73,716,000         73,716,000         73,716,000
BRAC 2005 (BCA)........................................      4,015,746,000      4,015,746,000      4,015,746,000
GWOT MCA...............................................        738,850,000        738,850,000        738,850,000
                                                        --------------------------------------------------------
      TOTAL............................................      9,375,961,000     10,553,804,000     10,553,804,000
----------------------------------------------------------------------------------------------------------------

    The Army's fiscal year 2008 budget request includes $10.6 billion 
for Military Construction appropriations and associated new 
authorizations, Army Family Housing, and BRAC.

                   MILITARY CONSTRUCTION, ARMY (MCA)

    The Active Army fiscal year 2008 Military Construction budget 
request is $3,385,329,000 for authorization and $4,039,197,000 for 
authorization of appropriations and appropriation, including 
$1,608,129,000 for Grow the Army. This year's projects support the 
infrastructure necessary to ensure continued Soldier readiness and 
family well-being.
    Soldiers as our Centerpiece Projects.--The well-being of our 
soldiers, civilians, and families is inextricably linked to the Army's 
readiness. We are requesting $590 million of our MCA budget for 
projects to improve Soldier well-being in significant ways.
    The Army continues to modernize and construct barracks to provide 
enlisted single soldiers with quality living environments. This year's 
budget request includes 14 barracks projects to provide improved 
housing for 3,703 soldiers and new barracks in support of major 
stationing moves as we recast the footprint of the Army. With the 
approval of $1,392 million for new barracks in this budget, 82 percent 
of our requirement will be funded at the ``1+1'' or equivalent 
standard.
    We are requesting the third increment of funding, $47.4 million, 
for the previously approved, incrementally funded, multiple-phased 
barracks complex at Fort Bragg, North Carolina. In addition, we are 
requesting the second increment of funding, $102 million, for the 
brigade complex at Fort Lewis, Washington. We will award the complex as 
a single contract to gain cost efficiencies, expedite construction, and 
provide uniformity in like facility types. The budget also includes a 
$175 million for two training barracks complexes at Fort Benning, 
Georgia, and another at Fort Bragg, North Carolina, which will house 
2,580 training soldiers.
    Overseas Construction.--Included in this budget request is $382 
million in support of high-priority overseas projects. In Germany, we 
continue our consolidation of units to Grafenwoehr as part of our 
Efficient Basing--Grafenwoehr initiative. This allows us to close 
numerous installations as forces relocate to the United States and 
within Europe reducing base support requirements and enhancing Soldier 
training. In Korea, we are again requesting funds to further our 
relocation of forces on the peninsula. This action is consistent with 
the Land Partnership Plan agreements entered into by the United States 
and Republic of Korea Ministry of Defense. Our request for funds in 
Italy is GDPR related and relocates forces from Germany to Vicenza to 
create a full Airborne BCT as part of the Army's transformation to a 
modular force. The Airborne BCT complex also includes new barracks to 
house 513 soldiers. Additional locations in Germany will close as 
construction is completed.
    Mission and Training Projects.--Projects in our fiscal year 2008 
budget will provide maintenance facilities, brigade complexes and 
headquarters, operational and administration facilities, and training 
ranges. These projects support and improve our installations and 
facilities to ensure the Army is deployable, trained, and ready to 
respond to meet our National Security mission. The budget request also 
includes two overseas Forward Operating Site base camps for $74 million 
that will provide a brigade (minus)-sized operational facility to 
support rotational training, allow for increased U.S. partnership 
training, and promote new military to military relationships.
    We will also construct a battle command training center and 
simulations training facility, urban operations terrain, urban assault 
course, modified record firing ranges, and digital multipurpose 
training ranges. These facilities will provide our soldiers realistic, 
state-of-the-art live-fire training. We are requesting a total of $177 
million for these high-priority projects. We are also requesting 
funding of $22.3 million for two defense access roads.
    Army Modular Force Projects.--Our budget continues support of the 
transformation of the Army to a modern, strategically responsive force 
and contains $315 million for three brigade complexes and other 
facilities. The new barracks will house 1,156 soldiers in support of 
the Army Modular Force.
    SOUTHCOM Headquarters Project.--Our budget supports a new 
consolidated headquarters building with other support facilities. Our 
budget request contains $237 million for the new facilities that will 
replace multiple leased facilities scattered throughout the Miami, 
Florida, metropolitan area. The new consolidated building will support 
over 2,800 Active, Reserve and civilian personnel whose mission is to 
achieve U.S. strategic objectives within their area of responsibility 
which spans 32 countries.
    Global War on Terrorism Projects.--The budget request also includes 
$738.8 million for 33 critical construction projects in Iraq and 
Afghanistan to support Operations Iraqi Freedom and Enduring Freedom 
including $19.4 million for planning and design. These funds will 
provide force protection, airfield facilities, operational facilities, 
support facilities, fuel handling and storage, and roads.
    Other Support Programs.--The fiscal year 2008 budget includes $481 
million for planning and design of future projects, including $383 
million to Grow the Army. As executive agent, we also provide oversight 
of design and construction for projects funded by host nations. The 
fiscal year 2008 budget requests $23 million for oversight of 
approximately $800 million of host nation funded construction for all 
Services in Japan, Korea, and Europe.
    The budget request also contains $23 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

    The Army National Guard's fiscal year 2008 Military Construction 
request for $404,291,000 for appropriation and authorization of 
appropriations, including $77 million for Grow the Army, is focused on 
Current Readiness, Transformation, other support, and unspecified 
programs.
    Current Readiness.--In fiscal year 2008, the Army National Guard is 
requesting $36.9 million for four projects to support current 
readiness. These funds will provide the facilities our soldiers require 
as they train, mobilize, and deploy. Included are one logistics 
building and three Readiness Centers.
    Army Modular Force.--The Army National Guard is also requesting 
$237.8 million for 28 projects in support of new missions. There are 13 
projects for the Stryker Brigade Combat Team initiative, four for the 
Army Division Redesign Study, eight range projects to support the Army 
Range and Training Land Strategy, and three Aviation Transformation 
projects to provide facilities for modernized aircraft and change unit 
structure.
    Other Support Programs.--The fiscal year 2008 Army National Guard 
budget also contains $43.8 million for planning and design (including 
$17 million for Grow the Army) of future projects and $8.7 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

    The Army Reserve fiscal year 2008 Military Construction request for 
$119,684,000 (for appropriation and authorization of appropriations) is 
for Current Readiness, other support, and unspecified programs.
    Current Readiness.--In fiscal year 2008, the Army Reserve will 
invest $73.2 million to build five new Army Reserve Centers, $17 
million for a combined maintenance facility, and $8.5 million to 
construct a regional medical training facility--for a total facility 
investment of $98.7 million. Construction of the five Reserve Centers 
will support over 1,700 Army Reserve soldiers and civilian personnel. 
In addition, the Army Reserve will invest $7.0 million to construct a 
training range and a training range support facility, which will be 
available for joint use by all Army components and military services.
    Other Unspecified Programs.--The fiscal year 2008 Army Reserve 
budget request includes $10.9 million for planning and design for 
future year projects and $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)

    The Army's fiscal year 2008 family housing request is $419,400,000 
for authorization, authorization of appropriation, and appropriation, 
including $266 million for Grow the Army. It continues the successful 
Whole Neighborhood Revitalization initiative approved by Congress in 
fiscal year 1992 and our RCI program.
    The fiscal year 2008 new construction program provides a Whole 
Neighborhood replacement project at Ansbach, Germany, in support of 138 
families for $52.0 million using traditional military construction.
    The Construction Improvements Program is an integral part of our 
housing revitalization and privatization programs. In fiscal year 2008, 
we are requesting $266.0 million in support of Grow the Army, as well 
as $99.4 million for direct equity investment in support of the 
privatization of 3,998 homes at Fort Wainwright, Alaska, Fort Sill, 
Oklahoma, and Fort Jackson, South Carolina.
    In fiscal year 2008, we are also requesting $2.0 million for 
planning and design for future family housing construction projects 
critically needed for our soldiers.
    Privatization.--RCI, the Army's housing privatization program, is 
providing quality housing that soldiers and their families can proudly 
call home. The Army is leveraging appropriated funds and existing 
housing by engaging in 50-year partnerships with nationally recognized 
private real estate development, property management, and home builder 
firms to construct, renovate, repair, maintain, and operate housing 
communities.
    The RCI program will include 45 locations, with a projected end 
state of over 86,000 homes--99 percent of the on-post family housing 
inventory in the United States. To date, the Army has privatized 35 
locations, with almost 75,000 homes. Initial construction and 
renovation at these 35 installations is estimated at $9.8 billion over 
a 3 to 10 year development period, of which the Army has contributed 
about $0.8 billion. Although most projects are in the early phases of 
their initial development, since 2001 our partners have constructed 
8,613 new homes, and renovated 8,415 homes. The fiscal year 2008 budget 
request of $99.4 million will allow the Army to expand the portfolio of 
privatized family housing to three additional installations.

                 ARMY FAMILY HOUSING OPERATIONS (AFHO)

    The Army's fiscal year 2008 Family Housing Operations request is 
$742,920,000 (for appropriation and authorization of appropriations), 
which is approximately 64 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 ($139 million).--The operations account includes four 
sub-accounts: management, services, furnishings, and a small 
miscellaneous account. All operations sub-accounts are considered 
``must pay accounts'' based on actual bills that must be paid to manage 
and operate family housing.
    Utilities ($145 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.
    Maintenance and Repair ($216 million).--The maintenance and repair 
account supports annual recurring projects to maintain and revitalize 
family housing real property assets. Since most family housing 
operational expenses are fixed, maintenance and repair is the account 
most affected by budget changes. Funding reductions result in slippage 
of maintenance projects that adversely impact Soldier and family 
quality of life.
    Leasing ($206 million).--The leasing program provides another way 
of adequately housing our military families. The fiscal year 2008 
budget includes funding for 11,836 housing units, including 3,680 
existing Section 2835 (``build-to-lease''--formerly known as 801 
leases) project requirements, 1,907 temporary domestic leases in the 
United States, and 6,249 foreign units.
    Privatization ($37 million).--The privatization account provides 
operating funds for implementation and oversight of privatized military 
family housing in the RCI program. RCI costs include selection of 
private sector partners, environmental studies, real estate surveys, 
and consultants. These funds support the preparation and execution of 
partnership agreements and development plans, and oversight to monitor 
compliance and performance of the privatized housing portfolio.

                  BASE REALIGNMENT AND CLOSURE (BRAC)

    The Army is requesting $4,015,746,000 for BRAC 2005 which is 
critical to the success of the Army's new initiatives, and $73,716,000 
for legacy BRAC to sustain vital, ongoing programs. All BRAC activity 
takes place within the context of achieving the Army's goals of winning 
the Global War on Terrorism, transforming from a division-structured, 
forward-deployed force to one comprised of agile BCTs stationed on U.S. 
soil and Growing the Army in a manner that maintains the Army's ability 
to win decisively any time, any where.
    BRAC 2005 is carefully integrated with the Defense and Army 
programs of GDPR, Army Modular Force, and Grow the Army. Collectively, 
these initiatives allow the Army to focus its resources on 
installations that provide the best military value, supporting improved 
responsiveness and readiness of units. The elimination of Cold War era 
infrastructure and the implementation of modern technology to 
consolidate activities frees up financial and human resources to allow 
the Army to better focus on its core war fighting mission. These 
initiatives are a massive undertaking, requiring the synchronization of 
base closures, realignments, military construction and renovation, unit 
activations and deactivations, and the flow of forces to and from 
current global commitments. If done efficiently, the end results will 
yield tremendous savings over time, while positioning forces, logistics 
activities, and power projection platforms to efficiently and 
effectively respond to the needs of the Nation.
    As an essential component of Army transformation, BRAC 2005 
decisions optimize infrastructure to support the Army's current and 
future force requirements. Under BRAC 2005, the Army will close 13 
Active Component installations, 387 Reserve Component installations and 
8 leased facilities. BRAC 2005 realigns 53 installations and/or 
functions and establishes Training Centers of Excellence, Joint Bases, 
a Human Resources Center of Excellence, and Joint Technical and 
Research facilities. To accommodate the units relocating from the 
closing Reserve Component installations, BRAC 2005 creates 125 multi-
component Armed Forces Reserve Centers and realigns the Army Reserve 
command and control structure. By implementing BRAC 2005 decisions, the 
Active Army will maintain sufficient surge capabilities to expand to 48 
maneuver brigades and handle increased production, training, and 
operational demands now and in the future. BRAC 2005 better postures 
the Army for an increase in end strength by facilitating the Army's 
transformation to a modular force and revitalizing and modernizing the 
institutional Army through consolidation of schools and centers.
    In total, over 150,000 soldiers and civilian employees will 
relocate as BRAC is implemented over the next 5 years. The over 1,300 
discrete actions required for the Army to successfully implement BRAC 
2005 are far more extensive than all four previous BRAC rounds combined 
and are expected to create significant recurring annual savings. BRAC 
2005 will enable the Army to become a more capable expeditionary force 
as a member of the Joint team while enhancing the well-being of our 
soldiers, civilians, and family members living, working, and training 
on our installations.

                   BRAC 2005 IMPLEMENTATION STRATEGY

    The Army has an aggressive, carefully synchronized, fully 
resourced, BRAC fiscal year 2006-2011 implementation plan, designed to 
meet the September 2011 deadline, while supporting our national 
security priorities. National Environmental Policy Act (NEPA) 
requirements necessary to support our implementation plan were 
initiated in fiscal year 2006 to enable the early award of essential 
construction projects. Our BRAC construction plan is fully coordinated 
and carefully synchronized to support our overall strategy for re-
stationing, realigning, and closing installations while continuing to 
fully support ongoing missions and transformation initiatives. This 
construction plan identifies requirements, defines scope, and considers 
existing installation capacity and infrastructure needs. It is an 
extremely complex plan that manages numerous construction projects, re-
stationing actions, BRAC moves, and deployment timelines to allow the 
Army to implement the BRAC statute while supporting critical missions 
worldwide.
    Seventy-five percent of all required construction projects are 
planned for award by the end of fiscal year 2009, and 100 percent by 
the end of fiscal year 2010. This will enable the major movement of 
units and personnel in fiscal years 2010 and 2011, with expected 
completion by the mandated BRAC 2005 deadline.
    In fiscal year 2006 the Army awarded 11 BRAC military construction 
projects to support re-stationing and realignments, including: three 
projects to support GDPR; two incremental projects for BCTs, and five 
Armed Forces Reserve Centers, totaling over $788 million. In fiscal 
year 2007, the Army plans to award and start construction on 75 
projects: 23 projects to support GDPR; 27 Reserve Component projects in 
14 States, and 25 other Active Component projects estimated to cost 
over $3.3 billion, including planning and design for fiscal year 2008 
and 2009 projects. This will lay the foundation for follow-on projects, 
and in earnest, start the implementation of our synchronized 
construction program.
    As signed into law, the Revised Continuing Appropriations 
Resolution, 2007 (Public Law 110-5) does not allow us to accomplish our 
fiscal year 2007 BRAC construction and threatens to derail our 
carefully integrated implementation plan. The Appropriation provides 
less than half of the total BRAC funds requested, creating a shortfall 
of approximately $2 billion for the Army. If the Army program is not 
fully funded, we will be significantly challenged to execute BRAC as 
intended. Construction of required facilities will be delayed, and the 
resulting impact will cascade through our re-stationing, 
transformation, and growth plans for years to come.

                   BRAC 2005 FISCAL YEAR 2008 BUDGET

    The Army's fiscal year 2008 budget request of $4,015,746,000 will 
continue to fund both BRAC and GDPR actions necessary to comply with 
BRAC 2005 Law. The Army plans to award and begin construction of 89 
military construction projects, plus planning and design for fiscal 
year 2009 and 2010 projects. This is estimated to cost $3,241,521,000 
and includes: 16 additional GDPR projects, 31 Army National Guard and 
Army Reserve projects, and an additional 42 Active Component projects.
    A significant portion of the Army's BRAC request supports the 
transformation and re-stationing of the operational force. BRAC 
military construction projects support major realignments of forces 
returning to the United States from Europe, as well as several 
stateside relocations. The fiscal year 2008 budget request also funds 
projects supporting Reserve Component transformation in 19 States. This 
is a healthy start to addressing BRAC 2005 recommendations impacting 
the Army Reserve and Army National Guard.
    The BRAC budget request will also fund furnishings for 86 BRAC 
projects awarded in fiscal years 2006 and 2007 as the buildings reach 
completion and occupancy. The request also funds movement of personnel, 
ammunition, and equipment associated with 25 BRAC Commission 
Recommendations.
    The Army will continue to procure investment type equipment in 
fiscal year 2008 in support of our BRAC military construction program 
as part of the ``other procurement'' budget line. This equipment 
exceeds the investment and expense unit cost threshold of $250,000 each 
and includes information technology infrastructure and equipment for 
the 86 previously awarded BRAC projects, which will be impacted if 
fiscal year 2007 funding is not fully restored.
    In fiscal year 2008, the Army will initiate environmental closure 
and cleanup actions at 14 BRAC properties. These activities will 
continue efforts previously ongoing under the Army Installation 
restoration program and will ultimately support future property 
transfer actions. The budget request for environmental programs is 
$86,756,000, which includes Munitions and Explosives of Concern and 
Hazardous and Toxic Waste restoration activities.

                               PRIOR BRAC

    Since Congress established the Defense Base Closure and Realignment 
Commission in 1990, the Department of Defense has successfully executed 
four rounds of base closures to reduce and align the military's 
infrastructure to the current security environment and force structure. 
As a result, the Army estimates approximately $11.7 billion in savings 
through 2007--nearly $1 billion in recurring, annual savings from prior 
BRAC rounds.
    The Army is requesting $73.7 million in fiscal year 2008 for prior 
BRAC rounds ($3.4 million to fund caretaking operations of remaining 
properties and $70.3 million for environmental restoration) to address 
environmental restoration efforts at 147 sites at 14 prior BRAC 
installations. To date, the Army has spent $2.7 billion on BRAC 
environmental restoration for installations impacted by the previous 
four BRAC rounds. We disposed of 235,361 acres (89 percent of the total 
acreage disposal requirement of 258,607 acres), with 23,246 acres 
remaining.

                       OPERATION AND MAINTENANCE

    The Army's fiscal year 2008 Operation and Maintenance budget 
includes $2.740 billion in funding for Sustainment, Restoration, and 
Modernization (S/RM) and $8.133 billion in funding for 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 Command to best 
utilize this funding.
    Sustainment, Restoration, and Modernization (S/RM).--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 the 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 
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 account funds programs to operate 
the bases, installations, camps, posts, and stations for the Army 
worldwide. The program includes municipal services, government civilian 
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.

                                SUMMARY

    Mr. Chairman, our fiscal year 2008 Military Construction and BRAC 
budget requests are balanced programs that support our soldiers and 
their families, the Global War on Terrorism, Army transformation, 
readiness, and DOD installation strategy goals. We are proud to present 
this budget for your consideration because of what this budget will 
provide for our Army:
  --138 homes replaced or renovated
  --3,998 additional homes privatized
  --Approximately 42,600 government-owned and leased homes operated and 
        sustained at the end of fiscal year 2008
  --Portfolio management of 78,426 privatized homes
  --33 projects in support of Operations Iraqi Freedom and Enduring 
        Freedom
  --9,461 soldiers get new barracks
  --$254 million in Training Ranges
  --$6.1 billion invested in Soldier/Family Readiness
  --$2,363 million to Grow the Army
    Base Realignment and Closure:
  --Statutory compliance by 2011 for BRAC
  --89 Military Construction projects
  --Planning & Design for fiscal year 2009-2010 Projects
  --Remaining NEPA for BRAC 2005 actions
  --Continued Environmental Restoration of 23,246 acres
    Army National Guard:
  --Improved Readiness Centers and an Armed Forces Reserve Center
  --Completion of eight range projects
  --Continued support of our Stryker Brigade Combat Team
  --Three Aviation Transformation projects
  --Three maintenance facilities
    Army Reserve:
  --Medical personnel get new training facility
  --New combined maintenance facility
  --New live fire training range facility
  --1,743 soldiers get new Reserve Centers
  --Center of gravity for Army Reserve families
    Base Operations Support:
  --Goal is to meet essential needs for all BOS programs: Base 
        Operations, Family, Environmental Quality, Force Protection, 
        Base Communications, and Audio/Visual.
    Sustainment/Restoration and Modernization:
  --Funds Sustainment at 86 percent of the OSD requirement, with plans 
        to achieve 90 percent of the requirement through efficiencies.
    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 Army and Defense transformation goals.
    In closing, we would like to thank you again for the opportunity to 
appear before you today and for your continued support for America's 
Army.

                       STATEMENT OF ROBERT WILSON

    General Wilson. Mr. Chairman, Senator Hutchison, 
distinguished members of the subcommittee, on behalf of the 
senior leaders in the Army and over 1 million soldiers that 
comprise our Army, thank you for the opportunity to discuss the 
Army's fiscal year 2008 military construction budget request, 
specifically, our $2.3 billion request for resources to grow 
the Army. I would also like to extend our heartfelt gratitude 
for the subcommittee's support for our soldiers, civilians, and 
families over the years. Our brave men and women could not 
perform their mission so superbly without your steadfast 
support. Thank you.
    As we increase our commitments in Iraq and Afghanistan, we 
face challenges that exceed the level of demand and vision in 
the recent Quadrennial Review Defense Strategy. Today, over 
248,000 soldiers are deployed, fighting the long war on 
terrorism or forward-stationed, deterring the Nation's 
adversaries. Over the last 4 years, we have maintained up to 21 
brigade combat teams deployed in Afghanistan or Iraq. And, the 
recent decision to grow the Army, as has been referred to, of 
74,000--65,000 in the Active Army, 8,200 in the National Guard, 
and 1,000 in the Army Reserve--addresses our need to increase 
capacity and build strategic and operational depth to sustain 
our increased and enduring levels of force deployment.
    Army growth will focus our brigade combat teams with the 
essential combat support and combat service support units and 
include Active and Reserve component rebalancing efforts to 
mitigate the high-demand, low-density capability shortfalls. We 
plan to grow six new brigade combat teams in the Active 
component, expanding our rotational pool to 76 brigade combat 
teams and approximately 225 support organizations in the 
operational force of the Army. Through this growth, we plan to 
provide a continuous supply of 20 to 21 brigade combat teams to 
meet our global commitments.
    For the Active Army, the fiscal year 2008 budget request 
contains $2 billion for 53 Grow-the-Force projects at 20 United 
States installations, as well as $278 million to support Army 
family housing at four installations. These projects will build 
the infrastructure needed to grow the combat support and combat 
service support units to address our current critical 
shortfalls. These shortfalls include examples, military police 
units, explosive ordinance disposal companies, and engineer 
battalion headquarters and companies.
    By the end of the year, we will make decisions on where to 
station the additional brigade combat teams using a BRAC best 
military value process, while using existing available 
facilities and capacity for near term stationing unit until the 
permanent facilities are built.
    The Army is conducting a detailed installation-level 
assessment to inform permanent stationing decisions for the new 
BCTs. A programmatic environmental impact statement is 
scheduled for completion in November 2007.
    We ask for the timely passage of the fiscal year 2007 
supplemental request and for your full support for our fiscal 
year 2008 budget request. Delays or reductions or diversions of 
this request will jeopardize the execution of our carefully 
synchronized stationing plan and limits our ability to provide 
the necessary strategic depth, improve readiness, and meet 
global commitments, while providing our soldiers and families 
the quality of life they deserve.
    We look forward to working with the subcommittee to ensure 
the Army has the infrastructure necessary to meet our global 
demands, grow the Army, and sustain the all-volunteer force. 
Our soldiers and their families deserve nothing less.
    Thank you again for your continued support. I look forward 
to your questions.

                   FISCAL YEAR 2008 BUDGET EXECUTION

    Senator Reed. Thank you, General Wilson.
    Let me begin the questioning. Secretary Eastin, you've 
already noted that this a significant increase in the request--
doubling, basically--for the Army, and then there's additional 
$8 billion in BRAC funding, which is projected to come online, 
which raises the obvious question--are you capable of executing 
and spending all this money in an efficient fashion, going 
forward?

                             MILCON PROCESS

    Mr. Eastin. We believe we are. The Army Military 
Construction Project process has been going through a 
transformation where we believe that our construction will be 
much more efficient in terms of uniform designs, one design for 
barracks around the country, modified instead of redesigning it 
for each and every installation, some modular construction, and 
manufactured buildings that are hauled to the site. So, 
basically we get down to our problems being site prep in 
themselves, which is kind of standard.
    But, the Corps of Engineers has been tasked to speed up the 
process. We have not been sitting around on our hands, this has 
all been very carefully planned out. You know, we get some 
hiccups when supplementals don't come and some projects start 
late, but currently--and I've checked this as of last night--
all of our BRAC moves and construction is on schedule. Don't 
ask me next month, but right now it is and I believe we will 
not have any difficulty, on the assumption that we get a 
supplemental or, as I think has been widely indicated to the 
hill, we are down about, a little more than $2 billion in the 
BRAC account that did not survive and I believe is included in 
the supplemental. So, as soon as we can get that, it's going to 
assure our ability to do this.
    Senator Reed. What's the impact on construction cost? 
You've got a big ramp-up focused in some key installations. Do 
you anticipate construction costs to be beyond the estimate?
    Mr. Eastin. We've taken most of that into account. Of 
course, that's mostly what's happened in the gulf States due to 
demand created by Katrina, has impacted some of this. But I 
believe that currently those impacts are known and have been 
programmed for within our MILCON request.

                       GROW THE FORCE STATIONING

    Senator Reed. You've, we've talked about the Global Defense 
Posture Review and, in that regard, planning to return 50,000 
from overseas to the United States, then simultaneously you 
have a Grow-the-Force initiative of increasing the absolute 
size of the Army. Will the Grow-the-Force initiative alter your 
plans to redeploy troops back into the United States?
    General Wilson. Mr. Chairman, as of right now we're staying 
on plan for the GDPR and BRAC, as is, by BRAC law. We, our 
initial Grow-the-Force decisions and recommendations we have 
made in 2007 with the $400 million in supplemental and the $2.3 
billion in 2008, we have looked at combat support, combat 
service support shortfalls, generally, as those forces, within 
CONUS. So, we haven't impacted on that now, we are continuing 
to assess the impact of where to place the brigade combat teams 
and we're looking at all available space for that. But, right 
now, we have not made any decisions and the senior leadership 
of the Army has not made any decisions to do otherwise.
    Senator Reed. So, you're still looking at the issue. 
There's a possibility, remote, that you might have to delay 
some of the redeployments because of facilities, is that fair?
    General Wilson. I would put it like this, Mr. Chairman. 
With the extension of time in overseas, the 15 months and 
things, it's going to have some adjustments on the redeployment 
of some of the 1st Armored Division units back to the United 
States. And, we're still assessing that. As you know, we have a 
new Chief of Staff of the Army and he has not been fully read 
in and made the decisions on where to go in the future.
    Senator Reed. Thank you, General Wilson.

               RESERVE COMPONENT FISCAL YEAR 2008 PROGRAM

    As I alluded to, and as Senator Hutchison alluded to, the 
regular Army MILCON budget has seen a robust growth, but 
Reserve and National Guard requests have actually shrunk a bit.
    And so, I'm going to ask General Burford and General 
Sherlock, I understand the Guard requested 25 projects and the 
Army Reserve requested only eight projects nationwide. Do you 
think that these are adequate to accomplish your mission? And 
to not only maintain your infrastructure, but to significantly 
upgrade it, given the role of both the Guard and the Reserve in 
combat operations? General Burford?
    General Burford. Sir, we do. If you look at the bare 
numbers on the requests in the Army National Guard from fiscal 
year 2005 to 2008, you could draw the conclusion that there is 
a downward spiral. But, if you look at the other funding that 
comes through to the Guard, you'd also notice in fiscal year 
2006 the hurricane supplemental was more than the request 
itself. Likewise, there are monies in the BRAC that flow 
through in 2008 that will create a project envelope, we think, 
which meets the Army's needs and the directions they've given 
us to modularize and transform our force.
    Senator Reed. General Sherlock, your comments?
    General Sherlock. Sir, we think our 2008 military 
construction request is adequate. With the reduction of the 
program as a result of the reprioritization of Army 
construction programs based on BRAC and GDPR, our request for 
2008 will support our readiness force.
    Senator Reed. Let me go back to, General Wilson, to the 
Grow-the-Force initiative. You know, even with these huge 
appropriations, there's always a need to find money. And, the 
question is, and I'll raise it as, are some of these National 
Guard and Reserve projects being used as bill-payers for the 
Grow-the-Force initiative?
    General Wilson. The answer is no, Mr. Chairman, it's not. 
We, when we did our assessment for the POM and up through the 
BRAC year of 2011, that was all before the Grow-the-Force 
decision. And, we still have those. And some of those are 
unfunded until the remainder of the BRAC bill is funded. We are 
looking at rebalancing and total operational and support 
requirements in the Grow-the-Force decisions.

                     MILITARY CONSTRUCTION IN ITALY

    Senator Reed. In my final remaining time, General Wilson, 
just a status report on Vicenza. Last year the Army request 
included $223 million, the total of $275 million request for 
Dal Molin, and this year's budget request is for $173 million. 
That's nearly $400 million in 2 years and, does the funding for 
this year's project complete the Vicenza request?
    General Wilson. Yes it does, Mr. Chairman.
    Senator Reed. And are your plans to relocate the 173rd 
Airborne on track with respect to Italy?
    General Wilson. We're still waiting for the signed document 
from the minister of defense, although we have verbal 
information that he's going to sign that. And, as soon as 
that's done, and of course, resources are there, we're going to 
then relocate the four units from Germany to Dal Molin.
    Senator Reed. Right. There still seems to be some question 
through the ministry of defense and the Government of Italy, at 
least, questions and concerns is that fair to say, in terms of 
the redeployment? Secretary Eastin, you might want to comment.
    Mr. Eastin. We are in daily contact with them, and have 
been assured by some of the highest levels in the Italian 
Government that this will not be a problem. And, in fact, we 
are planning to get into the ground with construction, probably 
late August, early September. We've been told there are ongoing 
meetings there, and I think we're probably within 10 days of 
having a signed document.
    Senator Reed. Thank you very much, Mr. Secretary.
    Senator Hutchison.

                    GDPR/BRAC EXECUTION AND TIMELINE

    Senator Hutchison. Thank you, Mr. Chairman. I just want to 
put a fine point on the first question that was asked by the 
Chairman, and that is--in the supplemental, we do have the rest 
of the BRAC funding, which was a commitment made to me, on the 
floor of the Senate, by the chairman of the Appropriations 
Committee, and that commitment is being met.
    And, if you get that funding, is the answer that you gave 
to the chairman that you will be able to stay on time to finish 
the BRAC requirements for the Army by 2011?
    Mr. Eastin. As I tried to indicate somewhat cutely--don't 
talk to me next month, but right now, we are, and we believe we 
can if we get funding here in the next couple of months, or so.
    But, we have a lot--as I indicated before--we have 1,300 
separate moves, and they're all integrated, it's like a pile of 
pick-up sticks, if you pull one of them out, a lot of them move 
around. And, when you pull out the factor of trying to get some 
design work done this year for a project next year, or try to 
get a project going that was designed last year. And we had 
planned funding in the January-February timeframe, and it's not 
there, it complicates things. But, right now, we're on track.
    Senator Hutchison. Well, thank you, we certainly intend to 
try to keep on track from now forward. I think that the 
chairman and I agree on that.
    And, I would like to have you report to us if you are 
getting off-track, in any significant way. I realize that month 
to month you may have fluctuations, but we would need to know 
that.
    Mr. Eastin. Yeah, my office tracks these things every 
couple of weeks, we get updates on them, and I will be happy to 
do that. I know you have a proper oversight responsibility in 
this, and we're looking for a lot of money, so we'll be happy 
to share that with you.
    Senator Hutchison. General Wilson, another fine point I 
want to put on the chairman's question. When Under Secretary 
Grone was at our previous hearing, he committed that the re-
stationing would stay on track. Now, that initiative was 
started by this subcommittee, Senator Feinstein and after 
visits to foreign bases, particularly in Germany, and after 
reviewing the military construction requests, which indicated 
that having so many small bases was not efficient. We worked 
with the Department of Defense and the initiative was made 
there to do the re-stationing back to America for training 
purposes and efficiency.
    Are you saying to this committee, also, that that re-
stationing is going to stay on track?
    General Wilson. Senator, they're continuing overseas with 
their relocation plans, and turning over bases, and 
consolidating bases, based on the BRAC GDPR decision and law. 
I'm also saying, we are assessing--the senior leadership of the 
Army--is assessing where to place units for Grow the Army, and 
they haven't restricted anything, but they have not reopened 
any changes to the re-stationing plan.
    Senator Hutchison. Well, if there is any beginning 
initiative to change what you have announced, I would want to 
be notified, and I'm sure the whole committee would, because 
the whole strategy of bringing people home for training, and 
for efficiency, I think, is the right one, and adding the Grow-
the-Force, plus the re-stationing, does mean that 90 percent of 
our Army will be housed in America. And I think that's a good 
thing.
    So, I hope there is no backtracking of that, and I know 
there has been pressure from some of the mayors of German towns 
and that sort of thing, but we think it is in the best interest 
of America to have the big bases that you are keeping there, 
because they are efficient and important, but that we continue 
working on closing the others, and re-stationing back here.
    General Wilson. I clearly understand.

                        GROW THE ARMY INITIATIVE

    Senator Hutchison. General Wilson, there is $18 million in 
the emergency supplemental for facilities at Fort Hood, as part 
of the Army's Grow-the-Force initiative. I don't know if you're 
familiar with this, but Fort Hood, actually, in BRAC, lost 
troop strength, because of movements out of Fort Hood, and it 
is one of our largest Army bases in America. And, I certainly 
know that they operate more efficiently at the higher level, 
the 50,000 to 55,000 level. Is there a plan to put some of the 
additional 65,000 in the Grow-the-Force initiative at Fort 
Hood?
    General Wilson. Senator, we've decided--we're putting 176 
soldiers, four explosive ordinance detachment (EOD) companies 
there, that decision was made at $18 million for projects and 
construction for 2007. That was combat support and service 
support units that we talked about earlier that we needed high-
demand low-density units.
    We're putting four EOD companies there, in 2008 we're 
building, putting another $46 million into unit operation 
facilities, and in barracks, another $45 million to facilitate 
that growth. The other decisions have yet to be made on the 
brigade combat team.
    Senator Hutchison. Approximately how many soldiers would be 
involved at this point in your projections in growth at Fort 
Hood?
    General Wilson. The only decisions that have been made thus 
far in 2007 and 2008 with the Grow-the-Force dollars, have been 
those 176 soldiers from the four EOD companies.
    Senator Hutchison. But in the future, as you're looking for 
spaces, I would assume Fort Hood would be on the list?
    General Wilson. Absolutely. And as you recall, we're moving 
one of our brigades there temporarily now, to build it, in 
order to meet operational requirements overseas.
    Senator Hutchison. Fort Bliss is already slated to receive 
a large number of the troops coming back from Germany. Is it 
slated for any of the Grow-the-Force troop structure increase?
    General Wilson. Yes, Senator, it is. In 2007, three EOD 
companies, 132 personnel, one MP company, 171 personnel, and 
engineer company, 191 personnel, and an EOD battalion 
headquarters of 36 people. That's about $12 million, $13 
million, $2.5 million and $5 million in construction.
    In 2008, we're placing another $84 million of construction 
there for the Army Evaluation Task Force.
    Senator Hutchison. Thank you.
    General Wilson. So, those decisions have been made in the 
combat support, combat service support arena.
    Senator Hutchison. I'm sorry, my time is up, but I have one 
more question which I'll submit. Is that okay?

                         SOUTHCOM HEADQUARTERS

    Quickly, one of the things that we've tried to do in this 
committee is, where possible, not invest in expensive real 
estate for bases. I'm talking about, now, the U.S. Southern 
Command, SOUTHCOM, in Miami, and I think that the Army did a 
great thing at Ellington Field, moving out of expensive real 
estate in Houston, to a bigger area that would be more 
efficient.
    I was going to ask you, did you consider for the SOUTHCOM 
headquarters MacDill AFB in Tampa, or Homestead Air Reserve 
Base in South Miami, Dade County, as alternatives to the more 
expensive location in Miami?
    General Wilson. Senator, I know that the two, that the 
SOUTHCOM Commander, Admiral Stavridis was most interested in 
was either Homestead, or in Miami. And, his recommendation was 
Miami, for several operational reasons. And that is the 
location, of course, they submitted that we supported for, to 
take those 8 of the 9 leased facilities, and can consolidate 
them into that one new structure.
    Mr. Eastin. Senator, if I may, the land was contributed to 
the Army on a 50-year lease by the State, so there is no land 
cost there, this is pure MILCON. I think the land cost was 
about $200 for some sort of deed transfer or something like 
that. But, I mean, they wanted to keep us in Miami, we wanted 
to be in Miami, there's a lot of other related operations 
there. And to consolidate them under this plan worked well for 
SOUTHCOM, and I think was quite cost-effective.
    Senator Hutchison. I may have another question on that, but 
my time is up. Thank you very much.
    Senator Reed. Thank you very much, Senator Hutchison, 
Senator Nelson?

                       NATIONAL GUARD FACILITIES

    Senator Nelson. Thank you, Mr. Chairman. And, good morning 
and thank you for your service to our country.
    I recognize that the budget is stretched thin, and we are 
going to have to make the best judgments we can about where we 
build, how we build and how we structure our force.
    I've not been a fan of the BRAC, because I've always felt 
that what we've made decisions on is the economics, rather than 
need first. And I would prefer to see needs established first 
as the driver for where the facilities are, or where the 
facilities aren't, rather than as just a matter of reducing 
costs.
    In that connection, I'd like to ask some questions, though, 
about BRAC and the Grow-the-Force initiative as it relates to 
National Guard facilities. It's my understanding that the Army 
is inserting both BRAC projects into the Army National Guard's 
MILCON projects, as well as Grow-the-Force projects, and that 
this has resulted in delayed funding for projects identified as 
critical by the adjutant generals and the Governors to the out-
years of fiscal year 2012 and fiscal year 2013.

                         ROLE OF GOVERNORS/TAGS

    I've been told that this all happened without the 
consultation of the Governors, and/or the adjutant generals. 
And, as a former Governor who spent a great deal of time 
working with my adjutant general, and had need of the use--
unfortunately the need and use of our National Guard in 
Nebraska, I just wonder if this is accurate.
    And I guess I would ask you first, Secretary Eastin.
    Mr. Eastin. I don't believe that is accurate, and Major 
General Burford can discuss this a little bit more, but it is 
our goal to work with each of the States. The Guard itself is a 
very important part of our force, both here and out at the 
point of the spear. So, we are not trying to short-change any 
of these, or to sidestep any of the State authorities. I think 
they play an important part in this, and will continue to do 
so.
    Senator Nelson. General Burford, when I talk about 
consultation, I'm not talking about you tell them what's 
happened, I'm talking about true consultation, before a 
decision is made.
    General Burford. Sir, we have a specific process our Guard 
has to go through in order to site and execute projects. Of 
course, you're aware that the Governor has the statutory 
authority to position his or her Guard Units.
    As you might imagine, with 54 States and territories the 
list of wants and needs is greater than the ability to satisfy 
that.
    We also have to look forward to what the Army sees the 
Guard providing as a force in the future, and even in this 
year's list, you might look at the 30-odd projects and see 13 
occurring in one State simply to support the Stryker brigade 
combat team development. We have to be responsive to the 
direction and the path that we're aimed toward. Occasionally 
that will cause us to change and alter what we thought were our 
long-range plans because, as you know, we're under a 6-year 
FYDP planning requirement, which is different from the other 
components. It makes it very challenging.
    Senator Nelson. Well, I understand that, but can you tell 
me that this was discussed with the Governors, and/or the 
adjutant generals before any of the decisions were made?
    General Burford. Sir, I think the process was probably 
evolving too rapidly for the Governors and their staffs to 
discuss adequately. It happened very quickly. The Army National 
Guard and the National Guard Bureau discussed it to the best of 
their ability in the time allowed.

               ARMY NATIONAL GUARD MILCON BUDGET PROCESS

    Senator Nelson. Well, about 15 years, for 15 years, the 
Installation Restoration Program has been in place to ensure 
fairness in military construction during funding distributed 
through the States for the Army National Guard, Congress had 
oversight in establishing the IRP, and the Governors and 
adjutant generals approved it. It appears that, if this hasn't 
been disregarded, it certainly wasn't given the full spirit or 
application that was intended for the last 15 years.
    General Burford. I think you're referring to the IRP, the 
Infrastructure Requirements Plan. Yes, sir, it was. Those 
projects were given a score based on need, on the age of the 
facility they might replace, any safety or health consequences, 
and the priority the adjutant general may have placed on that 
project. That gives us a list of at least 108, to which the 
Army National Guard adds up to 5 annually. Those have to be 
folded into the transformation necessity of the future, and how 
quickly we're asked to get to that position, as well as the 
limitations of the BRAC calendar, as laid out for us to meet.
    It's a dynamic process that changes every year. Some of the 
projects that we have come in on forms called 1390, sometimes 
those are incomplete. Sometimes the completion is not 
accomplished until after the need to evaluate those, and rank 
order those projects. It's very challenging.
    Senator Nelson. Well, I understand that, but I guess, my 
whole question is, there doesn't really seem to be a 
significant level of consultation with the Governors, because I 
don't have any Governor telling me that they were consulted to 
any significant degree about any of these decisions. And, 
that's my concern. That's been my concern with the BRAC, among 
other things, it's my concern with force structure changes and 
the decisions that are going to be made in bringing back troops 
from across the board, all over the world. That there isn't the 
full discussion going on with the governors. It's a decision 
made in the Pentagon that's passed down, and it's already a 
fait accompli by the time they're even made aware of it.
    General Burford. Point taken, sir. I can't personally speak 
for who got told what and when and when the decision points 
were, but I would tell you that the process happened very, very 
quickly, and answers were required before consultations could 
be fully executed with all of the States involved.
    Senator Nelson. Well, would it be possible for somebody to 
find out for me when that contact was made and who it was made 
with, and by whom?
    Mr. Eastin. I will, we'll chase that down and get it up to 
you or your staff.
    Senator Nelson. Sure.
    Mr. Eastin. Thank you.
    [The information follows:]

              Role of the Governors and Adjutants General

    As the statutory channel of communications with the States, 
the National Guard Bureau is in regular and ongoing 
communication with the Adjutants Generals (TAGs) and Governors 
regarding the requirements and concerns of the States and 
territories. The National Guard Bureau channels those 
requirements into the Department of Defense processes for 
prioritizing military construction projects and other spending 
needs. Requirements emerging from BRAC are considered in this 
process as well and may be prioritized more highly than other 
requirements. However, because Department of Defense (DOD) 
policy prohibits the release of budget materials during the 
internal DOD budget deliberations, the TAGs and Governors are 
not formally involved in the actual budget formulation process. 
Nonetheless, I can assure you that their ongoing input on their 
needs and requirements was weighed very carefully in the 
formulation of the budget request. Unfortunately, this 
limitation and the extremely short timeframe did not afford the 
opportunity to advise States of the impact on their projects 
before the official notification that came with the publishing 
of the fiscal year 2007 President's Budget in February 2007.

    Senator Nelson. I would appreciate it. Don't mean to be 
argumentative, I just want to make sure that this is being 
handled in the way that we expect it to be handled, and the way 
the Governors expect it to be handled, handled with the 
reliance on the Guard as an operational force, as opposed to a 
supplemental force today, I think it's probably more critical 
than it, perhaps, it's ever been.
    General Burford. And we would agree, sir. We fight tooth 
and nail for what we think is our ability to station and fund a 
force that's adequate for the future, as well as today. In the 
budget proposal for fiscal year 2008 you'll find that the 
National Guard has put in a wedge for growing the Army. So, 
we're trying to look ahead to what the needs are before it 
becomes an emergency.

     FISCAL YEAR 2008 MILITARY CONSTRUCTION, NATIONAL GUARD BUDGET

    Senator Nelson. Now, it's my understanding the MILCON 
budget for the Guard has been reduced by about $400 million, 
and I know my time's up--is that accurate?
    General Burford. You said reduced by $400 million?
    Senator Nelson. I think by $400 million. This has, this for 
the repositioning of the troops coming in from Europe.
    General Burford. Not to my knowledge, sir. The Guard part 
has not been reduced.
    Senator Nelson. All right, what we'll do is we'll flesh 
this out a bit more, submit a question for the record and get a 
response back.
    General Burford. Absolutely.
    [The information follows:]

                      National Guard Milcon Budget

    The Army National Guard Military Construction budget was 
not reduced by $400 million.

        STATEMENT ON BEHALF OF THE ADJUTANTS GENERAL ASSOCIATION

Problems

    MILCON for the National Guard has been historically under 
funded. We need $1.5 billion per year in the Army National 
Guard (ARNG) and $250 million per year in the Air National 
Guard (ANG) for a period of not less than 20 consecutive years 
to buy down the backlog to recapitalize (revitalization and 
requirements dollars) to sustain an operational reserve force 
across the Nation.
    DOD Base Realignment and Closure (BRAC) has been severely 
under funded. The Department of Defense (DOD) is moving State 
priority projects from the Future Years Defense Program 
(FYDP)to pay for the BRAC program.
    Transformation of the National Guard for missions required 
for the Global War on Terrorism, Global Defense Posture 
Realignment (GDPR), Army Modular Force Transformation, Grow the 
Army, Total Force Initiative (TFI), and other initiatives, 
require additional facilities. Any construction required by DOD 
initiatives must not deter from established programs identified 
in Problem 1, above.

Discussion

    Historically, MILCON for the National Guard has been 
severely under-funded. The result is that our facilities are 
not meeting the recommended quality (C-2) requirements as 
outlined in the DOD regulations. Further, we have not met the 
requirements to build the mission-critical facilities we need 
to provide an operational reserve force to meet the Guard 
mission.
    The DOD is attempting to significantly alter and reduce the 
MILCON program for the Guard in order to cover implementation 
of BRAC and other initiatives. The ANG was decremented by $300 
million in the fiscal year 10-13 FYDP. The ARNG was decremented 
by $1.5 billion in the fiscal year 2008-13 FYDP.
    In comparing the programs, the ARNG was decremented 9.8 
percent at the same time that others in the Army were increased 
26.2 percent and the Army Reserves were increased by 10.1 
percent.
    By law, the Governors and Adjutants General identify and 
prioritize projects for the Future Years Defense Program (FYDP) 
to meet State and DOD mission requirements. This process is 
necessary to ensure that National Guard and State 
considerations are included in military facility preservation 
and modernization efforts.
    We are opposed to significant changes in the MILCON process 
to recover money for other programs and initiatives.
    DOD is unilaterally determining which projects will be 
deleted from the FYDP or moved to out years and inserting 
projects, which are not the most mission-essential as 
determined by the States.
    States not previously impacted by BRAC stand to lose vital 
projects that will set back modernization efforts for years. 
States impacted by BRAC may lose projects of higher priority in 
their States than BRAC-directed projects.
    The BRAC process must proceed as directed by law, however 
its implementation should not come at the expense of mission-
essential facilities in the National Guard. Further, we are 
concerned that DOD, by their actions, may be usurping the 
intent of the law (32 USC 104) that ``each State . . . fix the 
location of the units and headquarters of its National Guard.''

Recommendations

    Fund the Military Construction Program for the National 
Guard at $1.5 billion per year for the ARNG and $250 million 
per year for the ANG for 20 consecutive years to recapitalize, 
revitalize and sustain facilities.
    The Adjutants General are very supportive of the DOD 
initiatives and programs, but those programs should come with 
their own funding.
    We request that Congress direct DOD to find alternate ways 
to execute their BRAC program and other initiatives without 
diverting MILCON funds from Guard mission-essential facilities.
    Submitted on behalf of the Adjutants General Association of 
the United States. Information was supplied specifically by the 
Infrastructure/Facilities/Information Technologies Committee.

    Senator Nelson. Thank you very much, I appreciate it.
    Senator Reed. Thank you very much, Senator Nelson, I think 
there will be several questions for the record, which we'll get 
to you as promptly as possible, and ask you to reply as 
promptly as possible.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. I'd ask unanimous 
consent that along with my opening remarks here in the 
committee, that we submit for the record, a memorandum dated 
April 13, 2007, to the Colorado Gubernatorial and Congressional 
Delegations, and its accompanying information page.

                   PINON CANYON MANEUVER SITE (PCMS)

    Secretary Eastin, in February, Under Secretary Krieg 
granted a waiver on the land acquisition moratorium regarding 
the expansion of Pinon Canyon. This waiver now allows the Army 
to interact with the community on these issues. But, in the 
past, you were prevented from doing so.
    Now, this is an important step, and involving those that 
would be affected firsthand by this potential expansion. 
Despite the progress, a great deal of concern still exists 
within the community about this potential expansion, 
particularly on the need for this site, and the importance of 
Pinon Canyon.&
    Now, the report issues by the Army in compliance with 
fiscal year 2007 Defense Authorization Act, stated the Army 
reached the decision to expand Pinon Canyon primarily as a 
result of your strategic shift, and plan for transformation, 
which includes a change to more modular brigade combat teams. 
Additionally, the increase in new soldiers, as a result of 
BRAC, contributes to the need for the expansion.
    Due to the shift to modularity, each brigade combat team 
requires about 95,000 acres more of training land, more land 
than it did before. Now, here's the question--is it fair to 
conclude that primary reason for expansion of the Pinon Canyon 
maneuver site is to better suit the Army's transformation plan 
for the 21st Century, as well as the addition of another 
brigade combat team at Fort Carson?

                              PINON CANYON

    Mr. Eastin. Yes, Senator, as I think we've discussed 
before--especially with Stryker brigades and other heavy 
equipment--they travel a lot faster, a lot wider, they maneuver 
in groups that basically eat up a lot more land, and some of 
the old training facilities are insufficient for that. I think, 
overall in the Army, we have identified needs of about 5 
million new acres. We're not, of course, looking for all of 
that at Pinon Canyon.
    But, this is operationally driven, and it is close, Pinon 
Canyon is not adjacent to, but within driving distance of Fort 
Carson, which is a major installation, and we wanted to 
continue it to be a major installation. So, we've identified 
land around the country, that is necessary to improve our 
training ranges, and our training capabilities in Pinon Canyon 
was one of those, that's why we're increasing the size, or are 
proposing to.
    Senator Allard. Now, would you speak to the uniqueness to 
the Pinon Canyon, and its importance to the Army? I've been 
told that Pinon Canyon resembles the mountainous terrain of 
Afghanistan, could you elaborate, perhaps, a little more on its 
uniqueness?
    Mr. Eastin. This is probably not in my lane, I have had the 
pleasure of being out in Pinon Canyon, I have not had the 
pleasure of being in Afghanistan, and I would hesitate to 
condemn the good citizens of southeast Colorado, as being part 
of Afghanistan, but----
    Senator Allard. General Wilson, do you want to comment?
    General Wilson. Yes, Senator, thank you. I had the pleasure 
of commanding Fort Carson for almost 2\1/2\ years, I had a 
great opportunity to spend time in Pinon Canyon, and it's got a 
full range of environmental conditions there, terrain--high 
terrain, like you would see in Afghanistan. It's got open 
terrain, so you can train full-spectrum operations there, and 
you can train people from the Special Forces like 10th Special 
Forces Group, as well as armored and light infantry units, and 
aviation units. So, it's an exceptionally good training area, 
that tracks well with our modular force conversion, which is a 
required, it's a bigger footprint and larger terrain areas, and 
a larger footprint that's going to Fort Carson.
    Senator Allard. And that's--that sets it apart from your 
other training areas.
    General Wilson. We have other training areas like that that 
have the space, but not necessarily the range of geographic 
locations like we just discussed, yes, sir.
    Senator Allard. Thank you. I appreciate you responding to 
that.

                           ADDITIONAL ACREAGE

    Now, back to you, Secretary Eastin, there's about--when we 
get done with the total plan, I'm understanding about 724,000 
acres--you're immediately trying to acquire 418,000 acres more 
for the expansion. Do you visualize any plans to go beyond the 
418,000 targeted acres now for expansion?
    Mr. Eastin. We have no current plans at all to go beyond 
that. We've got 235,000 acres now, we would be adding 418,000 
acres. I need to stress that this is going to be a very long-
term proposition. The first 250,000 that we're proposing to 
acquire, we've only put in our POM (program objective 
memorandum) enough money to go through 2013, so----
    Senator Allard. Two hundred and fifty thousand acres--
    Mr. Eastin. By 2013, so----
    Senator Allard. And then there's 168,000, you just don't 
have any idea?
    Mr. Eastin. Not yet.
    Senator Allard. That probably is based, a little bit, on 
willing sellers, right?
    Mr. Eastin. Yes, exactly.
    Senator Allard. Your recent information memo stated that an 
environmental impact analysis would be conducted during the 
NEPA environmental process, I appreciate your effort in doing 
that. I don't think we picked up when that analysis--when you 
would anticipate it to be complete?
    Mr. Eastin. Well, to answer your question straight up, 
probably about 18 months from now.
    Senator Allard. I see.
    Mr. Eastin. But we have to do some planning to figure out 
what exact acres we want. We will be discussing this with the 
community down there, which acres we want and where we would 
prefer them. And then you have to do an environmental impact 
statement to determine what alternatives there might be locally 
for moving in one particular place or another place, and how 
that impacts both the environment, air quality, historic sites, 
that sort of thing.
    Senator Allard. Now, in the terms of economic impacts, 
would the Army--are they willing, or are they looking at a 
permanent party station in the area, as a commitment to 
bringing infrastructure dollars to the region?
    Mr. Eastin. At the moment, we are not looking for anything 
significant in the way of permanent party there. Very few 
people are needed on the land to maintain it. But in terms of 
bringing a brigade down there or something, that is not 
currently planned.
    Senator Allard. Okay, now there's forest land there that's 
been incorporated into the total area that you're looking at 
for purchasing. Has the Forest Service been approached at all, 
and how serious is your consideration in the use of some of the 
forest land?
    Mr. Eastin. I don't know--excuse me--I don't know if 
they've been approached, we've looked at their land, and it is 
not exactly where we would like it. We will include that in the 
environmental impact studies that we were performing to see if 
some of that can be used. I would prefer to, personally, use 
other Government land, and not take things out of private 
property if we can help it, but we still have to study on 
whether that land is appropriate for what we need to do down 
there.
    Senator Allard. And, my understanding is you're--as you're 
trying to expand, your basis will be willing seller/willing 
buyer, is that correct?
    Mr. Eastin. That's our strong basis, I know that's been a 
concern of the community, and it's a concern here. We like to 
be good neighbors, and being good neighbors doesn't mean taking 
their land, so.
    Senator Allard. Thank you for your comments.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Reed. Thank you, Senator Allard.
    Gentlemen, thank you for your testimony and for your 
service to the Nation and the Army, and they'll be a few 
questions, I think, the panel will submit, and we'll ask for 
your prompt response. Thank you very much.
    Mr. Eastin. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

             Questions Submitted by Senator Robert C. Byrd

              spring valley formerly utilized defense site
    Question. Mr. Eastin, it is my understanding that your office is 
the Executive Agent for Formerly Utilized Defense Sites (FUDS), with 
the U.S. Army Corps of Engineers' having Program Execution 
responsibility.
    Please describe the work activities scheduled for the Spring Valley 
FUDS for fiscal year 2007.
    Answer. This fiscal year's primary work activities include: 
removing munitions from a known disposal pit at an American University 
(AU)-owned property; removing arsenic-impacted soil from approximately 
25 residential properties; digging test pits on another AU-owned 
property to determine whether it contains munitions or munitions 
debris; continuing the groundwater investigation which includes 
installing 10 new wells, and sampling wells and creeks; and conducting 
geophysical investigations on approximately 17 residential properties 
and clearing metallic anomalies on 7 previously investigated 
residential properties.
    Question. I understand that the Army Corps of Engineers is 
projecting a project closeout for the Spring Valley site in 2011. 
Please describe in detail what work remains, including associated costs 
to complete and timeframe.
    Answer. The following table describes remaining work and associated 
costs to closeout the Spring Valley Site in 2011:

                        [In millions of dollars]
------------------------------------------------------------------------
                                             Timeframe
      Project Activities Remaining         (fiscal year)      Amount
------------------------------------------------------------------------
Glenbrook Road Munitions Recovery.......            2007             8.7
Glenbrook Road Test Pits................            2007             2.4
AU Property Leases......................            2007             0.3
Arsenic Grids near AU Hughes Hall.......            2007             0.6
Residential Arsenic Soil Removals.......       2007-2009             9.7
Residential Geophysical Investigation...       2007-2909             8.1
Groundwater Investigation \1\...........       2007-2009             1.6
Public and Stakeholder Outreach.........       2007-2011             1.5
Soil and other Media Sampling/                 2007-2010             2.5
 Remediation............................
Property Impact Reimbursements..........       2007-2009             0.5
Remedial Investigation/Feasibility Study       2007-2011             1.5
 Report.................................
AU Landscape Damage Reimbursements......            2008             1.3
Ordnance Disposal.......................            2008             2.4
AU Public Safety Building Remediation...            2008             1.8
Dalecarlia Woods Geophysical                        2009             0.9
 Investigation..........................
Dalecarlia Woods Intrusive Investigation            2010             2.7
AU Trees Reimbursement..................            2010             0.8
Project Closeout........................            2011             2.0
Long Term Monitoring....................       2011-2050             0.8
                                                         ---------------
      Total Cost........................  ..............            50.1
------------------------------------------------------------------------
Assumes no groundwater remediation is required.

    Question. Is the Corps continuing to search for remaining munitions 
and contaminants? Is it likely that this clean-up effort could go on 
well beyond the projected closeout date of 2011 and the costs to 
complete the effort could increase dramatically?
    Answer. The U.S. Army Corps of Engineers (USACE) is continuing to 
search for remaining munitions and Department of Defense (DOD)-related 
contaminants. If a significant amount of ordnance or DOD-related 
contamination is discovered beyond what is presently known, the 
projected 2011 close-out date could be extended.
    Question. I understand that the Department established an $11 
million annual baseline for the Spring Valley FUDS in 2002, based on 
known requirements and estimates that were valid at that time. Given 
new information from the Corps that indicates a high probability of 
buried hazardous material affecting the American University (AU) Public 
Safety Building, the AU Admissions Building, the AU President's 
residence, and an adjacent residence owned by AU, is there cause for 
the Department to develop a new large-scale review of the Spring Valley 
FUDS to determine the full extent of the contaminants and to re-
baseline the annual funding level for the Spring Valley FUDS, 
accordingly?
    Answer. The USACE believes that the current baseline funding with 
periodic plus-ups such as the $3.0 million provided for fiscal year 
2007 and other funding in previous years will be adequate to complete 
the current known workload at the project area by 2011. This schedule 
is based on addressing Spring Valley in a timely manner without 
severely impacting other competing FUDS Military Munitions Response 
Program priorities.
    Question. Does the Department have the ability supplement the $11 
million for the Spring Valley FUD on an as-needed basis?
    Answer. Supplements to annual funding projections for Spring Valley 
have been made on an as-needed basis through reallocation of dollars 
within the annual FUDS appropriation. This has resulted in the 
deferment of funding for cleanup of other FUDS properties.
    Question. What is the Corps' full capability for this project in 
fiscal year 2008?
    Answer. USACE has the capability to perform additional work in 
fiscal year 2008 at an additional cost of $7.9 million above the fiscal 
year 2008 baseline amount of $11 million. USACE would advance the 
execution of several of the work activities currently scheduled for 
fiscal year 2009 and fiscal year 2010. Again, this action would be at 
the expense of delaying cleanup activities scheduled for other FUDS 
properties if no additional program funding is appropriated.
    Question. Please describe what authority the department has to 
provide compensation to individuals and organizations impacted or 
displaced by FUDS activities.
    Answer. The USACE is authorized to reimburse property owners of 
properties which undergo investigation and remediation activities for 
the independently appraised values for landscape items which are 
damaged or destroyed. In some cases, the USACE relocates residents from 
their properties and covers the expense of temporary lodging or leasing 
of the property if the remediation activities render the dwelling 
temporarily uninhabitable.
    Question. What compensation has been provided to the residents of 
Spring Valley neighborhood and American University for the major 
disruption this project has had upon their property and to the 
operations of the university?
    Answer. Direct reimbursements have been made to compensate affected 
property owners for damaged and destroyed landscape items due to 
investigation and remediation activities and for temporary lodging or 
leasing of a property if required. Since 2000, we have spent 
approximately $6.8 million on damaged and destroyed landscape items, 
temporary leases, or easements on properties and relocations. AU has 
been reimbursed $572,000 for Child Development Center relocation and 
playground equipment, and for AU-owned property leases and damage 
reimbursements.
    Question. When the Corps remediates a property or structure within 
a FUDS, is it required to restore the property or structure to its 
original stature?
    Answer. The USACE performs restoration at properties which undergo 
remediation activities (backfilling, grading, new sod, etc.) and 
reimburses the property owner for the independently appraised value of 
any and all landscape items which are damaged or destroyed. On a rare 
occasion where there may be damage to a structure related to our 
investigation or remediation efforts, the structure would be restored 
to its original condition.
    Question. In June 1995, the Corps issued a report, with concurrence 
from the Environmental Protection Agency, concluding that Spring Valley 
was safe after a two-year effort to clean up munitions, arsenic 
contaminated soil, and other contaminates that were discovered in 1993. 
I understand that the Corps reopened the Spring Valley case in 1998 at 
the insistence of the DC Department of Health and expanded the 
investigation to include every property located in the Spring Valley 
FUDS boundary. As we are all aware, this investigation revealed much 
more work was yet to be completed on the Spring Valley FUDS and the 
Corps is now in the second phase of clean up for this FUDS.
    When the cleanup is determined to be complete for current ongoing 
tasks, how does the Corps intend to monitor affected sites?
    Answer. The USACE plans on conducting long term monitoring of the 
site in consultation with regulatory agencies and partners.
    Question. If, after the stated completion of the cleanup, 
additional munitions, chemicals, or other hazardous waste are detected 
in Spring Valley, will the Corps return to immediately undertake an 
additional comprehensive clean-up?
    Answer. As the program executor for the FUDS program, the USACE 
would be able to respond appropriately to any future discoveries of 
ordnance or DOD-related contamination that poses an unacceptable risk 
to human health or the environment in the Spring Valley neighborhood.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

                               FORT HOOD

    Question. General Wilson: You mentioned that 176 personnel are 
already slated to come to Fort Hood as part of the Army's ``Grow the 
Force'' initiative. Are these people going to be part of the permanent 
end-state population of Fort Hood? What do you project the end-state 
population to be at Fort Hood?
    Answer. Yes, the previously mentioned 176 personnel, comprised of 
explosive ordnance detachment companies, will become part of the Fort 
Hood's permanent end-state population. Fort Hood's projected total 
population of 55,441 in fiscal year 2013 includes 40,799 military 
personnel, 5,188 U.S. direct hire civilians, and 9,454 others, such as 
other service and Department of Defense military and civilian 
personnel, private organizations, and contractors.

                                SOUTHCOM

    Question. Mr. Eastin, Can you provide the committee with 
information that details why you chose not to locate this facility on 
land owned by the Federal Government? Specifically, what made MacDill 
AFB and Homestead ARB unacceptable?
    Answer. MacDill AFB and Homestead ARB were considered mutually 
unacceptable due to the lack of proximity to international airports; 26 
partner nation consulates; Coast Guard District 7 Headquarters; 
universities that collaborate on Latin American Studies (University of 
Miami, Florida International University, Florida Atlantic University); 
and Federal agency regional offices (Homeland Security, Justice, Drug 
Enforcement Agency, State, Treasury, and Federal Aviation 
Administration). Additionally, MacDill AFB and Homestead ARB are 
located within mandatory hurricane evacuation zones and lack sufficient 
land to accommodate a SOUTHCOM Headquarters facility.
    MacDill AFB was also considered unacceptable because it is not 
located near housing communities in either Broward or Dade Counties, 
which would require moving assigned military and civilian personnel at 
government expense or cause them to seek employment elsewhere.
    Homestead ARB was also considered unacceptable because of multiple 
quality of life considerations including housing, schools, and medical 
care. Although Homestead ARB has some facilities to permit co-use, 
there is a lack of nearby hotels to support exercises, contingencies, 
and conferences. Additionally, existing SOUTHCOM personnel would be 
required to relocate at their own expense or commute greater distances 
in highly congested traffic and incur a daily $6 toll fee.
                                 ______
                                 

            Questions Submitted by Senator Robert F. Bennett

                         DUGWAY PROVING GROUNDS

    Question. I am concerned by what seems to me to be a perpetual lack 
of Army support for military construction projects at Dugway Proving 
Grounds in Utah. Dugway provides an essential service for the Army and 
the country, but from my perspective seems to be a very low priority. 
Of particular concern to me is the proposed Life Sciences Test Facility 
Addition. This project has been pushed back a number of times by the 
Army and is now scheduled for construction in 2012. Can you please 
provide me with a detailed explanation of the Army's decision making 
process with regards to this facility? Will this facility will stay on 
the FYDP for 2012 or do you anticipate further delays?
    Answer. The Army is working to improve facilities and 
infrastructure at Dugway Proving Ground. The Army is currently 
completing construction of significant improvements to the runway and 
other features at the Dugway airfield. Over the last 6 years, 
approximately $60 million in military construction has or is being 
executed at Dugway Proving Ground, in addition to Army Family Housing 
and non-appropriated fund construction. The Joint Chemical and 
Biological Defense Program has also funded improvements to the old 
chemical lab along with other infrastructure to increase test 
capability at Dugway Proving Ground as part of the defense-wide 
program.
    The Army Test and Evaluation Command submitted the Life Sciences 
Test Facility Annex as a high-priority project during the last military 
construction requirements data call and was able to retain the project 
in the Future Years Defense Program for fiscal year 2012. The Life 
Sciences Test Facility project is a Joint Chemical Biological Defense 
Program requirement, and the Office of the Special Assistant to the 
Secretary of Defense for Nuclear, Chemical and Biological Programs is 
working to establish a Defense-wide military construction program for 
the Chemical and Biological Defense Program.
    Question. Additionally, I would like to get your assessment of the 
dining facility project at Dugway. As you know, the mission of Dugway 
requires that it be remotely located. The downside to the remote 
location is that personnel stationed there often feel isolated as it is 
not convenient to drive to the nearest town. The current dining 
facility is an antiquated building and does not serve the unique needs 
of the personnel at Dugway. The proposed new dining facility, which 
would double as a community center, would provide a welcome boost to 
morale and give personnel an acceptable option for dining and community 
events. When do you anticipate construction on this project will begin?
    Answer. At this time, the dining facility project is scheduled to 
be programmed in the Army's fiscal year 2010-2015 Future Years Defense 
Plan.
                         Department of the Navy

STATEMENT OF HON. B.J. PENN, ASSISTANT SECRETARY OF THE 
            NAVY, INSTALLATIONS AND ENVIRONMENT
ACCOMPANIED BY:
        MAJOR GENERAL JAMES F. FLOCK, ASSISTANT DEPUTY COMMANDANT FOR 
            INSTALLATIONS AND LOGISTICS (FACILITIES)
        REAR ADMIRAL MARK A. HANDLEY, NAVY, DIRECTOR OF ASHORE 
            READINESS
    Senator Reed. Now, let me call forward the second panel.
    Let me welcome our second panel, the Honorable B.J. Penn, 
Assistant Secretary of the Navy for Installations and 
Environment, Major General James F. Flock, Assistant Deputy 
Commandant for Installations and Logistics (Facilities), and 
Rear Admiral Mark A. Handley, the Navy's Director of Ashore 
Readiness.
    And Secretary Penn, much like the Army's request, the Navy 
has requested an 80 percent increase in funding for military 
construction this year, and I hope to address this and other 
questions following your opening statement. Mr. Secretary, 
please go forward.
    Mr. Penn. Mr. Chairman, members of the subcommittee, thank 
you for the opportunity to discuss the Department of the Navy's 
installations and environmental efforts. I am accompanied by 
Major General James F. Flock, and Rear Admiral Mark A. Handley.
    Major General Flock has 32 years of distinguished service 
as a Naval Aviator in the United States Marine Corps. He now 
serves as the Deputy Commandant for Installations and 
Logistics. Major General Flock graduated with a Bachelor's 
Degree in Mechanical Engineering, and has a Bachelors of Arts 
in National Security and Strategic Studies. He has had 
extensive aviation assignments, flying the F-4 Phantom, and the 
F-18 Hornet aircraft, and has logged over 4,900 hours in 
tactical jet aircraft.
    I personally met the General when he was in Okinawa when he 
was a wing commander, a few years ago.
    Admiral Handley has 26 years of service in the United 
States Navy, he is the Deputy Commander of Naval Installations 
Command, and Director of Ashore Readiness, Office of the Chief 
of Naval Operations. Rear Admiral Handley has a Bachelor's 
Degree in Mechanical Engineering, and a Master's of Engineering 
in Construction.
    Admiral Handley has served in a variety of facilities 
assignments in the United States Navy, and overseas, including 
deployment with the 1st Marine Expeditionary Force to Fallujah, 
Iraq for Operation Iraqi Freedom.
    Both are highly-qualified subject matter experts.
    I would like to briefly highlight a few topics that are 
discussed in more detail in my written statement.
    Senator Reed. Your written statement will be part of the 
record, Mr. Secretary.
    Mr. Penn. Thank you, sir.
    I am pleased to report a very substantial increase in 
investment for installations and environment programs in this 
budget. We are asking for a total of $11.5 billion in fiscal 
year 2008, an increase of $1.8 billion above last year's 
request.
    I appreciate the efforts by the Congress to restore $3.1 
billion for BRAC 2005 implementation in the fiscal year 2007 
supplemental. The funds are critical to allow us to stay on 
track, and obtain the intended operational efficiencies, while 
minimizing further turbulence in the future of our personnel 
and communities affected by BRAC 2005.
    We continue to finance our prior BRAC environmental clean-
up and property disposal from the sale of other prior BRAC 
property. We have budgeted to spend the last of the $1.1 
billion in land sale revenue in fiscal year 2008, while our 
cost to complete environmental cleanup on all remaining prior 
BRAC property has increased by $725 million since last year.
    Most of the increase is due to the recognition last year of 
substantial low-level radioactive contamination at the former 
Hunters Point Naval Shipyard in San Francisco. The low-level 
radioactive material is buried underground, undetectable on the 
surface, and poses no risk to humans if left undisturbed.
    We are working this issue with the city, the regulators and 
the congressional delegation.
    I commend the Marine Corps for its commitment to eliminate 
by 2012, its barracks shortfall for their currently approved 
175,000 personnel in-strength. The budget includes $282 million 
for 10 BRAC projects at seven Marine Corps base locations. The 
budget also includes about $950 million across the baseline and 
supplemental budgets for a mix of facilities to grow the Marine 
Corps permanent in-strength to 202,000 by 2011.
    This initiative, which is separate from the current 
operations in Iraq and Afghanistan, will allow the Marine Corps 
to reduce the strain on individual marines by establishing a 
more stable deployment-to-dwell ratio, and enhance irregular 
warfare capabilities.

                           PREPARED STATEMENT

    Both the Navy and Marine Corps are continuing family 
housing privatization efforts. Our investment of less than $600 
million has attracted over $6.6 billion in private sector 
capital to eliminate inadequate homes for our sailors and 
marines with families.
    The Navy is successfully applying privatization to improve 
housing for unaccompanied sailors, the Navy signed the first 
Department of Defense barracks privatization contract in 
December 2006, it's located in San Diego, and this project will 
provide 941 new two-bedroom, two-bathroom apartments and 
privatize an existing building. Construction will be completed 
in 2009.
    The Navy is also in exclusive negotiation with the 
developer for a second barracks privatization project in 
Norfolk.
    Thank you, Mr. Chairman.
    [The statement follows:]

                    Prepared Statement of B.J. Penn

    Mr. Chairman and members of the committee, I am pleased to appear 
before you today to provide an overview of the Department of Navy's 
shore infrastructure.

                  THE NAVY'S INVESTMENT IN FACILITIES

    The Department of Navy's (DoN) shore infrastructure is where we 
train and equip the world's finest Sailors and Marines, while 
developing the most sophisticated weapons and technologies. The DoN 
manages a shore infrastructure with a plant replacement value of $187 
billion on 4.5 million acres. Our fiscal year 2008 shore infrastructure 
baseline budget totals $11.5 billion, representing about 8 percent of 
the DoN's fiscal year 2008 baseline request of $139 billion. There is 
an additional $410 million for facilities in the fiscal year 2007 
global war on terror (GWOT) Supplemental, and $169 million in the 
fiscal year 2008 GWOT request. Together, that represents a $1.8 billion 
increase compared to the fiscal year 2007 request of $10.3 billion.
    The Base Operating Support (BOS) request of $5.6 billion, excluding 
environmental, comprises the largest portion of the Navy's facilities 
budget request. This account funds the daily operations of a shore 
facility, e.g., utilities, fire and emergency services; air and port 
operations; community support services; and custodial costs. 



    Our fiscal year 2008 request of $5.6 billion for BOS reflects a 
$558 million increase from the enacted fiscal year 2007 level. The Navy 
increase of $356 million and Marine Corps increase of $202 million will 
return capability levels to those executed in fiscal year 2005, 
restoring reductions taken during fiscal year 2007 that are 
unsustainable, particularly in the area of information technology and 
counter terrorism and security guards as we substitute civilian and 
contract personnel in place of military personnel.
    The fiscal year 2008 military construction (active + reserve) 
baseline request of $2.2 billion is $992 million more than the enacted 
fiscal year 2007 level of $1.2 billion. The fiscal year 2008 request 
includes $59 million for Navy and Marine Corps reserve construction 
efforts. This level of funding supports traditional recapitalization 
projects for the existing infrastructure. It also provides facilities 
for 15 new Navy weapon systems, new facilities for the Marine Corps' 
plan to Grow the Force from the current 175,000 permanent end strength 
to 202,000 by 2011, and new barracks to ensure that all unaccompanied 
enlisted Marines are suitably housed by 2012.
    The fiscal year 2008 Family Housing baseline request of $670 
million is $140 million less than the fiscal year 2007 enacted level of 
$810 million. Within this sum, there is $299 million for replacement 
family housing on Guam and Marine Corps privatization. Housing 
operations and maintenance funds decline to $371 million as government 
owned worldwide inventory of 26,335 homes in fiscal year 2007 falls by 
15,481 homes to 10,854 homes in fiscal year 2008 due to privatization.
    Sustainment, Restoration and Modernization (S/RM) includes military 
construction and operation and maintenance funds. Our fiscal year 2008 
request of $1.83 billion represents only the amount of S/RM funded with 
Operations and Maintenance, and is $133 million above the enacted 
fiscal year 2007 level of $1.70 billion. Although fiscal year 2008 
funding is 8 percent higher than fiscal year 2007, sustainment levels 
are lower because of inflation and an increase in modeled requirements.
    Our fiscal year 2008 request of $898 million for environmental 
programs at active and reserve bases is comprised of operating and 
investment appropriations. This amount is about the same as the fiscal 
year 2007 request.
    Our BRAC program consists of environmental cleanup and caretaker 
costs at prior BRAC locations, and implementation of BRAC 2005 
recommendations.
  --Our fiscal year 2008 prior BRAC program of $179 million is $163 
        million below our fiscal year 2007 program of $342 million. The 
        entire prior BRAC effort continues to be financed with revenue 
        obtained from the sale of prior BRAC properties. We have not 
        sought appropriated funds for prior BRAC since fiscal year 
        2005, however, the fiscal year 2008 program depletes the 
        remainder of the land sale revenue received in previous years 
        from disposing prior BRAC property.
  --The fiscal year 2008 budget of $733 million to implement the BRAC 
        2005 recommendations is $434 million above the amount allocated 
        by the Department of Defense (DOD) to the DoN following the 
        reduction enacted in the House Joint Resolution 20.
Impact of House Joint Resolution 20
    The Department of Defense has been proceeding with BRAC 2005 
implementation through most of fiscal year 2007 under a series of 
Continuing Resolutions (CRs). The enactment of the House Joint 
Resolution 20 on 15 February provided an annual DOD BRAC 2005 
appropriation, albeit at a substantial $3.1 billion reduction to the 
PB-07 $5.6 billion request. The DoN had received $66 million of the 
$690 million budget request under the CRs, with most of the funds 
provided in January. The duration of the CR, and the magnitude of the 
funding reduction, has severely complicated program execution.
    The BRAC 2005 account is a DOD account. The Office of the Secretary 
of Defense has now allocated $297 million of the $2.5 billion 
appropriated by the Congress in fiscal year 2007 to the DoN, leaving us 
with a $398 million shortfall in fiscal year 2007. There is, however, 
no doubt that a 55 percent reduction from the President's fiscal year 
2007 budget request will create substantial turmoil in all of the 
Services and Defense Agency implementation plans and schedules. Our 
BRAC 2005 design and construction projects represent 81 percent of the 
fiscal year 2007 (49 construction projects at 20 locations) and 69 
percent of the fiscal year 2008 request (29 construction projects at 18 
locations), so any reduction of funds in fiscal year 2007 will require 
that we defer numerous construction projects, causing a bow wave of 
construction projects into fiscal year 2008. This will require a 
wholesale review of fiscal year 2008 execution plans and schedules as 
we accommodate construction projects deferred from fiscal year 2007. 
Delaying closures and realignments also requires us to replace funds 
which had been taken as savings in the budget. Finally, it adds further 
uncertainty in the lives of our military, civilian, and contract 
employees as they ponder their future, and jeopardizes our ability to 
meet the September 2011 deadline to complete all closures and 
realignments.
    The President submitted an amended fiscal year 2007 request on 
March 8, 2007 with accompanying offsets for $3.1 Billion in additional 
BRAC 2005 funds. I urge your support for the amended fiscal year 2007 
budget submitted to the Congress.
    Here are some of the highlights and additional details on these 
programs.

                         MILITARY CONSTRUCTION

Military Construction Projects
    The DoN's fiscal year 2008 Military Construction program requests 
appropriations of $2.1 billion including $110 million for planning and 
design and $10 million for Unspecified Minor Construction. This fiscal 
year 2008 baseline request is $975 million above, and nearly doubles, 
the fiscal year 2007 enacted level of $1.129 billion. The fiscal year 
2008 authorization request is $1.8 billion. This level of construction 
funds presents what I believe will be a substantial, long-term 
commitment for naval facilities.
    The active Navy program totals $1,126 million and includes:
  --$486 million for 15 construction projects supporting the fielding 
        of new weapons system platforms or research facilities for 
        future weapon systems. All construction projects are scheduled 
        to finish building and outfitting the facility just-in-time to 
        coincide with the arrival of the new platform and its planned 
        initial operating capability. The new platforms include: LPD-
        17, T6-A, LCS, SSN-774, E2-D, JPALS, FA-18E/F, MH-60, MUOS, EA-
        18G, T-AKE, and D5 LE. One example of these new platforms is a 
        $101.8 million extension to Kilo wharf in Guam to support the 
        arrival of the new T-AKE class Combat Logistics Force ships in 
        fiscal year 2010 that provide underway replenishment to Navy 
        ships at sea, replacing the current T-AE and T-AFS class ships;
  --$175 million to continue funding for six previously approved 
        incrementally funded construction projects. An example is a 
        $16.6 million recruit training center infrastructure upgrade at 
        Naval Training Center Great Lakes IL. This project is the final 
        phase of the infrastructure improvement effort at Great Lakes. 
        In accordance with Administration policy, there are no new 
        incrementally funded construction projects in this budget 
        request;
  --$146 million for four other waterfront recapitalization projects 
        not associated with new weapons systems. An example is a $91 
        million CVN maintenance pier replacement at Naval Base Kitsap, 
        WA;
  --$139 million for utilities infrastructure improvements to meet 
        current mission and operational requirements at Naval Base Guam 
        and Naval Support Activity Diego Garcia;
  --$24 million for training projects at Naval Air Station Corpus 
        Christi, TX and Naval Station Great Lakes, IL;
  --$22 million in three infrastructure improvement projects at Camp 
        Lemonier in Djibouti in support of CENTCOM's forward operating 
        base.
    The active Marine Corps program totals $1,037 million, including:
  --$361 million for facilities to support the ``Grow the Force'' 
        initiative, which I will discuss this in greater detail below;
  --$282 million for ten bachelor quarters at seven locations including 
        Marine Corps Base Camp Lejeune, NC, and Marine Corps Air 
        Station Yuma, CA;
  --$167 million for 11 operations and training facilities, including 
        an Infantry Squad Defense Range at Marine Corps Base Camp 
        Pendleton CA, and three facilities for the Marine Corps Special 
        Operations Command units at Camp Pendleton. CA and Marine Corps 
        Base Camp Lejeune, NC;
  --$52 million for two training facilities, including student quarters 
        for the basic school at Marine Corps Base Quantico, VA;
  --$32 million for three other quality of life projects, including a 
        fitness center at Marine Corps Base Camp Pendleton CA;
  --$31 million for four maintenance projects including a jet engine 
        test cell at Marine Corps Air Station New River NC;
  --$13 million for infrastructure improvements including main gate 
        improvements at the Blount Island Command, FL and Marine Corps 
        Base Camp Pendleton, CA.
    The Navy and Marine Corps Reserve Military Construction 
appropriation request is $59.2 million, $16 million more than the 
enacted fiscal year 2007 level of $43 million. There are three reserve 
centers at various locations and a Mobile Inshore Undersea Warfare Unit 
operation facility at Naval Station Everett WA.
Marine Corps Grow the Force
    To meet the demands of the Long War and respond to inevitable 
world-wide crises that arise, the Marine Corps must be sufficiently 
manned in addition to being well trained and properly equipped. A key 
objective is to establish a 1:2 deployment-to-dwell ratio for all 
active component forces. This ratio relates how long our forces are 
deployed versus how long they are at home. The goal is for every 7 
months a Marine is deployed, he will be back at his home station for 14 
months. Marine operating forces are routinely falling short of this 
target. To fix this imbalance, the President announced in January a 
need to increase the Marine Corps permanent end strength from 175,000 
to 202,000 by 2011, along with a larger increase for the Army. The 
Marine Corps growth will occur in stages, the first of which will build 
three new infantry battalions and elements of their supporting 
structure of about 5,000 Marines.
    The fiscal year 2008 baseline budget includes $4.3 billion for pay 
and allowances for the first increment of Marines, military 
construction and base operating support for permanent barracks and 
operations centers, procurement of additional H-1 aircraft and 
increased aviation support, along with recruiting, training, equipment 
and ammunition to bring units to full operational capability. The 
funding for infrastructure and facilities to initially support this 
initiative are in three separate budget documents now before Congress:
  --The fiscal year 2007 Supplemental includes $324 million for 
        planning & design, and eight military construction projects;
  --The fiscal year 2008 Global War on Terror includes $169 million for 
        planning & design, ten military construction projects, and 
        family housing privatization seed money for follow-on projects;
  --The fiscal year 2008 baseline budget includes $458 million for 
        planning & design, 20 military construction projects including 
        two Wounded Warrior barracks, and additional family housing 
        privatization seed money for follow-on projects.
    Because Marines will begin to arrive before construction at many 
locations is complete, the Marine Corps is planning to lease, rent, or 
purchase temporary support facilities. Based on the composition of the 
additional units, we are determining the optimal permanent bed down 
locations for these units for future construction requirements.

                         FACILITIES MANAGEMENT

Facilities Sustainment, Restoration and Modernization (SRM)
    The Department of Defense uses a Sustainment model to calculate 
life cycle facility maintenance and repair costs. These models use 
industry-wide standard costs for various types of building and 
geographic areas and are updated annually. Sustainment funds in the 
Operation and Maintenance accounts are used to maintain facilities in 
their current condition. The funds also pay for preventative 
maintenance, emergency responses for minor repairs, and major repairs 
or replacement of facility components (e.g. roofs, heating and cooling 
systems). Both the Navy and the Marine Corps have accepted more risk in 
facilities sustainment funding in fiscal year 2008 to fund higher 
priority requirements. With respect to the table, the Marine Corps 
moved additional funds to sustainment in fiscal year 2006 to restore 
reductions taken in fiscal year 2005. The Navy would require $240 
million and the Marine Corps $64 million to fund sustainment to the DOD 
goal of 100 percent of model requirements in fiscal year 2008.

                                                   SUSTAINMENT
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal years
                                                                 -----------------------------------------------
                                                                       2006            2007            2008
----------------------------------------------------------------------------------------------------------------
USN Budget......................................................              95              95              83
USN Actual/Plan.................................................              79              95  ..............
USMC Budget.....................................................              95              93              89
USMC Actual/Plan................................................             126              93  ..............
----------------------------------------------------------------------------------------------------------------

    Restoration and modernization provides major upgrades of our 
facilities using Military Construction, Operation and Maintenance, Navy 
Working Capital Fund, and Military Personnel funds. The DOD uses a 
``recap'' metric to gauge investment levels. The ``recap'' metric is 
calculated by dividing the plant replacement value by the annual 
investment of funds and is expressed in years. The DOD goal is to 
attain a 67-year rate by fiscal year 2008. This is a relatively coarse 
metric, as demonstrated by the dramatic improvement in execution as a 
result of funds from the fiscal year 2006 Hurricane Supplemental, which 
substantially improved only those bases affected by the storm. The Navy 
recap rate also benefits from military construction included in BRAC 
2005 implementation. We are working with the Office of the Secretary of 
Defense and the other Components to develop a recap model similar to 
the Sustainment model, planned for release in the next budget cycle.

                                                   RECAP YEARS
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal years
                                                                 -----------------------------------------------
                                                                       2006            2007            2008
----------------------------------------------------------------------------------------------------------------
USN Budget......................................................             105              83              63
USN Actual/Plan.................................................              45              67  ..............
USMC Budget.....................................................             101             112             103
USMC Actual/Plan................................................              97             109  ..............
----------------------------------------------------------------------------------------------------------------

Naval Safety
    The DoN has embraced the Occupational Safety and Health 
Administration (OSHA) Voluntary Protection Program (VPP), which seeks 
to foster a cooperative relationship between management, labor, and 
OSHA as a means to improve workplace safety. The VPP focuses on four 
major tenets: increased leadership and employee involvement in safety; 
effective worksite hazard analysis; a focus on hazard prevention and 
control; and effective safety and health training for employees. The 
DON has achieved ``Star'' status, OSHA's highest level of achievement, 
at four sites representing over half of the VPP star sites in DOD. The 
Naval activities include three Naval shipyards, our largest industrial 
facilities. Statistical evidence for VPP's success is impressive. The 
average VPP worksite has a Days Away, Restricted or Transferred (DART) 
injury case rate of 52 percent below the average for its industry, 
which is consistent with what we have seen.

Joint basing
    The Office of the Secretary of Defense released a draft Joint Base 
Initial Implementation guidance on 31 January 2007 for coordination by 
the Components. The Navy and Marine Corps have been working closely 
with the Components for over a year in developing a common framework 
and standards to establish joint bases. The DON supports the transfer 
of funding and real estate from the supported component to the 
supporting component for installation management functions, which will 
be the responsibility of the supporting component to provide at the 
joint base.

Encroachment Partnering
    We are successfully applying the authority in the fiscal year 2003 
National Defense Authorization Act to enter into agreements with state 
and local governments and eligible non-government organizations to 
address potential incompatible development near our installations and 
ranges, and to preserve nearby habitat to relieve current or 
anticipated environmental restrictions that might otherwise restrict 
military training, testing, or operations on the installation. Both the 
Navy and Marine Corps are using this authority to reduce or eliminate 
encroachment concerns. Through fiscal year 2006 Department of the Navy 
has protected nearly 16,000 acres near its installations under this 
program at a cost of $12.5 million while our partners have contributed 
$20.5 million. The DoN has also entered into several longer term 
agreements under which we and our partners will seek additional 
encroachment buffering opportunities. Examples include:
  --An agreement with Beaufort County, South Carolina under which we 
        will share costs to acquire interests in the vicinity of Marine 
        Corps Air Station Beaufort.
  --An agreement with Churchill County, Nevada under which we will 
        share costs to acquire interests in the vicinity of Naval Air 
        Station Fallon.

Energy
    The DoN is pursuing ways to meet the requirements of Executive 
Order 13423 and the Energy Policy Act of 2005. Central to this plan is 
our continued development of geothermal power plants. Navy has 
partnered with the renewable energy industry on a 270 MW geothermal 
plant at Naval Air Warfare Station China Lake, CA; awarded a geothermal 
power plant contract for Naval Air Station Fallon, NV; and is 
evaluating a project at Naval Facilities Engineering Center El Centro, 
CA. Other on-base renewable projects include photovoltaic, wind, wave 
and ocean thermal energy conversion projects. I issued a new DoN policy 
last fall requiring all new buildings to be built to a LEED Silver 
level.

                                HOUSING

    Our fiscal year 2008 budget continues to improve living conditions 
for Sailors, Marines, and their families. We have programmed the 
necessary funds and expect to have contracts in place by the end of 
fiscal year 2007 to eliminate all inadequate family housing. Renovation 
and new construction will be completed such that Sailors and Marines 
are no longer occupying inadequate homes by fiscal year 2012. We 
continue to provide homes ashore for our junior shipboard unaccompanied 
Sailors, to provide appropriate living spaces for our junior enlisted 
bachelor Marines, and to address long standing family housing deficits. 
We have programmed the necessary funding to eliminate over 99 percent 
of the inadequate permanent party unaccompanied bachelor quarters (BQs) 
housing spaces still served by ``gang heads.'' As we near finishing 
privatizing existing military family housing, we are making tangible 
progress in applying that same privatization approach to meet our 
unaccompanied housing needs.



Family Housing
    As in past years, 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 Basic Allowance for Housing (BAH) and own or rent 
        homes in the community.
  --Public/Private Ventures (PPVs).--With the strong support from this 
        committee and others, we have successfully used 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. Maintaining the 
        purchasing power of BAH is critical to the success of both 
        privatized and private sector housing.
  --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.

                      PLANNED PRIVATIZATION AWARDS
------------------------------------------------------------------------
                        Location                               Homes
------------------------------------------------------------------------
                    Fiscal Year 2007
Southeast Region........................................           5,501
Midwest (Phase 2).......................................             326
San Diego (Phase 4) (Southwest Region)..................           3,254
MCB Hawaii (Phase 2)....................................             917
MCB Camp Lejeune/MCAS Cherry Point/Westover JARB........           1,985
MCB Camp Pendleton/MCLB Albany..........................             294
                                                         ---------------
      Fiscal Year 2007 Total............................          12,277
                                                         ===============
                    Fiscal Year 2008
MCB Camp Lejeune........................................             451
MCB Camp Pendleton......................................             301
MCAGCC 29 Palms.........................................             279
                                                         ---------------
      Fiscal Year 2008 Baseline Subtotal................           1,031
                                                         ===============
MCB Camp Pendleton......................................              66
MCAGCC 29 Palms.........................................               6
                                                         ---------------
      Fiscal Year 2008 GWOT Subtotal....................              72
                                                         ===============
      Fiscal Year 2008 Total............................           1,103
                                                         ---------------
      Total Fiscal Year 2007-2008.......................          13,380
------------------------------------------------------------------------

    As of March 1, 2007, we have awarded 24 privatization projects for 
over 50,000 homes. As a result of these projects, over 30,000 homes 
will be replaced or renovated, about 5,000 new homes will be built, and 
the remaining 15,000 were privatized in good condition and did not 
require any improvements. Through the use of these authorities we have 
secured over $6 billion in private sector investment from $588 million 
of our funds, which represents a ratio of almost twelve private sector 
dollars for each taxpayer dollar.
    During the remainder of fiscal year 2007 and in fiscal year 2008, 
we plan to award nine Navy and Marine Corps family housing 
privatization projects totaling over 13,000 homes. By the end of fiscal 
year 2007, the Navy and Marine Corps will have privatized 95 percent 
and over 99 percent, respectively, of their U.S. housing stock.
    Our fiscal year 2008 and outyear family housing privatization 
projects are targeted at reducing family housing deficits by 
constructing additional housing for our families where the private 
sector cannot accommodate their needs. These authorities will ensure 
the availability of housing to address increased requirements 
associated with the Marine Corps' ``Grow the Force'' initiative, stand-
up of the Marine Corps Special Operations Command, and address our 
remaining housing deficit.
    Our fiscal year 2008 baseline family housing budget request 
includes $298 million for family housing construction and improvements. 
This amount includes $188 million for the Government investment in 
family housing privatization projects planned for fiscal year 2008 
award. It also includes the replacement or revitalization of housing in 
Guam and Japan where privatization is not planned. Finally, the budget 
request includes $371 million for the operation, maintenance, and 
leasing of remaining Government-owned or controlled inventory. The 
latter represents a 66 percent decline since 1999 when the DoN began in 
earnest to privatize its inventory of government owned housing. In 
addition, our fiscal year 2008 family housing Global War on Terrorism 
request includes another $12 million for the Marine Corps in family 
housing improvements.

Unaccompanied Housing
    Our baseline budget request of $323 million \1\ for 11 
unaccompanied housing projects continues the emphasis on improving 
living conditions for our unaccompanied Sailors and Marines. Marine 
Corps has an additional BQ for $41 million in the fiscal year 2007 GWOT 
Supplemental, and another BQ and dining hall in the fiscal year 2008 
GWOT. There are three challenges:
---------------------------------------------------------------------------
    \1\ Excludes two Marine Corps Wounded Warrier barracks.
---------------------------------------------------------------------------
  --Provide Homes Ashore for our Shipboard Sailors.--Approximately 
        13,000 E1-E3 unaccompanied Sailors worldwide lived aboard ship 
        even while in homeport. The fiscal year 2008 budget supports 
        Navy's goal of providing ashore living accommodations for these 
        Sailors. It includes one ``homeport ashore'' construction 
        project for $47 million to complete Naval Base Kitsap 
        Bremerton, WA (198 modules). We are requesting a second phase 
        of funding for this project previously authorized in fiscal 
        year 2005. The primary demographic are Sailors assigned to the 
        nuclear carrier USS JOHN C. STENNIS, which is homeported in 
        Bremerton. Efforts to build this barracks as a pilot BQ PPV 
        proved uneconomical due to the large number of vacancies that 
        would occur when STENNIS deployed.
      In addition to the E1-E3 shipboard Sailors, there are 
        approximately 6,000 unaccompanied E-4 Sailors with less than 
        four years service who are assigned to sea duty. Although they 
        are entitled to receive BAH, funding for housing allowances 
        remains un-programmed. We will accommodate those Sailors within 
        our existing unaccompanied housing capacity to ensure they do 
        not return to live aboard ship upon promotion to E-4.
  --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. Reflecting the 
        Commandant of the Marine Corps' priority to ensure single 
        Marines are adequately housed, the fiscal year 2008 budget 
        includes $282 million in MILCON funding (a 124 percent increase 
        over fiscal year 2007 funding levels) for the construction of 
        3,750 permanent party and trainee spaces at seven Marine Corps 
        installations. The Marine Corps has programmed the necessary 
        funding from fiscal year 2008 through 11 to ensure Marines for 
        their current approved 175,000 end strength are adequately 
        housed by 2012. These barracks will be built to the 2 + 0 room 
        configuration, as have all Marine Corps barracks since 1998.
      We appreciate the Congress authorizing the Services to adopt 
        private sector standards for the construction of military 
        unaccompanied housing. We believe that we can provide market-
        style housing with improved amenities (such as increased common 
        space for residents) at a cost equivalent to that associated 
        with building smaller modules to rigid military specifications. 
        In implementing this authority, we will ensure that Service-
        specific operational requirements are not compromised, such as 
        the core Marine Corps' tenets for unit cohesion and 
        teambuilding.
  --Eliminate Gang Heads.--The Marine Corps had programmed all 
        necessary funding, through fiscal year 2005, to eliminate 
        inadequate unaccompanied housing with gang heads \2\ for 
        permanent party personnel. They will, however, continue to use 
        these facilities on an interim base to address short-term 
        housing requirements resulting from temporary end strength 
        increases in recent supplemental appropriations. The Navy will 
        achieve over 99 percent of this goal by fiscal year 2007.
---------------------------------------------------------------------------
    \2\ Gang heads remain acceptable for recruits and trainees.
---------------------------------------------------------------------------
Unaccompanied Housing Privatization
    We awarded our first pilot unaccompanied housing privatization 
project to Pacific Beacon LLC in December 2006. When complete in 2009, 
this project will provide 941 new two-bedroom/two-bathroom apartments 
for E-4 and above enlisted personnel in San Diego, CA who are 
unsuitably housed in the private sector or who are living in Government 
quarters that could be used by shipboard Sailors. An existing 
unaccompanied housing building, containing 258 modules, was also 
privatized as part of this agreement. Our partner will provide 
additional quality of life amenities to existing buildings, such as a 
swimming pool.
    We are in exclusive negotiations with a prospective private partner 
for a second pilot project at Hampton Roads, VA. This project is set 
for contract award this spring, after the required Congressional 
notices. This project will build more than 1,000 new two-bedroom/two-
bathroom apartments and privatize over 700 existing unaccompanied 
housing modules for unaccompanied shipboard E1-E3 personnel. 



    We appreciate Congress extending the authorities and streamlining 
the notification process in last year's Authorization Act. We continue 
to pursue candidates for the third pilot, targeting the Mayport/
Jacksonville, Florida area, and expect to have preliminary results this 
spring on a feasibility study. We will also look at other candidates 
including additional phases at San Diego and Hampton Roads.
    Recognizing that these are long-term endeavors, we take seriously 
our responsibility to monitor the agreements to ensure that the 
Government's interests are adequately protected. We have instituted a 
portfolio management approach that collects and analyzes financial, 
occupancy, construction, and resident satisfaction data to ensure that 
the projects remain sound and that the partners are performing as 
expected. Customer surveys show overall improvement in member 
satisfaction after housing is privatized.

                            BUILDUP ON GUAM

    U.S. national interests and treaty commitments require 
strengthening of U.S. military capabilities in the Western Pacific. 
U.S. forces must be positioned to maintain regional stability, ensure 
flexibility to respond to regional threats, project power throughout 
the region, defend our assets as well as those of our allies, and 
provide forces to respond to global contingencies.
    The relocation of III Marine Expeditionary Force personnel from 
Okinawa to Guam under U.S.-Japan Alliance Transformation and 
Realignment is part of a broader realignment that, when implemented, 
will strengthen our regional posture, deter potential aggressors, and 
provide capabilities that can be flexibly deployed in contingencies, 
which are essential for the Defense of Japan and for peace and security 
in the region. For the Marines, this development will balance the 
Marine Air Ground Task Force (MAGTF) lay down across the region with 
improved flexibility. The  8,000 Marines and their 9,000 dependents 
leaving Japan will reduce the footprint of U.S. forces in Okinawa. This 
will facilitate consolidation of U.S. bases on Okinawa to allow 
additional land returns in Japan, while reinvigorating Guam's economy 
through economic stimulus, infrastructure improvements, and external 
investments.
    The Government of Japan will fund most of the infrastructure 
construction costs over the planned seven year time period to implement 
the realignment actions in mainland Japan, Okinawa, and Guam. On Guam, 
Japan will contribute $6.09 billion of cost sharing toward the 
estimated $10.27 billion development cost associated with the 
realignment of Marines from Okinawa to Guam. Japan's contribution 
consists of $2.8 billion in cash for operational facilities, barracks, 
and quality of life facilities, and $3.29 billion in equity investments 
and loans to special purpose entities that will provide housing and 
utilities for the Marines on Guam.
    The Deputy Secretary of Defense directed the Navy to establish a 
Joint Guam Program Office (JGPO) to coordinate and manage the 
relocation of the Marines from Okinawa to Guam. There will be JGPO 
offices in Arlington, VA and in Guam, along with a liaison billet in 
Hawaii with USPACOM, and another in Japan with USFJ. The JGPO will work 
closely with the Office of Economic Adjustment and the Government of 
Guam to ensure this initiative is mutually beneficial to DOD and to the 
people of Guam.
    JGPO will oversee National Environmental Policy Act (NEPA) studies 
that will provide the foundation for the Environmental Impact Statement 
(EIS) and parallel development of a Guam Master Plan. We have $10 
million in fiscal year 2007 and are requesting $28M in multiple 
appropriations in the fiscal year 2008 baseline budget to continue 
these efforts. My office released the NEPA Notice of Intent in the 
Federal Register on March 7, 2007. The Draft EIS, Final EIS, and Record 
of Decision, including public comment periods could take up to 3 years 
to complete. The EIS will address the impact of relocating III MEF with 
the Air, Ground, and Combat Service Support elements from Okinawa to 
Guam. The housing, operational, quality of life, and services support 
infrastructure for the Marines will be identified during the planning 
process, and assessed through the environmental analysis. It will also 
assess the impacts of improving the Apra Harbor waterfront to construct 
a pier capable of berthing a transient aircraft carrier as well the 
infrastructure requirements needed to station a U.S. Army ballistic 
missile defense task force on Guam. We will ask for the necessary 
military construction funds beginning with the fiscal year 2010 budget 
submission.

                              ENVIRONMENT

Endangered Species Protection
    For nearly a century, San Clemente Island, CA was ravaged by the 
destructive forces of invasive species, which severely degraded the 
island's entire ecosystem. Eleven endemic and/or native plants and 
animals neared extinction, and are now protected under the Endangered 
Species Act.
    Today, the status of most of these species has been significantly 
enhanced because of the Navy's environmental stewardship. The Navy 
eradicated all non-native feral grazing animals in the early 1990s and 
removed exotic plants which were overwhelming native species. The 
island has been healing through natural processes and Navy protective 
measures and restoration efforts. In response to a request from the 
Navy, the U.S. Fish and Wildlife Service in October 2006 recommended 
de-listing the Island Night Lizard on San Clemente Island as a result 
of a 5-year review. The final decision is still pending.
    Camp Pendleton uses its Integrated Natural Resources Management 
Plan (INRMP) to manage the ecosystem on this 125,000-acre installation, 
recognizing that the military mission as a central and integral element 
of the ecosystem. During the last 2 years, the INRMP demonstrated its 
benefit by excluding the base from Critical Habitat (CH) designations 
by the U.S. Fish and Wildlife Service (USFWS) for seven species. In 
each case, the Secretary of the Interior found that Camp Pendleton's 
INRMP provided a benefit to the species, and agreed to exclude all 
Base-managed lands from designation as critical habitat, per Section 
4(a)(3) of the Endangered Species Act., and required no further 
restrictions on military training activities.
    In 2006, the USFWS released 5-year status reviews for two species 
inhabiting Camp Pendleton: the least Bell's vireo and the California 
least tern. The USFWS recommended both birds be upgraded from 
``endangered'' to ``threatened'' due in large measure to Camp 
Pendleton's management efforts, such as habitat enhancement, cowbird 
control, and focused predator management. A final decision is pending.
Navy Marine Mammals/Sonar R&D investments
    The Navy recognizes the need to protect marine mammals from 
anthropogenic sound in the water. The Navy invests $10 million to $14 
million per year for research into hearing and diving physiology, 
behavioral response to human-generated sound, mitigation options, and 
simulation tools. Approximately 33 universities, institutes, and 
technical companies are supported by Navy research grants. All the 
research is aimed a developing a broad, scientific understanding of 
marine mammals. The Navy recently expanded its research on the effects 
of mid-frequency sonar to include effects on fish.

MMPA National Defense Exemption
    On 23 January 2007 the Department of Defense issued a National 
Defense Exemption (NDE) under the Marine Mammal Protection Act (MMPA) 
for all military readiness activities that employ mid-frequency active 
sonar or Improved Extended Echo Ranging Sonobuoys during major training 
exercise, within established DOD maritime ranges, or establish 
operating areas. A 6-month NDE had expired on December 30, 2006.
    The Navy is working closely with the National Oceanic and 
Atmospheric Administration (NOAA), which has jurisdiction on MMPA 
enforcement, to address procedural issues, identify and implement 
mitigation and monitoring measures to minimize potential effects to 
marine mammals, and establish mutually acceptable threshold criteria. 
The Navy has also established an outreach workgroup with the many non-
governmental organizations that have a vested interest in the 
protection of marine species. The Navy has begun the public NEPA 
process on its three most active ranges--Hawaii, Southern California, 
and East Coast, and is committed to completing environmental 
documentation for all ranges by the end of 2009.

Shipboard Programs
    The Navy continues modernizing its vessels to comply with more 
stringent environmental regulations. The Navy completed its Afloat 
Pollution Prevention Equipment installations in September 2006 with 152 
installations on Navy surface ships. The equipment reduces the need for 
hazardous material, and the generation of hazardous waste. The Navy 
continues to convert its shipboard air conditioning and refrigeration 
plants from Ozone Depleting Substances (ODS) to non-ODS refrigerants. 
As of March 1, 2007, we had completed 516 of 690 conversions of 
shipboard air condition systems and 600 of 614 conversions of shipboard 
refrigeration systems. Navy expects to complete its transition to non-
ODSs by 2014.
    The Navy has also completed 114 of 334 upgrades to its plastic 
waste processors (PWPs), which allow ships at sea to compress plastics 
into a solid disk for disposal or recycling ashore. The new PWPs reduce 
maintenance, improve reliability and throughput, and include a self-
cleaning future, giving our sailors the best equipment to meet no-
plastics discharge requirements while at sea.

Environmental Compliance by Shore Installations
    The Navy continues to improve its shore installation compliance 
environmental standards. Solid waste diversion has climbed from 42 
percent in fiscal year 2004 to 60 percent in fiscal year 2006 for 
combined municipal waste and construction and demolition debris, 
compared with an EPA national average diversion rate of 32 percent. Our 
hazardous waste disposal amounts are down to an all time low of 54,000 
tons of hazardous waste, compared to 207,000 tons when DOD starting 
using this metric in 1992, this despite increased optempo to support 
the Global War On Terror. Domestically, 91 percent of Navy permits are 
in full compliance with Clean Water Act standards, and 97 percent meet 
all Safe Drinking Water Act standards, both increases from recent 
years.
    The Marine Corps has made similar progress. For example, the number 
of new enforcement actions against the Marine Corps in fiscal year 2006 
has declined by 25 percent compared to the average number in fiscal 
year 2001 through fiscal year 2005. This decrease occurred at a time of 
high operational tempo and more regulatory inspections.
Alternative Fuel Vehicles
    The Navy has many initiatives to reduce its reliance on imported 
oil. Last year, Navy doubled biodiesel usage for non-tactical vehicles. 
Biodiesel fuels are now available at Navy Exchange fuel stations in 
Norfolk, VA; Crane, IA; and Charleston, SC. After successfully 
completing a pilot scale system, the Naval Facilities Engineering 
Services Center (NFESC) is building a full-scale biodiesel production 
facility at Naval Base Ventura County, Port Hueneme, CA. NFESC 
distributed 92 neighborhood electrics last year. These electric 
vehicles can be charged at any 110 volt outlet and are well-suited for 
use in ports, air stations, and large supply buildings.
Installation Restoration Program (IRP)
    The DoN has completed cleanup or has remedies in place at 78 
percent of our 3,700 contaminated sites. We plan to complete the 
program by the year 2014. The cost-to-complete the installation 
restoration program continues a downward trend with efficiencies of 
$600 million over the past 10 years. Use of new technologies, land use 
controls, remedy optimizations, contract efficiencies, and a dedicated 
professional staff have contributed to these efficiencies. Our fiscal 
year 2008 request of $301 million consists of $271 million for IRP, and 
$41 million for program management, and $43 million for munitions 
response.

Munitions Response Program (MRP)
    The DoN is proceeding with cleanup of Munitions and Explosives of 
Concern (MEC) and Munitions Constituents (MC) at all Navy and Marine 
Corps locations other than operational ranges. We plan to complete 
preliminary assessments this year at all 213 known sites on 56 active 
installations. Site inspections and sampling will be completed by 2010. 
We will not have credible cleanup cost estimates until these 
assessments are completed in 2010.
    Navy continues clearing munitions from Vieques, PR. About 65 acres 
of beaches have been surface cleared of munitions on the eastern side 
of the island, and we are removing surface MEC and MC on 1,100 acres of 
the former bombing range Live Impact Area and the artillery range. A 
total of 290 acres, including the ``Red'' and ``Blue'' beaches have 
been cleared. Our revised cost to complete for Vieques is $255 million, 
with completion expected in 2020.

                               BRAC 2005

    In developing the BRAC 2005 recommendations, the DoN sought to 
eliminate excess capacity, improve operational readiness, capitalize on 
joint basing opportunities with the other Components, maintain quality 
of service, and achieve cost savings. The BRAC 2005 Commission 
recommendations became legally binding on the DOD on November 9, 2005. 
In contrast to prior BRAC commissions, the BRAC 2005 recommendations 
have fewer closures and many more realignments, particularly 
realignments that involve more than one military Service or Defense 
Agency. The DoN has 6 ``fence line'' closures and 81 realignment 
recommendations involving 129 bases. Our remaining environmental cost 
to complete for fiscal year 2008 and beyond is $94 million.

Accomplishments
    Given that all closures and realignments in BRAC 2005 must by law 
be completed by September 2011, we must move quickly to construct the 
necessary facilities to relocate units from their current location to 
their new location. We initiated BRAC 2005 implementation in fiscal 
year 2006 by awarding 12 BRAC construction projects at the ``receiver'' 
locations. The Department of Navy obligated 96 percent of the total 
fiscal year 2006 $252 million BRAC 2005 funds we received.
    Nearly all impacted communities have established a Local 
Redevelopment Authority (LRA) to guide local planning and redevelopment 
efforts. The DOD Office of Economic Adjustment has been providing 
financial support through grants and technical assistance to support 
LRA efforts.
    To date, the Navy has terminated leases at eleven reserve centers 
thereby returning these properties to their owners, and completed 14 
surplus determinations, allowing us to proceed with disposal actions to 
non DOD recipients at these locations. We expect to complete the 
remaining two surplus determinations this spring. We also completed 23 
Environmental Condition of Property Reports, providing copies to local 
communities and Federal agencies to support their redevelopment 
efforts. These environmental reports provide a comprehensive summary of 
all known environmental contamination, as well as the studies, 
analyses, and cleanup that have been done, are now underway, or remain 
to be done.
    Navy has completed operational closure of 12 bases. We have 
received approval from OSD for 58 out of 64 business plans for which 
the DoN is the executive agent. These business plans, which average 40 
pages in length, include extensive details on costs, savings, 
schedules, and support documents for each construction project. We 
continue efforts to gain OSD approval for the remaining business plans, 
which involve more complex moves and joint basing decisions.

                PRIOR BRAC CLEANUP AND 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 
Department of Navy 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.

Property Disposal
    Last year we conveyed 906 acres in 12 separate real estate 
transactions at six prior BRAC bases. We also completed Findings of 
Suitability for Transfer (FOST) for 940 acres. The FOST certifies that 
DOD real estate is environmentally suitable for transfer by deed under 
Section 120(h) of the Comprehensive Environmental Response, 
Compensation, and Liability Act (CERCLA) \3\.
---------------------------------------------------------------------------
    \3\ 42 U.S.C. Section 9620(h).
    
    

Land Sale Revenue
    We have continued our success in using property sales to assist in 
funding environmental cleanup and property disposal as well as recover 
value for taxpayers from the disposal of Federal property. Through a 
combination of cost Economic Development Conveyances, Negotiated Sales, 
and Public Sales, the Department of Navy has received over $1.1 billion 
in revenues from the sale of prior BRAC property. Nearly all of this 
revenue has been generated since fiscal year 2003. In fiscal year 2006, 
we completed the sale of 3,719 acres at the former Marine Corps Air 
State El Toro, CA for $649.5 million. We also sold 167 acres at the 
former Naval Hospital Oakland, CA for $100.5 million. Beginning in 
fiscal year 2003, we have used these funds to accelerate environmental 
cleanup, and to finance the entire Department of the Navy prior BRAC 
effort including caretaker costs since fiscal year 2005.
    We have put this land sale revenue to good use! We have issued 
Findings of Suitability to Transfer for over 4,500 acres which enabled 
us to continue our disposal efforts. A few of the significant disposals 
include the last parcels at Naval Shipyard Charleston, SC; Naval Air 
Station Key West, FL; San Pedro Housing Area for Naval Shipyard Long 
Beach, CA; and Naval Hospital Oakland, CA, as well as the first parcel 
at Hunter's Point Naval Shipyard. In addition, Navy accelerated cleanup 
on the majority of MCAS El Toro, a National Priorities List (NPL) site. 
We have also completed the cleanup of over half of Naval Station 
Treasure Island and determined it acceptable for transfer. Significant 
cleanup activities were undertaken at both Hunter's Point Naval 
Shipyard, as well as Alameda Naval Air Station, all of which are NPL 
sites, greatly improving the protection to human health and the 
environment.
    Two significant property sales remain, both planned to begin in 
fiscal year 2009: approximately 176 acres at the former Naval Training 
Center Orlando, FL; and about 1,450 acres at the former Naval Station 
Roosevelt Roads, PR. We will spend the last portions of the $1.1 
billion in land sale revenue in fiscal year 2009. Revenue projections 
for Orlando and Roosevelt Roads are unknown, but are expected to be 
well below that obtained from the sale of California property at El 
Toro and Tustin. In the absence of additional land sale revenue, we are 
evaluating the need to resume appropriated funds in future budgets.

Prior BRAC Environmental Cleanup
    The DON has spent about $3.5 billion on environmental cleanup, 
environmental compliance, and program management costs at prior BRAC 
locations through fiscal year 2006. With our planned programs of $342 
million in fiscal year 2007 and $179 million in fiscal year 2008, we 
expect the environmental cost to complete for fiscal year 2009 and 
beyond at $1.168 billion. This is an increase of $725 million since 
last year. Nearly all of this cost increase is due to the recent 
discovery of substantially more low level radioactive waste at the 
former Hunters Point Naval Shipyard in San Francisco, CA and some at 
the former Naval Air Station Alameda, CA.

Hunters Point Naval Shipyard
    Hunters Point Shipyard represents one of the most unique prior BRAC 
challenges. Maritime use of Hunters Point began in the 1850's. The Navy 
purchased the property in 1939, and began to expand the shipyard and 
build facilities. Between 1939 and 1974, Hunters Point was one of the 
Navy's largest industrial shipyards and was home to the Naval 
Radiological Defense Laboratory (NRDL). The Navy used Hunters Point to 
decontaminate ships that had been used during atomic weapons testing 
under Operation Crossroads. NRDL conducted radiological research in 
numerous buildings on the base.
    The Navy closed Hunters Point in 1974, and then leased most of the 
property in 1976 to a private ship repair company. The Environmental 
Protection Agency placed the shipyard on the National Priorities List 
in 1989. The Department of Defense listed the shipyard for closure as 
part of BRAC 1991.
    The Navy has conducted expansive records and data search to 
identify all areas of potential contamination, as required under 
CERCLA. This included conducting a Historic Radiological Assessment and 
extensive sampling to identify potential contamination from past 
radiological activities. There are 78 installation restoration sites 
and 93 radiological sites, and Navy has spent about $400 million on 
cleanup efforts. While the base does not present a risk to human 
health, the additional data has revealed a much greater degree of 
contamination than previously known. The previous cost to complete was 
$110 million. The revised fiscal year 2008 cost to complete is $670 
million, which excludes submerged lands. We will have an independent 
outside consultant review the situation and seek options that balance 
cleanup costs and health risks to humans and the environment. Land use 
controls must be part of the remedy for Hunters Point.
    The City of San Francisco recently proposed building a new football 
stadium using a portion of Hunters Point. Such a proposal represents a 
very compatible reuse that could be effectively integrated into the 
cleanup program. While this appears to be an excellent opportunity for 
combining cleanup with transfer and redevelopment of Hunters Point, it 
will require significant financial resources in the near term that are 
not now budgeted.

                        HURRICANE SUPPLEMENTALS

    Following the experience learned from Hurricane Ivan in 2004, the 
Navy was prepared to respond quickly to the Hurricane Katrina and 
lesser storms in 2005 that affected eight major Navy bases. With 
Supplemental funds provided by Congress, we have made the necessary 
repairs to get our facilities back to full mission capability. The 
funding allowed us to begin the cleanup as the long term 
reconstruction. We have awarded 37 percent of the $493 million in 
military construction and family housing construction projects to date, 
with plans to award the balance by the end of this fiscal year.

              MEETING THE CONSTRUCTION EXECUTION CHALLENGE

    The ambitious programs I have outlined, encompassing military and 
family housing construction, continuing recovery efforts in the Gulf 
Coast, BRAC-related construction, and support for the Global War on 
Terror represent an execution effort of over $4 billion in fiscal year 
2008 compared to the fiscal year 2005 effort of $2.5 billion. The Grow 
the Force and barracks initiative by the Marine Corps, and the buildup 
on Guam initiative will add a sustained annual program of $2-3 billion 
through the FYDP.
    The Naval Facilities Engineering Command (NAVFACENGCOM) has, with 
the exception of fiscal year 2006, obligated between 92 percent to 98 
percent of all authorized and appropriated DoN construction projects 
(including congressional adds) in the first year funds became 
available. That obligation rate dropped to 74 percent in fiscal year 
2006, primarily due to pricing issues caused by material and labor 
shortages in the aftermath of hurricanes in 2004 and 2005.
    NAVFACENGCOM has substantial additional contracting capacity, and 
will seek to aggregate related projects while preserving competition 
and small business interests. For example, NAVFACENGCOM sponsored an 
industry conference in January 2007 to explore opportunities for cost 
and scheduling efficiencies. This is an execution challenge that 
NAVFACENGCOM can do.

                               CONCLUSION

    The Navy cannot meet the threats of tomorrow by simply maintaining 
today's readiness and capabilities of our physical plant. We must 
continue to transform and recapitalize for the future without 
jeopardizing our current readiness and the strides we have made--and 
continue to make--in managing our shore infrastructure. With our 
partners in industry, the acquisition community, and with the 
continuing support of the Congress, the Department of Navy will build 
and maintain installations that are properly sized, balanced--and 
priced for tomorrow.
    Thank you for the opportunity to testify before this committee. I 
look forward to a productive dialogue with the Congress on the 
Department of the Navy's shore infrastructure.

    Senator Reed. Thank you very much, Mr. Secretary. And, 
thank you General Flock and Admiral Handley.
    I have a series of questions. I think I'll run past my 
initial time, but I'll just take the first few minutes and then 
turn to my colleagues and expect, if not a second round, then 
I'll offer additional questions at the end.

                       CAMP LEMONIER IN DJIBOUTI

    First, Mr. Secretary, I want to focus a bit on Camp 
Lemonier in Djibouti. There was a request in the supplemental 
for several projects that's being debated right now between the 
House and Senate, but one of the perceptions that we had with 
respect to the request and supplemental is that it looked like 
permanent construction that you were looking at, not emergency 
supplemental construction. And, then I noticed in the fiscal 
year 2008 budget request, there is three additional projects at 
Camp Lemonier.
    The first question is, if this is a permanent 
establishment, why are we doing anything in the supplemental. 
Why aren't all requests in the 2008 budget or in regular budget 
orders, either you or the Admiral?
    Mr. Penn. Admiral.
    Admiral Handley. Thank you, Mr. Chairman. In addressing the 
MILCON requirement for Djibouti, we do look at Djibouti as an 
expeditionary base and we do not see it as, necessarily, an 
enduring base, but we do look at a few factors. One of those 
are the operational requirements and those are the facilities 
that you see in the 2008 budget and those are the taxi-way 
projects and the operational facilities that we have there.
    In the supplemental projects you see some utility projects, 
some water storage, some water production, electrical 
distribution, those projects are really based on a 5-year 
horizon that we looked at our best economic value by which we 
can provide that. Today, we ship water in at a very expensive 
rate. We think if we put in some water production and some 
water storage facilities, over a 5-year period, it turns out to 
be more economical for us.
    Senator Reed. Well, thank you, Admiral, but there's another 
factor, in terms of the operational aspects, and that is the 
new command that's being set up for Africa, with a new 
commander. And, I wonder if anyone has, from that emerging 
leadership level, commented about Djibouti or is that a place 
where we're going to locate this command or was there any 
discussion to date, Secretary?
    Mr. Penn. No, sir, they're looking at going farther south 
into South Africa for the location of the command.
    And, just to add to what the Admiral said, all of our 
facilities in Djibouti are austere, for living for instance, we 
have the compressed living units, which are basically trailers.
    Senator Reed. So, at this juncture, your perception is that 
that is not going to be an enduring base at all.
    Mr. Penn. Correct.
    Senator Reed. It's a temporary base.
    Mr. Penn. Yes, sir.
    Senator Reed. And, this probably tracks with the, sort of 
the arrangement you have with the Government of Djibouti, which 
is the lease term. As I understand it, it's a 5-year lease for 
$30 million a year and two 5-year options. Is that accurate? 
That's, if you don't have that data initially, just get back to 
us.
    Mr. Penn. Yes, sir, it is accurate.
    Senator Reed. And, the overall project cost to develop Camp 
Lemonier is in excess of $300 million. Is that a fair estimate 
at this juncture?
    Mr. Penn. I think that's a fair estimate, yes, sir.
    Senator Reed. And again, this is not an enduring base. This 
is something that has a planning life, what's, 5 years, 
Admiral?
    Admiral Handley. Let me clarify, Mr. Chairman. We do see an 
enduring mission in that area. We have taken it as an 
expeditionary base. For those reasons, you don't see projects 
like barracks and gymnasiums and others. And, we really have 
focused on operational facilities and some of those utilities, 
and essentially the backbone structure in order to operate out 
of there.
    Senator Reed. And, a final question that, with respect to 
the Navy and the Marine Corps and the Combatant Commanders. Has 
Djibouti been identified as a, if not a permanent enduring 
base, one that will, we want to, sort of, stake out for a long, 
long time in terms of not just operational and logistical, but 
strategic reasons? General Flock, is that, does the Marine 
Corps have a comment on that?
    General Flock. Mr. Senator, I think that you're going to 
see United States forces there for a while, as long as the GWOT 
continues.
    Senator Reed. Well, thank you.

                                  GUAM

    Let me turn to another request and that is, the Navy has, 
as we've noted, an 81 percent increase in MILCON, which is a 
very robust increase. Some of this, a lot of it is attributed 
to Grow-the-Force in the United States Marine Corps, which 
we're aware of. There's another $333 million for the move to 
Guam, which is a significant increase in the construction 
effort over the next 5 years for Guam. And, I'll ask the 
question I asked the Army, do you think in particular, with 
respect to Guam, that this huge infusion of construction monies 
can be adequately managed, both in terms of spending 
efficiently, and also not producing a huge increase in 
construction costs?
    Mr. Penn. Yes, sir. In fact, we have a, speaking of the 
management, the former IG is my program manager for this move 
and he's preparing for all sorts of investigations and so 
forth, so we are staying on top of that. It's going to be quite 
a growth for construction, as the Admiral can address, so we'll 
almost have to double our construction load for this.
    Admiral Handley. Mr. Chairman, if I could also expound, the 
projects that you see in the fiscal year 2008 submission are 
Navy requirements for existing forces that are there. It does a 
couple of things, but again, we're looking to focus on 
utilities backbones and infrastructure that are also for the 
current requirement, but we also are looking to the future and 
see a significant increase in construction in Guam and we're 
very concerned about the capacity of construction, so as a, if 
you'll call it a ramp on that construction, this is a very good 
transition to make sure that capacity stays there. But, each 
one of those projects provide a vital infrastructure or quality 
of life for those sailors that are on there today.
    Senator Reed. Thank you. Let me ask a final question before 
I yield to Senator Hutchison, but I do have additional 
questions later.

                             WHIDBEY ISLAND

    Two projects were submitted in last year's Presidential 
budget request that should have been incremented projects. One 
project was an Air Force project at MacDill Air Force Base, the 
other was a Navy project at Whidbey Island, Washington State. 
Initial increments of these projects were funded in Congress's 
fiscal year 2007 joint funding resolution. The Air Force chose 
to request funding for the remaining increment in this budget, 
the fiscal year 2008 budget, however the Navy did not fund the 
remaining portion of the Whidbey Island. Can you tell us why 
you're not doing that, Mr. Secretary?
    Mr. Penn. Yes, sir. At the time of the PB08 lock, not all 
four congressional committees had completed their bills and we 
really thought that there was a possibility of the full funding 
at that time, so we made a mistake. We erred in judgment for 
that.
    Senator Reed. Will you correct the mistake?
    Mr. Penn. Yes, sir. We will start the construction and we 
will roll the balance of funding into the fiscal year 2009 
budget request. And, the hangar really needs to be fixed up 
that was being built about a thousand years ago it seems, and I 
was in that hangar myself; it needs the work.
    Senator Reed. We might follow-up, just to get some more 
details on this issue----
    Mr. Penn. We have a lot on it.
    Senator Reed [continuing]. But thank you, Mr. Secretary.
    And, at this point, let me recognize Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman.

                     FULLY FUNDING MILCON PROJECTS

    Admiral Handley, the Navy has been directed by OMB to 
request several large MILCON projects all at once, rather than 
in the increments, as has been done so many times in the past. 
Funding the large projects all at once ties up the money for 
the present years when it's going to take more than a year to 
build something. And, my question is, if you do make requests, 
such as has been suggested, can you execute those within a 
year?
    Admiral Handley. Ma'am, your question goes to execution, 
and we can clearly execute within a year when it goes down to 
project award. The outlays, obviously, will go over the entire 
construction period. And, we recognize the benefits of 
incrementation because it does allow you to phase the funding 
along with that. But, in this area we have followed OMB 
guidance and we have submitted fully-funded projects, which we 
have been required to do.

                        GUARD AND RESERVE MILCON

    Senator Hutchison. Mr. Penn, we've talked about Guard and 
Reserve with the Army and the marines. My question to you is 
the same. Do you feel that your Guard or Reserve funding is 
enough for your future needs, or do you feel that the Guard and 
Reserve is being, sort of, held static to try to pay for the 
increases that you're going to need because of the Marine Corps 
increase in end-strength?
    Mr. Penn. No, ma'am. I think the Department of Navy is 
doing extremely well. In fact, our Reserve MILCON in fiscal 
year 2008 is $20 million higher than enacted in 2007.
    Senator Hutchison. And, you think, you feel that is 
adequate for keeping your facilities up to----
    Mr. Penn. Yes ma'am, I do.
    Senator Hutchison [continuing]. Standard? All right. Thank 
you very much.
    Thank you, Mr. Chairman.
    Senator Reed. Senator Allard.

                        PRIVATIZATION OF HOUSING

    Senator Allard. Mr. Chairman, I just have a brief question 
regarding your housing in Fort Carson on the Army side in 
Colorado. We've gone to privatization of the housing, it's 
worked very good. I mean, the facilities have allowed the fort 
to move ahead quickly to meet its expansion needs as well as 
being nice accommodations as far as the soldiers are concerned.
    And, I noticed in your report, Mr. Secretary, that you had 
talked about your housing, at least, and I assume you have some 
privatization of housing, and kind of share with the committee 
how that is working as far as the Navy is concerned.
    Mr. Penn. Sir, it's working extremely well. We have it at 
major locations, major installations throughout the country 
and, I think that if you have a young person going into this 
housing, they will be part of our permanent force, the housing 
is so nice; Corian countertops, energy efficient appliances, 
and in some of the major areas, San Diego and so forth, we have 
a very high cost of living, as you know, and we're putting 
folks into those new quarters and they're phenomenal. Everyone 
loves them. They will wait a longer period of time just to move 
into the housing. We have privatized housing in all of our 
major locations in Hawaii, and it's just fantastic. I can't say 
enough about it.
    Senator Allard. That's all I have, Mr. Chairman. Thanks.
    Senator Reed. Well, thank you very much, Senator.

                         NEWPORT, RHODE ISLAND

    Let me resume with a few questions of particular concern to 
me because they involve Newport, Rhode Island. And, I'm glad 
Admiral Handley is here because he served as a facilities 
engineer at the Naval War College, so he has great expertise.
    Mr. Secretary, I understand that the Navy's preparing a 
master plan for the use and/or disposal of land at Newport, 
Rhode Island because of the changing missions for the base, 
particularly the old Newport Naval Hospital. Could you just 
confirm that this master planning is underway, give me an idea 
of when it might be complete, and also when the results will be 
given to my staff and myself?
    Mr. Penn. Yes, sir. The master plan is underway. CNIC, 
Commander Naval Installation Command is preparing the master 
plan. We expect preliminary results in June, the final plan in 
September. We are having discussions with the Coast Guard, our 
sister service, about the facilities there and we will share 
the master plan with your office when completed.

                               NAVY PIERS

    Senator Reed. Thank you very much, Mr. Secretary. And, 
there's another issue here, we've talked about this previously, 
and that is the Navy piers. We understand there are two piers 
that are----
    Mr. Penn. Yes, sir.
    Senator Reed [continuing]. Need significant reconstruction, 
perhaps prohibitively expensive in terms of repairing those two 
piers, but there's a possibility of a smaller pier being 
constructed, significantly smaller, that could serve the needs 
of the Navy and perhaps the Coast Guard, also. And, I know 
you're looking into this, and I appreciate that. Could we have 
some type of discussion prior to, let's say the middle of June, 
with respect to possible options to go forward that, because as 
far as the long-term utility of the base, some pier arrangement 
is, I think, very important and essential. And, if you could 
plan to visit with us before the middle of June, that would be 
very good.
    Mr. Penn. Will do, sir.
    Senator Reed. Thank you very much.

                           BRIDGE REPLACEMENT

    And, a final point is that, we have a vehicular bridge, 
which I think Admiral Handley's crossed over many times. In 
2006 we appropriated $10.62 million to replace the bridge. 
Construction has not begun because the Navy insists it needs 
additional funding. The subcommittee attempted to add an 
additional $3.41 million in last year's bill, but because of 
the delay in passage of the bill, it never reached the 
President's desk for signature.
    We're still committed to doing this, but the bridge is 
deteriorating and it's causing operational constraints. One 
issue is just the passage of emergency fire equipment to get 
cross-post in an expeditious way and having been on the bridge 
many times, it's not the most convenient for emergency 
equipment.
    I think we've got to solve this problem and I would suggest 
that construction begin as soon as possible. We've put a 
significant down payment to do that, to get that done. So, when 
can you start construction, given the fact we've already 
appropriated $10 million? And, is there a possibility of 
reprogramming to make it happen faster? Admiral.
    Admiral Handley. Sir, I obviously share your concern on 
that bridge having both myself and then fiance at the time that 
I met in Newport, cross that bridge.
    Senator Reed. I think you've got a deal here.
    Admiral Handley. I was formerly also down at NAVFAC 
MIDLANT, responsible for the engineering and spoke several 
times with the designers responsible for finding solutions and 
we looked at a number of alternatives, including alternate 
locations to try and get it within the dollars. What it comes 
down to, is we need to have a complete and usable facility, 
obviously you can't get a bridge that goes three-quarters of 
the way across. And so, we will make sure that your staff has 
what the current estimate is as we go another year into this.
    But, we'll need to get the full amount in order to execute 
this. We don't currently have the ability to reprogram it; I 
think you and your staff know we have been faced with 
significant escalation in the MILCON program just from the cost 
of construction, cost of concrete, steel, and some of the 
impacts in the gulf coast with the volume of construction. So, 
we'll make sure that, that figure goes into your staff, but I 
think we're going to have to look at, when we get the 
additional funds for it, we'll be ready to execute a design-
build contract to get that bridge replaced.
    We have looked at the current load capacity on it, and I 
think you know we've restricted the load to, I think, 12 tons 
and does not allow for fire engines to go across, which from a 
safety perspective is absolutely a necessity. But, we're 
committed to replacing that bridge, we just need to get the 
money right.
    Senator Reed. Well, I am equally committed to replacing the 
bridge for the one concern, you just reiterated, which is the 
safety services getting back and across in coverage.

                               WRAMC BRAC

    Let me raise another, different question, more policy 
related. And, that is the discussion about the development at 
Bethesda, the Naval Hospital. BRAC has basically suggested that 
Walter Reed be closed, there's a great discussion now on 
whether that's going to be done, but also that the Navy will 
absorb part of this facility, Walter Reed, and will create a 
very significant concentration of medical headquarters.
    And, I'm just wondering, has the Navy thought about the 
additional barracks that are necessary to house enlisted 
personnel? Given the significant cost of living around 
Washington, I suspect young sailors and soldiers who are going 
to be stationed there won't have the wherewithal to go out on 
the economy easily. With the increase, we've been told that not 
only the footprint, but the size of operations that you're 
going to have significantly more personnel stationed there than 
you have now. And, then also, there are obviously, issues of 
environmental impacts.
    I think we've all had the privilege, I say that, kind of 
ironically, of going up Wisconsin Avenue or going down 
Wisconsin Avenue in the morning or the evening when NIH and 
Bethesda are going in and out--the facilities traffic will be 
much greater--I just, want to get a sense right now, Mr. 
Secretary, are you thinking beyond the broad outlines of taking 
some Walter Reed facilities, moving them over there within the 
BRAC.
    Mr. Penn. Yes, sir, we are thinking of that. As you know, 
the Navy responsibility for the move is primarily the NEPA, 
which consists of a $700,000 EIS analysis, and we do the design 
and construction, which is $497 million from Army BRAC funds. 
The Maryland delegation has requested that we do an expanded 
NEPA, which we are doing to look at the transportation, all the 
travel, the barracks, and so forth. In fact, we're looking at a 
back gate into Bethesda off of the beltway. We're trying to 
incorporate, encompass all thoughts. The barracks discussion is 
under way at this time. No decision has been reached yet, but 
I'm sure we'll do the right thing.
    Senator Reed. Well, it seems to me it's going to be a very 
expensive thing. We're talking about access directly to the 
beltway, perhaps even increased rail or rail stations to be 
more accommodating. And, I think the sooner we confront those 
costs and, perhaps not just in a specific Bethesda focus, but 
in the context of the Washington Metropolitan area and military 
medical facilities we'll be better off.
    Mr. Penn. Yes, sir. I concur.
    Senator Reed. I encourage you to do that.
    Senator Hutchison, do you have additional? Thank you very 
much, Senator Hutchison.
    Thank you, gentlemen, for your testimony and service to the 
Marine Corps and the Navy, and we look forward to working with 
you.
    Mr. Penn. Thank you very much, sir.

                         CONCLUSION OF HEARINGS

    Senator Reed. The hearing is recessed.
    [Whereupon, at 11:16 a.m., Thursday, April 19, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]
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