[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
                         SUBCOMMITTEE ON DEFENSE
                 JOHN P. MURTHA, Pennsylvania, Chairman
 NORMAN D. DICKS, Washington        C. W. BILL YOUNG, Florida
 PETER J. VISCLOSKY, Indiana        RODNEY P. FRELINGHUYSEN, New Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 MARCY KAPTUR, Ohio                 JACK KINGSTON, Georgia
 ALLEN BOYD, Florida                KAY GRANGER, Texas
 STEVEN R. ROTHMAN, New Jersey      HAROLD ROGERS, Kentucky             
 SANFORD D. BISHOP, Jr., Georgia    
 MAURICE D. HINCHEY, New York       
 CAROLYN C. KILPATRICK, Michigan    
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
   Paul Juola, Greg Lankler, Sarah Young, Linda Pagelsen, Paul Terry, 
 Kris Mallard, Adam Harris, Ann Reese, Brooke Boyer, Tim Prince, Matt 
Washington, B G Wright, Chris White, Celes Hughes, and Adrienne Ramsay, 
                            Staff Assistants
                  Sherry L. Young, Administrative Aide
                                ________
                                 PART 1
                                                                   Page
 Air Force Nuclear Enterprise.....................................    1
 Contract Services and Acquisition Management.....................   55
 Army Contracting.................................................  283
 Outsourcing......................................................  353
 Psychological Health and Traumatic Brain Injury Problems.........  431
 Global Mobility..................................................  515
                                ________

         Printed for the use of the Committee on Appropriations


         PART 1--DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2010
                                                                      ?

             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
                         SUBCOMMITTEE ON DEFENSE
                 JOHN P. MURTHA, Pennsylvania, Chairman
 NORMAN D. DICKS, Washington        C. W. BILL YOUNG, Florida
 PETER J. VISCLOSKY, Indiana        DAVID L. HOBSON, Ohio
 JAMES P. MORAN, Virginia           RODNEY P. FRELINGHUYSEN, New Jersey
 MARCY KAPTUR, Ohio                 TODD TIAHRT, Kansas
 ROBERT E. ``BUD'' CRAMER, Jr.,     ROGER F. WICKER, Mississippi
Alabama                             JACK KINGSTON, Georgia              
 ALLEN BOYD, Florida                
 STEVEN R. ROTHMAN, New Jersey      
 SANFORD D. BISHOP, Jr., Georgia    
                                    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
   Paul Juola, Greg Lankler, Sarah Young, Linda Pagelsen, Paul Terry, 
 Kris Mallard, Adam Harris, Ann Reese, Brooke Boyer, Tim Prince, Matt 
Washington, B G Wright, Chris White, Celes Hughes, and Adrienne Ramsay, 
                            Staff Assistants
                  Sherry L. Young, Administrative Aide
                                ________
                                 PART 1
                                                                   Page
 Air Force Nuclear Enterprise.....................................    1
 Contract Services and Acquisition Management.....................   55
 Army Contracting.................................................  283
 Outsourcing......................................................  353
 Psychological Health and Traumatic Brain Injury Problems.........  431
 Global Mobility..................................................  515
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 56-232                     WASHINGTON : 2010

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New   
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma             
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania    
                                    

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)
                    DEFENSE APPROPRIATIONS FOR 2010

                              ----------                              

                                      Wednesday, February 11, 2009.

                      AIR FORCE NUCLEAR ENTERPRISE

                               WITNESSES

HON. MICHAEL B. DONLEY, SECRETARY OF THE AIR FORCE
 GENERAL NORTON A. SCHWARTZ, CHIEF OF STAFF, UNITED STATES AIR FORCE

                              Introduction

    Mr. Murtha. Mr. Young.
    Mr. Young. Mr. Chairman, I move that those portions of the 
hearing today which involve classified material be held in 
executive session because of the classification of the material 
to be discussed.
    Mr. Murtha. Without objection.
    You know, this is a closed hearing this morning. We have 
had the room swept. And we are pleased to welcome two 
distinguished veterans here of the hearings. We appreciate your 
coming. I see you got a lot of backup there. I always get 
concerned when you have got so many people back there ready to 
answer questions.
    But this is a serious concern of ours. I said to Secretary 
Gates whenever I found out that we had nuclear weapons that 
were flying around; I said, Mr. Secretary, they take our nail 
clips away, they take our little scissors away at the airport, 
and yet you have got nuclear weapons flying around, activated. 
He did not laugh at that. He did not think that was funny.
    And I know the Air Force took some strong action, good 
friends of ours who were dismissed because of what happened 
over there, as they should have been even though they were good 
friends. I mean, there couldn't be anything more serious than 
flying around with activated nuclear weapons.
    So I appreciate it. We look forward to hearing what you 
have to say about it, and in an addition to what you talk about 
as far as what you have done to secure the nuclear weapons, 
also what you think needs to be done as far as down the road 
making sure they are taken care of. And I do not know that we 
need any more, but we ought to make sure that they are ready to 
go in case we would ever need them.
    Mr. Young.
    Mr. Young. Well, Mr. Chairman, thank you very much.
    And Chairman Murtha has, I think, pretty much explained the 
position of the members of the subcommittee. I just want to say 
that I appreciate the seriousness with how you, the Air Force, 
are addressing this extremely important issue.
    And we welcome your comments and your suggestions and your 
advice on how we deal with this problem.
    And thank you for being here.
    Mr. Murtha. Mr. Secretary.

                 Summary Statement of Secretary Donley

    Mr. Donley. Thank you, Mr. Chairman and members of the 
committee for scheduling this hearing today to discuss a 
critically important mission area for the United States Air 
Force, stewardship of our nuclear deterrent forces. This is a 
responsibility we take seriously, and one that is, as General 
Schwartz has put it, among our most solemn obligations.
    Mr. Murtha. Would you check to see that your microphone is 
on?
    Mr. Donley. Can do. Is that better?
    Mr. Murtha. Yes.
    Mr. Donley. Great. The nuclear deterrence mission assigned 
to the United States Air Force is one of our most solemn 
obligations to our Commander in Chief, to the Secretary of 
Defense, our national leadership, and to the American people.
    Nuclear deterrence operations and the sustainment 
activities that ensure the integrity of the nuclear arsenal 
entrusted to our care are core functions that the Air Force has 
proudly accepted since our inceptions 24 hours a day, 7 days a 
week for over 60 years America's Airmen have committed their 
talent and their skill to delivering the Nation's strategic 
backstop in a safe, secure, and reliable manner. Improving our 
institutional performance in the nuclear area has held my 
attention since my first day in office. It remains a top 
priority in both policy and actionable terms. And whatever the 
size or composition of the U.S. nuclear arsenal, I am 
absolutely committed to ensuring that the Air Force meets its 
solemn obligation, with the hallmark of professionalism and 
discipline for which we are known the world over.
    When I testified before the Senate Armed Services Committee 
last July, I indicated that I had directed the Air Force to 
establish a nuclear task force to synchronize corrective 
actions underway across the major commands of the United States 
Air Force. More importantly, however, I tasked the Air Force 
nuclear task force to identify root causes and necessary steps 
to mitigate these problems from an institutional and enterprise 
perspective over the long term. Creation of that task force 
raised the level of discussion to the top leadership team of 
the Air Force about how our service can be the best steward of 
our nuclear enterprise.
    General Schwartz and I have invested significant personal 
attention in enhancing our institutional performance. We have 
demonstrated the same--we have demanded the same of our Air 
Force assistant secretaries and the commanders of our major 
commands, and all for whom we are responsible and who are 
responsible for stewardship of our nuclear weapons. The output 
of our analysis and discourse is the Air Force's Nuclear 
Roadmap, a comprehensive assessment of root causes and required 
actions. We published the roadmap in October. And I am pleased 
to report that we are making good progress in its 
implementation. Since nuclear matters are also interagency 
matters, I want to assure you that the roadmap reflects 
thoughtful collaboration and feedback from many outside the Air 
Force, including our OSD and interagency partners.
    The roadmap and its implementation have benefited greatly 
from Dr. Jim Schlesinger's panel and their comprehensive and 
detailed examination of Air Force nuclear operations and 
sustainment. And I would like to thank Dr. Schlesinger for all 
the good work his panel has done.
    Among the most important changes we have instituted is the 
enactment of several corporate governance changes that will 
ensure the integrity of all aspects of the Air Force nuclear 
enterprise, from the missile fields in America's northern tier 
to our fleet of nuclear-capable bombers to the sustainment 
activities that ensure the reliability of these forces on a 
day-to-day basis.
    We have established a provisional Global Strike Command to 
prepare for the consolidation of nuclear operations, including 
our missile forces and nuclear-capable bombers under a single 
operational command. Additionally, we have worked to strengthen 
our nuclear sustainment functions by assigning all nuclear 
sustainment responsibilities to the Air Force Nuclear Weapons 
Center, using a measured and phased approach over time that 
will bring all the sustainment and support under one 
organization.
    Within our headquarters, we have established the Strategic 
Deterrence and Nuclear Integration Directorate, an A10 office, 
which reports directly to the Chief of Staff. So we now have an 
office inside the Air Staff focused on the nuclear mission. We 
have also established a Nuclear Oversight Board chaired by the 
Chief and me that gets together quarterly to gather the senior 
leadership of the Air Force with responsibilities for nuclear 
matters and provide a focused forum for debating and deciding 
policy matters, as well as resolving enterprise-level issues 
confronting our nuclear forces.
    Despite this progress, I want to caution the Committee that 
reinvigorating the Nuclear Enterprise in the Air Force will 
take not just months but years. But I am confident that we have 
established a comprehensive and appropriate framework that 
restores our institutional performance to a level consistent 
with the high standards of precision and excellence synonymous 
with the rest of the United States Air Force.
    Thank you again for the continued support that this 
Committee provides to our Airmen. I look forward to our 
dialogue this morning.
    Mr. Murtha. General Schwartz.

                 Summary Statement of General Schwartz

    General Schwartz. Mr. Chairman, thank you, Members of the 
Committee, for allowing us to testify on behalf of America's 
Air Force. Thank you as well for your support for our 
reinvigoration of the nuclear enterprise.
    I would like to echo and reinforce Secretary Donley's 
remarks by providing briefly my perspective on our nuclear 
posture. The United States Air Force is fully committed as 
stewards of the Nation's resources, those resources that the 
Nation entrusts to us. And America's airmen will work 
diligently each and every day, with precision and reliability, 
to earn and preserve that trust that the Nation places in us. 
We are grateful for the opportunity to serve the Nation by 
providing critical capabilities in air, space and cyberspace, 
capabilities that work in concert with our joint and 
interagency partners to support America's strategic deterrence 
policy.
    We also recognize the magnitude of the role that we play 
and the highest standards of accountability and performance 
this role demands. America's nuclear capabilities remain an 
indispensable part of our deterrence policy, and they are 
important contributors to our efforts to limit and to dissuade 
proliferation, as well as the threat of weapons of mass 
destruction.
    The Air Force is responsible for operating, maintaining, 
sustaining, and securing a substantial portion of the Nation's 
nuclear arsenal. We have devoted ourselves to performing this 
mission with great pride and skill and precision since our 
inception as a service, providing over 60 years of credible 
nuclear deterrence for the Nation. We expect every Airman to 
perform with precision and reliability each and every time. 
Certainly excellence, even perfection, is the standard.
    For all these reasons and more, Secretary Donley and I have 
established Reinvigorating the Air Force Nuclear enterprise as 
our number one priority. Today thousands of Airmen dedicate 
their lives and talents to sustaining and safeguarding 
America's nuclear capabilities. They operate America's on-alert 
missile fields to provide vital, stable, and a ready force for 
the Nation. This force stands ready to deter and dissuade any 
potential aggressor from launching an attack on the United 
States each and every day. These Airmen maintain bomber 
capabilities that provide visible and flexible deterrent 
effects around the globe and serve the vital role of reassuring 
our allies. Your Airmen sustain our nuclear weapon and delivery 
systems, providing life cycle cradle-to-grave support to ensure 
the integrity of the Nation's most powerful weaponry.
    Recent well-documented failures highlight the need to 
improve institutional performance in several areas of this 
crucial mission. Today I join Secretary Donley to give you my 
word, we will not accept anything but the highest standards of 
performance and accountability. We will not cease our 
concentrated effort to reinvigorate the Air Force nuclear 
enterprise, ensuring that our Airmen are fully committed to 
demonstrating the highest standards of excellence, standards 
that the American people, our national leadership, and our 
allies expect of those who are entrusted with the solemn 
obligation of America's nuclear capabilities. Your Air Force 
and America's Airmen are all in. We will keep our promise to 
the Nation to provide effective and uncompromising stewardship 
and mission readiness.
    Thank you for the committee's continued support of 
America's Air Force and particularly its Airmen and their 
contribution to nuclear deterrence.
    Sir, if I may request that our prepared statement be 
entered into the record.
    [The joint statement of Secretary Donley and General 
Schwartz follows:]

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    Mr. Murtha. Without objection.
    General Schwartz. Thank you, sir.
    Mr. Murtha. Let me diverge a little bit from the subject 
and just say how important it is, since the budget is going to 
be late, that you folks get your act together and get the 
information we need early. This is a bipartisan committee. 
Whenever something comes out of this subcommittee, it does not 
change until it goes to conference, and then there is very 
minor changes. So the product we produce is a key to the 
Defense Department's funding.
    But we need to know numbers. We need to be able to plan 
short term and long term about what needs to be done. And we 
need to have it as soon as we can. Supplementals are going to 
stop, and we are going to be in a bind as far as the regular 
budget goes.
    The budget this year is $387 billion plus whatever the 
President adds to that. But the supplemental, we think, will be 
about $20 billion more than the Defense Department sent 19 
over. Whatever we can do in the supplemental is so important. 
We tried to do a little in the stimulus. And the committee met; 
it was almost too late by the time we found out the way it was 
going. But we are going to get $4 billion or $5 billion there 
for infrastructure and things like that.
    But the sooner we know what the bottom line is, the sooner 
we can stabilize and look not just short term but long term 
about what needs to happen, and we can buy in quantities that 
get the price down.
    So the information we request is very important, and the 
sooner you can get it to us, the better.
    Mr. Young.
    Mr. Young. Mr. Chairman, thank you very much.
    And as I said, Mr. Secretary, General, thank you for being 
here. We are discussing a pretty important issue here. And I am 
curious if there have been any similar incidents in nuclear 
weapons under the control of U.S. Air Force Europe.
    General Schwartz. There have not, sir. There have been no 
similar incidents or even major mistakes that I am aware of 
that have occurred under the control of the United States Air 
Forces in Europe.
    Mr. Young. Well, are they under any different rules or 
regulations?
    General Schwartz. Sir, they operate under the same exact 
criteria, now under unified supervision of, for example, the 
Air Force Nuclear Weapons Center. Their policies and their 
procedures apply in Europe as they do in the Continental United 
States. Likewise, when Global Strike Command stands up, the two 
major commands will interact and support one another in terms 
of providing for nuclear deterrence.
    But the key thing is that the standard is universal, and 
the policies and procedures that we employ apply equally in 
Europe as it does here. There is the nuance of the ally in 
Europe. But in terms of the way the Americans execute the 
mission, it is the same.
    Mr. Young. Operational control of nuclear weapons has been 
transferred from the Air Combat Command to the Air Force Global 
Strike Command. Has that been accomplished? Is that already in 
place?
    Mr. Donley. It is not yet in place. We have stood up Air 
Force Global Strike Command provisionally in early January to 
begin the work to stand up that command at the end of this 
year. But we have not transferred operational responsibility 
for the ICBMs or for the bombers to that new command yet. That 
will be something that happens further along in its evolution. 
But we have established the new command in a provisional form. 
It will grow this year. At the appropriate time in the future, 
then we will transfer the responsibility into that command 
section.
    Mr. Young. Will the European-based nuclear weapons also be 
transferred to that command or will they stay under U.S. Air 
Force Europe?
    General Schwartz. They will stay under U.S. Air Forces in 
Europe in a supporting, supportive relationship. I might 
reemphasize, Congressman Young, what the Secretary just related 
is that this really is a wing-walking exercise. We will not let 
go of one hand until we are ready to make the transition. It 
will be seamless and continuous between the existing 
organizations which are operating the machines and the weapons 
and managing the people now to the new organization.
    Mr. Young. A little different direction. We are hearing 
that OMB is doing a study to transfer control of nuclear 
weapons from the Department of Energy to the military. Back in 
World War II, the Oppenheimer decision was to keep the control 
or the development of nuclear weapons in the civilian control 
as opposed to the military. Can you tell us anything about 
this? Is this a real study? I know President Reagan tried to do 
this during his administration. Is there a major effort under 
way, or are we just hearing rumors?
    Mr. Donley. I am not able to give you an update on the 
Department's position on that subject. I am aware that it had 
been discussed at the OMB level. Whether or not there are 
Defense officials involved in that dialogue, I am not aware. It 
has not worked itself down to the Navy or the Air Force at this 
point.
    Mr. Young. Mr. Chair, if I have time for one more question, 
the Schlesinger report indicates that the Navy's control of 
their nuclear responsibilities are somewhat frayed at the edges 
but that they think that they are being managed properly. Do 
you have any comment on that at all?
     General Schwartz. Sir, we certainly understand that the 
Navy has processes in place which we should model. In fact, we 
are doing that. A case in point is our decision to consolidate 
nuclear weapons related material that was in the inventory of 
other DOD activities within a dedicated Air Force facility with 
dedicated Air Force inventory control and management. That is 
something which is exactly the way the Navy manages their 
process, and one that is well proven.
    Mr. Young. Well, I want to thank you very much. And despite 
the fact that you had a couple of raps in the press on this 
issue, I would not trade our Air Force for anybody else's, 
believe me. So thank you very much for the good job you do.
    Mr. Murtha. I assume this transition makes no difference in 
the ability of us to respond to any attack.
    General Schwartz. It does not.
    Mr. Murtha. Mr. Dicks.
    Mr. Dicks. Secretary Gates appointed the Nuclear Weapons 
Management Task Force to recommend necessary improvements and 
measures to enhance deterrence and confidence in it. The task 
force found an unambiguous and unacceptable decline in U.S. Air 
Force commitment to the nuclear mission. In comparison, the 
task force found the Navy maintained the commitment, though 
there was evidence, as the chairman had just said, or Mr. Young 
has said, fraying around the edges in the Navy's manpower 
experience base as well as in maintaining the TLAM-N system. 
The report concluded that the U.S. Air Force failed to properly 
focus on the nuclear mission and identified six recurring U.S. 
Air Force problem areas.
    First is the U.S. Air Force has underinvested in the 
nuclear deterrent mission. What are you going to do about that? 
We are glad to have you here, by the way.
    General Schwartz. Thank you.
    Sir, I will take the lead on this for just a second. 
Congressman Dicks, fundamentally, there are three major pieces 
to what we have done. One is organizational. We talked about it 
already with the stand up of the provisional Global Strike 
Command. The other one is this unified sustainment channel so 
we have a single center on the operations side and on the 
sustainment side to work these matters. There were underfunded 
elements in both areas, operations and in sustainment. We put 
$300 million in 2009 into the program in order to remedy that.
    Mr. Dicks.  $300 million in what?
    General Schwartz. Additional dollars in a range of 
activities from sustainment to standing up a fourth B-52 
squadron and so on, in order to----
    Mr. Murtha. Was this a reprogramming, or was this new 
money?
    General Schwartz. Sir, it was new money. This was in the 
process when producing the 2009 program.
    Mr. Murtha. But there is also reprogramming money?
    General Schwartz. There is some reprogramming dollars 
involved.
    Mr. Donley. I can give you just a quick lay down. But to 
get back to the bigger point just so you understand, we had 
been taking recommendations from 11 or 12 different reports set 
in motion by the Secretary of Defense or the Air Force or 
others. We rolled all those into our roadmap, and we used end-
of-year money in 2008 within our own--top line within our own 
capability to get started on additional resources to put back 
toward the enterprise. We bumped up our intentions for 2009 by 
$320 million.
    I will give you the breakout of that. Almost half of that 
we realigned as priorities within our 2009 budget within 
existing limitations so we are not coming to you for that.
    Mr. Murtha. Limitations, is that a money limitation or 
what?
    Mr. Donley. O&M kind of funding, personnel realignments to 
get dollars----
    Mr. Murtha. What I am asking, do you have enough money to 
realign this?
    Mr. Donley. Well, of the $320 million, $145 million we have 
done internally to the Air Force. We have come to you for $104 
million in a reprogramming on top of that $144 million. So you 
have in front of you----
    Mr. Murtha. I do not mean to interrupt----
    Mr. Dicks. As long as you do it on your time, Mr. Chairman, 
that is fine with me. Go ahead.
    Mr. Murtha. What I am worried, you are not limiting the 
transition by not having enough money.
    Mr. Donley. No.
    Mr. Dicks. Okay. So you are working on that. Now it says 
nuclear-related authority responsibility is fragmented. What 
are you doing about that? You got your new command. But is 
there one person in charge who can say, I know where every 
single one of these nuclear weapons, cruise missiles is, and I 
know for sure we are not going to go out there in the hangar 
and get the wrong cruise missiles and send them to some place 
and make a fool of ourselves. Is there somebody in charge of 
that underneath you two?
    General Schwartz. Absolutely.
    Mr. Dicks. Who is it?
    General Schwartz. It is a brigadier general who is the 
commander of the Air Force Nuclear Weapons Center at Kirtland 
Air Force Base, New Mexico. He is the accountable party.
    Mr. Dicks. He is the accountable party for all nuclear 
weapons?
    General Schwartz. Correct.
    Mr. Dicks. Now this isn't the land-based missiles, too? Has 
he got that, too?
    General Schwartz. That includes the warheads associated 
with the land-based missiles and those which are associated 
with air-delivered munitions.
    Mr. Dicks. So he knows where every one, and he is going 
to--somebody is going to talk to him before any of these are 
moved?
    General Schwartz. There is coordination that occurs, yes, 
sir.
    Mr. Dicks. What happened here it seems to me is that 
somebody went in and got the wrong missiles. That means that 
somehow there was not an identification on those missiles that 
would make it very clear, or a separate area where they were 
that would make it very clear that these are nuclear weapons 
and that--you know, it is almost incomprehensible.
    General Schwartz. It is. Congressman, you are right. What 
we did was we mixed both training devices, shapes, if you will, 
with the real deal. Foolishly. Not consistent with procedure. 
We did the wrong thing. When you allow that to occur, it 
increased the risk. In fact, we made a terrible mistake. We 
have structured this corrective action from the street level to 
the very top in a way that will foreclose that chance of 
happening again. People will make mistakes. But that is why we 
have a two-man or two-person concept. The bottom line is we----
    Mr. Dicks. It takes two people now to move these things?
    General Schwartz. More than two. But at least two.
    Mr. Dicks. Okay.
    General Schwartz. So that if one person has, you know, a 
bad day, not both of them will. This is the whole nature of 
check, double check, precision, and reliability. You have the 
right to expect that. We demand that of our own people. And 
that is what our Airmen will deliver.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    I serve with Mr. Visclosky; he is Chairman of the Energy 
and Water Committee. And we have the responsibility for the 
nuclear stockpile. I spent Thursday and Friday down at Savannah 
River DOE site. And I must say, pretty tightly controlled. What 
struck me, and maybe this is not politically correct, is how 
old everybody is down there. And the gist of my question here 
is, and let me give you a few quotations from the Schlesinger 
report, you know, I see many of the people, there are a few 
young people behind you, but there is quite a lot of gray hair. 
Secretary Schlesinger said in his report, quote, the decision 
that junior officers assigned initially to ICBMs will spend the 
remainder of their careers in the space mission area, and thus 
outside the broader Air Force, both devalue the mission area, 
and have the effect of reducing the dept of the Air Force 
nuclear experience, especially among mid-career and senior 
officers, and that is all within quotation marks.
    And then, on page 55 of the Schlesinger report, and 
coincidentally I had hard about the report, but quite honestly 
this hearing had not been scheduled, so I read it, and it was 
an interesting comment here: And I quote, the task of providing 
unambiguous employment guidance regarding an increasingly 
complex plan has become more difficult with fewer nuclear-
qualified and experienced personnel. Moreover, U.S. STRATCOM 
has difficulty filling positions designated for rated air crew 
personnel with nuclear experience. As a result, these billets 
are often filled by rated personnel without nuclear experience, 
requiring the incumbent to invest a great deal of time and 
energy to on-the-job training, hardly a satisfactory posture in 
a mission with potentially little margin for error.
    I know you are intimately familiar with this aspect. Can 
you comment as to what we are doing relative to training, 
should we say, the next generation of young people to work with 
this, you know, vitally important area?
    Mr. Donley. Well, sir, we have undertaken a number of 
actions on the personnel side to rebuild the nuclear career 
fields. So as we establish a new command, as we go out and find 
the nuclear expertise in the Air Force and rebaseline what our 
requirements are going forward, we are bringing all those 
pieces together. We have already changed school house training, 
sort of short-term changes in curriculum, to make sure 
commanders get a full background on nuclear operations and 
understand the importance of that mission. We are also working 
on the career development issues that----
    Mr. Frelinghuysen. How are you making it interesting 
besides obviously exposing young people to perhaps your 
greatest responsibility and making it interesting enough for 
them to make it a serious career path?
    Mr. Donley. The main thing we have done I think is to 
highlight the importance of this mission to the United States 
Air Force and to organize ourselves in the way that focuses on 
that mission. So, as people go into that command, they will 
know that their primary responsibility is to focus on the 
safety, security, reliability, and operational support for 
nuclear weapons.
    Mr. Frelinghuysen. And I assume to be, you know, 
knowledgeable about why nuclear weapons are nuclear weapons. 
They are primarily a deterrent. Is this inculcated in what we 
are--what you are setting up here as a curricula?
    General Schwartz. It certainly is in an academic sense, but 
I think from a policy point of view--it was not a small thing, 
Congressman, that the Secretary of Defense, the first Secretary 
ever to visit Minot Air Force Base back in November, he went in 
part to remind the Airmen that what they are doing is valued.
    Yes, we have two wars going on. And yes, the people that 
are deployed down range are doing important things. But we have 
young Airmen who are deployed in place providing the back drop 
of deterrence for all the other activity that the Department 
executes. The bottom line is what they are doing is important; 
it has the support of the Nation's leadership; and we will work 
the career paths so that youngsters know they can grow up to be 
the commander of a Global Strike Command or 20th Air Force with 
missiles or Eighth Air Force with bombers. That is part of the 
institutional piece of this that is so vital. There is a path 
that people can see their future and that they can have passion 
in what they are doing.
    Mr. Frelinghuysen. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Murtha. Do we have any nuclear-trained people here with 
you? Nuclear experts?
    General Schwartz. Mr. Chairman, probably the quintessential 
nuclear trained person is over my left shoulder, Major General 
Don Alston.
    Mr. Murtha. Okay. How about the person you said would be in 
charge of the overall program?
    General Schwartz. Mr. Chairman, the person we intend to 
nominate is exquisitely qualified.
    Mr. Murtha. So he is not in charge yet?
    Mr. Dicks. You are talking about the brigadier general, Mr. 
Chairman? He is not in place yet?
    General Schwartz, No, he has been there certainly since I 
arrived in the job, Congressman Dicks. So he has been there at 
least six months, and probably longer.
    Mr. Dicks. Why does he have to be confirmed?
    General Schwartz. No, this is the command. Global Strike 
Command will be a three-star commander. The brigadier is at the 
Nuclear Weapons Center, two different positions.
    Mr. Dicks. Okay.
    Mr. Murtha. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    General, welcome.
    Secretary, welcome.
    And I just want to make sure in the interest of full 
disclosure, Mr. Secretary, I understand that you have two 
degrees from the University of Southern California. I am a 
Notre Dame grad. So I would make a couple of observations.
    One, I would congratulate you on beating our football team 
about 12 years in a row. It might be 13 or 14.
    Mr. Dicks. And the University of Washington. We can throw 
them in.
    Mr. Visclosky. We can throw in a whole bunch of them.
    Mr. Dicks. Except we got two of their coaches now coming to 
Washington.
    Mr. Visclosky. But also make the observation that my first 
born male child just graduated from U.S.C. in December.
    Mr. Donley. So you just got a pay raise then.
    Mr. Visclosky. Right.
    Mr. Secretary and General, as Mr. Frelinghuysen mentioned, 
we both serve on the Energy and Water Subcommittee, and we have 
an interest, obviously, with NNSA and the weapons program. Will 
not have time, obviously, to get into great detail on all of 
the issues of concern, but for the record, in particular on 
pages 11, 12, 15, 18, 22 and 23, I certainly have a particular 
interest.
    And on this round, I do want to talk about the proposed 
life extension program, the Mod 12. The first question I would 
have is, my understanding is we have just spent $400 million on 
a life extension and modification program. Could you explain 
the necessity of Mod 12? And briefly, because I know I do not 
have a lot of time and I have a couple of follow-up questions.
    Mr. Murtha. I think this is very important. You take the 
time you need.
    Mr. Donley. Well, the Air Force operates 10 different 
models of nuclear weapons. Without getting into the detail of 
each weapon, but if you have questions, we will take them for 
the record.
    Mr. Visclosky. But this would be for the B-61.
    Mr. Donley. The B-61 life extension.
    Mr. Visclosky. Specifically B-61.
    Mr. Donley. Okay. B-61, in all these weapons, but 
especially B-61, we need to be looking at life extension issues 
that focus on safety, security, and reliability of these 
weapons going forward. There are real issues with the life 
cycle of their components and where they are. Many of these 
weapons need attention. We need investment to keep up on the 
surety issues, safety, security, reliability, and we need to be 
considering and having good debates as a country about the 
future of these weapons and how we are going to sustain them 
going forward.
    Mr. Visclosky. If I could ask for the record, because I 
want to proceed here, why, after the expenditure of $400 
million on modification of some of the B-61s, there is now a 
request for the Modification 12? But you had mentioned the 
debate as far as the various components of these weapons as far 
as surety and safety and use control. And I am with you on 
that. But I would simply point out for the record that the 
Committee, the full Committee, in the last 2 years in report 
language has talked about the necessity of knowing where we 
want to be in the end before we start down the road. And that 
is to make sure----and I know that we have a stockpile posture. 
But what we have talked about in our report language is a 
strategy. Because you have, as I would understand it, in excess 
of 900 warheads here. The question would be as you proceed, are 
they all going to be modified?
    [The information follows:]

    The current B-61 Life Extension Program (LEP) will 
consolidate 4 of the 5 B-61 variants B-61-3, 4, 7, 10) and 
refurbish components that were not part of the recently 
completed LEP (Alt 357). In particular, Alt 357 reworked the 
canned sub-assembly on the B-61-7 and B-61-11 and did not 
include the B-61-3, B-61-4, and B-61-10 which are deployed 
outside the continental United States to support NATO. A two-
year B-61 LEP feasibility and cost study (Phase 6.2/6.2A) began 
in September 2008. The cost of the LEP will be determined as 
part of that study.

    General Schwartz. And Congressman, if I may, sir----
    Mr. Visclosky. Yes.
    General Schwartz. I think what you addressed there is 
really an issue for the nuclear posture review, which will 
commence shortly and work through the middle part of this year 
in terms of the strategy and so on. But I would like to 
reiterate Secretary Donley's comments. It is important for us 
to recognize that there are components that need to be 
sustained or remanufactured in the existing stockpile: Fuses, 
neutron generators, things that really influence the 
reliability of the weapons we already possess. And so that is 
where the focus of the Air Force is at, on those we currently 
possess that allow us to maintain our deterrence posture and 
where we will focus going forward.
     Mr. Visclosky. Would you describe it, General, as a 
modification or an alteration of the weapon?
    General Schwartz. I would characterize it as sustainment of 
the existing weapon. This is not dramatically changing the 
characteristics and so on and so forth. It is making them 
safer. It is maintaining their reliability and, in some cases, 
improving their security.
    Mr. Visclosky. And if I could look out to 2010, my 
understanding is the first increment for the cost that you 
would ask for is about $120 million, give or take? Or if you 
could for the record, and that would be moneys that are 
available under NNSA now, and then what the request would be 
from the Air Force.
    Mr. Donley. We will provide that for the record at the 
appropriate time. Just to be clear, at least as I understand 
our respective responsibilities here, DOE is responsible for 
the weapon and the internal operations of the weapon. We are 
responsible for the interface of the weapon to the platform. We 
share responsibilities and we share funding costs as we go 
forward to get this work done.
    [The information follows:]

    The cost of the B-61 LEP to the Air Force depends on the design 
option selected and will be determined as part of the Phase 6.2/6.2A 
study. The Air Force continues to evaluate funding options for LEP 
engineering studies related to the weapon/platform interface. The Air 
Force will address further LEP resource requirements in developing the 
Fiscal Year 2010 Program Objective Memorandum.

    Mr. Visclosky. Right, and I do just want to emphasize, 
because after 2 years of language and hearings, particularly 
with NNSA and others, there is a perception, and I speak only 
for myself now, that I am opposed to doing or having any 
changes made to any warhead. That is wrong. But I also would 
not want to be misunderstood. I understand we have issues on 
surety, safety, just use control. I am with you there but would 
want to make sure, because, as you point out, General, we are 
doing another posture review. What we are harping on, and I 
would say harping, whining, whatever you want to call it, the 
strategy, because in the end, you are looking at what changes 
need to be made now for some sums of money after just spending 
$400 million. Then the question is, to how many of those 
weapons will you apply that change at what cost only to find 
out later, well, we, because of a strategy that works, we do 
not need to apply it to all of these weapons maybe we have now 
applied it to. And obviously, we are talking about one system 
here. But as you allude to, Mr. Secretary, there is a number of 
them. So I would want to emphasize I would want to stay in 
touch and appreciate the additional time from the Chairman. I 
just want to be very cautious here and use every opportunity, 
because my point then is, if you have a strategy, and not just 
as far as the uses of the nuclear arsenal but nonnuclear, 
nonkinetic, the role of proliferation, my upset in the past has 
been that the weapons figure goes up, and I am not necessarily 
again opposed to that, but the nonproliferation number in the 
last several has gone down. And my sense is the greatest threat 
this morning when we woke up is that person who cannot be 
deterred; they can only be stopped. And after you, then, know 
what the constitute weapons are, particularly it is important 
to Mr. Frelinghuysen and myself and others, what does the 
weapons complex look like? Because my fear is if we start down 
a road without realizing or making a final determination of 
what the rationalization size should be, we will never get 
there. So I certainly do intend to, if you would, work with 
you. And I just want to make sure we are very careful here. 
Thank you very much.
    Mr. Donley. Understood. Thank you.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Frelinghuysen, you have anything to add to 
this conversation?
    Mr. Frelinghuysen. No, I support the Chairman's questions 
in this hearing.
    Mr. Murtha. Mr. Kingston.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Secretary, General, I have a question about the 
inventory in general. You have an inventory of every nuclear 
weapon that is in the country or in the world owned by the 
United States.
    Mr. Donley. Yes, 4,961 are under Air Force custody (A total 
of 8,938 are owned by the U.S.).
    Mr. Kingston. How about lost nuclear weapons? Do we have an 
idea of any that are unaccounted for going back to the 1940s?
     General Schwartz. Sir, there are some, you know, that have 
gone down in airplane crashes in those days gone by when we 
actually flew missions and training missions with live nuclear 
weapons. Decades ago, sir.
    Mr. Kingston. And in those cases where we know one was lost 
because it went down, what do we do about those? How are those 
being monitored today? Because they would still be nuclear 
capable, correct?
    General Schwartz. In each case, there were concerted 
efforts, and in one with which you might be personally 
familiar, very concerted efforts, even in recent years, when 
the possibility or new technology came along that would allow 
us to reconfirm areas where the weapons may have been lost due 
to accidents, we continued to do that work. And in fact that 
occurred I guess two years--no, more like 4 years ago in the 
effort down towards Savannah River where we used side-scanning 
sonar and other new technologies to try to reassure ourselves 
that if it was there, we were going to retrieve it even after 
all these years. This never goes completely off the radar 
screen to be sure.
    Mr. Kingston. Okay. So, theoretically, it could be 10 
years, 30 or 40 years from now we would eventually be able to 
find these with the right technology?
    General Schwartz. I think we never dismiss that as a 
possibility, Congressman.
    Mr. Kingston. All right. Thank you.
    I have a question about the aging B-52s, just switching 
subjects on dual capabilities and the bombers. We have nuclear 
capable B -52, B-2s and then dual capability in the F-16 and 
the F-15E. Has the Air Force thought about using Joint Strike 
Fighters and making them nuclear capable? What is going on with 
that?
    General Schwartz. The short answer is yes. That decision, 
given that the F-35 is an international program, we have a 
steering group that talks about what is on the airplane. It 
involves the international partners and when that goes on the 
airplane. We believe in the Air Force that the F-35 should be 
dual capable and that we will present that for consideration by 
the steering group this summer.
    Mr. Kingston. Okay. And also on the question of aging 
fleet, the WC-135s do the atmospheric sampling on vital 
intelligence after nuclear detonation. And is it correct that 
there are only two of them and they are 50-years old or 
approaching 50-years old? Have we thought about using the 737s 
or moving in the direction of the C-40A frame I guess?
    Mr. Donley. We have looked at that. We will continue to 
look at it going down the road. Those airframes, while they are 
very old, they still have a lot of life on them because they do 
not take a lot of stress in the airframe like a fighter would. 
They still have 20 years plus on the airframes left. We have 
recently been asked by the Office of the Secretary of Defense 
to go back and look at an analysis of alternatives. Going 
forward, we would want to think about how we do this mission 
out into the future. There may be other ways to do this, 
different combinations of sensors and capabilities, but we have 
time to work this.
    Mr. Kingston. Well, all right.
    Thank you, Mr. Chairman. I yield back.
     Mr. Murtha. Mr. Moran.
    Mr. Moran. Mr. Chairman, I have some questions, but I 6 
think it is only fair- to defer to those who have been waiting 
longer than I to ask them. So I am willing to defer.
    Mr. Murtha. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Moran.
    Welcome. I am interested in knowing how both of these 
incidents first came to public attention. The Taiwan, I 
remember reading it in the paper myself, and then also the 
Minot situation. How did it first--both--come to public 
attention, General?
    General Schwartz. Ma'am, it preceded my arrival in town. I 
was in a different position at the time that these situations 
occurred. In general, they were reported through channels once 
they were discovered all the way up to the Secretary of Defense 
and ultimately the President, in both cases. Then institutions 
within the Department swung into action.
    Ms. Kaptur. So you are saying, there was a public 
announcement by the Department?
    General Schwartz. No. What I am saying is, once the 
incidents were discovered, they were reported in command 
channels within the Department of Defense. I was not in town at 
the time, when an announcement occurred.
    Ms. Kaptur. They announced it publicly?
     General Schwartz. They did.
    Ms. Kaptur. Could you please explain to me, on the first 
incident where nuclear-related ICBM parts labeled as helicopter 
batteries, so, first of all, there was a mislabeling, were sent 
to Taiwan in 2006. All right. Do you separate in your parts 
supply chain the nuclear-related parts versus others? Is there 
a separate supply chain?
    General Schwartz. The supply chain was goofed up 
previously. We are improving but there is not a separate supply 
chain. This is part of the solution I described to you where we 
had multiple agencies responsible for different pieces of 
material, the so-called nuclear weapons related material. We 
are in the process of consolidating control of all nuclear 
weapons material under Air Force dedicated supervision.
    Ms. Kaptur. All right.
    General Schwartz. Inventory management system is associated 
with that as well. So that was one of the lessons learned from 
this incident. We followed the Navy's lead on this of doing it 
ourselves at one location.
    Ms. Kaptur. So you have a separated supply chain. Are all 
those components domestically sourced?
    General Schwartz. Ma'am, I would have to take that for the 
record.
    Ms. Kaptur. I would be very interested in knowing that.
    General Schwartz. Okay.
    [The information follows:]

    All assets defined as nuclear weapons-related materiel, 
which is the class of materiel involved in the Taiwan incident, 
are domestically sourced.

    Ms. Kaptur. Thank you very much, General. Now on the 2007 
incident, where the B-52 crew mistakenly flew six nuclear 
weapons from one base to another, which nuclear weapons, I did 
not find it in your testimony, exactly which nuclear weapons 
were flown?
    Mr. Donley. The weapons were attached to the bomb wing at 
Minot Air Force Base, and they were mistakenly flown from Minot 
Air Force Base to Barksdale Air Force Base.
     Ms. Kaptur. Correct. But what type of weapon?
     General Schwartz. Air-launched cruise missile.
     Ms. Kaptur. They are cruise missiles?
     General Schwartz. Right.
     Ms. Kaptur. All right. How did that happen?
     General Schwartz. This was an incident which involved 
commingling of the real deal and training assets. The truth of 
the matter is that----
     Ms. Kaptur. Loaded missiles versus unloaded missiles? They 
were not----
     General Schwartz. We had pylons with training devices 
loaded and pylons with real weapons in the same igloo, in the 
same weapons storage space. There were multiple failures which 
allowed the incorrect pylon to get put on the airplane and 
flown from North Dakota to Louisiana.
    Ms. Kaptur. That just seems so----
     General Schwartz. I agree with you completely.
     Ms. Kaptur [continuing]. Incredible.
     General Schwartz. It is incredible. It is embarrassing. It 
is profoundly unsettling, and it is why we are laser-focused on 
correcting the underlying reasons that this occurred, not just 
the superficial reasons that one or two people did not do their 
jobs, but rather the underlying rationale, some of which is 
culture-based, as Dr. Schlesinger outlined, some of which is 
procedure and process.
     Ms. Kaptur. General, can I be assured that every single 
person who goofed was under the command structure and not in a 
civilian contractor position? So it was a mess up internal to 
the Air Force----
    General Schwartz. With respect----
     Ms. Kaptur [continuing]. With no civilian contractors were 
involved in any aspect of this?
     General Schwartz. With respect to the Minot incident, that 
is true.
    Ms. Kaptur. All right. But not necessarily----
    Mr. Donley. But not the Taiwan incident.
    General Schwartz. The Taiwan incident----
    Mr. Donley. The Taiwan incident involved depot operations 
at Hill Air Force Base, where there are both uniformed and 
civilian depot employees working on nuclear-related matters. So 
there is a mixture of uniformed and civilian personnel.
    Mr. Murtha. Will that be changed under the new system?
    Mr. Donley. Well, I do not believe so. All of that--what 
has changed is the responsibility there, which was a mixture of 
Air Force and DLA, has been moved to Air Force. The Air Force 
and DLA have agreed to move that responsibility into the United 
States Air Force. We still have a civilian-heavy workforce at 
our depots. The civilian leadership has been changed in that 
particular organization. But I believe we still have civilians 
involved in our depot-related operations.
    General Schwartz. But they are DOD employees.
    Mr. Donley. They are DOD employees.
    Ms. Kaptur. I would like to have some type of information 
provided to the record to really look at who these--how they 
are classified. And of those working in the nuclear programs, 
how many are enlisted, how many are civilian contractors, if 
there is a way one can easily do that. And I am interested, for 
every single person under this new--is it three-star general?
    General Schwartz. Yes.
    [The information follows:]

    The Department of the Air Force has many military, 
civilian, and civilian contractors working nuclear programs.
    The Air Force Nuclear Weapons Center, located at Kirtland 
AFB, MN, is the overall responsible agency for the operation of 
safe, secure, and reliable nuclear weapon systems to support 
the National Command Structure and the Air Force war-fighter 
and is led by an Air Force major general. The following two 
units are subordinate to the Nuclear Weapons Center.
    The 526th ICBM Systems Group, located at the Ogden Air 
Logistics Center, UT, is responsible for inception-to-
retirement integrated weapons system management of Minuteman 
and Peacekeeper weapon systems. The group develops, acquires 
and supports silo based ICBMs and provides program direction 
and logistics support as the single face to the customer. The 
group is also responsible for acquisition, systems engineering 
and depot repair; manages equipment spares; provides storage 
and transportation; and accomplishes modifications and 
equipment replacement to maintain silo-based ICBM systems.
    The 498 Armament Sustainment Wing is a reporting unit of 
the Air Force Nuclear Weapons Center. It is responsible for 
sustainment of nuclear munitions and cruise missiles, including 
operation of two munitions maintenance and storage complexes 
(at Kirtland AFB and Nellis AFB, Nevada).

----------------------------------------------------------------------------------------------------------------
                      Unit                         Officer      Enlisted     Civilian      CME *        Total
----------------------------------------------------------------------------------------------------------------
Ogden Air Logistics Center, UT
    526 ICBM Group.............................           55            9          381          371          816
Nuclear Weapons Center, Kirtland AFB, NM
    Headquarters, Nuclear Weapons Center.......           33           23          108            0          164
        498 Armament Sustainment Wing..........           66          259          241           37         603
----------------------------------------------------------------------------------------------------------------
* CME=contract man-year equivalents.

    Ms. Kaptur. All right. Do you have a ribbon if you are 
working in a nuclear program? Are you separate from other 
people in the Air Force? I do not have any such basis in my 
area, but I would like to know if there is a culture of 
teamwork that is built because of special designation for 
persons working in this program regardless of what title you 
might have in the chain of command.
    General Schwartz. In the lingo that is known as what patch 
you wear. That patch will be a Global Strike Command patch. 
There will be a sense of community, a sense of mission, a sense 
of belonging, which we lost over the last 15 or 20 years and 
that we are bringing back.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Mr. Murtha. Ms. Granger.
    Ms. Granger. Thank you.
    In the report produced by Major General Alston, the 
recurring thread or theme is the underinvestment in nuclear 
enterprise. And my question is with the new corporate 
restructuring about the A10 head or position, the advocate for 
nuclear deterrent mission in the Air Force, with that sort of 
emphasis, what sort of effect will it have on other major 
programs within the Air Force like the F-22, the Joint Strike 
Fighter and the personnel?
    Mr. Donley. Ms. Granger, we have already taken steps to 
realign resources inside the Air Force to get back additional 
focus and additional manpower and additional dollars on the 
nuclear mission. We started in 2008. We are it in 2009. We have 
a string of dollars tied to 2010 and the out years where we are 
beefing up the nuclear enterprise, both people and dollars. We 
have added a B-52 squadron, a fourth B-52 squadron that will be 
dedicated to One year's worth of alert time. So we have gotten 
all this going as a result of our roadmap. We have a pretty 
robust view of all the things that need to be undertaken from 
an equipment point of view and from a people point of view, to 
include operations, organization, and training. We are 
identifying the resources that go with that. We are making 
adjustments inside Air Force as we can to address this issue.
    Ms. Granger. Right. And my question is, though, how does 
that affect existing programs or programs that are being built, 
like the F-22 and the F-35?
    Mr. Donley. Right. I do not believe it has had any direct 
impact on those investment programs. Probably the biggest 
impact that it has had is on our total active duty manpower. 
The Secretary of Defense made a decision in the summer to allow 
the Air Force to grow manpower back up to about 332,000 active 
duty end strength from a previously planned reduction down to 
316,000. So one of the major resource decisions was to allocate 
some of that manpower back into the nuclear enterprise.
    Ms. Granger. Thank you.
    General Schwartz. 2,500 spaces.
    Ms. Granger. Thank you.
    Mr. Murtha. Mr. Moran.
    Mr. Moran. I am going to pass.
    Mr. Murtha. Mr. Boyd.
    Mr. Boyd. I am going to pass.
    Mr. Murtha. Mr. Rothman.
    Mr. Rothman. Thank you, Mr. Chairman.
    Mr. Secretary and General, thank you for being here, thank 
you for your distinguished careers, and all of your years of 
service and sacrifice for our country. And I am hoping that 
your present positions will be the crowning jewel of your 
lifetime's work.
    Mr. Dicks. If you get the tanker thing right.
     Mr. Rothman. General Schwartz, I wanted to just touch base 
with you on something that I may have misunderstood in your 
testimony, or in your response to a question, namely that there 
would be two people responsible for--and remind me what those 
two people would be responsible for.
    General Schwartz. We have a policy, it is called the two 
person policy, and in a number of situations that relate to 
handling or processing of nuclear weapons that it takes two 
people to do it. In other words, one person cannot move it from 
place A to place B. It has to be done by two people. And 
accountability purposes has to be done again by two folks, one 
person and then verified by a second person.
    Mr. Rothman. So if I understand it, the storage of the 
materials in an igloo is done by two people?
    General Schwartz. At least two people.
    Mr. Rothman. At least two. Its location in the igloo is 
done by two people?
    General Schwartz. At least two people.
    Mr. Rothman. So every step of the way, the loading onto the 
aircraft by two people, the inspection of the aircraft before 
it takes off from a base with nuclear weapons.
    General Schwartz. In general, that is true, sir.
    Mr. Rothman. Okay. You used the words, General, 
``profoundly unsettling.'' And I do not think that that was an 
understatement. Each of those 6 warheads, each of them had the 
destructive power of up to 10 Hiroshima bombs; each of them, 
flying over U.S. soil and unaccounted for, for 36 hours. Each 
of the 6 have a destructive power of 10 Hiroshima bombs.
    General Schwartz. Congressman, we should not--I am not 
minimizing what happened. It is bad, but we shouldn't suggest 
that these weapons, had they left the airplane, would have 
detonated. Just allow me to make that caveat, that was not an 
issue in this instance.
    Mr. Rothman. Well, yes, I get that distinction, if you 
will. But they were without a steward----
    General Schwartz. Modest though it may be.
    Mr. Rothman. Good. There was no special guard for these 
weapons for 15 hours. So whether they could have been stolen by 
some bad guys, and then armed, and then blown up would have 
been extraordinarily catastrophic.
    Mr. Murtha. If the gentleman would yield, would he explain 
the arming process so we would know why they wouldn't have 
detonated?
    General Schwartz. Congressman, there is a--and I am not the 
expert on this--but fundamentally there is a complex mechanism, 
including codes, which have to be matched and done 
electronically in order for the weapons to arm.
    Mr. Murtha. From the ground or from the airplane?
    General Schwartz. It is from the aircraft.
    Mr. Dicks. But how do they know--if they think it is a test 
missile and not a nuclear missile, how do they know that they 
have to do that?
    General Schwartz. There is a way to determine by looking 
through a small window in the body of the weapon to determine 
whether it is an actual weapon or not, or a training shape. 
Regrettably in this instance, either that was not done 
properly, or the person who executed that, the persons, didn't 
know what the hell they were looking for.
    Mr. Murtha. Well, what Mr. Rothman is asking is you say it 
couldn't be detonated. No chance of it being detonated. In 
other words, they would not have had the key, the electronic 
key, to arm the weapon?
    General Schwartz. Correct.
    Mr. Rothman. If I may, Mr. Chairman, but we are very 
concerned these days about loose nukes, and our loose nukes 
would have been a disaster. And the fact that they were--they 
were without a special guard for hours just sitting 18 there at 
the base is obviously what has disturbed all of us.
    But to move on, if I might, to--and the fact that those 
four ballistic missile fuses that were unaccounted for for 17 
months, you know, my understanding as a lay person is those 
nuclear fuses are highly sought after and very important in the 
building of a nuclear program, and yet we didn't know about 
them for 17 months.
    My last question, which is a little bit of a--may require a 
little bit of an elaboration by each of you gentlemen, is how 
did this happen? General, you used 15 to 20 years. Does it go 
back longer than that? How did this culture develop? And I 
don't ask it to assign blame of any individual or 
administration, I ask it so that we can judge whether what you 
are doing now is the right fix for what the problem was. So if 
you can tell us the right fix and what the problem was at the 
time.
    General Schwartz. In the 1990s and the post-Cold War 
setting, sir, we decided, for example, weapons systems bombers 
that had been almost exclusively assigned to the nuclear role 
would have a much broader conventional responsibility to 
deliver conventional munitions.
    In addition, there was a sense that perhaps the nuclear--
the relevance of deterrence had waned in a post-Cold War 
situation.
    Our service took on the mantra, properly, perhaps 
excessively, but properly, to be expeditionary and to be able 
to move out and take care of business wherever that might be 
required, again, a conventional mission.
    In the process of these things occurring over time, the 
emphasis on the nuclear mission diminished. We go to war, and 
naturally there is a compulsion to do that well, to devote the 
resources to support the fight, to put good people and so on.
    In fact, in our Air Force, the truth of the matter is that 
being deployed forward was more valued than sitting in a 
missile hole in Montana, Wyoming or North Dakota. This is 
symptomatic of what Dr. Schlesinger identified, of a shift of 
which we, as leadership, over time, didn't grasp the 
significance. We do now.
    In establishing the Global Strike Command--and, I mean, one 
of the fundamental rationale for that is to have an institution 
in our Air Force as a major command whose singular focus is on 
nuclear stewardship and operations.
    Mr. Donley. Right. If I could just add, just briefly, the 
Chief has outlined this, I think, very well. To give you a 
little bit more flavor and sort of color background to this, as 
the wall came down at the end of the Cold War, we made national 
decisions to reduce the number of nuclear weapons and forces in 
our inventory. We made national DOD-level decisions to take 
what used to be Strategic Air Command, focused on the nuclear 
mission, rename it, reshape it, and give it more than just 
nuclear missions. Within the United States Air Force, the 
impact of those changes were to put the bombers under a command 
that had other than nuclear responsibilities, Air Combat 
Command, which has all our bomber aircraft responsibilities.
    Mr. Rothman. But they are still dual use.
     Mr. Donley. They are, but the command's focus was broader 
than nuclear, and, in fact, started to be oriented toward 
supporting joint warfighting and getting ready for other 
conflicts.
    The missiles went to Air Force Space Command, which has 
responsibilities for oversight of space-related activities, 
launch support, all of these other matters, some affinity with 
nuclear missiles----
    Mr. Rothman. Could I just follow up on that--all right, 
never mind.
    Mr. Donley. Different than a nuclear mission. I apologize, 
sir.
    Mr. Rothman. No, no, I just wondered--oh.
    Mr. Murtha. Mr. Rogers.
     Mr. Rogers. Thank you, Mr. Chairman.
    Bomber fleet, you got, what, 76 B-52s, and the age of that 
fleet? What is the age of the B-52 fleet?
    General Schwartz. Congressman, it is in the neighborhood of 
50 years. It was first built in the late 1950s and the early 
1960s.
    Mr. Rogers. I am sorry.
    General Schwartz. The aircraft were built in the late 1950s 
and early 1960s.
    Mr. Rogers. But are some of them newer than that, though?
    General Schwartz. No.
    Mr. Rogers. So all of them are approaching 50 years.
    General Schwartz. Right.
    Mr. Murtha. Let me interrupt, Mr. Rogers. Mr. Boyd has to 
leave. I just wanted to give the subcommittee an idea what the 
schedule would be towards April. Where is Paul? Is Paul here? 
No. Well, that takes care of that. We are trying to get as many 
hearings as we can get in by April 6.
    Now, the problem we are looking at is people aren't 
confirmed, won't be available to us, and the budget won't be 
done until later. We will have a series of 22, 23 hearings up 
until April 6, and then after we come back from our recess, we 
will try to get the rest in.
    The intelligence hearing, which we normally have first, we 
are going to get as soon as we can.
    The Secretary of Defense we won't get until probably after 
the recess because we just won't have a budget by that time. 
But as soon as we get a budget, we will get a lot of these 
people back up at the end, but we will try to finish up. We 
don't think we will have a product until June or July, and the 
supplemental will have to be done, we think, by May.
    I was telling leadership this. Let us get the supplemental 
done as quickly as we can. It is about $20 billion short in 
figures. We only have couple of pages, six pages, of 
justification, but we will add to that because the cost of the 
war is not included in the supplemental.
    But we will do everything we can to get that done, and, 
with some cooperation from the Defense Department, we will try 
to do as much as we can on the supplemental, get it passed. 
Now, if it goes past June, and you get into July, then you 
really got a problem with the Army. The other services can get 
by, but the Army really has a problem, too. We will try to work 
it out as quickly as we can as long as leadership goes along.
    So basically that is the schedule, and we will try our best 
to adhere to it. I know that a lot of you, because of other 
responsibilities, won't be able to come, but this is as good a 
turnout as we will probably have the rest of the year because 
all of you are such high-powered Members, so many different 
areas. But I appreciate the turnout, and we will get a concrete 
schedule to you as quickly as we can.
    Mr. Rogers.
    Mr. Rogers. At one point in time, at least, you had plans 
for a replacement aircraft for the B-52s, correct?
    Mr. Donley. Yes.
    General Schwartz. Yes, sir.
    Mr. Rogers. Do you still have such a plan?
    General Schwartz. Yes.
    Mr. Rogers. And what is the plan?
     General Schwartz. It is an R&D effort at the moment. You 
know the term, sir, that we use is next-generation bomber.
    Mr. Rogers. When do you expect to have the next-generation 
bomber in operation?
    General Schwartz. The target for a developmental platform 
would be in the late teens, 2018, 2019 timeframe. Fielding 
would be later than that.
    Mr. Rogers. So at least 9 years?
    General Schwartz. Sir.
     Mr. Rogers. Now, what do you plan to do in the meantime 
with 50-year-old bombers that are getting older every day on 
the chance that you will have a replacement bomber, next-
generation bomber, in 9 years?
    Mr. Donley. We have continued to make modifications in all 
our bomber equipment, so B-52s have had modifications. B-52s 
have had many modifications over the years. We continue to 
upgrade them as we can and modernize them.
    General Schwartz. For example, Congressman, the B-52 used 
to be an analog airplane. In other words, it did not have a 
digital backbone. It does now, so we can deliver the new 
digital weapons like the joint direct attack munition and so 
on. These are the kinds of things, new sensors and global 
positioning capabilities and what have you.
    The airplanes are not static. They might be 50 years old, 
but they are not static.
     Mr. Rogers. I presume they have been reengined perhaps 
several times.
    General Schwartz. The B-52s have not been reengined.
    Mr. Rogers. They have the original engines?
    General Schwartz. If I am not mistaken. I will take that 
for the record to reconfirm for you, sir.
    [The information follows:]

    The H model B-52, the only model still in the active inventory, is 
equipped with its original Pratt & Whitney TF-33 engines. However, over 
the years, the Air Force has completed several engine depot maintenance 
modifications needed to replace the high wear components, extending the 
service life of the engines and enhancing aircraft safety.

    Mr. Rogers. Are there any plans to reengine those aircraft? 
I mean, just from a lay point of view, just looking at that 
plane, I can tell you that engine is not working very good.
    Mr. Donley. Well, the engines get a lot of attention in the 
depot process, so they get rebuilt on a regular basis. To my 
knowledge, we have not had any catastrophic or engine 
maintenance sustainment problems that has threatened the health 
of the B-52.
    Mr. Rogers. Well, here is my concern, and I share it with 
you: making that plane last until the next generation is 
operable, one; and, two, I am not even sure you are going to 
get the next generation in the time frame, at least, you are 
talking about. Secretary, Secretary Gates said before the 
Senate Armed Services Committee in January that that plane may 
not be on the schedule that he had first thought, right? And he 
said--when he had talked about the importance of that plane 
being available in 9 years, he said, ``I made that speech at a 
time when the economic outlook was rather different than it is 
now, and the prospects for the defense budget, perhaps, 
differed accordingly.''
    Tell us what he meant.
    General Schwartz. I think it is pretty clear, sir, if there 
are not sufficient funds to do all the things the Department 
needs to do, we will make choices.
    Your Air Force, however, would make the argument, in the 
appropriate forum within the Department, that this is an 
important initiative for the country. We will make the argument 
as powerfully as we can, and we will see where it leads us.
    Mr. Rogers. Well, just any commonsense reading of what he 
said before the committee tells me that the plans for the next-
generation plane are off.
    Mr. Donley. I don't believe that those plans are off. I do 
think we are going to have a good discussion on the NGB this 
year, probably not going to be finally decided in the next few 
weeks as we put together the fiscal year 2010 budget, but 
probably will get a lot closer and, I would say, broader 
attention during the QDR and during the Nuclear Posture Review 
that the Department and the administration have planned for 
later this year. This will be in the mix, I think, for the NPR 
discussion.
    Mr. Rogers. Well, under your plans, what would be the first 
fiscal year that you would need money toward the next-
generation bomber?
     Mr. Donley. You have been supporting the R&D efforts for 
several years now, and there is both a white world and a black 
world classified dollars that go with that program. There have 
been dollars supporting the effort.
    Mr. Rogers. All right.
    Mr. Murtha. The time of the gentleman has expired.
    Mr. Moran.
    Mr. Moran. Thank you, Mr. Chairman.
    Beyond the immediate concern about inventory control, that 
is the fundamental issue, where do we go from here?
     President Obama made several public declarations that he 
was committed to substantially reducing our nuclear stockpile, 
but there is resistance on the part of the Pentagon, as I 
understand it. I don't want to put words in your mouth, I want 
you to clarify and find the posture, if you would, that you 
don't want to do that until we are well on our way to a 
modernization of our weapons and particularly of the production 
capability.
    Now, I know part of our problem is that it is really DOE 
that controls the production capability, and you distribute it 
and implement it. But that really seems to be the critical 
issue we are going to have to face.
    This public commitment, which I think there is a fair 
consensus that over time it has to be done, but there seems to 
be a commitment to substantially and quickly reduce our 
stockpile versus the Pentagon's position that we are not ready 
in terms of the modernization that would make you feel 
comfortable, particularly with regard to production capability.
    So would you address that a bit, both of you, but 
particularly General Schwartz?
    General Schwartz. Congressman, we respond to policy. I 
think this is why the Nuclear Posture Review is so important. 
It has, both within DOD and outside DOD, implications, and in 
the end we will accommodate to the national policy. If it is 
the current number or lesser number or lesser than that, we 
will do what policy dictates.
    Mr. Moran. I understand that, but you will also make 
recommendations, and that is what we are trying to get out of 
you, what you would recommend, because the implementation of 
that public policy has not been defined.
    General Schwartz. Sir, my basic recommendation is whatever 
the number is, they have got to be viable, they have got to be 
safe, they have got to be secure, and there are some issues in 
that regard, and I think that needs attention.
    Mr. Moran. Well, let me pursue it a little more so that I 
can get a more specific answer, if I could. By what percentage 
are we really talking about? They are going to turn to you for 
a recommendation, General, you know that. They are not going to 
make it in a vacuum. I mean, he is going to want to say, well, 
I am following the advice of the military on this, for 
instance, you, with the Secretary.
    So what would your recommendation likely be?
    General Schwartz. Sir, the way this works is that the Joint 
Chiefs will make a recommendation to the civilian leadership, 
and I can't presuppose what that recommendation will be.
    I can tell you, contrary to the implication that the 
Department has already made a decision on this, that issue has 
not come to the Joint Chiefs' tank for consideration. It has 
not been teed up yet, and I don't think it is likely to be teed 
up until the Nuclear Posture Review reports out its 
conclusions.
    The bottom line is I am not in a position, sir, to offer 
you other than personal insights, which I have.
    Mr. Moran. Well, personal insight.
    General Schwartz. Personal insight is whatever the number 
is--and I cannot give you a number now. I am not educated 
enough at the moment to do that. But whatever the number is, we 
have got to make sure that these things are viable, safe and 
secure. As your colleague mentioned earlier, there needs to be 
a strategy, it needs to be connected, and that is the purpose 
of the Nuclear Posture Review. It will come to the tank, the 
Chiefs will make their recommendations to the civilian 
leadership, and then that clearly will be, you know, ready for 
your consideration.
    Mr. Dicks. Will the gentleman yield just briefly for a 
comment?
    Mr. Moran. Sure.
     Mr. Dicks. The comment I would make is, you know, we have 
all been talking about nuclear weapons today, and one of the 
reasons for this whole discussion is with the advent of smart, 
conventional weapons that were highly accurate, you know, these 
things can be extremely effective and can be usable. I mean, 
nuclear weapons are a weapon of last resort. It is a deterrence 
weapon.
    So I think that we ought to--when we look at our whole 
capability, we ought to be first looking at the conventional 
capability and what that gives us in order to make a decision 
about how many nuclear weapons do you wind up with.
     We have been coming down, and I think it has been done in 
a safe and responsible way, but the thing that is different is 
the advent of these smart, conventional weapons.
    Mr. Moran. Well, reclaiming my time, even though there is 
none of it left, I wholly agree with you, Norm, and there is a 
certain irrelevancy to current and likely future threats in 
terms of the nuclear option, if you will.
    But I didn't want to prejudice the response. I wanted to 
see if we could get any kind of specificity in terms of what 
the recommendation might be.
    Thank you, Mr. Chairman.
    Mr. Murtha. I have to say that was a masterful response by 
General Schwartz, because he didn't really tell us anything at 
all.
    Mr. Dicks. It is premature.
    Mr. Murtha. It is premature, too, but I think we have to be 
careful interceding between what the recommendations of the 
Armed Forces and what the President might do.
    Mr. Hinchey.
    Mr. Hinchey. Thank you, Mr. Chairman, Mr. Chairman and Mr. 
Secretary. Thank you for your very interesting answers, 
although I couldn't hear every single word, interesting enough.
    I think the attention recently in the context of this 
hearing has been focused on the issue of global security, the 
fact that we have seen a decline of global security over the 
course of the last recent years, and that is something that is 
going to have to be an increased focus of our attention, 
generally, to improve that situation. And hopefully that is 
going to happen, and we very much anticipate that, and, of 
course, it is absolutely needed.
    But just focusing on the situation that we are addressing 
here, those two incidents that occurred, the transfer of the 
nuclear fuses from Taiwan and then the airplane flying over the 
country with nuclear weapons it, the transfer of the nuclear 
fuses didn't show up, at least publicly, for about 18 months.
    Was there an investigation going on in the course of those 
18 months, or was that the situation generally, that no one 
knew it for about that length of time?
    General Schwartz. The latter, Congressman.
    Mr. Hinchey. The latter, yes.
    In the context of the investigations that had ensued on 
both of these incidents, has anything else shown up, any other 
problems that have popped up, maybe not as big as these two, 
but any other circumstances that you are now focusing your 
attention on?
    General Schwartz. We have had nothing, certainly, of that 
consequence, but we have identified--for example, in this 
effort to sort of make sure that the inventory is right, we 
have discovered ourselves that some items that should have been 
on the inventory that are in stock are not, and that that 
primarily is what has occurred.
    This is the reconciliation of items with the inventory, and 
those are the discoveries that have ensued since that time. 
Going forward, we see that as positive. We are getting to 
ground truth on inventory, location, numbers and so on, which 
we did not have in sufficient measure before.
    Mr. Hinchey. So in the context of the investigation, you 
didn't see anything that was done here intentionally, or did 
you; or was it mostly something that resulted from an increased 
casuality in the way that these things were happening?
     Mr. Donley. Inadvertence, lack of discipline, a lack of 
adherence to the published technical orders, people 2 
developing their own ways of doing business locally to 
accommodate their work routine.
    But, you know, this discussion about the two incidents is 
helpful, but it also points to the broader underlying issues 
that we need to address.
    The main result of these investigations, and there were 
many, is that we do not just have individual problems at Minot 
Air Force Base and at Hill Air Force Base, we have an 
institutional challenge here to reinvigorate our culture of 
precision and discipline and reliability in the whole nuclear 
enterprise, so that is where we have been focusing.
    All the immediate corrective action, the discipline actions 
on Minot, on the Taiwan fuses, those have been done. The local 
corrective actions have all been taking place. That is behind 
us. Now what we are after is getting back to the level of 
performance across the Air Force that we need to rebuild to get 
back to where we have been in the past.
    Mr. Hinchey. And in the context of that, you are focusing 
on the people who are involved, obviously, and the people who 
do it. Most of them are in the military, but we know that some 
are civilians. I think you said they were all Department of 
Defense personnel?
    General Schwartz. In the Air Force, that is true.
    Mr. Hinchey. In the Air Force, and so they are overseeing 
the proper security operations, very tight in a secure way?
    General Schwartz. Of course.
    Mr. Hinchey. Just one last thing I would like to mention. 
This new triad, can you talk a little bit about that? What are 
the circumstances surrounding?
    General Schwartz. I think this, sir, this kind of relates a 
little bit to what Congressman Dicks was referring to, is that 
in--the sort of traditional triad was missiles, bombers, and 
submarines. That was the sort of traditional, nuclear triad.
    A subsequent version of that included missile defense, 
properly, and included also the use of high-precision 
conventional-type capabilities, which didn't exist, you know, 
in the original sort of formulation.
    The notion of the so-called new triad is just a recognition 
that over the years, the decades, in fact, that technologies 
and such have changed would suggest to us that we should be 
more sophisticated about how we deter adversaries. It is not 
just the traditional delivering a nuclear munition, but there 
are other ways to effectively deter, too, and that we should 
take advantage of those.
    Mr. Hinchey. Thank you very much.
    Mr. Murtha. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman, Mr. Secretary, and 
General. This has been very instructive here this last hour. I 
feel a lot better than I did when I came in here in terms of 
what you are now doing as well as how we got to this place.
    Mr. Secretary, I understand you have been the Secretary 
since October?
    Mr. Donley. I have.
    Ms. Kilpatrick. You anticipate that you will keep that job, 
or is there any way to anticipate that?
    Mr. Donley. I am awaiting the President's determination of 
what he plans to do in terms of Secretaries. Secretary Gates 
has asked that all senior officials remain in place until their 
replacements are identified and in place.
    Ms. Kilpatrick. Thank you. I commend you for your service.
    General Schwartz, how long have you been Chief of Staff?
    General Schwartz. Since the 12th of August, ma'am.
    Ms. Kilpatrick. And that would apply, Mr. Secretary, to 
your positions as well?
    General Schwartz. Yes, ma'am, the Chiefs of Staff service 
positions are statutory four-year tours. They obviously can be 
curtailed, as was the case, but that is typically a four-year 
tour, ma'am.
    Ms. Kilpatrick. And I appreciate your service and your 
command of your responsibilities.
    You were talking earlier about the three things that the 
Air Force has done to get ready and to move forward. You 
mentioned organizationally, unified sustainment, and I don't 
know if you got interrupted or I missed it, but what is the 
third leg of that?
    General Schwartz. This is the headquarters representation 
of having a champion who works for me and the Secretaries, not 
embedded; he has direct access, or she has direct access, in 
order to be the champion for the nuclear enterprise in our Air 
Force. It is not filtered, it is not submerged, it has direct 
access to us.
    Ms. Kilpatrick. I served on the Air Force Academy Board 
some years since I have been here, and the most outstanding 
part of my tenure there was the young men and women you are 
training, visiting Colorado and the school, and spending some 
time there and watching them.
    I mean, I feel better for our country because of the 
academies, first of all, and then the dedication that you all 
give the young men and women is something second to none.
    General Schwartz. I would just say that this problem that 
we had as an Air Force is not about the young Airmen. This, as 
the Secretary suggested, was--this was an institutional 
failure, and that is how we are approaching it.
    Ms. Kilpatrick. Thank you.
    And then lastly, for me, how do we fare in the world? I 
hate looking at the news anyway most of the time, but sometimes 
you have got to look at it. How do we fare, our nuclear 
capabilities, in terms of the world, our partners as well as 
our enemies, with what is going on? How do we fit?
    General Schwartz. Clearly we provide a deterrence 
capability for more than just America. It supports allies and 
other institutions, NATO, for example, and so on. We clearly 
are a leader in this area, and it is why, when we make mistakes 
like we have, that it harms the perception that others have of 
our professionalism and the viability of our deterrent. That is 
why this is so profoundly important. We will not goof it up 
again.
    Ms. Kilpatrick. Can't, can't afford to, unless--and I think 
the Chairman and Mr. Rogers were talking about our--you know, 
you have got to ask for what you want. We are the 
Appropriations Committee. Sometimes you can't ask for it, and 
some of our colleagues think we spend too much in defense. But 
all of us, to a person, all 535 of us, wants to be equipped and 
trained and educated and all of that.
    So I appreciate what you do, and I yield back, Mr. 
Chairman. Thank you.
    Mr. Murtha. I want to say I am impressed. You have all 
those people with you, and you didn't have to turn to them. I 
always measure the witnesses by how many times they have to 
have the backup people answer questions, so I am impressed by 
what you have said.
    But Mr. Dicks has one additional question.
    Mr. Dicks. Just so we don't get overly confident, data from 
the report shows that the Air Force failed on 5 of its 22 
surety tests, inspections, in 2008. It was the fourth time 
since 1992 that at least five failing grades were issued, the 
report said. And the most recent surety inspection failure took 
place at the 90th Missile Wing at F.E. Warren Air Force Base in 
Wyoming from December 2 to December 17.
    The base is in charge of 150 Minuteman III missiles that 
are on alert 24 hours a day. The Air Force official said the 
90th was given failing grades by inspectors from Space Command 
and Defense Threat Reduction Agency for not properly 
documenting tests on missiles which require strict monitoring.
    The two other nuclear surety inspections took place at the 
341st Missile Wing at Malmstrom Air Force Base, Montana, from 
October 26 to November 10, 2008; and at the 91st Missile Wing 
at Minor Air Force Base. This was earlier in the year, before 
you all took over, from January 22 to January 2008. So here we 
have five failures this year.
    So where was our brigadier general when all of this was 
happening?
    General Schwartz. Congressman Dicks, these are not Santa 
Claus inspections.
    Here is the fundamental thing, we have deliberately, by 
design, increased the intensity, the depth, the invasiveness of 
our inspection process. The reason is, because what happened 
earlier occurred in part because our evaluation and inspection 
process did not alert commanders to problems, to symptoms that 
they might well have dealt with had they been aware.
    So part of the challenge, part of the reason that we failed 
to perform was because our inspection processes were too 
superficial.
    So do I apologize for having five failures when we are 
turning over every rock, when instead----
    Mr. Dicks. But what about the people out there on the 
bases? I mean, this is December. Haven't they gotten the 
message they have got to do these things properly at this 
point; there is no room for an inadequate report or not 
reporting all the testing that has gone on? I mean, they should 
have the word by now.
    General Schwartz. No doubt about that. But we are not going 
to paper it over it they haven't performed.
    The reality is that, for example, in the prior inspection 
regime, we used to sample paperwork. We don't do that anymore. 
We do a 100 percent look at the paperwork. And in the case of 
F.E. Warren we discovered that there were some discrepancies in 
the paperwork. That is a major finding, because in this 
business there is only one way to do it, Congressman, and that 
is the Air Force way.
    Mr. Murtha. Define ``failure.''
    General Schwartz. There was a major finding, and this is 
the situation on a nuclear surety situation.
    Mr. Murtha. But from a technical standpoint are we talking 
about a technical administrative mistake? What are we talking 
about?
    General Schwartz. These were, I would characterize, as 
administrative errors. It still results in a failure of the 
inspection. You know, this is a pass-fail scenario. If you have 
a major finding, you fail.
    Mr. Dicks. Mr. Chairman, let me just give you what they say 
here. The Defense Threat Reduction Agency, you know, gave 
them--marked them down for not properly documenting tests on 
missiles which require strict monitoring.
    General Schwartz. Right. But what they----
    Mr. Dicks. That goes to your whole point about the 
viability of these missiles.
    General Schwartz. Yes, and in the case of those particular 
missiles, it was not an issue of whether the maintenance had 
been performed; it had, and that was confirmed. This was a 
question of whether it was properly documented.
    I am not saying that we should feel better about that 
because this is a system issue, but what I am trying to 
describe to you is that I personally am convinced that being 
invasive, that turning over every single rock, is the way to 
get us back up on step where you expect us to be.
    Mr. Dicks. What about training? I am just going to ask him 
this question. Are we going out and are we training these 
people? I mean, when we are obviously seeing people fail time 
and time again, it looks to me as if there is inadequate 
training.
    Can you tell us what you are doing? Do we have a day when 
training stops, and we have focused on training these Air Force 
people to do these jobs right?
    General Schwartz. We certainly have done that. We have had 
stand-downs. You know, the commands have been engaged on the 
missile and the bomber side and in the sustainment channel as 
well.
    As the Secretary suggested earlier, this is not an 
instantaneous fix. This will take some time, and we need your 
patience. I am not suggesting----
    Mr. Dicks. With nuclear weapons, I don't think we have a 
lot of time. I mean, in other words, you know, I think there 
ought to be a sense of urgency.
    General Schwartz. There is. If we haven't communicated that 
to you here today, Congressman, we flunked.
    Mr. Rogers. Will the gentleman yield on that point?
    Mr. Dicks. I yield.
    Mr. Rogers. It was not just a simple administrative pencil 
error, apparently, because the Defense Department Task Force 
report issued in October warned that the Air Force was not 
doing its job of securing and maintaining nuclear missile 
forces. The report identified ``a serious erosion of senior-
level attention, focus, expertise, mission readiness, resources 
and discipline in the nuclear weapons mission.''
    General Schwartz. Guilty as charged.
    Mr. Rogers. That is not a simple pencil error then. It is 
not an administrative overlook.
    Mr. Donley. We are all about rebuilding that discipline of 
precision and reliability in the nuclear business. I hope we 
have conveyed that 110 percent this morning. It is not about 
Taiwan and Minot. Those are symptoms, symptoms of deeper 
institutional problems that will take time to address.
    We are working the local issues, each one as they come up. 
The results of these inspections are reported to the Secretary 
of Defense. We evaluate on these inspections whether or not the 
officers or NCOs in charge need to be relieved, and there 
continues to be disciplinary action in these as they go along, 
depending on the situation. So we are deadly serious about how 
we are approaching this and tightening down.
    Mr. Dicks. You know, Admiral Rickover used to come out to 
the Puget Sound Naval Shipyard in Bremerton, Washington, where 
we do overhauls on nuclear-powered ships and submarines. He 
would come out and meet with the people who were burning the 
nuclear part of the shipyard and to make certain and insist 
that they were doing things safely.
    Now, they are not perfect. They have had their problems, 
too, over a long period of time, but the record of the nuclear 
Navy is pretty amazing considering everything. That is the 
level of attention that was given to the issue by the Navy, and 
I think that is a good example.
    General Schwartz. And still is, and it is the gold 
standard, and we are doing our best to replicate it.
    Mr. Murtha. Mr. Frelinghuysen, do you have any other 
questions?
    Mr. Frelinghuysen. No, I don't, Mr. Chairman.
    Mr. Murtha. The committee is adjourned until this 
afternoon--Mr. Visclosky.
    Mr. Visclosky. Just a couple of quick comments and one 
question on the B-61 again. One, I would agree with my 
colleagues' interchange earlier, which probably we are all 
wrong, but I would add nonkinetic, and I would add 
nonproliferation as far as the strategy.
    The second thing is--and I know there was already a 
question asked about the possible transfer in jurisdiction of 
the NNSA, and I know that question has been asked--but I am 
opposed to losing that civilian control for the very reason the 
Secretary is sitting here.
    Third, and I appreciate your seriousness about these issues 
and your urgency, and I do share that. What I am trying to 
imbue the Department of Energy with is that same sense of 
urgency, because 2 years ago, when we were talking about 
another system--and I don't want to beat a dead horse, we were 
talking about 2014--but the reorganization of the Department 
was going to be in 2030, which means it would never happen, and 
that is a DOE issue, not your issue.
    The question I would just ask, very briefly, what is the 
role of the Stockpile Stewardship Program and the facilities 
involved in that as you do look at the modification for the B-
61?
    General Schwartz. Sir, that is a major function within the 
Department. The Nuclear Weapons Council, which is cochaired 
both by the civilian leadership in OSD and the Vice Chairman of 
the Joint Chiefs, deals with that specific matter, the 
stockpile, its composition and its status.
    I think, at least by my observation, that gets, you know, 
considerable attention. You are aware that the Vice Chairman is 
the former STRATCOM Commander, so he is clearly well-schooled 
in these areas.
    Mr. Visclosky. I appreciate what you do, too, and thank the 
Chair for its indulgence.
    Mr. Murtha. We are adjourned until 1:30.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
answers thereto follow:]

                       Nuclear Security Incidents

    Question. As a result of nuclear security incidents and the 
subsequent lack of responsiveness from the Air Force, the Secretary of 
Defense asked for the resignations from the Secretary of the Air Force, 
Mike Wynne, and the Air Force Chief of Staff, Michael Mosley. After 
taking their new positions, Secretary Donley and General Schwartz 
disciplined six general officers and nine colonels for their roles in 
various incidents.
    Secretary Donley, given the nature and severity of the nuclear 
incidents over the past couple of years, are you satisfied with the 
accountability actions (concerning the disciplinary actions) taken 
within the Air Force?
    Answer. Yes, we are satisfied with the actions taken and we will 
continue to hold leaders at all levels accountable. To successfully 
reinvigorate the nuclear enterprise, leaders at every level must accept 
responsibility and demand that subordinates, peers, and superiors 
strive for excellence and precision.
    Question. Secretary Donley, what changes has the Air Force made to 
inventory control of nuclear components following the Taiwan incident?
    Answer. The nuclear components involved in the Taiwan incident 
belong to a class of materiel called nuclear weapons-related materiel 
or NWRM. Following the Taiwan incident, the Air Force took immediate 
action to gain positive inventory control of its NWRM, including 
emphasizing and clarifying existing policy and procedures; conducting a 
worldwide inventory of all nuclear weapons, nuclear components, and 
nuclear weapons related materiel and increasing the awareness and 
training of NWRM special handling procedures. The Air Force is now 
transferring all NWRM from the Defense Logistics Agency to Air Force 
controlled facilities. As part of that process, we are capturing the 
serial numbers of all NWRM assets, marking the assets with a 
corresponding tag or bar code and updating our legacy information 
technology inventory systems to automatically track the assets by 
serial number throughout the supply chain. Twice a year, the Air Force 
will conduct a world-wide inventory of NWRM to confirm the condition 
and location of the assets. We are also updating and consolidating our 
nuclear logistics policy, developing an assessment program to verify 
compliance with logistics policy and procedures and increasing the 
expertise of our personnel in the nuclear logistics enterprise.
    Question. General Schwartz, what changes has the Air Force made to 
the handling and transporting of nuclear weapons following the Minot 
incident?
    Answer. Within 60 days of the incident, the Air Force and Air 
Combat Command developed a formal process for coordinating, publishing 
and changing maintenance schedules. Additionally, Air Combat Command 
updated weapons loading technical orders and checklists mandating 
payload verification, and we published a revision to Air Force nuclear 
weapons maintenance procedures. This revision mandated specific 
procedures to record, coordinate, track and brief deviations to 
approved maintenance schedules. It further mandated maintenance teams 
validate contents of each storage structure with munitions control. 
This guidance prohibits co-mingling of nuclear and non-nuclear 
munitions within same storage structure, cell or weapons storage vault 
and we have mandated procedures to stanchion/cone, rope and placard all 
non-operational weapons and non-nuclear munitions. Formal custody 
transfer (signature) process for intra-area, logistics and operational 
weapons movements has been implemented as well.
    Question. General Schwartz, how is the Air Force re-instilling the 
confidence of the American people that their nuclear arsenal is in safe 
hands?
    Answer. The Air Force has taken several significant steps to 
reinvigorate the Air Force nuclear enterprise as we move forward 
towards fully regaining the confidence of the American people in our 
ability to safeguard our nuclear arsenal. We are creating a new major 
command, Air Force Global Strike Command, which will place all nuclear 
capable bombers and ICBMs under a single command. We are also 
consolidating all weapons sustainment functions under the Air Force 
Nuclear Weapons Center. Finally, we established the Assistant Chief of 
Staff for Strategic Deterrence and Nuclear Integration Directorate (AF/
A10). This change provides a single directorate that is focused day-to-
day on the nuclear mission and is responsible for the integration of 
all nuclear related policy and issues across the Air Staff and major 
commands. All three efforts increase the level of advocacy and repair 
the fragmented lines of authority within the Air Force nuclear 
enterprise. In addition, a comprehensive Air Force nuclear enterprise 
roadmap has been developed that contains detailed action plans which 
will restore the Air Force's world-class nuclear culture. This roadmap 
provides the framework to maintain an effective, credible nuclear force 
by strengthening our nuclear-related policies, inspections and 
training. The roadmap also lays out the framework for increased rigor 
and standardization within our nuclear inspection process and will lead 
to increased precision and reliability throughout the nuclear 
enterprise. Further, the roadmap provides a direct reporting link of 
nuclear enterprise-level performance metrics that are reported to the 
Secretary of the Air Force and me as co-chair of the Nuclear Oversight 
Board: this board is comprised of the top general officers in the Air 
Force nuclear enterprise and will ensure sustained institutional focus 
for this critical mission area.

                      Training Our Nuclear Forces

    Question. Secretary Donley, the Department of the Air Force is 
responsible by statute to train our nuclear forces to ensure effective 
nuclear deterrence and flawless nuclear security. The Air Force Blue 
Ribbon Review of Nuclear Weapons Policies and Procedures Report, issued 
in February 2008, observed the base of USAF personnel with nuclear 
experience is diminishing, nuclear units are finding it difficult to 
attract and train personnel with nuclear experience, and there is no 
standardized system to track personnel with nuclear experience, with 
the exception of the space and missile operations field. Further, the 
team observed that the Air Force needs a surety program that develops 
and supports a less experienced nuclear force and makes the nuclear 
business the core business of those engaged in it.
    In your view, what caused the reduction in the number of Air Force 
personnel with nuclear experience?
    Answer. The end of the Cold War necessitated changes in our 
National Security Strategy which drove a restructuring of Air Force 
priorities. Precision weapons became the weapons of choice both 
militarily and politically. Efforts to minimize collateral damage began 
to shift the focus of air power. With the changes in priorities, 
resources diminished, the nuclear weapon inventory downsized, and 
engagements in conventional conflicts increased. The Air Force 
reorganization of 1992 and subsequent BRAC closures resulted in a 
fragmented nuclear sustainment system, atrophy in the pool of nuclear 
experienced Airmen, and an erosion in nuclear expertise as less time 
and personnel were allocated to maintain nuclear systems proficiency. 
The Global War on Terror and Operations ENDURING FREEDOM and IRAQI 
FREEDOM further shifted focus and institutional priorities away from 
the nuclear mission.
    In his report on Department of Defense Nuclear Management, Dr. 
Schlesinger noted the post-Cold War environment, the implementation of 
arms control treaties, attenuation of the nuclear alert posture, and 
the priority assigned to the conventional and space missions led the 
Air Force to give markedly less attention and fewer resources to the 
nuclear enterprise. The result was five broad, accelerating trends: 1. 
Nuclear missions became embedded in organizations whose primary focus 
is not nuclear; 2. Overwhelming emphasis was given to conventional 
operations; 3. The grade levels of personnel in line and staff 
appointments whose daily business involved nuclear weapons were 
lowered; 4. The nuclear mission and those who performed it were 
generally devalued; and 5. There was no single command to advocate for 
the resources required to support nuclear capabilities. Collectively 
this meant that no one command in the Air Force had ``ownership'' of 
the nuclear mission. These trends led to the state of the Air Force 
that you described in your question.
    Question. What action will you take to (1) identify the number of 
personnel needed in the nuclear career field and (2) attract and retain 
personnel with nuclear experience?
    Answer. The Air Force has reviewed its nuclear personnel 
requirements and added nuclear enterprise positions to its overall 
endstrength. The Air Force has established a key nuclear billet list 
which articulates the key positions in the nuclear enterprise and the 
experience requirements needed to fill these positions.
    The Air Force has strategic force management practices to ensure 
the health of all Air Force career fields. The force management 
practices rely on a sustainment methodology which ensures we annually 
assess enough personnel into each career field to meet their 
requirements and to account for the retention of each career field.
    Additionally, the Air Force recently chartered the Nuclear 
Enterprise Advisory Panel. This panel is focused on providing oversight 
of the management and development of our officer, enlisted, and 
civilian nuclear work force and will regularly review the health of the 
career fields that support the nuclear enterprise.
    At this time, we do not envision a bonus program to target the 
accession or retention of strictly nuclear specialties but continually 
evaluate bonus needs. The Air Force currently pays special and 
incentive pays to some career fields in the nuclear enterprise as a 
part of a larger force management practice not related to nuclear 
issues. Aviator continuation incentive pay is paid to bomber pilots and 
combat systems operators as part of an aviation incentive program. 
Selected reenlistment bonuses are provided to enlisted career fields to 
encourage retention. Enlisted career fields supporting the nuclear 
enterprise are eligible for these bonuses as part of a larger force 
management strategy. We continue to advocate for the special and 
incentive pay programs currently in place and will make on-going 
modifications to meet the Air Force's strategic force management 
objectives.
    Question. How long will it take to attract and retain a sufficient 
number of personnel in the nuclear field?
    Answer. The Air Force has reviewed its nuclear personnel 
requirements and added nuclear enterprise positions to its overall 
endstrength. The Air Force has just started evaluating the time needed 
to retain a sufficient number of personnel and the force management 
impacts of these additions. For now, the only career field supporting 
the nuclear enterprise which is projected to have shortages are bomber 
pilots and combat systems operators.
    Question. What will it cost to implement programs to attract and 
retain needed personnel? Where will the resources come from to cover 
those costs?
    Answer. At this time, we do not envision a bonus program to target 
the accession or retention of strictly nuclear specialties but 
continually evaluate bonus needs. The Air Force currently pays special 
and incentive pays to some career fields in the nuclear enterprise as a 
part of a larger force management practice not related to nuclear 
issues. Aviator continuation incentive pay is paid to bomber pilots and 
combat systems operators as part of an aviation incentive program. 
Selected reenlistment bonuses are provided to enlisted career fields to 
encourage retention. Enlisted career fields supporting the nuclear 
enterprise are eligible for these bonuses as part of a larger force 
management strategy. We continue to advocate for the special and 
incentive pay programs currently in place and will make on-going 
modifications to meet the Air Force's strategic force management 
objectives.

                      Reliable Replacement Warhead

    Question. The Reliable Replacement Warhead was originally 
envisioned to ensure the aging nuclear stockpile could meet its long 
term mission by improving the long term reliability, longevity, and 
certification of the existing weapons and associated components. 
However, the design effort led by Department of Energy has seemingly 
led to the development of a whole new program. Last year the Committee 
markup removed all funding for the Reliable Replacement Warhead program 
which was consistent with the Energy and Water Subcommittee markup 
which removed all Reliable Replacement Warhead funding from the 
Department of Energy for weapons development.
    General Schwartz, in light of the fact that there was no funding 
appropriated to the Department for the Reliable Replacement Warhead, is 
it the Department's intent to support further development of a new 
nuclear weapon?
    Answer. Capabilities of the existing weapons stockpile meet the 
nuclear deterrence requirements of the nuclear combatant commanders. 
The Air Force requires refurbished or replacement weapons to maintain 
existing stockpile capabilities and to enhance weapon safety and 
security.
    Question. General Schwartz, has the Department of Defense defined 
its nuclear stockpile needs?
    Answer. The Department of Defense defines nuclear weapons stockpile 
requirements annually in the Nuclear Weapons Stockpile Memorandum to 
the President. The plan for Fiscal Year 2009 was delivered to the 
President on October 16, 2008 and approved on January 16, 2009. These 
requirements will be reviewed in detail this year during the Nuclear 
Posture Review that will begin shortly.
    Question. General Schwartz, will the fiscal year 2010 budget 
submission include any legislative proposals that would authorize 
development of a new nuclear weapon?
    Answer. The Fiscal Year 2010 budget submission is still in 
formulation at this time, but we do not anticipate the submission will 
include any legislative proposals that would authorize development of a 
new nuclear weapon.
    Question. General Schwartz, has the Department of Defense begun 
working with the Department of Energy to develop a nuclear weapons 
strategy for the 21st century as directed by the Appropriations 
Committee in the prior year's legislation?
    Answer. The Department of Defense and the Department of Energy 
issued a joint white paper on nuclear strategy in 2008. The two 
departments are conducting joint studies and analyses under the 
auspices of the Nuclear Weapons Council that will support the Nuclear 
Posture Review to begin shortly.

                        Nuclear Capable Aircraft

    Question. The current Air Force inventory for nuclear aircraft 
includes bombers and dual-capable fighters. Each of these platforms 
that are capable of delivering nuclear weapons is aging and 
recapitalization plans are unclear. As an example, the average age of 
the B-52 is over 46 years old.
    What are the Air Force's future plans with regard to these 
aircraft?
     Nuclear capable bombers (B-52, B-2)?
     Dual-capable aircraft (F-16, F-15E)?
     Dr. Schlesinger's report emphasized the NATO alliance 
dependency on extended deterrence as provided by European and U.S. 
dual-capable aircraft. Does the Air Force intend to make the Joint 
Strike Fighter nuclear capable?
    Answer. The Air Force is following the 2006 Quadrennial Defense 
Review plan to update the nuclear capable bomber fleet in three phases. 
Phase one will modernize the current bomber fleet of B-2s and B-52s to 
improve sustainability and maintain combat relevance. The second phase 
will field the Next Generation Bomber which will complement a 
modernized legacy bomber force. The third phase will evaluate cutting 
edge technologies for follow-on systems in the 2030 plus timeframe.
    The dual-capable F-16 and F-15E aircraft will remain mission 
capable beyond 2020 and will be gradually replaced by the nuclear 
capable Joint Strike Fighter. We plan to fund the Joint Strike Fighter 
Dual-Capable Aircraft modification in the Fiscal Year 2012 Program 
Objective Memorandum.

                         Next Generation Bomber

    Question. Mr. Secretary, you are investing a significant amount of 
time, attention and money in a next generation bomber program to 
recapitalize the Air Force's aging fleet of bombers, yet the Secretary 
of Defense has noted the defense budget may not be able to sustain all 
efforts.
    In light of Secretary Gates' recent comments to the Senate Armed 
Services Committee in January, what is your recapitalization strategy 
for the next generation of bombers?
    Answer. The Air Force is continuing to pursue its three phased 
strategy for maintaining the Long Range Strike (LRS) capabilities 
needed to support the national defense strategy and combatant 
commanders' operational plans. Phase one will modernize the current 
bomber fleet to improve sustainability and maintain combat relevance. 
The second phase will field the Next Generation Bomber which will 
complement a modernized legacy bomber force. The third phase will 
evaluate cutting edge technologies for LRS inclusion in the 2035 plus 
timeframe. However, as Secretary Gates has stated, the Department of 
Defense will complete the Quadrennial Defense Review (QDR) over the 
next few months with the purpose of identifying Department of Defense 
and Service actions necessary to field the capabilities and force 
required to realize our national security goals and objectives. The Air 
Force's LRS recapitalization strategy, which will sustain and modernize 
the bomber force, will be one of the many areas reviewed during the QDR 
process.
    Question. If not the Next Generation Bomber, how with the Air Force 
sustain our bomber fleet in the future?
    Answer. There are three phases to the Air Force's Long Range Strike 
(LRS) strategy. Phase one will modernize the current bomber fleet to 
improve sustainability and maintain combat relevance. The second phase 
will field the Next Generation Bomber which will complement a 
modernized legacy bomber force. The third phase will evaluate cutting 
edge technologies for LRS inclusion in the 2035 timeframe. Under Phase 
1 of LRS, the Air Force is investing over five billion dollars in 
current bomber modifications over the Future Years Defense Program, 
focusing on requirements needed to sustain and maintain an 
operationally relevant force structure. Sustainment programs focus on 
systems like avionics and radars to mitigate safety-of-flight issues. 
Current modernization programs include advanced weapon and targeting 
pod integration to improve lethality; satellite communications and data 
links to increase responsiveness; and, defensive systems and stealth 
materials to enhance survivability.

       Resources to Reinvigorate the Air Force Nuclear Enterprise

    Question. Under the leadership and culture recommendations of his 
report, specifically recommendation number seven, Dr. Schlesinger 
proposed that the Secretary of the Air Force should provide the 
resources necessary for the initiatives required to upgrade and 
revitalize the nuclear mission.
    Mr. Secretary, Dr. Schlesinger's panel asserted the Air Force 
underinvested in the nuclear mission. Do you agree? If so, what steps 
have you taken to change these conditions?
    Answer. Yes. Over the past two decades, an increased focus on 
conventional operations due to continual air combat operations put the 
nuclear mission at a competitive disadvantage with other Air Force 
priorities, resulting in underinvestment in the nuclear deterrence 
mission. We are continuing to review nuclear enterprise requirements 
and match them against combatant commander requirements and 
recommendations made in the various reports, including Dr. 
Schlesinger's.
    Question. Mr. Secretary, how do you define the Air Force's budget 
for the nuclear enterprise? How has it changed since these incidents? 
Do you feel training is adequately resourced to provide a force capable 
of following through on the action items of your nuclear enterprise 
roadmap?
    Answer. For our Fiscal Year 2010 President's Budget preparation, 
the Air Force looked at all aspects of the nuclear enterprise. Funding 
for the Air Force's nuclear enterprise is defined as the Research, 
Development, Testing, and Evaluation (RDT&E); Procurement; Personnel; 
and Operations & Maintenance (O&M) funding that covers all aspects 
regarding the development, operations, supporting infrastructure, and 
sustainment of nuclear forces. This includes activities from Science 
and Technology (S&T)--through development, fielding, and operations--to 
retirement; for the equipment and personnel supporting Intercontinental 
Ballistic Missiles (ICBMs), nuclear capable bombers (B-52s and B-2s), 
and the Dual Capable Aircraft (DCA) fighters that are in U.S. Air 
Forces in Europe (USAFE). The Air Force Nuclear Enterprise Roadmap 
recommendations and action plans were used as a guide to focus 
resources on those areas needing the most attention.
    To define the nuclear enterprise budget, the Air Force evaluated 
requirements for our nuclear capable bomber force (B-52 and B-2); 
Minuteman III ICBM (including sustainment activities); nuclear security 
for continental U.S. bases and European locations; and electromagnetic 
pulse hardening requirements at certain Ballistic Missile Early Warning 
System sites. The Air Force also reviewed numerous smaller requirements 
to address recommendations and issues. All have been thoroughly 
reviewed for inclusion in the Fiscal Year 2010 Air Force Budget 
request. The Air Force believes this represents a critical step toward 
reinvigorating the Air Force Nuclear Enterprise.
    In addition, the Air Force requested nearly $170 million in Fiscal 
Year 2009 research, development, test and evaluation, and procurement 
funds be reprogrammed through Congressional action and we reallocated 
resources to execute over $144 million in Fiscal Year 2009 operations 
and maintenance funds to address immediate needs.
    Training has been adequately resourced to address the Nuclear 
Roadmap action items and recommendations. During requirements 
validation, we included funding for any recommended additional and/or 
complementary training. For example, in Fiscal Year 2009, included 
within the $144 million of reprogrammed operations and maintenance 
funds, $12 million will provide realistic weapons trainers for our 
munitions Airmen, cruise missile trainers for increased technical 
training, and tools for providing realistic training on tracking and 
inventory systems. Of the $12 million, nearly $5 million will be 
dedicated to help further nuclear career path development, develop 
refresher courses and curriculum for nuclear specific and related 
career fields.
    Question. General Schwartz, in your internal Blue Ribbon Review 
completed in February 2008, your team identified $100 million in 
unfunded requirements. Do you feel this list of unfunded requirements 
in all-inclusive? If not, what requirements are the most urgently 
needed?
    Answer. Reinvigorating the nuclear enterprise is the Air Force's 
number one priority and we will ensure the proper resources are 
provided to upgrade and revitalize the nuclear mission. We have 
carefully examined all Blue Ribbon Review recommendations as well as 
those of the Schlesinger Panel Review for funding requirements. These 
are all being considered for funding in the Fiscal Year 2010 
President's Budget submission.
    We are confident the most pressing nuclear enterprise needs are 
addressed. These include: Requested reprogramming authority for $39.7 
million in Research & Development funds to establish positive inventory 
control of our Nuclear Weapons Related Material and committed an 
additional $500 million in Fiscal Year 2008-2009 for security, 
training, sustainment and logistics requirements. In addition, the Air 
Force is recommending even greater increases in the out-years which 
will be identified in the Fiscal Year 2010 President's Budget 
submission.

                    Sustaining the Nuclear Stockpile

    Question. According to the Office of the Assistant to the Secretary 
of Defense for Nuclear Matters' website, the U.S. produced its last 
nuclear weapon in 1991 and performed its last Underground Nuclear Test 
in 1992. The Presidential decision to stop testing and to terminate 
weapons production resulted in a paradigm shift that required 
significant adjustments in the U.S. approach to nuclear weapons 
stockpile management.
    Secretary Donley, with the U.S. producing its last nuclear weapon 
in 1991, what is your assessment of the nuclear industrial base?
    Answer. In regards to the weapon industrial base, the Air Force 
looks to Department of Energy (DOE) as the lead agency. The National 
Nuclear Security Administration under DOE is focused on research, 
development efforts and long-term viability, while seeking to identify, 
develop, and deliver new or enhanced processes, and technologies.
    Air Force industrial base concerns are focused on delivery 
platforms. Specifically, the Air Force supports the industrial base 
activities to sustain Minuteman III while developing next-generation 
strategic missile technologies to address future requirements.

                          Strategic Deterrence

    Question. The latest National Security Strategy (2006) indicated, 
``Safe, credible, and reliable nuclear forces continue to play a 
critical role. We are strengthening deterrence by developing a New 
Triad composed of offensive strike systems (both nuclear and improved 
conventional capabilities); active and passive defenses, including 
missile defenses; and a responsive infrastructure, all bound together 
by enhanced command and control, planning and intelligence systems. 
These capabilities will better deter some of the new threats we face, 
while also bolstering our security commitments to allies. Such security 
commitments have played a crucial role in convincing some countries to 
forgo their own nuclear weapons programs, thereby aiding our 
nonproliferation objectives.''
    Secretary Donley, Please describe the strategic deterrence provided 
by ICBMs, Nuclear-capable bombers, and dual-capable aircraft?
    Answer. Our nuclear-capable ICBMs and aircraft (B-2s, B-52s, F-15Es 
and F-16s), provide unique, yet complimentary, capabilities to our 
nuclear deterrence mission.
    Operationally deployed Continental United States (CONUS) based 
ICBMs provide the President with a highly accurate, reliable, and ready 
response capability with near-global range. The offensive and defensive 
deterrence value of the ICBM force located in hardened facilities 
spread over thousands of miles is a stabilizing force. Our fielded ICBM 
forces are survivable in almost any attack scenario we can postulate. 
It would take a large scale attack of unmistakable intent and origin to 
defeat them. Operationally deployed ICBMs, while responsive, are under 
positive control and can only be employed with approval of the 
President.
    Nuclear-capable CONUS-based bombers and Overseas CONUS-based 
fighters provide visible deterrence and escalation control. This 
flexible capability is deployable and recallable, and maintains a human 
in the loop until the last possible moment. Furthermore, our nuclear-
capable fighters serve a vital role in our extended deterrence 
commitment to our NATO partners.
    Question. General Schwartz, do you believe the U.S. nuclear arsenal 
enhances our nonproliferation efforts?
    Answer. A safe, secure and reliable nuclear arsenal is critical to 
providing a credible nuclear deterrence. This credible nuclear 
deterrence is not only critical to our security, but to the security of 
our allies and partners, thereby enhancing our non-proliferation 
efforts. If our extended deterrence capability begins to falter, some 
non-nuclear allies may perceive a need to develop their own nuclear 
capability.
    Question. General Schwartz, is ``hair trigger alert'' an accurate 
way to depict our ICBM nuclear forces?
    Answer. No. ``Hair trigger alert'' is not an accurate way to depict 
our ICBM nuclear forces. A better way to depict the force is utilizing 
a term that General Chilton stated during a February 27, 2009 media 
engagement and that is that our ICBM force is analogous to a ``weapon 
in a holster with two combination locks on it, requiring two people to 
open the locks. They can't do it without authenticated orders from the 
President of the United States.'' All U.S. nuclear forces maintain 
rigorous discipline and operate under very strict and demanding nuclear 
surety and command and control principles to insure that all weapons 
remain safe, secure and reliable. In addition, ICBMs provide stability 
in crisis by presenting any adversary a complex targeting solution 
while providing the President survivable and flexible response options. 
It is through this confidence that we plan and posture ICBM forces that 
provide the President with the maximum decision time and flexibility.

                            WC-135 Aircraft

    Question. The number of unstable countries with nuclear weapons 
capabilities is likely to grow in the coming years, specifically when 
considering what is happening in Iran, Pakistan, India, and North 
Korea. The U.S. Air Force has two WC-135 aircraft that are used to 
perform atmospheric sampling to collect vital intelligence following a 
nuclear detonation. Approaching fifty years of age, these two WC-135s 
are the oldest -135 airframes currently operated by the Air Force. The 
age of these aircraft has a tremendous impact on their ability to 
deploy quickly to hot-spots around the world. I understand that the Air 
Force is considering spending tens of millions of dollars to re-engine 
these nearly 50-year-old airplanes.
    Have you looked at the possibility of utilizing a new aircraft like 
the C-40A for the mission?
    Answer. Yes. In 2006 the Air Force initiated a Deputy Under 
Secretary of Defense (Intelligence) funded study to analyze 
alternatives to the WC-135. The study completed a functional area 
analysis, functional needs analysis and functional solutions analysis. 
The C-40 was one of the options. However, from January 2008 to January 
2009 the WC-135 enjoyed a mission capable rate of 76.2 percent which 
includes all maintenance and operations reporting, and we applied 
resources to more pressing Air Force needs. Importantly, the aircraft 
has flown every collection mission tasked. In 2009, Congress approved a 
funding request for WC-135 cockpit upgrades. These upgrades will allow 
the aircraft to continue to accomplish its mission viably beyond the 
2025 timeframe.
    Question. The Air Force currently operated a fleet of 737s under 
the C-40 designation, and could realize two major benefits of going to 
the 737--greatly increased reliability (and therefore greater ability 
to deploy where necessary) and greatly reduced maintenance and 
operation costs. Would it not make more sense to take the current 
sensing equipment and install it on new C-40 airframes as opposed to 
continuing to maintain and operate 50-year-old airframes that are not 
adequately accomplishing their mission?
    Answer. Although the WC-135 is one of our older aircraft, the Air 
Force is mitigating risk with cockpit upgrades, keeping the platform 
viable beyond 2025. In addition, the WC-135 has accomplished all 
collection missions tasked and has an overall mission capable rate of 
76.2 percent over the last year.
    Question. Given our current expanding nuclear threat (Iran, North 
Korea, unstable Pakistan), our nuclear sampling capability appears to 
be more critical than ever, yet it remains on nearly 50-year-old 
airframes. I understand that the current planes used for this mission 
have extremely poor mission readiness and propulsion issues. What is 
the Air Force's plan to ensure we have the capability to gather this 
critical intelligence in the future?
    Answer. The Air Force has looked at options to replace or upgrade 
the WC-135, however, from January 2008 to January 2009, the WC-135 
enjoyed a mission capable rate of 76.2 percent which includes 
maintenance and operations reporting. Additionally, the aircraft has 
flown every collection mission tasked.
    In 2006, we conducted a functional area analysis, functional needs 
analysis and functional solutions analysis which also explored the 
option of WC-135 cockpit avionics upgrades. Given its mission capable 
rate (76.2 percent) and the fact that it has met every collection 
mission tasking, the cockpit upgrades were chosen as the best solution. 
In 2009, Congress approved an Air Force/Deputy Undersecretary for 
Defense (Intelligence) funding request for WC-135 cockpit avionics 
upgrade. These upgrades permit the aircraft to use faster and more 
economical flight paths appropriate for rapid deployment worldwide, 
satisfying the air sampling mission. When coupled with continued 
support for the jet engines and other maintenance, these upgrades 
should allow for WC-135 operation beyond 2025.
    At this time the Air Force does not seek to replace the WC-135 as 
regards its current missions but does anticipate potential requirements 
increase associated with national technical nuclear forensics. When the 
national technical nuclear forensics requirements now in development 
become available, Air Force will examine the need for possible 
adjustments of the air sampling platforms.
    Question. We understand that the State Department has stated that 
this is a high priority mission for treaty verification and compliance. 
Does the Air Force share this view?
    Answer. The Air Force views this mission as a high priority and 
will continue executing this mission as tasked by our national 
authorities.

    [Clerk's note.--End of questions submitted by Mr. Murtha.]
                                      Wednesday, February 11, 2009.

              CONTRACT SERVICES AND ACQUISITION MANAGEMENT

                               WITNESSES

GENE L. DODARO, ACTING COMPTROLLER GENERAL OF THE UNITED STATES
KATHERINE V. SCHINASI, MANAGING DIRECTOR, ACQUISITION AND SOURCING 
    MANAGEMENT
 MICHAEL SULLIVAN, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT
CAROLE COFFEY, ASSISTANT DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT 
    TEAM

                              Introduction

    Mr. Murtha. Welcome, Mr. Dodaro.
    When Mr. Walker came before the Committee, I said to him, 
when I was in Iraq, these contractors were falling all over 
themselves. How many contractors do we have? He could not 
answer that question. He did not know, he says, and I cannot 
get the answer. I need you to help me get the answer.
    Well, it turns out, Ann reminds me that we put fencing 
language in and said, until you tell us how many contractors 
you have, you are not going to get any money. So we got the 
information. But when I look at the numbers, that we have 
267,000 DOD contractors in CENTCOM; we have we think 190,000 in 
Iraq; and the figures we have, the determination we have is if 
we save--or if we hire them in-house, we save $44,000 per 
person.
    Now, last year, the Committee cut 5 percent out of the 
contracting, $4.5 billion. We added a billion dollars so that 
they could hire people. Because they would veto the bill, we 
had to drop those provisions. And we were not able to implement 
that cut. We did put a $650 million cut in the budget. But when 
I look at the number of contractors and the cost overruns that 
we have had over and over and over again, I think we have to do 
something about contracting out. And I would ask you to look at 
a couple things. One is to describe what a contractor is, 
describe what their mission is, and so forth. Give us as much 
information as you can. And then make recommendations to us how 
we can get this under control. I think fencing the money may be 
the only way. But certainly we have got to do something about 
it. If it costs $44,000 per contractor more than it costs for a 
person in-house, then it seems to me the direction to go is to 
get rid of as many contractors as we can and hire as many 
people as we can in-house. But I know the trend has been going 
the other way. But this is just atrocious in my estimation, and 
we need help trying to get it under control.
    Mr. Frelinghuysen.

                      Remarks of Mr. Frelinghuysen

    Mr. Frelinghuysen. Thank you, Mr. Chairman. I am 
substituting for Congressman Bill Young, who sends his best and 
may be with us a little later in the afternoon.
    I certainly would like to welcome you and the team behind 
you here this afternoon for what is the first in a series of 
three contracting hearings this year. I only point this out to 
illustrate how important this issue is, as the Chairman said, 
this issue is to all of us.
    For years the contracting acquisition workforce was taken 
for granted. They were on the receiving end of numerous 
downsizing and outsourcing actions that left them barely 
capable of handling today's global challenges. The acquisition 
workforce now is a fraction of what it once was, yet their 
responsibilities have grown exponentially.
    It appears now, however, that we have arrived full circle 
and must deal with the ramifications of this neglected 
workforce. The Department has started to address this, but much 
work remains to be done. In those regards, your testimony today 
is very important.
    I welcome you and look forward to your comments.
    You know that Mr. Walker has gone onto greener pastures, I 
might say much greener pastures, and you are left to, shall we 
say, provide the Committee with the information that we tried 
to secure during his period directing the GAO. So we look 
forward to your testimony.
    Mr. Murtha. Look forward to your recommendations.
    Mr. Dodaro.

                    Summary Statement of Mr. Dodaro

    Mr. Dodaro. Thank you very much, Mr. Chairman, Congressman 
Frelinghuysen.
    I appreciate the opportunity to be here today to discuss 
GAO's work as it relates to contracting at the Department of 
Defense as it relates to weapons systems acquisition and 
service contracting as well. We have had a number of concerns 
and pointed out a number of challenges in both of these areas.
    First, in the acquisition of weapons systems, as you 
pointed out, Mr. Chairman, there has been considerable cost 
growth in this area. When we last did a comprehensive 
assessment of 95 weapons systems that were in the DOD portfolio 
in 2007, we noted that there had been cost growth from the 
initial estimates of close to $300 billion. In 44 percent of 
those 95 programs, the cost growth had been over 25 percent 
from the initial estimates. In addition to that, the average 
schedule delay for bringing new weapons systems on line had 
been up to 21 months, which was up 5 months over 16 months 
previously in 2000 before that. So the cost growth is going up, 
the schedule delays are there as well. And this has been a 
problem.
    We pointed out it is a problem at two levels. First is a 
strategic level, which is where the Department is not making 
clear priority choices across the Department on which weapons 
systems to deploy. Still largely a process driven by the 
services, and that needs to change going forward if you are 
going to get that part of it under control. Then, at the 
individual program level, we have noted that there is not 
always a good business case for moving forward with the weapons 
systems, from research and development into deployment. That 
technologies are not always matured before they move forward 
with decisions. And best practices are not employed. And we 
think there needs to be more discipline at that process as 
well. And we made recommendations on both of these fronts to 
the Department.
    Now, we were pleased in December 2008; DOD adopted some 
changes in their guidance in these areas and put in place some 
best practices, which we encouraged. I have also been 
encouraged by the Secretary's recognition recently that this is 
a big institutional challenge for them in terms of their 
acquisition of weapons systems. But, ultimately, the policies 
are not enough if they are not implemented very effectively. 
And that is one area where we have consistently seen DOD have 
some difficulties. So implementation of these new policies is 
really paramount to bringing about change to bring costs down 
and bring systems in on time.
    Now, on the service contracting area, you have additional 
concerns there. The amount of money for contracting, as you 
point out, has doubled in real terms over the last 6 years to 
$200 billion a year just in service contracting alone. We have 
pointed out that the Department has used some risky contracting 
vehicles, time and materials contracts, undefinitized 
contracts, and they have not managed those very effectively.
    Also there has not been enough training provided to 
contracting personnel throughout the acquisition workforce. And 
they really do not have enough people to be able to adequately 
oversee the contractors. While the size of the contracting 
budget has doubled during the last 6 years, the acquisition 
workforce, contracting workforce rather, has only increased by 
1 percent. So there really has to be better management and 
control----
    Mr. Murtha. Say that again.
    Mr. Dodaro. It is in our statement, Mr. Chairman.
    The contracting budget has doubled over the last 6 years, I 
believe. But the acquisition or do the contracting workforce, 
the acquisition workforce has only grown by 1 percent during 
that period of time.
    Mr. Murtha. Do you define that contracting workforce as 
contractors or you define it as people working for the Defense 
Department as government employees? Which one?
    Mr. Dodaro. The latter. These are people that are working 
for the Department and are responsible for overseeing the 
contractors. You know, basically what I am saying is they are 
using more contractors, money is going up, but the amount of 
DOD people managing the contractors has stayed roughly about 
the same.
    Mr. Dicks. Mr. Chairman, would you yield just on this point 
for a second? What about--I mean, there was a period where we 
cut back the acquisition force. Is not that correct?
    Mr. Dodaro. That is correct. That was during the 1990s, 
following the Cold War, end of the Cold War.
    Mr. Dicks. I remember hearing a former chairman of the 
Armed Services Committee saying these are shoppers; they are 
not important. He demeaned and cut the budget for them. Now how 
much was it cut?
    Mr. Dodaro. Let me just----
    Mr. Dicks. From say the middle of the 1990s forward.
    Mr. Dodaro. I can provide that.
    Mr. Dicks. Any idea?
    Mr. Dodaro. How much was the acquisition workforce cut 
during the 1990s? My staff tells me it was about in half during 
that period of time.
    Mr. Dicks. So it has been cut by 50 percent. Now we wonder 
why we have a problem.
    Mr. Dodaro. Right.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Dodaro. This is a key point that you are bringing out. 
We bring it out in our report as well. And it is really very 
important because regardless of how much you reduce the numbers 
of contractors, you are still going to be relying on them to 
some level. But the real key is to make sure you effectively 
manage the contractors so we bring things in on time, within 
cost, and we have the right outcome as it is received.
    Now with regard to our recommendations on the service 
contracting, DOD put some additional controls in place to 
provide some additional training and established a focal point. 
So they have reacted to some of our recommendations and put in 
place some recent changes. But, again here, implementation of 
the new policies is going to be very important.
    Now, one of our main recommendations here, and just sort of 
in closing, and I am happy to answer any questions you have, 
there are really three things that we are recommending at this 
point, particularly in light of DOD's recent adoption of our 
recommendations: Number one, DOD has to translate these new 
policies into practice. Implementation is paramount. Number two 
is that there has to be follow-through to make sure that the 
new policies are implemented and people are held accountable in 
the Department for implementing these new policies and really 
making sure that they happen. Then three, and this goes to the 
heart of your opening statement, Mr. Chairman, we have 
recommended that the Department do a comprehensive assessment 
as to what should be done by contractors and what should be 
done by employees. This is really a strategic decision that 
needs to be made by the Department. What we have pointed out, 
and they have recognized, is that we are where we are right now 
at the Department of Defense because of the collection of 
thousands of individual decisions that have been made to 
contract out, but it has not occurred within a framework of a 
strategic vision on where to take the Department over time and 
then how to build in the necessary controls and the skills to 
oversee that contractor workforce. And we think that is a very 
important recommendation. I think it goes to the heart of your 
concerns that whatever is done in terms of the balance between 
the Federal employees and the contractors produces good 
results. And right now, the current process does not do that.
    [The statement of Mr. Dodaro follows:]

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                         REPORT ON CONTRACTORS

    Mr. Murtha. Well, one of the worst examples I heard last 
year was the budget for the Comptroller of the Defense 
Department wanted to hire contractors to send a budget over to 
us. You know, we stopped that. But the point was everybody was 
looking for contractors. And part of this happened because the 
Armed Services Committee cut the acquisition force so 
substantially, and so they had to hire contractors who were not 
as responsive.
    But say again, it comes down to accountability and how do 
we, for instance, how do we get the information? Okay, we can 
fence the money and say, look, unless you come up with this 
comprehensive report the GAO asked for, we are not going to 
give you any money. How much time should they have in order to 
come up with this comprehensive report?
    Mr. Dodaro. I would think within the next year they should 
be able to produce something.
    Mr. Murtha. Can we not force the issue by, say our bill is 
ready to go by June or July, cannot we get the information from 
them that quick?
    Mr. Dodaro. You would have to ask DOD that question. We 
have had this recommendation on the books for a while now. I am 
not sure how far along they are in that area. But I think it 
would be a very important question to ask them. I mean, our 
goal here would be to make sure that they do it correctly. They 
could perhaps give you some short-term answers and then a 
longer-term strategy that would cover more years down the road.
    I would also point out here that there are two other 
factors in addition to the cutback in the acquisition workforce 
in the 1990s. One is the complexity of the weapons systems that 
are being procured. You may want to ask for a strategy on 
weapons systems acquisition apart from service contracting 
because there are different levels of sophistication here. The 
complexity of those weapons systems is a critical issue where 
DOD is going to need to have the capability to manage. And it 
could be more difficult to build all that in-house.
    And the other area is the extent to which these demands 
have been driven by the immediacy of the needs for the global 
war on terrorism in the past few years. And particularly it is 
going to be an issue if we are going to deploy additional 
forces over to Afghanistan. It is important that the lessons 
learned about training people before they are deployed to 
manage contractors in Afghanistan is heeded as well.
    Mr. Murtha. I just talked to the National Security Adviser, 
and I told him how important it was to get us information to 
this Committee as quickly as he could about what his plans are 
so we would have some idea of what is going to happen.
    Now, for instance, we do not know whether they are going to 
take troops in by land or have to fly them in, which is going 
to be a substantial additional expense. But what you say about 
the acquisition system, we found LCS just all kinds of 
problems. One of the worst examples is that helicopter one, the 
Marine One. That thing increased so much. I had people in here, 
and I said to them, we are not going to pay $500 million for 
one helicopter, period. And there are 14 people sitting there. 
And finally, they said, well, we will put off the decision 
until the new administration comes in. I mean, it is just 
frightening how they throw money around like it is out of 
style.
    Well, we will listen for any advice you have and try to 
come up with some recommendations. But when I look through the 
increased cost of the weapons systems, the increased cost of 
doing business, and the personnel costs and so forth, it is not 
sustainable in what it amounts to, particularly as we are going 
to build down the budget. But I appreciate the work you folks 
do. The staff tells me you are leaning forward on this issue. 
And it is so important to us.
    Mr. Frelinghuysen.

                  RETIREMENTS AND INSTITUTIONAL MEMORY

    Mr. Frelinghuysen. I am sure there will be a lot of time to 
talk about how long it took to develop the F-22, the Future 
Combat System, the littoral combat ships. I just have a few 
sort of basic questions. There has been a reduction in the 
acquisition workforce. That is recognizable. You also have the 
issue of retirements. Would you briefly comment on that?
    And the complexity of the systems, it is great to say that 
we want, you know, DOD personnel as opposed to private 
contractors, but sometimes the complexity of the system calls 
upon the very people who are familiar with how it was developed 
to provide that information. Would you comment a little bit on 
the potential retirement of what I would call institutional 
memory, and also the issue of competition in the workplace for 
people who would be qualified to make up the group that would 
replace the diminished acquisition force?
    Mr. Dodaro. All right. Yes. Those are both very important 
issues.
    First, on the retirement issue, that is a problem. And it 
is not only a problem in DOD; it is a problem across the 
Federal Government in terms of the age of the workforce and the 
impending retirements. Now a lot of that is driven by 
demographics and the Baby Boom generation, et cetera, but it is 
a concern. I know in leading the GAO, I spend a lot of time on 
this myself making sure we have good succession planning in 
place to go forward. And it will be an issue that the 
Department's going to have to confront, and it will be a 
problem, particularly in having the numbers of people who have 
the experience and the background to oversee contractors or 
carry out some of the activities. The team and I were just 
talking about this before we came to the hearing. We can 
provide some additional information on that area.
    Mr. Frelinghuysen. I assume you have some information. I 
mean, normally people have some information about how many 
people are, you know, eligible to retire. Somebody must have 
that figure.
    Mr. Dodaro. I know we have it, and we can provide it. I do 
not have it with me. But I can provide it.
    [The information follows:]

    According to DOD demographic data dated December 2008, about 11 
percent of the department's 670,492 permanent employees covered by the 
Civil Service Retirement System (CSRS) and the Federal Employee's 
Retirement System (FERS) are currently eligible for optional 
retirement. As of December 31, 2013, about 30 percent, or 193,880 
civilian employees will be eligible for optional retirement. Optional 
retirement is available to federal employees who have reached the 
required age and years of service necessary to receive an immediate 
retirement benefit. For example, under CSRS, an employee who is 55 
years of age with 30 years of service is eligible for optional 
retirement An employee under FERS who is 60 years of age and has 20 
years of service is eligible for optional retirement
    DOD's demographic data also shows that, in addition to those 
permanent employees eligible for optional retirement, about 15 percent, 
or 100,605 civilian employees are currently eligible for early 
retirement. Further, as of December 31, 2013, 32 percent, of DOD's 
civilian workforce will be eligible for early retirement. Early 
retirement is available to federal employees that meet special 
requirements. For example, for an employee to take an early retirement, 
his or her agency must be undergoing a major reorganization, reduction-
in-force, or transfer of function determined eligible by OPM.

    Mr. Frelinghuysen. All right.
    Mr. Dodaro. And on the complexity of the weapons systems, 
that is a very important point. Things are becoming more 
complex. I think the issue here is DOD, like a lot of agencies, 
is going to have to rely on contractors to some extent. I mean, 
there is just not going to be any substitute for a certain 
portion of people will need to be contractors with the 
appropriate technical skills. What DOD needs to make sure is it 
has people that can oversee and manage the contractors. The 
competition in the workplace is an important issue here. But 
you need a certain cadre of people that have some technical 
skills to oversee the contractors so you are not totally 
relying on the contractors. So you need that core expertise 
there. You are not going to ever be able to replace the full 
complement of technical people that the contractors can bring 
to the table. And an important issue here----
    Mr. Frelinghuysen. Some of these systems have been studied 
for so long that some of the very people that are most 
knowledgeable might have been there at the beginning, but I 
would think would be heading out the door in a retirement 
queue.
    Mr. Dodaro. That could be an issue. But you also have a lot 
of changes that take place.
    Mr. Frelinghuysen. What about competition for good people?
    Mr. Dodaro. I think the competition, particularly for the 
highly skilled people, is an issue in the government. I mean, 
it is hard to compete under some of our salary structures for 
the really highly technical people. I know I face that at the 
GAO as well. And so that is an issue. And I think we are going 
to have to, if the government wants to build some of that 
capacity, and we do it at some of our national labs and other 
places, I mean, we have got a lot of technical people. We are 
going to have to consider the proper salary incentive and 
retention structures to be able to do something like that. But 
I think the more practical and immediate need is to make sure 
we have the capacity at the government with government people 
to oversee the contractors. And that I think is where we need 
to start.
    Mr. Frelinghuysen. All right.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Dicks.

                             SUBCONTRACTORS

    Mr. Dicks. You know, another part of this problem, you 
know, you talk about the 95 weapons systems that I have noticed 
in the things that I follow is that the prime contractors, the 
big companies now, I am talking about Boeing, Lockheed, 
Northrop-Grumman, Raytheon, all of them seem to have a major 
problem monitoring the subcontractors. In other words, they get 
the work, and then they subcontract it out to all these other 
companies. And then, you know, on several major weapons 
systems, we have had major problems with the subcontractors not 
performing. And then that delays the whole program. And that 
forces up the cost. Have you guys looked at that at all as one 
of your things to take into account?
    Mr. Dodaro. Yes.
    Mr. Dicks. That is where, again, you are so right, if you 
do not have the acquisition personnel who is not only 
monitoring the prime contractor on these major weapons systems 
but actually getting down to see what these subs are doing and 
ensuring that the prime contractor is overseeing the 
subcontractors. It is shocking to me to find out how sometimes, 
until they get into major trouble, these prime contractors are 
not monitoring their own subcontractors. And again, I think it 
is the failure of having adequate government personnel there to 
do their job to insist that that be done. And because of that, 
we have these delays and escalations in cost.
    Mr. Dodaro. I am going to ask Mr. Sullivan to elaborate on 
this. But one point I would bring to your attention in that 
area is it is not only, you know, adequately monitoring, but 
there need to be intermediary metrics that people are held 
accountable to, particularly for these long development 
projects, where there can be discrete decision points made and 
you either meet the decision point or you do not. A lot of 
times things are let to continue on into the next phase when 
they have not completed the prior phase. And so I think, you 
know, holding people to metrics and monitoring is very 
important in this regard. But Mike leads a lot of our weapons 
systems work. And I would like him to elaborate on your 
specific questions.
    Mr. Sullivan. I think, just specifically to what you are 
talking about, about managing----
    Mr. Dicks. Pull that just a little closer.
    Mr. Sullivan [continuing]. Managing major subcontractors as 
well as the overall, I think, supplier base----
    Mr. Dicks. Right.
    Mr. Sullivan [continuing]. On a major weapons systems 
program, we recently did a study that was focused on looking at 
why the quality assurance problems that we always found at the 
end of programs. And the study led to actually three key 
findings, I think, that get at what you are talking about. And 
in fact, it drives right up into the Department's workforce. 
There is a lack of systems engineering knowledge, both in the 
Department as overseers of these major weapons systems. I do 
not have exact numbers, but I know that the systems----
    Mr. Dicks. Systems engineering, what was the last word?
    Mr. Sullivan. Knowledge.
    Mr. Dicks. Knowledge.
    Mr. Sullivan. Systems engineers as part of the acquisition 
workforce that would be able to oversee requirements setting, 
for example, understanding the requirements and if they are 
doable given the resources that are available to the government 
at both the government level as overseers and in the major 
prime contractors and all the way down to probably through the 
contracted workforce. That is an area that probably the private 
sector is able to attract people a lot better than the 
government can for the reasons that Mr. Dodaro was pointing out 
earlier. And there are other things. You know, I would say the 
requirements-setting process and oversight is the key thing to 
that. But in addition to that, they do not have good supplier 
management processes in place. The kind of contracting methods 
they use, cost-reimbursable contracts, things like that make it 
harder to incentivize people to do that and oftentimes the 
designs. When designs on major weapons systems are not stable 
because of their complexity, it makes it difficult to manage 
that process.

                ACQUISITION STRATEGY FOR MAJOR PROGRAMS

    Mr. Dicks. The other point I want to make, and I think this 
is something that we have to insist on, and I found this out as 
we were going through, Mr. Chairman, the acquisition on the 
tankers, that there are DOD acquisition regulations that 
require it to examine the industrial base impacts in developing 
the acquisition strategy for major programs. Now, I confronted 
Secretary Young on this point. I do not think they are doing 
this. They are supposed to be doing this. It is in the law that 
they are supposed to be doing it. Do you have any idea that 
they do an industrial base impact analysis on every major 
weapons system before they start the acquisition? We have got 
the--you got the information on this. We will get you the 
information on where in the law it says you are supposed to do 
this.
    Mr. Dodaro. Okay.
    [The information follows:]

    10 U.S.C. 2440 requires the Secretary of Defense to prescribe 
regulations requiring DOD to consider the national technology and 
industrial base when developing and implementing acquisition plans for 
each major defense acquisition program. DOD's existing guidance 
requires that the contents of a written acquisition plan for a major 
defense acquisition program include an analysis of the capabilities of 
the national technology and industrial base to develop, produce, 
maintain, and support the program including the consideration of 
factors related to foreign dependency, requirements for efficient 
manufacture of the systems to be procured under the program, and 
methods to encourage investment by U.S. domestic sources in advanced 
manufacturing technology production equipment and processes. This 
guidance also requires the program to have an industrial capability 
strategy that assesses the capability of the U.S. industrial base to 
achieve identified surge and mobilization goals, or explain the 
rationale for why no strategy has been developed. According to a DOD 
official, the Department is revising its current guidance, in part to 
require industrial capability assessments earlier in the acquisition 
process and to require program managers to evaluate the impact of their 
program's acquisition strategy on the competitive market place.

    Mr. Dicks. But this would be something interesting to see 
if GAO could find out whether in fact they are doing this or 
not. I do not think they are. They say, well, we do not have 
to. I do not think the law gives them any discretion. Do you 
know anything about this?
    Mr. Dodaro. We have not done any work on it, my team tells 
me. But we would be happy to look at your citation and look 
into the issue.
    Mr. Dicks. Has your study of DOD acquisition found any 
trends or results about how well, you know, I mean, I think the 
industrial base issue is part of the problem here, where you do 
not have as much competition. I mean, what have we got? Three 
major companies, Lockheed, Boeing and Northrop-Grumman. I mean, 
you know, they are all intertwined in these things. Somebody 
wins the prime, and then, I mean the major contract, and the 
other ones come in as subcontractors. I mean, is the lack of 
having enough competitors part of the problem here in terms of 
the raising costs and not getting these things built right?
    Mr. Dodaro. The one thing I would say we know is that the 
adequate management of whatever the original decisions are is 
really probably the most difficult or most contributing factor 
to the increase in cost growth. I am not sure, and I cannot 
comment on the competition issue, you know, from a general 
perspective.
    Mr. Dicks. Okay. Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Kingston.

           ABILITY OF LOCAL CONTRACTORS TO WIN DOD CONTRACTS

    Mr. Kingston. Thank you, Mr. Chairman.
    I was wondering something that might be a little more 
routine, and I am not sure if it comes into your purview or 
not, but the ability of a local contractor to get military 
construction-type jobs on military installations or to sell a 
product to the military; it seems to me that it is really the 
domain of large contractors and large vendors, and not the 
small entrepreneurial local guy. Can you comment to that?
    Mr. Dodaro. Let me ask Katherine to comment on that.
    Ms. Schinasi. The ability of local contractors to win DOD 
contracts?
    Mr. Kingston. Yes.
    Ms. Schinasi. Yes, there are. DOD has certain requirements 
that it must provide, you know, award a portion of its 
contracts to certain categories of business. Local is not one 
of those, but small is one of those. Small and disadvantaged is 
another one. So as an overall measure, DOD has a requirement at 
the macro level to do that. But they do it in different ways 
that might or might not capture someone in every locality.
    Mr. Kingston. I have had the honor of representing Fort 
Stewart, for example, for 16 years now. At the present level it 
has about $500 million worth of military construction going on, 
largely because of a lot of the good things this committee and 
the other committee has done, and the Chairman has been down 
there personally. But it is very frustrating to the local 
vendors, painters, sheetrock guys, masonry, concrete workers, 
heat and air, people who have been in business 10, 15 years, 
who do a solid day's work and deliver a good product, but 
because they are not really geared up for it, they cannot get 
on the post. And it seems like the front end is an inside 
track. What can we tell--and I have been working for years to 
try to open it up more but have not had much success in that.
    Ms. Schinasi. I do not have an answer for an individual 
company. But I do know that the Department is required, at that 
macro level. But it is up to the individual companies at each 
location to compete for those contract awards.
    Mr. Kingston. Well, who would be a point of contact within 
your office that I could talk to, maybe bring down to Fort 
Stewart and have a vendors and a contractors job fair, if you 
will?
    [The information follows:]

    Congressman Kingston asked us to identify a person at Ft. Stewart, 
Georgia who could be contacted regarding the process for small and 
disadvantaged businesses to obtain contracts at Ft. Stewart. 
Accordingly, we are providing the name and contact information for 
Deborah Swindell, the senior person within the Office of Small and 
Disadvantaged Business Utilization at Ft. Stewart. She may be contacted 
at 912-767-8425.

    Ms. Schinasi. We can get you that information. But I would 
offer up the Department's own Office of Small and Disadvantaged 
Businesses. They are the ones, OSDBU. That name might be more 
appropriate for what you are looking for. Those are the 
individuals who are on--their responsibility is to keep the 
Department honest, if you will, in terms of meeting the 
requirements that they have to give a certain amount of the 
contract awards to small businesses. So that might be a more 
helpful person for you.
    Mr. Kingston. Okay. Mr. Chairman, if we have a second round 
I wanted to follow up on this, but I will yield back. Thank 
you.
    Mr. Murtha. Mr. Visclosky.

                       OVERSEEING THE CONTRACTORS

    Mr. Visclosky. Thank you, Mr. Chairman. You had talked 
earlier about the mix of Federal employee and contractor. And I 
certainly would assume there is no set formula. And even within 
a department, you have so many different missions and functions 
taking place. But you do talk about the disparity as far as the 
number of contractors and government employees----
    Mr. Dodaro. Overseeing the contractors.
    Mr. Visclosky [continuing]. Overseeing the contractors. And 
not wanting to keep bringing up the Department of Energy, and I 
know that is not part of the hearing, but the ratio is nine to 
one. And I think just human nature, you got nine people and one 
supervising, human nature takes hold. How are we supposed to 
know what the right mix is? It seems like there is an 
imbalance. But when do we know we are back in balance?
    Mr. Dodaro. I think there are two parts to that equation. 
One is the recommendation that we did make to figure out how 
many contractors should you have to begin with versus 
employees? And then I think one of the ways that you know is 
whether or not what you are contracting out for is being 
delivered on time, within budget, and you get the deliverables 
you have. And then, secondly, the type of problems that we and 
the Inspector General and others have found, you know, lack of 
documentation in some of the contracts, the fact that the 
people are not trained properly to be able to do it. So you 
have the level of activity, but number one is you get what you 
pay for without as much cost overruns as we have seen in the 
period of time and you get it on time. And so those type of 
metrics are the type of things that should be in place. And you 
do not have as many problems that are identified by people in 
your contracting activities. You know, those I think would be 
the two things I would say off the top of my head that are 
really important ways to gauge.
    Mr. Visclosky. And I assume numbers are not everything. 
Part of it is also the skill and talent of the people who are 
doing the supervision.
    Mr. Dodaro. Right.
    Mr. Visclosky. I assume just from the questions and 
statements I have been reading here that that also is a problem 
that needs to be addressed as well.
    Mr. Dodaro. Yes. Yes. Right now, the Department is going 
through and identifying what competencies that they need for 
some of their acquisition workforce and where they have skill 
gaps. And there definitely is a qualitative component of this, 
having not only the numbers properly but the right skills 
necessary to be able to do it. You know, the main reason we are 
bringing this up is to just show, why there continues to be 
problems with many of the contractors. We are trying to get, at 
some of the root causes here. And one of the root causes is the 
fact that you have not had a comprehensive strategic decision 
made on what to do. And then following from that, having the 
right kind of workforce plan with the right skills and the 
right numbers of people and then the right metrics to track it. 
And so that all has to be, I think, recalibrated in a 
comprehensive way.
    Mr. Visclosky. And you are still asking DOD to provide a 
clearer statement as to what an inherent governmental position 
is versus a private sector position?
    Mr. Dodaro. Well, that is part of the issue. Let me ask 
Katherine to elaborate on that.
    Mr. Visclosky. If I could, just, and again and from some of 
the notes I have in front of me, it appears that the Army has 
started down this road and identified at least a thousand 
contract positions that are inherently governmental and moving 
them back over, if you could.
    Ms. Schinasi. The Office of Management and Budget was 
directed last year to come up with a definition of inherently 
governmental that would be more useful----
    Mr. Visclosky. For everybody.
    Ms. Schinasi [continuing]. For people making decisions 
about whether or not to hire a contractor. They are in the 
process, they are just starting that right now, they are in the 
process of trying to determine by regulation what that means.
    Mr. Visclosky. Are there standards today in place?
    Ms. Schinasi. Yes, there are. The Federal Acquisition 
Regulations lay out certain activities that are prohibited, 
that are reserved for a government official. For example, 
signing a contract must be done by a government official. But 
in addition to the inherently governmental definition, there 
are also a number of things that are associated with that or 
closely associated with that that we would still want to have 
more discussion about even after a regulation is put in place. 
Because, for example, if you have the prohibition against a 
contractor signing a contract, but how about the basis, how 
about the analysis that he was given to make the decision 
whether to sign it or not? Who performed that analysis for him? 
So we are calling that closely associated with inherently 
governmental function.
    So you have not just the definition that OMB is working on 
in a regulatory manner, but you also have a management 
imperative to look at how those decisions are actually made. 
What are the costs and risks associated with having a private 
individual perform a function than having a government employee 
perform that function?
    Mr. Visclosky. Is there a timeline as to when OMB is 
supposed to finish their----
    Ms. Schinasi. They are just now starting.
    Mr. Visclosky. And are the principles, are they more 
principles as opposed to job classification definitions that 
are in place today?
    Ms. Schinasi. That is my understanding. And actions. Not 
just principles, but actions.
    Mr. Visclosky. So that would not necessarily be as helpful.
    Ms. Schinasi. Not sufficient. Necessary, but not 
sufficient.
    Mr. Dodaro. Yeah. What I would say on this issue, 
Congressman, is that, you know, for decades this issue about 
inherently governmental, you know, the A-76 process and other 
processes have been in place probably for over 50 years in the 
government with this inherently governmental kind of 
definition. But there is a narrow legal definition to it. But 
as we have seen greater reliance on contractors at DOD and 
other agencies, you know, the sphere of things that are 
involved in being contracted out and management has grown 
considerably. So I think, one suggestion I have is, while this 
is an important issue, there is a broader issue as to what 
management risk the government is willing to bear, whether it 
falls in that narrow legal definition or not. And are we 
getting the right type of service at the right type of cost? So 
there are a lot of risks in making sure that the government is 
properly using contractors that fall outside of that narrow 
legal definition that are really important, too. And I think 
they are ones that are a little easier to get to because they 
are tied to mission and what kind of outcomes that you want to 
achieve.
    Mr. Visclosky. Thank you for your work.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Moran.

                          Remarks of Mr. Moran

    Mr. Moran. All right.
    Mr. Chairman, this issue is not going to be a pleasant one 
for the administration, even though some of the folks that will 
be responsible were not initially responsible for creating this 
situation. We know that we have always had mercenaries in the 
Army. We did in the Revolutionary War. We always had contracted 
with some support personnel. But it is way out of control right 
now. And we look for the reasons.
    I think part of it was ideological. But we have also seen 
that while military pay went up by 26 percent in the last 
decade, civilian pay went up by 10 percent. From what we can 
gather, contractors went up by a hundred percent, even though 
we do not have specific numbers. This subcommittee in almost 
every single hearing has asked about contract personnel. And 
now, 8 years later, we are talking about figuring out what the 
definition of inherently governmental is. We have looked at 
some of the situations that have arisen which boggle the mind, 
really, and it goes to this definition. Now, we know that 
military and civilian and even contract personnel have always 
worked side by side. But the Pentagon has had contractors 
manage other contractors and even manage other government and 
military personnel. In March of this past year, the GAO found 
that 42 percent of the Army's Contracting Center of Excellence 
was staffed by contractors.
    We also learned that the Comptroller had contracted for the 
development of the budget justification for the fiscal year 
2008 supplemental funding request. I used to work in the budget 
office. I cannot imagine having contractors come in and 
developing the budget justification. Well, I mean, seriously, 
talk about how far we have gone, I do not think it has been in 
the right direction. We found that we have had contractors 
making decisions on the expenditure of government resources, 
determinations of agency policy, directing and controlling 
other Federal employees, the intelligence analysis, weapons 
systems maintenance. I could go on and on.
    The GAO found that poor planning, changing requirements, 
and inadequate number of contract oversight personnel in Iraq 
and Afghanistan led to an average 385 percent cost increase in 
the service contracts that the GAO investigated. I mean, this 
is unbelievable. And it is not for lack of concern expressed by 
this subcommittee that has funded all this. They found that the 
total acquisition cost for DOD's 2007 portfolio of major 
programs under development or in production has grown by nearly 
$300 billion over initial estimates. So, obviously, something 
is wrong.
    And here is an issue that the Chairman has been 
particularly on top of, but apparently to no avail. We now find 
out, CBO told us just in the last few months that there are 
190,000 private personnel operating under U.S.-funded contracts 
in Iraq alone; 150,000 of them are Defense contract personnel. 
So who is fighting this war? The contractors. Now, the first 
question, and you are probably wondering, is he ever going to 
get to a question, the first question is what are your plans to 
draw down contractors? If we have got----
    Mr. Dicks. This is the GAO. This is not the Defense 
Department.
    Mr. Moran. Oh, this is Dodaro, I know it.
    Mr. Dicks. They are just reporting to us what the issue is. 
They do not run----
    Mr. Moran. I know. I am just getting warmed up for the Army 
that is coming. Thank you. It is true. But the question, let me 
rephrase, the question I want you to ask of the military, what 
plans exist for drawing down contract personnel when we draw 
down the military? It just seems if you have got as many 
contract personnel as uniform personnel, how are we ever going 
to get them out? Now, have we asked that, Mr. Dodaro?
    Mr. Dodaro. Yes. We issued a report for the planning for 
the draw down in Iraq, where the status was with the DOD 
planning. We listed a number of factors. We would be happy to 
provide that to you. But we are now, at the request of the 
Congress, looking at how that will ripple through the contract 
draw down as well, because as you point out, there are as many 
contractors in these areas as there are military personnel 
right now.
    [The information follows.]

    During a discussion of DOD's planning for a draw down from Iraq 
with Congressman Moran, I indicated that GAO had issued a report on 
DOD's draw down planning efforts and promised to provide a copy of the 
report. The report, GAO-08-930, is attached.

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    Mr. Dicks. Was the surge military or contract?
    Mr. Moran. That is the thing. The surge was----
    Mr. Murtha. Let me interrupt.
    Mr. Dodaro. But we are looking at that issue.
    Mr. Moran. Well, thank you. The information we get is 
coming from GAO. You are giving us this information. It is 
unbelievable. But our frustration has just reached the level 
of, you know, we are ready to pull our hair out on this. And I 
am sure if you were to continue doing more investigations, the 
information is going to be all the more compelling that 
something needs to be done dramatically. I do not take fault at 
your recommendations. But things continue to deteriorate. And I 
think that we are going to have to continue to ask you to get 
this information on even a more timely basis than you have been 
able to, because we have got to change things very quickly. And 
it sounds accusatory. I do not mean to be accusatory of you. I 
do of the Army. The idea that the Pentagon is finally getting 
around to coming up with a definition of what is inherently 
governmental is just unbelievable, really.
    And you know, you have got to be dispassionate about this, 
but we do not have to be. And that is why this is as important 
an issue as we are going to face. And we are going to have to 
get to the bottom of it. We appreciate the effort you have made 
to help us in that pursuit.
    Mr. Dodaro. Thank you.
    I would say, Congressman, also that while there are some 
short-term issues that need to be dealt with, one of the 
fundamental frustrations I have is looking at the quality of 
strategic planning in the government over a period of time. And 
we cannot move from one end of the spectrum to the other end of 
the spectrum without having unintended consequences. And there 
needs to be a plan to get there. And so a lot of our 
recommendations go to having well-thought-out, well-crafted 
plans and strategies at the Department. And I would hope that 
the Congress provides adequate oversight to ensure that that 
happens. That, I think, at the end of the day is really the, or 
one of the, fundamental issues.
    Mr. Murtha. Let me say, before Mr. Moran came in, we talked 
about what we had done. When Mr. Walker came before the 
subcommittee 2 years ago, he said he could not get the 
information. So we fenced. I had forgotten this; the staff 
reminded me. We fenced the money and said, you do not get any 
money until you report to us how many contractors you have. 
Well, they got the information pretty quick after that. So I 
think we, as a subcommittee, we are going to have to fence the 
money in order to get some movement out of them. We save 
$44,000, according to the study we have, for every person we 
hire in-house compared to a contractor. Now, last year, we cut 
$4.5 billion out of contractors in this subcommittee. We added 
a billion dollars to hire direct hires and of course lost it 
because they were going to, the administration was going to 
veto the bill. So we have got to get some guidance and some 
recommendations, but they will not do it unless we tell them to 
do it, unless we put some teeth into it. And I think that is 
what----
    Mr. Moran. They would not even spend the money you put in 
for contract acquisition procurement personnel. You put money 
in for that and Shay what's-his-name would not even spend it 
this past year.
    Mr. Dicks. Mr. Chairman, I think the new administration 
will be a little more forward leaning on your request.
    Mr. Murtha. I hope so.
    Mr. Dicks. I know it is sometimes hard to remember that----
    Mr. Frelinghuysen. If not, we are in trouble, right?
    Mr. Murtha. Mr. Tiahrt.
    Mr. Tiahrt. I do not have any questions at this time, Mr. 
Chairman.
    I appreciate the work of the GAO.
    Mr. Murtha. Ms. Granger.

               PROJECT PURCHASING OFFICERS IN AFGHANISTAN

    Ms. Granger. Let me follow up a little built on Mr. Moran's 
questions and let me turn to Afghanistan.
    According to the information I have got, according to GAO, 
there are six Department of Defense warranted contracting 
officers in Afghanistan, and they approve every contract valued 
at $250,000 or above or the commander emergency response. If 
there are six--so they are approving contracts. How does the 
number come up? How does that make sense?
    Mr. Dodaro. Yeah, Congresswoman Granger, we need to correct 
the record. I mean, our staff says it is 60.
    Ms. Granger. It is how many?
    Mr. Dodaro. Sixty to seventy, not six. And that was our 
communication issue. And so I would like to correct that.
    Ms. Granger. Okay. Do you think that is the right amount?
    Mr. Dodaro. Well, it depends on how things are going 
forward. Our recommendation here is that we learn the lessons 
on how we accelerated a contractor workforce in Iraq and that 
contracting acquisition workforce people be trained, plus the 
commanders in Afghanistan, so that whatever contractors go 
there, there is adequate oversight structure in place to make 
sure we do not have a repeat of the problems that we had in 
Iraq.
    Ms. Granger. If it is adequate oversight, then, according 
to, again, to GAO, 97 percent of the commander's emergency 
response projects are valued at less than $500,000. They are 
awarded by the project purchasing officer, who has 1 hour's 
training. Is that a mistake, too?
    Ms. Coffey. No, that is correct.
    Mr. Dodaro. That is correct.
    Ms. Granger. Would you say that was adequate, 1 hour's 
training to oversee 97 percent of those contracts?
    Mr. Dodaro. We are supportive and have recommended 
additional training.
    Ms. Granger. How much additional training?
    Mr. Dodaro. It depends on the position. I can give you some 
information on it. Let me think that through.
    [The information follows:]

    GAO is currently reviewing the Commander's Emergency Response 
Program (CERP) in Afghanistan. Our preliminary work raises some 
concerns over the amount and type of training Project Purchasing 
Officers (PPO) are currently receiving. PPOs are either officers or 
senior enlisted personnel designated by the commanders to award 
contracts for CERP projects or services up to $500,000. According to 
military officials, generally PPO personnel have had little or no 
contracting experience and do not undergo the same type of extensive 
training that is provided to warranted contracting officers. Current 
training for PPOs consists of a 1 hour briefing which is focused on the 
CERP guidance and not the technical aspects of contract management or 
administration such as writing statements of work, drafting contract 
documents, ensuring that the project is completed to contract 
specifications, and completing contract close out. For the past several 
years GAO has reported on the need for better and more complete 
training for those responsible for contract management in contingency 
operations like those in Iraq and Afghanistan, to reduce the risk of 
waste or mismanagement. While we are finalizing our work at this time, 
our preliminary view is that PPOs do require more training than the one 
hour that is currently provided.

    Mr. Murtha. Would these folks identify themselves for the 
reporter?
    Mr. Dodaro. Okay. Yeah, I am sorry, Mr. Chairman.
    Ms. Coffey. I am sorry, I am Carole Coffey.
    Mr. Murtha. Did you hear that, reporter?
    And this young lady here.
    Ms. Schinasi. Katherine Schinasi.
    Ms. Granger. Thank you.
    Mr. Murtha. How much time do you have? We have plenty of 
time, because there is 224 that have not voted.
    Mr. Rothman.
    Mr. Rothman. Thank you, Mr. Chairman. I am going to lay out 
some general concerns and then let you have it so I do not take 
up all the time. You have talked about lack of strategic 
planning, lack of management. And I am glad you are there to 
discover these things and to make recommendations to address 
them. Again, my concern is, why did this develop? Has this 
always been the case in the history of our Defense 
establishment since the founding of the Republic? And again, 
not to identify an administration for that purpose, but to 
identify what did we stop doing that was right and what did we 
start doing that was wrong so we can know how to fix it? Will 
you be addressing that in general terms? Was there a culture 
change? Or, as has been alluded to, was the interest in 
contracting out that expanded in the last 8 years, is it a 
necessary consequence of contracting out that there will be 
less accountability? Is that a consequence of contracting out? 
And if so, then you should let us know. If not, let us know 
that if not. Because I see in your statement you say that 
reliance on contractors can create mission risk when 
contractors are supporting deployed forces. And you say, 
without understanding the depth and breadth of contractor 
support, they will be unable to determine the right mix. And 
you are concerned about, the urgency is because of our upcoming 
increase in forces in Afghanistan. So goodness, we do not want 
to increase mission risk upon our forces that we are bringing 
or existing in Afghanistan because we do not know the impact of 
contractors. So it is the philosophical or general principle, 
what happened to the culture there? Does contracting per se 
equal some less accountability? And number three, as quickly as 
possible, how do we address what you call mission risk for 
deployed forces caused by our contractor forces?
    Mr. Dodaro. Okay. First, let me say that some of these 
fundamental weaknesses have been present at the Department for 
a long time. We have had weapons systems acquisition on the 
high risk list that we keep for Congress of areas of potential 
risk of fraud, waste, abuse, and mismanagement since 1990 when 
we first created the list. We added contract management in 1992 
to the list. So there have been some fundamental needs for 
improvement at the Department for a long time. What has 
happened recently, however, though, is the decline in the 
acquisition workforce at the same time you had a concomitant 
huge increase in the use and reliance of contractors over a 
period of time. Underlying all that has been the demographic 
changes that are occurring throughout our society and the aging 
of the Federal Government's workforce, and you had a natural 
turnover of experience.
    Mr. Rothman. And they were not being replaced on the 
numbers.
    Mr. Dodaro. Right.
    Mr. Rothman. The numbers were not even being replaced.
    Mr. Dodaro. Right. Right. But I would also say that we have 
for the past several years, though, stepped up some of our 
criticism of the Department's strategic planning that has been 
taking place. But the situation in global war on terrorism and 
other things have accelerated the need to have strategic 
planning, not only within the Department but across the 
agencies. But I would say the Department of Defense has more 
areas on our high-risk list than any other Department in the 
Federal Government. They are also one of the few departments 
that have not yet been able to pass a test of a financial 
audit. So that is why I think you have a lot of data problems 
as well.
    Now, to get to your point on recommendations, we have made 
recommendations on the need to do a comprehensive study in 
these areas to deal with and put in place best practices. And 
so we have got plenty of recommendations. But the point that we 
made, and the Department has been very willing to make some 
policy changes, but implementation is really a key here. And I 
cannot stress that enough.
    Mr. Rothman. If I could get those for the record, that 
would be great, Mr. Chairman. Thank you.

    Congressman Rothman asked for copies of reports or testimonies in 
which GAO has recommended or called for a comprehensive study of DOD's 
use of contractors (see page 41 of the transcript). Please find copies 
of three testimonies in which GAO called for a fundamental re-
examination of the use of contractors by DOD. Specifically, see GAO-08-
621T, page 13; GAO-08-572T page 30; and GAO-08-436T, pages 19 and 21.

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    -Mr. Murtha. I think we have exhausted the information that 
you have and recommendations you have. You have seen our 
frustration and concern about contracting out. With your help, 
and with our help, if you need help from us, ask, and we will 
try to get you more information that they are hesitant to give. 
You said to me before the hearing started that you did not 
think they were hesitant to give us information; they just did 
not have the information. Well, we are going to force them to 
find the information, because we cannot make a legitimate 
decision and recommendation on money until we get some idea of 
what a government contractor is, what the government 
responsibility is. And I think the idea of oversight is the 
key. You said at least as you make the transitions you should 
have somebody working for the government that is in charge of 
the contractors. Well, we will see here. But as two examples 
that Mr. Moran gave, they have got contractors in charge of 
contractors. And one of my staff said, when he was in the Army, 
they were cutting the grass at Fort Benning, they hired a 
contractor to tell the contractors how to cut the grass. I 
mean, we got a hell of a problem here. And we are going to have 
to work together trying to get to the bottom of it.
    We appreciate your coming before the committee.
    Unless somebody else has any questions, we adjourn the 
committee until 10 a.m. tomorrow.
    Mr. Moran will be the Chair.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
answers thereto follow.]

    Question. Mr. Dodaro, do you think DOD has thought about its 
workforce holistically in order to determine the right balance of 
federal and contractor employees in performing DOD missions?
    Answer. DOD has not conducted a comprehensive assessment of its 
workforce needs particularly with regard to the roles and functions 
contractors perform in supporting DOD's missions and activities. Our 
work on strategic human capital planning and acquisition workforce 
issues has encouraged DOD to conduct such an assessment.
    Question. Mr. Dodaro, if DOD is not defining the proper balance 
between federal and contractor workforce, what steps should DOD take to 
better assure a balance?
    Answer. DOD must engage in a fundamental reassessment of when and 
under what circumstances the department should use contractors. As part 
of this assessment, DOD needs to take several steps, including 
developing a data collection system that will allow DOD to identify all 
services currently being provided to DOD by contractors; detennine 
which of those services being performed by contractors should be 
performed by government personnel, taking into account the need to 
ensure proper government oversight of contractors' efforts and the need 
to develop or retain in-house sufficient institutional capacity to 
perform core capabilities; develop a total workforce strategic plan to 
identify and effect the appropriate mix, roles, and responsibilities of 
contractor, civilian, and military personnel, to include plans for how 
DOD will grow the in-house capabilities it has identified as lacking or 
otherwise convert contractor performance to in-house performance; 
developing budgets, both short and long term, that will support 
implementation of DOD's total workforce strategic plan, to include 
funding additional government personnel full time equivalents when 
necessary to perform the services in-house. These steps are consistent 
with the requirements contained in sections 324 and 807 of the Fiscal 
Year 2008 National Defense Authorization Act.
    Question. Does the Department have the ability to report on the 
number of contractors that they employ and their compensation costs?
    Answer. Section 807 of the Fiscal Year 2008 National Defense 
Authorization Act directed the department to develop a department-wide 
inventory of services being provided by contractors and the numbers of 
contractor full time equivalents used to provide the service. The 
inventory report is an annual requirement and is to be provided to 
Congress by the end of the third quarter of each fiscal year. However, 
DOD does not currently have the ability to report on the total number 
of contractor personnel it employs or their compensation costs at a 
department-wide level.
    Question. Mr. Dodaro, DOD continues to deploy huge numbers of 
contractors. Currently 267,000 contractors are deployed to the CENTCOM 
area of responsibility. Would you comment on the consequences of having 
more contractors than military personnel in CENTCOM's area of 
responsibility?
    Answer. Our work has noted that DOD's increased reliance on 
contractors at deployed locations exacerbates long-standing challenges 
regarding DOD management and oversight of contractors to support 
deployed forces. These include an insufficient number of acquisition 
workforce personnel, DOD's failure to systematically collect and 
distribute lessons learned, and a lack of pre-deployment training for 
military commanders and contract oversight personnel. Moreover, the 
large number of contractors at deployed locations, particularly the 
widespread use of third-country and host-country national contractor 
employees, can increase the risk to military personnel due to the 
limited background screenings of contractor personnel.
    The fact that there are more contractors than military personnel in 
Iraq further highlights the strains on DOD's ability to provide 
appropriate contract management and oversight. As we have noted in the 
past, DOD lacks adequate numbers of properly trained contract oversight 
personnel in Iraq to oversee the large numbers of contractors there. 
This is why we testified in January 2008 (see GAO-08-436T) that as part 
of the DOD's efforts to increase the size of the Army and the Marine 
Corps, the department should consider using a portion of its increased 
force structure to expand its professional acquisition corps. DOD's 
heavy reliance on contractors also underscores the need we identified 
last year for DOD to carry out a fundamental reexamination of when and 
under what circumstances the department should use contractors versus 
civil servants or military personnel.
    Question. DOD officials have stated that contractors will be 
redeployed from Iraq in proportionate numbers to the redeploying 
troops. How can DOD effectuate proportionate redeployment given that 
the number for contractors in Iraq is a function of hundreds of 
decentralized contract actions in contrast to military personnel 
strength levels which are a function of a handful of centrally managed 
deployment orders?
    Answer. In September 2008, GAO reported that from late 2007 through 
July 2008, planning for the drawdown of U.S. forces in Iraq did not 
include a theater-wide plan for the withdrawal of contractors. It is 
still unclear how DOD plans to manage and coordinate the drawdown of 
contractors and military forces from Iraq. We have recently begun a new 
review of DOD's plans for managing the drawdown and will review DOD's 
plans for contractors as part of this effort. In addition, in October 
2008, DOD released Joint Publication 4-10, Operational Contract 
Support, which states that for each operation, the geographic combatant 
commander should publish a contractor management plan and outline in an 
appendix contractor management planning considerations.
    Question. Does DOD have a good plan to account for assets, both 
government and contract, when drawing down contractors out of Iraq?
    Answer. As of August 2008, DOD had not established effective plans 
and procedures to account for its assets--both government and 
contractor-managed--during the drawdown process. As we noted above, we 
have recently begun a new review of DOD's plans for managing the 
drawdown and will review DOD's plans for plan to account for government 
and contractor assets as part of that review.
    DOD's management of the equipment retrograde process is hindered by 
use of incompatible data systems that necessitate frequent manual 
manipulation of data. This system incompatibility has resulted in 
diminished visibility over equipment and materiel while it is in 
transit. Furthermore, in addition to the incompatibility of the data 
systems, the disposition process can be slow and cumbersome due to the 
manual workarounds used to pass and manipulate the data. Although a fix 
for this system incompatibility had been identified, the implementation 
of the fix had not been enforced by DOD.
    GAO also identified problems related to the accountability and 
disposition of contractor-managed government-owned property in Iraq. 
While there are ongoing efforts to plan for the disposition of 
contractor-managed government-owned property in Iraq, several 
challenges remain. The first challenge is determining the original or 
fair-market value of contractor-managed government-owned property and 
determining any security restrictions on its disposition. Second is the 
time-consuming and labor-intensive task of accounting for and 
determining the disposition of contractor-managed government-owned 
property. Finally, the Defense Logistics Agency may not have sufficient 
data to adequately plan capacity needs at the Defense Reutilization and 
Marketing Offices--facilities in theater responsible for disposing of 
surplus DOD property through reutilization, transfer, donation, and 
sale.
    Question. The Department reports that a great number of contractors 
perform base support functions in Iraq. What exactly does ``base 
support'' mean?
    Answer. Base operations support is a term used to describe a 
collection of day-to-day programs, activities, and services needed to 
keep the bases and installations running. As we have previously 
reported, base operations support is not a single, well-defined program 
area but a collection of many diverse programs, activities, and 
services. According to DOD budget documents, base operations support 
provides the resources to operate DOD bases, installations, camps, 
posts, and stations. According to the department, these resources 
sustain mission capability, ensure quality-of-life, and enhance work 
force productivity and fund personnel and infrastructure support. 
Personnel support includes food and housing services for unaccompanied 
and deployed forces; religious services and programs; payroll support; 
personnel management; and morale, welfare, and recreation services to 
military members and their families. Infrastructure support includes 
utility systems operations; installation equipment maintenance; 
engineering services including fire protection, crash rescue, 
custodial, refuse collection, snow removal, and lease of real property; 
security protection and law enforcement; and transportation motor pool 
operations.
    Base operations support at deployed locations, such as Iraq, 
consists of providing food and housekeeping services on bases. This 
includes many of these services described above such as food, laundry, 
recreational, construction and maintenance, road maintenance, waste 
management, fire-fighting, power generation, and water production and 
distribution. While DOD estimates that over half of its contractors in 
Iraq are engaged in providing base support GAO has not verified DOD's 
estimates nor has GAO analyzed the data to determine what specific 
services are categorized as base support in Iraq.
    Question. How can the DOD become less reliant on contractors in 
future military operations?
    Answer. As noted in a February 2009 testimony, DOD officials have 
stated that without a significant increase in military end-strength, 
the department is likely to continue to rely on contractors to support 
future operations. The testimony also noted that the department has yet 
to conduct a fundamental reexamination of its extensive reliance on 
contractors in order to identify what types of function and activities 
should be contracted out. We called for such a reexamination in March 
2008 (see GAO-08-572T). Until such an examination is completed, DOD may 
not be totally aware of the risks it faces in using contractors and 
will therefore be unable to mitigate those risks in the most cost-
effective and efficient manner.
    Question. Mr. Dodaro, the DOD is required by law 10 U.S.C. 2464 to 
have an in-house depot maintenance workforce able to respond to 
national defense emergencies. Do you believe that DOD has sufficient 
numbers of in-house personnel to meet all core maintenance functions to 
respond to national emergencies?
    Answer. On the basis of ongoing work, we believe the depots 
currently have sufficient numbers of in-house personnel to handle their 
workload. As a result of the Global War on Terror (GWOT), the depots 
have experienced a surge in workload over the past few years. Some of 
this work relates to special projects, such as adding armor to 
vehicles, and some is attributable to repairing battle damage and other 
depot repair work associated with the military's high operations tempo. 
To accommodate the surge of workload, the depots have added to their 
total workforce over the last several years. Workforce data for the 
Army and Marine Corps indicate that the number of permanent government 
employees has remained steady, but the number of contract labor and 
temporary workers has risen. Depot officials told us they hired 
contractors and temporary workers in lieu of hiring permanent 
government workers due to uncertainties about the duration of GWOT. In 
the future however, there is a possibility that the depots could lack 
sufficient in-house technical expertise if core capabilities for new 
systems are not established at the depots.
    Question. Mr. Dodaro, do you agree that current DOD policy 
encourages the use of contractor logistics support?
    Answer. While DOD policies call for the use of both the public and 
private sectors to maintain weapon systems, DOD has moved toward 
greater use of the private sector to perform maintenance and other 
logistics support for new weapon systems. Our ongoing work on core 
logistics capabilities and depot operations indicates that some program 
managers prefer the original equipment manufacturers to provide long-
term logistics and maintenance support for new and modified systems. 
Among the reasons cited for not considering the military depots is the 
cost associated with purchasing technical data and providing equipment 
to establish depot capability. In addition, DOD stated in 2001 that 
performance based logistics (a form of contractor logistics support) is 
its ``preferred weapon system support strategy.'' DOD's policy is that 
performance based logistics arrangements shall make the best use of 
public and private sector capabilities, and with support provided by 
the government, the private sector, or a combination of both. Nearly 
all of the performance based logistics arrangements we reviewed 
recently were implemented directly with private sector contractors, 
although some of the contractors subcontracted with government depots 
to provide support either for economic reasons or to help the 
government meet requirements for having a core logistics capability.
    Question. If so, are we in danger of not having sufficient in-house 
technical expertise?
    Answer. There is a possibility that the depots could lack 
sufficient in-house technical expertise in the future if core 
capabilities for new systems are not established at the depots. Our 
ongoing work on core logistics capability and depot operations raises 
concerns about the ability of the depots to maintain core capability in 
the future. Depot planners are concerned about the type and amount of 
workload that will replace their existing workload if GWOT-related and 
legacy system workloads decrease. Moreover, with the shift toward 
greater use of contractors to provide logistics support for new 
systems, depot planners are concerned that their permanent workforce 
may not be equipped with the necessary technical expertise to support 
core maintenance for new weapon systems. The depots have developed 
recruitment and training programs to attract and retain skilled 
workers, and they believe sufficient numbers of skilled workers are 
currently available. However, uncertainties about the type and amount 
of future workload hinder their ability to plan for future workforce 
requirements.

    [Clerk's note.--End of questions submitted by Mr. Murtha.]
                                     Thursday, February 12, 2009.  

                            ARMY CONTRACTING

                                WITNESS

LIEUTENANT GENERAL N. ROSS THOMPSON, III, PRINCIPAL MILITARY DEPUTY TO 
    THE ASSISTANT SECRETARY OF THE ARMY FOR ACQUISITION, LOGISTICS AND 
    TECHNOLOGY AND DIRECTOR, ACQUISITION CAREER MANAGEMENT

                              Introduction

    Mr. Moran. Good morning to everyone.
    This morning, the Committee will hold a hearing on the 
Army's contracting services, often referred to as outsourcing. 
More specifically, our private-sector contractors support 
government functions and the policies and procedures to ensure 
appropriate oversight.
    We will also talk about the DOD acquisition workforce and 
about acquisition management and oversight of contracts.
    We are very pleased to welcome Lieutenant General Ross 
Thompson, the Military Deputy to the Acting Assistant Secretary 
of the Army for Acquisition, Logistics and Technology. General 
Thompson is co-Chair of the task force to address the Army's 
structural weaknesses and shortcomings in contracting, of which 
there are many. He also shaped improvements to expeditionary 
contracting activities.
    We are very pleased that you are with us this morning, 
General.
    America has relied on contractors for national security 
support and materiel since the founding of the Republic, but 
that reliance has never been more pervasive than it is today. 
The Army now spends twice as much on contract services than on 
the pay of American military and civilian personnel combined.
    For decades, it has been the policy to contract for all 
functions and activities that are not inherently governmental. 
But now it is impossible to define what that phrase 
``inherently governmental'' means.
    Further, after careful examination of some service 
contracts, the Army discovered that it had contracted out some 
of what we would consider--and most rational people would--
inherently governmental functions, with contractors evaluating 
other contractors, building budget justifications and the like. 
The Army is now bringing those jobs back in house.
    This Committee has oversight of DOD funding, and under 
Chairman Murtha's direction we focused considerable attention 
on contracted services over the past 2 years. The Army spends a 
lot of money on contracted services, and today we will hear 
more about how the contracts are made, how requirements are 
determined about the contracting workforce and how oversight is 
accomplished.
    General Thompson, thank you for the time and attention that 
you have given to this problem and thank you for being here to 
discuss this very important issue.
    We welcome Vice Chairman Dicks, Mr. Frelinghuysen, Ms. 
Granger and Ms. Kilpatrick to the hearing; and we are going to 
hear now from the ranking member, Bill Young.
    We appreciate your presence and leadership. Mr. Young, if 
you would proceed.

                          Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much. I just want 
to add my welcome to General Thompson, representing the Army in 
this great, real challenge. We have had an opportunity to visit 
and talk, and I feel very confident with him in charge of this 
particular responsibility. So, General, thank you for being 
here today. Welcome to the members of your team who are here.
    Mr. Chairman, I just want to make a personal note that 
sitting in back with the team is one of my constituents and a 
former member of my staff like maybe 15, 18 years ago, Ky 
Dughi, whose mother still lives in my district. And, Ky, she 
keeps telling me to come home more often to see her.
    General, welcome.
    Mr. Moran. Let that be on the record.
    General Thompson, you may proceed with your summarized 
statement; and your entire statement will be placed in the 
record.

                 Summary Statement of General Thompson

    General Thompson. Thank you for inviting me here today, 
Chairman Moran and Congressman Young and distinguished members 
of the subcommittee. I really do thank you for the opportunity 
to update you on the Army's progress, and I do mean progress, 
in enabling the contracting mission to be agile, expeditionary 
and responsive to our warfighters, while ensuring proper 
stewardship of taxpayer dollars.
    I have a written statement that I will respectfully request 
be made part of the record of today's hearing.
    Mr. Chairman, as you know, the Secretary of the Army 
created a special commission on contracting, led by Dr. Jacques 
Gansler and a number of distinguished members, to look at the 
long-term strategic view of the Army's acquisition and 
contracting mission in support of expeditionary operations. The 
Army Contracting Task Force, which you alluded to, I co-chaired 
with Kathryn Condon, who is the Executive Deputy at the Army 
Materiel Command; and we looked at current contracting 
operations and took immediate action steps where they were 
necessary.
    When our work was complete, we handed this off and created 
a Army Contracting Campaign Plan Task Force. It was led by my 
Assistant Military Deputy, Major General George Harris, who I 
work with on a daily basis. We continued the review of the 
Commission's recommendations and the other contracting 
recommendations that came from audits and other sources to 
determine the requirements and resources necessary to address 
the systemic issues. The mandate of both these task forces has 
been met, and their workload is being transferred to the 
enduring organizations in the Army that are responsible for the 
long-term contracting success, and we think our progress has 
been steady and significant.
    In all of our work, we were guided by Dr. Gansler's 
Commission's overarching recommendation, which was to implement 
the Commission's recommendations rapidly and then measure 
success. Because if you don't measure success, you don't know 
if you are going to get there.
    The Commission outlined four supporting recommendations for 
our success, and they included 40 actions to correct 
discrepancies identified. Twenty-two of those were Army 
specific actions; and the remaining 18 are within the purview 
of the Office of the Secretary of Defense or are legislative 
actions being addressed jointly among the services, with OSD in 
the lead.
    We have completed actions on 21 of the 22 specific 
recommendations that came out of the Gansler report. The 
remaining one, to increase the contracting workforce by 400 
military and 1,000 civilians, is going to require more time to 
ensure we have both the quality and the quantity necessary to 
properly execute the contracting mission.
    The initial recommendation from the Gansler Commission was 
the 400 military and the 1,000 civilian. Our actual numbers 
that we are pursuing in growing the contracting workforce are 
446 military and 1,191 civilians. I will talk more about that 
later depending on the question.
    Mr. Moran. Are those on board?
    General Thompson. No, sir, they are not. They are planned 
in our structure. We are starting to grow those military and 
civilian members this year. As I indicated yesterday when we 
talked, it is going to be a multiple-year process; and I can 
talk about the specific numbers. But about a third of those 
numbers is the planned growth in each of the next 3 years.
    Mr. Moran. But they are fully budgeted for. They are 
included within the personnel ceiling?
    General Thompson. Yes, sir, they are included both in the 
military personnel accounts and they have been budgeted for in 
our budget. And even though we may adjust the budget here, as 
we resubmit it in the current schedule of April, they won't 
fall out of that budget, I assure you.
    We also want to thank the Congress for the five additional 
general officer billets designated for acquisition. As of 
September, 2008, even in advance of the authorization from the 
Congress, we selected an additional general officer, a newly 
promoted Brigadier General, as commander of our recently 
established expeditionary contract command; and we will select 
more acquisition general officers this year. That board has 
already met, and the results are being reviewed appropriately 
in the Defense Department, and those results will be announced 
here over the next couple of months.
    We have already established a two-star U.S. Army 
contracting command as part of the Army Materiel Command and a 
one-star-level mission and installation contracting command, 
which does all of the contracting primarily for our bases. 
These two billets are presently being filled by experienced 
members--and I emphasize that--experienced members of the 
Senior Executive Service; and it is our plan over time to 
replace those two individuals with a properly qualified and 
skilled general officer once those selections are done.
    Let me also mention here that Brigadier General Bill 
Phillips, who is really one of our best acquisition officers 
with an extensive, extensive background in contracting, just 
took command in the last couple of weeks of the Joint 
Contracting Command in Iraq and Afghanistan. He is an excellent 
choice to lead this Command. His in-depth contracting 
experience and expertise will be instrumental in continuing our 
efforts to improve Army contracting, and under his leadership 
the Army intends to improve the management of large dollar 
contracts in theater through reach-back to the Army Sustainment 
Command in Rock Island, Illinois. This reach-back methodology 
was largely successful in some of the issues that we had a year 
and a half ago in Kuwait, and we want to expand on that success 
by doing it for more of the large dollar contracts in Iraq and 
Afghanistan.
    As we have testified before, Mr. Chairman, the Army 
acquisition workforce declined significantly in the last 
decade, while the workload and the dollars associated with that 
workload have increased significantly. To further improve 
contracting, the Army is now participating in a defense 
acquisition workforce 60-day joint assessment team to assess 
and make recommendations regarding the component workforce mix, 
the total force mix and future funding levels. I think 
personally we are well ahead of that, so our participation is 
going to just reinforce the path that we are already on.
    A brief topic of interest to this committee and the U.S. 
Army is insourcing. Insourcing implements congressional 
direction to give special consideration to Federal Government 
employee performance of contracted functions based on the 
review and inventory process required by Congress for 
identifying inherently governmental functions, those closely 
associated with inherently governmental functions, and 
unauthorized personnel services.
    We have a comprehensive approach to comply with the 
congressional direction. Insourcing is not simply a contracting 
matter. It also involves civilian manpower authorizations, our 
hiring processes and our budgets.
    We have found that a practical insourcing schedule must be 
established in order to ensure continuity of service. This 
schedule may be affected by the timing of base realignment and 
closure moves, the effect of headquarters head counts or 
ceiling limits, and the ability and capacity of our civilian 
infrastructure to hire people.
    Most importantly, successful insourcing requires strategic 
planning that looks at activities or functioning holistically 
for the total work force, looking at the workforce balance 
between military, Department of Army civilians and contractors 
within the framework of a manpower requirements determination 
process. Simplistically, what is the work that needs to get 
done and what is the proper mix of the workforce in order to 
get it done?
    It also requires a contractor inventory and a process for 
reviewing the contracted activities in that inventory. And, 
again, we are well on the way; and I can talk more about that 
subject to your questions. This was recently directed by the 
Congress in the fiscal year 2008 National Defense Authorization 
Act, but we started to put our arms around the contractor 
inventory back in 2005. So we have got a very comprehensive 
database, we know what that contractor inventory is, and we are 
starting to make decisions around what is the proper mix of the 
contractors in the workforce.
    I have submitted for the record a detailed written 
statement which describes how we are changing our culture in 
this vital area specifically to ensure prompt compliance with 
both the congressional intent and the Federal acquisition 
regulation. To date, the Army is planning to in-source nearly 
1,400 positions, of which 1,127 are programmed in fiscal year 
2009 to 2011.
    In light of the congressional interest, Dr. John Anderson, 
who is sitting behind me, who is our expert in this area from 
the Office of Manpower and Reserve Affairs, is leading our 
efforts and has accompanied me today and is available to 
provide additional details should you desire.
    The other individual I would like to introduce behind me is 
Mr. Ed Harrington, who is now the Deputy Assistant Secretary of 
the Army for Procurement. This gets to one of my larger issues 
on the acquisition workforce about having the right people.
    Mr. Harrington left the Army as General Harrington in 2003 
as Commander of the Defense Contract Management Agency. He has 
a long history in the Federal Government and is really an 
expert in the contracting area, and we convinced Mr. Harrington 
to come back to work for us starting in December. We are 
delighted to have him back on our team. I think he is delighted 
to be with us to date.
    But it is just an indication of hiring the right people in 
order to help us get through these very challenging areas that 
are of interest to the committee.
    I am honored to be here today, and I will forthrightly--and 
I mean that--answer your questions that fall into my area of 
responsibility.
    This concludes my opening remarks, Mr. Chairman; and I look 
forward to your questions.
    [The statement of General Thompson follows:]

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                           CONTRACT PERSONNEL

    Mr. Moran. Thank you, General Thompson.
    As difficult an issue as this is to deal with, we know that 
you are not the problem, that you are part of the solution. I 
would like to figure out how you got a guy like Harrington 
back, because that is part of our problem. We get these 
experienced people and they leave and we desperately need to 
bring them back into the government, but a private contractor 
is willing to pay him three times as much without harassment 
from the Congress. So it is difficult to get them back. So if 
you have any ideas on how that can be done, we need to know. I 
don't know how you get the incentives to bring the people of 
that caliber back into the government.
    General Thompson. It is a good recruiting pitch, I think.
    Mr. Moran. I suspect there has to be some substantive 
incentives there, too. Whatever they are, I am glad you used 
them.
    We are here because contracted services has gone up by 183 
percent in the last 8 years, while salaries for military 
personnel have grown 5 percent. So we feel there is something 
wrong. We want balance. We are not trying to eliminate contract 
services, but it is out of balance now. I would like to hear 
your views about that and what you are beginning to think might 
be the proper balance.
    One of the indications of the imbalance is what Chairman 
Murtha continually references, the fact it appears we have more 
contract personnel in Iraq than we do Federal employees, 
whether it be military or civilian. I will never forget being 
on one of those Congressional Delegations (CODELs) waiting in a 
line that there were four or five of us, and we were doing what 
we were told, we were waiting in line to get into the Green 
Zone. By the time we got up to the end of the line, it didn't 
take long because many people deferred to us, but I had been 
looking over to our left and there was a group of people that 
just walked right through, just waved and in they went.
    So I asked the military police (MP), we don't mind waiting 
in line, but what is with all of those folks who just walk in? 
Who are they? This MP says they are from Halliburton. He said 
``They run the place.'' This was the Green Zone, and somehow I 
thought the U.S. military ran the place. So that is the 
imbalance that has struck us.
    Lord knows when we did the surge how many of those surge 
personnel were actually contractors.

                   REDEPLOYMENT OF CONTRACT PERSONNEL

    And that brings up another related issue that I think the 
Committee would be interested in hearing. As we redeploy troops 
out of Iraq, how are you going to redeploy those contract 
personnel, who are at least as many? Are you going to do it 
proportionally or whatever? That might be of interest to the 
subcommittee.
    If you might respond to some of those general questions, 
then we are going to hear from the members of the panel and 
their questions.
    General Thompson. Well, let me answer the second one first 
on the rebalancing as we reduce the force presence in Iraq. I 
have seen and been briefed on the comprehensive plans as we 
bring down the military structure that also appropriately 
brings down the contract support structure that is in Iraq. 
That is one of the things that is General Phillips', who just 
went over there, prime responsibilities is to appropriately 
bring that down.
    So I don't know what the exact numbers will be, but they 
will be proportional. So we should have fewer troops and a 
smaller presence with the forward-operating bases. You will 
need fewer support contractors to be able to support the troops 
that are out there doing the mission.
    The way I would look at this, Congressman, if you go back 
strategically, there was a conscious decision at the end of the 
Cold War to reduce the size of the military, the military force 
structure. When we reduced the size of the military, it was to 
keep as many of the warfighters in the force and look at the 
reliance on some of the support functions that we had military 
members performing such as cooks and truck drivers and supply 
personnel.
    In the Army, I know when we reduced from 780,000 in the 
active component and a proportionate reduction in the reserve 
components, we kept as much of the war fighting structure as we 
could; and we eliminated not all but some of the structure that 
was doing the support mission, with the thought that, if we 
needed it, we could contract for it if necessary. And I think 
that is what happened strategically from 2001 until today. When 
we needed the base support structure and contracted support 
primarily, we ended up contracting for it.
    Is it too much? I don't know. I think it is a balance. 
There is a defined amount of work that needs to get done in 
order to support the troops. Some of it we do ourselves with 
the military and the Department of Army civilians, but we have 
elected to contract for it with a large proportion of it over 
the last 6 years.
    Mr. Moran. Thank you, General Thompson.
    Again, we understand you are not the problem and didn't 
make those decisions in terms of the proper balance of contract 
versus in-house military personnel, but at this point let me 
turn to ranking member and former chairman, Chairman Young.

                        DOD CONTRACT MANAGEMENT

    Mr. Young. Mr. Chairman, thank you very much.
    General, for a number of years, the Armed Services 
Committee and especially its Chairman made the case that he 
referred to them as shoppers. I am sure you know what I am 
talking about. He was determined to reduce the number of people 
in the contracting business at the Pentagon. Obviously, that 
was not the decision on the part of the Congress, at least not 
in a major way. But, today, apparently we have turned and gone 
a different direction.
    For example, GAO identified DOD contract management as a 
high-risk area. Most recently, a senior DOD acquisition 
official stated that the Department must increase the size and 
capability of its civilian acquisitions workforce dramatically. 
What does that mean, ``dramatically''? Does that mean an 
additional 100 or 1,000 or 10,000? What does that mean? This 
was GAO's recommendation, so what do you think it means?
    General Thompson. Sir, what I think it means are the 
numbers that I articulated in my oral statement at the 
beginning and in the written statement. For us, we have gone 
through our very deliberative process, and it is the 400-some 
military and the nearly 1,200 civilians in the contracting 
workforce, and we think that will get us to where we need to be 
properly in balance with the right number of people doing this 
critically important mission.
    I do think the pendulum swung too far the other way. There 
was a conscious decision to reduce the size of the acquisition 
workforce, because we had statute at the time. We complied with 
that statute, but we swung the pendulum too far, and we need to 
swing it back in the other direction to an appropriate level.
    I don't want one more person on my staff in any of my 
organizations than I need to get the job down done. But, right 
now, with the amount of contracted services we have and with 
the complexity of a lot of the contract instruments, you need 
to have a larger workforce. And you need to value that 
workforce. You can't label them in a pejorative way. Because if 
you do that, you won't get good people that want to do that 
mission and function. You have got to value that contracting 
workforce, make them feel like every day that they are a 
valuable part of the team. Because they are. They are at the 
forefront of guarding the taxpayer dollars and making sure we 
get an appropriate service or product for those taxpayer 
dollars.
    So our numbers are there, very well thought out. We will 
adjust those as we need to over time here. But, right now, I am 
in a major recruiting effort, using some of the authorities 
that have been given to us by Congress that we have now 
implemented in policy in order to recruit the right people, 
like Mr. Harrington, to come to work for the Army or the 
Department of Defense in this critically important area.

                        ARMY CONTRACTING COMMAND

    Mr. Young. General, the Committee understands you are 
talking about raising the Army Contracting Command to 5,800 
civilians and military personnel. Is that the right number?
    General Thompson. That is about right.
    Mr. Young. Where are you today?
    General Thompson. We are a little over 5,000. We are about 
800 short.
    Mr. Young. Will that 800 be civilian or military or a 
combination?
    General Thompson. Primarily civilian, in the Army's 
acquisition workforce as we define it. And it is not just 
contracting. There are 12 different skill sets. Program 
management, engineering, cost estimating are another couple of 
examples as well as information technology. There are about 
40,000 members roughly in the Army's acquisition workforce. We 
are at about 1,500 military members today, and we will grow 
that to around 2,000 over the next couple of years. The rest of 
that 40,000 are all Department of the Army civilians.

                   WARRANT OFFICER CONTRACTING BRANCH

    Mr. Young. Sir, where are you on the creation of the 
warrant officer contracting branch?
    General Thompson. Sir, that was a proposal to create a 
career field in contracting for warrant officers. This is one 
of the things that had just gotten started when Ms. Condon and 
I led the early task force in 2007. We have noncommissioned 
officers--NCOs--now that we are starting to recruit, and we now 
have about 240 noncommissioned officers that have got 
operational experience and other specialties that are now in 
the contracting career field. We are looking through our 
deliberate process. We call it a forced design process. Should 
we have warrant officers involved in that mix between NCOs, 
officers and warrant officers, which are a skill set? We 
haven't come to a conclusion yet that we think warrant officers 
are the right fit. They may be. But we are in the process of 
evaluating that right now.
    We do need the number of people, whether they are civilians 
or NCOs, to do the mission; and we are evaluating whether 
warrant officers would be more appropriately suited to do a 
particular portion of the contraction mission, which is a broad 
mission.
    Mr. Young. Have you planned safeguards to make sure that we 
just don't create a bloated bureaucracy that might not do any 
better than what is being done today?
    General Thompson. Yes, sir. And those safeguards are good 
metrics and good performance plans for organizations and 
individual performance plans for every individual in the 
organization.
    I will give you one metric that we use with the Program 
Executive Officers who are direct reports to me, and there are 
12 of them. We look at their overhead. So we evaluate the 
percent of the dollars that they have responsibility for and 
how much of that is in overhead; and we hold them to less than 
5 percent, which is the high side, and in most cases it is far 
less than that. So we do evaluate that very significantly in 
the acquisition business. That is a key metric for me.
    Mr. Young. Well, I wish you a lot of success, because this 
is a real challenge, and it is a problem that is becoming more 
and more obvious to the Congress and I think the general 
public.
    General, thanks for being here today. I appreciate your 
testimony.
    Mr. Chairman, thank you.
    Mr. Moran. Thank you, Mr. Young.
    Vice Chairman Dicks.

                         NUMBER OF CONTRACTORS

    Mr. Dicks. Thank you, Mr. Chairman.
    General Thompson, we are glad to have you here today.
    In October of 2008, Nelson Ford, the Under Secretary of the 
Army, stated, ``We really don't know the number of contractors 
that we have, and we really haven't thought about the 
appropriate role of contractors on the battlefield. We still 
don't understand that.''
    This is October of 2008. Where is all this action that was 
outlined in your statement, General?
    I was over in Iraq. I am sorry that Congresswoman Kaptur is 
not here; she has been very interested in this. We have asked 
witness after witness after witness how many contractors do we 
have, and we never got an answer until we had to take out some 
money and say you are not going to get your money until you 
answer these questions forthrightly.
    I think in my mind this was a deliberate attempt to keep 
the information from Congress so that Congress wouldn't realize 
the number of people that we have over there.
    Now, as I understand it, when you look at the whole picture 
in CENTCOM, we have currently 216,000 military personnel versus 
267,000 contractors. The Under Secretary of the Army doesn't 
have any idea about this? What is going on? Why was this 
information withheld from the Congress? Were you ordered or did 
somebody tell you not to present us the information when we 
asked for it year after year after year?
    We went over there to Iraq, and I met with the officials 
there in Iraq, and I asked them these questions. They said, we 
don't know. That was the official answer from the military 
until this hearing today. Why didn't we know?
    General Thompson. Sir, I don't know why that information 
wasn't presented to you, but that information is available. I 
remember Congresswoman Kaptur asking me those questions last 
year, and I answered the questions very closely to what the 
numbers actually were, and then we followed up on that in 
response to the Committee. And I have got those numbers.
    Mr. Dicks. Why does the Under Secretary still think we 
don't know anything about this?
    General Thompson. Sir, I don't know. Mr. Ford is no longer 
the Under Secretary. I have a great deal of respect for Mr. 
Ford.
    Mr. Dicks. Is this one of the reasons?
    General Thompson. For Mr. Ford? No, sir. I think it was 
just the appropriate time because of the change of the 
administrations.
    Mr. Dicks. For a long time there was a difficulty within 
the administration to come up with any numbers.
    General Thompson. And we have those numbers today. I will 
ask one of the guys here in the back to pull out the sheet, and 
I will give you the latest numbers.
    The Office of the Secretary of Defense now has a Senior 
Executive Service member, Mr. Gary Motsek, who has put his arms 
around this issue. We have monthly reports. I get a report 
every day that accounts for the contractor workforce in the 
theater. It comes on my BlackBerry every morning at 6 o'clock, 
and we gather up those numbers on a monthly basis and report 
them. I can give you the January figures in just a minute here.

                     SURGE IN CONTRACTOR EMPLOYEES

    Mr. Dicks. Was the surge really the surge in contractor 
employees, or was it these additional five brigades? What are 
these 267,000 people doing besides supporting the troops? Is 
that basically what it is all about?
    General Thompson. Well, it is supporting the troops. I will 
give you the exact numbers in a minute here. But a lot of the 
individuals that are over there are local nationals.
    So here are the numbers as of the middle of January.
    In the CENTCOM area of responsibility--that is Iraq, 
Afghanistan, Kuwait, Qatar, that whole area--there are 266,678 
contractors; 41,000 of those are U.S. citizens, 100,640 are 
third-country nationals, and 125,000 are local and host-country 
nationals. A lot of the local and host-country nationals are 
being hired in order to create jobs, in order to rebuild their 
own infrastructure in Iraq.
    Those numbers are available. There is no reason why they 
can't be shared with the Members of Congress.
    Mr. Dicks. That is good. That was not part of your 
testimony, I don't believe, was it?
    General Thompson. It was not in the prepared statement that 
I made.
    Mr. Dicks. Are there any other reports like this that you 
would like to present us? We would like to have that for the 
record.
    General Thompson. We can add that for the record. There is 
no information here that should not be part of the public 
record.
    [The information follows:]

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    Mr. Moran. If the gentleman will yield, this is the number 
of deployed contractors, but we also wanted to know how many 
contractors are working for the defense establishment. Do we 
have that number? Can we even guess at what it might be?
    General Thompson. I can tell you that number for the Army. 
I don't know the number off the top of my head for the entire 
Department of Defense. If you just give me one second, 
Congressman.
    Dr. Anderson, who as I said earlier is our expert in this 
area.
    Mr. Dicks. Do you want him to come up to testify?
    General Thompson. I don't think it is necessary unless I 
don't get this right. John will keep me straight.
    But in the deployed infrastructure, which is not what is 
overseas, the number is about 125,000 for the Army right now. 
We started in 2005, before I had the job that I am in now, when 
our former Secretary asked us to get our arms around this issue 
because he wanted to understand the total workforce mix. So we 
have gone out and gathered that information on how many 
contractors we have working for us.
    Mr. Dicks. 125,000 separate contractors.
    General Thompson. Separate than the number I just gave you.
    Mr. Dicks. This isn't people. This is contractors. He is 
telling me you are wrong now.
    General Thompson. Yes, full-time equivalent employees.
    Mr. Dicks. Okay, but not 125,000 contractors who would have 
500,000 employees.
    General Thompson. It is 125,000 people that are part of the 
multiple contracts we have got. I don't know what that number 
is, but 125,000 full-time equivalents people.
    Mr. Moran. So the answer to Vice Chairman Dicks' question 
is there are about 400,000 contracted people working for the 
Army alone in addition to the normal military and civilian 
hired personnel?
    General Thompson. If I can make a clarification, the 
266,000 number in the CENTCOM area of responsibility are all 
DOD, are all contractors, not just Army. The 125,000 number 
that Dr. Anderson just gave us are the ones that work for the 
Army here in the continental United States.

                              ACQUISITION

    Mr. Dicks. The other point I would like to make, I think we 
have to make a distinction--correct me if I am wrong--but this 
contracting that is going on and sending those people over 
there instead of government workers or whatever, there is a 
whole separate thing here which is acquisition, right? The 
acquisition thing is the Army's ability to go out and buy 
equipment, which has not been one of your strong suits over the 
years, just thinking of the six or seven billion dollars that 
we lost on the Comanche helicopter. Acquisition hasn't been one 
of the--since the '80s, when we did the tank, the Bradley and 
the Infantry Fighting Vehicle and the helicopter. So we are 
trying to get the acquisition thing straightened out.
    I go back to what Mr. Young said. The former chairman of 
the Armed Services Committee kept demeaning these acquisition 
people as ``shoppers''. This is the people that go out and get 
the weapons system, buying the equipment, doing this stuff. We 
cut way back on the number of people we had there, 
unfortunately.
    Can you tell us just quickly what are we trying to do to 
improve Army acquisition, to try to get beyond the period of 
time when we have been not very successful in bringing in new 
equipment?
    General Thompson. The strategic thing, Congressman Dicks, 
is the people and having the right number of people and having 
the people with the right skill set. We have an excellent 
acquisition workforce today. They have certification levels 
that they have to achieve. They have required training.
    Mr. Dicks. Are any of those people contractors?
    General Thompson. The acquisition workforce that I referred 
to, the 40,000 earlier, are all government.
    Mr. Dicks. This is inherently government.
    General Thompson. This is inherently government. They do 
the inherently governmental things. They write and approve 
contracts, they build budgets, they approve payments, they do 
the final checks on everything that is required in the Federal 
Acquisition Regulation and the Defense and the Army supplements 
that go with that.
    There are contractors that work in support of the 
acquisition process, for example, in engineering. When we don't 
have the engineer with the right skill set because of a 
particular technical area, we will go out and hire that 
engineer to work for us, and then they have the appropriate 
checks on what they can and cannot do because they are a 
contractor.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Moran. Well, thank you, Mr. Dicks.
    The problem we are having up here is that for these 
contracted services that you said are 125,000 working for the 
Pentagon, basically----
    Mr. Dicks. No, this is for the Army.
    Mr. Moran. The Army.
    Mr. Dicks. Not for the whole military.
    Mr. Moran. That is right. We understand that. Just for the 
Army. The number in the budget is $35 billion for contracted 
services. It averages out to, what, 20 or 30 million per 
person. So we are wondering if it isn't much larger than 
125,000. That is something the staff is working on now, but you 
may want to respond to that. Because the figure we have for 
contracted services for the Army for 2007, that is the time 
period that you gave us those numbers, is $35 billion. It was 
an increase of $23 billion over 2000.
    Mr. Dicks. Mr. Chairman, is that just for personnel, or is 
that buying stuff as well?
    Mr. Moran. Well, it says contracted services. So it is just 
contracted services, which is not products, it is not 
equipment, it is not weapons. Maybe your people there, Mr. 
Anderson, might give some thought to that, and you can respond 
to us in a few moments.
    Let's hear from Mr. Frelinghuysen for the time being.
    Mr. Young. Mr. Chairman, will you yield for a moment before 
we leave this subject?

                QUALIFICATIONS FOR CONTRACTING OFFICIAL

    General, what qualifications do you require when you hire 
someone as a contracting official? We are talking about large 
numbers of people, adding large numbers of people. What kind of 
experience do you expect, do you demand or do you get?
    General Thompson. The minimum qualification is 24 college 
credits in a business or a management or an economic area for 
contracting, and then there are the certification levels as 
they work through, they have a number of courses they have to 
go to and a number of individual self-development things they 
have to do. To be certified at level 1, it is 2 years of 
experience on the job. To be certified at level 2, it is an 
additional 2 years of experience at an appropriate job. And 
level 3 just adds on top of that.
    So, depending on the discipline, for engineering, you would 
expect us to hire people with an engineering degree; and we do. 
For cost estimating, somebody that has got an economics degree 
or accounting degree. Those are the kind of people that we hire 
for the different acquisition career fields.
    Mr. Young. Do you hire them with personal interviews, or do 
you just use this computer system that seems to be engulfing 
the government where a person applies on line and they get a 
response yes, no or maybe on-line, never having talked to or 
had contact with a human being?
    General Thompson. Well, I can't say categorically that it 
is 100 percent done with interviews, but it is pretty close to 
100 percent. My stump speech to people is the most important 
thing you do is to hire the right people to work for you. And 
if you can do that with a computer resume, more power to you. I 
don't see how you do that. So the ones that I am involved in 
the selection process with and all of the people that I 
interact with at a more senior level typically go through an 
interview process.
    They will get, as an example, 10 resumes for a particular 
job application. I forget the exact number for Mr. Harrington, 
but it was over 20 people applied for his position. We 
evaluated those, we picked what we thought were the top 7 or 8, 
and I personally interviewed every one of those individuals, in 
some cases more than once, in order to make sure we got the 
right person for the job.
    That is the typical way it is done. It is time-consuming, 
yes, but it is also a critically important thing to do.
    Mr. Young. Mr. Frelinghuysen, thank you very much for 
yielding to me.

                         ACQUISITION WORKFORCE

    Mr. Frelinghuysen. Thank you, Mr. Young.
    The Committee has focused on the issue of contractors in 
Iraq and Afghanistan, and I assume we have quite a few 
contractors in Kuwait, where we have a rather large footprint, 
and much has been made of the fact that we have so many 
contractors. But the figures you have given us here about 
foreign nationals--and what was the other category?
    General Thompson. Third country nationals.
    Mr. Frelinghuysen. Third country nationals. That puts the 
picture in far greater focus.
    In Vietnam, we had similar foreign national support. We had 
large companies with a variety of different initials which ran 
military bases large and small. So there is contracting, and 
there is contracting.
    I would like to just know sort of what you are doing in 
terms of ratcheting up the acquisition workforce. It is a 
little indefinite as to where you stand relative to your hiring 
goals. But how are those goals impeded by issues of 
retirements/loss of institutional memory and what are you doing 
to sort of retain people, taking a look at a variety of 
different incentives? Much has been made of the whole issue of 
competition for people with core competency. Can you sort of 
briefly touch on those issues dealing with issues of retirement 
and retention?
    General Thompson. Yes, sir. There has been lots of studies 
done, Congressman Frelinghuysen, on the percent of the 
government workforce--we are talking civilians primarily now--
who are retirement eligible or will be early retirement 
eligible in the next 5 years; and those numbers are at the 50 
to 60 percent level, typically, depending on the study that is 
done. So when we take into account our necessary strategic 
hiring plan, we take into account those retirement numbers.
    We typically don't see nearly the number of people retire 
in a year that could retire in a year. People typically stick 
around longer than they could in order to draw retirement 
benefits, which is a good thing for us because you do want to 
keep that experience and skill set.
    So when we look at the strategic hiring, how many we are 
going to hire in 2009 and 2010 and out, we take into account 
those numbers. We predict how many we need in order to keep the 
numbers up against the authorization documents that are out 
there. So in the acquisition workforce, again, if I can go back 
to the 40,000, to try to stay at least at that steady state for 
40,000, and as we grow by a couple of thousand over the next 
few years how do we make sure that we don't fall further 
behind.
    The one thing that we have gotten from the Congress in the 
2008 authorizations are the Section 852 permissions which were 
designed to give us the right statute and mechanism to recruit, 
retain, and train the acquisition workforce; and we are doing 
that. We are using those tools starting in 2008. We got started 
late in the year, but we are going to spend in the DOD nearly 
$900 million out to 2013 in order to take care of the 
government acquisition workforce.
    As I mentioned yesterday to several of you, the mechanism 
to do that is to tax the contracted services dollars. So to 
meet the intent of Congress is to tax the dollars that we are 
spending on contracted services and spend less there and to 
take that nearly $900 million and apply it for the right 
incentives for the government acquisition workforce. I am not 
the best business person in the world, but that is a pretty 
good way, I think, of meeting the intent of Congress and 
accomplishing a number of objectives.

                          REACH-BACK TECHNIQUE

    Mr. Frelinghuysen. Lastly, I think you somewhere made a 
good choice with General Phillips being responsible for 
contracting in Iraq and Afghanistan. Could you comment on the 
whole issue, what you call the reach-back? Is this the issue 
that was identified in the Gansler report of the Pentagon 
actually talking to the commanders in the field as to what the 
hell is going on and getting their take on things, rather than 
on some other, shall we say, more traditional model?
    General Thompson. Yes, sir.
    When I use the term reach-back, the contracting process is 
a broad process that starts with identifying what do you want 
to do, what is the requirement. That process, the requirements 
definition has got to be done with what the commander needs, 
whether it is base support services or transportation services 
or pick something that is a requirement. That part has got to 
be done with the requiring activity of the commander in the 
field.
    But a lot of the contracting process, the detailed source 
selection, the pricing, things like that, doesn't have to be 
done in theater, and I would argue strategically, don't do 
forward what you can do back here. With the tools that we have 
got available today, if I can do the source selection process, 
the evaluation, the pricing, the negotiation with the 
contractors, if I can do all that at Rock Island, Illinois, 
which we have done very successfully with the contracts we had 
in Kuwait.
    Mr. Frelinghuysen. So you have problem-solving teams back 
here.
    General Thompson. Back here. And what we did in Kuwait, 
when Ms. Condon and I got that started, is we put the people at 
Rock Island, Illinois, who were in support of the contracting 
office in Kuwait, we put them on the same work schedule. So 
they would start work at 7 o'clock Kuwait time, which was 3 or 
4 o'clock in the afternoon here. They would run the same work 
schedule. So they were in direct support. That has proved to be 
very, very successful.
    I can give you an example on one contract that we 
negotiated because of the right expertise back at Rock Island 
where we had an $18 million savings from what we would have 
already spent, and a lot of other examples that way. General 
Phillips is well aware of that. He is over there to do his 
command mission for the joint contracting, but one of his 
specific strategic objectives is to appropriately expand the 
use of that reach-back technique for what we are doing in Iraq 
and Afghanistan.
    Mr. Frelinghuysen. And that is into Afghanistan as we move 
a greater obligation there, expand that?
    General Thompson. Yes, sir.
    Mr. Frelinghuysen. Thank you.
    General Thompson. Bill Phillips has got responsibility, 
Congressman, for both the contracting in Iraq and in 
Afghanistan.
    Mr. Moran. Mr. Visclosky.
    Mr. Visclosky. I will defer.
    Mr. Moran. Ms. Kaptur.

                          COST OF CONTRACTORS

    Ms. Kaptur. Thank you, Mr. Chairman.
    Welcome, General. I am sorry I wasn't here a little bit 
earlier. I had two other briefings and meetings I had to 
attend.
    I am very interested in the subject of contracting, and you 
have a very difficult job.
    I wanted to ask you for the record, do you have the most 
recent numbers of the number of contractors employed in Iraq 
versus--hired by our military--versus the number of individuals 
who are, as you have, dedicated their lives to the military in 
the regular force? Could you provide those numbers for the 
record? And could you tell me off the top of your head are 
those numbers of contractors increasing or decreasing at this 
point as a percent of total budget?
    General Thompson. We talked about those numbers before you 
had the opportunity to join us, because that question came up 
already. I can restate that, but I plan on leaving those 
numbers behind with the latest DOD report.
    Ms. Kaptur. All right. Are those numbers increasing?
    General Thompson. I don't know. I will check before we 
leave here and somebody go back and look at the notes. I don't 
know what the trend has been in the last year, for example. I 
want to give you the most relevant information.
    My recollection is that they have been fairly steady for 
the last couple of years, not increasing dramatically but 
fairly steady over the last couple of years.
    Ms. Kaptur. According to the numbers I have, from the 
period of 2000 to 2007, the Army's spending on contracted 
services grew by 183 percent in constant dollars while spending 
on military and civilian personnel salaries grew by 5 percent. 
The personnel salaries of the Army's budget were 31 percent, 
had fallen to 15 percent of the total, and contracted services 
from the year 2000 to date rose from 15 percent to now 20 
percent of the total. And in October of 2008, Nelson Ford, then 
Under Secretary of the Army, made this statement--I don't know 
if others have put this in.
    Mr. Moran. We have discussed it.
    Ms. Kaptur. Okay. So my question is, what steps is the Army 
taking to understand its reliance on contractors?
    General Thompson. To the specific numbers, ma'am, having a 
little bit of an operations research background, I always ask 
what was the source of the information. And I think we probably 
need to get with that and reconcile that with the committee 
staffers to make sure of the numbers. But not arguing about the 
percentages. I can say, no matter what database they came from, 
that the spending on contracted services has grown faster than 
the percent that we have spent on military pay.
    As I indicated earlier, we started in 2005 to get our arms 
around the number of contractors, full-time equivalents, that 
work for the Army. Dr. Anderson, who I introduced earlier, has 
built that database over time.
    Our process right now is, as we look at our authorization 
documents for the organizations in the Army, we don't just look 
at how many military are there or Department of the Army 
civilians. We also look at how many contract employees they 
have and should they be contract employees.
    Ms. Kaptur. Do you look at salary levels and compensation?
    General Thompson. Yes, ma'am.
    Ms. Kaptur. That will be in this document or material given 
to the committee?
    General Thompson. It can be. We can come back to your 
staffers or the professional staffers on the committee with Dr. 
Anderson and show you our process to evaluate that.
    But it is what is the work to be done, simplistically. What 
is the right mix, military, government or civilian, to do that? 
A lot of that is driven by the dollars available. So if I got 
somebody that is picking up trash on an installation, we will 
pay them an appropriate salary to pick up the trash that goes 
through a justification process to make sure that is a fair 
salary to pay, a fair contracted price to pay. All that is done 
in conjunction with the proper auditors and the Defense 
Contract Management Agency.
    Ms. Kaptur. Well, I don't want to repeat what others may 
have said earlier, but I am very, very interested in the costs 
to the taxpayers of the United States of increasing reliance on 
contractors, and I am very interested in contracted work force. 
I have asked for that information in the past. I am still 
interested in that. And I am interested in compensation levels.
    So I would be very interested in the meals. I am interested 
in the whole deal. But I am particularly interested in the 
contracted forces and what has happened since the year of 2000 
to date, and I am interested in those compensation and benefit 
levels.
    Thank you, Mr. Chairman.
    Mr. Moran. Thank you, Ms. Kaptur.
    The $35 billion, which represents the 183 percent increase 
in contract personnel, is comprised of almost 400,000 people. 
But if that includes all the foreign nationals who are paid 
virtually nothing in terms of U.S. dollars, $10,000, $15,000, 
$20,000 at the most, which of course has much more purchasing 
power in their country of origin, but it is an average figure 
of $100,000 that probably masks some great disparities in terms 
of compensation levels. So I think what Ms. Kaptur and the 
Committee would like is to break some of those numbers down.
    For example, what do the average American contract service 
person get per person compensation? What does the foreign 
national get? And maybe break them down by security or 
professional category so that we can get our hands around this 
to see what is a typical kind of compensation for these 
personnel. Because just to say 400,000 and 35 billion, doesn't 
really give us much insight into whether it is appropriate or 
not.
    General Thompson. I think that is definitely a fair 
question. That is analysis we can do.
    Again, it comes back to what is the source of the 
information, and you've got to come to agreement on where the 
data came from and how we pulled it. Otherwise, we could be 
talking past one another.
    But, back to the point, roughly half of the contractors in 
theater are the local and host country nationals who do make a 
salary at the lower end of the wage scale. And it is done not 
just because we need the work done, but it is also done so that 
they have jobs and they don't become insurgents themselves and 
they begin to rebuild their own economy as well.
    Mr. Moran. We are not arguing about that policy. I don't 
think that is at issue.
    Did you want to continue to pass, Mr. Visclosky?
    Mr. Visclosky. I will keep passing.
    Mr. Moran. Mr. Bishop.

                         INSOURCING/OUTSOURCING

    Mr. Bishop. Thank you very much.
    Let me also extend my welcome to you, General Thompson.
    I want to talk about, at least inquire about, outsourcing, 
about insourcing and also about some contingency contract 
problems. The 2008 Defense Authorization Bill required that the 
services take an inventory of the contracts; and, of course, 
the Army did that and was fairly aggressive I think with some 
push from our subcommittee; and I think you had some initial 
findings.
    As I understand it, you reviewed your contractor positions; 
and you discovered there were a number of inherently 
governmental functions that were in fact performed by 
contractors. I want to ask you what do you as a military person 
identify as the dangers of relying on contractors for 
inherently governmental functions, and in your review were you 
able to convert some of those positions thus far from contract 
positions to government positions? And what are the financial 
implications that you have been able to determine were the 
result of either utilizing the contractors for governmental 
functions or switching back and if that was a cost saving. And 
what are the factors that you are using to determine what the 
mission needs are with regard to governmental functions or for 
contractors or government personnel?
    General Thompson. Let me start, Congressman, and I think I 
will get answers to all of those questions, and if I don't, 
just remind me, and I will come back to it.
    We have a very deliberate process, and I gave some of the 
committee staffers the checklist ahead of time. This is a 
checklist that we go through that has to be signed by a senior 
official for service contract approvals. It starts with the 
statute and works its way down; it is a yes/no checklist.
    I will just give you an example looking at the checklist 
for inherently governmental.
    Here is an example: Does the function involve contractors 
providing legal advice and interpretations of regulations and 
statutes? Does the contract involve the direct conduct of 
criminal investigations? Does it involve the conduct of foreign 
relations? Determination of Federal program priorities for 
budget requests.
    Those are just examples of a very comprehensive checklist. 
You must answer no to all of those, or you cannot contract it 
out, because by the definition we determine that to be 
inherently governmental.
    That process is in place.
    Mr. Bishop. How is that monitored? Is that left to the 
discretion of the local commander? Who decides whether that yes 
or no answer is sufficient or is accurate?
    General Thompson. It is the appropriate level of approval 
authority depending on the contract value, in most cases. For 
example, I, for the Acting Assistant Secretary of the Army for 
Acquisition who I work for, have the approval authority for 
services contracts over a certain dollar threshold.
    Mr. Bishop. What is that dollar threshold?
    General Thompson. That dollar threshold is $250 million. 
That is not just one year. That is multiple years in some 
cases. So any request for a services contract that exceeds that 
threshold has to come to me, and with that packet comes this 
checklist.
    Mr. Bishop. Okay. So if they do it incrementally and it 
does not exceed that amount, it means who under you without 
having to get your approval has the discretion to make that 
decision, if they decide to do it, say, in $500,000 increments 
or $250,000 increments or $1 million increments or $10 million 
increments? What kind of checks and balances do we have there 
so we know they are not done incrementally to get around the 
approval of a sharp eye like yours?
    General Thompson. It is against our policy to do things 
incrementally because that is really not meeting the intent. 
The approval authorities for those service contract thresholds 
below me are depending on the dollar value.

                         INCREMENTAL CONTRACTS

    Mr. Bishop. The Gansler commission found that there were a 
number of incremental contracts, in fact, an excessive number, 
in Iraq and Afghanistan, and they found that was a problem 
because it caused unnecessary workload, inefficient operations, 
and limited the contracting officer's ability to achieve a 
better bargain. Now, apparently it may have been against your 
policies to do it but the Gansler commission found that it was 
very common practice that was being done. Some of them were 
funded monthly, and some of them even on more shorter intervals 
than monthly.
    General Thompson. A couple of points. There is no threshold 
on the checklist. Every services contract has got to have that 
checklist gone through, and it is part of the contract file, 
and so you make it part of the record on who approved that, it 
could be a $2 contract or a $250 million contract. I don't have 
any specific examples. If we had specific examples of somebody 
that was trying to break apart a contract in multiple 
increments to get underneath the threshold, we would deal with 
that appropriately. We would deal with that appropriately 
administratively or legally or criminally if it came to that.
    Mr. Bishop. But the discretion is that the command level, 
the unit level, brigade level?
    General Thompson. It is typically at the general officer or 
the SES equivalent level.
    Mr. Bishop. That doesn't depend on an amount?
    General Thompson. No, it doesn't. The principal assistants 
responsible for contracting in the government are the senior 
procurement officials who have the most expertise in compliance 
with the Federal Acquisition Regulation and all of the policies 
that exist.
    Mr. Bishop. But all of that has been thrown out for the 
most part with Iraq and Afghanistan, particularly at the 
beginning of the effort with the no-bid, sole-source contracts.
    General Thompson. Sir, I don't think it has been thrown 
out, and to make sure we are complying with that, our Army 
audit agency is doing an audit on that very issue just to make 
sure we are in compliance. We have a team that works for Mr. 
Harrington, a contract operations review team, that goes out 
and reviews every one of our contracting organizations to make 
sure that they are in compliance. That is in addition to the 
Army Audit Agency, the DOD, the Inspector General.
    Mr. Bishop. That is a relatively recent occurrence, though, 
only after this Committee, through the language that we put in 
our report, as well as the authorization committee required 
that you be more accountable for that. You weren't doing it 
before that, were you?
    General Thompson. I would say that we have probably paid 
more attention to it since the interest has been there, but it 
is not something that we just started recently. It is part of 
the process. The detailed checklist is relatively new because 
of the emphasis there, and that has been put in place within in 
the last year.
    Mr. Anderson. Since June.
    General Thompson. Within the last year.
    Mr. Bishop. Since June, did I hear him say?
    General Thompson. Yes.
    Mr. Moran. That was 7 years on, but thank you very much, 
Mr. Bishop, for your line of inquiry.
    I would wonder, General, if you might pass that checklist 
around. It appears to be the kind of checklist this Committee 
was pursuing. And it is strange that it is the only Army that 
has it, but it is the kind of checklist that we need so as to 
define what should be inherently governmental work in terms of 
classification. So if you would just pass that around to the 
Members and give it to the staff at some point.
    Ms. Kilpatrick. Mr. Chairman, could the staff get it and 
copy it and see that we all get it?
    Mr. Moran. Yes.
    General Thompson. We did give a copy to Ms. Reese but we 
will provide additional copies.
    [The information follows:]

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    Mr. Moran. Mr. Young, you had a request you wanted to make 
at this point.
    Mr. Young. Mr. Chairman, what I discussed with you off the 
record was whether or not it would be any advantage to the 
Committee or if it would be a task so large that I shouldn't 
ask for it to have a list of all of the contractors employed by 
the Department of Defense and how many people they employ and 
what they do. I just--I am seeing amazing numbers, and I am 
just thinking of bloated bureaucracies all over the place.
    General, if we were to ask you to provide that for the 
record, would that be an insurmountable assignment?
    General Thompson. From an Army perspective, again, going 
back, Congressman, we started to gather that information 
starting in 2005. So we have got a pretty good handle on that 
information in the Army. I don't know if the other 
organizations are as far along.
    You have got the Web site?
    Mr. Anderson. It is on our Web site in a PDF file.
    General Thompson. That information for the Army is on a Web 
site that is accessible?
    Mr. Anderson. Yes, it is an M and RA Web site.
    General Thompson. M and RA is the Manpower and Reserve 
Affairs Assistant Secretary of the Army. So we have got that 
information for the Army, it is not an onerous burden.
    But, starting in 2005, I will tell you there was a lot of 
pushback when Dr. Anderson and I sat with the Secretary of the 
Army and said, we really need to do this, and he agreed because 
he knew the importance of it to get our arms around this. But 
it has been a couple of years of work to get this to where we 
are right now. So if the committee would ask the Defense 
Department to do it, I am not sure that other parts of the 
Defense Department would be happy to have that analysis passed.
    Mr. Young. Are you saying this would be available to the 
Committee online?
    Mr. Anderson. Yes, sir. We provided it to Congress last 
fall, and it is also on our Web site so it is available.
    Mr. Moran. You provided to the authorizing or 
Appropriations Committee?
    Mr. Anderson. To both. It was in a hard file, and then we 
had electronic versions. It is a work in progress. We think it 
is about 70 percent accurate. That is a guess.
    Mr. Moran. Seventy percent accurate?
    Mr. Anderson. Right. Because we compare it to the your 
accounting system numbers. We have about 82 billion reported 
associated with 125,000 and it is important to understand the 
accounting system counts the total invoice amount of the 
contract which includes other direct costs. We also have direct 
labor amount, which is a portion of that.
    General Thompson. You can't just divide the $82 billion by 
125,000 and get a number. That is why it is important, 
Congressman, to define the analysis task so we don't end up 
with an average number that over or under represents the point 
we are trying to make.
    Mr. Moran. The 125,000 you are referring to, if it is not 
82 I think----
    Ms. Kilpatrick. Mr. Chairman----
    Mr. Moran. I think that would result in 20 million per 
contract person; so we know that is not accurate.
    General Thompson. That is right.
    Mr. Moran. The information our staff--she does not recall 
our being in receipt of that, but if we could get that, I think 
that would be helpful.
    [The information follows:]

    The contractors and the number of contracted full-time equivalents 
providing services to the Army worldwide are listed in the Army FY2007 
Report of Contracts for Services, which is available on the Assistant 
Secretary of the Army for Manpower and Reserve Affairs website at 
http://www.asamra.army.mil/ref.htm. Included in the report is a list of 
contracted functions with the number of contractor full-time 
equivalents performing the functions and the total contract costs and 
direct salary costs of the functions.

 SEE ATTACHMENT: FY2007 Army Inventory of Contracting Contract Services

    Some important caveats are in order: Because total contract cost 
and direct labor cost are treated as proprietary information when 
associated with either contract number or contractor name, these costs 
are not listed with contractors providing services in the inventory. We 
are still reviewing and validating the Fiscal Year 2008 data.

    Ms. Kaptur.
    Ms. Kaptur. Mr. Chairman, I appreciate the gentleman for 
yielding.
    I just wanted to ask in the way that information is 
organized, if one goes to that, which categories, how is it 
arranged? Are we going to just look at an accounting list, or 
are there headings for different functions within that? If I am 
interested in contracted force, how easy is that to pick out 
versus garage collection? What are we going to look at when we 
look at this site?
    Ms. Kilpatrick. Excuse me, Mr. Chairman.
    Mr. Moran. Ms. Kilpatrick.
    Ms. Kilpatrick. Being the newest member on here and having 
done some of the research, the Web site is very convoluted. It 
is not an easy access; it is incomplete. And as he mentioned, 
they are in the process of getting better in formulating. We 
have been looking at it, and it is coming, but it is not what 
you want yet. And as a teacher-- it takes a while. So we have 
begun the process. There are several things you have to compare 
in chart and form. It is not something you are quite looking 
for, but it is a start, I think.
    Mr. Moran. We will see if we can't perfect it. But as we 
understand it, it is only the Army that is even trying to do 
it.
    Mr. Bishop.
    Mr. Bishop. That is the point. What has made it so 
frustrating for us is, with different accounting methods, with 
different methods of organizing the data, it has been virtually 
impossible for us as a Committee and for the auditors as well 
as the Inspectors General to sort all of this information out 
and sometimes we wondered if it was intentionally obfuscated so 
we couldn't track it and of course up until the last couple of 
years we were not allowed very much oversight, and we just 
begun our serious oversight 2 years ago, and I think that 
somehow we have got to make sure that we compare apples to 
apples and originals to originals.
    Mr. Moran. It is an appropriate line of questioning. So if 
you could get it to us in a way we could get our arms around it 
intellectually to understand what it is we are seeing, it would 
be very helpful to this Committee.
    General Thompson. And to all of the members of the 
Committee, Mr. Chairman, if you would just define for us the 
questions you think you want answered, we will go out of our 
way to give you access to all of that information and to make 
sure we are talking apples to apples, not passed from one to 
another, because it is not helpful to you or to us if we are 
throwing out numbers that we don't come from the same frame of 
reference from the database perspective and accounting, et 
cetera. We want to get this right because it is our 
responsibility to get it right, and we owe that to you.
    Mr. Moran. I think the staff may have done that. But the 
staff will give you a clear list of questions that we would 
like to have answered.

                         Remarks of Ms. Kaptur

    Ms. Kaptur. Mr. Chairman, I just wanted to place this 
experience on the record. As someone who tried to understand 
how our government had contracted with Blackwater security in 
Iraq, and Mr. Dicks led us on a CODEL. We were in Iraq. We were 
in Baghdad. And what I found was that the Blackwater contract 
wasn't under DOD. It was over at the State Department. So even 
when you produce your data set for us, one of my questions is, 
who is contracting for force across this government, and can 
this Committee access that information from other Committees? 
Because we have people being paid in theater that one would 
normally think would be under the purview of this Committee, 
and all of a sudden, you find it is squished over somewhere 
else inside the Government of the United States, and it was 
extraordinarily frustrating to try to track contracting when it 
was in other places in this government. So I don't know how you 
deal with referral contracts that were over at State, for 
example, and they were doing more than just guarding embassy 
personnel. But I wanted to place that experience on the record 
so we can get at the full extent of contracted force.
    Mr. Bishop. Will the gentlewoman yield on that point?
    Mr. Moran. This is getting a little out of order here, but 
very quickly go ahead.
    Mr. Bishop. If the gentlewoman will recall, I think it was 
2 years ago that she was only able to get any information about 
that contracting from Vanity Fair Magazine.
    Mr. Frelinghysen. So the object here is to substitute our 
military for whatever these people are doing in terms of 
protective services? I sort of want to know where we are going 
here. I am for full disclosure, but with all due respect, when 
we go over there, would you rather have our soldiers doing 
that?
    Ms. Kaptur. Yes.
    Mr. Frelinghysen. All right, I just sort of wanted to know 
that so----
    Ms. Kaptur. I want to understand who it is providing force, 
certainly inside theater, but in any place relating to our 
Department of Defense, I want to know who they are. And I found 
with Blackwater, all of a sudden it vaporized, and it was over 
at the Department of State. At least that is what we were told, 
and it was very hard to find it inside of DOD and how all of 
that happened.
    Mr. Moran. The decision as to the allocation of security 
personnel wasn't made by General Thompson, but what we are 
trying to get here is a handle on the scope of contracting out, 
the imbalance, et cetera. And we are really primarily talking 
about the Army here. So if we could develop kind of a best 
practices approach to at least providing the Committee with 
relevant information, I think that would be helpful. And then 
we can ask other military services to do the same so that we 
can get our handle--our arms around the scope of this, and that 
will yield to some policy conclusions. But at this point if we 
can get information as to at least the Army's contracting, as 
Mr. Young has suggested, in a way that we can understand, we 
would very much appreciate that, General.
    And at this time, let us turn to Mr. Kingston.
    Mr. Kingston.

                      BECOMING PRIVATE CONTRACTORS

    Mr. Kingston. Thank you, Mr. Chairman.
    General, I just want to say I represent the Third Infantry 
in Hinesville, Georgia, Savannah, at Fort Stewart. I know a lot 
of the retired soldiers actually are able to be effective by 
becoming private contractors, and the ones I know are really 
great, top notch people. Most of them didn't even want to get 
out of the Army, but as you know, there is a kind of retirement 
timeline. So it might be helpful for you for the record to 
outline the advantages because I know of so many really young 
people who are now out of the Army but want to stay involved in 
Iraq, believe in the mission, are dedicated to the mission, 
doing a great job, working side by side with soldiers right 
now, and it could be good just for you to outline some of the 
advantages of using contractors because I don't think we talk 
about it that much. And there are mistakes that are made by 
contractors, just as there are by men and women active duty in 
uniform, but the ones that get the headlines are the mistakes, 
not the good work. However, I actually wanted--so if you could 
submit that for the record, that will be very helpful, I think.
    General Thompson. A point would be that part of our 
recruiting efforts for the Army are to look at those men and 
women who have served in uniform that because of retirement 
eligibility or just for personal reasons decided to not wear 
the uniform anymore. We have active programs to recruit them if 
they are good people, most of them are or they wouldn't get 
through all of the wickets, to continue to work for us. I do 
that personally. I have a lot of senior officers, for example, 
in the acquisition workforce that, when they do decide it is 
time to retire, I try to encourage them to look for the federal 
civilian opportunities to continue to work for us because it 
takes 20, 25 years to develop that kind of a skill set, and you 
don't want to let that skill set go. So that is part of the 
routine for us, not just in the acquisition workforce.
    Mr. Kingston. And also when they return to service wearing 
a contractor's hat, so to speak, they actually have some 
flexibility which they did not have when they were in the Army. 
And it also gives you flexibility that, if you don't need them, 
you don't hire them. But there are a lot of people who actually 
don't make colonel or general, and they are forced to retire, 
and yet they have lots to offer, lots of good productivity.
    General Thompson. I agree 100 percent.

                           PROCUREMENT SYSTEM

    Mr. Kingston. Actually, my question, though, is in a 
different direction. In terms of procurement, when we earmark 
things--and I have been with lots of military procurement 
people, and I will say--I will ask a rhetorical question, how 
many of you think the Army or Navy or whatever procurement 
system is in great shape? Zero hands go up.
    And I understand everybody thinks there is room for 
improvement. But when we earmark stuff in the budget, often it 
is because of a frustration with procurement. And this 
committee was known, I guess, as the one who really pushed for 
the Predator, for example, and there are other weapons systems, 
and I can tell you some other stories, as I am sure everybody 
here can, but I think all of us really try to vet the earmarks.
    There is this public perception that, oh, you know, you 
like somebody, they are a supporter, you want to earmark. I 
don't think anybody, Democrat or Republican, does that, 
particularly on this committee. We vet it. We shop it around at 
Pentagon. Is this really the gizmo that you want? Because there 
is really only one private company that could supply it or 
manufacture it or whatever, and we have to earmark it. Does 
this help the system or does this undermine the system? And you 
are kind of darned if you do and darned if you don't, but is 
there a growing problem or a growing solution with DOD 
earmarks?
    General Thompson. Well, earmarks do indicate the intent of 
the Congress, and we execute on those earmarks for the most 
part. The strategic objective though is full and open 
competition wherever we can do it. So roughly two-thirds of all 
of our contract actions are full and open competition. They are 
very strict. There are seven provisions that allow you to not 
do full and open competition. Those things again have to be 
approved all the way up to the Assistant Secretary level or the 
DOD level in some cases so the arching principle is full and 
open competition so that everybody out there has an opportunity 
to compete for that product or services. And that is the 
overarching objective in every acquisition decision we make, 
and we only do not do full and open competition by exception.
    Mr. Kingston. So are earmarks good or bad? I would never 
ask you to answer that in a yes or no, General. But I can tell 
you that----
    General Thompson. It depends.
    Mr. Kingston. We all have seen earmarks that have done 
something very helpful.
    General Thompson. That is true.
    Mr. Kingston. Yet I think all of us would like to think, 
hey, if this is a good system, it doesn't need an earmark 
because the Army is going to go after it anyhow but the problem 
is the Army doesn't, and many times these are your small 
entrepreneurial inventors that come up with the idea and, it is 
something that the soldiers on the ground actually do want. 
But, again, I think most of us vet the heck out of this stuff 
before we thrust it.
    General Thompson. We do look for those small innovative 
solutions. But it has to start with a need for that. And 
sometimes you create a need when you have got an inventive 
solution, but it has got to start with the need. And I get a 
lot of people that talk to me at trade shows and things like 
that, if I could just get you to buy this particular product, 
my answer always is, go back and look at our solicitation 
opportunities, which are open to everybody, and compete that 
product. And I will say that the ones that are good are 
successful, and the ones that are not good are not so 
successful.
    But I will say for the record, and this is a broad 
statement and I hope it doesn't get me into too much trouble 
here, a lot of people oversell the value of their product or 
service. And when you bore into it and you look at it 
objectively with set criteria that we do for all of our 
contracts, the ones that are good come to the top, and the ones 
that are not so good come to the bottom. And if somebody feels 
like they haven't gotten a fair shot, they have appropriate 
remedies to include a protest of our action that goes to GAO, 
and we fairly adjudicate that. So I think the proper checks and 
balances are in the system. The outcomes of those checks and 
balances are not always in the government's favor or the 
contractor's favor but they are fair.
    Mr. Kingston. Well, we want to work with you if there is a 
better way for us to do earmarks, something we should know, we 
want to work closely with you because we don't want to be 
embarrassed, and we don't want you to be embarrassed, and we 
certainly don't want to waste taxpayers' money, but we also 
philosophically believe in the legislative branch's prerogative 
to put in an earmark because almost everyone understands in 
Washington and almost no one understands outside of Washington 
that the Pentagon budget is the President's budget, and whether 
you are of his party or the other party, you may have some 
disagreements as to that budget. So the equal branch of 
government, the legislative branch, should be able to do 
earmarks. But if there is anything we need to know that we can 
do better, I think all of us would like to work with you on 
that.
    Mr. Moran. Thank you, Mr. Kingston.
    Mr. Hinchey.

                         Remarks of Mr. Hinchey

    Mr. Hinchey. General, thanks very much.
    I really appreciated the response that you have given to 
these questions. And I think we are dealing with a very 
difficult set of circumstances that has evolved over the course 
of the, well, last several years, and there are a number of 
examples of that. Yesterday I had a meeting with the Secretary 
of the Army, Secretary Geren, at the West Point Board of 
Visitors meeting. And one of the things that he was talking 
about was the number of suicides that have occurred and how 
that number of suicides has been at record proportions, last 
year particularly, and how it even jumped up in January of this 
year. So I assume that that is something that you and other 
leaders in the Army are deeply concerned about, and I think 
that we would appreciate any insight that you might be able to 
give us with regard to that problem and how it can be dealt 
with.
    For example, and this is not the critical example, but I 
understand that the investment in personnel in the military as 
a matter of the function of the budget has dropped from 31 
percent of the Army's budget to 15 percent of the budget over 
the course of the years 2000 to 2007. Now, that is something 
that I think ought to get some attention. So anything that you 
and the other people in the Army who are focusing on that issue 
can provide us with information so that we could be helpful, I 
think would be something very significant, and I would 
appreciate that very much, if you have any comment on that.
    General Thompson. Sir, to your question on the suicides, it 
is something that the entire Army takes very seriously, and 
there are comprehensive plans in place. We are even increasing 
the level of effort to make sure that the numbers don't go in 
the wrong direction; they go down as they should be. From the 
medical help that is there and the personnel community is doing 
all the things they need to do to reach out to the right 
psychologists and psychiatrists and social service providers, a 
significant investment. This is not an area that is directly 
under my purview, but it is something we take very seriously. I 
know there are a number of plans in place, I am just not the 
right person to talk about those plans.
    To the question on the percent of the pay, again, it is, 
how do those numbers get derived? I used to be the Army's 
programmer in my former job, and that is the individual that 
has got responsibility for the 5- or the 6-year plan and where 
the Army puts all of its money; it balances its portfolio. So, 
again I don't recognize that 15 percent number. My 
recollection, and it is still pretty true today, is that about 
42 or 43 percent of the Army's total dollars in its base 
program are spent on military pay, but that military pay is not 
just salaries. That is also retirement accrual and health 
benefits and reenlistment bonuses, et cetera. I don't recognize 
that 15 percent number. I have to determine how we got that, 
and so that is the issue of defining the question we are asking 
here.
    Mr. Moran. General, that is just pay. It is not benefits; 
it is pure pay.
    General Thompson. Okay.
    Mr. Hinchey. Anything further?
    General Thompson. No, sir. Unless I have got something I 
didn't answer that you asked me.
    Mr. Hinchey. Well, I appreciate the answer and I appreciate 
the focus of attention on it because it is something that has 
to be----
    General Thompson. It has to be addressed.
    Mr. Hinchey. The Army's obligation on contracts has 
essentially tripled over the course of the last several years. 
It rose from 18 billion to 54 billion, just gone up three 
times. What do you see happening in the future? Do you continue 
to see that kind of thing to continue to develop or is it going 
to change? Now, I know that there is a whole set of 
circumstances relating to the situation in Iraq and Afghanistan 
which promoted this kind of a set of circumstances. And while 
those conditions there continue, while we continue to have to 
deal with them, probably some of that is going to have to 
change but not very much. But the situation here with 
contractors, I think, is causing a great deal of concern, and I 
am just wondering what you think about that and what you think 
that this issue might--how it might change, how it might not 
change, what will be the set of the circumstances over the 
course of the next couple of years.
    General Thompson. The number of contractors that we need in 
order to get the work done, whether it is in the Middle East or 
someplace else, it depends on the work that needs to get done. 
As we draw down our presence in Iraq, we will have fewer 
military and fewer contractors in Iraq. As we grow our presence 
in Afghanistan, the number of military is going to go up; the 
number of contractors is going to go up. It takes years to grow 
the military. The Army is on a path to grow the size of the 
active Army and the Reserve components. From the active 
component, it is to increase to about 547,000. We are going to 
get there quicker than we thought, but it was going to take us 
a couple of years in order to grow that. So when you don't have 
enough military to do the work that needs to get done, then you 
need to appropriately contract for that in order to get the 
work done.
    Mr. Hinchey. Well, this is the first time that we have had 
an alleged war and we didn't have the kind of active 
recruitment that you normally have. You are just relying on 
volunteers, and that is the basic problem. And in addition to 
that broad analysis, you have also had to deal with the 
situation of the decline in the quality and the value of the 
people who were being recruited or absorbed into the Army, 
taken into the Army, and I know that that has been a problem, 
something that you have had to deal with; you and others have 
had to deal with. So the situation with regard to the 
contractors is the main focus of attention right now.
    What is the kind of oversight that you have on the activity 
of these contractors, the kind of oversight that they deliver 
in places like Iraq, for example?
    General Thompson. Every contract that we have got has got a 
statement of work, duties that that contractor is supposed to 
perform. And there is oversight. The contracting officer 
doesn't always do that him or herself because that is too much 
of a responsibility. The Defense Contract Management Agency has 
a responsibility primarily for the weapons systems contracts, 
but they are now doing quite a bit of the service contract in 
theater. And then we have individuals that are not part of the 
professional workforce that are contracting officer 
representatives. And it is those people, as an example, if you 
are on a forward-operating base in Iraq and a contractor is 
there to pick up trash three times a day, somebody has got the 
responsibility to make sure that contractor is picking up the 
trash three times a day and not just once a day because that is 
what the terms of the contract specify. And if they perform 
satisfactorily to the terms of the contracts, they get paid 
appropriately, and if they don't, there are remedies that are 
taken. So there is a check and balance taking place.
    Mr. Hinchey. Based on experience, what is the real outcome 
there? What you are talking about is the general way that it is 
supposed to behave, but we have seen a number of examples of 
bad behavior on the part of the contractors, and this bad 
behavior causing a host of serious problems.
    General Thompson. The seriousness of the issue from 2003 to 
2006 was because there was not contracting officer 
representatives assigned to every contract. That was one of the 
reasons that we had so many cases of fraud and abuse during 
that timeframe. I can say today that, starting in Kuwait, there 
is a contracting officer representative assigned to every 
contract. So we do that. That is the way it should be done. 
Nothing is ever 100 percent but damn near 100 percent that is 
being done today in the theater.
    Mr. Hinchey. But you know you have got more oversight on 
the regular military personnel than you do on the contractors, 
don't you?
    General Thompson. Sure you do. You have got a uniform code 
of military justice. But the change in policy in the last 
couple of years is the contractors over there are subject to 
the discipline as well.
    Mr. Hinchey. Let me ask you one more small specific 
question. Do you think it is appropriate to have contractors in 
charge of security operations at places like West Point and 
other military academies?
    General Thompson. Yes, I do.
    Mr. Hinchey. You do?
    General Thompson. I do. As long as the government has got 
the ultimate responsibility for that. But to pay a security 
guard to check passes coming in and out of an installation like 
West Point, you can't just compare the cost of that security 
guard to the cost of a soldier doing that, because the soldier 
has got nonsalary benefits. It has got retirement accrual 
benefits and health care benefits. The cost of the security 
guard as a contractor is a fully burdened cost. If you want to 
compare that to the cost of a soldier doing that, you have got 
to compare apples to apples with fully burdened cost. We make 
those kind of business case analyses all the time.
    Mr. Hinchey. Are you saying that the contractors do a 
better job than a military personnel would do in security 
operations?
    General Thompson. I did not say that. I did not imply that. 
You asked me if it is appropriate for them to do that, and I do 
think it is appropriate with the right oversight. We set the 
standards for the force protection aspects around West Point 
and all of our installations. Some Department of the Army 
civilian police, some contracted security force, some military 
police on some installations--we expect them to do that.
    Years ago, we had a lot of military police on our 
installations doing traffic control and security. We don't have 
as many today doing that because the demands of the operational 
environment in the Middle East primarily have caused us to use 
the military police in their military-only roles and not in a 
role that could be done by a private security contractor.
    Mr. Hinchey. Thank you very much.
    Mr. Moran. Thank you, Mr. Hinchey.
    Mr. Young.
    Mr. Young. Yes. Mr. Chairman, the conversation that we had 
a little bit earlier on the list of contractors, Ms. Kilpatrick 
makes a good point. What is on the Web, unless you have some 
way to break the code, it is pretty hard to understand. So what 
I would like to do is make a formal request for what we 
discussed a few minutes ago, that you provide us for the record 
a list of contractors that provide services to the Army 
worldwide; identify the function for each contractor; in other 
words, what they are doing for you, identify the total contract 
cost; and break it down so that we know the number of employees 
employed by the contractor and what the personnel cost is.
    General Thompson. That is doable. I am just looking behind 
here to the guy that is going to have to lead that work. He is 
nodding, we can do that, so we will sign up for that as a team.
    Okay, John?
    [The information follows:]

    The contractors and the number of contracted full-time equivalents 
providing services to the Army worldwide are listed in the Army FY2007 
Report of Contracts for Services, which is available on the Assistant 
Secretary of the Army for Manpower and Reserve Affairs website at 
http://www.asamra.army.mil/ref.htm. Included in the report is a list of 
contracted functions with the number of contractor full-time 
equivalents performing the functions and the total contract costs and 
direct salary costs of the functions.

 SEE ATTACHMENT: FY2007 Army Inventory of Contracting Contract Services

    Some important caveats are in order: Because total contract cost 
and direct labor cost are treated as proprietary information when 
associated with either contract number or contractor name, these costs 
are not listed with contractors providing services in the inventory. We 
are still reviewing and validating the Fiscal Year 2008 data.

    Mr. Moran. Very well and within a timely timeframe.
    General Thompson. No doubt, if we could have a little 
leeway to negotiate that timeline with you, so that it is 
reasonable for you and reasonable for us.
    Mr. Moran. But it would be helpful to have those numbers 
available for the 2010 budget consideration.
    General Thompson. Right.
    Mr. Moran. Mr. Visclosky.

            PAY SCALE OF MILITARY PERSONNEL VS. CONTRACTORS

    Mr. Visclosky. Thank you very much.
    In a sense, the question has been covered, and I know you 
and Ms. Kaptur talked about it, too, but I have just a general 
question about wage rates and understanding your interchange 
with Mr. Hinchey that you have to factor in all of the cost of 
that military personnel. Is there a broad differential as far 
as what contractors in places like Iraq and Afghanistan are 
being paid compared to military personnel?
    I assume there is a variance position to position. But, of 
course, we hear the exaggerated exception to the rule where you 
have a military personnel doing a function and is getting paid 
in the high 20s and a contractor in the same room with this 
military getting $120,000. Is there a wide discrepancy? Because 
at some point, you are still paying more for a contractor. And 
will some of these tables that are being requested reflect 
those salary levels?
    General Thompson. We spend a lot of time with differences 
of opinion. It would be easy to say, and I am making this up 
and I am giving you an example, to say that Sergeant Thompson 
gets $50,000 a year as salary and yet there is a guy--a 
maintenance guy, I fix Bradleys or I fix helicopters, and there 
is a contracted field service rep there that is making $150,000 
a year. That is a fully burdened cost for that contractor. That 
includes retirement benefits and the war differential they are 
getting for being in harm's way. The soldier also gets danger 
pay, and he also has health care benefits and a housing 
allowance that is tax free. So you have got to make a fair 
comparison. And it is easy to say this guy is making $150,000 a 
year, and I am making $50,000, and that is not fair. You have 
got to put it in context. For the same kind of work, you can 
make a fair comparison, I think.
    Mr. Visclosky. Can I ask it a different way? For the person 
making $120,000 and, again we are talking hypothetically here, 
that is cash in the pocket compared to the sergeant making 
$50,000 plus benefits that may equal $120,000 but the 
contractor employee, I assume, will have some health care 
benefits and some type of thrift plan that the company will 
provide for. He is probably getting some housing that is 
allotted to him added onto that $120,000.
    General Thompson. The operative question I always ask if I 
have got a contracted employee working is what is the burden 
cost for that employee.
    Mr. Visclosky. And we are paying the contractor every penny 
on that and the contractor is making a profit on that employee.
    General Thompson. I will give you an example. On my 
immediate staff, when I first got to the position that I am in 
now, we had 11 different management support contract 
instruments in place supporting the acquisition function at the 
headquarters of the Department of the Army. I said, what are we 
doing? We have now reduced that to two and on a glide-path to 
go to one because I want to pay one set of overhead if I need 
that kind of function and not 11. And I asked the operative 
question, what is the burden cost of that?
    So I may be paying somebody $150,000, but the profit and 
the GNA and all of that that goes with that it may be $250,000. 
And so the question to ask for everybody, not just the 
Congress, but for everybody, is, am I getting a fair day's work 
for a fair day's pay?
    Mr. Visclosky. And I would ask two other questions related 
to the salary because I want to make sure that person is 
working for me and not loyal to somebody else. I am not saying 
anybody who is working for a contractor isn't loyal to the 
United States of America, but you have got somebody in a 
uniform who, essentially, when they take that oath and put on 
that uniform, they are risking their life, and they are making 
less money. On the issue of the Gansler Commission, it is 
suggested it is going to take 3 to 5 years to hire additional 
personnel and training. If there is that pay differential, the 
question is what about the retention of quality trained people? 
I understand people make a career of the military. They retire, 
and then they go over to contractor, but I assume we are losing 
a lot of people on the front end of this, too, if I am sitting 
in that room, and I am seeing somebody make 120,000 plus a 
thrift plan plus health care plus housing plus a profit. It is 
not just to get up to where we want to be in 3 and 5 years but 
retaining people. And if I am paying $50,000 in cash, and 
somebody else $120,000 in cash, and forgetting the benefits for 
a second, who is going to attract somebody who may have that 
additional skill set that I want as a Federal employee, as a 
military employee, keeping an eye on the contractor? I want 
somebody who has the same set of skills and more as the 
government employee working for me keeping an eye on them.
    General Thompson. I do, too.
    Mr. Visclosky. How do we--is there a pay differential here 
or something we have to look at as far as retention and the 
issue of finding those quality people who will work for the 
government?
    General Thompson. We talked earlier, Congressman, about the 
authorities that we have, and I refer back to the section 852. 
We need to, one, value the acquisition workforce more than we 
have, not put them under the spotlight and criticize them 
constantly because they all are trying to do the best job that 
they can, but we have got the right authorities, I think, to 
recruit, retain, and train those people. We have a lot of 
programs, for example, where we send people off to education 
opportunities to get master's degrees, to pay back college 
tuition loans because I want a smarter shopper than the other 
person on the other side of the negotiating table for the 
contract.
    And there are a lot of people in this room, I will use Mr. 
Harrington as an example, who could and do make more money on 
the outside, but the level of responsibility and authority and 
the service that you get, you can put a dollar value against 
it, but that is the kind of person that I want both militarily 
and the Department of Army civilian. And I say this to you 
honestly, and I use this a lot when I talk to the workforce: I 
like my contractors that are doing a fair day's work for a fair 
day's pay. I love my government workforce, because they are on 
my team. They have the same set of values. Their motivations 
are more pure.
    And contractors are not evil people, but they have a 
different set of motivations. The ones, as Congressman Kingston 
alluded to, that are former military. They have a different set 
of allegiances, and I like those kind of people that are 
working for us in a contracted capacity because they know what 
it is like to be shot at and cold and hungry and dirty and in 
harm's way. So I am giving you more a philosophical answer than 
a specific one.
    Mr. Visclosky. And I have nothing against contractors.
    Thank you very much, Mr. Chairman.
    Mr. Moran. Good line of questioning. Thank you.
    Ms. Kilpatrick.

                        BUSINESS REPRESENTATION

    Ms. Kilpatrick. Thank you, Mr. Chairman.
    And thank you, General, for your service and your time. 
This has been very instructive. I am a new member on the 
Committee. It took an hour and 45 minutes for you to say you 
love your troops. I sincerely needed to hear that. And I never 
doubted it, but I need to hear you say that.
    General Thompson. I mean that sincerely. But sometimes it 
is tough love, ma'am.
    Ms. Kilpatrick. Congress is tough. It is tough here. That 
is the nature of who we are.
    A couple of questions. Of the 266,600 plus troops who are 
in theater overseas, in Kuwait and other places, how many 
businesses are represented in the 267,000?
    General Thompson. I would have to take that one for the 
record. To the specific question that Mr. Young read out 
earlier, the answer to that question will be in answer to your 
question.
    [The information follows:]

SEE ATTACHMENT: FY2007 Army Inventory of Contracting Contract Services 
                            (Contractor Tab)

    This list was compiled by Assistant Secretary of the Army for 
Manpower and Reserve Affairs.

    Ms. Kilpatrick. So, in that number and as you prepare that 
document, we are to understand that, as you talk about the 
contractors, as you have been doing this morning, those are 
individuals you speak of rather than businesses; is that right, 
for the most part?
    General Thompson. That is correct. The number 266,000 is 
individuals.
    Ms. Kilpatrick. I know that is individuals. The discussion 
this morning has been mostly about the individuals and not the 
businesses themselves.
    I think Mr. Visclosky, our chairperson, our cardinal from 
Energy and Water was going where I went with the Gansler 
report, which talked about what they found that contributed to 
abuse and neglect perhaps, and you are on about fixing that in 
the Army. We heard earlier from one of the other branches of 
services this week who said their contractors did all of that 
as well including the administrative things as well as 
researching weapons, as well as monitoring those weapons, and 
doing the reporting back. I heard you say a little while ago 
that your report back of the monitoring of the monitor will be 
an Army personnel; is that right? Or is it a contractor 
monitoring their contracting obligation?
    General Thompson. The way I would answer that, ma'am, is to 
those things that are inherently governmental, there is a 
government employee, military or Department of Defense civilian 
that is at the head of that approval process.
    Ms. Kilpatrick. But the report found some abuse there and 
that contractors, they do government functions like programs, 
financial management, intelligent analysis, policy making, 
weaponry, researching. Those are contractor obligations you 
have been using. Are you saying you are not going to use 
contractors for some of those now in the Army?
    General Thompson. We want to in-source those things that 
should be done by the government. And if there are cases where 
that is being done by a contractor today, we want to switch 
that and make it done by a government employee.
    Ms. Kilpatrick. So, over the last 7 or 8 years, where 
contracting has increased tremendously and it seems like 
military and civilian personnel has decreased, is it the view 
of the Army that we do more contracting and less of those 
dedicated Army civilian DOD employees? Is that the move----
    General Thompson. The move is to bring more of that 
capacity in-house but not let the government overhead get too 
great because, again, it is swinging the pendulum back to what 
is the right balance. I want enough government people to do the 
job that needs to get done and not one person more than that.
    Ms. Kilpatrick. I think that is what all of us want. And 
from where I sit, I want more government employees. I want more 
people who are dedicated and take that oath and wear that 
uniform, civilians and military, to run and be operative in the 
military. Of course, I am not opposed to contracting. I just 
don't believe that they ought to have more of the $500 billion 
that we spend. I have heard in my own district from soldiers, 
who are next to and done their third deployment, an armed 
uniform person side by side by the contractor who does get two 
or three times the pay. You mentioned the fringe benefits that 
they get. They don't think it is right. And you have not 
mentioned it this morning, but you have got to feel some of 
that as well.
    I didn't like your opening remarks. I can read that, and I 
am a reader; I can read those on the airplane. But what we have 
been talking about for the last 2 hours is what I want you to 
sit there and talk to us about because that is really the meat 
of who we are as a Nation and what our military service--we 
have got to understand what you do and who you are because many 
of our colleagues think $500 billion for Defense, is too much, 
and the Congress should cut it. I don't care what they are 
doing. So I, as a new appropriator to this Committee and 10 
years on the Appropriations Committee, I want the real 
information.
    We don't have a lot of time, and you have been pretty 
straight with us, and I appreciate your staff. But as I sit 
here and I try to learn, and I am like a CRS 101 just trying to 
keep up; I need you to give it to me straight. And when I read 
and have a question, I really want to know. And about those 
267,000 contractors I do want to know if it is the top 10 
companies--I have a list here of the top 20, and since 2003, 
one particular company got $5 billion plus dollars, many of 
them contractors. Why? There are men and women all over the 
country, and we want to help you with a strong military 
uniformed American force that will raise their hand and commit 
their lives. We want you to help you with that, and I want you 
to count on me.
    General Thompson. Thank you.
    Ms. Kilpatrick. Thank you.
    I yield back.
    Mr. Moran. Thank you very much, Ms. Kilpatrick.
    We need to vacate this room within a few minutes. They are 
going to need it for logistics of putting together the stimulus 
bill. So we will conclude this hearing at this point.
    We do want to thank the Army for being as responsive to the 
subcommittee's questions and concerns as you have been. So we 
thank you, General Thompson, and I think the best that we could 
hope for is to get kind of a best practices approach to getting 
a handle on how much is being spent and the manner which it is 
being spent so that we can a apply that to the Air Force and 
the Navy. They are not as far along as the Army is.
    And it is not that there is any vendetta against 
contracting. I would hope we have made that clear that there 
needs to be a balance between in-force personnel and 
contracted-out personnel. But at this point, we really haven't 
had much control upon the way in which the money was being 
spent, and when we realized that there were more contract 
personnel in Iraq than there were uniformed and regular 
civilian personnel, it naturally raised a great deal of concern 
on the part of all the Members.
    So, once we get that information, we can address it in the 
2010 appropriations bill. And we appreciate you certainly 
having this forum. That is the best step yet in terms of 
helping us to define what is and should be inherently 
governmental. And we appreciate your being willing to disclose 
the information on what contractors this subcommittee is 
funding, and we will move forward from here. So this has been a 
very informative hearing. We appreciate your testimony, General 
Thompson, and those of the fine professionals that backed you 
up on it.
    General Thompson. Congressman, I just want to say thank you 
to the members of the committee. Every time I have been before 
this committee, and it has been more than once, or dialogue 
with the Members or the staffers related to issues, it has been 
an honest exchange, and the committee has always been 
supportive of the military and the Army, in particular. My 
promise to you is to be forthright and share the information so 
we can come to the best decisions for the country.
    Mr. Moran. Very good. Thank you, General.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
questions thereto follow.]

                      Contractor Service Providers

    Question. Please list the contractors providing services to the 
Army worldwide. For each:
     List the number of contracted personnel in terms of full-
time equivalents.
     Identify the contract function by describing the type of 
work performed.
     Provide total contract cost and identify direct salary 
costs.
    Answer. The contractors and the number of contracted full-time 
equivalents providing services to the Army worldwide are listed in the 
Army FY2007 Report of Contracts for Services, which is available on the 
Assistant Secretary of the Army for Manpower and Reserve Affairs 
website at http://www.asamra.army.mil/ref.htm. Included in the report 
is a list of contracted functions with the number of contractor full-
time equivalents performing the functions and the total contract costs 
and direct salary costs of the functions.

 SEE ATTACHMENT: FY2007 Army Inventory of Contracting Contract Services

    Some important caveats are in order: Because total contract cost 
and direct labor cost are treated as proprietary information when 
associated with either contract number or contractor name, these costs 
are not listed with contractors providing services in the inventory. We 
are still reviewing and validating the Fiscal Year 2008 data.
    Question. Has Army done mission analysis and/or a study of roles 
and missions that includes consideration of the role that contractors 
should play?
    Answer. The Army, the Joint Staff and DoD have engaged in a number 
of working group efforts and studies to analyze the proper roles and 
missions of contractors. Some of these efforts resulted in guidance, 
such as the DoD Instruction 1100.22, Guidance for Determining Workforce 
Mix; a 2005 RAND Study, How Should the Army Use Contractors on the 
Battlefield; and a 2005 Secretary Harvey directive to establish a 
contractor manpower inventory to be used for this kind of analysis. The 
Army has used this inventory to comply with the National Defense 
Authorization Act for FY 2008 mandate for such an inventory and is at 
the very beginning stages of doing the kinds of reviews and analyses 
required by that statute.

                         Contracting Oversight

    Question. How does the Army headquarters achieve oversight of 
contracting that is accomplished at Army field locations around the 
world?
    Answer. The Army has an overarching strategy that provides for the 
oversight of contracting from formation to administration. The Army 
recently mandated Solicitation Review Boards and Contract Review Boards 
to implement the Office of Defense Procurement policy for Peer Reviews. 
Standards for the boards are communicated through ``toolkits'' and 
validated through Procurement Management Reviews. Metrics from the 
approved acquisitions are reported annually back to the Deputy 
Assistant Secretary of the Army (Procurement) (DASA(P)). Army policy 
stipulates that all service contracts contain quality surveillance 
plans and all service contracts valued greater than $2,500 must have an 
appointed Contracting Officer's Representative (COR) prior to contract 
award. Moreover, the COR must complete the minimum training standard of 
the Defense Acquisition University Continuous Learning Course ``COR 
With A Mission Focus'' (CLC 106); over 19,000 Army civilian and 
military employees have completed this training through Fiscal Year 
2008. In addition to training, Army policy mandates that CORs are held 
accountable for their responsibilities via their performance 
objectives. Policy instituted in November 2008 also mandates oversight 
performance objectives for contracting personnel. Compliance with the 
Army's oversight policies is being monitored through routine reporting 
to the DASA(P). All acquisition strategies for services greater than 
$500 million are reviewed and approved by the Army Services Strategy 
Panel, which is a multi-functional leadership team chaired by DASA(P).

                              Base Support

    Question. The Army reports that a great number of contractors do 
base support in Iraq. What exactly does `` base support'' mean?
    Answer. Base Support refers to the resources involved with 
operating and maintaining Army installations. Base Support accounts 
fund installation functions such as administration; automation support; 
family programs; morale, welfare and recreation services; real estate 
leases; environmental conservation and compliance; pollution 
prevention; facility support services; minor construction; maintenance 
and repair; audiovisual and visual information production, acquisition 
and support; demolition and disposal of excess facilities; base 
communications; and other base operations support services.

                              Outsourcing

    Question. While it may be appropriate to outsource activities when 
they are to be performed at home station, this outsourcing may result 
in the need to deploy contractors to contingency operations. What steps 
does the Army take to factor the potential need to deploy contractors 
into its outsourcing calculation?
    Answer. The Department has preplanned certain capabilities such as 
the Logistics Civil Augmentation Program (LOGCAP) which provides a wide 
variety of logistics and base operations services for the combatant 
commanders. This program has been effective in providing preplanned and 
negotiated services. There is room for improvement in this area. Two 
areas of note include contract logistics support (CLS) for major 
weapons systems and certain shortage combat support and facility 
engineering functions that are highly interrelated to tactical 
operations. The Army is developing an enhanced manpower estimate 
reporting (MER) process for acquisition systems to examine Contract 
Logistics Support. Expanding the Army Total Army Analysis (TAA) process 
to include both civilian and contractor requirements on the battlefield 
will improve the latter.

                       Combatant Commanders Role

    Question. What role should the combatant commanders play in 
deciding what tasks should be contracted out, particularly for mission 
essential skills that will be needed for a contingency?
    Answer. Pursuant to 10 U.S.C. 164(b), the combatant commander is 
responsible to the President and Secretary of Defense for the 
performance of missions assigned to that command by the President and 
pursuant to 10 U.S.C. 164(c)(1)(C) for organizing commands and forces 
within that command as he considers necessary to carry out missions 
assigned to the command. Additionally, according to 10 U.S.C. 3013(c), 
the Secretary of the Army is responsible for ``carrying out the 
functions of the Department of the Army so as to fulfill the current 
and future operational requirements for the unified and specified 
combatant commands.'' The combatant commander requests a particular 
capability, and the source of labor to perform that mission is 
determined by the size of the Army and the available force structure. 
Therefore, the ultimate decision regarding what functions are 
contracted is made by the Department of the Army, not by the Combatant 
Commander.

                        Lead Systems Integrators

    Question. The Army Future Combat Systems (FCS) Program has 
contracted for a lead Systems Integrator (LSI) to assist in defining, 
developing and integrating the programs. Employing an LSI was viewed as 
the best option for program management due to the scope and complexity 
of the FCS program. Why can't the Army manage all of its own programs 
rather than use Lead Systems Integrators?
    Answer. The Army has not contracted out the Program Management 
functions for the FCS program. The Army has invested extensive 
resources in managing the FCS Program. The FCS LSI is the prime 
contractor for the FCS development effort. Just as with every other 
prime contractor relationship within DoD, the prime contractor for the 
FCS Program routinely subcontracts and manages efforts of its 
subcontractors and suppliers for major components of the acquisition. 
The FCS Program manager is responsible for and provides program 
management and oversight to ensure government equities are protected. 
This is evidenced by the assignment of a Major General as the Program 
Manager, the assignment of three flag level (General Officer/Senior 
Executive Service) Deputies, four 06 (Colonel) level Project Managers, 
twelve 05 (Lieutenant Colonel) level Product Managers, a total of over 
80 Army Acquisition Corps officers, and over 1,000 Army civilian 
Acquisition Corps professionals. Every LSI senior position has an Army 
leader as a counterpart. Program level decisions involving subcontracts 
are coordinated and agreed to by both Army and LSI leaders.

                            Contracting Out

    Question. Why does the Army need to contract out for program 
management, in effect hiring a contractor to manage other contractors?
    Answer. With respect to the FCS program, The Army has not 
contracted out the Program Management functions for the FCS Program. 
The Army has invested extensive resources in managing the FCS Program. 
The FCS LSI is the prime contractor for the FCS development. Just as 
with every other prime contractor relationship within DoD, the prime 
contractor routinely subcontracts and manages efforts of suppliers for 
major components of the acquisition. This does not take away from 
government oversight and management of the program to ensure government 
equities are protected. This is evidenced by the assignment of a Major 
General as the Program Manager, the assignment of three flag level 
(General Officer/Senior Executive Service) Deputies, four 06 (Colonel) 
level Project Managers, twelve 05 (Lieutenant Colonel) level Product 
Managers, a total of over 80 Army Acquisition Corps officers, and over 
1,000 Army civilian Acquisition Corps professionals. Every LSI senior 
position has an Army leader as a counterpart. Program level decisions 
involving subcontracts are coordinated and agreed to by both Army and 
LSI leaders.

                           Program Management

    Question. Isn't program management an inherently governmental 
function?
    Answer. Yes, program management is an inherently governmental 
function. Army has not contracted out program management.

                        Weapon Systems Programs

    Question. Does the Army have any concerns about its institutional 
capacity to manage its own weapon system programs given this degree of 
contractor support?
    Answer. Yes and we have taken steps to mitigate these concerns 
through reducing our reliance on contractor support. The Army's in-
sourcing policy has allowed us to convert 150 contractor support 
positions to government employees. We will continue to use in-sourcing 
to reduce our reliance on contractor support.

                      In-House Program Management

    Question. Specifically what has the Army done to expand in-house 
program management capacity? What more should be done?
    Answer. The Army has acquired and will continue to acquire and 
train personnel in key areas such as systems engineering, network 
engineering, and software development as well as sustaining program 
management, contracting, and business management expertise.

                          Equipping the Force

    Question. The committee understands that the traditional 
requirements determination process is not responsive enough to provide 
essential capabilities required by deploying units. The committee 
further understands that the Army has expanded the number of ways a 
unit can request a materiel capability and these are called the 
``Operational Needs Statement'' and the ``10 liner''.
    Isn't equipping the force the responsibility of the Chief of Staff, 
Army and the Department of the Army and not the deploying unit?
    Answer. The Secretary of Army has statutory responsibility for 
equipping Army forces. As senior military advisor, the Chief of Staff, 
Army supervises the execution of policies, plans, and programs to 
include the ``traditional'' materiel requirements determination process 
known as Joint Capabilities Integration and Development System (JCIDS). 
This process is centered on the deliberate analysis of operational 
concepts set 10-15 years in the future, representing the entire range 
of military operations our Army may be asked to execute. If capability 
gaps against potential enemies are identified, analysis of the 
alternative solutions is conducted to determine operational 
suitability, technical feasibility, and life-cycle affordability. The 
selected solution is then described in sufficient detail to support 
execution of an acquisition program and associated force integration 
activities such as documenting required changes to unit equipment 
authorizations, ensuring life-cycle sustainment capabilities are 
emplaced, and establishing Army training plans for operators and 
commanders that will employ the new capability. Deploying commanders 
are not responsible for developing, introducing and sustaining new 
capabilities to their own unit or to the Army force at large. 
Commanders are responsible for conducting mission analysis and 
requesting any additional resources such as manpower, equipment, direct 
support affiliations, etc. that they determine are essential to mission 
accomplishment or the safety of their soldiers.

                         Materiel Capabilities

    Question. Why does the Army need three processes to provide 
materiel capabilities for deploying forces?
    Answer. The three processes cited are mutually supporting and not 
redundant. The deliberate requirements determination process is used to 
design Army units and develop the integrated capabilities that those 
units will need to perform their missions over the full range of 
potential military operations. There is risk inherent in this designed 
force due to the difficulty in analyzing every possible scenario 
against every potential type of enemy. Additional risk is introduced by 
fiscal realities that preclude development of solutions for every 
capability gap that can be identified. The Operational Needs Statement 
(ONS) process provides a mechanism for the Army to adjust to a known 
enemy and a narrower set of capability gaps. In that sense, the ONS is 
part of the Army's risk mitigation strategy. Operational Commanders 
conduct mission analysis using actual rather than theoretic 
intelligence, environmental considerations, and assessments of the 
strengths/weaknesses of their own units as well as coalition partners. 
With this information, the Deploying Commander develops ONS requests to 
fine-tune his unit to accomplish his assigned mission. The additional 
equipment or ``new capabilities'' are provided for that specific 
mission and they do not become a permanent addition to that unit's 
authorization or design. The Army is constantly assessing and analyzing 
current operations, to include the requests for additional 
capabilities, to glean lessons learned that should be applied to the 
designs of the future force. These potential future force improvements 
are integrated and resourced through the deliberate processes. The 
Army's Rapid Equipping Force (REF) provides a forward-deployed research 
and development capability that is focused on finding quick solutions 
to warfighter problems. Deployed soldiers describe these tactical 
challenges in a simple ``10 Liner'' format. The REF methodology 
capitalizes on market surveys to identify potential useful technologies 
and rapid prototyping--unit evaluation of the initiatives. The REF does 
not develop integrated solutions for large-scale application. REF 
Initiatives are assessed for broader applicability to current 
operations via the ONS process and the potential integration of 
successful REF solutions with the future force is evaluated through 
introduction to the deliberate requirements determination process.

                  Operational Needs Statement/10 Liner

    Question. What is the difference between the Operational Needs 
Statement and the ``10 liner''?
    Answer. The Operational Needs Statement process is used by deployed 
or deploying units to request: (1) additional quantities of Army 
Standard equipment above the level they are already authorized, (2) 
Army Standard equipment that is not normally authorized to that type of 
unit, or (3) a ``New'' capability that doesn't currently exist in the 
Army inventory. This last category can include commercially available 
equipment or software, Other Service equipment, or a capability that 
must be developed or prototyped because it does not exist in an 
operational configuration. The Army's ability to provide training and 
sustainment for the requested equipment is an element of the ONS 
validation/approval process. An ONS request can be satisfied or 
disapproved by any Commander in the chain of command. Validation of the 
ONS at HQDA is essential to access Army resources but does not 
automatically constitute approval to execute as resourcing priorities 
may force a given request to be documented as an Unfunded Requirement 
(UFR). Additionally, an ONS request for additional/improved capability 
may be satisfied with a different solution than requested by the 
Commander. Any proposed ``in lieu of'' capability is coordinated with 
the requesting commander to ensure operational suitability. The ``10 
Liner'' submitted by a deployed unit is used by the Rapid Equipping 
Force (REF) to initiate rapid prototyping and/or expedient evaluation 
of commercial products that have potential to solve that particular 
unit's problem or ``capability gap''. REF is limited in the amount of 
resources and the number of interested units that they can provide the 
solution to for use and evaluation. If the initiative is deemed 
successful by the deployed commanders, an ONS will be submitted to the 
Army G-3/5/7 to expand the initiative to additional units and to 
initiate Army integration and sustainment planning.
    Question. Who approves each of these processes?
    Answer. The Army's approval authority for the deliberate 
requirements determination process (JCIDS) is delegated by the Army 
Chief of Staff to the Vice Chief of Staff (VCSA) and the Deputy Chief 
of Staff, G-3/5/7. The Army Requirements Oversight Council (AROC) 
process facilitates integration of Army Staff input to the VCSA and DCS 
G-3/5/7 for each materiel capability proposal before it is submitted 
for joint review in the (Joint Requirements Oversight Council) JROC 
process. The approval authority to direct re-distribution of equipment 
to satisfy Operational Needs Statement (ONS) requests exists at each 
level of command for equipment organic to that organization. Approval 
authority to apply Army resources for additional procurement as well as 
to divert or re-distribute equipment at the Army-level, in support of 
ONS requests is the Army Deputy Chief of Staff, G-3/5/7. This approval 
authority is delegated by the Army G-3/5/7 to his subordinate Flag 
Officers and Colonels within resource thresholds. The Army Requirements 
and Resources Board (AR2B) process facilitates integration of Army 
Staff input for each ONS submitted by an Army Commander and also Joint 
Urgent Operational Needs submitted by Joint Commanders that require 
Army resources to resolve. The approval authority for a ``10 Liner'' 
submitted to the Rapid Equipping Force (REF) for limited prototyping 
and procurement is the REF Commander (Colonel). REF initiatives are 
briefed to the Army G-3/5/7 within the AR2B process to ensure Army 
Staff visibility for potential expansion or integration opportunities.

    [Clerk's note.--End of questions submitted by Mr. Murtha.]
                                       Thursday, February 26, 2009.

                              OUTSOURCING

                                WITNESS

HON. GORDON S. HEDDELL, ACTING INSPECTOR GENERAL, DEPARTMENT OF DEFENSE

                              Introduction

    Mr. Moran [presiding]. All right. The Committee will come 
to order. Mr. Young, we didn't want to start without you. Ms. 
Granger, thank you for joining us. Let the record show that we 
have Vice Chairman Dicks on hand here. This morning the 
Committee will hear about the Pentagon's use of private sector 
contracts to support government functions, often referred to as 
outsources. We will also discuss the acquisition workforce 
which has been a focus for many members of this Committee.
    We are very pleased to welcome Mr. Gordon Heddell who is 
DOD's acting inspector general, doing a fine job, as well as 
two expert members of his staff, Mary Ugone and Charles 
Beardall. We know both of them. They are long time pros and we 
are very happy to have you with us. Mr. Heddell and his staff 
have taken this topic very seriously. Their research is 
thorough. And we are grateful that these folks are with us this 
morning to answer some of our questions and concerns.

                          Remarks of Mr. Moran

    As we all know, DOD has increasingly relied on contracted 
services activities and functions provided by contract 
personnel. In the year 2000, 26 percent of DOD's budget was 
spent on contracted service, but today contracted services 
account for 34 percent of the budget. Another indication of 
DOD's increasingly large contracts is that contractor costs are 
now greater than compensation costs. Prior to 2008, more was 
spent on personnel compensation than on service contract, but 
this year DOD will spend $43 billion more on service contracts 
than on military and civilian compensation combined.
    Despite this growth, the Secretary of Defense's Office has 
yet to establish a chain of accountability and oversight. They 
still cannot answer a fundamental question: How many 
contractors has DOD hired with the funds that this committee 
has appropriated? I know that the DOD IG has reviewed the 
actions underway in the Pentagon to inventory the contracts for 
services, identify functions that are inherently governmental, 
and insource the inherently governmental positions.
    This hearing will continue to help the committee better 
understand the extent of the problems in contracting, but more 
importantly, how we can solve those problems constructively.
    The Congress has pressed for this and will be interested in 
what you believe that DOD has accomplished, Mr. Inspector 
General. We will also want to know what needs to occur to 
ensure that there is an effective and cost-efficient mix of a 
Federal and contracted workforce and DOD.
    Mr. Heddell, thank you for the time and attention that you 
have given to these issues. Before we hear your testimony, we 
would like to call on the Ranking Member, Mr. Young, for his 
comments. Bill.

                          Remarks of Mr. Young

    Mr. Young. Mr. Chairman, thank you very much. And I want to 
add my welcome to our distinguished guests as we conclude the 
third hearing in a series of hearings on contracting. The truth 
is we could probably spend a lot more time on the issue because 
it is a very major issue and it has a lot to do with the cost-
effectiveness of our programs.
    We heard from GAO earlier this month and from the Army on 
the subject of contracting. The challenges facing the 
Department and contingency contracting are highlighted and may 
be created by long-term neglect of the Department's contracting 
and acquisition workforce.
    Maybe it is because of this that we see reports of 87,000 
weapons unaccounted for in Afghanistan. I don't know if that is 
true or not, but we are probably going to ask you about that. 
We are concerned, because rumored last year at a similar 
hearing, we discussed 190,000 unaccounted-for weapons in Iraq. 
So these are important issues and especially for those of us 
responsible for providing the funding. So we look forward to 
your testimony today.
    And as an afterthought, I wanted to make a suggestion that 
I made last year at the hearings. We have some very successful 
business firms that keep track of everything they handle almost 
minute by minute. And at a meeting with some UPS workers, I 
made the comment that might be good if the Defense Department 
would hire somebody like UPS or FedEx who know how to do this, 
who don't lose packages, and they surprised me by introducing 
me to a young man who was an Army reservist, who actually 
worked in management control at UPS. And he had just been 
called up to be deployed to go to Afghanistan to help with that 
purpose.
    So we need to get a handle on it. And I know that you all 
feel that this is as important as we do. So we are looking 
forward to your testimony and anxious to see what we can all do 
together to work together to fix this problem.
    Thank you for being here. Thank you, Mr. Chairman.
    Mr. Moran. Thank you, Mr. Young.
    Mr. Heddell, you may proceed with your summarized 
statement. Your entire statement will be placed in the record.

                    Summary Statement of Mr. Heddell

    Mr. Heddell. Thank you very much, sir.
    Congressman Moran and distinguished members of the 
Appropriations Subcommittee on Defense, thank you for this 
opportunity to appear before you today to discuss challenges 
regarding the management of acquisition and contract 
outsourcing.
    Effective and efficient contracting is an ongoing 
challenge. Concerns related to overpricing, contractor fraud, 
inadequate goods, and the lack of government oversight began 
with the Revolutionary War. Today, that challenge has been 
compounded by the global nature of Department of Defense 
operations and the size of our military.
    A great urgency has been placed to increase the speed of 
procurement needed to meet urgent warfighter needs in both Iraq 
and Afghanistan, and to support other efforts such as 
humanitarian assistance and disaster relief.
    Since the early 1990s, my office and the Government 
Accountability Office have identified contracting as a high-
risk area within the Department. In 1998, then-Inspector 
General Eleanor Hill, in testimony before Congress, expressed 
her concern regarding the downsizing of the acquisition 
workforce and the plan to increase the outsourcing of numerous 
functions.
    One thing is very clear: that adjustments to the 
acquisition workforce should not be driven merely by personnel 
reduction goals, but by management decisions based on sound, 
reliable, and quantifiable analysis.
    We also continue to be concerned about the lack of 
oversight in services contracting. As we testified recently 
before the Commission on Wartime Contracting, contract 
administrators focus primarily on timely mission 
accomplishment, sometimes, unfortunately, at the expense of 
following traditional contract administration procedures, many 
of which are designed to reduce the risk of fraud, waste, 
corruption, and abuse.
    When engaging in contingency contracting, administrators 
may not always consider the increased risk of failing to apply 
stringent controls and oversight of contracting practices. 
Their priority is to provide goods and services to the 
warfighters as quickly as possible. Very legitimate.
    However, every acquisition dollar that is not prudently 
spent is a dollar that is not available to fund other top 
priorities of the Department of Defense. Because of the 
magnitude of the Department's purchasing power and the global 
presence of personnel and resources, we face significant 
challenges relative to the absolute requirement for fair and 
reasonable pricing, the importance of contract oversight and 
administration, and the dangers of outsourcing inherently 
governmental functions.
    One example of pricing problems involves an investigation 
by our Defense Criminal Investigative Service regarding C&D 
Distributors, a company. C&D, beginning in 1997 and continuing 
all the way into 2006, submitted electronic bills to the 
Department to supply small hardware components, things like 
plumbing fixtures, electronic equipment, and other items, as 
well as claims for shipping costs.
    These fictitious shipping costs ranged in the hundreds of 
thousands of dollars, despite the fact that the value of the 
items that were shipped rarely exceeded $100. In fact, in the 
final transaction before this particular scheme was discovered, 
C&D billed the Department almost $1 million to ship two flat 
washers, two flat washers that cost 19 cents apiece.
    Mr. Moran. Mr. Heddell, I want to make sure that everyone 
heard that precisely. Two flat 19-cent washers and they charged 
$998,000 for them?
    Mr. Heddell. That is correct, sir. That is correct.
    Mr. Dicks. Was that the only thing they shipped? Was that 
the only thing?
    Mr. Heddell. No, sir. In fact, over the period of----
    Mr. Moran. For the $998,000, but----
    Mr. Heddell. For that particular shipment, yes.
    Mr. Tiahrt. Was there any engineering that went with it?
    Mr. Heddell. Nothing except for two washers at the cost of 
$998,000. And I will tell you that over the course of this 
particular conspiracy, the defendants obtained approximately 
$21 million in fraudulent shipping costs. Now, the surviving 
sister in this particular company pled guilty and is today 
pending sentencing.
    In this instance, it is clear that the attempt to expedite 
supplies into a war zone allowed pricing to be manipulated 
through a vulnerability in an automated purchasing system that 
lacked oversight and effective internal controls.
    With regard to contract oversight and administration, we 
reported in a recent audit that Regional Contracting Command-
Bagram contracting officials, accepted construction projects 
that required extensive rework by another contractor. This 
particular audit looked at 42 contracting actions totaling $1.9 
million for construction, and of these 42 contracts, 2 contract 
files were missing and 40 contract files lacked quality 
assurance surveillance plans as well as contracting officers' 
representative designation letters. Contracting personnel 
further stated that there was often a lack of qualified 
personnel available to serve as contracting officer 
representatives.
    Examples of rework that was performed included reinstalling 
sewer lines for latrines and repairing flooring that was 
improperly installed.
    We have also identified many examples of outsourcing 
inherently governmental functions, which are functions that are 
so intimately related to the public interest as to mandate 
performance by government employees in one example regarding 
controls over what should have been government-issued 
contractor Common Access Cards, also known as CACs. All DoD 
employees carry one of these for access and identification. We 
found that contractors were sponsoring other contractors to 
obtain these cards. These Common Access Cards are the DoD 
credential for obtaining physical and logical access worldwide, 
to include facilities in Southwest Asia.
    My office is also engaged in proactive initiatives to 
improve acquisition and contracting practices. And these 
include aggressive audit planning for contracts, depot 
overhaul, maintenance of equipment, and spare parts in support 
of operations in Iraq and Afghanistan.
    We also maintain an active membership on the Panel on 
Contracting Integrity and we have launched our own fraud 
indicator Web site to assist oversight personnel in detecting 
indicators of potential fraud.
    This concludes my opening statement. I thank the committee 
for this opportunity to testify on contracting and outsourcing 
within the Department and I would be more than happy to try to 
answer your questions.
    [The statement of Mr. Heddell follows:]

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                 MINE RESISTANT AMBUSH PROTECTED (MRAP)

    Mr. Moran. Well, thank you very much, Mr. Inspector 
General. I appreciate your testimony. I appreciate the work 
that you have done.
    I was concerned in your more extensive testimony about the 
MRAPs. I saw that it appeared that we have paid for the same 
vehicle very substantially different amounts; for example, it 
has ranged from about $300,000 to over $1 million. Is this 
truly for the same vehicle, the difference in prices that we 
have been charged?
    Mr. Heddell. Well, Mr. Chairman, there are a variety of 
vehicles that we have contracted for, and it is a little more 
complex than simply saying it was one particular kind of 
vehicle. In fact, that actually in a way is the problem, in 
that when the contracting process itself frequently ignored in 
this particular case the type of vehicle that we were 
contracting for. So you may have had, let us say 
hypothetically, five or six different kinds of vehicles, and we 
were just looking at whatever price the company was offering 
that vehicle for without regard to it being one specific kind 
of vehicle.
    Mr. Moran. Well, at one point it looks like the Marine 
Corps purchased 1,500 MRAPs and yet never asked for a quantity 
discount; paid exactly the same price as if they had ordered 
one individual vehicle. That is the kind of thing I was getting 
at. Is that what you have determined?
    Mr. Heddell. Absolutely. In fact, with regard to the audit, 
one of two audits that we did regarding the MRAP, there was one 
instance involving nine different contracts. There were two 
problems with these contracts. One is that we never obtained 
the underlying pricing data in order to determine what a fair 
and reasonable price would be. The second problem is what you 
alluded to, and that is that we never asked for volume 
discounts from one contractor. And clearly in hindsight, we 
realize that those would have been available had they been 
asked for, and we know that in one case we very likely would 
have saved had we asked for the volume discount. We would have 
saved at least $45 million on that one particular contract.
    Now, the two contracts that you are actually alluding to 
involved contracts that exceeded the maximum of 1,500 vehicles 
to be purchased in each of those. And the Marine Corps exceeded 
that in one case by 300 to 400 vehicles and in another case by 
as many as 2,800, and should have in fact, absolutely should 
have asked for a volume discount, but did not. So we do not 
believe that the Marine Corps has any assurance that the prices 
that they paid for those vehicles were fair and reasonable.
    Mr. Moran. There is just no particular relation between 
price and cost?
    Mr. Heddell. That is correct.
    Mr. Moran. They are pricing whatever they can get away 
with.
    Mr. Dicks. Mr. Chairman, on that point, was there a 
competition here? No competition?
    Mr. Heddell. Competition in the sense that the vehicles 
that were offered for sale were different kinds of vehicles in 
that--for instance, let me put it in U.S. terms. Ford, 
Chevrolet, a Honda, a Saturn, and they were all different makes 
and models, and we viewed those as one specific kind of vehicle 
without regard to model and the bells and whistles and whatever 
happened to be the best price; we looked at it as if it was all 
for the same vehicle. We didn't go to the trouble to obtain 
what we would call the underlying pricing data. For instance, 
we didn't know what it cost these companies to build those 
vehicles so that we knew where our foundation starting point 
was.
    Mr. Dicks. If I could just follow up. What I was trying to 
get to, was there a competition by the services, the Marines or 
the Army, amongst various companies to build the MRAPs? Was 
this sole source?
    Mr. Heddell. This was not sole source. There were five 
contractors that were bidding for these contracts. There ended 
up being nine contracts altogether. Am I correct on that, Mary?
    Ms. Ugone. Yes.
    [The information follows:]

    The contracts were not sole-source. Nine contractors submitted 
proposals (bids), and nine contracts were awarded. Subsequent to 
contract awards, 2 contracts were terminated because their vehicles did 
not pass testing. In addition, the Government decided not to order 
additional vehicles from another contractor due to unfavorable 
automotive and human factors; and one other contractor could not meet 
contractual obligations and therefore was terminated. As a result, five 
contractors remained in the competition and are producing MRAP 
vehicles.

                          COMMON ACCESS CARDS

    Mr. Moran. Mr. Dicks, I think I will reclaim my time, 
because I would like for you to pursue that further. I think 
this is an important issue.
    I wanted to raise one other issue and then turn it over to 
Mr. Young, and that is the matter of common access cards. 
People get cards that give them access to military bases and to 
Federal agencies. So this is a very important matter of 
security. But from what I understood from your report, these 
cards are issued by contractors, not by Federal Government 
personnel. And they determine who they issue them to and 
generally they issue them to employees of the same contracting 
firm first. So if we are looking at security on military bases 
and the like, it seems to me we could be compromising our 
security if the determination of who gets access is made by a 
contractor and not by the Federal Government.
    Now, am I misreading this, or would you explain it further, 
Mr. Heddell?
    Mr. Heddell. Let me clarify that, Congressman Moran, 
because we are very concerned about this and we have spoken 
with the Department about it. But let me clarify it a little 
bit and give a little bit of background here.
    The Common Access Card and what we are talking now about is 
the contractor Common Access Card. This goes back to HSPD-12, 
the Homeland Security Presidential Directive, that established 
a mandatory government-wide standard for secure and reliable 
Federal identification. And out of that requirement, the 
Department came up with this card. And it began issuing these 
back in October of 2006. The Common Access Card is the 
Department's credential for obtaining physical and logistical 
access worldwide, not to mention--and also that includes 
southwest Asia, not to mention the fact that you can get 
Internet information access with it also. It gives a person 
access to installations and to services such as dining 
facilities, welfare and recreation facilities, and various 
military exchanges around the world. It also, as I said, can 
give access on the Internet.
    [The information follows:]

    Common Access Cards were not created in response to HSPD-12, but 
were in use prior to the issuance of HSPD-12. However, a new generation 
of HSPD-12-compliant Common Access Card was issued by the Department 
beginning in October 2006, after the new requirement was established.

    Now, what is significant about all of this is that as 
services are outsourced in these contracts, contractors who 
have a validated need to have access to our facilities, they 
apply for these. A government official, a government-employed 
official is responsible for overseeing the application and 
approving the application, and then the card is issued to the 
particular contractor.
    Now, if these cards are not properly processed, if they are 
not controlled throughout their life cycle, they pose a 
potential national security risk, and that is why we are 
concerned about it. And what we have found in the work that we 
are doing--and we have done one audit which I can tell you 
about this morning and we are in the process of doing an 
additional audit, because we are so concerned about this--there 
are several things we found. But one thing we found is that in 
one instance, 303 out of about 10,000 Common Access Card 
sponsors, in other words, the government employees--they are 
supposed to be government employees that issue these--303 of 
the sponsors were in fact contractors who had the authority to 
issue these cards. So we found that when we looked at a sample 
of about 10,000. That means that these 303 contractors had the 
authority to issue these cards to other contractors, violating 
what is essentially an inherently governmental function and 
creating a national security vulnerability. We did inform the 
Department and they did deactivate these 303 accounts.
    We also found in another random sample of 30 KBR employee 
Common Access Card applications that one of the KBR contractors 
was authorized to approve access card applications for KBR 
employees. In addition, we found that verification of 
background checks was not always being performed on KBR 
contractors. And this is very important because in order to get 
one of these cards, you have to have a background investigation 
conducted and it has to be certified as properly done by a 
government employee. It is my opinion that, as of July 2007, 
the Department of Defense did not have assurance that as many 
as 25,428 KBR contractors who were deployed in Southwest Asia 
had authorized access. That is my opinion based on----
    Mr. Moran. They got cards, but they didn't have 
authorization----
    Mr. Heddell. No one at the Department can say with 
assurance that those cards were properly issued. Now, the 
reason for that, for the most part, is that the verification of 
the background checks for criminal history, et cetera, were not 
certified, not verified to have been done properly.
    Now, we also have concerns about the possible 
misidentification of United States and foreign national 
contractors who have been issued these cards, because what we 
found is that almost 10 percent of 421,000 contractor cards had 
a General Schedule designation on the card. And what that means 
is that that 10 percent were identified as U.S. Government 
employees when, in fact, they were not. So that is another 
concern of ours. And that 72 percent of 290,000 U.S. 
contractors and 93 percent of 3,500 foreign national 
contractors were misidentified as U.S. Government personnel in 
e-mail addresses, which is included on this card.
    So these are significant concerns and we are concerned 
because of the lack of what we think are potentially extremely 
weak internal controls. We estimate that about 90 percent of 
40,000 contractors with these cards have inaccurate or 
unsupportable expiration dates also. So in other words, we are 
concerned that even the expiration dates on these are not 
accurate, and we are also concerned that about 38 percent of 
28,000 cards that have been revoked or terminated were never 
recovered. So there are a lot of cards out there that possibly 
have current--that are active and current that should have been 
turned in and canceled that were not.
    Mr. Moran. So 38 percent would be about how many?
    Mr. Heddell. Thirty-eight percent would be about 7,000.
    Mr. Moran. Seven thousand that are still out there and 
should have been turned in, but in somebody else's hands. Thank 
you very much, Mr. Young.
    [The information follows:]

    Thirty-eight percent of 28,000 would be about 10,600. Therefore, 
approximately 10,600 cards are still out there and should have been 
turned in, but could be in somebody else's hands.

                          COMMON ACCESS CARDS

    Mr. Young. Mr. Chairman, this last point was very 
interesting, and let me follow up on that. Who has the 
authority to call in those cards and have them canceled or 
terminated or gotten out of the hands of the people that aren't 
supposed to have them any longer?
    Mr. Heddell. Under HSPD-12, Congressman Young, the 
Secretary of Defense and his executive have the authority to--
or the responsibility to establish a system of cards that are 
legitimate, and we have spoken with the deputy secretary about 
this. And I could tell that he was very moved and----
    Mr. Young. I get the feeling that nothing was done when you 
notified them.
    Mr. Heddell. Well, at this point, that is one of the 
reasons we are doing a second audit because we--in fact, we are 
going to do an audit in southwest Asia and also in Korea 
because we want to look at what is happening more specifically 
on the ground, whether anything is in fact being done with 
these. So we also have suggested that one of the requirements 
of having these cards is that when you no longer are justified 
and validated to use it, it is a requirement that you should 
have to turn it in. It can be a pretty simple procedure, to be 
honest with you.

                           QUANTITY DISCOUNTS

    Mr. Young. Sir, you were asked earlier about quantity 
discounts, and your response was sort of disappointing because 
we don't get a benefit for quantity buys. What about a lot of 
the equipment we buy from our contractors, also sold to allies 
overseas interests, do we get any credit for that? Or do they 
pay the same thing that we pay, or do they get a discount of 
some kind? Where do we stand on the foreign sales versus our 
own purchases?
    Mr. Heddell. Well, I actually don't know the answer to 
that, Congressman Young. But, again, it seems to me just 
reasonable that if we buy a product and if we buy it in 
significant volume for our own people, that we should get some 
kind of a discount for that. Did I answer that as best as I 
could?

                       ACCOUNTABILITY OF WEAPONS

    Mr. Young. Let me go back to one issue that I mentioned in 
my opening comments. The 190,000 weapons that were unaccounted 
for in Iraq, I expect that someone has looked into that and 
investigated it. And I am just wondering--I see some heads 
shaking yes. And I am just wondering what we found out. Did we 
learn anything? Did we recover any of these lost weapons?
    Mr. Heddell. I actually am very fortunate to have my 
Principal Deputy who is sitting behind me today, who actually 
led the team that went over and took a look at that. And the 
short answer is, yes, we think we have had some impact here. 
And you may want to take the opportunity to let my deputy 
speak.
    We recently spoke with General Petraeus and that was one of 
the subjects we talked about, and General Petraeus knows the 
results of our first effort in terms of weapon accountability 
and has asked us to go back in, particularly now with regard to 
Afghanistan, but to go back in and confirm that accountability 
has improved.
    But as I say, I have Mr. Gimble here, and he knows this 
subject in tremendous detail since he actually was on the 
ground. And I will be fine to allow him to answer your 
questions, with your permission.
    Mr. Young. Mr. Chairman, is that----
    Mr. Moran. Please. Again, you can identify yourself for the 
record, sir.
    Mr. Gimble. I am Thomas Gimble, Principal Deputy Inspector 
General, of the Department of Defense.
    The answer to the 190,000--there has been a lot of work 
done on that. That was originally reported to SIGIR and also 
GAO. And we took a team in led by General Kicklighter 
initially, to look at the processes in place on the ground in 
Iraq and to determine what kind of control and accountability 
of weapons. And what we found is there were not adequate 
policies and procedures in place to account for them. So we 
made the recommendations and Central Command issued the 
policies and procedures.
    About a year ago, I led a team back in and we looked at 
control and accountability of weapons, going down to the 
warehouses, the depots, inventory, also sending teams out. 
Another part of this is how do you control or account for the 
weapons that we turn over to the Iraqi security forces, to look 
at those controls. We thought there was a great deal of 
progress being made in the--when arms in Iraq, to the country, 
that they are being accounted for. The processes are pretty 
much in place and working. There was a weapons cell put 
together.
    There are actually criminal investigators to try to 
ascertain what happened to many of the 190,000 weapons. They 
have, in fact, determined that they were recovered. We have 
determined where some of the leaks were; for example, where the 
Glocks were leaving out of Baghdad Police College. The Iraqis 
had put together a number of very stringent controls for 
basic--like if a weapon is issued to a police officer and it 
turns up in the wrong hands and is recovered, or when it is not 
accounted for, there is a substantial cost, like $5,000 U.S., 
which is about a year's salary that they levy on that police 
officer.
    So I personally went through two of the police colleges and 
did the inventories on the weapons that they had on hand. And 
in those 2 days that we were in Simone and Irbil, we had 100 
percent accountability of the weapons that they had on hand, 
which I thought was good progress.
    I would just offer up that we have done the same type of 
stuff in Afghanistan. We have a team scheduled to depart on a 
follow-up visit next week, going back in. One of the topics 
they will be looking at is control and accountability of 
weapons and munitions in Afghanistan.
    Mr. Young. Well, the situation is embarrassing, I would 
say, to probably all of us. And I know that many of us are 
called on to explain why we are paying for these things, and 
these situations develop. Anyway, Mr. Chairman, I know the 
attendance is good today and I know a lot of members have a lot 
of good questions so I will yield back.
    Mr. Moran. Thanks very much, Mr. Young. That is an ongoing 
concern. We are glad that some progress is being made, but we 
still have cause for concern. Mr. Dicks.

                        CONTRACTOR ACCESS CARDS

    Mr. Dicks. On these cards, we have been working--my staff 
and I have been working on trying to understand how we get 
access to our defense bases in the United States. The problem 
at Fort Dix is one of--where people got in, and we find that 
there is just no understandable strategy between the services. 
And we can't find out literally who is in charge of this 
program inside the Department of Defense. They have different 
groups that are doing different things, DBIDS and different 
systems.
    And I think it sounds as if what you are facing on the 
international scene, and with these cards, is just part of a 
total disaster. I have had at least seven or eight meetings in 
my office, bringing over all the people that were involved, 
trying to understand this. And we are still baffled by who, in 
fact, is in charge, how do we get them to do it--have proper 
security at these bases, some of which have nuclear weapons? 
And I mean, we are finding where we do get proper checking of 
the identification cards, that a lot of people are going on 
these bases who are not supposed to be, people with criminal 
offenses and other things. And we brought this to the attention 
of each of the services, and yet--it is very hard to ask 
questions when we have--thank you.
    Anyway, can you give us any understanding of that?
    Mr. Heddell. I think you make a very good point, 
Congressman.
    Mr. Dicks. This is a problem right here in the United 
States.
    Mr. Heddell. Keep in mind, I have been at the Department of 
Defense for 6 months, but I think based on my travels and 
having some of the same problems you just mentioned, I think 
one of the concerns might be a very decentralized system that 
has a lot of people at a very decentralized level that are 
controlling different systems and processes for gaining access. 
That is not an audit opinion; that is an observation of my own 
at this point.
    And I think that is part of the problem that we deal with 
these contractor access cards. It is decentralized. There are a 
lot of people who have responsibility at different levels 
around the country, around the world; in some ways they develop 
their own policies, they determine--they hire the security 
forces, they train them on how they should review the 
identification of people that want access. They issue the 
access passes and cards in this case. And I think the system 
just simply needs to be tightened up and it needs to start at 
the top and work down. I think right now we are at the bottom 
working up.
    Mr. Dicks. It would seem to me that we need to get the 
deputy to appoint somebody in charge of this. I mean, we still 
couldn't find out who, in fact, has the responsibility. We had 
brought in people from various--from the services, from DOD, 
and they really couldn't tell us who is in charge.
    Mr. Heddell. That actually was our recommendation to the 
deputy secretary, that one person needed to take charge of this 
problem. And that was--in fact, that was probably our central 
recommendation.

                              CONTRACTING

    Mr. Dicks. Let me ask you another thing. Is this just--are 
these--I mean, these contracts going out to companies to do 
work in the Department of Defense, outsourcing, is there any 
plan here or is this just done service by service and by 
Defense Department agencies without any strategy or 
understanding of the cost or anything? How is it--it looks very 
chaotic based on your testimony.
    Mr. Heddell. Secretary Gates in fact testified on that very 
question in January of this year, and he stated that the 
Department, particularly with regard to the combatant areas, 
had no holistic or strategic plan for how it handles 
contracting. That was his statement and not--maybe not an exact 
quote, but I think it is fairly close.
    And there are literally thousands of people making 
contracting decisions around the world. And our audits would 
indicate that we are not always considering important issues of 
pricing. We are not thinking about oversight and administration 
of the contracts. We are not thinking about the dangers of the 
issue of inherent government authority and accountability here. 
And in some cases, it is because there are not enough 
contracting officials. In some cases it is because, as you 
know, the volume and the dollar value of contracting has gone 
up so significantly over the years, over the last decade in 
particular, and the level of contracting officials has actually 
gone down or stayed the same.
    Mr. Dicks. Well, the previous Chairman of the Armed 
Services Committee would go on the floor and say, ``These are 
shoppers, we don't need these people.'' And now we find that we 
are understaffed in terms of acquisition on the weapons 
systems, isn't that correct, and having enough program managers 
to properly manage these weapons systems?
    Mr. Heddell. Well, I can't address a specific weapons 
system, but I think I can say generally that there are not 
enough skilled, able contracting officials to handle all of the 
high-dollar important contracting that is being done out there.
    Mr. Dicks. Just one last quick--is there a difference--you 
talk about all these contracts where they are actually doing 
work that normally was done. That is different, isn't it, from 
acquisition of weapons systems? Those are two separate----
    Mr. Heddell. There is contracting to purchase materials and 
services and contracting to purchase weapons systems. I mean, I 
am not sure I am following what you are getting at.
    Mr. Dicks. What I am trying to get at is, we understand 
there is an acquisition group that works on each of the major 
weapons, the F-22, the C-17. These are huge contracts, okay? I 
am talking about all these service contracts where they are 
doing work that used to be done by government employees. Is 
that a different acquisition force that handles that?
    Mr. Heddell. No. There are program managers for each major 
weapons acquisition, and those program managers are supposed to 
be knowledgeable and to be engaged and to follow those 
acquisitions all the way through from beginning to end. 
Depending on which particular acquisition you might be 
referring to, it would be hard to know--to say, well, one is 
good and one isn't. I think we are speaking in a general sense 
here that we have concerns because of the kinds of problems 
that we are identifying.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Moran. Thank you, Mr. Dicks.
    The reality is that the amount of contracting is almost 
three times what it was 8 years ago, and yet the number of 
acquisition officers is one half of what it had been. And that 
seems to be an underlying problem in terms of oversight and 
accuracy.
    Mr. Frelinghuysen.

               RECRUITING QUALIFIED PROCUREMENT OFFICERS

    Mr. Frelinghuysen. Thank you, Mr. Chairman. Satisfy my 
curiosity. Does the IG for the DOD do any outsourcing?
    Mr. Heddell. We do contract for auditors to help us with 
some of the work.
    Mr. Frelinghuysen. Your IT work?
    Mr. Heddell. We do.
    Mr. Frelinghuysen. I just want to make sure if we are 
talking about organizations that are assignment pure, I would 
like to know.
    Mr. Heddell. Absolutely. I think you will find that most--
--
    Mr. Frelinghuysen. My questions are going to focus on how 
we get qualified procurement officers. But I would just like to 
know that in your own portfolio we are not contracting out jobs 
that are inherently governmental. So can you----
    Mr. Heddell. Excellent question. We at the Department of 
Defense do contract out for work that we do on the financial 
statement, for example.
    Mr. Frelinghuysen. For your specific office, I am talking 
about.
    Mr. Heddell. That is correct, sir. And even though I am 
Acting Inspector General at DoD, I am also the Senate-confirmed 
IG of Labor right now. And I only mention that because at 
Labor, most of the work that we do on the financial statement 
is contracted out.
    Mr. Frelinghuysen. My time is limited. I just raise that 
issue.
    I happened to see Joe Davidson's Federal Diary in the 
Washington Post yesterday. It was ``Stimulus Contracts: Let's 
Avoid Another Katrina.'' I commend it to your attention. It 
points out, among other things, that answering the questions--
this is how we--all the many contractors will have to deal with 
the stimulus package, he says, and I quote: ``Answering any 
questions will fall to Federal staffers who work with the 
contractors. Government data shows that the procurement 
workforce, while increasing in recent years, remains short of 
the 67,885 that the Federal Acquisition Institute said that 
Uncle Sam employed in 1992.'' Somewhat apropos of the 
Chairman's comments.
    And he goes on to say, ``As of fiscal year 2007, the number 
was 61,434, with more than half of those in the Department of 
Defense.'' All of that within quotation marks.
    I would like to focus--we had General Ross Thompson in here 
the other day and a lot of my questions had to do with 
education and training of Federal contracting personnel. How 
should the Department of Defense be going out and locating, 
recruiting and hiring, developing the needed professionals to 
do the job? And then you add in perhaps the disincentive to go 
to the war zone. What would you recommend that we should be 
doing?
    Mr. Heddell. Well, you know----
    Mr. Frelinghuysen. Or if we are doing something now, how 
should we do it differently?
    Mr. Heddell. This was also part of the work of the Gansler 
Commission. Clearly there is a lot that needs to be done here. 
But first I think you have to know what we are trying to get at 
here with our contracting. It is very simple. We are trying to 
purchase materiel and services that are safe, that have a high 
level of quality and performance, and that are provided in 
sufficient numbers and that are provided at a reasonable cost. 
Once we do----
    Mr. Frelinghuysen. I am all for that. But I want to know 
how we get the people on board that can do that. From your 
perspective, I know you have been on the job for 6 months, 
but----
    Mr. Heddell. What I am saying sir, is that--I can tell you 
just in terms of recruiting, all right, but I think it is a 
bigger problem than that, and that is what I am getting at. 
From a standpoint of just getting the right people, you know, 
there are incentives. We need to go out and recruit people that 
have the skills that can do this kind of work. There are 
internship programs to get people into the government who are 
interested in this. This is not an area that is of great 
interest to an awful lot of people.
    Mr. Frelinghuysen. It is of interest to this Committee 
because we are focusing----
    Mr. Heddell. But it isn't to young people coming out of 
college. And that is what I am saying.
    Mr. Frelinghuysen. So we are being thwarted from doing the 
very things we need to do to provide oversight because we don't 
obviously want----
    Mr. Heddell. It is extremely important.
    Mr. Frelinghuysen [continuing]. Valuable equipment walking 
away.
    Mr. Heddell. It is extremely important, sir. And we have to 
find programs and incentives: internships, journeyman programs, 
things that are going to cause young people coming out of 
college to have an interest in this kind of work, get them 
recruited.
    Mr. Frelinghuysen. Underlying your comments is the fact 
that you don't seem to be too optimistic about that happening, 
which is a nice way of saying it is a competitive environment 
out there and it is pretty difficult to get people to join up.
    Mr. Heddell. That takes me back to where I started. The 
problem, in my opinion, if you sense a lack of optimism, it 
isn't that we can't find people or encourage people to do this 
kind of work, it is that we have to understand the need at the 
very top. We have to understand at the very top of our 
executive level of government why this is so important and what 
the dangerous ramifications are if we do not do a good job of 
contracting. We have been in----
    Mr. Frelinghuysen. General Thompson, I think--and maybe you 
are saying basically the same thing. You say we need to make 
sure that the people we are trying to put in these positions 
know that their job is considered to be valuable. It is a major 
contribution to our national security.
    Mr. Heddell. That is correct. But the people doing the 
hiring, the people responsible for making the decisions have 
to--that is where it really starts. They are the ones who have 
to decide that it is important enough to have the right number 
of people and to have people that are qualified and to find 
ways to recruit them and then, once recruited, to keep them on 
board and to raise the status of this kind of work because I 
think--I think it is difficult----
    Mr. Frelinghuysen. Well, my time is limited. As you put 
your oar in the water, which is an opportunity you have been 
given today, you are in there pitching as IG, because obviously 
you came up with a whole slew of recommendations, and obviously 
in the war zone it is a particularly difficult task to get 
people that are willing, to quote, ``volunteer,'' other than 
the military.
    Mr. Heddell. Well, I think it can be done. We have allowed 
this to happen, unfortunately, over a period--I mean, this is a 
230-year-old problem in our country. We have had----
    Mr. Frelinghuysen. It has recently gotten a lot worse.
    Mr. Heddell. It has gotten a lot more expensive. And that 
is a factor of complexity. The more expensive it gets, the more 
complex it gets, and it goes to these very sophisticated 
warfighting systems that we purchase. And planning. Planning 
contingency planning years in advance, being prepared for the 
Southwest Asia event, knowing--unfortunately, we often focus as 
a government on personnel reductions, when in reality our 
management decisions should be based on sound, reliable, 
qualifiable analysis. And it is not. It is simply based on how 
do we reduce the workforce here or there.
    Mr. Frelinghuysen. Well, we have a new regime, so let us 
see what happens under new leadership.
    Thank you very much, Mr. Chairman.
    Mr. Moran. Thank you, Mr. Frelinghuysen.
    As the inspector general says, this has been around a long 
time, although it is a particularly acute problem now. Larger 
testimony cites how in the Revolutionary War, contractors were 
supplying General Washington's troops with meat that was full 
of stones and roots in order to make them look--make it look 
heavier and fuller. And the troops found the stones and roots 
in the meat. Isn't that true?
    Mr. Heddell. That is correct, sir.
    Mr. Moran. So apparently this is not a problem that just 
cropped up but it is one that we need to do a better job of 
addressing.
    Mr. Young says he forgot about that.
    Ms. Kaptur.

                          CONTRACTED SERVICES

    Ms. Kaptur. Thank you, Mr. Chairman. I am very interested 
in the culture of the Department of Defense over a period of 
actually centuries. But if one goes back to World War II and we 
compare the amount of contracted services in World War II to, 
let us say, the first Persian Gulf War and today, what can you 
say about the culture of contracting in those eras? According 
to some numbers we have here in material that has been provided 
us, it states that today DOD's obligations on contracts rose 
from 47 percent of total budget in fiscal year 2000 to over 
half, 51 percent, in 2007. And then from that, it says, 
contract costs, service contracts, grew from 26 percent of that 
total to 27 percent.
    I assume the difference between the service contract and 
obligation on overall contracts must be hardware contracts or 
something, as distinguished from service contracts?
    Mr. Heddell. I don't know the answer to that specific part 
of your question, although I think I can address the broader--
--
    Ms. Kaptur. All right. But if one looks back at the amount 
of contracting, my sense is that only until recently have we 
had this level of contracted-out functions of the Department of 
Defense. What about World War II? Can you compare it to that 
era?
    Mr. Heddell. I think that there--we must have faced very 
similar issues. If you remember, after World War--or maybe it 
was during--that the Truman Commission on Wartime Contracting, 
clearly they were looking at the very same issues, I think, 
that we are looking at today. Just different numbers and a 
different war.
    Ms. Kaptur. How difficult, Mr. Heddell, would it be for you 
to get me those numbers? I am just looking for a percent.
    Mr. Heddell. I will certainly do my best to get you those.
    Ms. Kaptur. What about the first Persian Gulf War in 1991, 
about how many contracted services would we have had back then 
compared to----
    Mr. Heddell. I will do my best to find those for you.
    Ms. Kaptur. I just need a number. And I am particularly 
interested in the contracted security forces. That is a number 
that I am extraordinarily interested in.
    Mr. Heddell. There has been--in fact, I think that the 
National Defense Authorization Act asked the Department to tell 
it how many contractors it had in theater, and it has not been 
able to do that. But it has made efforts to begin to try and 
obtain that kind of data.
    [The information follows:]

    The Congressional Budget Office issued a report, ``Contractors' 
Support of U.S. Operations in Iraq,'' in August 2008, which addressed 
these issues. The CBO report contains estimates of the number of 
contractor personnel presence during U.S. military operations. This 
report can be accessed at: http://www.cbo.gov/ftpdocs/96xx/doc9688/08-
12-IraqContractors.pdf.

    Ms. Kaptur. Contracted security officers, sir, did you say.
    Mr. Heddell. Well, any kind of contractors, whether they 
are contracting security officers, any contractors that we are 
hiring to go into theater. Or am I misunderstanding your 
question?
    Ms. Kaptur. Well, I am just interested in----
    Mr. Heddell. You are talking about service contracting?
    Ms. Kaptur. As I understand the numbers--I am just trying 
to get simple numbers, okay? If we look at DOD and we look at 
all contracts, they now total over half your budget. Is that a 
correct statement?
    Mr. Heddell. That, I believe, is correct.
    Ms. Kaptur. Right. If one were to go back to World War II 
and look at what percent of the total overall DOD expenditures 
were contracts, I would be interested in that number. I would 
be interested in that number for the first Persian Gulf War.
    Mr. Heddell. We are going to try to get the answer. But I 
will tell you that because--I will be surprised because I don't 
think there is a current inventory that would give you that 
answer for today, much less in 1990 or in 1943.
    Ms. Kaptur. And I guess what has got me concerned is 
normally the recommendations that come to us are, well, because 
we have so many more contractors, now just give us more 
contract personnel and accountants to count those.
    Well, my answer is, wait a minute, let's have fewer 
contracts, and maybe I will give you more contract auditing 
personnel. But if we cut back on the contracts, we don't need 
as many--I don't want to grow it. I don't want to grow it. I 
want to manage it.
    Mr. Heddell. I mean, we know what has happened. We know 
that in the last 7 years, the value of contracts--well, in 2008 
it was $390 billion, and that is compared to $155 billion in 
2001. And, at the same time, the number of contracting 
officials to handle those has not kept pace. We know that.
    Ms. Kaptur. I understand. Those are very helpful numbers.
    Mr. Heddell. What we don't know is how many contractors are 
out there.
    Now, you know from the Army's testimony, I guess, General 
Thompson addressed this as what they--you know, they have gone 
from 10,000 contracting officials back--when was that, Mary? 
1996 or 1997, I forget. Or, I am sorry, in the early 1990s from 
around 10,000 contracting officials to 1996 when they were down 
to 5,500. And it has stayed pretty level since that time. But 
the amount and volume of the contracts that they have overseen 
has gone up 331 percent. In fact, today the Army alone handles 
over $100 billion in contracts every year.
    Ms. Kaptur. I don't want to abuse my time here, but I am 
interested in the culture change at a department that contracts 
out over half of what it does. And I am especially interested 
in the culture of the security forces. We have not been able to 
pursue a line of questioning here as I want to regarding 
deployed contractors involved in security.
    According to the numbers I have for overall military 
personnel as of January, there were 219,000 military personnel 
versus 259,000 contractors deployed to CENTCOM. All right, of 
those numbers, of those numbers, which are defined as security 
personnel? And how much of that is a culture change from what 
might have existed in the first Persian Gulf War and certainly 
from World War II?
    I don't remember contractors in World War II carrying guns. 
I don't remember that.
    Mr. Moran. It is a good line of inquiry, Ms. Kaptur. I am 
not sure the Inspector General is going to be able to answer 
that completely.
    But perhaps you could solicit an answer from someone in the 
Pentagon and provide it for the record.
    Mr. Heddell. Yes, sir.
    [The information follows:]

    The Assistant Deputy Under Secretary of Defense for Program Support 
point paper, ``Contractor Support of U.S. Operations in USCENTCOM AOR, 
Iraq, and Afghanistan'' released February 2009, reported 12,907 private 
security contractor (PSC) personnel in Iraq and Afghanistan (9,218 Iraq 
and 3,689 Afghanistan) as of the end of the 1st quarter FY 2009.

    Ms. Kaptur. And we will provide specific questions to the 
record.
    Thank you, Mr. Chairman.
    Mr. Moran. Excellent. Thank you, Ms. Kaptur.
    Mr. Kingston.

               EDUCATION TRAINING OF CONTRACTING OFFICERS

    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Heddell, on page 6 of your testimony, going back to the 
MRAP for a minute, you talked about, and I quote, ``The current 
leading contracting officer could not explain how the price 
evaluation team concluded that prices were fair and 
reasonable.'' And then it went on to say, ``The Marine Corps 
did not obtain volume pricing discounts from two contractors.''
    Now, it would appear to me that that is his job.
    Mr. Heddell. Yes, sir.
    Mr. Kingston. And so the question would be, what was his 
punishment for not doing his job?
    Mr. Heddell. I don't have an answer to that, sir.
    Mr. Kingston. Was he punished?
    Mr. Heddell. I don't know.
    Mr. Kingston. Is part of your recommendation to say, hey, 
you guys aren't punishing bad behavior and incompetence or 
neglect or however you want to classify it, call it?
    Mr. Heddell. Mary, do you know? Do you want to shed light 
on that?
    Ms. Ugone. I can shed a little bit of light on that.
    There is a fundamental--and it goes back to what Mr. 
Heddell has stated. Our contracting officers, the skills of our 
contracting officers, when they are faced against negotiating 
these huge multi-billion-dollar contracts, they are not as 
skilled as they should be. That is part of the problem. Part of 
the problem is education and training, having a skilled 
contracting officer facing very, very competent negotiators on 
the other side of the table. That is one thing.
    The second thing----
    Mr. Kingston. I don't get that. Just a minute, if I could 
reclaim my time for a second, and then I will get back to you.
    That doesn't make any sense at all. You know, we all laugh 
about how incompetent the government is. This--I mean, 
everybody here is beating up on private contractors, and 
rightfully so, but you are telling me that somebody for the 
Marine Corps that is sitting in the seat of being a purchasing 
officer, they don't do the obvious of a $306,000 to $1,089,000 
difference and they don't question it? And then we say, ``Oh, 
well, he is not trained''?
    For example, Abu Ghraib, the general was fired who 
probably, you could argue, had very little to do with it except 
for the fact that it happened during his or her watch. I don't 
remember who the general was. But the reality is, you know, 
that is the message that you send, that it is your 
responsibility.
    And it would appear to me that this contracting officer 
should have been potentially fired, certainly reprimanded, and 
so should his superior and his superior. And that is the way it 
is done in the field of active-duty combat, for example, or 
something.
    So I am hear hearing from you, ``Well, it is not his fault 
because he is not trained.''
    Ms. Ugone. I am not saying that, actually. I wanted to put 
it in a little context before I actually answered the specific 
question.
    The Marine Corps didn't agree with us on our findings, and 
that is part of it, is that they believe that there was price 
competition and there was a disagreement about that as well. 
But the contracting officer--there are corrective actions that 
were undertaken with regard to this.
    But I wanted to provide the context. And each individual 
program or contract has--or each contract has a contracting 
officer. We can find out whether or not this particular 
contracting officer had any kind of administrative action 
taken. But the response to our report was generally a good 
response. But the dilemma there also is the Marine Corps does 
not believe that there was, you know, necessarily a problem in 
the price competition area.
    Now, we had to go to Mr. Shay Assad, the director of 
defense procurement, to weigh in on this. And he pretty much 
indicated that we--he concurred with our position.
    So we can follow up for you and get additional information, 
but I wanted to provide the context, because this whole area of 
pricing is not a very easy area. It requires a lot of skill and 
training and attention at both the contracting officer level 
and also senior levels.
    Mr. Kingston. I would like to know, you know, if there was 
punishment or what was the after action.
    [The information follows:]

    According to a responsible Marine Corps official, as of April 2009, 
they were unaware of any administrative actions taken against the 
contracting officer. The Marine Corps does not believe there was 
necessarily a problem in the price competition area.

    And I want to--you know, going to page 8 a minute, you are 
saying here, ``We recommended that the Marine Corps contracting 
officers be provided training on their authority and 
responsibility and that the assistant Secretary of the Navy''--
blah, blah--``agreed with this recommendation.''
    And then on page 25, you say, ``The statute requires the 
Army Audit Agency, Naval Audit Service, and the Air Force Audit 
Agency, in coordination with the OIG, to develop the plan to 
audit equipment, maintenance, and spare parts. We are actively 
developing this plan.''
    Both those statements seemed to be stating the obvious. 
And, you know, if this problem has been going on since George 
Washington and here we are saying, ``We recommend that the 
Marine Corps contracting officers be trained on their authority 
and responsibility,'' oh, well, I feel better about government 
now. And I am not being sarcastic towards you, but, I mean, 
let's think about it in terms of stewards of taxpayer dollars. 
Why in the heck wasn't that the case last year, the year 
before, the year before, going back to General Washington? And, 
you know, here it is, the same thing on page 25, that ``we are 
actively developing a plan.''
    And I am not pointing my finger at you. We are all 
responsible here. But, you know, if you went out prime-time and 
told this to the public, ``I want you to feel a lot better 
about this because we are actively developing an audit plan,'' 
what the heck? I mean, I am sure in our individual offices, as 
would be the case with somebody who runs a shoe store, a bike 
store, or a barber shop, they are doing this kind of stuff 
every single day. Why in the world would the military culture 
start thinking that there was an option on doing audits?
    Ms. Ugone. What you refer to on page 25 of the testimony is 
section 852, which was legislated by Congress for the service 
audit agencies to work with us, coordinate with us on a plan to 
look at depot maintenance. Because when we draw down, there is 
going to be an enormous amount of reset issues. Our depot 
maintenance capability, which is a whole other arena that we 
could probably talk about, they are a very complex issue.
    So this audit plan is actually to be able to focus more 
accountability and oversight of what we know will be heavy 
contractor involvement, as well as in-house involvement, in 
depot maintenance. I mean, this is a huge area as we reset our 
equipment that return back from Iraq and also from the 
standpoint of the proper mix of what is going to be in depot 
maintenance. And that is an issue of proper mix of contractors 
and government employees.
    So this audit plan, as Congress recognized, is an important 
piece of providing accountability over that side of the house.
    Mr. Kingston. I appreciate it.
    Mr. Moran. The gentleman's time has expired. But I might 
mention, in this report, they do make the point that it has not 
just a matter of lack of quantity; it is also of quality. Many 
of the best government negotiators are scooped up by the 
private sector to work on their behalf. And that is why we have 
a constant need for training, promotion, and enhancement of the 
quality.
    Mr. Kingston. Absolutely.
    Mr. Moran. Mr. Boyd.

                      PROCUREMENT AND ACQUISITION

    Mr. Boyd. Thank you, Mr. Chairman.
    Panel, thank you for your service.
    I think everyone here understands we have a serious problem 
in procurement and acquisition in our Federal Government. And 
probably everybody here understands that the Department of 
Defense is the worst abuser of that procurement system. And I 
think it is good that we try to understand what has happened in 
the past. It leads us to where we go in the future.
    But I want to shift gears, if I might, Mr. Chairman, and 
talk about where we go in the future. And I know, relative to 
Mr. Frelinghuysen's line of questions and Ms. Kaptur's, we 
focused a lot on what has happen in the past.
    And, Mr. Chairman, I know everybody here understands that, 
as Mr. Frelinghuysen said, we do have a new sheriff in town--I 
don't think you used exactly those terms, but something like 
that--and the new administration understands this issue and is 
focusing on it.
    Now, there was a fiscal summit this week. And for those of 
you who weren't there, you only read the press clips, and you 
really didn't get into the guts of it. But there were five 
particular issues, five issues, that that fiscal summit focused 
on. The sexy ones are health care and taxes and budget reform 
and stuff like that. But the fifth one was procurement. You may 
not know that, but procurement and acquisition, Federal 
procurement and acquisition.
    And the President put together a team across the political 
spectrum to deal with those issues. And Senator John McCain, 
sort of, headed that team. And so I want to make sure everybody 
understood that we are going to have an opportunity, as a 
legislature, to delve into this, because the administration 
clearly understands the gravity of this problem and will want 
to help solve it.
    So, Mr. Chairman, I wanted to make sure all the Committee 
members knew that, and the Committee staff, that there will be 
ample opportunity to work on these kind of problems to improve 
the situation, not just look at what has been wrong in the 
past.
    Now, my question for you, Mr. Heddell, is--I have two quick 
questions, and it won't take long. In the 2009 Defense 
Authorization Act, the director of the OMB was required to 
develop a single consistent definition of an inherently 
governmental function. Now, the director was supposed to 
address deficiencies with existing definitions and develop 
criteria that each government agency, each department, could 
identify positions that should not be contracted out.
    In that act, in that law, he was given 1 year to report 
back to Congress on the new definition. Now, obviously, we have 
had a change in the OMB office, a change in the administration. 
Can you, do you have any information as to the status of that 
effort, the OMB's effort to help the heads of the agencies 
better understand which positions are inherently governmental? 
And what plans does the OMB have in place to ensure a smooth 
transition of what has already been done?
    Mr. Heddell. I can't answer that, sir.
    Mr. Boyd. You can't answer that.
    Mr. Heddell. No, sir.
    Mr. Boyd. Okay. That is all I have, and maybe we could ask 
that of another expert, Mr. Chairman.

                       AUDITS AND INVESTIGATIONS

    Mr. Moran. Is it not true, though, Mr. Inspector General 
that you do have some survey work going on, there are some 
classifications that some agencies have used to determine what 
is an inherently governmental role? We are working on that, are 
we not?
    Mr. Heddell. Well, it is something, Mr. Chairman, that, by 
virtue of our audit and investigative work for one thing, we 
are constantly addressing that issue when it comes up in our 
audits and investigations with the Department. So we know that 
they are constantly sensitized to our concern about that.
    We know that the law--in fact, I think the laws are pretty 
clear on that. I don't know that there is even any need for any 
additional language in the law. If the law is followed, I don't 
think there is going to be a problem with regard to that matter 
of definition. I mean, I think it is fairly clear.
    Mr. Boyd. Mr. Chairman, one quick follow-up question.
    Do you know of any interaction or communication between the 
OMB office and the Department of Defense relative to this 
directive in public law in the Defense Authorization Act?
    Mr. Heddell. No, sir, I am not personally aware of any. But 
there may have been. I don't know of any.
    Mr. Boyd. Okay, thank you.
    Thank you, Mr. Chairman.
    Mr. Moran. Thank you very much, Mr. Boyd.
    Ms. Granger.

                        INHERENTLY GOVERNMENTAL

    Ms. Granger. I am going to follow up on what Congressman 
Boyd asked about, and it is not the definition--and this is 
pretty simple, I am sure, for you. But, in making those 
decisions, this is going to be inherently a governmental 
position or contractor, then, in that comparison, we have 
looked at national security, we have looked at cost, we have 
looked at effectiveness, are we comparing, like, just paycheck 
to paycheck and say it is cheaper to have a contractor? Are we 
looking at all the benefits, all the entitlements? How do we 
make a comparison of the actual cost, at that point?
    Mr. Heddell. Your question absolutely gets to the core of 
the entire problem, because we have thousands of contractor 
officials and executives out there that are purchasing 
materials and services, and there is no--we can't tell you what 
they are doing, how they are doing it, or when they are doing 
it. And we don't know what their motives are in terms of--for 
instance, we don't know if they really understand the 
definition of what is inherently governmental. We don't know 
what their motives are when they purchase.
    I mean, for instance, Congressman Kingston asked the 
question, what has been done about this? But if a military 
official were sitting here as a devil's advocate, they would 
say, ``Look, we did our job. We got that material and those 
services out there on the front line as quickly as we could. It 
cost us, perhaps, but we got it out there. And we are saving 
lives by doing it.''
    This is not a simple issue, unfortunately. But what we have 
learned is that, no matter how expediently you think it should 
be done, it is not worth it to overlook the fiscal issues. 
Because every dollar that we lose is a dollar that doesn't go 
out there and support our troops.
    There is a lot that we need to do to improve this whole 
process. And, as I said earlier, it is not a simple matter of 
making personnel decisions. It is a matter of balancing. It is 
a matter of making sound, reliable, quantifiable analysis of 
the entire issue regarding a particular product or service.
    Ms. Granger. But as we are making a decision on that 
personnel, part of that has to be, what is the real cost of 
that person, whether that person is a contractor, whether that 
person is a government employee. And is that his disability or 
her disability, her retirement, her health care, are we looking 
at that? And is that consistent? I think the answer is no.
    Mr. Heddell. I don't know. In fact, I will defer to Mary. 
She may be able to answer that a little better than I can. I 
don't know the answer to that question.
    Ms. Ugone. Let me see if I can try and answer.
    When we look at this inherently governmental function, if 
you look at the FAR, the Federal Acquisition Regulation 
specifies what is inherently governmental, and then they give 
examples of what is not inherently governmental. And I think 
there is an education and interpretation issue of what we don't 
think is inherently governmental.
    Let me just give you an example. Assisting in preparing the 
statement of work. Well, how much is ``assisting''? Assisting 
could be doing, doing all of it, doing the first draft; that is 
assisting.
    So I think part of it is clearly an educational issue. I am 
not sure people understand what they mean with ``inherently 
governmental.'' It could be easy just to say it is a decision-
making process. But there are a lot of decisions we make.
    So, if you look at the FAR, you could take what is not 
inherently governmental and put your own interpretation to it. 
And, you know, people in this room could probably interpret it 
many different ways. So I think that is a fundamental issue 
there, too.
    And also I think the Department has recognized, by going 
back to insourcing, trying to find ways where it makes sense to 
bring those functions that really are inherently governmental, 
bring them back in. And that is through section 324.
    And that is also, in answering Congresswoman Kaptur, is 
that there is no--when you really look at it and you look at 
the total picture, there is no inventory of services 
contractors. There is no inventory of how we are managing our 
contracts at this level. How are we managing our contractors? 
How do we manage the mix? What is the strategy? There is no 
strategy.
    So, I think there are a lot of interrelated issues, 
inherently governmental, services contracting, pricing. If you 
look at these contracting issues, they all interrelate--skilled 
workforce--they all interrelate.
    I hope I answered your question.
    Mr. Heddell. You know, if I can just add, the Department, 
on this whole issue of inherently governmental, I mean, does 
have a policy. And they, in fact, they list numerous examples 
of what inherently governmental is. I mean, they go way beyond 
the definition. They go down to the----
    Mr. Moran. So this goes to Mr. Boyd's question, as well, 
and Ms. Granger's. There is work done. It is not that they are 
mindless of the issue of the distinction. Excuse me for 
interrupting.
    Mr. Heddell. No, I think that they fully understand it is 
an important issue. But I don't think that--I think every case 
is separate, sir. And whether they even consider the issue is 
maybe the first question. And then, if they do consider it, do 
they really understand what ``inherently governmental'' means?
    And then I guess you might even ask, do they care? I am not 
sure I would go that far. I believe the Department of Defense 
does care. I just think it is a matter, many times, of just not 
knowing.
    Mr. Moran. Well, what the Army did in having the list that 
they made available was helpful because people could consult 
that, as to what would normally be considered inherently 
governmental. And then there is the issue of cost. If it is a 
short-term responsibility where you can hire somebody without 
having to pay them benefits and be responsible for them for the 
rest of their career, there is that economic consideration.
    This is a very good line of questioning. Thank you, Ms. 
Granger.
    Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Mr. Chairman.
    Mr. Moran. We have three votes, but I think we can finish 
this up before we have to leave for the votes. But anybody that 
wants to should feel free to.

                           CONTRACT OVERSIGHT

    Mr. Hinchey. Thanks very much for your testimony and your 
response to these questions. It is a fascinating set of 
circumstances, and obviously a set of circumstances that has to 
be dealt with effectively.
    Based upon the questions, you remind us that the corruption 
and incompetence involving military operations is not unique in 
the context of the last several years. It has happened before. 
But what we are dealing with now is also very serious and needs 
to be dealt with effectively.
    One of the numbers, for example, that I understand is that 
the defense obligations and contract acquisitions increased 
from somewhere around $190 billion in 1997 to up to about $430 
billion in 2007. But at the same time it went up, the people 
overseeing those contracts went down. More and more money is 
being spent, more and more money is being spent wastefully, 
incompetently, corruptly. And the number of people who are 
obligated and responsible to watch that stuff have been reduced 
significantly. It doesn't seem to be an accident; seems to have 
been done intentionally.
    What are your observations about that and about the way it 
has been operated? And how many oversight employees do we have 
right now focusing on the seriousness of this issue?
    Mr. Heddell. Well, I can't say that it has been 
intentional, Congressman.
    Mr. Hinchey. No, I am going to say that. You don't have to.
    Mr. Heddell. But I can tell you that it is a serious, 
serious problem. I can tell you that, if this matter is not 
addressed, probably not just within the Department of Defense, 
I would bet government-wide, we are going to be in even more 
serious trouble. It has to be addressed.
    We have to make very clear, very intellectual decisions 
regarding what we buy, what we are going to pay for it, and 
what it is going to do for us. And then we have to decide what 
is most important, because we don't have money to buy 
everything. But we clearly don't have enough contracting 
officials to do the work that is out there.
    So it is either, don't buy as much, don't do as much 
contracting, or find more people that can handle it.
    Mr. Hinchey. So the problem, obviously, is in the context 
of funding, all the money that we have lost, all the money that 
has been misused, all the money that has been poured into 
people for whatever the reason, whether it was intentional or 
just sloppy.
    But there is also a downgrade in security because of the 
way in which military operations have been manipulated and the 
way in which military materials have been lost.
    Mr. Heddell. Well, we haven't even begun to talk about the 
fraud issue, which Mr. Beardall could address at great length, 
here today. That is a big concern of ours, also, because when 
you don't have controls, the opportunity for fraud is there. 
And we have many examples of that having occurred in recent 
years as a result of poor contract oversight.
    Mr. Beardall. It is the sad truth, but that is what it is. 
And it gets worse and worse and more difficult.
    And I think some of it goes back to the fundamental 
struggle with, how big of an army do you want to have? And that 
has been the issue, with the size of the military. And as you 
cut down the size of the military, where people used to do 
contract oversight--you used to have lawyers who were contract 
law specialists and those folks who are now getting paid better 
by contractors. It is that struggle where, once you are not 
doing it yourself, where you have controls, you have a very 
good structure in the military to oversee those things, and 
then you have to then farm that business out because your 
military is small, you will always then have: Now we are 
farming it out, and then you get to the question of what is 
inherently governmental. We wouldn't even have to ask that 
question if we had our own folks to do the work internally.
    Mr. Hinchey. If you make the military small because you 
don't want to engage in actually requiring civilians to come in 
and be involved in the military because you don't want to get 
that as a political issue, well, then you have created another 
part of the problem.
    I just have one last question, if I may, Mr. Chairman.
    In your written statement, you identify an important 
potential security risk. And you noticed that there are 212,000 
Department of Defense contractors with e-mail addresses. And 
that classifies them as government personnel. So they have 
access to huge amounts of information--not just information, a 
whole host of other things as well.
    How serious is this? What has happened? What are some of 
the effects that have taken place? Have you had an opportunity 
to look into that, or is this something that we are going to 
have to do?
    Mr. Heddell. We have only looked at the aspect of whether 
or not people who have this access have gotten security 
background checks done. Keep in mind that even if a person has 
access to information, there are levels of classification, and 
they would have to have additional access codes, et cetera, to 
gain that access.
    Are we concerned? Absolutely. We still are concerned.
    Mr. Hinchey. Well, whatever recommendations you might have 
on that I think would be very important because of the insight 
that you have on it and the experience that you have had 
investigating it. And what needs to be done additionally, that 
kind of information would be very, very important to this 
committee and to the Congress generally.
    Mr. Heddell. We are doing additional work in both southwest 
Asia and Korea. We will be. And we will make that one of the 
things that we will----
    Mr. Hinchey. Thank you very much.
    Mr. Moran. Thank you, Mr. Hinchey.
    The Committee will want to be kept apprised of your 
progress on that. It is a very serious concern.
    Ms. Kilpatrick.

                           COMMON ACCESS CARD

    Ms. Kilpatrick. Thank you, Mr. Chairman.
    I am scared to death, sitting here. I have heard what you 
said. I read your testimony last night. It is even more 
flagrant when I hear you give it. And thanks to you and your 
staff for being here and for your knowledge.
    The Common Access Cards, first of all, did they start in 
2006 or 2007?
    Mr. Heddell. October of 2006. The current what is called 
the Common Access Card was implemented as a result of HSPD-12.
    [The information follows:]

    Common Access Cards were not created in response to HSPD-12, but 
were in use prior to HSPD-12. A new generation of the Common Access 
Card was implemented as a result of HSPD-12, and the Department began 
issuing the new HSPD-12-compliant Common Access Cards in October of 
2006.

    Ms. Kilpatrick. Right. I wanted to make sure I had the year 
right. It sounds like it is totally inoperable, a security 
breach, and anybody can get one.
    Mr. Heddell. I would say this: As I said, we are concerned. 
We do not believe that the Department can provide full 
assurance that the people that are intended to have that card 
are in fact the ones who have it. So we do have concerns.
    Ms. Kilpatrick. Major. I mean, that right there is a start. 
Because if we have contractors who are monitoring the 
contractors and giving fraudulent cards, and it sounds like, 
from what I read last night and hearing you today, it is out of 
control and unable to monitor in its current state.
    Mr. Heddell. Well, it is potentially much greater than just 
a matter of the issue of inherently governmental.
    Ms. Kilpatrick. Right. It is much broader. It is much 
broader than that.
    Mr. Heddell. It is a potential national security issue, and 
we are concerned.
    Ms. Kilpatrick. So, should we be handling it? If you tell 
me it is being handled and we know it is out of order and you 
have turned that over and Pentagon are now addressing that--can 
you tell me that today?
    Mr. Heddell. No, ma'am. That is why we are beginning two 
new audits, one in southwest Asia and one in Korea, because we 
are following up to determine what the new status of this is.
    Ms. Kilpatrick. Okay. I know what you do, and you do it 
well. I don't know if it is Congress's responsibility or our 
Chairman--and I love how our two Chairmen work together--that 
we have to do something with this. And it is not acceptable to 
this Rep, and I am sure it is not to any of the congressional 
people sitting here.
    You alluded to the KBR employee. And this is another 
fraudulent thing. I guess they are contractors; most KBRs are.
    Mr. Heddell. Well, the KBR staff around the world have 
these contractor Common Access Cards issued to them, yes.
    Ms. Kilpatrick. And they also issue cards, some of them.
    Mr. Heddell. Well, we found in use--we did a sample of 30, 
and we found that one KBR employee had the authority to issue 
other KBR employees----
    Ms. Kilpatrick. It has to be centralized somewhere, and I 
would rather that be a governmentally inherent responsibility 
rather than a contractor doing it.
    Mr. Heddell. It is not just a preference, it is a 
requirement. It has to be a government employee to authorize or 
sponsor the issuance of that card. It cannot be a contractor.
    Ms. Kilpatrick. In this particular case, the employee 
worked in Afghanistan. He was sentenced to 26 months in prison 
and a $216,000 restitution. After receiving the gas, according 
to your comments this morning, receiving it, selling it back, 
making the bribe, taking--I mean, it is like six layers. And 
all he got--I want him in jail longer, first of all, and I want 
him to pay back all the money. So it seems like the military 
court was too lenient, because it is an example to continue the 
fraud and abuse.
    Mr. Beardall. It was the Federal district court.
    Ms. Kilpatrick. He must have known the judge.
    Mr. Heddell. If it were a court-martial, it would be a lot 
more than that.
    Ms. Kilpatrick. Okay, then somebody has to say that. 
Somebody has to say that. That is a very light fine, from what 
I read last night and you reinforced today in your opening 
comments.
    I still want to believe we have the best military in the 
world.
    Mr. Heddell. I think we do.
    Ms. Kilpatrick. That things happen, and from time to time 
we will have to correct them. But all the IGs that do your 
work, it is up to the Congress and the Executive Office to take 
action. This that I have been reading in the last 24 hours is 
very troubling to me. I commend you for the work you do.
    Mr. Chairman, I am not sure where it goes from here. And I 
heard all the comments from my colleagues this morning. This is 
very serious. I don't know how you can fight two wars, and we 
are about to expand in Afghanistan and do all this stuff, and 
have all this going on.
    If a contractor--and we already know, I would rather have 
government employees. I want a larger military if that is what 
it takes. I don't know where it came from; shrink the military, 
cut off the monitors and hire all the contractors. It is very 
dangerous. And I think we have to fix it sooner rather than 
later.
    Thank you for your testimony.
    Mr. Moran. Thank you, Ms. Kilpatrick.
    I think the committee staff is planning on having an 
extensive section of the report on the bill dealing with this 
subject area. So any member of the committee who would like to 
contribute to that, I would hope they would.
    Mr. Dicks had a quick question, and then Mr. Kingston if we 
still have time.
    Mr. Kingston. I will pass.
    Mr. Moran. Okay. Fine, Jack. Thanks.

                         ACQUISITION PERSONNEL

    Mr. Dicks. Let me ask you a question. When we were talking 
about the personnel for the acquisition, in some departments I 
understand that they have a private contractor with a Web 
site--and I think DOD does this--to bring in the personnel. Is 
that correct?
    So it would seem to me to be an inherently government 
function, you know, the hiring of personnel to do acquisition, 
is being done through a contractor and a Web site. Is that 
correct?
    Mr. Heddell. I am not aware of that, sir. It may be 
correct. I am not aware of that.
    [The information follows:]

    The Director of Defense Procurement responded that he was not aware 
of any use of a private contractor with a website for hiring 
acquisition personnel.

    Mr. Dicks. Yeah, I think that is something you might want 
to take a look at.
    Also, the whole question on personal service contracts, I 
don't know if you got into that.
    Mr. Heddell. We have. Well, I mean, we have done work in 
that area.
    Mr. Dicks. Are we reversing that? Apparently, they went 
beyond the legal authority to do this to services, and now we 
are talking about insourcing some of this.
    The other thing I would just point out, you know, under A-
76, they should be using the A-76 process, which I think they 
are not doing, under pressure. And can you talk about that?
    Mr. Heddell. I can tell you that we have completed audits 
where we felt that there was a strong appearance of violating 
the personal services contracting rules. And, in fact, one was 
an audit that we recently did, and although I am pretty 
familiar with it, I think it might be worth it to have Mary 
explain that, if you have a moment. It is an interesting audit, 
and it goes to your question.
    Ms. Ugone. Personal services contracts, as I am sure you 
are aware, Congressman Dicks, is not the preferred method. And, 
in fact, I think it is not legal, except in certain 
circumstances there are waivers for that. And that is a 
situation in which we are having a government employee directly 
supervising contractors to the point where it is a daily 
ongoing supervision.
    We had ``America Supports You,'' an audit report that we 
issued that had to do with it. And we did not go as far to say 
it was personal services, but it had some of the 
characteristics of a personal services contract, which is 
verbal direct communication to the contractor of how to 
proceed, what to do. And that does trouble us, from that 
standpoint.
    We have not done a significant amount of work in personal 
services contracting, but the area that we are focused--and it 
is part of the overall services contracting area. I think the 
whole area of services contracting is an area that needs 
additional focus, because it is for services. It is not like 
your traditional, you know, you buy an end item and you have a 
deliverable that you can actually touch and feel. Services 
contracting is a lot more problematic, where you are actually 
having some sort of service done that you may not necessarily 
touch and see and feel.
    And so I think that, absolutely, personal services 
contracts we should not be using. And, in fact, if we are, they 
are illegal except under certain waivers circumstances.
    Mr. Dicks. Do we have any idea on numbers of these personal 
services contracts?
    Ms. Ugone. We don't even have any idea of the number of 
services contracts that we have. In fact, that is what the--I 
think it was section 807, which Congress had asked that the 
Department implement. And so there is a phased approach. I 
think the Army is supposed to be identifying an inventory in 
two phases, and the other services kick-in in, I believe, 2010, 
yes, fiscal year 2010, and then other defense agencies will 
kick-in in 2011 to report to Congress an inventory of services 
contracts. We don't even currently have an inventory right now.
    Mr. Moran. Mr. Dicks, we are out of time in the vote. We 
are all going to have to run up there, unfortunately.
    This has been a very good hearing. We thank you very much. 
I have some questions that I will submit for the record. Any 
other member who does, as well, will get them answered for the 
record.
    Thank you very much, Mr. Inspector General, and your very 
competent staff. Thank you. Your colleagues were very good, as 
well.
    [Clerk's note.--Questions submitted by Mr. Moran and the 
answers thereto follow:]

                       Advance Competition Notice

    Question. Numerous defense industry representatives have discussed 
with me the importance of the Government providing industry with 
greater advance notice of when an existing contract (i.e. re-compete 
with an existing incumbent contractor) or a new contract (i.e. new 
start with no incumbent contractor) acquisition is to take place so 
that it can align and allocate business development capture and 
proposal resources to targeted procurements.
    What is your perspective of the job the Department of Defense does 
today at providing industry with such advance procurement notices, 
which maximizes the potential for competition, thereby resulting in 
reduced Government cost and are there opportunities for improvement?
    Answer. During the past five years, we have issued 31 reports that 
have addressed sole source or directed source awards. We have found 
that sole source awards have occurred because of poor acquisition 
planning rather than the urgency or uniqueness that have been cited as 
the need for a particular source. We have also found problems with 
advance notice to contractors on multiple award contracts. Contracting 
officers have limited the amount of time for contractors to respond to 
solicitations for proposals or have cited inappropriate exceptions to 
competition to select a particular contractor.

                        Sole Source Contracting

    Question. One area of contracting concern is sole source contracts.
    Does the Department of Defense know how many active sole source 
contracts there are by name, contract #, the period of performance, the 
contract amount, the company awarded the sole source contract, the last 
time the contract was competed, and the sponsoring organization and 
their FAR rationale for the sole source contract award?
    Answer. The Federal Procurement Data System (FPDS) captures a 
variety of information about DoD as well as other Federal contracts. 
Similar information is also reported on the USAspending.gov website. 
For instance, in FY 2008, a query of DoD contract dollars by 
competition type shows that of $383 billion reported, only $131 billion 
was fully and openly competed. The remaining contract awards were based 
on more limited or no competition.

                         Appropriate Oversight

    Question. It appears that in many federal agencies, both within and 
outside of DoD, greater and greater emphasis is being placed on the 
seamless and rapid obligation of appropriated funds. This transactional 
focus manifests itself when acquisition management systems have been 
subsumed into the agency's overall financial management solution. I am 
concerned that the strategic importance of acquisition management (e.g. 
contract writing) systems and the required checks and balances that 
these systems historically have provided have been diluted tremendously 
since they are now considered by many to be simply a ``back office'' 
non-core feeder system to the financial management system.
    Please comment on what is being done to reinvigorate the necessary 
checks and balances and the strategic importance of acquisition 
management systems to combat waste, fraud and abuse, and maximize the 
benefit that each taxpayer dollar is being spent wisely and in 
compliance with federal law and regulation?
    Answer. We have issued a number of reports that have cited problems 
with attempts to rapidly award procurements. Our audits have found that 
urgent awards are often improperly justified. Additionally, the Panel 
on Contracting Integrity has taken on a number of contracting 
initiatives designed to improve the contracting process and reduce the 
risk of fraud, waste and abuse. The Panel established 10 subcommittees, 
to include (1) the current structure of contracting integrity, (2) 
sustained senior leadership, (3) capable contracting workforce, (4) 
adequate pricing, (5) appropriate contracting approaches and 
techniques, (6) sufficient contract surveillance, (7) contracting 
integrity in a combat/contingent environment, (8) procurement fraud 
indicators, (9) contractor employee conflicts of interest, and (10) 
recommendations for change. The Panel identified 21 actions for 
implementation in FY 2008 to improve contracting, and has identified 28 
new actions for FY 2009.

                   Role of the DoD IG in Contracting

    Question. There is some concern in the contracting industry that 
DoD IG staff are now performing more roles during contract negotiations 
between contractors and the GSA. Specifically, that these DoD IG 
advisors are not participating in negotiations with rather than GSA 
contracting officers.
    What is the proper role of the DoD IG in instances where 
contractors are negotiating GSA schedules contracts with the GSA?
    Answer. My office has no role in negotiating GSA schedules between 
GSA contracting officers and contractors. The GSA IG has primary 
oversight of GSA contracting actions. Over the past several years, the 
DoD IG was mandated to perform joint reviews with the GSA IG of 
interagency direct and assisted contracting actions using DoD funds. 
These audits have looked at contract actions that have already been 
awarded and while we may have looked at issues related to the award of 
these actions, none of our work was done during the actual pre award 
phase for these actions.

                           Cleared Personnel

    Question. One of the impediments to processing contracts and 
execution of those contracts in a timely manner is the availability of 
cleared personnel, both within the acquisition and contracting force 
for the government and with the contracting industry.
    Can you comment on the challenges that the current clearance 
process presents to our contract management and execution?
    Answer. The clearance process has become mired due to the failure 
of federal agencies to rely upon clearances processed by other federal 
agencies. This inability and several other inefficiencies are being 
addressed through the development of a federal strategy to improve the 
accessibility of federal investigative records. The Repository Reform 
Implementation Team is working with the Office of Personnel Management 
and the Joint Reform Team to remove obstacles to developing a fully 
automated, end-to-end capability, which processes record requests and 
record responses in optimal time. This would apply to reports of 
background investigations and federal records of Executive Branch 
agencies requested in support of those investigations. While the team's 
long term goals will be accomplished by automation, short term goals 
will be accomplished by agency accountability and incrementally 
increasing performance standards.

    [Clerk's note.--End of questions submitted by Mr. Moran. 
Questions submitted by Ms. Kaptur and the answers thereto 
follow:]

    Question. I am interested in the evolution of the culture of 
contracting within the Department of Defense and its changing nature 
over time and its impact on the ``Espirit de corps'' within the U.S. 
military.
    Answer. The DoD IG does not have a body of work to use as support 
for responses to these questions. As such, in response to 
Representative Kaptur, we utilized three publications that are in part 
responsive to her questions.
     Congressional Budget Office report, ``Contractors' Support 
of U.S. Operations in Iraq,'' released August 2008 (http://www.cbo.gov/
ftpdocs/96xx/doc9688/08-12-IraqContractors.pdf)
     Assistant Deputy Under Secretary of Defense for Program 
Support point paper, ``Contractor Support of U.S. Operations in 
USCENTCOM AOR, Iraq, and Afghanistan,'' released February 2009 (http://
www.acq.osd.mil/log/PS/docs/5A_Feb2009.doc)
     Special Inspector General for Iraq Reconstruction report, 
``Agencies Need Improved Financial Data Reporting for Private Security 
Contractors,'' released October 30, 2008 (http://www.sigir.mil/reports/
pdf/audits/09-005-fpdf)
    What was the total number of contractors during World War II?
    Answer. The Congressional Budget Office report, ``Contractors' 
Support of U.S. Operations in Iraq,'' released August 2008, estimated 
that during World War II there were 734,000 contractors and 5,400,000 
military.
    Question. What was the number of contractors during the Persian 
Gulf War?
    Answer. The Congressional Budget Office report, ``Contractors' 
Support of U.S. Operations in Iraq,'' released August 2008, estimated 
that during the Gulf War there were 9,000 contractors and 500,000 
military.
    Question. What is the current number of contractors in the wars in 
Iraq and Afghanistan?
    Answer. The Assistant Deputy Under Secretary of Defense for Program 
Support recently reported that as of the end of the 1st quarter FY 2009 
there were approximately 259,400 contractor personnel working for the 
DoD in the USCENTCOM AOR, broken down as shown in the following chart:

Iraq.......................................................     148,050
Afghanistan................................................      71,755
Other USCENTCOM............................................      39,616
                                                       ---------------

          Total............................................     259,421

    Question. What were the responsibilities and assignments of 
contractors during those two conflicts?
    Answer. The aforementioned reports do not address the 
responsibilities and assignments of contractors during those two 
conflicts, and the DoD IG does not have a body of work to address this 
question.
    Question. What are the current contractor responsibilities in the 
current wars in Iraq and Afghanistan?
    Answer. The Assistant Deputy Under Secretary of Defense for Program 
Support [ADUSD (PS)] recently reported the contractor breakdown by type 
of service provided in Iraq as of the end of the 1st quarter FY 2009. 
The contractor breakdown for Iraq is detailed below; the ADUSD(PS) 
report did not provide a similar breakdown for Afghanistan.

Construction...............................................      20,729
Base Support...............................................      80,931
Translator/Interpreter.....................................       9,268
Transportation.............................................       6,685
Security...................................................       8,380
Communication Support......................................         700
Other......................................................      21,357
                                                       ---------------

        Total..............................................     148,050

    Question. Has there been an expansion of the missions contractors 
are providing?
    Answer. We cannot state for certain whether there has been an 
expansion of the missions of contractors. However, all contractor 
requirements are to be stated in the contract and any subsequent 
contract modifications. Accordingly, any expansion of contract 
requirements would be specified and approved by DoD.
    Question. Provide a breakout by category of responsibility.
    Answer. The Congressional Budget Office report, ``Contractors' 
Support of U.S. Operations in Iraq,'' released August 2008, and the 
Assistant Deputy Under Secretary of Defense for Program Support point 
paper, ``Contractor Support of U.S. Operations in USCENTCOM AOR, Iraq, 
and Afghanistan,'' released February 2009, list the following types of 
services as being provided by contractors in Iraq and Afghanistan.
     Professional, Administrative, and Management Support
     Construction of Structures and Facilities
     Fuels, Lubricants, Oils, and Waxes
     Subsistence (Food)
     Lease or Rental Facilities
     Maintenance, Repair, or Alteration of Real Property
     Utilities and Housekeeping Services
     Maintenance, Repair, and Rebuilding Equipment
     Research and Development
     Architect and Engineering--Construction
     Translator / Interpreter
     Transportation
     Security
     Communication Support
     Other
    Question. Provide a breakout of contracts for contracted security 
forces.
    Answer. The Assistant Deputy Under Secretary of Defense for Program 
Support point paper, ``Contractor Support of U.S. Operations in 
USCENTCOM AOR, Iraq, and Afghanistan,'' released February 2009, 
reported the following distribution of private security contractors 
(PSC) in Iraq and Afghanistan as of the end of the 1st quarter FY 2009:

----------------------------------------------------------------------------------------------------------------
                                                                                                    Local/host
                                                       Total    U.S. coalition   Third country       country
                                                                                    national         national
----------------------------------------------------------------------------------------------------------------
Total DoD PSC in Iraq...............................    9,218              782            7,226            1,210
Armed DoD PSC in Iraq...............................    8,701              727            6,909            1,065
Total DoD PSC in Afghanistan........................    3,689               15               23            3,651
Armed DoD PSC in Afghanistan........................    3,184               12               18            3,154
----------------------------------------------------------------------------------------------------------------

    Question. Provide an analysis of Department of Defense and 
Department of State contracted security forces.
    What are the total dollars spent by both Departments?
    Answer. The DoD IG does not have a body of work to support a 
response to this question and we were only able to identify responsive 
information related to Iraq. The Special Inspector General for Iraq 
Reconstruction (SIGIR) in its report, ``Agencies Need Improved 
Financial Data Reporting for Private Security Contractors,'' released 
October 30, 2008, stated that as of September 2008, the obligations of 
reconstruction funds for private security contracts by agency in Iraq 
were as follows:

------------------------------------------------------------------------
    Fund source  (in millions)         DoD          DoS         USAID
------------------------------------------------------------------------
Multiple Funds Used for Contract.       $712.0     $1,443.3       $493.8
Operations and Maintenance             1,150.1          0.0          0.0
 Account.........................
Iraq Relief and Reconstruction           310.7        422.4        127.1
 Fund............................
Iraqi Security Forces Fund.......        244.1        254.5          0.0
Diplomatic and Consular Programs           0.0         97.7          0.0
 Fund............................
Economic Support Fund............         67.6          0.0         14.7
Development Fund for Iraq (Iraqi          71.9          0.0          0.0
 funds)..........................
Fiscal Year 2007 Supplemental....          0.0         71.6          0.0
Seized Assets....................         16.8          0.0          0.0
Commander's Emergency Response            11.0          0.0          0.0
 Program.........................
Iraq Freedom Fund................          7.9          0.0          0.0
Fund Source Not Identified.......        331.2          0.0        105.1
                                  --------------------------------------
    Total........................     $2,923.3     $2,289.5       $740.7
------------------------------------------------------------------------

    SIGIR further reported that as of September 2008, obligations for 
private security services by agency in Iraq were as follows.

------------------------------------------------------------------------
  Security service (in millions)       DoD          DoS         USAID
------------------------------------------------------------------------
Multiple Services Provided.......       $962.9     $1,875.4       $314.7
Static...........................        893.4        414.1        108.5
Convoy...........................        185.9          0.0          0.0
Personal Security Detail.........        163.3          0.0          7.4
A & P Advice and Planning........         17.7          0.0          0.0
Escort...........................          1.8          0.0          0.3
Security Service Not Identified..        698.2          N/A        309.8
                                  --------------------------------------
    Total........................     $2,923.3     $2,289.5       $740.7
------------------------------------------------------------------------

    Question. Who were the contracted security forces?
    Answer. The DoD IG does not have a body of work to support a 
response to this question and we were only able to identify responsive 
information related to Iraq. The Special Inspector General for Iraq 
Reconstruction in its report, ``Agencies Need Improved Financial Data 
Reporting for Private Security Contractors,'' released October 30, 
2008, provided the following chart for Total Obligations for 
Contractors with Direct Contracts or Subcontracts for Private Security 
Contractors (PSCs) by U.S. Agency since 2003 (in $ Millions):

----------------------------------------------------------------------------------------------------------------
                    Contractor name                      Direct   Sub        DoD           DoS          USAID
----------------------------------------------------------------------------------------------------------------
Blackwater Worldwide..................................        7      2       $27.740    $1,147.020       $31.290
Aegis Defence Services LTD............................       19      2       798.621             0             0
DynCorp International LLC.............................       10      3        31.428       659.220             0
Triple Canopy, Inc....................................       35      0       106.932       422.233         0.291
EOD Technology, Inc. (EODT)...........................      295      0       328.665             0             0
Sabre International Security..........................       25      3       225.816             0        58.666
Special Operations Consulting-Security Management            35      2       271.856             0             0
 Group (SOC-SMG)......................................
Agility Logistics.....................................       23      0       183.030             0             0
Unity Resources Group.................................        0      2             0        50.000        92.951
ArmorGroup............................................       22      7        91.558             0        46.088
Erinys International..................................        3      8       108.159             0             0
Sallyport Global Holdings.............................        0      3             0             0       101.526
Global Strategies Group...............................        7      1        83.797             0             0
Garda World...........................................        0      4             0             0        74.701
Kroll Associates, Inc.................................        2      2         8.969             0        38.386
MVM...................................................       21      0        38.382             0             0
US Investigations Services (USIS).....................       10      0        35.511             0             0
Vance Global..........................................        0      1             0             0        31.255
Falcon Group..........................................        8      0        29.289             0             0
Hart Group............................................        4      1        26.264             0             0
Olive Group FZ LLC....................................       13      8        17.603             0             0
Control Risks Group...................................        8      3        17.213             0             0
Custer Battles........................................        1      0        16.840             0             0
CSS Global, Inc.......................................      112      0        15.016             0             0
Total Defense Logistics...............................       13      0        12.710             0             0
Iraqi Contractor #4...................................        0      1             0        10.800             0
Reed Incorporated.....................................        8      0         9.235             0             0
Universal Security....................................       86      0         8.523             0             0
Edinburgh International...............................        2      2         4.989             0             0
Raymond Associates....................................        5      0         4.944             0             0
BLP...................................................        1      0         4.185             0             0
Rover Global Services, Ltd (RGS Logistics)............       46      0         3.883             0             0
ISI Group.............................................        1      3         3.838             0             0
Securiforce International.............................       73      0         3.408             0             0
SAL Risk Group Ltd....................................       63      0         1.861             0             0
American-Iraqi Life Support Solutions.................        1      0         1.614             0             0
Sandi Security Company................................        1      0         1.575             0             0
Panalpina.............................................        0      1             0             0         1.137
Blue Hackle Middle East...............................        3     25         0.904             0             0
Overseas Security & Strategic Information.............        2      0         0.781             0             0
Threat Management Group...............................        2      0         0.500             0             0
BH Defence............................................        1      0         0.179             0             0
Iraqi Contractor #1...................................        0      1             0         0.119             0
Iraqi Contractor #3...................................        0      1             0         0.054             0
Tetra International LLC...............................        3      1         0.053             0             0
Iraqi Contractor #6...................................        0      1             0         0.047             0
Iraqi Contractor #2...................................        0      1             0         0.034             0
Danubia Global........................................        1      0         0.010             0             0
Iraqi Contractor #5...................................        0      1             0         0.008             0
Peak Group Inc........................................        1      0         0.005             0             0
Cochise Consultancy Inc...............................        1      0             0             0             0
ECC International (ECCI)..............................        1      1           N/A             0             0
Operations Support Technologies.......................        1      0           N/A             0             0
OSSI-Safenet Security Services........................        2      9           N/A             0             0
Janusian Security Risk Management Ltd.................        1      0           N/A             0             0
Paratus World Wide Protection.........................        1      0           N/A             0             0
Pesh--Kurdistan Army..................................        1      0           N/A             0             0
Pilgrims Group Ltd....................................        1      0           N/A             0             0
Iraqi Contractor #28..................................        0      0           N/A             0             0
Askar Security Svcs...................................        2     14           N/A             0             0
Ronco Consulting Corporation..........................        1      0           N/A             0             0
Innovative Technical Solutions, Inc. (ITSI)...........        2      0           N/A             0             0
Rubicon International Services........................        1      0           N/A             0             0
Safe Security Limited (SSL)...........................        1      0           N/A             0             0
Babylon Gates.........................................        1      0           N/A             0             0
TOIFOR................................................       12      1           N/A             0             0
Ellis World Alliance Corp. (EWAC).....................        1      0           N/A             0             0
Britam Defence, Ltd...................................        1      0           N/A             0             0
Burhan Security Services..............................        2      0           N/A             0             0
Wamar International, Inc..............................        0      0           N/A             0             0
Whitestone Group, Inc.................................        1      0           N/A             0             0
Greystone Ltd.........................................        0      1           N/A             0             0
Centurion Risk Assessment Ltd.........................        1      0           N/A             0             0
Lakeshore Engineering Svc, Inc........................        1      0           N/A             0             0
Iraqi Contractor #7...................................        0      1           N/A             0             0
Unity Logistics and Security..........................        1      0           N/A             0             0
DS Vance Iraq.........................................        1      0           N/A             0             0
                                                       ---------------------------------------------------------
    Total.............................................  .......  .....    $2,525.890    $2,289.530      $476.290
----------------------------------------------------------------------------------------------------------------

    Question. What is the breakdown by nationality of individuals 
employed by contracted security forces in Iraq and Afghanistan?
    Answer. The Assistant Deputy Under Secretary of Defense for Program 
Support point paper, ``Contractor Support of U.S. Operations in 
USCENTCOM AOR, Iraq, and Afghanistan,'' released February 2009, 
reported the following distribution of private security contractors 
(PSC) in Iraq and Afghanistan as of the end of the 1st quarter FY 2009:

----------------------------------------------------------------------------------------------------------------
                                                                                                    Local/host
                                                       Total    U.S. coalition   Third country       country
                                                                                    national         national
----------------------------------------------------------------------------------------------------------------
Total DoD PSC in Iraq...............................    9,218              782            7,226            1,210
Armed DoD PSC in Iraq...............................    8,701              727            6,909            1,065
Total DoD PSC in Afghanistan........................    3,689               15               23            3,651
Armed DoD PSC in Afghanistan........................    3,184               12               18            3,154
----------------------------------------------------------------------------------------------------------------

    Question. Between 1997 and 2007 there has been a 331 percent 
increase in the amount of dollars awarded to contractors.
    What has been the increase in the number of contractors during that 
time?
    Answer. The DoD IG does not have a body of work to support a 
response to this question. However, information on contractors is 
available at the USAspending.gov website. A query from this website 
shows that in FY 2008 there were 85,891 parent companies, and in FY 
2000 there were 29,361 parent companies.
    Question. Please provide a list of all current Department of 
Defense contractors.
    Answer. The USAspending.gov website has a search function to obtain 
a list of contractor parent companies by agency, specifically the DoD. 
The list of current DoD contractor parent companies can be printed from 
the site.
    Question. On page 5 of your written testimony you write, ``We saw 
no comprehensive efforts by the Department to oversee or manage the 
growth, costs, profits, or fees for services contracts. In just the 
last decade, the value of services contracting more than tripled.''
    Who in the Department of Defense is responsible for such oversight 
and management? Who should?
    Answer. The Under Secretary of Defense for Acquisition, Technology 
and Logistics is responsible for oversight and management and we 
believe this is the appropriate office.

    [Clerk's note.--End of questions submitted by Ms. Kaptur. 
Questions submitted by Mr. Murtha and the answers thereto 
follow:]

        Inspector General Actions To Improve Contract Oversight

    Question. On March 31, 2008, the Inspector General issued a Growth 
Plan for Increasing Audit and Investigative Activities, as required by 
the fiscal year 2008 Defense Authorization Act. Under that plan, the IG 
will add 481 full-time positions to its Audit, Investigation, Policy & 
Oversight, Intelligence, Administration & Management, and other staff 
by the year 2015. The Defense Appropriations Subcommittee has supported 
this planned growth by providing the DoD IG with an additional $63 
million over the past two years:
          Fiscal Year 2008: +$24 million
          Fiscal Year 2009: +$24 million
          Stimulus 2009: +$15 million
    Mr. Heddell, how many staff have you hired with the additional $63 
million provided to the IG by the Committee in the last two fiscal 
years?
    Answer. We increased our staff by 132 personnel over the last two 
fiscal years, from 1,398 at the end of FY 2007 to 1,530 as of April 13, 
2009, to include:
           51 auditors;
           23 investigators;
           8 intelligence-related positions;
           7 dedicated GWOT-related positions;
           10 personnel in a new office of Special Plans and 
        Operations;
           4 personnel in a new Office of Professional 
        Responsibility;
     10 conversions of contracted IT positions;
     1 ombudsman position; and
     18 positions in administrative and support functions.
    In addition to our current strength of 1,530, we have authorized a 
total of 1,704 positions for FY 2009, to allow us to expand by up to 
another 174 positions by the end of this fiscal year.
    Question. Can you provide specifics about how additional staff has 
enabled the IG to improve contract oversight?
    Answer. The additional staff has been used to bolster our mission 
effectiveness in priority oversight areas. Some of the additional Audit 
positions have been used to augment our overseas presence in Southwest 
Asia to ``get more boots on the ground.'' We have also augmented our 
staff at headquarters and established new field offices to provide 
coverage in areas where our coverage was limited in the past, and to 
focus our resources where they are most needed. For example, within 
Audit, our additional staff is performing oversight of the controls 
over contractor common access cards within the Department, including 
controls over common access cards provided to contractors in Southwest 
Asia and Korea.
    The additional funding was also used to establish the Special Plans 
and Operations component. Its work to date includes assessments of the 
accountability of weapons, ammunition, and night vision devices; 
foreign military sales; building the logistics and medical 
sustainability base for the security forces of Iraq and Afghanistan; 
and the train and equip mission for the security forces of Iraq and 
Afghanistan. Finally, the additional personnel allowed Defense Criminal 
Investigative Service (DCIS) to deploy six additional agents for 6-
month rotations to Kuwait, Iraq, and Afghanistan. This increase places 
more investigators on the ground to conduct investigations of fraud, 
waste, and abuse of DoD funds in the Southwest Asia area of operations. 
Similarly, we increased agent strength in the U.S. as stateside agents 
also support OIF and OEF efforts by investigating criminal activities 
in the U.S. as well as supporting investigations that occurred in 
Southwest Asia to ensure conclusion and prosecution.
    Question. Do you have a plan in place to increase the number of 
auditors and investigators working in Afghanistan to support the growth 
in contracting there that will follow the expected increase in U.S. 
force levels?
    Answer. We do have a plan in place for increasing our oversight 
presence in Afghanistan. In December 2008, I met with and received the 
endorsement of the Commander, U.S. Central Command, to expand our 
footprint in Southwest Asia, including Afghanistan. Overall, we plan to 
increase our permanent presence to 36 (an additional 15 persons) in 
Southwest Asia. In Afghanistan, our goal is to have 12 permanent 
personnel for a total of 8 auditors (growth of 5) and 4 agents (growth 
of 2). DCIS has already increased its presence in Afghanistan by one 
agent for a total of three on the ground, and anticipates the fourth 
agent by the end of FY 2009.
    Our current personnel work out of our field office on Bagram Air 
Base, which we established in June 2007. In February 2009, we sent 
senior personnel to Afghanistan to brief the command on our growth plan 
and negotiate office space for future field offices in Kandahar and 
Camp Eggers. We plan to adjust our deployed strength as the DoD mission 
in Afghanistan grows and we can better ascertain the requirement for 
oversight personnel.
    Question. Are the majority of the new staff relatively junior, or 
are you finding experienced auditors and investigators who can hit the 
ground running?
    Answer. To ensure that we obtain a cadre of experienced staff for 
our priority efforts, such as oversight of Southwest Asia operations, 
we generally emphasize recruiting experienced, Government personnel 
(current or retired)--both Federal and DoD--as well as retired military 
members. For example, when establishing our Special Plans and 
Operations component, we acquired several experienced, retired 
Government oversight personnel as well as an Ambassador with experience 
in Iraq/Afghanistan transition programs. Our DCIS teams consist of a 
mix of junior and experienced agents, with every team consisting of at 
least one senior experienced agent. We have found that the experienced 
recruits augment our existing, experienced staff and our junior staff, 
to create an effective balance in support of our Southwest Asia 
oversight efforts.
    Question. Are you competing for talent with DoD agencies, such as 
the Defense Contract Audit Agency and the Defense Contract Management 
Agency, who are also trying to beef up their contract oversight staff?
    Answer. Yes. In addition to competing for auditors with DoD 
agencies, such as the Defense Contract Audit Agency and the Defense 
Contract Management Agency, we also compete with the DoD Service Audit 
Agencies, other Federal Inspectors General, as well as the private 
sector, CPA firms, and businesses to attract and retain talented staff 
to support our oversight mission. And while having to compete with 
other federal law enforcement agencies for talent is a normal 
occurrence, our DCIS has no trouble recruiting and retaining special 
agents.

                  Federal Employee vs. Contractor Mix

    Question. Over the period 2000--2007 (the most recent year actual 
financial data is available) spending on services contracted from the 
private sector grew by 98 percent in constant dollars while spending on 
total civilian personnel compensation grew by 13 percent.
    However, there has been no study to establish the appropriate mix 
of federal and contracted personnel.
    Mr. Heddell, Do you think DoD has thought about its workforce 
holistically in order to determine the right balance of federal and 
contractor employees in performing DoD missions?
    Answer. The Secretary of Defense testified in January 2009 that DoD 
has not thought holistically or coherently about the use of 
contractors, particularly when it comes to a combat environment. 
Additionally, GAO recently conducted an assessment to determine the 
sufficiency of the Department's acquisition workforce and its efforts 
to improve its workforce management and oversight. GAO Report 09-342, 
``Additional Actions and Data Are Needed to Effectively Manage and 
Oversee DoD's Acquisition Workforce,'' March 25, 2009, found that DoD 
lacks critical department-wide information to ensure its acquisition 
workforce is sufficient (including the right number and appropriate mix 
of civilian, military, and contractor personnel) to meet its national 
security mission.
    Question. How does DoD define a proper balance between federal and 
contractor employees? How should they?
    Answer. As previously mentioned, GAO issued a report in March 2009 
that states, ``DoD lacks critical department-wide information to ensure 
its acquisition workforce is sufficient to meet its national security 
mission. First, in its acquisition workforce assessments, DoD does not 
collect or track information on contractor personnel, despite their 
being a key segment of the total acquisition workforce. DoD also lacks 
information on why contractor personnel are used, which limits its 
ability to determine whether decisions to use contractors to augment 
the in-house acquisition workforce are appropriate. Second, DoD's lack 
of key pieces of information limits its ability to determine gaps in 
the acquisition workforce it needs to meet current and future missions. 
For example, DoD lacks information on the use and skill sets of 
contractor personnel, and lacks complete information on the skill sets 
of its in-house personnel.'' GAO made recommendations aimed at 
improving DoD's management and oversight of its acquisition workforce, 
including the collection of data on contractor personnel. DoD concurred 
with three of the recommendations and noted that implementing the other 
requires careful consideration.
    Question. Mr. Heddell, if DoD in your view is not defining the 
proper balance, what steps should DoD take to better assure a balance 
between federal and contractor employees in meeting DoD mission needs?
    Answer. The first and most important step is to determine (1) what 
workforce mix (civilian, military, and contractor personnel) currently 
exists, and (2) what the appropriate workforce mix should be. Once the 
appropriate balance has been established, the budget needs to be 
aligned in support of the appropriate workforce mix.
    Question. Has DoD done mission analysis and/or a study of roles and 
missions that includes consideration of the role that contractors 
should play?
    Answer. GAO found that in its acquisition workforce assessments, 
DoD does not collect or track information on contractor personnel; 
lacks information on the use and skill sets of contractor personnel; 
and lacks complete information on the skill sets of its in-house 
personnel. However, Secretary Gates stated during an April 6, 2009, 
press briefing, ``there is broad agreement on the need for acquisition 
and contracting reform in the Department of Defense. There have been 
enough studies. Enough hand-wringing. Enough rhetoric. Now is the time 
for action.'' The Secretary concluded this statement with a final 
recommendation to overhaul how defense organizations are staffed and 
operated with regards to contractors versus full-time government 
employees.
    Question. Do you share the concern that there has been an erosion 
of federal personnel control within the DoD?
    Answer. Yes, we share the concern of the Secretary of Defense that 
the correct mix of military, DoD civilian, and contractor personnel was 
not thought out holistically. However, on April 6, 2009, the Secretary 
of Defense announced key decisions that he will recommend to the 
President with respect to the fiscal year 2010 defense budget, to 
include a recommendation that will have a significant impact on how 
defense organizations are staffed and operated. Under this budget 
request, the Department will reduce the number of support service 
contractors from the current 39 percent of the workforce to the pre-
2001 level of 26 percent and replace them with full-time government 
employees. The Secretary stated that the goal is to hire as many as 
13,000 new civil servants in fiscal year 2010 to replace contractors 
and up to 30,000 new civil servants in place of contractors over the 
next five years.
    Question. Do you share the concern that there may be an over 
reliance on contractors?
    Answer. Contractor support has become an integral part of today's 
execution of DoD's mission. However, with this comes a greater risk 
that contractor's roles infringe on areas that are inherently 
governmental. I highlighted an example of this during my testimony on 
February 26, 2009; specifically, I described an incident in which a 
contractor, rather than the military or other DoD entity, was 
responsible for issuing Common Access Cards, which allowed the holder 
to gain access to DoD facilities world-wide creating a national 
security issue. As such, we agree with the Secretary of Defense's 
recommendation as part of his FY 2010 budget to reduce the number of 
support service contractors and replace them with full-time government 
employees; specifically, up to 30,000 new civil servants in place of 
contractors over the next five years.

                 Growth in Contractor Provided Services

    Question. DoD's obligations on contracts rose from 47 percent of 
the total budget in fiscal year 2000 to 51 percent in fiscal year 2007 
(according to the 2009 President's Budget). Of the contract costs, 
service contracts grew from 26 percent of the total budget billion in 
2000 to 27 percent in 2007.
    The GAO recently testified to this Committee that the transition to 
contractor provided services was in no way the result of a strategic 
decision but was a piecemeal response to downsizing that occurred 
despite increasing workload. Have you seen any strategic thinking on 
this issue from DoD?
    Answer. We agree that the reliance on contractors to support DoD's 
current mission was not the result of a strategic or deliberate process 
but resulted from thousands of individual decisions to use contractors 
to provide specific capabilities. Additionally, the Secretary of 
Defense testified in January 2009 that DoD has not thought holistically 
or coherently about the use of contractors particularly when it comes 
to a combat environment.
    Question. Does DoD have clear policy guidance on contracted 
services?
    Answer. In addition to the Federal Acquisition Regulation and the 
Defense Federal Acquisition Regulation Supplement, DoD continues to 
clarify and issue new guidance on aspects of service contracts in 
response to findings in our audit reports and other information.
    Question. Where in the Pentagon do you believe service contract 
policy should emanate from?
    Answer. Because spending for services accounts for such a large 
portion of the Defense budget, policy should emanate from the highest 
levels of the Department. Specifically, the Under Secretary of Defense 
of Acquisition, Technology and Logistics is responsible for 
establishing and publishing polices and procedures governing the 
operations of the DoD Acquisition System and the administrative 
oversight of defense contractors. In addition, since policy should be 
based on informed decisions about the balance of in-house versus 
contracted resources, policies should include senior officials 
responsible for personnel and human capital decisions.
    Question. Should contract service policy be a function of a human 
capital plan?
    Answer. It appears it would not be possible to appropriately 
evaluate the Department's needs to contract for services without having 
coordinated such an assessment against a human capital plan of overall 
DoD resource considerations.
    Question. Does DoD have a human capital plan?
    Answer. Yes, the Department does have a Civilian Human Capital 
Strategic Plan.

                           OMB Circular A-76

    Question. The Executive Office of the President's policy on the 
performance of commercial type activities, OMB Circular A-76, states:
    ``The longstanding policy of the federal government has been to 
rely on the private sector for needed commercial services.'' Further 
DoD has not defined or measured the value it seeks from contract 
service dollars, in part because the roles of contractors are not fully 
known or defined.
    Mr. Heddell, it seems that federal policy encourages contracting 
out of services, rather than determining the correct balance between 
federal and contractor personnel. Do you agree?
    Answer. We do believe that contracting out of services has been 
encouraged. Commercial Services Management (formerly Competitive 
Sourcing) has been a President Management Agenda item for the past 8 
years. It was also encouraged through OMB Circular A-76 for years 
without a study by DoD on the proper balance.
    Question. Is there any evidence that once a government activity has 
been outsourced to the private sector that there continues to be 
savings to the taxpayer?
    Answer. In our opinion, the savings are questionable. Examples of 
questionable A-76 Competitions include:
           In an audit of the DFAS military retired and 
        annuitant pay A-76 competition, we identified a $30 million 
        error in the in-house cost proposal, which caused the 
        Government to lose the competition to the contractor. We are 
        currently conducting an audit looking at the contractor's 
        costs.
           In an audit of the Navy San Diego Public Works 
        Center environmental services A-76 competition, the contractor 
        won by proposing rates that were lower than the rates the 
        contractor actually charged once he began work on the contract.
    We have a competitive sourcing strategic audit plan, and plan to 
look at A-76 cost savings in the future. However, the recent 
Congressional direction to freeze further competitions may alter or 
delay our planned oversight. We will continue to monitor the guidance 
and efforts to determine what oversight can be performed and be of 
value given the potential changes to the overall efforts in the 
Department.
    Question. The previous administration held the assumption that 
using contractors in place of federal employees will yield cost 
savings. Does DoD, in making decisions to contract for services, have 
sound decision-making processes to ensure that savings will result from 
using contractors to meet a mission requirement? If not what should be 
done by Congress to get DoD to put such safeguards into place?
    Answer. DoD Instruction 1100.22, ``Guidance for Determining 
Workforce Mix,'' implements policy for determining the appropriate mix 
of manpower (military and civilian) and private sector support 
necessary to accomplish Defense missions consistent with applicable 
laws, policies, and regulations. However, GAO found in past oversight 
efforts instances where converting functions from the Government to the 
private sector was actually more costly. GAO Report No. 09-041, 
``Improved Analysis and Cost Data Needed to Evaluate the Cost 
Effectiveness of Performance Based Logistics,'' December 19, 2008, 
gives several examples where contractor support costs are greater than 
in-house maintenance costs. For example, the report states that FA-18 
E/F contractor support would be $400 million more expensive than 
Government support over the next 28 years.
    Question. Is there evidence that services provided by the private 
sector are in any way inherently less costly than the public sector?
    Answer. It would not be appropriate to generalize regarding cost 
effectiveness; each comparison should be done on a case-by-case basis 
to ensure best value for the government.

                          Competitive Sourcing

    Question. The DoD IG issued a report on January 13, 2009 that the 
Defense Department is studying the outsourcing of nearly 9,000 civilian 
jobs. The IG report was ordered by Congress to evaluate whether the 
Pentagon is holding jobs competitions under orders from the Office of 
Management and Budget. The fiscal year 2008 National Defense 
Authorization Act (P.L. 110-181) prohibited OMB from ordering DoD to 
hold the competitions. The IG concluded the Defense Department's jobs 
competitions were not being done under orders from OMB but the report 
said some jobs competitions were being done under pressure from senior 
Pentagon officials and that the competitions were hurting morale and 
fueling turnover of staffs in some cases.
    Mr. Heddell, please summarize the finding in the January 13, 2009, 
DoD IG report that senior Pentagon officials pressured the Military 
Services to compete 9,000 jobs with the private sector.
    Answer. As of the April 22, 2008, date of our interim report, only 
the Army was feeling extreme pressure from the Office of the Secretary 
of Defense (OSD) to conduct public-private competitions. However, as of 
December 15, 2008, the date of our final report, the Army was no longer 
receiving pressure from OSD to conduct public-private competitions.
    Question. Did you find inappropriate influence to compete 
government jobs with the private sector?
    Answer. No, we found no evidence of inappropriate influence to 
compete government jobs. As of the December 15, 2008, date of our final 
report, DoD competitive sourcing officials and headquarters-level 
competitive sourcing officials for the three Military Departments all 
stated that they were not directed by and did not feel any pressure 
from the Office of Management and Budget (OMB) to conduct public-
private competitions. Major Command and Budget Submitting Office 
competitive sourcing officials agreed with the statements made by 
headquarters-level officials, and stated that the pressure to conduct 
public-private competitions was not directly from OMB or OSD, but from 
the chain of command.
    Question. If so, who was it that exerted inappropriate influence?
    Answer. We found no evidence of inappropriate influence to compete 
government jobs.
    Question. What is the impact on morale?
    Answer. During our audit, installation-level officials within the 
three Military Departments raised many concerns about the competitive 
sourcing process, including staffing. Most of the officials we spoke 
with expressed concerns about the strain public-private competitions 
place on their workforce and the ability to meet their mission. They 
stated that because a public-private competition puts a person's 
livelihood at risk, it causes angst among the workforce and in turn, 
management of that workforce becomes very difficult. Also, many 
employees look for and accept other employment opportunities before the 
completion of the competition, which creates vacant positions. 
Officials stated that it is difficult to hire new employees during an 
ongoing competition because most qualified personnel do not want to 
take a temporary position. At a time when much of the workforce is 
eligible for retirement, positions under public-private competitions 
add to the difficulty of hiring, training, and transferring knowledge 
to a younger workforce, which creates a struggle to maintain an 
adequate workforce to meet the required level of performance.

                 Definition of Inherently Governmental

    Question. The Office of Management and Budget's Office of Federal 
Procurement Policy advocated ``competitive sourcing'' during the last 
Administration. Competitive sourcing requires that federal government 
work that is not ``inherently governmental'' go through a public-
private competition.
    There have been numerous media reports that illustrate how private 
contractors have been hired to perform contract oversight functions 
that were traditionally reserved for federal employees. The GAO found 
that of 52 major weapons programs, over 45 percent of the program 
office staff were private contractors.
    In the 2009 Defense Authorization Act (Public Law 110-417), the OMB 
Director was required to develop a single consistent definition of an 
``inherently governmental function.'' The Director was supposed to 
address deficiencies with the existing definitions and develop criteria 
so that the head of each department could identify positions that could 
not be contracted out because they exercise an inherently governmental 
function. The Director was given one year to report to Congress on the 
new definition and put forward any legislative recommendations as may 
be necessary.
    What is the status of the OMB Director's effort to help the heads 
of the Agencies better determine which positions are inherently 
governmental and cannot be contracted out?
    Answer. We are not aware of the current status of OMB's efforts. 
The OMB could provide the best answer to this question.
    Question. What plans does OMB have in place to ensure an orderly 
transition of the existing work to the new administration?
    Answer. We are not aware of OMB's plans. This question would be 
best answered by OMB.

                   Inherently Governmental Functions

    Question. An inherently governmental activity is an activity that 
is so intimately related to the public interest as to mandate 
performance by government personnel. These activities require the 
exercise of substantial discretion in applying government authority 
and/or in making decisions for the government.
     For example, in March of last year, the GAO found that 42 
percent of the Army's contracting center of excellence was staffed by 
contractors. In other words, contractors were making decisions on 
government contracting.
     In another example, the OSD Comptroller had contracted for 
the development of budget justification of the fiscal year 2008 
supplemental funding request.
    Inherently governmental functions are not to be performed by 
contractors. Within the Department of Defense, are there any private 
contractors performing inherently governmental functions?
    Answer. We have identified instances of outsourcing inherently 
governmental functions. For example, we identified that contractors 
were used as contracting officer representatives for the Air Force 
Second Generation Wireless Local Area Network contract. We believe that 
the interests of taxpayers are not protected when we have one 
contractor monitoring another contractor.
    Question. Do you believe that the DoD should provide a clearer 
statement of what constitutes inherently governmental functions?
    Answer. The Federal Acquisition Regulation (FAR) defines inherently 
governmental functions, not DoD. However, the definition is interpreted 
differently and inconsistently by different people at different 
agencies. As such, GAO has recommended that the DoD provide a clearer 
statement regarding which positions are inherently governmental.
    Question. Do you believe that there needs to be greater attention 
on the types of functions and activities that should be contracted out 
and which should not?
    Answer. Yes, the Department needs to pay greater attention to the 
types of functions that should be contracted out and provide training 
to acquisition, contracting, and human capital officials for 
appropriately contracting out personnel services.
    Question. What are the dangers in relying on contractors for 
inherently government functions such as program and financial 
management, intelligence analysis, and policy making?
    Answer. As GAO reported, the closer contractor services come to 
supporting inherently governmental functions, the greater the risk of 
contractors influencing the government's control over and the 
accountability for decisions that may be based, in part, on the 
contractor's work. We believe this may also increase the risk that 
contractors can inappropriately influence government decisions to 
provide the contractor a financial windfall, all of which may result in 
decisions that are not in the best interests of the government and the 
American taxpayer. Over-relying on contractors could also lead to 
increased vulnerability of fraud, waste, and abuse (i.e. organizational 
conflicts of interest might arise if an employee of a contractor 
recommends an action that would benefit the contractor in a future 
procurement).
    Question. The line separating contractor from government employee 
can be blurry and not well-defined on work that closely supports 
inherently governmental functions. The Army has undertaken a review of 
contracted positions and has discovered that inherently governmental 
functions are often performed by contractors. Do you believe that this 
may be the case in the Navy and Air Force as well?
    Answer. This is certainly a possibility. The inventories that the 
Navy and Air Force will be compiling in response to Section 807 of the 
FY 2008 National Defense Authorization Act, ``Inventories and Reviews 
of Contracts for Services,'' should assist them in determining whether 
they have inappropriately contracted out inherently governmental 
functions.
    Question. What factors should DoD consider when making a decision 
to use contractors to meet mission needs and what tradeoffs are 
involved in considering such factors?
    Answer. The factors and tradeoffs vary depending on the mission and 
the needs of the requiring activity. However, whether a function is 
inherently governmental, cost/benefit and human capital considerations 
should be part of the process.

                       Personal Service Contracts

    Question. A personal service contract is when the government 
obtains the services of specific person by contract, rather than by 
direct hire. It is legal in only a few specific instances, for example 
when the need for services is short term or intermittent. However, GAO 
has testified that the DoD may be using these contracts more 
expansively than intended.
    Mr. Heddell, personal service contracts are legal for very limited 
circumstances. Do you believe that DoD confines its use of personal 
services to only those that are legally allowable?
    Answer. Not in all cases. DoD is required to comply with the 
Federal Acquisition Regulation in relation to the use of personal 
service contracts. However, we have identified concerns regarding the 
appearance of a personal service contract in the America Supports You 
Program, and GAO has reported concerns with the use of personal 
services contracts by the Army Contracting Command.
    Question. Mr. Heddell, could you comment on DoD's use of personal 
service contracts?
    Answer. DoD is required to comply with the Federal Acquisition 
Regulation in relation to the use of personal service contracts. 
However, we have identified concerns with the use of a personal service 
contract in the America Supports You Program, and GAO has reported 
concerns with the use of personal services contracts by the Army 
Contracting Command.
    Question. Mr. Heddell, how does the work that contractors perform 
differ from the work that civilian employees perform?
    Answer. Contractors can not perform tasks that require either the 
exercise or discretion in applying government authority, which should 
be performed by government employees.
    Question. How do government ethics rules apply to personal service 
contractors? Do the personal conflict of interest safeguards apply to 
personal service contractors?
    Answer. Contractor employees, including those performing personal 
service contracts, are not subject to the same laws and regulations 
that are in place to prevent conflicts of interest among federal 
employees. As examples, 5 C.F.R. Part 2635, ``Standards of Ethical 
Conduct for Employees of the Executive Branch,'' and the Joint Ethics 
Directive, DoD 5500.07 (November 29, 2007) do not apply to contractor 
employees. Similarly sections of Title 18, United States Code are only 
applicable to Government employees (207 and 208).
    There are certain laws and regulations applicable to both federal 
and contractor employees (i.e., 18 U.S.C. 201--Bribery or 41 U.S.C. 
423(a) and FAR 3.104-4--protection of procurement-related information). 
Specifically, contractors are bound to follow ``ethical rules'' set 
forth in the FAR and DFARS (i.e., Part 3, ``Improper Business Practices 
and Personal Conflicts of Interest,'' Part 9.2, ``Qualification 
Requirements,'' Part 9.1, ``Responsible Prospective Contractors,'' Part 
9.4, ``Suspension and Debarment and Ineligibility,'' Part 9.5, 
``Organization and Consultant Conflicts of Interest,'' and Part 9.6, 
``Contractor Team Arrangements''). Perhaps most importantly, the FAR 
was recently amended to require that if the value of the contract is 
expected to exceed $5,000,000 and the performance period is 120 days or 
more, the solicitation and the contract shall contain FAR clause 
52.203-13 \1\, ``Contractor Code of Business Ethics and Conduct.'' That 
section requires the contractor to have a code of conduct and business 
ethics, and to provide a copy of that code to each employee engaged in 
performance of the contract. It does not set forth specific 
requirements for what the code shall address.
---------------------------------------------------------------------------
    \1\ Unless the contract is for the acquisition of a commercial item 
or will be performed entirely outside the United States.
---------------------------------------------------------------------------
    Question. How can the Congress compel DoD to limit the use of 
personal service contracts to only those few unique circumstances where 
they are legal?
    Answer. The Congress should not have to compel DoD because DoD is 
obligated to follow the law and the rules delineated in the Federal 
Acquisition Regulation on the use of personal services contracts. As 
such, DoD is drafting guidance with regard to this matter in response 
to Section 831, ``Development of Guidance on Personal Services 
Contracts,'' of the FY 2009 National Defense Authorization Act.

  Guidelines on Considering Civilians for New and Contracted Functions

    Question. The National Defense Authorization Act for Fiscal Year 
2008, required the Under Secretary of Defense for Personnel and 
Readiness (USD[P&R]) to develop guidelines and procedures to ensure 
that consideration is given to using DoD civilian employees to perform 
new functions or functions that are performed by contractors--and 
required the DoD IG to review implementation.
    Mr. Heddell, In July of last year, the DoD IG reported on the 
actions underway within DoD to in-source new and previously contracted 
functions. Would you give a general description of on DoD's in-sourcing 
efforts?
    Answer. DoD issued guidelines and procedures on in-sourcing new and 
contracted functions on April 4, 2008. As of March 13, 2009, an 
official from the DoD Office of Program Analysis and Evaluation stated 
that the directive-type memorandum for the Full Cost of Manpower 
Business Rules was submitted for formal coordination and the review was 
expected to begin the week of March 23, 2009. Also, the costing 
software contract was awarded and the contractor was developing a 
timeline. We have not conducted any follow-up work to determine if 
there has been any progress on DoD components beginning in-sourcing 
actions under Section 324.
    In addition, on April 6, 2009, the Secretary of Defense announced 
key decisions that he will recommend to the President with respect to 
the fiscal year 2010 defense budget, to include a recommendation that 
will have a significant impact on how defense organizations are staffed 
and operated. Under this budget request, the Department will reduce the 
number of support service contractors from the current 39 percent of 
the workforce to the pre-2001 level of 26 percent and replace them with 
full-time government employees. The Secretary stated that the goal is 
to hire as many as 13,000 new civil servants in fiscal year 2010 to 
replace contractors and up to 30,000 new civil servants in place of 
contractors over the next five years. Finally, the Secretary stated 
that he would also recommend overhauling the acquisition workforce by 
converting 11,000 contractors and hiring an additional 9,000 government 
acquisition professionals by 2015--beginning with 4,100 in fiscal year 
2010.
    Question. The Under Secretary of Defense for Personnel and 
Readiness (USD [P&R]) was to develop in sourcing guidelines. Did, the 
USD (P&R), Dr. Chu, comply?
    Answer. Yes, DoD complied. On April 4, 2008, Deputy Secretary of 
Defense England issued the in-sourcing guidelines and procedures 
prepared by the USD (P&R).
    Question. Mr. Heddell, this Committee heard testimony from the Army 
earlier this month on their in sourcing efforts. What, if anything, 
have the Navy and Air Force done?
    Answer. As of the July 23, 2008, date of our report, the Air Force 
and Navy had not in-sourced functions under Section 324 of the 2008 
National Defense Authorization Act. We have not conducted any follow-up 
work on the in-sourcing efforts of the Air Force and Navy since our 
final report was issued.
    Question. What do you recommend to the Navy and Air Force?
    Answer. As of the July 23, 2008, date of our report, the Air Force 
and Navy had not in-sourced functions under Section 324 of the 2008 
National Defense Authorization Act. We have not conducted any follow-up 
work on the in-sourcing efforts of the Air Force and Navy since our 
final report was issued. Therefore, we cannot make recommendations to 
the Navy and Air Force until we have determined through our follow-up 
efforts what actions the Navy and Air Force have taken under Section 
324 of the 2008 National Defense Authorization Act.

        Annual Inventories and Review of Contracts for Services

    Question. The National Defense Authorization Act for Fiscal Year 
2008, required The Secretary of Defense to submit annual inventories of 
contracted services beginning in 2008. The Army has largely completed 
an inventory. However, due to ``the magnitude of the task . . .'' the 
Air Force and Navy cannot complete inventories until 2010.
    Mr. Heddell, Why can't the Navy and Air Force submit the required 
annual inventories of contracts for services?
    Answer. DoD is not currently capable of tracking all service 
contracts. We are not aware of one DoD system that exists to fully 
capture the required information of Section 807 of the 2008 National 
Defense Authorization Act. Additionally, some contract information is 
tracked manually, making reporting even more difficult.
    Question. Is it fair to assume that if the DoD cannot provide an 
inventory of contracted services that it also cannot do meaningful 
oversight and management of contracted services?
    Answer. While DoD cannot provide an inventory of contracted 
services and some contract information is tracked manually, we cannot 
assume that meaningful oversight is not occurring.
    Question. How can the Congress force greater visibility of the 
contracted services workforce?
    Answer. I believe the Congress has provided the Department with the 
tools necessary for greater visibility. As GAO testified earlier this 
month, ``DoD needs to ensure that existing and future guidance is fully 
complied with and implemented. Doing so will require continued 
sustained commitment by senior DoD leadership to translate policy into 
practice and hold decision-makers accountable.''
    Question. How can Congress compel better management and oversight 
of contracted services?
    Answer. I believe the Congress has provided the Department with the 
tools necessary for better management and oversight. As GAO testified 
earlier this month, ``DoD needs to ensure that existing and future 
guidance is fully complied with and implemented. Doing so will require 
continued sustained commitment by senior DoD leadership to translate 
policy into practice and hold decision-makers accountable.''

                          Contractor Oversight

    Question. In 2007 more than half of DoD's budget was obligated on 
contracts. Of the contract costs, 27% of the total DoD budget was spent 
on service contracts. Despite this very significant percent of DoD 
resources, DoD does not know how many contractors and subcontractors 
are employed, or what their average salary is. The responsibility for 
acquiring services within DoD is spread among individual military 
commands, weapon system program offices, or functional units on 
military bases with no central oversight.
    Does the Department have the ability to report on the number of 
contractors and subcontractors that they employ and their compensation 
costs?
    Answer. While certain databases such as the Federal Procurement 
Data System can provide information on awards to contractors, we are 
not aware of any system that can report the number of contractors, 
subcontractors, or their compensation costs.
    Question. Has DoD considered or planned what part of the workforce 
increase should be dedicated to contract oversight?
    Answer. My understanding is that each Military Department and 
Defense agency should provide its own oversight or include the Defense 
Contract Management Agency in the oversight process. We are not aware 
of a DoD-wide plan for oversight resources.
    Question. Mr. Heddell, the DoD can report for both military and 
civilian employees the number of employees, the pay costs, and the 
total compensation costs. Why doesn't DoD track the number of 
contractors and their compensation costs?
    Answer. In response to Section 807 of the FY 2008 National Defense 
Authorization Act, DoD is required to submit annual inventories and 
reviews of contracts for services. The Deputy Under Secretary of 
Defense for Acquisition and Technology has issued implementing 
guidelines and stated that, because of the magnitude of the task of 
conducting inventories and reviews for all service contracts, DoD will 
implement this in phases. The Army will submit an inventory in FY 2009, 
the Navy and Air Force in FY 2010, and all Military Departments and 
Defense Agencies in 2011. We believe this effort will provide DoD 
greater visibility over contractors and their compensation costs.
    Question. Mr. Heddell, given that DoD does not know or track 
contractors' average salaries, how can DoD make an informed decision on 
obtaining ``contractor'' VS. ``in-house'' services--if the ``unit 
costs'' can't be compared?
    Answer. DoD cannot make fully informed decisions if unit costs 
cannot be compared.

                       Gansler Commission Report

    Question. In the November of 2007, a commission headed by the 
former Undersecretary for Acquisition during the Clinton 
Administration, Dr Jacques Gansler, found a number of key failures of 
the Army's contract system which contributed waste, fraud and abuse. 
The Commission examined business processes, the acquisition workforce, 
and contract management and made 22 specific recommendations for the 
Army and 18 for the Office of the Secretary of Defense. On December 14, 
2008 the Secretary of the Army reported on the status of implementation 
of the Commission recommendations.
    Mr. Heddell, Do you believe that the Army has implemented all of 
the actions called for by the Gansler Commission on Expeditionary 
contracting?
    Answer. Based on our interaction with the Army and work in this 
area, we believe the Army is actively implementing or addressing the 
recommendations made in the Gansler report. In addition, the Army 
testified in February 2009 that they completed actions on 21 of the 22 
specific recommendations from the Gansler report. The remaining 
recommendation--to increase the contracting workforce by 400 military 
and 1,000 civilians--will require additional time by the Army to ensure 
the quality and quantity of workforce is obtained.
    Question. How would you grade the Army expeditionary contracting 
now?
    Answer. As stated above, the Army is actively implementing or 
addressing recommendations to improve expeditionary contracting, but it 
is a work in progress and will take time.
    Question. Mr. Heddell, the Gansler Commission recommended that Army 
increase the status and size of the Army acquisition workforce. What's 
been done and what is still needed?
    Answer. The Army testified in February 2009 that they are pursuing 
growth of their contracting workforce by 446 military and 1,191 
civilians. The Army further testified that about one-third of those 
numbers is the planned growth in each of the next three years.
    Question. Mr. Heddell, the Gansler Commission recommended that the 
Army elevate the authority for acquisition issues within the Army. How 
has the Army done this? What obstacles did the Army face?
    Answer. The Army established a 2-star billet to head the U.S. Army 
Contracting Command and obtained five additional general Army officer 
billets for acquisition; one of which will head the recently 
established Expeditionary Contracting Command. The Army needed the 
authority provided in the FY 2009 National Defense Authorization Act to 
create the billets.

                          Deployed Contractors

    Question. DoD has extensively used contract support in the conduct 
of Operations Iraqi Freedom and Enduring Freedom. Deployed contractors 
continue to outnumber deployed U.S. military personnel. As of January, 
219,000 Military personnel versus 259,000 contractors were deployed to 
CENTCOM.
    Mr. Heddell, DoD continues to deploy huge numbers of contractors. 
Currently 259,000 contractors are deployed to the CENTCOM area of 
responsibility. Would you comment on the consequences of having more 
contractors than military personnel in CENTCOM area of responsibility?
    Answer. While we cannot express a suitable ratio for the number of 
contractors compared to military members in an area of operations, we 
can state that contractors deployed to the CENTCOM area of 
responsibility should be performing necessary work. In addition, for 
the contracted efforts in the CENTCOM area of responsibility, it is 
imperative that the number of contractors, type of contract vehicle, 
scope of the contracted efforts, and complexity of the effort be 
considered to ensure that the appropriate level of contract oversight 
is also maintained in the area of operations.
    Question. How does the CENTCOM commander control the number of 
contractors in his area of responsibility?
    Answer. Joint Publication 4-10, ``Operational Contract Support in 
Joint Operations,'' October 2008, provides overall guidance to support 
the CENTCOM Commander on contracting and contractor management in his 
area of responsibility. The joint publication defines key personnel 
involved in the contracting process and includes checklists to support 
the Commander with proper contractor planning. The Contracting Support 
Plan Checklist covers the key requirements associated with 
orchestrating and managing contracting efforts in a joint operations 
area, including a requirement to ensure that there are adequately 
trained Contracting Officer Representatives and Contracting Officer 
Technical Representatives to assist in managing contract performance. 
The Contractor Integration Plan Checklist covers the key requirements 
associated with managing contractor personnel in a joint operations 
area and providing Government-furnished support, when such support is 
required.
    In addition to the Joint Publication, the CENTCOM Commander should 
consider what magnitude of contractor efforts are sustainable, will 
most likely achieve the desired outcomes, and are feasible given the 
operational environment in his area of responsibility.
    Question. Are there any particular lessons from the extensive use 
of contract support in Iraq that DoD must consider as Military forces 
are increased in Afghanistan?
    Answer. DoD must consider that increased utilization of contractors 
requires additional oversight on the part of the military and civilian 
DoD components to ensure that contractors comply with relevant 
contractual requirements and refrain from engaging in fraudulent 
activity. Contractor oversight personnel must be properly trained and 
deployed timely and in adequate strength to ensure proper oversight. 
Our summary report of challenges impacting Operations Iraqi Freedom and 
Enduring Freedom reported by major oversight organizations from FY 2003 
through FY 2007 identified specific problems in contract management, 
logistics, financial management and other areas, which should all be 
considered before contracting functions in Afghanistan.

                  DoD's Panel on Contracting Integrity

    Question. Panel on Contracting Integrity identified areas for 
improvement all of which focus on acquisition workforce issues. Areas 
that the Panel identified are reinforcing the functional independence 
of contracting personnel, filling contracting leadership positions with 
qualified leaders, determining the appropriate size of the contracting 
workforce and ensuring that it has the appropriate skills; and 
improving the planning and training for contracting in combat and 
contingency environments.
    Mr. Heddell, this Committee is interested in DoD's progress in 
addressing the problems of the acquisition workforce based on the work 
of DoD's Panel on Contracting Integrity.
    What should this Committee be looking for from DoD to ensure that 
DoD keeps focused on taking actions to resolve the long-standing 
problems of DoD's acquisition workforce?
    Answer. During 2008, DoD made significant progress in establishing 
the framework to assure functional independence of contracting 
personnel, Separation of Duties of senior acquisition and contracting 
leaders, and leveraging of contracting officer training. In addition, 
DoD has begun a workforce-wide competency assessment of 22,000 civilian 
and military contracting professionals, and the Secretary of Defense 
stated in a press conference on April 6, 2009, that his recommended 
fiscal year 2010 defense budget is aligned to support the Department's 
acquisition reform goals by increasing the size of defense acquisition 
workforce, converting 11,000 contractors, and hiring an additional 
9,000 government acquisition professionals by 2015 beginning with 4,100 
in FY 2010. The Committee should expect periodic updates from the 
Department on the implementation of its initiatives.
    Question. What factors should DoD consider when making a decision 
to use contractors to meet mission needs and what tradeoffs are 
involved in considering such factors?
    Answer. The most important consideration when determining whether 
contractors should be used is whether it is essential that the function 
be performed by government personnel (i.e. inherently governmental 
functions). Once it is decided that a contractor could do the work, 
there are a number of tradeoffs. One consideration is how well can the 
work be defined? If it can be well-defined, fixed price contracting 
would be appropriate to put the risk on the contractor and reduce the 
need for surveillance. If the work cannot be well-defined, some form of 
cost-type contract will likely be used, which puts more risk on the 
government and requires more use of government personnel to oversee the 
work. Other considerations include whether multiple contractors are 
available to do the work or only one contractor. Multiple contractors 
would allow for competition and require fewer resources for pricing the 
contract. Whereas, detailed pricing evaluation would be needed in a 
sole source situation.
    Also, DoD needs to consider from recent wartime contracting 
experience that it continues to have insufficient resources to monitor 
contractor performance in an expeditionary environment. The inability 
to enforce contract requirements and monitor contractor performance 
remains a critical DoD problem because DoD lacks the trained resources 
to award, monitor, and ensure that contractors provide services needed 
by the warfighter.

                           Depot Maintenance

    Question. Nearly a year ago GAO testified that the DoD lacks the 
assurance that corps logistical capabilities were being maintenance as 
needed to ensure timely and effective response to national defense 
emergencies and contingencies (as required by 10 U.S.C. 2464). However, 
the DoD continues to outsource much of these core depot maintenance 
functions.
    Mr. Heddell, the DoD is required by law to have an in-house depot 
maintenance workforce able to respond to national defense emergencies.
    Do you believe that DoD has sufficient numbers of in-house 
personnel to meet all core maintenance functions to respond to national 
emergencies?
    Answer. This is a continuing challenge for the Department. We agree 
with the GAO testimony that DoD lacks the assurance that core logistics 
capabilities were being maintained as needed to ensure timely and 
effective response to national defense emergencies and contingencies. 
We will continue to assess DoD's progress in this area through our 
reviews of the Department's efforts related to depot overhaul and 
maintenance of equipment, spare parts, and in-house overhaul and 
maintenance of military equipment for the forces in Iraq and 
Afghanistan.
    Question. Mr. Heddell, do you agree that current DoD policy 
encourages the use of contractor logistics support?
    Answer. Yes. Current law encourages that at least 50 percent of all 
depot work may go to contractors. Data shows that for FY 2009, about 
$16 billion of $32 billion of depot work is planned for contracted 
depot work.
    Question. If so, are we in danger of not having sufficient in-house 
technical expertise?
    Answer. Yes, that is why we believe the Department must assess its 
needs and skills requirements to determine the proper mix of military, 
civilian, and contractors in its workforce.

             Size of Federal Civilian Contracting Workforce

    Question. DoD downsized the defense contracting workforce without 
ensuring that it retained an adequate in-house workforce with the 
specific skills and competencies needed to accomplish the DoD 
contracting mission.
    The Committee understands that from 1997 to 2007 obligations for 
contracts and acquisition increased from $190 billion to $429 billion 
per year, while the DoD acquisition workforce which oversees contracts 
and acquisition was downsized significantly.
    In your opinion, is the current DoD acquisition or contracting 
workforce adequate to the task in terms of number of employees and the 
skill level of those employees?
    Answer. No. Several internal DoD panels, such as the Panel on 
Contracting Integrity and the Gansler Commission, have found or 
acknowledged the fact that the present DoD Acquisition workforce is 
insufficient to fully meet wartime contract award, monitoring, and 
performance oversight functions needed by the warfighter.
    Question. How does the DoD contracting workforce compare with the 
contracting workforce at large private sector companies, in terms of 
the number of workers and the skill level of those workers?
    Answer. I cannot comment on the quantity or skill level of the 
private sector contracting workforce; however, a Defense Acquisition 
University study published in early 2008 on Acquisition Structures and 
Capabilities found:
           The Acquisition, Technology, and Logistics (AT&L) 
        workforce is the most experienced in DoD (Fifty percent of the 
        AT&L civilian workforce has more than 20 years of experience);
           The AT&L workforce is highly educated, with 74 
        percent of civilians having bachelor's or advanced degrees; and
           Sixty-six percent of the AT&L workforce is 
        certified, and 50 percent meet or exceed their position level 
        requirements.
    Question. In your opinion, is the current DoD acquisition or 
contracting workforce adequate to the task in terms of number of 
employees and the skill level of those employees?
    Answer. No. Several internal DoD panels, such as the Panel on 
Contracting Integrity and the Gansler Commission, have found or 
acknowledged the fact that the present DoD Acquisition workforce is 
insufficient to fully meet wartime contract award, monitoring, and 
performance oversight functions needed by the warfighter. In addition, 
Secretary Gates acknowledged during an April 6, 2009, press briefing 
that ``there is broad agreement on the need for acquisition and 
contracting reform in the Department of Defense.'' The Secretary stated 
that he would recommend overhauling the acquisition workforce by 
converting 11,000 contractors and hiring an additional 9,000 government 
acquisition professionals by 2015--beginning with 4,100 in fiscal year 
2010.

                    Contracting Management Personnel

    Question. DoD has acknowledged that it faces significant workforce 
challenges that if not effectively addressed could impair the 
responsiveness and quality of acquisition outcomes.
    The Department of Defense workforce of contracting officials is 
losing many of its most talented and experienced personnel to 
retirement. In some cases the talent that remains does not match up 
well with the types of services to be contracted.
    How does the DoD go about finding, recruiting, hiring, and 
developing the needed contracting professionals? What should be done 
differently?
    Answer. My office has long been concerned about the need to 
maintain a trained and experienced acquisition workforce in DoD. We 
have not performed any analysis of the Department's hiring practices 
and have not offered any specific recommendations to the Department on 
how it could improve its recruiting policies and procedures.
    Question. What are the career education and training progressions 
for DoD contracting personnel? What should be done differently?
    Answer. The Acquisition, Technology, and Logistics (AT&L) Workforce 
Desk Guide provides the DoD AT&L Education Training and Career 
Development Program requirements. The intended audience is the 
acquisition and contracting workforce and provides information about 
certification, qualification, and tenure requirements.
    Question. As private contractors increasingly are intertwined into 
the work that civilian personnel perform in managing contracts, how can 
the DoD ensure that private contractors have adequate skills to meet 
the demands of the work?
    Answer. As a contract management requirement, DoD must have metrics 
in all contracts and hold contractors accountable for their 
performance.
    Question. How do you rate the DoD contracting workforce in 
achieving the appropriate levels of skill certification?
    Answer. GAO issued a report in March 2009 that states that the 
Office of the Under Secretary of Defense for Acquisition, Technology 
and Logistics (AT&L) ``not only lacks information on contractor 
personnel, but also lacks complete information on the skill sets of the 
current acquisition workforce and whether these skill sets are 
sufficient to accomplish its missions.'' The report further states that 
AT&L is conducting a competency assessment to identify the skill sets 
of its current acquisition workforce, and that while this assessment 
will provide useful information regarding the skill sets of the current 
in-house acquisition workforce, it is not designed to determine the 
size, composition, and skill sets of an acquisition workforce needed to 
meet the department's missions.
    Question. How is the new training program for military non-
contracting officers intended to affect contract management and 
oversight in forward areas?
    Answer. It is intended to improve management of contracts because 
non-contracting personnel will be aware of contract oversight 
requirements.

            Needed Improvements to the Acquisition Workforce

    Question. For years numerous high level panels of experts found 
that the acquisition workforce must be improved by filling contracting 
leadership positions with qualified leaders, determining the 
appropriate size of the contracting workforce and ensuring that it has 
the appropriate skills; and improving the planning and training for 
contracting in combat and contingency environments. Most recently the 
DoD's Panel on Contracting Integrity made recommendations.
    Mr. Heddell, this Committee is interested in DoD's progress in 
addressing the problems of the acquisition workforce based on the work 
of DOD's Panel on Contracting Integrity.
    What should this Committee be looking for from DoD to ensure that 
DoD keeps focused on taking actions to resolve the long-standing 
problems of DoD's acquisition workforce?
    Answer. During 2008, DoD made significant progress in establishing 
the framework to assure functional independence of contracting 
personnel, Separation of Duties of senior acquisition and contracting 
leaders, and leveraging of contracting officer training. In addition, 
DoD has begun a workforce-wide competency assessment of 22,000 civilian 
and military contracting professionals, and the Secretary of Defense 
stated in a press conference on April 6, 2009, that his recommended 
fiscal year 2010 defense budget is aligned to support the Department's 
acquisition reform goals by increasing the size of defense acquisition 
workforce, converting 11,000 contractors, and hiring an additional 
9,000 government acquisition professionals by 2015--beginning with 
4,100 in FY 2010. The Committee should expect periodic updates from the 
Department on the implementation of its initiatives.
    Question. What factors should DoD consider when making a decision 
to use contractors to meet mission needs and what tradeoffs are 
involved in considering such factors?
    Answer. The most important consideration when determining whether 
contractors should be used is whether it is essential that the function 
be performed by government personnel (i.e. inherently governmental 
functions). Once it is decided that a contractor could do the work, 
there are a number of tradeoffs. One consideration is how well can the 
work be defined? If it can be well defined, fixed price contracting 
would be appropriate to put the risk on the contractor and reduce the 
need for surveillance. If the work cannot be well defined, some form of 
cost-type contract will likely be used, which puts more risk on the 
government and requires more use of government personnel to oversee the 
work. Other considerations include whether multiple contractors are 
available to do the work or only one contractor. Multiple contractors 
would allow for competition and require fewer resources for pricing the 
contract, whereas detailed pricing evaluation would be needed in a sole 
source situation.
    Also, DoD needs to consider from recent wartime contracting 
experience that it continues to have insufficient resources to monitor 
contractor performance in an expeditionary environment. The inability 
to enforce contract requirements and monitor contractor performance 
remains a critical DoD problem because DoD lacks the trained resources 
to award, monitor, and ensure that contractors provide services needed 
by the warfighter.
    Question. It seems that ``blue ribbon commissions'' come to nearly 
the same conclusions on what must be done to improve the acquisition 
workforce. What inhibits these recommendations from being implemented?
    Answer. Primary factors include funding and a trained, available, 
professional workforce (i.e. available personnel). Also, the ``tone at 
the top'' needs to show a continued commitment.

                       Types of Service Contracts

    Question. Some types of contracts are:
           Cost Reimbursement--Utilized for acquisitions when 
        uncertainties in contract performance do not permit costs to be 
        estimated with sufficient accuracy:
           Cost Plus Award Fee (CPAF) Cost Plus Incentive Fee 
        (CPIF)
           Fixed Price--Optimal for acquiring commercial items 
        or other supplies/services with reasonably definite functions 
        or detailed specifications:
           Firm Fixed Price Fixed Price Incentive
    We often hear of apparent waste and abuse associated with sole 
source contracts.
    What other types of contracts are available for providing services?
    Answer. Other than sole source contracts, there are competitive 
contracts. However, you may be referring to the types of contracts 
included under Federal Acquisition Regulation Part 16, where there are 
many different variations of fixed-price and cost-type contracts.
    Question. What are the advantages and disadvantages of each type 
and how frequently are they used?
    Answer. Cost-reimbursement contracts are suitable for use only when 
uncertainties involved in contract performance do not permit costs to 
be estimated with sufficient accuracy to use any type of fixed-price 
contract. Cost type contracts place more risk on the Government and 
require close supervision to oversee performance and costs.
    Firm-fixed-price contracts provide for a price that is not subject 
to any adjustment on the basis of the contractor's cost experience in 
performing the contract. This contract type places upon the contractor 
maximum risk and full responsibility for all costs and resulting profit 
or loss. It provides maximum incentive for the contractor to control 
costs and perform effectively and imposes a minimum administrative 
burden upon the contracting parties.
    Fixed price and cost type incentive contracts have many varieties, 
which include fixed fees, incentive fees and award fees. For FY 2007, 
cost type contract actions accounted for about $100 billion, which 
represents about a third of the contract expenditures for FY 2007.
    Question. Is ``Best Value'' contracting more difficult to 
accomplish than ``Lowest Cost'' contracting?
    Answer. Best value contracting involves more considerations than 
lowest cost contracting so it would be more complicated and probably 
more difficult. The contracting officer is required to evaluate 
technical as well as cost considerations in making the selection. 
Despite the difficulties, we support the best value contracting process 
because cheaper is not always better.

                          Common Access Cards

    Question. Your testimony points out that the DoD had contracted out 
the inherently governmental function of issuing Common Access Cards 
which permits the card holder to enter military bases and access 
certain official information.
    Did someone in the U.S. Military give KBR authority to decide who 
would receive Common Access Cards.
    Answer. The Army Materiel Command (AMC) and the Deputy Under 
Secretary of the Army for Business Transformation (DUSA-BT) are 
responsible for monitoring the CAC life cycle at the KBR Deployment 
Processing Center. Because the KBR contractors were receiving CACs for 
work under contract to AMC, AMC was responsible for CAC approval, 
revocation, and recovery.
    An Under Secretary of Defense for Personnel and Readiness [USD 
(P&R)] Memorandum required the use of the Contractor Verification 
System (CVS), manned by a Trusted Agent (i.e. a Government sponsor), 
for approving all contractors for CACs and did not authorize the 
continued use of the DD Form 1172-2. However, AMC officials believed 
they had a waiver to this policy because they received an e-mail from 
the Defense Enrollment Eligibility and Reporting System/Real-time 
Automated Personnel Identification System (DEERS/RAPIDS) Project Office 
within the U.S. Army Human Resources Command. This e-mail stated that 
AMC could continue using the DD Form 1172-2 to authorize CAC issuance 
and that an official waiver from USD (P&R) was not necessary. According 
to my Office of General Counsel, the U.S. Army Human Resources Command 
had no authority to waive a policy issued by the USD (P&R).
    DoD IG Report No. D-2009-05, ``Controls Over the Contractor Common 
Access Card Life Cycle,'' October 10, 2008, recommended that the 
Commander, AMC mandate the use of CVS at the KBR Deployment Processing 
Center and appoint Government employees to sponsor KBR contractors; AMC 
concurred with this recommendation. Further, we recommended that the 
Adjutant General, U.S. Army Human Resources Command inform the DEERS/
RAPIDS Project Office that it is not permitted to waive DoD policy 
unless explicitly delegated that authority. The Adjutant General 
agreed, stating that corrective action has been taken to ensure that 
the Project Office complies with DoD identity card issuance policies 
and procedures.
    Question. If so, who was that person?
    Answer. The U.S. Army Human Resources Command DEERS/RAPIDS Project 
Office (for additional information, see response to Question #72).
    Question. When was the decision made?
    Answer. The e-mail referred to in the response to Question #72 was 
sent on Tuesday, March 27, 2007.
    Question. Has anyone been reprimanded for this decision to hand 
over the CAC vetting process to KBR?
    Answer. The Adjutant General, U.S. Army Human Resources Command 
stated that corrective action has been taken to ensure that the Army 
DEERS/RAPIDS Project Office complies with DoD identity card issuance 
policies and procedures. The Adjutant General also stated that the Army 
DEERS/RAPIDS Project Office has been notified that any deviation from 
DoD policy will not occur without prior coordination and approval from 
the Office of the Secretary of Defense.
    Question. Are KBR employees still approving CACs independent of DoD 
review?
    Answer. DoD IG Report No. D-2009-05, ``Controls Over the Contractor 
Common Access Card Life Cycle,'' October 10, 2008, recommended that the 
Commander, AMC mandate the use of CVS at the KBR Deployment Processing 
Center and appoint Government employees to sponsor KBR contractors. In 
a response to a draft of this report, AMC agreed, and stated that they 
would ensure compliance and use CVS by September 1, 2008. AMC also 
stated that as of October 29, 2008, the Army had assigned a Government 
employee as the Trusted Agent Security Manager within the acquisition 
center and was in the process of hiring an additional person to assume 
the responsibility of the alternate Trusted Agent Security Manager by 
November 10, 2008. Those Trusted Agent Security Managers would be 
responsible for assigning Trusted Agents to oversee the KBR contract 
via CVS. We have not verified whether AMC's corrective actions have 
been implemented.
    Question. If no formal DoD decision was made to give KBR authority 
to issue CACs, has anyone from KBR been held accountable for 
overstepping their approved role in granting the cards?
    Answer. As previously mentioned, AMC officials believed they had a 
waiver to the USD (P&R) policy requiring the use of CVS because they 
received an e-mail from the DEERS/RAPIDS Project Office authorizing the 
continued use of the DD Form 1172-2 to authorize CAC issuance. AMC has 
since stated that they would ensure compliance and use CVS by September 
1, 2008, and assign Government employees to oversee this process by 
November 10, 2008. We have not verified whether AMC's corrective 
actions have been implemented.
    Question. If KBR did not have DoD approval to decide who would 
receive CACs, were DoD personnel in the field aware that KBR employees 
were issuing the cards in violation of their contract and DoD security 
guidelines?
    Answer. As I mentioned during my testimony on CACs earlier this 
year, one of the reasons we are doing audits in Southwest Asia and also 
in Korea, is because we want to look at the impacts of weak controls 
over CACs ``on the ground.'' As a result, one objective of our follow-
on audit of the Controls Over the Contractor Common Access Card Life 
Cycle in Southwest Asia is to ensure the proper use of the Common 
Access Card by contractors.
    Question. If DoD personnel were aware of KBRs routinely 
circumventing security protocol, have any of them been reprimanded or 
punished for allowing it to take place?
    Answer. See the response to Question #75. In addition, DoD IG 
Report No. D-2009-05, ``Controls Over the Contractor Common Access Card 
Life Cycle,'' October 10, 2008, recommended that the Commander, AMC, 
verify that KBR contractors undergo background checks that meet 
Homeland Security Presidential Directive 12 and Federal Information 
Processing Standard 201-1 requirements prior to issuing these 
contractors CACs, and maintain evidence of these background checks. AMC 
agreed and explained procedures that they will implement to verify that 
KBR contractors undergo background checks.
    Question. Is there any discussion of rebooting the program and 
issuing new Common Access Cards to appropriate military and non-
military personnel and making the old CACs obsolete?
    Answer. DoD IG Report No. D-2009-05, ``Controls Over the Contractor 
Common Access Card Life Cycle,'' October 10, 2008, recommended that the 
Commander, AMC, implement procedures to recover CACs from KBR 
contractors when the cards are expired or no longer needed. AMC agreed 
and explained procedures that they will implement to recover 
contractor-issued CACs. Additionally, we recommended that the USD 
(P&R), the Under Secretary of Defense for Intelligence, and the 
Assistant Secretary of Defense (Networks and Information Integration)/
DoD Chief Information Officer: a. Designate within 90 days the lead 
organization responsible for immediately developing and implementing a 
recovery plan for contractor CACs showing improper pay grades and e-
mail addresses; and b. Implement the recovery plan for contractor CACs 
showing improper pay grades and e-mail addresses. The USD (P&R) agreed 
and stated that their office is the lead proponent for CACs, and the 
plan for CAC recovery is to let current CACs be revoked and expire 
according to the normal card life cycle, which will be completed in 
conjunction with improvements to policy and issuance processes. The 
Under Secretary of Defense for Intelligence and the Assistant Secretary 
of Defense (Networks and Information Integration)/DoD Chief Information 
Officer also agreed and stated that they would work with the USD (P&R) 
to implement a recovery plan.

    [Clerk's note.--End of questions submitted by Mr. Murtha.]
                                            Tuesday, March 3, 2009.

        PSYCHOLOGICAL HEALTH AND TRAUMATIC BRAIN INJURY PROBLEMS

                               WITNESSES

ELLEN P. EMBREY, DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR FORCE HEALTH 
    READINESS AND PROTECTION
BRIGADIER GENERAL LOREE K. SUTTON, M.D., DIRECTOR, DEFENSE CENTERS OF 
    EXCELLENCE FOR PSYCHOLOGICAL HEALTH AND TRAUMATIC BRAIN INJURY

                              Introduction

    Mr. Murtha. The meeting will come to order.
    Let me welcome Ms. Embrey and General Sutton to the 
committee.
    And let me acknowledge Nick Buoniconti. He used to play for 
one of those teams other than the Steelers. You know, I got my 
Steelers tie on.
    You notice that, Nick?
    But he has been very involved in research with spinal cord 
injury. He has done a marvelous job there, and we appreciate 
the work that he has done.
    But we appreciate the work that you two have done.
    A couple years ago, this Committee realized, because we 
visited the hospitals so often, that we had real problems with 
PTSD and brain injuries. And we put $900 million in. And we 
want you to talk about how you spent that money, talk about how 
important it was. And then we put $1 billion, I think, for 
PTSD, I think, last year.
    I was just out to Fort Carson, and every place I go, 
suicide rates are up. Homicide is up. Divorce rates are up. So 
we have got a lot of problems, and much of it comes from PTSD. 
In a book that a doctor friend of mine gave me, ``War and 
Medicine,'' they talk about, it is going to cost, they quote, 
``the trillion dollar war,'' and say it is going to cost $660 
billion to treat PTSD after the Iraq war. I don't know if that 
is accurate, but certainly we are certainly going in that 
direction with the amount of money that we are spending.
    And the sooner we get to it, the better off we are; 
everybody that I have talked to. But to give you an example, I 
was at one of the bases not long ago, and the commander 
certainly recognized the problem. But in talking to some of the 
enlisted men in a private conversation, one was telling me that 
he was in Iraq, and this fellow said he was going to commit 
suicide. And he said, well, here is a rifle, go out and shoot 
yourself. You know, that is not the way we want to handle it. 
And yet it will take a long time for that to get down to the 
NCO level.
    The other thing that I noticed is the quality, according to 
them, is much less than it was. We have a tendency, those of us 
that have been there, to say the ones coming in now aren't as 
good as the old corps. But still we find that this is a real 
problem, according to them. They call them sugar babies and so 
forth. But what I worry about, if the quality has decreased, if 
we are facing people with a lot more psychological problems 
that come into the military just for the money or to get away 
to get a job, we are going to have more PTSD. And so it is 
something we have to really focus on.
    And I know you folks are in the forefront, and we 
appreciate it. This Committee has been in the forefront of 
taking care of military medicine for a long time, and we have 
increased the money substantially year after year.
    Ms. Embrey mentioned to me that she was pleased to see that 
her request for increase in research, for research, has gone up 
substantially, advanced research. I am glad to hear that, and 
we will look at it and maybe even put more money in if we can 
see that, if you can persuade us that it is necessary.
    And you two are very persuasive, so we appreciate your 
appearing before the Committee.
    And I ask Mr. Frelinghuysen if he has any comments.

                     Comments of Mr. Frelinghuysen

    Mr. Frelinghuysen. I thank you, Mr. Chairman.
    This is an important hearing. And I am substituting for 
Congressman Bill Young, who I may say would very much 
associate, as would I, his remarks to those of the Chairman. I 
think your work here is important.
    Let me, first of all, and I think we all pay tribute to 
those, obviously, who fight on our behalf in Iraq and 
Afghanistan, but to the remarkable work that physicians and 
medics do before you in fact, deal with the more substantial 
parts of working to make their lives sufficient and better. 
Really, what happens on the battlefield, compared to Vietnam, a 
remarkable transformation of health care and support.
    But to you, General, I have read of your distinguished 
career; present at the creation of this new entity and have 
seen it through. And we are particularly proud of your work, 
your distinguished history of work in the military, and Ms. 
Embrey, as well for your work in this important area. I am very 
pleased that both of you are here, and we look forward to a 
productive hearing.
    Mr. Murtha. As Mr. Frelinghuysen said, Bill Young has been 
in the forefront of military medicine when he was Chairman.
    And this is a bipartisan Committee. When we send a bill to 
the Full Committee, it is not changed. And when it goes to the 
floor, it is not changed. And it goes to conference, and we 
have some concessions and adjustments that we make, but as a 
whole, the bill that comes out of here pretty well is the bill 
that you will see at the end of the day.
    But we appreciate your coming before the Committee and your 
dedicated work in the field of medicine.
    And Dr. Embrey, if you will lead off.

                    Summary Statement of Ms. Embrey

    Ms. Embrey. Thank you, Mr. Chairman, Mr. Frelinghuysen. I 
thank you for the opportunity to bring you up to date on what 
the Department of Defense is doing to improve the quality of 
care for our warriors with psychological health needs or 
traumatic brain injuries.
    We are very pleased to be here, and we thank the Committee, 
you especially, for the support that you have given us since 
the war began, and we very much appreciate it.
    We are committed to ensuring that every warrior, especially 
those with psychological health or traumatic brain injuries, 
receives consistently excellent care across the entire 
continuum of care, from prevention, protection, diagnosis, 
treatment, recovery and transition; from the Department of 
Defense to the Department of Veterans Affairs or to the private 
sector.
    In 2007, the Department of Defense embarked on a 
comprehensive plan to transform our system of care for 
psychological stress and traumatic brain injuries. The plan was 
based on seven strategic goals: first, to build a very strong 
culture of health leadership and advocacy for these two topics; 
the second was to improve the quality and consistency of care 
around the country, as well as in locations where we have 
personnel across the globe; third, to increase the timeliness 
and frequency and quality of care regardless of where the 
patient is located; fourth, to strengthen individual and family 
health, wellness and resilience; fifth, to ensure early 
identification and intervention for individuals who have 
conditions, as well as concerns, which are not the same thing; 
sixth, to eliminate gaps, particularly in the handoffs between 
physicians as they move from location to location; and lastly, 
to establish a very strong foundation of research, to address 
gaps and to build new technologies and therapies for these two 
topics.
    Throughout 2008, as you will see in our statement for the 
record, we made significant progress towards achieving those 
strategic objectives. We established the Defense Centers of 
Excellence for Psychological Health and Traumatic Brain Injury, 
of which General Sutton is the director. She is leading the 
effort to develop excellence in practice standards, training, 
outreach, research and direct care for those with mental health 
and TBI concerns.
    We established clinical standards that incorporated lessons 
learned and best practices to improve the quality of care and 
introduced evidence-based care as the enterprise standard for 
acute stress disorder and PTSD and depression as well as 
substance abuse disorders.
    To assess the likelihood of mild traumatic brain injury, we 
introduced a military acute concussion evaluation tool and 
published clinical guidelines for its management in field 
settings. We implemented a standardized training curriculum for 
medical providers, and we initiated a certification process for 
TBI programs at military treatment facilities.
    To improve access to care, regardless of location, we 
funded additional mental health providers in contracts, as well 
as civilians. We are also seeking ways to embed military 
uniformed providers in our units in operational settings. We 
also implemented a policy that requires first appointment 
access within 7 days for psychological health issues.
    To strengthen resilience to psychological stress and 
traumatic events, we are implementing solid prevention and 
health protection policies, mitigating organizational risk 
factors and strengthening family wellness programs. To ensure 
earlier identification and intervention, we enhanced post-
deployment health assessments and reassessments, modifying them 
to include information that helps us understand and early 
intervene problems as they occur. We are working to eliminate 
gaps in care as patients transition throughout the various 
systems or to different locations.
    Lastly, we are establishing a strong foundation of research 
that will improve prevention, detection, and diagnosis, 
particularly for traumatic brain injury, and treatment.
    Mr. Chairman, I would like to thank you again for your 
contribution. My comments are joint. A statement is provided 
for the record. We stand by to answer questions.
    [The joint statement of Ms. Embrey and General Sutton 
follows:]

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    Mr. Murtha. We talked earlier. Your statement is a joint 
statement.
    Are you going to say anything, General Sutton?

                  Summary Statement of General Sutton

    General Sutton. Mr. Chairman, Mr. Frelinghuysen, good 
morning, and thank you so much for your support and comments.
    I would just say that, sir, I join Ms. Embrey in thanking 
you for the privilege of being here this morning and to review 
what we have done this last year. We have come a long way since 
a little over a year ago and we started out with a title on a 
paper and passion in our hearts for this effort.
    Since then, today, Mr. Chairman, I am proud to report, we 
have got five component centers. We have got a sixth center, 
the National Intrepid Center of Excellence. We have Dr. James 
Kelly, who just joined us from the University of Colorado. He 
will serve as a director. We have a network of 20 and growing 
sites. These are a mixture of the VA polytrauma centers, as 
well as military treatment facilities, as well as civilian 
facilities. Last month we opened up the pilot assisted living 
program in Johnstown, where we have three families and soldiers 
who are there recovering.
    We have a number of training programs going on. We have 
trained over 2,700 providers. We have launched, together with 
the Department and the services, over 90 research studies, and 
we are continuing that process with the fiscal year 2008 
supplemental and the CSI.
    We also, sir, in the process of working with the vice 
chiefs to launch a public national educational campaign. 
Because we can do all of these other things, Mr. Chairman; we 
can become that open front door for the Department of Defense 
working with the VA for all issues related to these concerns, 
and we have done that. We can continue our unceasing efforts to 
grab next-generation solutions and bringing them here and now 
today. But fundamentally our challenge becomes that of 
transforming the culture, transforming the culture to one of 
transparency, resilience, accountability, candor, strength; one 
which supports individuals and their family members and 
recognizes that seeking support, seeking treatment, is an act 
of courage and strength.
    And so, Mr. Chairman, we will continue our efforts. We look 
forward to addressing your questions. And of course, we are 
committed to bringing excellence in all things on behalf of 
those who are so deserving.
    I would just close my opening comments, sir, with some 
wisdom from a great, great preacher who started out his life as 
a slave, and when looking back over the state of America at the 
end of his life, he said this, he said: We ain't where we want 
to be. We ain't where we ought to be. We ain't where we gonna 
be. But thank God we ain't where we was.
    I look forward to your questions Mr. Chairman.

                       Remarks of Chairman Murtha

    Mr. Murtha. Well, you gave me a couple of articles which we 
want to put in the record. And let me just read the titles of 
the articles. A very poignant one was by Gabrielle Luera, L-U-
E-R-A, and the other is by a survivor of the war. And to me, 
having been there, and one a Doonesbury cartoon, which I don't 
know if we can put the cartoons in there, but it is very 
poignant, products of people who know what it is all about in 
being at the war.
    [Clerk's note.--Articles are located at the end of this 
hearing.]
    But you mentioned the Intrepid. And Bill Young and I have 
talked about this, and we are committed to putting the 
additional money in, because we know the private sector, they 
have done so much so many places all over the world, and 
particularly in Fisher houses and so forth, that we are going 
to, we will put the $20 million in the supplemental. We will 
recommend it to the subcommittee, and we feel confident the 
subcommittee will agree to fund the equipment and so forth.
    The Guard and Reserve, I know with the unit you have in 
Johnstown, you are addressing problems that the Guard and 
Reserve have. And it is one of the things that has worried us 
for a long time. I have had a number of people, and I have 
talked about it before, one had a foot amputated, and he was 
blinded, and he is struggling. In the early part of the war, we 
didn't do near as good a job as we are doing now. One young 
fellow lost both his hands and was blinded. So we have a lot of 
them that get lost once they leave. And the sooner we get to 
PTSD in particular, the better off we are.
    And the work that has been done with prosthesis has just 
been absolutely amazing. In this war, in medicine, when you 
look back at the Crimean War and World War I, you see examples 
of how difficult it was for them to be rehabilitated versus the 
way we do it today. So it is like that former slave said, we 
aren't where we want to be, but we are going to get there, and 
we have got a ways to go, so I am impressed.
    Now, one of the things I mentioned, General Mattis came to 
see me. He says that, at Pendleton, they have a new process of 
teaching the young people when they go to war about what it is 
all about before they get there with all the sights, sounds, 
and smells, and so forth. And I don't know if any medical 
people have looked at it, but I would be very interested if you 
would have somebody go out there and evaluate it from a medical 
standpoint to see if there is anything in addition we should 
do. I was supposed to go out there, and I just couldn't get out 
there to look at it. But he claims, and having been in Iraq 
himself for a long period of time, he claims that could be the 
best type of thing to harden the mental aspect of this thing 
before they go to war.
    Two other points. One, transplants. I had some people in 
that said they could transplant hands. And I know that Dr. 
Embrey looked into it, and she feels that the cost is really 
expensive, and the rejection process is so onerous. But we are 
going to put some money in for that because we think we ought 
to do more research on rejection. I know sometimes the 
rejection medicine is so onerous that they feel like, well, I 
wish I hadn't gone through it. I know a lot of members finally 
say, well, take that leg off because it is causing such a 
problem or take that arm off because it is just not getting any 
better.
    But we still think we ought to do research. So we will put 
extra money in. And if somebody wants to have a hand transplant 
or an arm transplant, you will certainly have that available. I 
know it is expensive, but I think that is the kind of stuff we 
need to do, especially if they lost both hands. And I have seen 
a number of them that lost both hands. And they are in good 
morale when they are in the hospital, but I know it has to 
affect them when they go home. But I appreciate the work you 
two do, because there are no better people to be in charge of 
this field than you two are, so we appreciate it.
    Mr. Frelinghuysen.

                         TRAUMATIC BRAIN INJURY

    Mr. Frelinghuysen. Either one of you, when you talk, give 
us a few of the, or give the Committee a few of the statistics 
that relate to traumatic brain injury.
    General Sutton. Yes, sir.
    What we are finding is we are finding that, of the 
continuum of traumatic brain injuries, which of course 
encompasses mild traumatic brain injury, or concussion, 
moderate and severe, of the over 8,000 troops that we currently 
have in our registry, between 80 and 85 percent of them 
fortunately are mild concussion. But that doesn't mean that we 
are not concerned about them. Clearly, much of our research is 
aimed at better understanding what the impact of blast injury 
is, for example, and the differences between the concussion 
that may be experienced on a football field versus that which 
occurs on a battlefield where you have such a mix of factors, 
the life-threatening stressors, the very real physical risks, 
the psychological risks, the morale, and the spiritual risks. 
When we bring troops back home and do the screening, we find 
that the incidence of traumatic brain injury, and again, most 
of these are concussion, because if they were moderate or 
severe, they would have come through our medical evacuation 
system where we keep our arms around them and then have a care 
coordination process for ensuring that we keep our arms around 
their needs as well as their families, but for those who come 
back with their units, it ranges between 10 to 20 percent of 
those who screen positive for concussion or mild traumatic 
brain injury.
    This is very similar to what the RAND study, which used 
different methodology, earlier last year reported; when those 
individuals then get clinical evaluation, whether it be in the 
VA system or within our own military treatment system----
    Mr. Frelinghuysen. Can you make the distinction here? You 
know, I know that, according to the figures I have, of the 
61,000 veterans that the VA has screened for TBI to date, 
11,000, approximately 11,000 to 12,000, or as you said between 
19 or 20 percent, screen positive for TBI. What is the hand-off 
between the active DOD and the VA? You know, we like the notion 
on this committee that the DOD and the VA are joined at the 
hip, but in reality, how are they co-joined?
    General Sutton. Well, sir, let me give you an example. 
During this conflict, DOD has already transferred over 1 
million records, those post deployment health assessment 
records and postdeployment reassessment health records, so that 
the VA providers will have those records when they see troops. 
This a work in progress. But I will tell you that the hand-off, 
the linkage between DOD and VA, it is at the level that I have 
not seen in my 28 years in service. As an example of that would 
be the fact that when Secretary Peake first got into office 
last year, one of the first things he did was he sent one of 
his best and brightest psychologists, Dr. Sonja Batten, to 
become our deputy at the Defense Centers of Excellence. So this 
is an ongoing partnership that continues to grow and develop, 
broaden and deepen.
    Ma'am, I don't know if you would like to add to that.
    Ms. Embrey. I would like to talk a little bit about how we 
engage with the Department of Veteran Affairs.
    Back in 2007, the Deputy Secretaries of both Departments 
determined that we needed to get together and to develop common 
approaches for how we saw some of the challenges associated 
with psychological health and traumatic brain injury 
specifically. Together with the oversight of, and leadership 
of, the top leaders in both Departments, we embarked on a 
series of initiatives to include coming up with common 
protocols for how we screen and assess for traumatic, mild 
traumatic brain injuries. We have had a decade's worth of 
partnership on traumatic brain injury with the DVBIC, the 
Defense Brain Injury Center, Defense and Veterans Brain Injury 
Center, sorry. We have had a whole series of updated clinical 
practice guidelines and postdeployment health guidelines that 
we have developed in partnership with the VA, and we apply 
those to both of our health communities. So I would say that we 
have unprecedented levels of collaboration and sharing across 
the continuum of care.
    Mr. Frelinghuysen. Obviously, those that are severely, have 
severe traumatic brain injury are wholly embraced by both the 
DOD and the VA system.
    But, obviously, there are obviously other soldiers besides 
the regular military, Guard and Reserve, who are under, have 
suffered concussions from IEDs. Well, what happens to, should 
we say, the citizen soldier who is not hospitalized, but let us 
say months down the road, and we have had plenty of discussion 
in here, what happens to that man or woman who might suffer 
psychological and certainly some symptoms of traumatic brain 
injury?
    General Sutton. Sir, I would note that the VA has completed 
a Herculean effort in contacting over 500,000 troops. These 
were troops who had gotten out of uniform or perhaps gone back 
to their communities as guardsmen and reservists before the 
screening had been implemented for TBI; contacted every one of 
those troops directly, gave them the information on how to 
enroll, checked in with them to see how they were doing, and 
made that personal contact that is so important. Every 
individual who gets treated at the VA gets screened, just as 
our individuals in the DOD get screened.

                      POST-DEPLOYMENT REASSESSMENT

    Mr. Frelinghuysen. There is a desire, obviously, of many 
men and women in the service to get far away from the trauma 
they experienced. And I am not talking about necessarily TBI 
but obviously the war environment. And I assume that what you 
are saying, you are giving them fairly high marks for the 
follow-up.
    Ms. Embrey. Sir, we use the same assessment tool. And in 
addition to that, the Department implemented a postdeployment 
reassessment 6 to 9 months following deployment. We engage the 
VA in that screening process for all service members, whether 
they are Guard, Reserve or Active Duty. And that is the time in 
which we evaluate how they are doing. It is the point in time 
where research tells us it is the optimum time to early 
intervene, especially for mental health issues. So we have 
partnered with the VA, and we conduct those assessment 
processes with the VA for the Guard and Reserve specifically.
    General Sutton. Sir, I know you will also be glad to know 
that, during this transition period, there has been no momentum 
lost with the actions of the Senior Oversight Committee that 
Ms. Embrey addressed. Just last week we had our first Senior 
Oversight Council meeting. It was chaired by Secretary Gates 
and Secretary Shinseki. I was asked to give a briefing on what 
the collaborative efforts are that are going on with the VA and 
DOD joined by Dr. Ira Katz specifically aimed at suicide 
prevention. I will say that the national lifeline, that 1-800-
273-TALK, the VA has gotten over 100,000 calls on that, many of 
them from our service members who are either still active duty, 
Guard or Reserve. And we are working closely with our outreach 
center in all of the call centers to make sure that when an 
individual calls in, we have the right processes in place to 
make sure that we take care of their needs, get them back 
plugged into the system. And there have been over 2,000 clear 
saves already over the last 2 months.
    Mr. Frelinghuysen. That is great progress. Thank you both.
    Thank you, Mr. Chairman.

                             SUICIDE RATES

    Mr. Murtha. Yet suicide rates are up.
    General Sutton. Yes, sir. This is an area that clearly is 
demanding our greatest efforts and focused urgency. We are 
focused, working on the far end of that continuum, to make sure 
that our service members are aware of the danger signs who know 
and know how to intervene. Each service has a program that is 
geared towards that end.
    But we also know how important it is to get what we say to 
the left, to get to this side of writing the note or buying the 
weapon or giving ones prized possessions away, and to address 
all of those psychological health principles, both at the 
individual, family and community level, that will build 
resilience, that will foster post-traumatic growth, and yes 
will, good Lord willing, reduce our suicide numbers, which as 
you know, sir, in recent years, have gone up, within the Army 
at any rate.

                       EVACUATION OF THE INJURED

    Mr. Murtha. Well, you folks have done a magnificent job in 
this book that I quoted. In the American Revolution, 41 percent 
of the people died from injuries, and it goes, stays about the 
same; the Civil War, it went up to 56 percent; 37 percent World 
War II; 26 percent the Korean War. But it is now 11 percent in 
Iraqi Freedom.
    Now, Afghanistan, and this is something that we need some 
advice on, we keep playing around with these helicopters which 
we need to get these folks out. It is taking longer to get out 
in Afghanistan. So I would assume that is one of the reasons 
that the percentage of people who die from injuries or wounds 
is higher. So you folks need to--you know, the military keeps 
playing around with coming up with a helicopter that will work. 
We put $100 million in to fix the one up because it couldn't 
make a decision. We need a recommendation that you folks ought 
to get on them a little bit because you can see the difference 
there between the people in Afghanistan and Iraq; where they 
can get them out in a hurry in Iraq, and Afghanistan, for one 
reason or another, and I would assume it is because they don't 
have the ability to evacuate them as quickly as they would 
like.
    Ms. Embrey. Sir, if I can address that a little bit. I know 
the Secretary of Defense, Secretary Gates, and General Petraeus 
both have identified this concern and have specifically asked 
for a plan that distributes medical assets in such a way that 
we can respond more effectively as we expand operations in 
Afghanistan.
    Mr. Murtha. Doctor, we don't get a decision. We keep 
getting studies. That is the problem with the Defense 
Department. They study it to death. In the meantime, people are 
not making it because they don't have the equipment they need 
out in the field. That is the frustrating thing to me. It is 
like any decision over there; it takes them forever to make a 
decision. In this particular case, we have been in front of 
them in TBI. We have been in front of them in post-traumatic 
stress, all these areas. So you need to urge them a little bit 
to get better medical evacuation.
    Mr. Visclosky.

                       PERIODIC HEALTH ASSESSMENT

    Mr. Visclosky. Thank you, Mr. Chairman.
    Two lines of questioning. One is for individuals who do 
have a problem who have been injured. Do you have a concern? Is 
there a problem about identifying them before they leave 
service? And we have had this discussion in previous hearings 
about, hey, I just want to sign my papers, I am fine, I want to 
get out. And are we losing people? And do you have programs in 
place to do a better job to say, listen, there is no shame 
here; we want to help; we are not trying to force you out to 
deny you have got a problem. How are you dealing with that?
    Ms. Embrey. The Department of Defense recognizes that we 
need, it is part of our force health protection policy, and we 
are focusing on maintaining and sustaining a healthy and fit 
force. And we have set up several metrics to evaluate how 
healthy the force is and how deployable, medically ready they 
are to deploy. We instituted a series of assessments; some are 
required by law, some of which are appropriate to ensure that 
we are constantly evaluating the health and the fitness of a 
person to serve.
    We do that throughout their career. We do it on accession. 
We do it every year at a periodic health assessment, and then 
prior to deployment, and following deployment twice, we 
evaluate the status of the health of the individual so that we 
can appropriately intervene and sustain a healthy force.
    When individuals do not come forward, we figure these 
forced assessment processes allow us to maintain visibility. As 
an individual separates, there is also a very elaborate 
separation physical process involving the VA to evaluate 
injuries that have occurred over a lifetime.
    We have been evaluating a pilot to evaluate not only what 
an individual has suffered as a result of military service, but 
how compensable it might be from the VA perspective. We are 
doing that with the VA, with VA providers, so we believe we 
have improved the process significantly.

                         PROGRAMS FOR CHILDREN

    Mr. Visclosky. And what about children? Could you describe 
programs? And how do you identify which children may be having 
a problem? Is it through school programs.
    General Sutton. Yes, sir. Children certainly bear a good 
share of the toll on the wear and tear of deployment stress. We 
have a number of programs in place. The military family and 
life consultants working within the school systems; we partner 
with Military Child Education Coalition for example with their 
Living in the New Normal program. We have also invested in the 
National Child Traumatic Stress Network. The Uniform Services 
University is the military site for this national network that 
is working together to coordinate efforts to develop the 
research strategy, to collaborate and to identify, particularly 
building on the work of Dr. Steve Cozza, who, during his time 
as the chief of psychiatry of Walter Reed, really pioneered a 
lot of the research that has helped us better understand how to 
support children who are part of wounded warrior families, as 
well as now in a broader community-based effort, how can we 
reach out and give the support that is developmentally 
appropriate for children of military families, because we know 
now, eight years into this conflict, that for the children who 
were 6, 7, 8 years old when 9/11 happened, they are now in 
their teenage years. And there are different issues that affect 
them that we absolutely must continue to support them and their 
parents in addressing.
    So a number of programs. For example, the Mr. Poe program. 
If you go to battlemind.org, they have developed a number of 
videos using real military families and children to illustrate 
some of the challenges as well as the strengths. We have 
partnered with Sesame Workshop, who has now issued the second 
of what will be a three DVD series. The first one is ``Talk, 
Listen and Connect,'' focusing on the general deployment stress 
issues for families, giving them a way to talk about it and to 
make it approachable. The second one, which was launched last 
spring, focused in on the changes caused by deployments, both 
psychological, physical changes, and how families adapt to 
those changes. This spring, we will be launching the third in 
the series, which will address the issues of grief, trauma, and 
loss due to losing a parent.
    So we are continuing to focus our efforts on communities, 
families. And we know that children, not only are they our 
armed forces of the future; they are our precious, precious 
treasure here and now. So we will continue our efforts in that 
regard, as well as continue to invest in the research which 
will help us to better understand their evolving needs.
    Mr. Visclosky. Any particular unmet needs you have that we 
can be helpful with, whether it is monetary or directive, to do 
a better job?
    Ms. Embrey. This Committee particularly has been 
extraordinarily helpful to us with the $900 million provided 
and then subsequent supplemental funds, as well as honoring and 
increasing our budget requests over the last year. We are 
challenged to make sure that we responsibly expend those 
dollars, and we are learning from the infusion of those dollars 
right now. I would say that you have helped us significantly, 
and we would like to report back to you in future hearings or 
briefings to let you know how we are doing with the money you 
have provided, which is significant.
    Mr. Visclosky. Thank you very much for your work.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Moran.

                           MENTAL HEALTH CARE

    Mr. Moran. Thanks Mr. Chairman.
    And I want to thank Mr. Visclosky for raising the issue of 
the children. It is almost 3,000 children who have lost their 
parents in the war. I taught football, and I have coached 
football and taught a class at Fort Devens after college for 
awhile, and boy, you could immediately recognize kids' behavior 
based upon the status of their parents, either overseas or 
those who have lost parents and so on. We do need to extend 
that. But the first priority is what the Chairman put in the 
2007 supplemental for mental health care, and that is the 
purpose of this hearing. It was $900 million. More than $1 
billion has been provided now.
    We were concerned last year that of that $1 billion, only 
about $53 million was actually obligated. I know that that has 
now been corrected, that there is a substantial amount of money 
that is going into the purposes for which it was intended and 
particularly looking at alternative means of providing mental 
health care, breaking from the tradition.
    One of the problems I think that we have encountered is the 
military culture. As the Chairman and Mr. Frelinghuysen 
mentioned, it is contrary to the culture to acknowledge that 
you might have some kind of mental health concern, particularly 
PTSD, yet you tough it out. But that is counterproductive in 
terms of what we are seeing, and one of the contributing 
factors to the fact that suicide rates are twice what they are 
among the general population. One of the things we found is 
that almost half of military families are using what is called 
complementary medicine, integrative medicine, I guess that is 
the term that you now use, again, contrary to the culture. But 
they find that even meditation, yoga, all kinds of things that 
you never would have imagined in the last generation, is 
actually helpful in coping with the stress, the psychological 
problems that PTSD generates. Are you encouraging that, or are 
you running into any resistance?
    General Sutton. Thank you so much for that question, sir.
    We are absolutely encouraging that. We, in fact, last 
spring, we published a request for proposals and were able to 
fund ten projects specifically focused on complementary and 
alternative forms of therapy, such as yoga, acupuncture, Tai 
Chi, facilitated pet therapy. We are continuing that work. We 
know that in places like Fort Bliss, places like Fort Campbell, 
places like Camp Lejeune, as well as Camp Pendleton; and, sir, 
I did have a chance two weeks ago to meet with General Lehnert 
there at Camp Pendleton, and to review that program, which was 
actually initiated through a partnership through our top 
psychological health advisor Russ Schilling. And so we are 
looking broadly. We recognize that this is a moment in history 
that may not pass our way again, certainly not in this 
lifetime. And so we see ourselves in a position where through 
our efforts to transform military culture, we can perhaps even 
serve as a model for the Nation at large. To that end, we are 
working very closely with the Samueli Institute. Dr. Wayne 
Jonas, as you know, has been a real pioneer in this area. As 
well as with the RAND Corporation, this year now that we are 
in, within the next month, we are launching the initial phases 
of what we are calling the win-win network, the Warrior 
Wellness Innovation Network. This will be a series of pilot 
studies so that we can put program outcome metrics against some 
of these promising practices. Whether it be the ones that we 
have already mentioned or noninvasive neuromodulation, there 
are a number of different biofeedback products and social 
networking tools and Web 2.0 and 3.0 tools that really we are 
so excited about. For example, last fall, we launched our 
afterdeployment.org Web site, which now is getting 4,000 hits a 
month, providing tools, providing interactivity. We have 
invested in an Island on Second Life, and now we are working 
with the VA so that we can make this truly a seamless 
transition.
    So, yes, sir, we will continue our efforts to both better 
understand the potential efficacy and use of these kinds of 
therapies, as well as to promote them as part of our culture of 
resilience, performance and wellness.

                       MILITARY ONESOURCE PROGRAM

    Mr. Moran. Well said.
    I want to get in a couple of questions, so maybe you can 
address that as well. I want your colleague to be able to speak 
as well, General.
    But I am also, there are two other things that I am 
concerned about. You can choose which ones to emphasize in your 
response. When soldiers call the hotline that VA has set up, 
some people have suggested that they are much more likely to 
talk, to listen, if the person on the other end has gone 
through their experience, is a veteran themselves. And while 
the hotline, that Military OneSource is a terrific program, I 
wonder if we shouldn't complement it with volunteers, veterans, 
who would be more than happy to do that, many of them, but it 
might encourage other veterans to be more likely to call, even 
though you have already gotten a lot of calls, I know that, and 
I understand you have saved maybe a couple thousand lives. But 
I would like for you to respond to that.
    And then in terms of personnel, you had said that, actually 
we put into the language of the bill that you needed to hire 
more mental health providers; that for all the good intentions, 
unless you have got the mental health providers out there, you 
are very limited. I mean, you can do stuff on the Web and so 
on, but you really need professionals dealing with PTSD 
victims. And clients, I guess I should say. Have you found 
them? Are you hiring them? And I don't know how you are doing 
it, because Public Health Service has a great need as well, and 
yet Public Health Service was supposed to provide the personnel 
that you needed to implement this program. So those are three 
things.

                     ALTERNATIVE MEDICINE/THERAPIES

    And if you would like to, Ms. Embrey, maybe respond to the 
alternative medicine as well, because it is very important for 
us, if we are going to fund it, we have got to be able to show 
objectively that it does work.
    Thank you.
    Ms. Embrey. Alternative medicine or alternative therapies 
are often not considered by the medical community nor medically 
reimbursable by insurance companies. Therefore, it is very 
important that we, and the Center of Excellence, do not 
``medicalize'' some of these approaches and address these 
issues in ways that nonphysicians and that social workers and 
other folks that aren't certified per se can engage. Studying 
them and studying the metrics of their effectiveness is very 
important. We believe very strongly that our leaders and our 
commanders own this issue. We should not medicalize this. We 
should make it a part of their normal day-to-day living. An 
individual should view themselves as a person who is striving 
to stay fit and healthy to perform their mission, and fitness 
includes mind and body and spirit. Just as we send people to 
the gym to be physically fit, we need to create an environment 
where people can go to the psychological gym, and that we 
develop, through research, the tools that will work to 
strengthen our mental health. So that is in answer to your 
first question.
    Mr. Moran. Well put. Thank you.
    Ms. Embrey. And secondly, I think the idea that the 
Veterans Administration--the Department of Veterans Affairs--I 
am sorry, I am an old-timer, I keep thinking of VA as Veterans 
Administration, but it is the Department of VA.
    Mr. Moran. We do, too, so it is okay.
    Ms. Embrey. But I think the idea of having a veteran who 
understands is the whole concept behind the veterans centers 
that they stood up. I think that we are trying to embed and 
engage our line leaders and outreach and education for the very 
same reason, for our active duty service members. They are 
creating mechanisms within their units, within their commands 
and within their line structures that don't medicalize it, but 
help people understand the signs and symptoms and to recognize 
when medical intervention is appropriate and to refer them at 
that time without penalty, without penalty.
    And then to answer your question, are we hiring folks? Yes, 
we are. Are we hiring enough? I don't think we could hire 
enough at this point. But I think we should give a lot of 
credit to the TRICARE community, our purchase care network. 
They have expanded their outreach to hire mental health 
providers to deal with our family members and beneficiaries, 
including retirees, who are affected and stressed by this 
environment as well. And they have hired more than 3,000 health 
providers in our network since last year. The services have a 
target of hiring 1,000 providers by this point in time. They 
have actually been able to hire approximately 800 so far, so 
they are not as successful as they would like. We have several 
initiatives that are actually combining the energy of all of 
the services to have a single way so that they are not 
competing with each other and elevating the salaries. That is 
one initiative that we are taking to try to improve that 
national recruiting initiative.
    And lastly, the Public Health Service is assisting us. They 
are required by law to recruit a cadre, a fairly large cadre of 
mental health professionals to deal with Katrina-like events, 
to be prepared to deal with that. We realize that if we had 
them on a string and they weren't being used, that that would 
be a problem. And so what we asked in a Memorandum of Agreement 
with them was to share those assets when they hired them to 
help us in our time of need. We had a landmark agreement to 
support that. And they are recruiting as best they can to meet 
our specific needs as they recruit to meet their objectives 
under the law.
    Mr. Moran. Thank you very much, Ms. Embrey and General 
Sutton. You are both very articulate, and I am glad you are 
doing what you are doing.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Frelinghuysen.

                          PERSONNEL SHORTAGES

    Mr. Frelinghuysen. Could you put a little meat on the bone? 
When Senator Dole and Secretary Donna Shalala did their work 
with the Wounded Warrior Program at Walter Reed, the Army was 
down 20 percent from its full complement of psychologists at 
that point in time. The Air Force was missing 17 percent of its 
235 authorized psychologists. It only filled, I think, 11 of 
the 23 internship slots last year. And the Navy, which also 
provides, correct me if I am wrong, psychological services for 
the Marine Corps, was down 29 percent with only 87 of its 122 
psychologists and nontraining positions on board. I know the 
figures are a little bit outdated. Where do we stand now?
    General Sutton. Sir, when the services came together as 
part of the Red Cell that Ms. Embrey led last summer, they 
identified what they approached their provider needs were going 
to be. And that was the roughly 1,000 additional providers that 
were identified, of whom approximately 80 percent have been 
hired at this point, thankfully a year, year and a half later.
    I think the other question though that your question raises 
is the need for us to look at our uniformed provider 
population, the authorized slots. Because we know that with the 
needs on the home front as well as the needs on the battle 
front, that there has been a tremendous load, an operational 
and deployment load on our uniformed providers. And that is 
why, as we get the results back from the Center for Naval 
Analysis, the staffing study which we are currently working to 
complete at this point, we will be able to take a look from a 
risk-adjusted population health standpoint to look at the total 
complement of our team, both our uniformed providers as well as 
our government service civilian providers as well as our 
contract providers. So it is a team effort, but your question 
raises a number of different important dimensions that we are 
continuing to pay attention to.
    Ma'am.
    Ms. Embrey. I would like to also add that one of the other 
initiatives that Loree specifically has undertaken, excuse me, 
General Sutton has undertaken is to recognize that our military 
treatment facilities are not where all warriors need care. 
General Sutton has in her Center of Excellence established a 
specific center that is focused on telemedicine that will 
provide a fairly extensive network to use expertise that is 
resident in our system to provide consultative care in remote 
areas. This is particularly to address the issues of guardsmen 
and reservists who live in small towns who do not have access 
to the kind of expertise that is needed. She has a staff that 
is working those issues extensively and leveraging the already 
excellent networks that were established with the VA.
    Mr. Frelinghuysen. Thank you.
    Mr. Murtha. Mr. Bishop.

                       HYPERBARIC OXYGEN THERAPY

    Mr. Bishop. Thank you very much, Mr. Chairman.
    And thank you so much for what you ladies do for our 
Defense health. PTSD and TBI are real challenges that we are 
facing with this Committee and our force. And you have 
indicated in your testimony that, well, let me just say that, 
because of the challenges we face, recruitment and retention of 
trained military personnel who are affected by TBI and PTSD is 
difficult. And the replacement costs, which this Committee has 
to be very concerned about, are very, very high. If you have 
got a pilot or a Special Ops person who suffers from PTSD or 
TBI, you are talking about hundreds of thousands of dollars per 
soldier to replace that particular personnel.
    In your testimony, you talk about the fact that, in fiscal 
years 2007 and 2008, you executed research, development and 
testing in the areas of psychological health and TBI, including 
complementary and alternative medicine approaches to treating 
PTSD and TBI, and yoga, even acupuncture. My question to you, 
based on some information that I have recently seen, is, what 
has the Department of Defense done in relation to hyperbaric 
oxygen therapy treatment that has been used and which has been 
found to be extremely effective and economical in treating TBI 
as well as PTSD? There have been particular concerns where it 
has been tried and utilized and results were given, but TRICARE 
would reimburse the cost of the treatment. It is my 
understanding you can get any of those treatments for about 
$16,000 compared to hundreds of thousands of dollars to retain 
or to train and recruit new military personnel. So tell me 
about the hyperbaric oxygen therapy support that the Department 
has given and whether or not you are going to pursue that, 
whether or not you think it is something that we ought to 
pursue, and if it would give results, would you please.
    General Sutton. Thank you, sir, for that question.
    Mr. Bishop. And explain for those who may not know what 
that is, what that treatment consists of.
    General Sutton. Yes, sir.
    Hyperbaric oxygen is a treatment that has been around for 
years. It has been used, for example, very effectively with 
wound healing as well as divers, in terms of folks who have the 
benz. There are a number of different uses for which there is 
clearly sound evidence upon which to base that practice.
    When it comes to traumatic brain injury, at this point, 
although there are some very promising case studies, we have 
not yet got the science in front of us that will allow us to 
move forward and establish this as a standard of care.
    Now, having said that, we are as hopeful as anyone that 
this may be actually, may become a proven standard of care that 
we can use on behalf of our troops who are experiencing post-
traumatic stress and TBI. We were looking forward to funding 
research, quality research. In fiscal year 2007/fiscal year 
2008 Broad Agency Announcement, there was one study proposal 
that met scientific muster with our peer-reviewed process. We 
funded it; a preclinical animal study. We have also worked with 
Dr. Bill Duncan, who is here today; and his group, Dr. Harch at 
Louisiana State University; as well as Dr. Cifu, who is at 
Richmond; and Dr. Lynn Weaver at Utah, to name a few of the 
experts in this area. And we brought together, understanding 
that the research hadn't been done, and we didn't get the 
proposals that would have allowed us to move forward, we said, 
well, let us bring together the leading experts across the 
services, across the government and across the Nation. So early 
last December, we brought together approximately 60 individuals 
and spent 2 days immersed in this. The individuals who had done 
off-label work with hyperbaric oxygen brought their pilot study 
data. We were able to lay that out on the table. And the 
consensus was among that group that in fact there was enough 
information, there was enough data, enough evidence that would 
allow us to go forward to conduct a multi-site randomized 
clinical controlled trial. And so that is the course that we 
are on right now. We are working across those various studies 
that I mentioned in terms of the individuals who are using it 
for off-label uses at this point. And we are very eager to 
bring that data into the randomized control trial data. We are, 
at this point, compressing what is ordinarily a 12- to 18- or 
even 24-month cycle of study preparation and development so 
that we can launch with subject enrollment as early as this 
April and launch a multi-site randomized controlled clinical 
trial, so that within a year, we will have some definitive 
evidence that will point us towards what the safe and 
efficacious use for this modality may be.
    Mr. Bishop. Do you think it is very promising?
    General Sutton. It is very promising, sir.
    Mr. Bishop. Do you have the resources now that you need to 
move forward with it?
    General Sutton. We do.
    Mr. Bishop. There is nothing else that this committee needs 
to do too?
    General Sutton. Sir, we are, at this point, we have a 
meeting schedule with the FDA at the end of this month. They 
have been very helpful with us in helping us understand what 
the requirements will be. In this case, it will be for an 
investigational new drug registration. And we are moving full 
speed ahead on this without squandering any of the scientific 
rigor and safety and standards that, of course, are so 
important and part of the integrity of any scientific research 
process. But nothing more needed from this committee. We have 
everything we need to move forward, and we are very much 
looking forward to the outcome of this study.
    Mr. Bishop. Thank you very much.
    I understand that one of the people who participated in the 
pilot was a general who had brain injuries and had miraculous 
recovery as a result of this HBOT therapy and that it holds 
great promise for treating this. And it will save our 
government a lot of money in having to retrain people who are 
discharged, who are well trained, as a result of TBI and PTSD.
    General Sutton. Yes, sir. We are all united in that hope 
that we can do whatever it takes to bring relief, health and 
well-being to our troops who are suffering.
    Mr. Bishop. Thank you.
    General Sutton. Thank you.
    Mr. Murtha. Ms. Kilpatrick.

                     DEFENSE CENTERS OF EXCELLENCE

    Ms. Kilpatrick. Thank you, Mr. Chairman.
    And outstanding, as a new member of the Committee, 
outstanding, first, that there are women in charge. I am most 
impressed by that.
    General, General Sutton, your passion, your understanding 
and really the rigor that you use in presenting yourself and 
the material is outstanding, to the both of you.
    How long and how old is this Defense Center of Excellence?
    General Sutton. Ma'am, thank you for your kind comments and 
your words of support. The Defense Centers of Excellence opened 
its doors on the 30th of November in 2007. At that time, we had 
a receptionist, a phone number, a bank of empty offices, a 
part-time chief of staff and two contractors, thanks to Ms. 
Embrey's generosity. From that point forward, ma'am, we have 
evolved the concept. We have grown the five component centers 
that I mentioned. We have developed the design and concept of 
operation for the National Intrepid Center of Excellence, which 
will be the hub of our national and global network. We have 
also recognized the importance of broadening our focus. You 
will recall perhaps in the spring and summer of 2007, following 
the Walter Reed tragedy, there was a lot of focus on PTSD and 
TBI.

                     POST-TRAUMATIC STRESS DISORDER

    Ms. Kilpatrick. And how long has that been defined as such? 
I mean, how old does it go back?
    General Sutton. Post-traumatic stress disorder was actually 
codified in the Diagnostic and Statistical Manual for the 
American Psychiatric Association in 1980.
    Ms. Kilpatrick. It has been evolving ever since.
    General Sutton. But I will tell you, ma'am, and this is why 
it is so important for us to learn from history, is that we 
know from the beginning of time that these issues related to 
the adversity of war and post-traumatic stress, everyone is 
affected by combat. In fact, I would worry about an individual 
who, going down range and experiencing what our warriors are 
experiencing today, who would come back and say, you know, it 
didn't affect me a bit. Of course, it does. In our own civil 
war, we talked about it then as ``soldier's heart,'' which 
remains to this day my favorite phrase for those struggles. But 
of course, World War I, ``shell-shock.'' World War II, ``battle 
fatigue.'' More recently, combat stress and post-traumatic 
stress.
    Ms. Kilpatrick. That is where I was kind of going. I have 
an uncle, a World War II veteran, mental illness, then came 
home looking fine but, for the next 60 years, was in and out of 
mental health hospitals and lived there for a couple of years; 
just died last year at 80-some years old, did not find it at 
first. He came back looking normal, but he obviously had 
battled something and lost his mind literally. I am happy to 
see the innovations and how we have moved forward on that.
    I have one of my staffers here, who is Riley Grimes, who 
won the Purple Heart, won an award from the Purple Heart 
Association just recently for his work in this area, so he has 
been kind of updating me. He is a Marine himself, so he has a 
certain passion for that. So I want to appreciate you for that.

                          MULTIPLE DEPLOYMENTS

    Ms. Kilpatrick. Tour of duty. And we keep hearing they keep 
going back again and again, some two, three, four-time 
deployment. I just last weekend was with Chairman Dicks in 
Washington State on a naval submarine, two of them, and one 
aircraft carrier, talking to young sailors, I am told, sailors 
not soldiers, sailors. And many of them have been out two or 
three times. With the number of suicides and what you discussed 
earlier with both TBI and PTSD, how does it all relate? How can 
we help with that? What needs to happen?
    It comes back to me that we are short military. Contractors 
we talked about a little bit in this Committee, and we are 
going to talk about it more, and we have more now than ever 
before. Do we need--and this may not be your part, because I 
know you are healthy. With the shortages that we are seeing in 
the enlisted and the repeated tours of duties and TBI and PTSD, 
how does it all intertwine and relate?
    General Sutton. Thank you for that question, ma'am. It is a 
serious concern.
    I think once again, looking back to our history, never in 
the history of our Republic has so much been placed on the 
shoulders of so few on behalf of so many for so long. And so 
there is an enormous challenge for us to both do some of the 
things that are already under way in terms of expanding and 
increasing the force strength as well as tailing back on the 
tour lengths. Those are certainly factors, risk factors that we 
are well aware of.
    I think also there are the struggles--and you mentioned the 
Navy. The Navy and the Air Force, those troops who have been 
included as individual augmentees for units to go downrange and 
to do things perhaps for which they had not been trained 
initially, then they received training and go down as part of a 
unit but not their home unit. That also carries significant 
stressors related to it.
    We know that in the history of warfare, actually, suicides 
themselves, the suicide rate typically during high-intensity 
warfare is not adversely affected; and that makes some sense 
because when you are in high-intensity warfare, you are focused 
on a goal. Operations are very fast, very intense, very deadly 
at times certainly. But suicide doesn't seem to be affected 
adversely in those conditions.
    We know that when it becomes a lower intensity and more 
protracted situation----
    Ms. Kilpatrick. Like multiple tours of duty.
    General Sutton. Like multiple tours, like the kinds of 
stressors on families, like the physical, spiritual, 
psychological, and moral wear and tear over a protracted period 
of time, certainly that has its impact.
    But I would like to also point out that while everyone is 
affected by combat, the majority of individuals do not go on to 
develop a disorder. The majority of folks who experience 
concussion or mild TBI completely recover from that injury and 
do well.
    Now it is important for us to document it as we would any 
other injury, and it is important for us to monitor and 
evaluate to see, does this troop need to take a leave? Do they 
need to take a few days before they get back into the battle? 
And, of course, we have some of the same challenges that the 
civilian world does with high-school-football-age and college-
age players who want to stay in the battle.
    But those are all things that are important for us to 
continue to monitor, to act, to develop those programs while, 
at the same time, we ensure that we put the truth out in terms 
of the fact that most folks will actually do very well; and in 
fact many, despite the adversity of war, will go on to claim 
what has been termed now post-traumatic growth. That is to say 
that even, for example, the double-lower-extremity amputee that 
I spoke with last week at the Canadian Embassy who told me, 
ma'am, if someone offered to give me back my legs today, I 
wouldn't take them. I have grown so much in this experience. I 
know so much more about myself, my family, life, what my 
purpose is.
    Individuals, despite the most adverse and ugly of 
situations, can develop a greater sense of purpose, of faith, 
of meaning, of connection to others. And so it is important as 
we go forward that we communicate accurately and balance not 
only the tough reality of war but also ensure that individuals 
understand that this is an experience like other traumatic 
experiences from which individuals cannot only bounce back but 
also grow stronger as a result.
    Ms. Kilpatrick. Thank you.
    Mr. Chairman, one more, based on what you just said.
    So will we find in 5, 10 years RAND studies that show it is 
not the combat itself but maybe the tour of duties or duty that 
would cause the rates to increase?
    General Sutton. You know, those are all questions that, as 
we focus our longitudinal prospective studies now over the next 
10 to 15 years, we will absolutely be able to understand more 
about those factors. Right now, what we know is that each of 
those factors has an additive effect, but we don't understand 
completely the relationship between them as well as the various 
factors that combine to make this such a tough experience for 
both troops as well as family members. And I must also 
recognize and I appreciate so much the Committee commenting on 
the service and sacrifice of our health care professionals. It 
is just phenomenal.
    Ms. Kilpatrick. Thank you.
    Thank you, Mr. Chairman.
    General Sutton. And they deserve our care and concern as 
well.
    Ms. Kilpatrick. Right. Thank you very much.
    General Sutton. Thank you.
    Mr. Murtha. Mr. Dicks.

                  HYPERBARIC OXYGEN THERAPY TREATMENTS

    Mr. Dicks. I apologize for not being here for your 
testimony. I have another Committee that I Chair, and we are 
reviewing the conduct of the Department of the Interior this 
morning.
    There are two questions I wanted to ask. One, I had some 
people come into my office. And I know you have discussed this, 
but I want to discuss it a little bit further, on hyperbaric 
oxygen therapy treatments. What they basically told me is that 
they are having great difficulty--that because the Surgeon 
General I think of the Navy somehow doesn't like this treatment 
or thinks this treatment, you know, has to be studied further, 
FDA, whatever--but there have been 16 instances where they use 
I guess an off-label prescription; and in all 16 of these, the 
people have been dramatically improved, in cases that were very 
severe. And this is with traumatic brain injury.
    So if you have had 16 successes--and I think this is 16 for 
16--why would we then go have a study? I mean, what I am 
concerned about--now General Corelli keeps telling me that we 
are moving out, that we are going to get something in the 
field. But I don't see that yet. Except I understand we are 
doing yoga and massage and things like this. To me, that seems 
as if a higher priority might be the hyperbaric oxygen 
treatment if it is really helping these people beyond these 
other things. I mean, I can't understand why it is, you know, 
that it is taking us so long to come to grips with this and to 
take action.
    General Sutton. Sir, thank you for your comments and your 
question.
    First of all, let me just clarify, the Navy Surgeon General 
has been enormously supportive of this endeavor.
    Mr. Dicks. I am glad to hear that.
    General Sutton. In fact, hosted a conference at his office 
last August. All of the Surgeon Generals. And in fact, the vice 
chief, the service vice chiefs--and you mentioned General 
Corelli, but all of the service vice chiefs have come forward 
and, in fact, are now serving as----
    Mr. Dicks. So why are we going to study it? Why can't we 
just implement it and let people get this treatment?
    General Sutton. Sir, we brought together the 60 leading 
experts in the country to advise us on this issue. Because--
yes, sir.
    Mr. Murtha. Sixteen people were treated, and sixteen people 
were successful? Is that accurate?
    Dr. Duncan. Yes, sir.
    Mr. Dicks. Who said, yes, sir, in the back? Are you a 
witness or are you public?
    Dr. Duncan. I am a doctor.
    Mr. Dicks. Okay. Well that is good. So you know about this, 
too.
    Mr. Murtha. Is that accurate or not accurate?
    General Sutton. I have seen some case reports----
    Mr. Murtha [continuing]. People know whether it is accurate 
or not?
    General Sutton. I have not seen 16 case study reports, but 
I have seen the five that Dr. Duncan has recently distributed.
    Mr. Murtha. Does Dr. Duncan work with you?
    General Sutton. He does not, sir. We certainly are 
colleagues.
    Mr. Dicks. Who does he work with?
    General Sutton. I will let Dr. Duncan speak for himself.
    Dr. Duncan. I am a pro bono lobbyist for the hyperbaric 
community to get these men and women treated as quickly as 
possible.
    Mr. Murtha. Factually, we know that 16 have been treated; 
and that is accurate?
    General Sutton. We do not know, sir. I have not seen that 
data. I will tell you that Dr. Jim Kelly, who was a member of 
the consensus group study, the group of experts that met in 
December, as was Dr. Duncan, when they looked at these 
promising case studies--and that is what they are. They are 
very promising.
    Mr. Dicks. When was this?
    General Sutton. Early December of 2008, sir.
    Mr. Dicks. That is 3 months ago.
    General Sutton. Yes, sir. When we came out of that 
conference, the consensus of those national experts was that, 
given these promising case study results, given the promising 
off-label uses for this modality, that the time is now ripe for 
us to proceed to what becomes the gold standard for scientific 
evidence. And this is an opinion that is supported by the 
leading experts across the Nation. We are being responsible 
scientists and leaders in this area.
    Mr. Dicks. How did these doctors, these 16 doctors decide 
that they didn't need any further studies or analysis, that 
they could go forward and prescribe this and then have it work 
and yet we are still not--we are still not moving out on this? 
This is what is very frustrating to me.
    Ms. Embrey. Sir, off-label use, if the Department of 
Defense were to establish a policy to direct doctors to a 
standard of care that was off-label, not FDA-demonstrated in 
science and evidence----
    Mr. Dicks. The FDA has approved this, by the way.
    Ms. Embrey. Not for this. The issue is we in the Department 
of Defense have a long-standing policy that we do not direct 
off-label practices without the evidence behind it. So any 
doctor can talk to their colleagues and make a judgment based 
on the particulars of that individual to use a therapy in an 
off-label way. For instance, aspirin for heart, you know, for 
heart, cardiac issues, that is an off-label use of aspirin. 
Although aspirin isn't a prescribed drug, but it is a simple 
way to understand it. The Department of Defense can't just make 
a policy to go do this since it is an off-label application.
    Mr. Dicks. Even though it has worked.
    Ms. Embrey. Doctors can choose to do it on a case-by-case 
basis. But as a department policy, we cannot direct it as a 
standard of care without the evidence.
    Mr. Dicks. All right. My time is running out.
    I have another question. The other issue is----
    Mr. Murtha. Excuse me. Tell us what this is. Tell us what 
this encompasses, this process.
    Ms. Embrey. Well, FDA----
    Mr. Murtha. No. I mean, what is he talking about?
    Mr. Bishop. Hyperbaric oxygen therapy.
    General Sutton. Yes. Hyperbaric oxygen therapy involves a 
series of usually 40 to 60 treatments where an individual is 
exposed to increased atmospheric pressure of oxygen, and it is 
certainly closely supervised medically. It has been proven to 
be effective for conditions such as wound healing as well--
infection as well as certainly when divers, for example, get 
the bends. The research, though, just simply has not yet been 
done to establish its use for TBI.
    Mr. Murtha. I want to know. You get in some sort of a----
    General Sutton. A chamber, yes.
    Mr. Murtha. Turn the atmospheric pressure up and adjust 
that and so forth, and it is closely monitored?
    General Sutton. Yes, sir.
    Mr. Bishop. They have increased oxygen, also.
    Mr. Dicks. These off-label prescriptions were people with 
traumatic brain injury who, because of the treatment, were 
vastly improved and able to go back to their jobs. I mean, so I 
think it is worth--I am glad you are at least looking at it. It 
just takes so long. That is what is frustrating.
    Mr. Bishop. They also generated new nerves. Nerves that had 
been killed were regenerated in the brain.
    Mr. Murtha. Well, I have to take the side with the Defense 
Department. I argue with folks all the time about these things. 
But we want to make sure it is safe, because there are always 
effects that we don't recognize.
    We were talking earlier, Norm, about transplants. And when 
you transplant a hand, it is something that they haven't done a 
lot of. But the rejection figure really causes a lot of 
problems. So we have got to be careful here.
    But, from what I am hearing is, we certainly ought to move 
as quickly as we can studying this thing so that we know what 
we are doing.
    General Sutton. Absolutely.

               WEB-BASED CLINICAL MENTAL HEALTH SERVICES

    Mr. Dicks. If I could just finish up here. The other one I 
wanted to ask you about, our Committee last year in the report 
said to DOD, to establish and use a Web-Based clinical mental 
health service program is a way to deliver critical clinical 
mental health services to service members and their families, 
particularly in rural areas. Now, I know that--and I talked to 
General Corelli. I have talked to everybody about this. I know 
you sent out a request for information, and now you are going 
to have an RFP on this, and I have been told that a decision is 
going to be made on this by April. Is that correct?
    General Sutton. Actually, sir----
    Mr. Dicks. I happen to think that for a lot of people who 
are fearful that there is going to be recriminations, to have a 
Web-Based system--I think you could even do this in country 
where they would be able to go back, talk to a psychiatrist and 
have it done privately and get the help that they need.
    I think this--and especially for our Guard and Reserve 
people who aren't at like Fort Lewis or a base, this is another 
way of trying to reach out and help these people. And we see 
these suicide numbers going up, up, up, and yet again there--we 
put this in months ago, and we are supposed to get a report 
back on March 16. It is frustrating that we can't move this 
forward a little more expeditiously, because I think it is an 
idea that is at least worth studying, and we should do it as 
soon as possible.
    General Sutton. Sir, I completely agree with you, and I 
would like to inform you of some of the efforts that are 
already under way.
    For example, Military OneSource, an individual can get 
counseling online, by phone or in person. The military mental 
health tool, which was launched last year, develops the ability 
for an individual in the safety and the privacy of their own 
home to be able to assess their mental health and to get linked 
up with those that can help them.
    Last fall, we launched the afterdeployment.org. It is a Web 
2.0, 3.0 socially interactive tool which likewise, again, is a 
Web-Based, stigma-free opportunity for troops to get help.
    Destress, which is a program that was developed in 
partnership with Duke University and Dartmouth----
    Mr. Dicks. Is this where the yoga comes in?
    General Sutton. No, sir. Destress is a Web-Based treatment 
program involving coaching and treatment for post-traumatic 
stress as well as depression.
    We also have a training module that is available for 
providers, primary care providers; and we are embedding 
behavioral health providers in our clinics across the services 
and in concert with the VA.
    All of this, sir, in addition to the request for proposal 
that is feeding off of the 23 submissions for information--
there is a lot of interest in this area, and we share it. We 
are excited about it.
    All of these efforts, sir, will serve as a down payment, if 
you will, for what I would say is possibly the most 
revolutionary project that we are endeavored in right now; and 
that has to do with the Sim coach. We are working with the 
Institute for Creative Technology in southern California as 
well as with Carnegie Mellon and DARPA. We are bringing the 
best of artificial intelligence, the best of neuroscience 
knowledge, the best of simulated conversation and expert 
technology and voice recognition to provide a coach, an avatar 
coach.
    With this generation, virtual is as real as real is to us. 
That will provide that opportunity to have a coach that they 
can talk with who can bring in the most promising tools and 
practices and, yes, providers no matter where one is stationed.
    And we have launched the SBIR on that. We have got four 
submissions. We are moving forward towards a Sim coach.
    We will have as a down payment--yes, in the very near 
future we will have providers who troops and their family 
members can access online as well. Every avenue that we can 
possibly use to connect with our troops and their family 
members to provide them that help, that support, that 
compassion that they need, we are committed to providing.
    Ms. Embrey. Sir, I would also like to just clarify, too, 
out of the over $1 billion that this Committee has provided to 
us to study these topics, only $5 million was provided for the 
study of alternative medicine, such as yoga.
    Mr. Dicks. Have you asked for a reprogram?
    Ms. Embrey. Well, it was also congressional direction to 
engage in study of alternative medicine for these topics. It 
was congressionally directed.
    Mr. Dicks. This is where the yoga and the--what do you do 
with the pinpricks?
    Ms. Embrey. Acupuncture.
    Mr. Dicks. Acupuncture, all that. What are the results? How 
is that working?
    General Sutton. Actually, sir, there is some very promising 
results. A couple of months ago Dr. Kelly and I had a chance to 
visit the Rehab Institute of Chicago where we funded some 
research, in this case looking at the efficacy of using 
acupuncture for sleep conditions. We know that sleep problems, 
it is the number one factor that affects our troops coming 
back. And of course when your sleep is not going well, nothing 
goes well over the long term. And pain management as well.
    So in talking with that particular research group, one of 
the things that they are very hopeful about at this point, the 
preliminary findings are looking good. But the possibility is 
that we could--just as we have provided our frontline corpsmen 
and medics a tourniquet to be able to perform life-saving 
practices that will save lives for severely injured 
extremities, we are looking at the possibility of having a very 
basic acupuncture kit which could be used for sleep, for pain, 
if the research continues to support it.
    Our own deployment health clinical center has done some of 
the pioneering work, looking at virtual cognitive behavioral 
therapy and its use for post-traumatic stress. Also, the use of 
yoga and acupuncture. We have got a program just up the road at 
the Deployment Health Clinical Center that has a 3-week 
regimen. They bring in referrals from all over the Department 
of Defense, folks who just aren't getting better where they are 
locally. And it is not clear why. We bring together the best of 
eastern medicine, the best of western medicine.
    As one officer last spring testified here on the Hill, he 
said, I owe my life to this program, my family. We have had 
continued testimonials as well as rigorous science that have 
demonstrated the efficacy of some of these promising practices. 
So it is on that basis, whether it be hyperbaric oxygen or yoga 
or acupuncture or tai chi, we will continue to follow these 
promising practices and learn everything we can on behalf of 
our troops and their loved ones.
    Mr. Murtha. The $5 million we put in was to study whether 
alternative medicines were working, not for alternative 
medicine but whether it works or not, $5 million. You can spend 
any amount you want to on alternative medicine. We said, study 
it and come up with a result.
    Mr. Frelinghuysen.

                         THERAPEUTIC PROPOSALS

    Mr. Frelinghuysen. Just so I understand it, you serve as a 
clearinghouse. You should know that Members of Congress are 
visited by a variety of different constituents, university-
based R&D, hospital-based R&D, which may not be university 
connected, the private sector with a variety of therapeutic 
proposals to deal with TBI. Just assure the committee that you 
are the general clearinghouse for such proposals here. I mean, 
the ingenuity that is out there is incredible, what people are 
coming up with. But you are the gatekeeper.
    General Sutton. It is absolutely phenomenal, sir. And as we 
have gone across the country and visited with the leading 
programs across the country, whether it be places like Mayo 
Clinic, Cleveland Clinic, UCLA, Stanford, Cornell, Kessler 
Institute, just these programs across the country who are doing 
just incredible work, much of the time in partnership with our 
own scientists, our own clinicians.
    We are working right now, for example, with the NIH, their 
Center for Information Technology. We are signing a memorandum 
of agreement that will establish the same data analytic and 
storage infrastructure as was developed for autism. This will 
allow researchers around the country and around the world to 
have visibility of the knowledge as we reap it, as we harvest 
it from this research that will then advance and catalyze the 
development of effective treatments and approaches for our 
troops.
    So we are absolutely joined at the hip with, for example, 
our consortium, our research as well as our clinical 
consortium, the leading minds not only in this country but 
around the world. So we are absolutely committed to continuing 
to develop those relationships, that network of networks, not 
just in this country but in places like Canada, like Great 
Britain, like Australia, Spain, any number of countries that we 
have already been partnering with.
    I would also mention, sir, is that as important as the 
medical----
    Mr. Frelinghuysen. You are going to give your stamp of 
approval here?
    General Sutton. Oh, yes, sir.
    Mr. Frelinghuysen. This is obviously based on sound science 
medicine. There are a lot of interesting people that come into 
our lives, but we want to make sure that it is substantiated in 
a way that it has veracity, that it is truly effective.
    General Sutton. We adhere to excellence, yes, sir, in all 
things. And that means that we cannot squander, we cannot 
violate scientific rigor and integrity. So we will not do that. 
But we certainly will relentlessly pursue leading and advanced 
ways of treating, of diagnosing, of screening, of building 
resilience, of supporting our troops and their loved ones with 
a sense of focused urgency because we know time is not our 
friend.
    Thank you.
    Mr. Murtha. One of the things we are still concerned about 
is there is a number of Wounded Warrior programs. We don't 
think that you have proved to this committee, who funds these 
programs, that they are working.
    We need you to give us some proof if there are gaps in the 
program, overlapping programs, are we spending money in areas 
where we shouldn't be spending it to--I am not convinced that--
you know, it sounds good. You know, you can get up here and 
tell me apocryphal stories, but we want to see the proof. We 
want to see that these are working. Because if there is 
someplace else that we could spend the money, we would want to 
spend the money there.
    The Congress is anxious to spend money in the places where 
it works. But, you know, many times when you get a name like 
Wounded Warrior, that sounds good. But, you know, there is a 
lot of programs in that category that we are not sure of that 
merit funding. So you need to show us about that.
    The other thing, simulation out there, you said you looked 
at the simulation out there at Camp Pendleton. Do you think 
that it hardens the mind, it helps with their mental attitude 
when they go into combat?
    General Sutton. Sir, the evidence points to the fact that 
anytime that we can build resilience through the use of tough, 
realistic and, yes, dangerous training that as closely as 
possible approximates what a troop will encounter in battle, 
that will much better prepare them for that experience.
    Mr. Murtha. I want to you answer specifically. Does this 
help? Because General Mattis wants me to fund that. He wants me 
to recommend to the Committee we fund that and one at LeJeune. 
Does that help? That is what I am asking you. Does this 
particular program help toughen mentally the people going into 
combat?
    General Sutton. Sir, we have research that is undergoing 
right now looking at those specific programs. The preliminary 
results are promising. I will let you know in 6 months what my 
opinion is on proliferating.
    Mr. Murtha. We want you to let us know by May or June, 
because that is when we will be funding the programs.
    General Sutton. Okay, sir.
    Mr. Murtha. Any other questions?
    Mr. Bishop.

                             PTSD SCREENING

    Mr. Bishop. Yes, sir.
    Ms. Embrey, one of DOD's psychological strategic goals is 
to ensure early identification and prevention for individual 
conditions, but apparently this does not always occur. I have 
got two soldiers from my district who were not properly 
diagnosed on redeployment for PTSD, and they suffered 
relationally, that is, ended up in divorce. And they suffered 
professionally, ended up with some problems and ended up 
getting busted.
    The issue seems to be improper screening at the local unit 
level. DOD has designed the National Intrepid Center of 
Excellence to deal with PTSD nationally. What is being done to 
rectify the issue of poor PTSD screening at the local unit 
level? And how can our troops who are suffering from PTSD and 
related mental health problems be properly screened so that 
they don't suffer disciplinary actions, which are really a 
function of their PTSD?
    Ms. Embrey. I think that we have struggled to develop 
sensitive and specific assessment tools that allow us to 
understand through a dialogue of questions whether or not an 
individual is at risk and needs referral and intervention for 
PTSD and other traumatic stress. The challenge is is that some 
individuals are in denial or they choose not to answer the 
questions honestly; and, as a result, they make it through the 
accessment without referral.
    So what we are trying to do is a double-pronged process, 
which is to address the issue through outreach with the line 
leadership. We learned that individuals respond well to 
traumatic stress with very strong leaders.
    Mr. Bishop. Can I interrupt you for a second? I have got an 
example right here where an individual says that on the 20th of 
January he approached his first line supervisor with an issue 
that he needed to see the chaplain, he was having mental 
issues, and he needed to be dealt with. All the way through--he 
was set up for an appointment. It was cancelled. He tried to 
make it through. He was rescheduled. It was set up. It was 
cancelled. All the way--and his next appointment is now set for 
March 9. He has not gotten the support that he needed on the 
unit level.
    And that is to make my question short. But I have got a 
narrative here on what this particular soldier had to go 
through and still has not gotten his therapy. He has not gotten 
to talk to a therapist.
    Ms. Embrey. I misunderstood your question. I thought you 
were talking about our assessment process.
    Actually, when an individual seeks care--there is emphasis 
from the very top of the department when a person approaches a 
commander for a referral. It may well be that the culture has 
not changed, and we need to further emphasize it further down 
the line and make sure that people understand that when people 
have identified a need that they are taken care of as quickly 
as possible.

                          MEDICAL HELICOPTERS

    Mr. Murtha. Let me just stress the last question here, the 
CSAR thing. I just saw a classified report. The staff went down 
and got me a classified report. You folks have to weigh in on 
this. We can't let the budget drive the number of medical 
helicopters we have. They don't want to announce the number 
they have because it is inadequate, in my estimation. But the 
amount of time it takes to get these people out of the field is 
absolutely unacceptable. So I wish you folks would look at it 
and then make a recommendation, to us in particular.
    I went out to Nellis, and I was unhappy about--so we put 
$100 million into refurbishing the ones. The RFP fell by the 
wayside. Now Secretary Gates is himself involved. But sometimes 
they get sidetracked by numbers.
    You folks are the ones that use it, and you folks are the 
ones who should make the recommendation. So I need to hear from 
you about the numbers you need and see if there is anything we 
can do.
    It is a complicated problem. And with the altitudes they 
have, with the outposts that are so isolated, it is a much 
different situation; and the Afghans are a much more difficult 
enemy than the Iraqis. So we have got some real problems here.
    But we appreciate your coming before the Committee, your 
dedication to the health of our soldiers.
    The Committee will now adjourn until 10:00 Thursday, March 
5.
    Ms. Embrey. Thank you.
    General Sutton. Thank you, Mr. Chairman.
    [Clerk's note.--Questions submitted by Ms. Granger and the 
answers thereto follow.]

    Question. Has the Defense Department estimated or studied the 
impact of OEF and OIF on local community health systems, and in 
particular the mental and behavioral health systems in regions where 
the military is growing the force? More specifically, the north Texas 
region?
    Answer. Absolutely. The TRICARE Regional Office-South, with its 
managed care support contractor, Humana Military HealthCare Services 
(HMHS), has established the Warrior Navigation and Assistance Program 
(WNAP) to support Active Duty, Guard, and Reserve warriors in 
transition and their families with information and assistance with 
TRICARE programs. WNAP offers these beneficiaries person-to-person 
guidance and access to a new advocacy unit specially trained for the 
unique challenges that many warriors face as it relates to access to 
care or the need for information on all available resources. This 
includes the Military Health System, Veterans Affairs, and local 
community assets. Additionally, WNAP will also oversee education and 
assistance initiatives for civilian providers caring for warriors and 
their families.
    In addition to WNAP, HMHS has partnered with ValueOptions to 
provide behavioral assistance and services to beneficiaries in the 
South region, which includes north Texas. They provide a behavioral 
health provider locator and appointment assistance line.
    Question. One of the biggest challenges faced by the behavioral 
health care organizations in my region when trying to provide outreach 
and treatment is the lack of knowledge as to the number of soldiers in 
the region, specifically the reserve component, that need immediate 
access to behavioral health specialists. Is there a reason that non-
military entities are not able to access information in the Millennium 
Cohort Study to assist in planning and delivering of behavioral health 
services? If not, why? Please explain.
    Answer. We appreciate the outreach efforts of behavioral health 
care organizations in your region. The best and fastest way to help our 
beneficiaries is to have those organizations work with local military 
treatment facilities, the TRICARE Regional Office-South and the managed 
care support contractors for your region. Humana Military HealthCare 
Services has partnered with ValueOptions to provide behavioral health 
care. We expect all to work together to either provide or arrange for 
health care for our beneficiaries.
    In response to concerns about the health effects of deployments 
following the 1991 Gulf War, Congress and the U.S. Institute of 
Medicine recommended that the DoD conduct prospective epidemiological 
research to evaluate the impact of military exposures, including 
deployment, on long-term health outcomes. The Millennium Cohort Study, 
the largest prospective health study in the military with more than 
140,000 participants at present, meets this critical need. The 
Millennium Cohort Study is poised to provide critical information 
toward understanding the long-term health of future generations of 
military members, thus contributing to force health protection, a DoD 
priority. The DoD Center for Deployment Health Research currently 
shares non-patient specific information collected with non-DoD 
entities.
    Question. How is the Department addressing behavioral health care 
needs in large rural areas that consist of diverse populations?
    Answer. Our military treatment facilities, TRICARE regional 
offices, and our managed care support contractors work together to 
provide or arrange for care. For TRICARE Prime enrollees, they work 
together to provide the care within our written access standards, 
regardless of location. Because we understand that access to behavioral 
health services is a key component of TRICARE, we require our managed 
care support contractors to offer beneficiary assistance to Active Duty 
service members and Active Duty family members in locating behavioral 
health care providers and making behavioral health care appointments. 
We have asked our contractors to provide a dedicated toll-free 
telephone number and have given them one of two ways to assist the 
beneficiaries.
    The first way the contractor will provide telephone numbers of 
behavioral health care providers and call the beneficiary back within 
three days to see if the beneficiary was successful, and to offer any 
additional assistance needed. The second way, the contractor will 
establish a three-way conversation between the beneficiary, provider's 
office and the contractor. The contractor will only participate in this 
three-way conversation long enough to confirm the provider is willing 
to provide an appointment.
    Question. How is the Department addressing behavioral health care 
needs in large rural areas based on reserve components?
    Answer. The Department has implemented many programs for our 
Service members who reside in medically underserved areas and in 
particular to meet the mental health care needs of our Reserve members. 
We have been incrementally enhancing our capabilities from general 
medical support to niche programs designed to support the specific 
mental health challenges faced by the Reserve Component. Our vision is 
for a robust system of mental health support across the entire 
continuum of care. The following are highlights of different types of 
programs currently offered along this continuum.
    Prevention/Pre-clinical:
    (1) An example of an internet-based mental health tool is 
afterdeployment.org, online since August 5, 2008, which offers 
anonymous access. Afterdeployment.org addresses the concerns of Service 
members who do not seek in-person consultation for adjustment problems 
because of barriers to care and concerns about stigma. Its behavior-
change strategies and educational materials span several content areas, 
including combat stress; conflict at work; re-connecting with family 
and friends; depression; anger; sleep problems; substance abuse; stress 
management; kids and deployment; spiritual guidance; living with 
physical injuries; and health and wellness.
    (2) Another example of preclinical counseling support is Military 
OneSource. This is an internet-based Service member and family 
assistance program that offers personalized advice and support on many 
kinds of issues, such as relationship problems, spouse employment, and 
other mental health issues. Military OneSource offers the opportunity 
for Active Duty, Reserve, or National Guard Service members or their 
family members to speak to master's-level, credentialed healthcare 
providers or social workers on many topics.
    Diagnosis and Care: One of the most mature programs available to 
the Reserve Component addresses both physical and mental health needs. 
TRICARE Reserve Select (TRS) is offered to qualified National Guard and 
Reserve members who are not otherwise qualified for TRICARE. It is a 
premium-based plan and offers coverage similar to TRICARE Standard and 
Extra. TRICARE Reserve Select allows the first eight behavioral health 
visits per fiscal year without prior authorization. TRS members may 
obtain this care from any TRICARE authorized mental health provider, 
but we encourage these members to use existing TRICARE network 
providers. Members choosing TRS are authorized to use military 
treatment facilities on a space-available basis.
    Screening/Assessments: The Post-Deployment Health Reassessment 
(PDHRA) program is designed to identify and address health concerns, 
with specific emphasis on mental health, that have emerged over time 
following deployment. The reassessment is scheduled for completion 
before the end of 180 days after return from deployment so that Reserve 
Component members have the option of treatment using their TRICARE 
health benefit. The PDHRA is required for all Service members who have 
returned from operational deployment, including all National Guard and 
Reserve members, as well as those who have separated or retired 
following their return from deployment. The assessment includes 
questions on behavioral health and traumatic brain injury.
    Transition: The Transitional Support Program (TSP) has been 
designed to bridge potential gaps in psychological health services that 
can occur during periods of transfer that are typical to Service 
members. The TSP uses an established behavioral health network with 
national networking capabilities and scope. Through the program, 
Transitional Support Facilitators provide a readily accessible (24/7), 
knowledgeable specialists for Service members who are seeking expert 
advice about mental health specialties, techniques, and modalities that 
are typically used in therapy, as well as direction in obtaining 
assistance and resources in their immediate area.
    Question. It is my understanding that the Texas region is 
underserved and if that is accurate, can the coalition of behavioral 
health care providers led by University of North Texas Health Science 
Center work effectively with the Defense Center of Excellence?
    Answer. We are always interested in learning more about new and 
innovative ways to assist Service members, Veterans, and their 
families. As to this specific program, it sounds promising and 
something the DoD would be interested in exploring. As a result, we 
will be in contact with them, and hope to set up a meeting where we can 
learn more about the program, and better determine whether it would be 
of benefit.

    [Clerk's note.--End of questions submitted by Ms. Granger. 
Questions submitted by Mr. Murtha and the answers thereto 
follow.]

                  Mental Health and Military Families

    Question. Visits to military bases have confirmed the widespread 
nature of this problem. Declines in school performance and increases in 
disciplinary problems have surfaced at major bases throughout the 
country. For example, last year alone the Children's hospital here in 
D.C. had over 1,000 visits from children of military Service members, 
many of which were suffering from mental health problems. Getting 
information about the trends in children's illnesses related to the war 
would serve as an important basis for potential additional action by 
the Committee.
    Of the amounts this Committee approved for PTSD and other mental 
health programs, how much have you dedicated for children's programs? 
What are there any notable trends in children's illnesses related to 
the war?
    Answer: In addition to robust family support systems at 
installations and online, a step-up of $5,010,800 has been dedicated 
for children's programming, with $4,710,800 for Sesame Street programs 
and distribution of Sesame Street DVD's and online resources: (http://
www.sesameworkshop.org/initiatives/emotion/tlc/). Videos were developed 
for children and adults covering: deployments, homecomings, and 
changes. In addition, specialized outreach materials and guides for 
using the videos were developed and distributed.
    In addition, $300,000 went to the DoD Uniformed Services University 
of Health Sciences' Child Trauma Network organization and affiliations, 
supporting research into the effects of war on children. We have also 
allocated $320,000 for the ``Signs of Suicide'' school-based suicide 
prevention program in DoD middle and senior high schools and others 
with high proportions of military dependents.
    Significant trends from 2003 to 2008 have been noted for child and 
adolescent use of DoD direct and purchased mental health care 
resources. There have been increases in inpatient bed days for both 0-
14 and 15-17 age groups, as well as for ambulatory mental health visits 
in both age groups.
    Historically most information about the effect of war on the 
children of Service members has been anecdotal and limited. DoD-funded 
research is underway to more precisely define the relationship.
    Question. If so, what initiatives have been funded by the 
Department and what are potential future programs that should be 
considered?
    Answer. In 2006, the offices of Health Affairs and Military 
Community and Family Policy jointly funded a specialized initiative to 
establish the United States military site of the National Child 
Traumatic Stress Network, based at the Uniformed Services University of 
the Health Science's Center for the Study of Traumatic Stress. This 
program develops knowledge related to military childhood experiences, 
develops effective public education materials, and expands and studies 
effective intervention strategies, all using a strength-based approach. 
The Center for the Study of Traumatic Stress conducts research, 
education, consultation, and training on preparing for and responding 
to psychological effects and consequences of traumatic events. Program 
scientists are recognized nationally for their expertise related to the 
health and well-being of military children and have published and 
presented extensively on the topic.
    Signs of Suicide (SOS) is a school-based suicide prevention program 
that teaches adolescents how to identify symptoms of depression and 
suicidality, and how to respond effectively by seeking help from a 
trusted adult. The SOS program is the only school-based program proven 
to reduce suicide attempts in a randomized, controlled study. A future 
program in development will supply SOS Booster Kits to high school 
seniors to prepare them for mental health issues that may arise after 
graduation.
    In order to address the mental health of adolescent and teen 
children of Service members, an online screening was added to the 
existing online Mental Health Self-Assessment Program to help parents 
assess their children for depression or suicidality.
    Current research focuses on a comparison of the effects upon family 
members of a Service member who returns from deployment wounded versus 
those who were not injured. Congressionally mandated research funding 
has been provided for research on the effects of deployments upon 
children. Research consortium centers (hubs) for psychological health, 
and traumatic brain injury are being established in three locations in 
the United States: San Diego, San Antonio, and Houston. Each will be 
affiliated with local study sites at major medical centers (spokes) 
across the country engaging the finest scientific minds to fill gaps in 
research, including research on families and children of Service 
members who deploy.
    Sustained research will more completely characterize the near- and 
long-term effects of sustained war efforts upon our families, the 
effectiveness of enhanced preventive family support, and clinical 
interventions for those who experience severe distress and psychiatric 
disorders.
    Question. What does research tell us about the effects of post-
traumatic stress disorder (PTSD) on children of military members 
suffering from this disease?
    Answer. Returning Service members may suffer from post-traumatic 
stress disorder (PTSD), depression, substance use disorders, or other 
mental health conditions that may have a significant impact upon their 
spouses and children. The extent to which this occurs has not been 
fully characterized for this war. Research regarding Vietnam veterans 
described negative impacts, including reduced family cohesion, 
interpersonal expressiveness, ability to problem-solve, and increased 
interpersonal conflict. Vietnam veterans have reported that the PTSD 
symptom of avoidance, in affiliation with co-morbid anger and 
depression, negatively affected their family functioning, while their 
spouses identified anger as the most damaging symptom. Thus, 
identifying and treating PTSD early may reduce the potential negative 
impact to families of struggling Service members and veterans.
    Trans-generational effects of PTSD have been the focus of some 
recent research. These effects merit more study but cannot be directly 
inferred as relevant to the children of Service members with PTSD.
    Due to more robust data systems now in place, the connections 
between Service member PTSD and adverse effects, such as child neglect 
and maltreatment, may potentially be better characterized during this 
conflict.
    Question. Is there a correlation between child and spouse abuse and 
post-traumatic stress disorder (PTSD)?
    Answer. Post-traumatic stress disorder (PTSD) is not directly 
related to child or spouse abuse, i.e., one is not always present with 
the other. However, they can occur together. The same can be said of 
substance abuse or depression, which are often seen with PTSD. All 
children of parents with mental health conditions have some effects--
especially when the parent's condition is alcohol dependence, but 
others as well. Researchers have recently examined the impact of PTSD 
symptoms on family relationships, and on children in particular. Family 
members of individuals with PTSD may experience numerous difficulties. 
Children may experience cognitive or emotional symptoms related to 
witnessing their parent's symptoms (e.g., having difficulty 
concentrating at school because they are thinking about the parents' 
difficulties). However, DoD family and child-oriented initiatives focus 
on minimizing the negative effects on families and children of parental 
mental health issues in general, not only of PTSD.
    Child and spouse abuse are indicators of a stressed family that 
needs help in coping with challenges. Child abuse, particularly 
neglect, also can be seen in times of high deployment, not necessarily 
with PTSD, but accompanying the demands of deployment and single parent 
families that are a part of deployment. Many DoD programs are in place 
to address these issues and there is ongoing attention to these family 
needs.
    A study describing the characteristics of neglect for substantiated 
Army child neglect cases (2001-2006) is nearing completion to better 
understand the key factors that lead to these conditions by 
identifying:
           child, parent, and family-based risk and protective 
        factors for child neglect cases;
           possible military community risk and protective 
        factors for child neglect cases;
           civilian community risk and protective factors for 
        child neglect cases; and
           family-based factors (marital/relationship problems, 
        financial problems, substance use problems) and Service member 
        injuries (including PTSD).
    We anticipate the findings of this study will serve to help us 
develop programs to reduce risk and increase protective factors in our 
military families.
    Question. Of the amounts appropriated for post-traumatic stress 
disorder (PTSD), could any of these funds be used to help children?
    Answer. The Services and the TRICARE Management Activity are using 
part of the funding appropriated to PTSD to implement programs 
appropriate for children of Service members with PTSD and other mental 
health conditions to help them understand the changes they see in their 
parents. These programs will encourage their support and caring for 
their affected parent, and to identify ways to help them cope with the 
changes in the family dynamics that result. Additionally, by expanding 
the number of clinical providers for mental health conditions, 
including PTSD, there is more capacity to provide behavioral health 
services to beneficiary children.

  Defense Center of Excellence for Psychological Health and Traumatic 
                              Brain Injury

    Question. It seems that the Department's ``Center for Best 
Practices'' is a top-down solution to a bottom-up problem. Meaning, 
that the center was created not by ``lessons learned'' from soldiers or 
their families seeking care but by multiple outside panels comprised of 
retired military officers and former secretaries. While there is a need 
for a ``Center for Best Practices'' it may not address the immediate 
concern about increasing access to services for individuals.
    What action, not PROCESS, have you taken over 3 1/2 years?
    Answer. The Defense Centers of Excellence (DCoE) for Psychological 
Health (PH) and Traumatic Brain Injury (TBI) was established in 
response to the recommendations of seven panels and commissions, as 
well as to the FY 2008 National Defense Authorization Act (NDAA). In 
November 2008, the Department reported in detail on the 
responsibilities and actions of the DCoE in its report to Congress in 
response to FY2008 NDAA, Section 1624. DCoE addresses the spectrum of 
PH and TBI concerns of Service members with seven strategic goals:
    Leadership and Advocacy. Reinforces the notion that taking care of 
Service members is a leadership responsibility by developing training 
and education programs, both career and just-intime, to raise leader 
awareness of PH and TBI issues and intervention opportunities.
    Access to Care. Enhances the ability of Service members and their 
families to receive the resources they need--when and where they need 
them--by evaluating PH and TBI resilience requirements and making 
recommendations regarding future personnel, resources, and 
capabilities.
    Quality of Care. Ensures the highest quality of care through 
research and evidence-based clinical practice guidelines and state-of-
the-art therapies.
    Resiliency Promotion. Focuses on preventing or mitigating PH 
conditions through research into risk factors and specific preventive 
techniques.
    Surveillance and Screening Systems. Promotes consistent, effective 
PH and TBI assessment practices and new classification systems to 
enhance diagnostic capabilities.
    Transition of Care. Ensures the successful, standardized transition 
between DoD, VA, and civilian health care systems.
    Research. Fosters scientifically rigorous programs to address gaps 
in current knowledge regarding PH and TBI conditions.
    The design and concept of operations for the National Intrepid 
Center of Excellence (NICoE), a component center of DCoE, is under 
construction in Bethesda, MD. NICoE began with Mr. Arnold Fisher's 
offer in September 2007 to build and equip the facility at the National 
Naval Medical Center in Bethesda using private funds. The facility is 
expected to open in the spring of 2010. DoD's plans to staff and 
operate the NICoE are complete to ensure the best care for Service 
members living with the effects of TBI or psychological health problems 
such as depression, anxiety and post-traumatic stress disorder. The 
NICoE concept is a ``hub-and-spoke'' model with the hub as the NICoE 
state-of-the-art facility in Bethesda offering diagnostic planning and 
treatment, along with research and education that would inform and 
elevate the levels of care in military and civilian healthcare sectors. 
The spokes in the model will be military medical treatment facilities 
and civilian centers around the country that partner with NICoE in 
caring for these injured Service members in locations near where they 
live. The NICoE Director has already begun the process of visiting 
treatment sites around the nation in an effort to identify those of 
high quality and willingness to partner in this important mission. 
Planning groups for the NICoE have involved both those with PH problems 
and TBI, and their family members, to get the most complete stakeholder 
input. The NICOE will add one more component of the DoD continuum of 
care that increases access to healthcare services for individuals.
    Question. How many mental health professionals will see patients in 
the new Center?
    Answer. The Defense Center of Excellence (DCoE) for Psychological 
Health and Traumatic Brain Injury will not see patients. However, the 
National Intrepid Center of Excellence (NICoE), one of the centers 
associated with the DCoE will see patients once it becomes operational. 
All of the 90+ staff members of the NICoE will be selected for their 
experience in the diagnosis and treatment of human brain disorders from 
both the neurological and psychological perspectives. The needs of each 
individual patient referred will be assessed in a holistic fashion, 
taking into account their physical, cognitive, psychological, and 
spiritual well-being. There will be psychiatric, psychological, 
substance abuse, and chaplaincy services as well as neurological and 
neuropsychological assessment and rehabilitation with the full 
complement of occupational, speech/language, physical and recreation/
art/music therapy.
    Question. Will there be in-patient beds?
    Answer. The National Intrepid Center of Excellence (NICoE) will be 
an outpatient facility, although housing for the Service members and 
their family members will be provided during the duration of their 
assessment and treatment at NICoE. Inpatients will continue to receive 
care at military medical treatment facilities and Department of 
Veterans Affairs' hospitals and clinics around the country.
    Question. What type of utilization capacity will the Center have?
    Answer. On any given day, the National Intrepid Center of 
Excellence (NICoE) will see approximately 20 patients in various stages 
of the individualized diagnostic and treatment planning process. All 
patients will be offered the opportunity to participate in clinical 
research being performed in collaboration with the National Institutes 
of Health, the Uniformed Services University for Health Sciences, and 
other affiliated academic research programs. The NICoE will also host 
education and training programs locally at the Bethesda facility as 
well as broadcasting lectures and interactive training sessions from 
its media room.
    Question. How much of the funding provided will be designated for 
the Center?
    Answer. In FY 2008, the Defense Center of Excellence (DCoE) was 
allotted $79.2M in Operations and Maintenance funding. In FY 2009, that 
amount was $123M in support of the DCoE and its associated Centers to 
include the National Intrepid Center of Excellence (NICoE). However, 
since the NICoE is not scheduled to become operational until FY 2010, 
very little funding has been allotted for it to date. A notable 
exception is that a Director was hired in FY 2009.
    Question. How much of the funding provided will be designated for 
the Defense and Veterans Head Injury Center?
    Answer. In FY 2009, $34.2 million (including $5 million transferred 
from the Army) has been designated for the Defense and Veterans Brain 
Injury Center.
    Question. How will returning servicemembers and their families in 
rural parts of the country access the new center?
    Answer. Individual patients can be referred from anywhere in the 
United States and abroad to the National Intrepid Center of Excellence 
(NICoE) for its specialized assessment and interventions, or they can 
be referred to partnering centers nearer home. Specialty centers in 
each region of the country will be ``spokes'' of NICoE and will use 
treatment plans established by NICoE to gather outcome data to measure 
the effectiveness of the interventions. To target the needs of our 
military and their families in rural regions, the Defense Center of 
Excellence (DCoE) for Psychological Health (PH) and Traumatic Brain 
Injury (TBI) has established a link to the nation's Area Health 
Education Centers, which were created by federal statute to address the 
educational and training needs of healthcare professionals in rural 
America's underserved regions. This liaison will help elevate the 
requisite knowledge of PH and TBI of the healthcare in underserved 
areas.
    The DCoE National Center for Telehealth and Technology also is 
delivering multiple projects that address this need. The 
www.afterdeployment.org program offers online self-help interactive 
resources targeting those affected by deployment. A coordinated effort 
with the Services is underway to develop robust telehealth capabilities 
to better serve those for whom accessing services is difficult due to 
distance or other factors. Finally, DCoE National Center for Telehealth 
and Technology has embarked on a program to develop and deliver web-
based telehealth care that will further extend the reach of services to 
our rural beneficiaries.
    Question. What are the anticipated operating costs of the center 
and how will they be funded?
    Answer. Of the $600M Operations and Maintenance supplemental funds 
received in FY 2008, $79.2M went to the Defense Center of Excellence 
(DCoE) for Psychological Health (PH) and Traumatic Brain Injury (TBI) 
to initiate operations of its headquarters and to fund specific ongoing 
initiatives in the area of PH and TBI. Of the $575M supplemental funds 
identified in FY 2009, $123M was allotted to the DCoE to fund its 
headquarters and transition support to the subordinate centers. The 
DCoE will receive additional funding in FY 2010. This will fully 
support the headquarters and its subordinate centers.

                              Rand Report

    Question. What, if any parts of the RAND study has the Department 
incorporated in the Defense Center of Excellence for psychological 
health (PH) and traumatic brain injury (TBI)?
    Answer. The RAND study provided four recommendations, which the 
Defense Centers of Excellence (DCoE) for PH and TBI has been 
addressing:
    1. Increase the cadre of providers who are trained and certified to 
deliver proven (evidence-based) care, so that capacity is adequate for 
current and future needs.
     In FY 2008, trained 1178 providers in deployment care, 
including Prolonged Exposure and/or Cognitive Processing Therapy for 
Post Traumatic Stress Disorder.
     Trained providers at 13 sites in Virtual Reality Therapy.
     Trained more than 1600 providers in evidence-based 
treatment for traumatic brain injury (TBI) through joint DoD and 
Department of Veterans Affairs (VA) training courses.
     Provided funding for development of training materials 
(e.g., training Family Practice physicians to treat those with mild to 
moderate mental health and TBI concerns).
     Developed Courage to Care materials.
     Offered clinician education and training through the 
Deployment Health Clinical Center's site (www.pdhealth.mil).
    2. Address the stigma that poses a barrier to seeking mental health 
care.
     In May, will launch the ``Real Warriors Real Battles Real 
Strength'' campaign, a national outreach initiative that seeks to 
combat the stigma around mental health conditions and treatment and 
encourage psychological resilience. This public information campaign 
will solicit the involvement of DoD, VA, and the general population to 
foster a culture of support for psychological health.
     Changed question 21 on Security Questionnaire related to 
seeking mental health treatment for combat-related issues; limits 
required disclosures for military members in counseling.
    3. Deliver proven, evidence-based care to Service members and 
veterans whenever and wherever services are provided.
     Established clinical standards as well as researching, 
refining, and distributing lessons learned and best practices 
throughout the Military Health Services.
     Developed education and outreach resources for leaders, 
families, and communities.
     Introduced evidence-based care as the enterprise standard 
through VA/DoD clinical practice guidelines for mild traumatic brain 
injury, post-traumatic stress disorder, depression, and substance use 
disorders.
     Issued the Military Acute Concussion Evaluation tool, 
which is based on the validated Standardized Assessment of Concussion 
used in sports medicine, for accessing the likelihood of mild traumatic 
brain injury after events in which the head may have been hurt.
     In conjunction with the VA, published symptom management 
guidelines for mild traumatic brain injury and established clinical 
guidance for acute management of mild TBI in military operational 
settings.
     Implemented standardized training curriculum and content 
for our medical providers, as we have initiated a certification process 
for TBI programs in our medical treatment facilities.
     Funded research to improve knowledge of evidence-based 
treatment.
     Assisted military members, veterans, and families with 
deployment health concerns or military related exposures after 
deployment
      --Post-Deployment Clinical Practice Guidelines;
      --Specialized Care Programs; and
      --Web-based PTSD self-management tool (DESTRESS-PC).
     Advanced quality care through education, research, 
consultation and training.
     Provided evidence-based training on deployment-related 
behavioral health topics to military and civilian mental healthcare 
providers.
     Advanced TBI-specific evaluation, treatment and follow-up 
care and conducted clinical research that defines optimal care and 
treatment for individuals with TBI.
    4. Invest in research to close information gaps and plan 
effectively.
     Expanded the research opportunities for PH and TBI to 
establish a strong foundation of medical and cross-functional research, 
including new and innovative treatments such as complementary and 
alternative medicine techniques.
     Initiated integrated individual and multi-agency research 
efforts that will lead to improved prevention, detection, diagnosis, 
and treatment of combat-related psychological health issues and 
traumatic brain injury.
     Will execute program funds to address targeted research 
gaps in the area of psychological health and TBI. The goal of the 
research program is to fund scientifically meritorious research to 
prevent, mitigate, and treat the effects of traumatic stress and 
traumatic brain injury on function, wellness, and overall quality of 
life for service members and their caregivers and families. The program 
strives to establish, fund, and integrate both individual and multi-
agency research efforts that will lead to improved prevention, 
detection, diagnosis, and treatment of combat related psychological 
health and traumatic brain injury.
    Question. How do the percentages in the RAND report correlate to 
the Departments? Are there any differences? If so what are the 
differences?
    Answer. The DoD-funded the Millennium Cohort Study has shown that 
combat-exposed Service members are at significantly higher risk of 
post-traumatic stress disorder (PTSD). The RAND report measured PTSD 
using a screening instrument, not an actual clinical diagnosis, so we 
do not know how many of those who screened positive in the RAND report 
actually had PTSD. Thus, it is difficult to correlate the RAND data 
with Service-level data derived from clinician-diagnosed PTSD.

              Demonstration Projects and Outside Entities

    Question. Psychological health is an overarching concept that 
covers the entire multi-dimensional continuum of psychological and 
social well being, prevention, treatment and health maintenance. An 
approach of this type would be more complete by using new and 
innovative companies and approaches.
    How many outside entities, companies and individuals have you met 
with outside the military that specialize in behavioral health 
programs? Please discuss a few of the promising ones.
    Answer. Over the past two years, staff from the office of the 
Assistant Secretary of Defense (Health Affairs) and in particular the 
Director and staff of the Defense Centers of Excellence (DCoE), have 
met with many companies and groups to solicit the best ideas for 
consideration and possible implementation within the DoD. Several of 
our collaboration efforts are addressed below.
    1. The RESPECT-Mil is a project that in 2003 we did not have the 
capability of doing but through contacts with subject matter experts, 
we created a collaborative primary care program for detection and 
management of post-traumatic stress disorder (PTSD) and depression. 
This program was based on a MacArthur Foundation-funded program for 
depression (``RESPECT-Depression'') and the outside collaborators were 
all internationally respected experts funded under that program.
    Within RESPECT-Mil, we needed the capability for a web-based care 
management support system. We consulted with an internationally 
respected primary care mental health expert at University of Washington 
(Seattle) who modeled a prototype system used there. In consultation 
with the expert, the Defense Health Clinical Center joined with a 
contractor called Previdence from Salt Lake City, Utah, to build this 
system and it is going on line at 43 primary care clinics later this 
month.
    2. DESTRESS is an online PTSD psychotherapy tool that with 
investigators in the Department of Veterans Affairs (VA) (Boston VA and 
Boston University, Charleston VA and Medical University of South 
Carolina) and in Australia (University of New South Wales), we 
developed, tested, and published the results of the initial test in the 
American Journal of Psychiatry in November 2007. Now, we are rolling 
out and continuing to test it for use in primary care.
    3. We funded one Small Business Innovation Research (topic 
``Interactive Game-Based System for Psychological Health Education'') 
to four businesses: Novonics, SOAR, Simmerson, and Total Immersion.
    4. We co-sponsor a Common Data Elements Workshop for Research in 
PH/TBI with the VA, the National Institute for Neurological Disorders 
and Stroke (NINDS, which is a part of the National Institutes of Health 
(NIH)), and the National Institute for Disability Rehabilitation 
Research (NIDRR). Approximately 175 subject matter experts, 48 
agencies, 21 universities, 8 NIH components, 4 rehabilitation centers, 
6 international experts, 19 DoD entities and the 4 Services. The 
purpose of this undertaking is to reach consensus on recommendations 
for common data elements, standard definitions, metrics, outcomes and 
instruments to facilitate for use in PH and TBI research for more 
robust comparisons of research studies not only within the fields of PH 
and TBI, but also between those fields. Involves both national and 
international partners.
    5. We have established a strategic scientific advisory group for PH 
and TBI research, which includes both federal and civilian agencies.
    6. We established regular Community Collaboration Days to allow the 
community an opportunity to discuss their products.
    7. The Center for Deployment Psychology partnered with Magellan to 
provide content for web-based distance learning modules for mental 
health care providers.
    8. We partnered with the Institute for Creative Technology at the 
University of Southern California to develop and research Virtual 
Reality as a technology for use in the treatment of PTSD. Other 
partners are from Emory University and Cornell.
    9. In the area of virtual worlds, we have been working with the 
Seattle Science Foundation and a development company along with key 
partners at the University of Washington to advance potential 
applications in this area.
    Question. How many of these programs demonstrate capabilities to 
which that the Department currently does not have access?
    Answer. Quite a few of our collaborations are resulting in growing 
and enhancing our capabilities. While we could develop some of these 
capabilities within DoD, we often find it is faster or easier to rely 
on the expertise or a capability already existing elsewhere and 
importing it directly or shaping it to meet our particular need.
    We rely on leveraged resources and collaboration with partners 
(both federal and nongovernmental) to maximize our impact in addressing 
clinical, research, and training needs associated with traumatic brain 
injury and psychological health.
    For instance, the Common Data Elements workshop hosted by the 
Defense Center of Excellence for Psychological Health and Traumatic 
Brain Injury tap into expertise DoD does not have. The products of the 
workshop will help inform and develop evidence needed to support future 
projects, and will be of potential use to existing projects.
    Additionally, our research program often partners federal resources 
with outside resources--innovative technologies, infrastructure, 
facilities, staff, and eligible study populations.
    Question. Please list the mental health and behavioral health 
demonstration and pilot project Requests for Proposal (RFPs) that the 
Services or Force Health Protection have issued since the FY 2007 
supplemental was enacted?
    Answer. The following represents a list of Psychological Health 
pilot projects identified by the Services and TRICARE Management 
Activity. These projects are in various stages of planning and 
execution.

------------------------------------------------------------------------
    Psychological Health Pilot Projects                Service
------------------------------------------------------------------------
TeleHealth................................  Navy.
Caregiver Occupational Stress Control.....  Navy.
Combat and Operational Stress Control for   Navy.
 Caregivers.
Families Coping with Deployment...........  Navy.
Naval Special Warfare Resilience            Navy.
 Enterprise.
Outreach Coordination for USN Reserve.....  Navy.
Promoting Resilience in the Face of Loss..  Navy.
Psychological Health Training for Family    Navy.
 Practice Physicians.
Adaptive Disclosure Training Program for    Navy.
 Marines.
Web Based Training for Combat Stress First  Navy.
 Aid Grief and Loss (USMC).
Assessment and Treatment of Wounded         Navy.
 Warriors Families.
Family Program Assessment.................  Navy.
Outreach Call Center......................  DCoE.
DoD-wide Gap Analysis.....................  DCoE.
Sesame Workshop...........................  DCoE.
Child Trauma Network Support..............  DCoE.
RESPECT.MIL...............................  DCoE.
Virtual Reality...........................  DCoE.
Pro Resilience Campaign (Real Warriors)...  DCoE.
South East Regional Medical Center          Army.
 Psychological Health Program.
Intensive Outpatient Program..............  Army.
Residential Treatment Facility............  Army.
Warrior Resiliency........................  Army.
Warrior Transition Intensive Outpatient     Army.
 Program.
Family Resilience Building................  Army.
Compassion Fatigue Program................  Army.
Medication Management.....................  Army.
Soldier Wellness Assessment...............  Army.
Virtual Reality...........................  Army.
Transition Support........................  FHP&R.
------------------------------------------------------------------------

    Our headquarters data systems are not configured to identify if a 
pilot is contracted out or if it is run internally to DoD. Therefore, 
we have submitted a data call to the Services to collect this data and 
will forward a more complete answer to the Committee staff as soon as 
we compile the information from the Services.
    Question. Are you engaging the States to assist in closing gaps 
that exist?
    Answer. We are working to develop relationships with the National 
Guard Bureau's Directors of Psychological Health (PH) in order to 
conduct training workshops across the United States.
    In August 2008, DoD partnered with Substance Abuse and Mental 
Health Services Administration and Department of Veterans Affairs (VA) 
to sponsor the ``Paving the Way Home'' conference, in which 10 states 
identified policies and practices that would advance the continuum of 
care and services for returning Service members in their states.
    We are developing Military Family Toolkits, which identify federal, 
state, and local resources that can help create a supportive network 
for the mental health needs of returning service members.
    In a separate effort, DoD will discuss military culture and 
deployment issues and provide DoD resource training to the Arkansas 
chapter of the National Association of Social Workers, many of whom 
provide direct clinical care to Reserve Component beneficiaries in 
local and rural communities. This effort may prove to be a viable model 
or template for equipping local and rural providers with an important 
cultural context and PH and traumatic brain injury (TBI) 
familiarization to empower local and rural clinicians and encourage 
their engagement as part of a community response and linkage with a 
national collaborative effort to address the clinical and support needs 
of our returning Service members.
    Research partnerships exist at all levels of government and non-
governmental service. The post-traumatic stress disorder (PTSD)/TBI 
Clinical Consortium consists of 10 study sites across the United 
States, each focusing on unique aspects of research in PH and TBI.
    Question. What is the Department doing to increase evidence based 
and translation research instead of doing research that will not be 
applicable to solving or assisting current mental health issues?
    Answer. Evidence-based approaches to the treatment and prevention 
of psychological health (PH) problems and traumatic brain injury (TBI) 
rely on both basic science as well as translational research. As such, 
the DoD--and its federal research partners--funds a portfolio of 
research programs aimed at addressing expert-identified gaps in the 
science relevant to current mental health issues.
    We have initiated a program in Complementary and Alternative 
Medicine ($45M from FY 2007 Supplemental Funds) to evaluate therapies 
in non-traditional areas such as acupuncture, yoga, and meditation. 
Defense Center of Excellence (DCoE) also has been supporting the 
continued development of Virtual Realty Therapy for post-traumatic 
stress disorder (PTSD) treatment and encouraging additional 
translational research. In FY 2009, we will develop mechanisms to 
quickly evaluate therapies and promising practices to speed the ability 
of transitioning new approaches to Service members and their families.
    Through a collaborative research database of federated information-
technology systems, we find ways for researchers in the fields of PH 
and TBI to gain access to data from previous or ongoing projects that 
may contribute to new studies.
    Current efforts investigate the feasibility of a social networking 
tool for scientists in PH/TBI that will identify leaders in particular 
areas of research.
    A State of the Knowledge Summit will bring together researchers in 
the field with policymakers and military leaders through a face-to-face 
forum in which researchers and consumers dialogue and address 
procedural challenges.
    We are conducting a national gap analysis to determine where 
additional efforts are needed.
    The PH/TBI Clinical Consortium and the PTSD Multidisciplinary 
Research Consortium (STRONGSTAR) are examples of DoD's efforts to 
increase evidence-based and translational research. The research 
underway and planned for the STRONGSTAR consortium involves the 
application of evidence-based treatments to military and new veteran 
populations.

    Hotline for Mental and Behavioral Health Services and Counseling

    Question. The suicide rate among Iraq and Afghanistan veterans is 
almost twice that of the national average. That does not include 
alcohol and drug abuse, spousal abuse and/or murder, not to mention the 
effects on children. Can you provide the following information?
    What action has been taken to ensure easy access to behavioral 
health care to our service members and their families?
    Answer. We consider access to care a top behavioral health priority 
and have invested in it more heavily than other strategic goals. Within 
the direct care system, we implemented strategies increasing behavioral 
health staffing, primarily by increasing contract and government 
service providers.
    In 2007, a Health Affairs policy memorandum clarified the routine 
access standard of 7 days for initial mental health specialty care for 
PRIME beneficiaries. (For emergent conditions, care is to be provided 
immediately; for urgent conditions, care is to be provided within 24 
hours.)
    Subsequent analyses of initial mental health specialty care for 
PRIME beneficiaries seen in the direct care system demonstrated 96 
percent of these visits occur without an appointment, when 
beneficiaries present to a mental health clinic for care unannounced. 
Four percent of initial care visits were scheduled by appointment. This 
is due to the practice of most military mental health clinics that 
designate rotating behavioral health specialty care providers as ``on 
call'' for emergent, urgent, and walk-in patients every workday.
    Additionally, the Services are increasing the degree to which 
behavioral health providers function as consultants serving in primary 
care clinics (integrated care), markedly reducing the stigma of 
receiving specialty assistance. In addition, models of enhanced 
screening and behavioral health consultation are being utilized in 
populations where there is a higher risk of combat-related Post 
Traumatic Stress Disorder and depression.
    We have also improved mental health access under our managed care 
support contracts. In addition to the substantive TRICARE PRIME benefit 
of eight unmanaged behavioral health specialty visits a year without 
referral (plus more visits as required), TRICARE contractors now 
provide Behavioral Health Locators to assist beneficiaries in engaging 
specialty care within 7 days from network providers. Locators will 
assist by providing telephone numbers of behavioral health care 
providers near beneficiaries' homes, or by establishing a three-way 
conversation with the beneficiary and a provider's office staff. The 
Locator will only participate in this three-way conversation long 
enough to confirm that the provider is willing to provide an 
appointment within access standards.
    We have also implemented innovative programs in concert with the 
line Commanders to improve resiliency and reduce stigma for seeking 
mental health care. These programs range from training Chaplains to 
assist with pre-clinical responses to mass disasters and trauma to 
Military One Source, which is an anonymous call center where Service 
members and their families can obtain support for a myriad of issues as 
well as up to 12 free counseling sessions with licensed counselors per 
year. We have also implemented web sites for Service members and family 
members to access when they want to learn more about mental health 
conditions, what symptoms they may have that are normal reactions to 
stress or when symptoms might be such that they should seek 
professional care.
    Additionally, we have worked diligently to educate our Service 
members and family members about the many resources currently available 
to them. The TRICARE website describes all benefits and provides a 
convenient list of specific Mental Health Resources. The Defense Center 
of Excellence for Psychological Health and Traumatic Brain Injury 
maintains a call center to provide information. A particularly robust 
asset developed by the Department of Defense (DoD) is the national 
Resource Directory where anyone can seek available help by clicking on 
a map showing where various services (including mental health) are 
available to Service members and family members at the Federal, state 
and local level.
    Below is a Department information paper that reviews pre-clinical 
psychological support resources provided by DoD and the Services.

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    Question. What is the number of Service members, to include Guard 
and Reserve members, and their family members that have used the 
Military OneSource hotline for mental and behavioral health services 
and counseling?
    Answer. In FY 2008, service members and their families made over 
2.8 million contacts with Military OneSource by telephone, e-mail or 
through the web page for information, resources or referrals.
    If the contact deals with a mental health issue, the master's level 
Military OneSource consultant makes an assessment and a referral. If 
the mental health issue is determined to be serious enough for medical 
mental health services, the Military OneSource consultant stays on the 
line and connects the caller to a Tricare consultant. For less serious 
mental health issues, callers have several options for counseling; a 
counselor in their community provided by Military OneSource, Chaplains 
and Military Family Life Consultants are all options for Service 
members and their families. In FY 2008, Military OneSource provided 
approximately 105,475 counseling sessions to Service members and their 
families.
    Question. How many suicide calls have the Military OneSource and 
the other services hotlines received? Please break down by component.
    Answer. In FY 2008, Military OneSource received 93 Duty-to-Warn: 
Harm-to-Self calls. Sixty-seven (67) of these calls came from Active 
Duty, 14 from the National Guard and 11 from the Reserves. In the case 
of a Harm-to-Self call, the Military OneSource consultant keeps the 
caller on the phone and talking while another Military OneSource 
consultant contacts local service providers. Only after help arrives on 
the scene will the Military OneSource consultant end the call. The next 
day, the Military OneSource consultant follows-up with the service 
provider who responded to the call and asks what further resources or 
services can be provided by Military OneSource.
    Question. What is the mechanism for follow up with Service members 
or their family members following a call to Military OneSource?
    Answer. If the call is a Duty-to-Warn situation, local service 
providers are contacted while the consultant keeps the caller on the 
line. The call will only be released when help arrives at the location 
of the caller. Within 24 hours, a follow-up call is placed by the 
Military OneSource consultant to the local service provider to ensure 
that any services that Military OneSource can provide are made 
available to the Service member and their family.
    Question. How many mental health TRICARE claims have been submitted 
in the past 6 months?
    Answer. While we do not have data readily available about the 
number of mental health TRICARE claims submitted in the past six 
months, we recently analyzed mental health care utilization by TRICARE 
beneficiaries during FY 2008. The analysis revealed claims in the 
private sector for: 372,432 days of inpatient mental health services, 
5,556,594 outpatient mental health visits, and 4,629,865 pharmacy 
prescriptions for mental health medicines.
    Question. You are forming partnerships with the Public Health 
Service to provide 200 uniformed public health service mental health 
providers of all disciplines.
    Has this happened?
    Answer. Yes. The partnership was finalized through a memorandum of 
agreement (MOA) that was signed by the Assistant Secretary of Defense 
(Health Affairs) on 15 April 2008. The MOA is in place for 10 years and 
identifies that recruitment of mental health providers estimated at, 
but not limited to, 200 officers. The Public Health Service works 
directly with the Surgeons General of the military Departments to 
identify and fill critical mental health gaps.
    Question. If not, what is the time frame for contracting with these 
200 health officials?
    Answer. N/A
    Question. How can Public Health Service commit to this number when 
a shortfall exists across the United States?
    Answer. The Commissioned Corps of the United States Public Health 
Service (PHS) has advised the DoD that it remains confident of meeting 
the goal of placing approximately 200 mental health PHS officers at DoD 
military treatment facilities (MTFs) and other appropriate locations 
within the next several years, in keeping with the Memorandum of 
Agreement (MOA) between DoD and the Department of Health and Human 
Services signed April 15, 2008. PHS advised that, in summer, 2008, it 
began quite an aggressive implementation response to the signed 
agreement. Despite the constraints of its limited recruitment resources 
at the time, PHS has already been able to provide DoD with more than 40 
active duty PHS officers, including psychiatrists, psychologists, 
social workers, nurses, and physician assistants, for deployment to 
CONUS-wide MTFs. Since that successful early beginning, PHS expanded 
its recruitment efforts for mental health professionals with the 
assistance of additional funding from DoD for this purpose, including 
funding support for salaries and benefits of the PHS officers assigned 
to this DoD project. At present, nine additional mental health 
professionals are being cleared and prepared for placement as PHS 
commissioned officers in support of DoD MTFs, and some 25 additional 
candidates are being processed through various stages of inquiry, 
clearance, and preparation for commissioning.

                        Warrior Transition Units

    Question. As part of its efforts to improve Wounded Warrior care, 
the Army established 32 Warrior Transition Units to provide a unit in 
every medical treatment facility that has 35 or more eligible service 
members. Funding for Warrior Transition Units (WTUs) is both 
supplemental and base bill funding.
    Can you define what Warrior Transition Units (WTUs) are and how 
they compare or augment other resources for counseling or services to 
be provided by the Center of Excellence?
    Answer. The delivery of care and treatment is provided by medical 
and behavioral health professionals practicing primarily at the 
military medical treatment facilities. WTUs provide the command, 
control, and care management necessary to ensure soldiers receive this 
care and information about other support services in an effective and 
efficient manner. Currently, there are 36 WTUs with about 3,600 
assigned personnel, located across the United States and in Germany. 
WTUs are primarily staffed with combat-experienced officers and 
noncommissioned officers.
    The key to WTU success since they became fully operational in 
January of 2008 is the ``Triad of Care'' concept where each soldier's 
care and progress is closely managed by three individuals: a Primary 
Care Manager (a physician), a Nurse Case Manager, and a Squad Leader. 
These individuals develop and implement a multi-disciplinary 
Comprehensive Transition Plan that identifies the courses of treatment 
and goals to accomplish in the care, education, and training of 
soldiers and their family, and then assure the soldiers receive the 
care and assistance required during rehabilitation and transition. 
Additionally, WTUs are staffed with behavioral health professionals to 
provide care management; Medical Evaluation Board physicians to ensure 
timely and comprehensive medical care, recovery, and medical 
determinations; and legal professionals to counsel and advocate for 
soldiers and families as they progress through the Disability 
Evaluation System.
    The Department of Defense Centers of Excellence (DCoE) for 
Psychological Health (PH) and Traumatic Brain Injury (TBI) assesses, 
validates, oversees, and facilitates prevention, resilience, 
identification, treatment, outreach, rehabilitation, and reintegration 
programs for PH and TBI. It provides a clearinghouse of the latest 
information pertaining to PH and TBI, making that information available 
to WTUs. It also collects best practices to help standardize 
consistently excellent PH and TBI care across all WTUs.
    Question. Are Warrior Transition Units (WTUs) are as effective as 
they can be given resourcing and other constraints?
    Answer. The Army is committed to supporting the Warrior Care and 
Transition Program, which includes the Warrior Transition Units (WTUs) 
concept of care. The WTUs have significantly improved the 
rehabilitation experience of Army wounded warriors and their families, 
and they attribute that success to the ``Triad of Care'' concept where 
each soldier's care and progress is closely managed by three 
individuals: a Primary Care Manager (a physician), a Nurse Case 
Manager, and a Squad Leader.
    The Army established extensive metrics to assess the effectiveness 
of WTUs. Senior Army leadership receives briefings regularly to enable 
adjustments in resourcing when the situation changes to assure a 
consistently effective level of operation.
    Question. What are the Warrior Transition Units (WTUs) not doing 
that they should be to assist soldiers and their families?
    Answer. The Warrior Transition Units (WTUs) are doing what they 
were designed to do. These units work in consonance with other non-
medical wounded, ill and injured support service organizations to 
provide comprehensive support for their rehabilitation, recovery and 
transition back to active duty or to civilian life. Mindful of the 
changing needs of wounded warriors and their families, the Army revises 
its operational procedures for WTUs whenever it identifies something 
else that WTUs need to do. For example, the Army is currently focusing 
on changing the mindset from a focus on disability to a focus on 
achievement and aspiration. This approach, which we strongly endorse, 
would promote resilience, self-reliance, and provide for re-education 
and employment, while ensuring that soldiers and their families receive 
the enduring benefits they so richly deserve.

                  Interfacing With The Local Community

    Question. Some military installations are located in communities 
that provide additional support beyond the walls of the base. There are 
also installations in communities that resources are not available to 
support the needs of an individual base. With the growth of mental 
health issues in and around military installations:
    Can the military health care system provide local communities with 
the appropriate level of interaction and support for treatment of 
psychological health issues?
    Answer. We believe that through the expansion of our web-based 
programs, online services, telehealth direct care and care partnered 
with our managed care support contractors, we will be able to reach out 
beyond the physical boundaries of our military bases and work closely 
with our civilian counterparts to address the mental health needs of 
our Service members and their families.
    The findings of the DoD Task Force on Mental Health clearly suggest 
that the military health system is challenged to provide resources in 
the form of clinical providers sufficient to meet the mental health 
care needs. It has been particularly challenging to address the mental 
health needs of Reserve and Guard members who reside in remote or 
smaller communities that are geographically distant from military 
medical treatment facilities or TRICARE providers. We have been 
actively involved in addressing these challenges by focusing on the 
reintegration issues faced by returning Service members. The Defense 
Centers of Excellence (DCoE) for Psychological Health (PH) and 
Traumatic Brain Injury (TBI) co-chairs (along with the VA) the Federal 
Partners Priority Workgroup on the Reintegration of Returning Service 
Members and their Families, which is a collaborative effort among DoD, 
VA, and multiple federal agencies, to tighten the fabric of resources 
to the benefit of our Service members and families. Through this same 
venue, we are exploring ways to maximize outreach to service members 
and their families in order to facilitate the connection, or bridge the 
gap, between warrior needs and resources. DCoE has also formed a 
collaborative partnership with the Department of Labor's ``America's 
Heroes at Work'' campaign to help our returning Service members with PH 
or TBI conditions succeed in the workplace. This initiative also 
underscores the importance of employment in the reintegration process, 
while also highlighting the vital role of collaboration across agencies 
and government/private/public sectors in addressing such issues of 
complexity.
    Question. Does the military health care system provide for 
coordinating efforts with the local level with education and training 
programs to local and rural providers?
    Answer. The Center for Deployment Psychology (CDP) provides 
training on evidenced-based treatment of post traumatic stress disorder 
(PTSD) to local providers through the TRICARE network. This training 
has been very well received and is continuing.
    CDP provided training to civilian mental health care providers. The 
training is also being offered to the National Guard Bureau's Directors 
of Psychological Health in each State.
    CDP is also developing online versions of training materials to 
make them available to health care providers in all areas of the 
country.
    We are engaged in discussions with representatives of Area Health 
Education Centers to establish bridge training to health care providers 
the private sector, particularly in rural areas.
    The Defense Centers of Excellence (DCoE) for Psychological Health 
(PH) and Traumatic Brain Injury (TBI) is leading a collaborative, 
multi-agency effort to develop a toolkit that will support community 
partnership building at the local level. This toolkit will be geared 
primarily towards supporting the Guard and Reserve members who are 
often geographically isolated from military support facilities.
    In a separate effort, DoD is discussing military culture and 
deployment issues and providing DoD resource training to the Arkansas 
chapter of the National Association of Social Workers, many of whom 
provide direct clinical care to Reserve Component beneficiaries in 
local and rural communities. This effort may prove to be a viable model 
or template for equipping local and rural providers with an important 
cultural context and PH and TBI familiarization to empower local and 
rural clinicians and encourage their engagement as part of a community 
response and linkage with a national collaborative effort to address 
the clinical and support needs of our returning Service members.
    Question. What current non-governmental programs are currently 
being used by the Department?
    Answer. The American Red Cross developed a new course, ``Coping 
with Deployments: Psychological First Aid for Military Families'' that 
is now available. The course, offered free of charge, is open to 
military family members of Active Duty Service members, Reserve and 
National Guard forces, as well as veterans and their families. 
Presently, the course is offered in sixteen states (AL, AR, CA, CO, FL, 
HI, IN, MN, NE, NH, OH, OR, PA, TN, TX and WV) and Washington, D.C. 
However, the Red Cross plans to make the course available across the 
country in the summer of 2009. The Red Cross developed the course to 
address the stress and strain of deployments on military family members 
to include spouses, children, parents, siblings and significant others 
of Service members and veterans.
    The DoD announced October 1, 2008, that families of deployed 
members of the National Guard and Reserve, Active Duty Service members 
on independent duty and their families, and Active Duty Service members 
and their families assigned to selected bases would be eligible for 
free family memberships at participating YMCAs in their local 
community. The new program was effective immediately. The free YMCA 
memberships for Guard and Reserve families are available if the Service 
member's deployment exceeds six months. The deploying Service member 
also will be eligible for three months pre- and post-deployment 
membership to help promote family participation. Active Duty families 
assigned to independent duty stations, such as recruiting and Reserve 
Officer Training Corps assignments and not currently receiving support 
from the Service component also are eligible for free memberships at 
participating YMCAs. Additionally, 32 hours a month of free respite 
child care is available for families of deployed National Guard and 
Reserve and geographically dispersed Active Duty Service members in 10 
states with YMCA child care programs that have been preapproved by DoD. 
Participating YMCAs have agreed to cap their monthly fees and waive all 
joining fees so there is no cost for Service members and their families 
for membership.
    Inova Health Systems of Northern Virginia and the DoD have launched 
a new partnership to train and support military spouses interested in 
careers in healthcare. The new program provides military spouses with 
streamlined access to training, career, and job opportunities in a wide 
range of healthcare related fields at Inova facilities. Inova worked 
closely with DoD to develop a formal plan to recruit, hire, and retain 
military spouses. Inova hopes to set an example for corporations and 
institutions all over the country to support military spouses in the 
work force.
    The National Military Family Association (NMFA), a non-profit 
informational and educational organization, has been responsible for 
producing two documents which have been important sources of data for 
DoD program planning on issues relevant to families. The report, 
``Serving the Home Front: An Analysis of Military Family Support from 
September 11, 2001 through March 31, 2004'' (NMFA 2004), was based on 
data derived from an online survey of 2,500 respondents (military 
spouses), focus groups representing 14 Active and Reserve groups from 
all military Services, personal interviews, anecdotal information 
gleaned from periodicals, and information from congressional testimony 
and military briefings. The second report, ``Cycles of Deployment: An 
analysis of survey responses from April through September 2005'' (NMFA, 
2005), presents data from another online survey. This survey had 1,592 
respondents (military spouses) from both Active and Reserve components 
of the Army, Navy, Air Force, Marine, Coast Guard and Public Health 
Service, with half of the respondents having a Service member currently 
deployed. The goal of the NMFA is to promote the interests of military 
families by influencing the development and implementation of 
legislation and policies affecting them.
    Military OneSource introduced the video-sharing site ``TroopTube,'' 
designed to help military families connect and keep in touch while 
miles apart. It is the only video-sharing site for military families 
sponsored by the DoD. ``TroopTube'' extends the virtual military 
community by enabling Service members and their families to connect 
with each other and share videos wherever they may be.
    Because members of the military and their families are stationed 
worldwide and must often travel great distances for specialized medical 
care, Fisher HouseTM Foundation donates ``comfort homes,'' 
built on the grounds of major military and Department of Veterans 
Affairs (VA) medical centers. These homes enable family members to be 
close to a loved one at the most stressful times--during the 
hospitalization for an unexpected illness, disease, or injury. There is 
at least one Fisher HouseTM at every major military medical 
center to assist families in need and to ensure that they are provided 
with the comforts of home in a supportive environment. By law, there is 
no charge for any family to stay at a Fisher HouseTM 
operated by the VA. The Foundation uses donations to reimburse the 
individual Fisher Houses operated by the Army, Navy, and Air Force. No 
family pays to stay at any Fisher House.

                         Legislative Direction

    Question. The Committee's language that directed DoD to increase 
its reach and work with commercial entities to increase capacity of the 
mental health system as well as the breadth of programs available to 
individuals. It is unclear whether progress has been made, and whether 
Service members have access to increased services.
    As the wars in Iraq and Afghanistan continue, how many certified 
mental health providers will the Department require in the next 24 
months to handle the increasing prevalence of psychological health (PH) 
and traumatic brain injury (TBI)?
    Answer. A 20+ population- and risk- factor based mental health 
staffing model was developed by DoD in the summer of 2007. In the fall 
of 2007, a contract was awarded to the Center for Naval Analyses for an 
independent validation study of the model, which is now complete. The 
validated model was rolled out to the Services on April 1, 2009, to 
inform them regarding the optimal number and mix of mental health staff 
providers to the installation level in the United States and to the 
command level overseas. It includes several assumptions that can be 
adjusted by the Services to accommodate their unique needs and access 
to networks for additional purchased care, as required. Based upon the 
current distribution of care provided directly, and TRICARE purchased 
network services, a projection of requirements for each mental health 
specialty has been made for the Services from 2009 through 2014, 
including mental health specialty providers embedded into operational 
units and integrated into primary care clinics.

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    Question. Where do you intend to find certified mental health care 
professionals?
    Answer. Increased accession and retention incentives are being made 
available to uniformed mental health care providers. Legislative 
authority to incentivize civilian mental health provider trainees to 
repay their obligation at Military Treatment Facilities as civilians 
could potentially increase the availability of providers, as long as 
incentives were not more than those for uniformed providers, which 
could create higher attrition rates.
    Services and local facilities engage local hires and contractors to 
identify available resources, as well as establish government service 
positions.
    Public Health Service mental health providers are already assisting 
DoD and up to 200 positions are approved and funded in a cooperative 
agreement.
    Question. How many has the Department and or the Services hired?
    Answer. From January 2007 through October 2008, 845 civilian mental 
health professionals were hired across the Services. For the same 
period TRICARE Regional Office-West added 8,095, TRICARE Regional 
Office-South added 213, and TRICARE Regional Office-North added 2148 
mental health providers.
    Question. How else has the Department increased services to 
soldiers and their families?
    Answer. Increased civilian mental health providers:
     Funded more civilian mental health providers at military 
medical treatment facilities (MTFs)
     Created and deployed Military and Family Life Consultants
     Developed an interim staffing model and hired 233 mental 
health providers against it
     Signed agreement with Department of Health and Human 
Services to provide 200 Public Health Officers for MTFs
     Implemented retention incentives such as incentive pays, 
special pays, and bonuses
     Established the Telehealth and Technology Center to 
increase access of services in remote areas
     Initiated multiple telemedicine pilot programs to provide 
mental health services to Service members and their families, 
regardless of geographic location
     Integrated behavioral health with primary care:
          --Army RESPECT-Mil
          --Air Force Behavioral Health Optimization Program
          --Navy Deployment Health Clinics
          --Increased on-line capabilities to access care or recognize 
        when care is needed:
          --Military OneSource
          --Wounded Warrior Outreach Center
          --AfterDeployment.org
          --Established a 24/7 Outreach Center
          --Established a National Resource Directory
     Improved access through TRICARE
     Implemented TRICARE Mental Health Care Finder System
     Established monitoring of TRICARE Regional Offices 
contractors' performance
     Released policy requiring 7-day mental health access 
standard; compliance with this new standard is over 95%
     Developed the Family Caregiver Curriculum
     Trained civilian mental health care providers in 
appropriate care of military personnel and their families

                         Reporting Requirements

    Question. The Committee put a lot of responsibility on the 
Department to properly execute the funding provided with tangible 
results. The Department has reported to the Committee on the spending 
plan and current obligation of funds.
    What reporting mechanisms have been put in place to ensure the 
Services are executing funding properly?
    Answer. The Services report to Chief Financial Officer monthly. 
Their reports include execution of psychological health and traumatic 
brain injury funds by strategic goal (access, transition, resilience, 
quality, and screening/surveillance). The Services also have reported 
quarterly on their execution of funding at the program and project 
level, and have recently been asked to input status of implementation 
and program execution through a web-based tool.
    Question. How often are the Services required to report to the 
Department?
    Answer. The Services are required to provide both financial and 
programmatic reports on a monthly basis.
    Question. What difficulties have the Services or the Department 
generally experienced implementing the new programs and pilot projects 
as demonstrated by the reports?
    Answer. While implementation of programs can be accelerated, steps 
in the process can not be bypassed. In addition, certain processes just 
take time. We need to implement pilots, evaluate them for best 
practices, convert best practices to policies for implementation, 
ensure we have enough providers and tools to implement the policy, and 
train all the users in the new policy, after which we can evaluate the 
program to continue the cycle. Managing expectations becomes critical 
because a program may be successful under one set of conditions but not 
another.
    We also are experiencing a shortage of experienced trainers for the 
large number of new and expanded training and education programs.
    Communicating information about best practices, lessons learned, 
and promising programs across the Services and (sometimes) across 
facilities within a Service still needs improvement.

                 Obligation of Funding to The Services

    Question. Of the funding provided for psychological health and TBI, 
about 45% went to the Army, 15% went to the Navy, 10% went to the Air 
Force, and 30% went to the TRICARE Management Agency for Joint Support.
    Does the Department believe the distribution of funds was done 
equitably or have other shortfalls been identified by the Services?
    Answer. We distributed the funds to augment already on-going 
initiatives to support psychological health and traumatic brain injury 
needs of our Service members and families. The augmented initiatives 
were to address gaps in capability and improve our ability to improve 
access to care and quality of care. Each Service proposed programs to 
address those gaps, so the distribution was based not on total 
capability but on the areas of focused enhancement.
    Question. What other programs or initiatives are the Services 
looking at to improve access to care for soldiers and their families.
    Answer. There are more than 325,000 providers in the TRICARE 
network with over 1 million non-network providers accepting TRICARE 
patients. The TRICARE Management Activity (TMA) conducts surveys to 
determine the numbers of health care providers accepting new patients 
under TRICARE. TMA's FY 2005-2007 surveys covered network/non-network 
providers in various geographic areas nationally, including remote 
areas. Together, the three-year findings across all states and health 
care service areas reveal that approximately 87 percent of all 
physicians surveyed are aware of the TRICARE program and about 81 
percent of physicians accepting new patients would also accept new 
TRICARE patients. We are in the process of re-surveying our 
beneficiaries and civilian providers.
    In areas where access to care is severely impaired because of low 
reimbursement rates, TMA can use its authority to increase TRICARE 
reimbursement rates by issuing locality waivers. Also, TMA can issue 
network-based waivers that increase network civilian provider 
reimbursements up to 15 percent above the maximum TRICARE reimbursement 
rate to ensure an adequate number and mix of civilian network 
providers.
    TRICARE Regional Offices (TROs) also monitor the number and mix of 
providers in their region. For example, TRO-West identified all 
geographical locations with a TRICARE Standard beneficiary population 
of 500 or more. There were 56 locations identified, and to ensure 
access to care was on par with TRICARE Prime, a beneficiary population 
sizing model was designed for each location. Using a Graduate Medical 
Education National Accrediting Committee-based model, it established 
provider requirements for 26 specialty categories and primary care. 
They then identified network and non-network providers to see TRICARE 
beneficiaries. Their experience was that providers are willing and 
ready to see TRICARE patients even in remote and rural areas.
    Question. Of the Army's 45%, the bulk of it is for access to care 
for psychological health and traumatic brain injury.
    How is the Army obligating the funding provided?
    Answer. The Army has obligated the amounts for Access to Care in 
the commodities mentioned below:

------------------------------------------------------------------------
                                                            Obligations
                        Commodity                             ($000)
------------------------------------------------------------------------
Civilian Personnel......................................           5,790
Contracts...............................................          15,156
Equipment...............................................              38
Other...................................................              12
Supplies................................................              89
Travel..................................................             233
                                                         ---------------
    Total...............................................          21,318
------------------------------------------------------------------------

    Question. How much has been obligated to date?
    Answer. During FY 2009 the Service Medical Departments have 
obligated the following amounts through February 2009:

------------------------------------------------------------------------
                                                            Obligations
                         Service                              ($000)
------------------------------------------------------------------------
Army Medical Department.................................          34,210
Navy Bureau of Medicine and Surgery.....................          12,101
Air Force Medical Service...............................              95
------------------------------------------------------------------------

    Question. Are mental health professionals being hired in a timely 
fashion?
    Answer. The direct-hire authorities for the mental health 
specialties have been assigned to the medical facility-level and local 
hiring officials are using these to hire government mental health 
professionals. The Services are establishing innovative hiring 
programs, such as centralized recruitment and referral centers for 
mental health professionals to maximize the use of the direct-hire 
authorities.
    Question. Are there any contracting issues with current hiring 
policies?
    Answer. Our primary issue continues to be a shortage of qualified 
Mental Health providers in the locations where they are most needed. We 
are attempting to accomplish this with a combination of government 
civilian hires, expanded purchased-care network providers, and local 
contracting for behavioral health providers to fill critical needs. Our 
contracting offices have worked hard to satisfy our requirements but 
they received no additional staff for the expanded workload, so they 
are often understaffed and oversubscribed.
    Question. Of the Navy's 15%, most of it is for access to care.
    How is the Navy obligating the funding provided?
    Answer. During FY 2009 for the Access to Care Initiative, the Navy 
Bureau of Medicine and Surgery has obligated a total of $8.192 million 
through the month of February 2009 for the commodities listed below:

------------------------------------------------------------------------
                                                            Obligations
                        Commodity                             ($000)
------------------------------------------------------------------------
Contracts...............................................           8,050
Equipment...............................................               7
Travel..................................................             135
                                                         ---------------
    Total...............................................           8,192
------------------------------------------------------------------------

    Question. Are mental health professionals being hired in a timely 
fashion?
    Answer. The direct-hire authorities for the mental health 
specialties have been assigned to the medical facility-level and local 
hiring officials are using these to hire government mental health 
professionals. The Services are establishing innovative hiring 
programs, such as centralized recruitment and referral centers for 
mental health professionals to maximize the use of the direct-hire 
authorities.
    Question. Of the Air Force's 10%, has the funding been used for 
existing programs or new initiatives?
    Answer. The Air Force Medical Service's FY 2009 funding has been 
used to expand existing psychological health and traumatic brain injury 
programs to support new requirements.
    Question. Of the TRICARE Management Agency's (TMA) 30%, most of the 
amount is for the Center of Excellence and for surveillance.
    Has there been obligation of these funds for the intended programs?
    Answer. Through the Defense Center of Excellence (DCoE) and its 
associated centers, funding is programmed for multiple research and 
surveillance initiatives. Examples of such initiatives include clinical 
trials, longitudinal and epidemiological studies, the Suicide Risk 
Management and Surveillance Office, neuro-imaging programs, and child 
and family studies.
    Question. What new initiatives has TMA been looking at for 
enhancing care and treatment?
    Answer. Examples of new initiatives include evaluating the efficacy 
of a virtual reality exposure treatment for Post-Traumatic Stress 
Disorder, assessing a variety of alternatives for web-based 
interventions, determining the standard of care to assure the effective 
use of telepsychiatry services, investigating mind-body techniques for 
provider resilience, developing and implementing an automated 
behavioral healthcare record, and designing and executing Hyperbaric 
Oxygen Therapy clinical trials.

                         Obligation of Funding

    Question. The funds provided have been distributed to the services 
and TRICARE Management Agency.
    Please briefly explain what the Department has provided the Service 
members and their families with the funds provided.
    Answer. DoD funded a broad spectrum of mental health and traumatic 
brain injury projects designed to support Service members and their 
families across the continuum of care in both non-clinical and clinical 
settings. These programs range in focus from preventive resilience 
building to post deployment transitioning programs. Examples of 
accomplishments include:

------------------------------------------------------------------------
                 Area                        Major accomplishments
------------------------------------------------------------------------
Quality of Care......................  Army--First Summit on Military
                                        Child and Adolescent Behavioral
                                        Health and Well-Being During
                                        Wartime and Beyond was held June
                                        2008 at McChord Air Force Base.
                                        Attended by over 150 military
                                        and community youth serving
                                        professionals.
                                       Defense Center of Excellence
                                        (DCoE)--Assisted in the
                                        development of educational tools
                                        designed to help families,
                                        especially children, cope with
                                        having parents or loved ones on
                                        deployment, including the Sesame
                                        Workshop ``Talk, Listen,
                                        Connect: Deployments,
                                        Homecomings, Changes'' program.
                                        DCoE worked with the nonprofit
                                        educational organization behind
                                        ``Sesame Street'' to produce
                                        over 700,000 DVD kits and to
                                        date, DoD has distributed over
                                        350,000 kits.
Resilience...........................  Navy--Held Returning Warrior
                                        Workshop training for over 1,000
                                        Reservists and family members--
                                        100% of attendees recommended
                                        that others attend.
                                       Navy--Over 25,000 families,
                                        providers, and community members
                                        have received proactive
                                        outreach, education, and
                                        training.
                                       Army--Funded three psychological
                                        health (PH) school based
                                        programs that take a
                                        preventative approach by
                                        providing PH support to and for
                                        school-aged children in the
                                        school setting.
                                       Army--Established the Child and
                                        Adolescent Center of Excellence
                                        to focus on the impacts of being
                                        a child with a parent deploying,
                                        wounded or killed, supporting
                                        interventions, programs, and
                                        policy assisting families
                                        dealing with these unique
                                        stressors.
Transition of Care...................  Navy--Continuing to support and
                                        expand Wounded Warriors Program,
                                        a program for Soldiers who are
                                        disabled, as found by the Army
                                        disability system, to ensure
                                        their families receive all the
                                        benefits and support they are
                                        entitled--741 Service members
                                        have received outreach with 178
                                        having been referred to
                                        appropriate levels of care.
                                       Air Force--Continuing to support
                                        and expand the Air Force Wounded
                                        Warrior (AFW2) Program which
                                        takes a comprehensive approach
                                        to helping wounded Airmen.
                                        Family liaison officers are
                                        assigned to hospitalized wounded
                                        members and provide a wide range
                                        of assistance to family members.
Screening and Surveillance...........  Air Force--Screening and
                                        Surveillance Conducted Community
                                        Assessment and Survey which
                                        provided anonymous data on post
                                        traumatic stress disorder
                                        (PTSD), alcohol/drug use and
                                        family maltreatment.
------------------------------------------------------------------------

    Question. What funds if any have yet to be obligated?
    Answer. Obligation status as of the end of January 2009 is shown in 
the following tables.

----------------------------------------------------------------------------------------------------------------
                                  Appropriated    Appropriated    Reprogrammed     Reprogrammed
    $ millions  FY 2007/2008           O&M            RDT&E           RDT&E      Procurement \1\       Total
----------------------------------------------------------------------------------------------------------------
Appropriated Amounts...........          $600.0          $300.0  ..............  ...............          $900.0
Less: O&M Extended to FY08/09..         $(75.0)  ..............  ..............  ...............         $(75.0)
Less: O&M Reprogrammed to RDT&E         $(70.5)  ..............           $58.8            $11.7             $--
 and Procurement...............
Less: Statutory withhold for     ..............          $(7.5)  ..............  ...............          $(7.5)
 Small Business Innovation
 Research (Small Business Act,
 15 U.S.C. 638)................
    Net Funding................          $454.5          $292.5           $58.8            $11.7          $817.5
    Amount Obligated Through             $416.0          $292.5           $51.8             $6.0          $766.3
     January 31, 2009..........
    Percentage of Net Funding               92%            100%             88%              51%             94%
     Obligated.................
----------------------------------------------------------------------------------------------------------------
\1\ Procurement funds are FY 2007/2009 and will continue to obligate through FY 2009.


----------------------------------------------------------------------------------------------------------------
                                                                   Appropriated RDT&E
               FY 2009                       O&M funding              funding \2\                 Total
----------------------------------------------------------------------------------------------------------------
FY 2008 Supplemental Appropriation--  ........................  $107.3                   $107.3
 RDT&E (portion of $273.8
 appropriated for Battle Casualty/
 Psych Health Research)\3\.
FY 2009 Supplemental Bridge Funding-- $300.0                    .......................  $300.0
 O&M.
FY 2009 Appropriation...............  $210.0                    $90.0                    $300.0
FY 2007/2008 Funding Extended to FY   $75.0                     .......................  $75.0
 2008/2009 (from above).
Less: Army Suicide Study with         $(10.0)                   .......................  $(10.0)
 National Institutes of Health.
    Total Funding...................  585.0                     $197.3                   $772.3
    Amount Obligated Through          $67.8                     $--                      $67.8
     December 31, 2008.
    Percentage of Net Funding         12%                       0%                       9%
     Obligated.
----------------------------------------------------------------------------------------------------------------
\2\ RDT&E projects are peer-reviewed before award of funds. RDT&E does not reflect withhold 2.5% for Small
  Business Innovation Research (Small Business Act, 15 U.S.C. 638) pending final calculations.
\3\ FY 2008 Supplemental Appropriation--RDT&E is FY 2008/2009 funding.

    Question. A large part of the funding provided was to hire 
additional staff. Where are you in executing a hiring plan?
    Answer. The Services have established internal staffing 
requirements and received funding to support these Service-specific 
conditions. Psychological health (PH) and traumatic brain injury (TBI) 
FY 2009 staffing update as of March 3, 2009:

------------------------------------------------------------------------
                                                       TBI
           Service            PH funded   PH hired    funded   TBI hired
------------------------------------------------------------------------
Air Force...................         97         91         NA         NA
Army........................        890      444.3      * 250        149
Navy........................        297        162        115         25
TMA.........................        200      ** 41  .........  .........
                             -------------------------------------------
    Total...................       1484      732.3        365       174
------------------------------------------------------------------------
* Some of Army's TBI dollars have been used to pay for existing staff
  retasked to provide TBI care.
** Awaiting breakdown of how many are serving in TBI position versus PH
  positions.
*** Navy numbers reflect: ``Funded'' = those positions being supported
  and contracted in FY 2009 (including the FY 2009 continuation of FY
  2008 positions), ``Hired'' = those positions previously contracted and
  filled in FY 2008.

    Question. What shortfalls or gaps exist in your staffing?
    Answer. The Services have noted the following gaps:
          1. Short supply of child and adolescent mental health 
        providers
          2. Small number of available, qualified providers
          3. Disparity of provider specialties depending on 
        regional locations
    Question. What still needs to be accomplished?
    Answer. We need validation of a population-based, risk-
adjusted staffing model for DoD that projects the staff 
requirements by provider type, based on each Service policies 
and needs. Upon validation and acceptance of the model, funding 
requirements will be reviewed to implement efforts to meet the 
population-based, risk-adjusted needs.

                               Spend Plan

    Question. Can you update this Committee on your spend plan?
    Answer. A Spend Plan summary is attached. Most of the funding is 
pushed to the 4th quarter when contracts will come due.

[GRAPHIC] [TIFF OMITTED] T6232B.289

    Question. Does the Department and the Service have the internal 
capacity to obligate the funding provided? Please explain.
    Answer. DoD has the internal capacity to obligate the funding. The 
funds have been distributed to the Services and TRICARE Management 
Activity for execution.
    Question. What issues exist that are hindering the Department in 
executing these funds?
    Answer. The health care support requirements for the psychological 
health and traumatic brain injury programs are labor intensive and 
highly reliant upon the availability of civilian and contract providers 
to accomplish the required functions. Given the limited number of 
specialists available psychological health or traumatic brain injury 
training and the competition by the private sector organizations who 
concurrently seek to hire from the limited labor pool, the Department's 
ability to execute all the appropriated funds for psychological health 
and traumatic brain injury requirements may be hindered.
    Question. What is still needed, whether funding or personnel to 
continue this endeavor?
    Answer. We are still looking at opportunities for technological 
infrastructure, equipment for virtual therapy, research studies and 
outcomes evaluations, personnel to provide empirically supported 
treatments, and more mental health providers to be embedded in line 
units.
    Question. What shortfalls exist?
    Answer. We are still working to improve connectivity and 
collaboration between clinical and pre-clinical care (Military 
OneSource, chaplains, etc.); enhance access to care in deployed 
situations, especially for those in small units or at outposts; promote 
evidence-based programs and treatment; and expand access to substance 
abuse/dependence treatment, particularly for adolescents.

    [Clerk's note.--End of questions submitted by Mr. Murtha. 
Articles referred to by Mr. Murtha follow:]

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                                           Thursday, March 5, 2009.

                            GLOBAL MOBILITY

                               WITNESSES

GENERAL DUNCAN J. McNABB, USAF, COMMANDER, UNITED STATES TRANSPORTATION 
    COMMAND
GENERAL ARTHUR J. LICHTE, COMMANDER, AIR MOBILITY COMMAND
MAJOR GENERAL RANDAL D. FULLHART, DIRECTOR OF GLOBAL REACH PROGRAMS, 
    OFFICE OF THE ASSISTANT SECRETARY OF THE AIR FORCE FOR ACQUISITION

                     Mr. Murtha's Opening Statement

    Mr. Murtha. I will ask Mr. Young for a motion.
    Mr. Young. Mr. Chairman, I move that those portions of the 
hearing today which involve classified material be held in 
executive session because of the classification of the material 
to be discussed.
    Mr. Murtha. Without objection.
    We are having, in my estimation, one of the most important 
hearings that we will have this year. I have said over and over 
again, we want to try to fit in some of these other programs so 
that we can take care of mobility--tankers, mainly--down the 
road. And so you two, with your experience, we appreciate your 
being here.
    We appreciate what you are going to say, but when we see 
the CSAR program, the KC-X, all these programs being protested, 
I worry. The President says you are going to reform the system. 
Well, it takes forever to reform the system. So we have to get 
something done. If we are going to get tankers out there, ready 
to go, replaced, we have got get to get it done early; and of 
course, these other programs which you have control over also.
    As you know, we put the C-130s and C-17s in, which helped 
alleviate some of the problems. We are going to try to do the 
same thing.
    We get all kinds of guidance from the White House. We are 
the ones that finally make the decision. It is not that we are 
fighting with the White House. We just don't agree with them on 
some issues. We know more than they do about what needs to be 
done.
    So you folks have the recommendations. We know you have to 
agree with the Secretary of Defense. I don't always agree with 
the Secretary of Defense. And we sometimes, this committee--
this subcommittee changes, and we put in what we thinks need to 
be done.
    I will give you an example. We put in limiting language for 
the Marine One long before Senator McCain or anybody else 
recognized it. We said, we are not going to build this thing. 
As a matter of fact, I had 14 people in here, and I told the 
White House, You have got to quit increasing these requirements 
because it is your fault that these costs have gone up. And we 
want to protect the President, but we are not going to spend 
that kind of money on one helicopter.
    So they said, Well, we will put this off until the Obama 
administration comes in. They did. And now we are trying to 
convince the Obama--they need a helicopter, no question about 
that, but they don't need the requirements for the one that is 
so expensive. And we are willing to fund the other one--at 
least I am going to recommend to the subcommittee that they 
fund the other one.
    We look forward to your testimony, and we know that we will 
get some good questions from the members about what needs to be 
done.
    Mr. Young.

                     Mr. Young's Opening Statement

    Mr. Young. Mr. Chairman, thank you very much. And I want to 
add my welcome to our very distinguished guests today. And as 
we have discussed--and General McNabb and I had a very long 
session, one-on-one, not too long ago and we discussed the fact 
that you can't engage the enemy if you can't take your troops 
and your equipment where the enemy is.
    So the importance of our airlift, the importance of being 
able to move personnel and material is just--you just can't do 
it without it. And that is why this is so important and this 
hearing is so important, because we do have some issues that 
need to be resolved. And I think most everybody on the 
committee would agree, we are here to help you resolve the 
issues.
    Thank you for being here today.
    Mr. Murtha. We have 8,000 miles we have to travel to 
resupply the people in Afghanistan, the most difficult terrain 
in the world. You folks are as important as anybody. I used to 
think, when I was in the infantry on the ground, these other 
guys were just nothing. Well, I found out when you didn't have 
the food, you didn't have the resources you needed, you damn 
well needed everybody else.
    So I appreciate your coming. And who is first here on this, 
General McNabb?
    General McNabb, we will hear from you first. Summarize the 
statement. We will put the rest in the record.

                  Summary Statement of General McNabb

    General McNabb. Chairman Murtha, Congressman Young, 
distinguished members of the committee, it is indeed my 
privilege to be with you today, representing USTRANSCOM and the 
136,000 of some of the world's finest logisticians. This total 
force team of active duty, Guard, Reserve, civilian contractors 
and commercial partners enables the combatant commanders to 
succeed anywhere in the world by providing them unmatched 
strategic lift and end-to-end global distribution.
    And this committee is well aware that it is our great 
people that get it done. It is our total force air crews, 
flying combat approaches on night vision goggles or air-
dropping supplies to our troops in Afghanistan. It is our air-
refueling crews who deliver 5 million pounds of fuel every day 
at night in the weather, extending the reach of our joint and 
coalition partners.
    With the maintenance teams and aerial porters behind them, 
these crews execute over 900 sorties a day, sometimes in the 
most austere conditions, like Antarctica, and sometimes into 
the most dangerous, like in a forward operating base under fire 
in Afghanistan.
    It is our merchant mariners and military and civilian port 
operators, loading, offloading and sailing over 35 ships every 
day to support the warfighter. It is our terminal operators 
pushing thousands of containers, domestic freight and railcar 
shipments, pushing warfighters--their vital supplies, and 
making sure that they have what they need to fight.
    It is our contingency response groups, port opening experts 
arriving first, to open up the flow in a disaster relief 
operation. And it is our commercial airlift and sealift 
partners, standing beside us, opening up new routes through, 
the north going into Afghanistan, or supporting the Nation in 
times of surge.
    And it is our medical crews and critical care teams, 
tending to our wounded warriors, rapidly delivering them from 
the battlefield to the finest world-class care on the planet, 
saving lives and families at the same time. And it is our crews 
bringing back fallen comrades, transporting heroes dressed in 
our Nation's colors, Americans returning with dignity to our 
country which owes them so much.
    It is this logistics team, working from home and abroad, 
that gives our Nation unrivaled global reach, committed to 
serving our Nation's warfighters by delivering the right stuff 
to the right place at the right time. Whether sustaining the 
fight, providing disaster relief to friends in need or moving 
six brigades simultaneously, we are there.
    Chairman Murtha, your support and the support of this 
committee has been instrumental in providing the resources our 
team needs to win and support the combatant commanders, and I 
thank you. You have given us the Large, Medium-Speed Roll On-
Roll Off ships and supported upgrades to the Ready Reserve 
Fleet, all of which have been key to our success over the last 
seven years; and the new joint High-Speed Vessels will give us 
even greater flexibility.
    The C-130J and C-17 have come of age since 9/11 and have 
allowed us to change how we support the combatant commanders 
from the air. The current C-5, C-130 and KC-10 modernization 
programs will also make an enormous difference in our 
capability to support the warfighter.
    My top priority remains the recapitalization of our aging 
tanker fleet. The KC-X will be a game changer. Its value as a 
tanker will be tremendous. Its value as a multirole platform to 
the mobility enterprise will be incomparable. It will do for 
the whole mobility world what the C-17 did for theater and 
strategic airlift. It will be an ultimate mobility force 
multiplier.
    Chairman Murtha and Congressman Young, I am grateful to you 
and the committee for inviting me to appear before you today. I 
respectfully request my written testimony be submitted for the 
record, and I look forward to your questions.
    Mr. Murtha. Without objection.
    [The statement of General McNabb follows:]

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    Mr. Murtha. General Lichte.

                  Summary Statement of General Lichte

    General Lichte. Mr. Chairman and committee members, thank 
you for the opportunity to appear before you today.
    As the commander of Air Mobility Command, I am extremely 
proud of the total force team of over 132,000 active duty, 
civilian, and Air National Guard and Air Reserve mobility 
Airmen. We stand ready as proud members of the United States 
Transportation Command joint team, and we are privileged to 
provide global reach to our Nation's warfighters through 
airlift, air refueling and global patient movement.
    I am extremely pleased by what the command has accomplished 
as we continue our focus on winning today's fight as part of 
the joint and coalition force, developing and caring for our 
Airmen and families, enhancing the nuclear mission, optimizing 
mobility partnerships and preparing the mobility forces for the 
future.
    And, although the process of recapitalizing our tanker 
fleet could take more than three decades and will require a 
long-term commitment, it is time that we take that first step 
towards retiring our geriatric, Eisenhower-era KC-135s, a first 
step that will posture future generations of mobility Airmen to 
continue their great support of the joint warfighter and United 
States Transportation Command's global mission.
    Considering the critical role that the tanker plays in 
today's joint and coalition environment, it is no surprise that 
modernizing and recapitalizing today's tanker fleet is the Air 
Force's number one acquisition priority. Without a modern 
tanker capable of flexible and versatile operations and 
response in this new century, our Nation's ability to respond 
to the traditional spectrum of conflict is in jeopardy, as is 
our Nation's ability to respond to future challenges.
    Procurement of a new tanker is a matter of national 
security, and that is why it is the Air Force's number one 
acquisition priority. Tankers underpin the entire joint 
mobility team's ability to project combat power or humanitarian 
relief operations around the world. And while a decision on 
source selection and acquisition strategy remains with OSD, my 
goal remains to ensure that we procure a system that best meets 
the warfighter's requirement now and well into the future. To 
meet that end, Air Mobility Command is working closely with OSD 
in their management of this program.
    Air Mobility Command brings a unique tool to our Nation. 
Through mobility forces our Nation can extend a clenched fist 
to our adversaries or an open hand to those in need. Air 
Mobility Command stands ready to assist at home or abroad to 
save lives and alleviate human suffering in the aftermath of 
any natural disaster or other crisis.
    Although we still await the outcome of the mobility 
capabilities and requirements study, we are making progress 
with regards to recapitalization efforts. We are modernizing 
our C-5s with the avionics upgrades that will allow us to 
continue to operate in international airspace and foreign 
airfields. Additionally, the C-5 reliability enhancement and 
reengining program is making great strides. We recently 
delivered the first C-5M to Dover Air Force Base and we look 
forward to modernizing a total of 52 C-5s to enhance the 
capabilities of our Nation's largest airlifter.
    However, we are focused more on just modernization and 
recapitalization. We continue to take care of airmen, not just 
airmen, but soldiers, sailors, marines, as well. Through 
airlift and precision airdrop, we continue to pull the supply 
chain vertically up out of the threat, reducing the need to 
place soldiers, sailors, airmen and marines in harm's way on 
the roads of Iraq and Afghanistan.
    For those who must be on the front lines to perform their 
duties, Air Mobility Command has airlifted almost 4,000 Mine 
Resistant and Ambush Protected vehicles, MRAPs, to Iraq on C-5s 
and C-17s and contract carriers as part of the United States 
Transportation Command's joint effort to rapidly deliver these 
high-priority systems by both sea and air.
    Air Mobility Command clearly offers an edge in irregular 
warfare operations. When properly integrated with other 
military and civil efforts, the mobility advantage enables the 
infiltration, resupply and exfiltration of relatively small 
ground units. By providing humanitarian assistance, medical 
support and transportation for government officials to remote 
areas, Air Mobility can promote the government's credibility 
and improve the quality of life for its population. These types 
of operations which directly affect and are immediately visible 
to the population in question can have significant effects in 
the overall campaign against insurgents.
    The continued wear and tear on our airframes remains a 
major concern. As our mobility Air Force's C-130 fleet shrinks, 
the remaining fleet ages quicker, resulting in aircraft being 
operationally restricted sooner. This, in turn, increases the 
number of inspections required, which affects our aircraft 
availability. And while our C-130 center wing box replacement 
program is making great progress, we are beginning to see wear-
and-tear issues on other airframes as well.
    The C-5 fleet has cracks appearing on the top of the 
aircraft and in the structures near the forward cargo door 
hinges. We are pressing ahead with fixes for these issues, but 
others undoubtedly will appear in the future as the fleet 
remains heavily tasked to meet mission requirements.
    We also face looming deadlines to complete avionics 
upgrades to meet global air traffic requirements and continue 
to access congested airspace worldwide. Thus far, we have been 
able to modify a considerable portion of our fleets, but we 
have a lot to do before restrictions begin to impact operations 
in the year 2015.
    In conclusion, I am proud to be both a mobility airman and 
a member of the United States Transportation Command's joint 
team. From direct support of the warfighter on the battlefield 
to humanitarian relief in response to natural disasters, our 
air mobility fleet is and will continue to be a critical 
component of America's strategy--strategic capability.
    I am proud to wear the Air Mobility Command patch, and I am 
humbled to represent the 132,000 Mobility Command Airmen as we 
support the United States Transportation Command in 
demonstrating our national resolve, delivering combat power and 
saving lives.
    Thank you very much for this opportunity, Mr. Chairman.
    [The statement of General Lichte follows:]

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    Mr. Murtha. General Fullhart.

                 Summary Statement of General Fullhart

    General Fullhart. Mr. Chairman, Congressman Young and 
members of the committee, I am honored to be here this morning 
to update you on the status of Air Force Mobility programs. I 
will keep my remarks brief in order to provide additional time 
to focus on issues of interest to the committee.
    It is a privilege for me to be here with General Lichte 
from Air Mobility Command and General McNabb from United States 
Transportation Command. They are Air Force acquisition's 
primary customers for mobility aircraft. They determine the 
requirements and capabilities that are needed by the 
warfighter; and it is my responsibility to work with those who 
acquire aircraft platforms that meet those needs.
    As the Director of Global Reach Programs, I oversee the 
acquisition of nearly 30 airlift, refueling, training and 
Special Operations Forces programs. I am proud of the 
approximately 50 acquisition professionals who serve in the 
Directorate of Global Reach. On a daily basis these individuals 
work with industry, the Department of Defense, other services 
and Congress to provide the warfighter with the capabilities 
they need to accomplish their missions. Our job is to properly 
execute the acquisition process so we can effectively equip the 
warfighter.
    We are successfully moving forward with the acquisition and 
modification of our mobility aircraft. We are working with the 
Office of the Secretary of Defense to release a draft request 
for proposal for the KC-X air refueling tanker. We are 
competing the combat search and rescue aircraft source 
selection and anticipate awarding a contract this year.
    We appreciate greatly the support that this committee has 
provided to the C-17 and C-130J programs. Procurement of these 
aircraft is on cost and on schedule.
    Finally, the modernization programs for C-5 and legacy C-
130 fleets are under way and performing well.
    The timely acquisition of critically needed platforms will 
be an ongoing priority for our Air Force. The warfighter 
depends on the Air Force's acquisition workforce to procure 
these aircraft platforms so they can execute the mission that 
they have been given. We will also continue to focus our 
efforts on modernizing and recapitalizing our aging weapons 
systems.
    We appreciate Congress's ongoing support for Air Force 
mobility programs.
    Sir, I respectfully request my written statement be 
included in the record. Thank you again for the opportunity to 
be here. And I look forward to answering your questions.
    [The statement of General Fullhart follows:]

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    Mr. Murtha. Without objection, all three statements will be 
put in the record.
    Because of the interest of our vice chairman in this 
particular subject, we are going to allow him to go first with 
his 5 minutes.

                                 TANKER

    Mr. Dicks. Thank you, Mr. Chairman. And I want to welcome 
all witnesses, particularly General McNabb, whom I have worked 
with for many years.
    You know, last year we went through this tanker issue, and 
the Air Force made a decision, which I strongly disagreed with. 
General Handy, who doesn't work for Northrop Grumman or for 
Boeing, writes a very good op-ed about, you know, somebody who 
was both head of Air Mobility Command and TRANSCOM--like the 
last person to have both hats--why a smaller tanker is better 
and especially a tanker that would replace the KC-135.
    And what the Air Force had testified to up until the very--
like weeks before we had this decision, is, they wanted a 
medium-sized airplane.
    And, you know, the question I have here is--one thing that 
was not taken into account that I found out was not taken into 
account was life cycle costs. And the evaluation they did was 
very cursory, and was only 25 years. The JROC had said that the 
life cycle of these planes is 40 years.
    So the big issue to me is, if that had been properly 
evaluated and you look at the difference in the fuel 
consumption rate of an A-330--these are commercial airplanes; 
we know how much fuel they burn. And the numbers that I come up 
with--and let's say, at $100 a barrel, comparing the 767 and 
the A-330, 750 planes for 40 years at 750 hours per year, the 
difference in fuel cost between the two planes is $25 billion.
    If it was 150--and we were almost at 150 last year; now it 
has come back rather dramatically--the difference would be $35 
billion. And that is enough to buy the 179 airplanes.
    So if I can get one point across to my colleagues, bigger 
isn't better. And that is why, General Lichte, I was so 
disappointed in what you said. Now you have clarified it to me 
today. You seem like a gentleman and a professional, so I am 
going to give you the benefit of the doubt that maybe you had a 
bad day.
    But the reason I bring this up----
    Mr. Moran. It is like this for all of us.
    Mr. Dicks. I know you weren't part of the selection 
process. I called Sue Payton immediately after I heard what you 
said, because in the selection process there were certain 
requirements, and if you met the requirements, you didn't get 
any extra points for doing extra, because they were concerned 
about getting too big an airplane. In fact, the testimony all 
the way up to the last days was that we wanted a medium-sized 
plane, which the 767 is.
    The A-330 is a much bigger plane. It is even larger than 
the KC-10s, much larger, and yet has less fuel capability than 
the KC-10.
    Now, on fuel offload, one other point I want to make, the 
average fuel offload of these planes, these tankers, is 62,000 
pounds per sortie. Now the Boeing plane--the KC-135E offloads--
has the capability of carrying 200,000 pounds of fuel; the 767, 
205; the A-330, 245,000. So they are well in excess of the 
average requirement, which is 62,000 pounds. It may be 62,000 
to 69,000, somewhere in that range.
    So, again, you see that having a bigger airplane is going 
to wind up costing you more money not only in fuel, but you 
have hangars, that more hangars have to be replaced with the A-
330 than the 767. They can't land at as many runways around the 
world.
    This is like the difference between a C-5 and a C-17. One 
of the reasons why the C-17, a smaller airplane, but a very 
capable airplane, was the Air Force choice over C-5 was because 
you had more flexibility. In Europe, for example, I think you 
can have two C-5s on one of these fields and it stops 
everything. And you can have seven to nine C-17s.
    This is the same issue here. You have more airfields that 
you can use with the 767 versus the A-330.
    So, again, you are the leaders of the Air Force. All I am 
saying to you--and I am also very concerned on the acquisition 
side of this thing, again, that the companies are not even 
allowed to talk to the Air Force.
    When is that gag rule going to be lifted? I think that is 
wrong. I think the companies need to be engaging the Air Force 
on the next RFP. When are we going to lift this we-can't-talk-
to-anybody rule?
    General Lichte. Sir, that ruling, if you will, came out of 
OSD, anticipating that as we await the arrival of the new Under 
Secretary for Acquisition Technology and Logistics, that we 
will be starting that engagement process soon thereafter.
    Mr. Dicks. Okay.
    I want you to address fuel consumption. I want you to 
address some of the things that would have to be--you would 
have to have more hangars, you would have to strengthen the 
runways with a bigger airplane. Those costs weren't even taken 
into account. Those costs were not even taken--I mean, it was 
some general number, but not a real hard evaluation for the 
National Guard.
    The other thing, one other thing that is just as important 
to our committee, we are going to have the Osprey, 439 Ospreys. 
The A-330 cannot refuel the Osprey; the 767 can. That is a big, 
additional benefit of having this smaller airplane, because the 
other plane can't slow down to a speed where it can offload the 
fuel to the Osprey.
    I would like to hear you explain why you thought on the day 
of this announcement that more was better when the requirements 
said, if you meet the requirements, you shouldn't get extra 
credit for more, and it isn't necessary; and it has got this 
fuel--and it has got this weight problem that causes all this 
extra fuel consumption.
    Would you like to address that, General?
    General Lichte. I would be happy to, Mr. Dicks. Thank you 
for raising some of those issues, and perhaps I can clarify.
    First of all, on February 29 last year, when I was at the 
announcement, I, as the operator of Air Mobility Command, the 
commander of Air Mobility Command, established the requirements 
that were necessary to meet the new tanker requirements. And 
then the acquisition world takes over and comes up with the 
solution.
    The day that I was standing there on February 29 was really 
the first time that I found out which tanker won the source 
selection; and so, when I made the comment about more, I was 
talking in comparison to the KC-135. Either tanker really 
provided more than the KC-135--more fuel offload, more 
passengers carried, more cargo carried--and that was my 
reference to when I made the comment that afternoon. Because, 
quite frankly, I was very excited with the fact that we had 
finally gotten a new tanker. We have been asking for a new 
tanker for a long time.
    These tankers were built in the Eisenhower era. As a matter 
of fact, these tankers were designed and built before our 
current President was even born. We need to get on with the 
replacement for the tankers. And as the person who established 
the requirements, either tanker met that requirement.
    And so what I was trying to say is, I was very pleased that 
we were taking the next step to start this process, because 
even if everything had gone well--and as you know, we had the 
protest--it is going to take some 30 years and a long-term 
commitment to replace the tankers. And so when I made those 
comments, it was really in regard to that.
    When you talk about offload requirement, yes, the average 
could be 62,000. I won't debate that. But there are B-52s, 
there are C-5s and everything that will take 125,000-, 150,000-
pound offload which we are required to give them. And so, on 
the average, it may be. All those other parameters that were 
decided and reviewed by the acquisition world, that is how they 
came out with which tanker was the winner. And so I was 
expressing my gratitude and happiness with the fact that we 
were finally taking a bite out of the elephant, finally trying 
to get forward progress on an issue that we need to tackle.
    And I am glad to see that at this committee you continue to 
tackle that.
    Mr. Murtha. The time of the gentleman has expired. We are 
going to work this thing out, that is for sure. We know you 
need tankers. We know it is the number one priority of the Air 
Force, as far as I am sure it should be in the Department. When 
we are going 8,000 miles to a battle area, we need to work that 
problem out.
    Mr. Young.

                            C-17 GLOBEMASTER

    Mr. Young. Yeah, Mr. Chairman. Thank you very much.
    And we have covered the tanker issue quite well, but I want 
to tell you that having MacDill Air Force Base right on the 
edge of my district--and, of course, I claim MacDill anyway and 
we have invested a lot of time and a lot of taxpayers' money in 
making MacDill the base that it should be.
    But we have tankers there, and these tankers are KC-135s. 
They are not even the oldest version of the KC-135s, but they 
are old. And I want to tell you, your crews are amazing. As I 
talk to these young men and women that are flying these 
aircraft on missions, they tell me, Hey, this is old; I can't 
believe that we are flying airplanes this old, but we will fly 
them until there are no wings left on them. I mean, these guys 
are determined.
    But the wings are only going to last so long and the 
aircraft is only going to last so long, and they are getting 
very expensive to maintain. So we need to get a decision, and 
we needed to get a contract, and we need to get the tankers in 
the air.
    And having said that, let me go to the issue of the C-17. 
C-17 is pretty much a program that this committee basically 
kept going when there was serious question about whether we 
should even build a C-17. But once we had the C-17, there has 
never been a question about its capability or its reliability 
or what it can do for us that a C-5 can't do. And a C-5, of 
course, has been just a tremendous airplane.
    But now we are in a dilemma; we don't have a budget 
request, and I don't think we are going to get one--I don't 
know--for any new C-17s. We also don't have any indication that 
there is going to be a budget request to close down the line.
    Where do we go on C-17? The committee is going to need a 
little bit of direction on what the Air Force really thinks we 
should do on the C-17. Give us a good answer, we will find a 
way to make it happen. But I think we should think really long 
and hard before we do away with C-17.
    General McNabb. Well, Congressman Young, thanks. Again, 
your support has been superb. And the C-17, if you look at 
where we sit, both as we were asked to get convoys off the road 
in Iraq and going into Afghanistan, the C-17 has proven its 
worth. Everything that we had hoped it would do, it has done.
    I am checked out on the C-17, and I go down and fly with 
those young folks at Altus. And those young captains put their 
arm around me and say, ``Come on over here, son; let me show 
you how we fly this airplane.'' And it is really tremendous 
what we have done, and it has taken it to a whole different 
level, and it has been great. So the support of the committee 
has been superb, and we really do appreciate it.
    I would say that I know, as you all know, as the new 
administration has taken over, they are reviewing all of these 
programs--the Secretary of Defense is personally in the middle 
of that--to take a look at all of these things to see how it 
will fit with all the requirements to include when the 
President outlines his strategy for Iraq and Afghanistan. So 
those are under review right now, and I know that there are a 
lot of decisions and discussions that are going on right now.
    I was in the middle of the Nunn-McCurdy discussion last 
year when we said, how much does the C-5 reengining cost, and 
coming back saying, here is what we think as a department. And 
I would say that the current program of record of 205 C-17s, 52 
modernized, reengined C-5s and 59 C-5As, which will have an 
avionics modernization program, ends up giving you a fleet of 
about 316. That meets the requirement, as TRANSCOM Commander; 
and the 205 C-17s gives me the flexibility that I need to make 
sure that I can deal with places like Afghanistan and others. 
Again, that was brought together by everybody taking a very 
good look at all of the options to include additional C-17s and 
reengining more C-5s.
    And we have a new study that is going to be due out in 
December that is going to take into account the increased 
ground strength of the Marines and the Army--look at how we are 
employing the assets, look at the Future Combat System, the 
fact that it has got to be carried by the C-17 vice the 130. If 
there are any changes, we have flexibility.
    Mr. Murtha. That doesn't help us because the budget--the 
money that we are going to--in the supplemental and in the full 
bill, this study is not going to help us a bit. We need to 
know.
    What are we going to do, shut down the line and then reopen 
it? You know the expense of that.
    General McNabb. Yes, sir.
    Mr. Murtha. We need to know if you need additional C-17s.
    General McNabb. Yes, Chairman. And what I would say is 
that, right now, the budget is going to come to you in a couple 
of weeks--3 weeks, I think--that is, the final decisions along 
with the administration; and I think probably in discussions 
with you all, will try to get their final hands around that.
    So those are the things that are playing with it right now. 
I am comfortable that the Nunn-McCurdy, as we came in with, 
this is the overall solution on the airlift side, on that 
portion of it. I would say, the tanker is, no question, my 
number one priority; and as I look at that, that also helps us 
deal with the overall mobility situation.
    So that is kind of where I sit right now.

                            C-5 RE-ENGINING

    Mr. Young. General, you mentioned that you reengined C-5s, 
the C-5M. And I understand you have--some of those are deployed 
to Dover Air Force Base.
    General McNabb. Yes. The first two, Congressman Young.
    Mr. Young. What kind of a success story do we have with the 
C-5M? Is it a good story?
    General McNabb. Yes. I think right now it is meeting the 
test. I will let General Lichte, who actually flew the airplane 
into Dover--the first airplane went into Dover. But--they will 
test and evaluate, but right now the test and evaluation has 
gone very well, or I would say, the parameters of meeting the 
requirements that they have outlined.
    We will do further tests now that it goes out in the 
system, and we will see how that does. But right now not only 
is it meeting all the parameters that we had asked it to do, in 
fact, it is exceeding some of those.
    I will also say that the cost seems to be good as long as 
they keep that cost down. And right now that all looks good 
from where I sit.
    General Lichte. Right.
    I would just add that the C-5M performs wonderfully. It 
will be able to carry more cargo. It will be able to go longer 
because of the new engines.
    The engines were probably the biggest problem with the old 
C-5s. So with the new engines--the time on the wing with the 
old engines was about 1,000 hours. Now with the new engines, it 
may last longer than the airplane does.
    I think it has tremendous capability. It has got a mission-
capable rate now in the 50s. We expect that to be up around 75 
percent as an absolute minimum; but what we have seen so far--
indications are that it is going to probably be about 81 
percent. That allows us to get it out in the field and doing 
well. It is doing well.
    Two of them have arrived. The third one is on the way.
    Mr. Murtha. General, what does it cost to refurbish those 
airplanes, well over $100 million?
    General Lichte. Right. You get about two C-5Ms for the 
price of one C-17, roughly.
    Mr. Murtha. And the infrastructure or the body of the 
airplane is how old?
    General Lichte. Well, we expect it to fly until 2040. What 
we are going to have to deal with on the older A models, which 
are the older ones----

                            C-5 RETIREMENTS

    Mr. Murtha. But you see our problem, if you don't come up 
with--to shut down the C-17 line is inconceivable. So we are 
going to have to make the decision, what--you know, what we do 
here. And we are sure as hell--I don't see us shutting down the 
line because that would be so expensive to reorganize it.
    General Lichte. All the studies indicate that about 205 C-
17s and 111 C-5s will meet the requirements that we have for 
wartime. And so if more C-17s come, then we would need 
permission to start retiring some of the C-5s, the older, 
poorest-performing C-5s.

                            C-17 PROCUREMENT

    Mr. Young. Just one last question on the C-17. Isn't it a 
fact that the C-17 has been used far more extensively than we 
ever intended in a short period of time, which means that the 
maintenance requirements, means that the life span is being 
used more rapidly than we had anticipated; isn't that a fact?
    General Lichte. That is a fact.
    General McNabb. Absolutely, Congressman. But you know, when 
we talked about buying the C-17, we said, here are the kinds of 
things that we may need it to do, and in fact, that is what we 
have been doing with it both in Iraq and Afghanistan.
    It is not the flying hours per se. It is the wear and tear 
on the airplane, because we actually are tankering a lot more 
fuel and doing a lot more of those assault landings than we had 
programmed for its life cycle.
    This committee helped us a bunch two supplementals ago by 
giving us the 10 airplanes to make up for the wear and tear 
that we had on the fleet. I can't tell you how much that meant 
to us.
    The 15 aircraft helps us do the same kind of thing. It 
allows us to now spread that wear and tear over the overall 
fleet because where that wear and tear is happening is in the 
airplanes that are flying into Afghanistan and Iraq.
    General Lichte. I will say, big picture-wise, we had 
programmed to fly them about 1,000 hours a year. They are up 
around 1,100. So, what we are doing is using fleet management, 
taking some of those that have been at home, maybe at the Guard 
and Reserve that haven't had the high rate of flight, using 
those more. So we are trying to balance this out, coupled with, 
as General McNabb pointed out, the result of getting some extra 
aircraft to bring us up to higher numbers.
    It is fleet management and we are controlling it very 
closely.
    Mr. Murtha. Mr. Moran.

                            KC-X PROCUREMENT

    Mr. Moran. Thanks, Mr. Chairman. I may not get into quite 
the prelude that my colleague got into in asking my question, 
but I do want to get just a little bit into the tanker issue.
    I understand that there was a review of the KC-X 
procurement program just last week, and we are told that some 
of the requirements in the RFP were reduced. I don't think you 
mentioned that in your testimony, did you?
    Is that true or false?
    General Lichte. The initial stage is, we have not changed 
our requirements. What we are looking at and where that comes 
from is, how do you translate requirements into language? And I 
am going to let the acquisition expert just give you the rest 
of the story.
    Mr. Moran. Okay. I don't want to get a long explanation. 
Let me give you another question you can answer at the same 
time.
    I understand that they may be looking at low-cost versus 
best value. I gather that is far more than just semantics. What 
does it mean?
    General Fullhart. Sir, I will try to give you the short 
answer that you desire.
    Mr. Dicks. Can you speak up? We are having a hard time 
hearing you. Get a little closer.
    General Fullhart. The green light is on. Is that all right, 
sir?
    There are two key documents in terms of requirements. The 
capabilities development document is the core document. And 
what General Lichte is referring to is, those are the 
requirements levied by the warfighter and that are approved by 
the AFROC and JROC, if I could use those acronyms with you; 
those are the formal bodies.
    Those requirements are translated into things that you then 
put into a request for proposal. Those are the systems 
requirements, document requirements. Those were the famous 800-
plus requirements that I think people have heard about. With 
great credit to the warfighter to the acquisition community, 
they have gone through a very extensive review of those 
requirements to look at, how do you clarify them, how do you 
make sure there are not redundancies. Because that was one of 
the findings from the last----
    Mr. Moran. So there is no substantive change in the 
requirements, you are just making them clearer, more concise?
    General Fullhart. Exactly.
    Mr. Moran. It does seem to me to be a substantive change, 
though, if the policy is to seek low cost versus best value.
    General Fullhart. Yes, sir. And all those things are on the 
table, because clearly, until we have, as the Secretary of 
Defense has indicated, a new Under Secretary for Acquisition 
Technology and Logistics, we haven't had a dialogue between OSD 
and the Air Force on both the acquisitions strategy as well as 
the source selection strategy.
    Mr. Moran. You haven't had the dialogue?
    General Fullhart. We have not, sir.
    Mr. Moran. Let me ask you, there seems to be pushback 
against the idea of having a mixed buy of tankers.
    Do you have a policy or a clear issue with regard to the 
idea of having two different types of tankers?
    General Fullhart. Well, sir, as I think you know, the 
Secretary of Defense is on the record both in testimony and in 
public comments that, at this time, the fiscal realities are 
that we think that one tanker program is the way to go.
    Mr. Moran. And you agree with that? That is what I am 
asking. Was that your recommendation?
    General Fullhart. Well, sir, we haven't made a formal 
recommendation. But all the indications that I have seen, or 
the data that I have seen, do point out the fact that clearly 
if you are acquiring two aircraft at the same time, the costs 
are going to be higher. How you rationalize that in the fiscal 
environment is a dialogue that certainly we want to have with 
this committee and others.

                          MRAP TRANSPORTATION

    Mr. Moran. Well, I know what Secretary Gates said. I just 
wanted to hear what you might say.
    Let me ask you about the transportation of MRAPs. You have 
already sent 12,000 MRAPs to Iraq and Afghanistan in the last 
year and a half or so. I want to know what you are going to do 
with those MRAPs in Iraq. It is enormously expensive to move 
them, but the DOD made the policy to transport them by air, 
particularly into Iraq because you can't trust getting them 
across land through Pakistan.
    Can you tell us what your plan is and give us some sense of 
the cost of moving these MRAPs out of Iraq, recapitalizing them 
maybe, getting them back into Afghanistan?
    General McNabb. Congressman, I will take that one.
    What we initially did was--because lives were at stake, we 
basically said, hey, if you needed to go by air so that we can 
get those to the warfighter the fastest possible way, obviously 
we took the initial ones in there.
    It is about a tenth of the cost to take it by surface. You 
are right about Afghanistan. We will take it, if we can, by 
surface as far forward as possible, and then take it for the 
last leg by air.
    Obviously, we don't take that through a ground line of 
communication (LOC) through Pakistan; we take that by air. We 
will take MRAPs in that final leg into Afghanistan by air.
    Whatever we can do by surface, we will as long as----
    Mr. Moran. What surface is there? There is no surface 
between Iraq--I mean, maybe some surface Iraq out to Saudi 
Arabia. But you are using the port there, I guess, in the Basra 
area anyway. So you are floating them, and then you are flying 
them.
    You are going to land them in Pakistan, so there is really 
no surface that you can use, is there?
    General McNabb. Right, in Afghanistan. If I am moving them 
from Iraq to Afghanistan, pretty much you are exactly right.
    But in many cases these are different types of MRAPs. They 
are lighter. There are different types that they need in 
Afghanistan. So primarily what we will do is, we will take 
those in. Like I said, those last legs will come in by air to 
make sure that we don't put them at risk as we take them 
through the ground Loc.
    So you are exactly right. It is about--again, about a tenth 
of the cost to take it by surface. And again, whatever we can 
do as far forward as we can by surface and do the last part by 
air, that makes us money.
    Currently, about 72 percent of the MRAPs have moved by 
surface and, you know, roughly 28 percent by air, but that was 
going into Iraq. Now we are going to Afghanistan.
    Mr. Moran. The proportion is going change dramatically, 
though, as you get into Afghanistan.
    I am out of time so I am not going to ask a question, but I 
just want to make a point.

                             FUEL LOGISTICS

    Fuel logistics--we can ask a question on this for the 
record--but they represent 70 percent of the materiel that the 
Army ships into battle. It is something we need to look at. 
That is an enormous cost, just fuel logistics, and it is going 
to continue to be as we ramp up in Afghanistan.
    So we will present a question for the record.
    General McNabb. Congressman, I will be glad--as TRANSCOM 
and especially as the J-4, obviously getting fuel into 
Afghanistan has always been just really a key issue.
    We try to make sure we have lots of options coming in from 
different directions. A lot of our fuel, in fact, 65 to 70 
percent comes in from the north; only 30 percent comes in from 
the Pakistan side, to give you an idea. And the idea is you 
want to have multiple ways of getting it in.
    That is one of the big things--as we bring in additional 
forces, is to make sure that we have got the fuel in place in 
Afghanistan, something General Petraeus, something we watch 
very closely with CENTCOM and also with DOA and DESC, who is 
responsible for that. But we watch it every day to make sure 
that we are keeping that fuel flowing.
    Mr. Moran. Thank you, General.
    Thank you, Chairman.

                        COMBAT SEARCH AND RESCUE

    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Gentlemen, thank you for being with us this morning. I have 
not forgotten my trip out to the Air Mobility Command several 
years ago. The logistical footprint of what your young people 
do across the world is amazing; and no matter what anyone 
thinks about what happens in Iraq and Afghanistan, the support 
and the operations under that command are truly remarkable, 
night and day.
    And it is amazing, of all the flights and tanker issues, 
that you don't really hear of some of the problems that could 
come from such aged tankers. It is truly remarkable.
    Your second highest priority behind the tanker 
replacement--and I know the chairman has been to Nellis Air 
Base. And, you know, sometimes in life when you make a 
promise--when I met with some of those crews, talking about the 
combat search and rescue helicopters, those guys and gals that 
are involved--and they are going to be, you know, really 
involved in Afghanistan.
    I learned yesterday--I guess this isn't confidential--there 
is not 1 mile of rail in Afghanistan. You would think there 
might have been.
    General McNabb. Right.
    Mr. Frelinghuysen. But the air support of getting our 
injured--well, obviously getting our troops there, setting up a 
whole new series of air bases, where does the CSAR contract 
stand? I mean, what in the devil is going on here? Is there any 
optimistic news on the horizon?
    General Fullhart. Yes, sir, there is.
    In fact, on the day of the Inauguration we received the 
best and final proposals from the three vendors who are vying 
for that contract. We are in source selection as we speak, and 
we are on track for an April review by OSD in getting that 
contract signed and getting started with production.
    Mr. Frelinghuysen. So we are making some progress?
    General Fullhart. Yes, sir.
    Mr. Frelinghuysen. The combat search and rescue, obviously 
there have been situations where remarkable things have 
happened----
    General Fullhart. Absolutely.
    Mr. Frelinghuysen [continuing]. In terms of rescuing.
    What is the medevac component? Hasn't the Secretary of 
Defense directed the use of CSARs for medevac?
    General Fullhart. Sir, I can take that; that is an 
operational question which I can take for the record.
    [The information follows:]

    The medical evacuation (MEDEVAC) component exists under the U.S. 
Army for the specific mission of evacuating injured personnel. The 
mission is performed by U.S. Army rotary-wing assets. Due to enduring 
requirements for MEDEVAC capability, the Air Force has assisted the 
U.S. Army in performing this mission in U.S. Central Command with HH-
60G Combat Search and Rescue (CSAR) helicopter assets, which are 
inherently capable of performing the MEDEVAC mission with their 
advanced mission abilities.
    The Secretary of Defense has recently directed additional Air Force 
CSAR assets to enhance the MEDEVAC capability in Afghanistan. However, 
this has not been the first time that Air Force CSAR assets have been 
used for MEDEVAC operations in this theater. Since the initiation of 
U.S. Central Command combat operations, deployed Air Force CSAR 
helicopters have always performed MEDEVAC missions, when requested, due 
to their inherent capability to execute missions in demanding 
environmental and threat conditions, such as night low illumination 
conditions. Starting in January 2006, Air Force CSAR helicopters were 
also deployed solely to perform the MEDEVAC role in Afghanistan due to 
shortages of available U.S. Army aircraft. In February 2009, to further 
support the Secretary of Defense's MEDEVAC initiatives, all Air Force 
helicopters located in Afghanistan were tasked to perform the MEDEVAC 
mission, including those assigned for CSAR alert. In addition, to 
further improve MEDEVAC response with more aircraft, the Air Force will 
temporarily cease advanced tactics training at the HH-60G Weapons 
School at Nellis Air Force Base, Nevada in March 2009 to provide these 
aircraft and instructors for combat operations in Afghanistan.

    General Fullhart. But certainly they play in all those 
roles. I have a colleague who is in that business, and his 
story to me was that since 2001 in Iraq and Afghanistan alone 
that they have been responsible for about 2,600-plus savings 
out there. So there are a lot of mothers and fathers and 
husbands and wives out there who are grateful.
    Mr. Frelinghuysen. They don't have any roads. With all due 
respect, the few roads that are out there, we have built.
    General Fullhart. Yes, sir.
    Mr. Frelinghuysen. And these helicopters, one thing we know 
about Afghanistan, high altitudes.
    General Fullhart. Absolutely.
    Mr. Frelinghuysen. How does that fit into the overall 
equation? And how does it meet, should we say, other operations 
that are important, Special Ops and----
    General Fullhart. Certainly. The contract that we are going 
to be letting for the replacement CSAR-X helicopter 
specifically addressed the need for that platform to be able to 
operate in higher altitudes and higher heat conditions because 
that is a limitation that we are facing in places like 
Afghanistan today.
    Mr. Frelinghuysen. And satisfy my curiosity.
    Afghanistan is not Iraq--obviously, a far more or less 
hospitable terrain, horrendous situation. What sort of 
evacuation procedures are you looking at, planning for? You are 
obviously--we have a higher rate of injury and deaths in 
Afghanistan now.
    What are we doing relative to evacuations that are 
different from Iraq?
    General McNabb. Actually, we will end up--as you said, it 
is that front end portion of how do you get the forces to the 
hospital. And once we stabilize them, to get them aboard an 
aircraft.
    Once we get them aboard a C-17, KC-135, the new KC-X, then 
that is going to be pretty much the same. We will bring them 
pretty much the same into Landstuhl unless we need to bring 
them all the way home, just like we do now using air refueling. 
That, as you said, has been one of the greatest things we have 
done in our promise to these great Americans that have raised 
their hands.
    Mr. Murtha. I think what Mr. Frelinghuysen is saying, we 
had a hearing yesterday, or the day before yesterday, and they 
talked about 72 minutes and the death rate is almost twice as 
much in Afghanistan as it is in Iraq.
    General McNabb. Right.
    Mr. Murtha. That is because it takes so long to get them 
in. We are in the business of trying to get the resources to 
you, and we can't get an answer in many of these things.
    CSAR is absolutely essential. And what Mr. Frelinghuysen is 
talking about is, let's get these things out there, whether it 
is tankers or CSARs or whatever it is, and--so we can reduce 
the time it takes to get these troops to the hospital.
    General McNabb. Absolutely.
    Mr. Frelinghuysen. And do we have, quite honestly, enough 
aircraft to do what we need to do----
    General McNabb. On the aircraft side----
    Mr. Frelinghuysen [continuing]. To shorten that period of 
time?
    General McNabb. It is really going to be that helicopter 
movement that you are talking about.
    Mr. Frelinghuysen. Do we have shortfalls in these types of 
helicopters? Do we, because of this mess-up or the delay with 
the CSAR contract?
    General Fullhart. Sir, what I will do is take that for the 
record as an operational question.
    But what I will tell you is that this contract is intended 
to replace 101 of the current fleet with 141 of the new fleet, 
which is meant to address the----
    [The information follows:]

    Yes, but not because of the delay with Combat Search and Rescue 
(CSAR) contract. In 2003, the Air Force developed the Personnel 
Recovery Vehicle Operational Requirements Document. In 2005, it was 
converted the CSAR-X capability development document. This document 
identified a base-line fleet of 141 aircraft. The current HH-60G fleet 
stands at 101 from an original fleet of 112, a capability gap of 40 
airframes.
    The delay of CSAR-X is not causal in the shortfall of rescue 
helicopters we currently face. Desired Initial Operational Capability 
of CSAR-X was Fiscal Year 2013. Without an acceleration of this 
original initial operational capability, CSAR-X would not have been 
able to alleviate the shortfall in today's rescue assets.

    Mr. Murtha. But you are only going to buy 10 a year, one a 
month. I mean, we can't save any money when we buy that small a 
fleet.
    You guys have got to give us figures where we can save 
money and get the stuff out in the field. That is the problem 
we have, and there is no question, CSARs is something that fits 
into a supplemental because it is so directly related to the 
warfighting. You need to get that information to us so we could 
put the money in to reduce the hazards to the troops out in the 
field.
    General Fullhart. Yes, sir. I will take that back.
    And as we have indicated, there are meetings going on as we 
speak to try to determine the future.
    Mr. Frelinghuysen. We have wounded soldiers, I assume, 
still being flown into Balad. And then they go out from there. 
I assume we have the same sort of logistical responsibilities 
in Afghanistan. And are there shortfalls in aircraft assets for 
the theater?
    So we are going to get that information; we don't have it 
now? That is unfortunate.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Hinchey.

                    STEWART AIR NATIONAL GUARD BASE

    Mr. Hinchey. Thank you, Mr. Chairman.
    Generals, thank you very much. In the context of this 
hearing and your response to the questions, I even understand a 
little more clearly the complexity and the difficulty of the 
circumstances that you are dealing with in light of the new 
political circumstances that we have with the new President. So 
I can appreciate what is going on here.
    But at the same time, as our chairman has been saying, we 
need to know more information, as much as we can get from you 
and as quickly as possible.
    I just want to mention a situation that is a little local 
in my context. The 105th Airlift Wing is located at the Stewart 
Air National Base in New York; and it is a fairly large and 
fairly active operation there.
    They are pretty much dominated by the C-5As. And the C-5As, 
as we know and has been discussed here, are running low. They 
have been around a long time and there is increased concern 
about the safety and security of the people who are operating 
them and using them. But there is also a certain amount of 
growing concern about some of the people who live in the area 
around the airport, that there may be some problem that might 
result.
    In any case, the C-5As were supposed to be replaced by C-
17s in 2010, but that is now in the process of changing, or at 
least potentially so. Well, we know that there are some 
changes.
    I would like for you, if you would, to just give us a 
little clarity with regard to that. And in the short time that 
I have, I just want to mention just a couple of things in the 
context of this situation which you might be able to answer.

                           C-5A MODERNIZATION

    Could you describe for us the challenges of modernizing the 
C-5As, which are older than the C-5Bs, and I know that that has 
been part of the problem because there is such a challenge to 
modernize them. Can you give us some information about that?
    If all of these C-5As need to be replaced, is there a 
reason--what is the reason why we wait to do so? Why are we 
putting it off if they need to be replaced? And it is pretty 
clear that they do.
    And just my own situation, when do you expect that the 
changes at the Stewart Air Base are likely to be made? And when 
will the mobility and capabilities requirements study, which 
has focused on these issues, when is that going to be completed 
and what do you think we are going to get as a result of that?
    General Lichte. If I could take that, sir, I just visited 
Stewart--twice in the last 6 months. I agree with you. They are 
a fantastic group of folks. General Johnston has a great team 
up there. Some of the things you talk about with modernizing 
the C-5A, your folks are up there coming up with innovative and 
creative ideas. One thing they showed me is, two of the NCOs 
have figured out a new way of doing the landing gear panel on 
the C-5. It is very complicated. The gears all have to spiral 
and turn and everything all at the same time. They were able to 
figure out a better way to do that, to test it without having 
to launch an aircraft. They are trying to help with 
modernization efforts.
    But you point out that the C-5A is old. And when you put 
new equipment on it, it is the digital interface with the old 
round dials. And when you say, What is the challenge for 
modernizing C-5s, it comes down to dollars. And as we have 
looked at this over the years, it was cheaper to modernize C-5s 
with new equipment, new engines to keep them going than to 
afford new C-17s.
    And so it has been a balance, and that is why we struck the 
difference of 205 C-17s, 111 C-5s, fully modernized, all of 
them get avionics upgrades and 52 of them get the new engines.
    When will MCRS, the Mobility Capabilities Requirements 
Study come out? We hope about a year--well, at the end of the 
year we should have something for the results of that.
    We have been doing a lot of studies over all the years. We 
come out with about the same each time because it is based on 
deliberate war plans; and we are waiting to see the results of 
the MCRS because we did factor in some new items on this 
Mobility Capabilities Requirements Study. So we are hoping to 
get that.
    The reason we held up on distributing the C-17s, as you 
discussed about Stewart perhaps being in line for C-17s, was if 
this study comes out with new requirements, higher 
requirements, and we don't get permission to retire any C-5A 
models, we are kind of stuck with, where do we put these 
aircraft? And that is why we said, we are better off 
distributing them among the C-17 bases we have right now until 
we get the final decision and then we will go back and address 
it.
    We are certainly aware, very much aware of Stewart's 
contribution, the fact that it could do the mission with C-17s 
as well. We just want to make sure we get it right for the 
taxpayers so we don't have to do this two or three times.
    Mr. Hinchey. So are you looking at the possibility of the 
danger, the increasing danger of the C-5As and the rate that 
they have been used so steadily and effectively?
    General Lichte. Right.
    Mr. Hinchey. But the age and the aging, in spite of the 
fact that the modernization process is----
    General Lichte. The age is a factor that comes out, and 
quite frankly, we put it back on our NCOs and airmen who are 
fixing and repairing those aircraft. They do a marvelous job. 
Just like Mr. Young said, those folks go out there and even 
though they are working on aircraft sometimes twice as old as 
them, they take great pride in launching those aircraft and 
making them successful.
    But that--for me and General McNabb and General Fullhart, 
we want to make sure that that doesn't continue forever. We 
want to get new requirements out there, we want to try to do 
it. And again, we appreciate the great work that the committee 
does to help us on it.
    Mr. Dicks. Would the gentleman yield?
    Mr. Hinchey. Just one last thing, if I could.
    Mr. Dicks. What is the mission reliability rate of the C-5 
and the C-17?
    General Lichte. I will give it to you exactly. The C-5As 
are--47.9 is the mission capable rate; C-5B is 57.8; and the C-
5M, we hope to go greater than 75 percent or higher; and for 
the C-17, the C-17 is 86.4, to be exact.
    Mr. Hinchey. I would just--if I may, one last thing.
    I just hope, and I would expect that this is going to 
happen, that the people who are putting this budget 
recommendation together which is going to come to us, which our 
Chairman has been so focused on, will understand your 
understanding of the circumstances that we are dealing with, 
with issues like the C-5A and how that issue has to be 
addressed; and also to put it into context of the economic 
development program in which we are engaged and the jobs that 
are associated with the development of the new aircraft.
    All of that, I think, is very important.
    General Lichte. Yes, sir.
    General McNabb. Congressman, I couldn't agree with you more 
on that, to bring that all together.
    There is no question that if you can't trust an airplane, 
you have to treat it differently. In other words, you will have 
to put in four to make two, three to make two. And you have to 
build in--you can't carry cargo into places because--if you are 
afraid that it will break.
    So we have to manage the fleet differently because of that. 
And I think that all plays--and again, I echo what General 
Lichte says, it is amazing what our folks who are out there do.
    Stewart has been instrumental across the C-5 fleet making 
sure that when we--we put the C-5 into battle, they have been 
ready to take care of anything we need done, to include 
bringing in other airplanes to do heavy maintenance there at 
Stewart.
    So again I tell you a great unit that has been, and we 
really do appreciate that.
    Mr. Hinchey. Well, thank you very, very much.
    Thank you, Mr. Chairman.
    Mr. Murtha. You have no choice is what it amounts to. The 
same way with the line. We may have put enough money into this, 
the C-17 line, but the subcontractor is going to run out. This 
is the problem we are going to have down the road if you guys 
don't make a decision there down the line before long.
    Mr. Tiahrt.

                           TANKER REPLACEMENT

    Mr. Tiahrt. Thank you, Mr. Chairman. Have we decided 
whether the tanker competition is going to come out of OSD or 
out of the Air Force? Has that decision been made?
    General Fullhart. Sir, that is a decision that has not yet 
been made.
    Mr. Tiahrt. We don't yet know. I keep seeing ads for a KC-
45. Did we actually terminate the contract with Airbus and 
Northrop Grumman?
    General Fullhart. Yes, sir, we did.
    Mr. Tiahrt. Was there a term liability clause in there that 
was employed? And I would like to know how much was spent 
there.
    General Fullhart. I can provide that to you for the record.
    Mr. Tiahrt. All right. Thank you.
    [The information follows:]

    The contract contained both the cost reimbursement 
termination clause as well as the limitation of funds clause. 
The contractor had billed for approximately $60 million prior 
to the termination. The Air Force and the Defense Contract 
Management Agency are currently in the process of negotiating a 
settlement price to the terminated contract.

    Mr. Tiahrt. We heard about low cost, best value. Mr. Moran 
brought that up.

                               SUBSIDIES

    How are you going to deal with these ongoing problems, 
though, that were apparent in the previous proposals, like the 
startup subsidies that the United States Trade Representative 
says are illegal? Are we going to turn a blind eye to those 
again, or will they be taken into consideration in the next go-
around?
    General Fullhart. Sir, it is my understanding that those 
are being adjudicated in the WTO, and so we await the outcome 
of those.
    Certainly, we are following whatever laws have been passed 
by Congress in terms of our Federal acquisition regulations, 
and we will certainly abide by those.
    Mr. Tiahrt. So as far as the contract itself, it will have 
no contractual consideration for these startup subsidies?
    General Fullhart. Sir, it would be premature for me to know 
at this point what the future contract----
    Mr. Tiahrt. This is an ongoing problem. There needs to be 
either some kind of reconciliation if it occurs after the 
contract award, if there is an impact--a little late when it is 
downstream. I think it should be taken into consideration as we 
move forward, that this is an unfair advantage that some 
corporations have in this process. And I don't know how you get 
a true low cost if you don't take into consideration illegal 
subsidies.
    What about these regulations that are waived in the DFARS 
for foreign suppliers, the things like Buy American Act, cost 
accounting standards, international trafficking in arms 
regulations, the Foreign Corrupt Practices Act, the Berry 
amendment? The DFARS waives these; Congress doesn't waive these 
considerations.
    In waiving those regulations, are you going to take into 
consideration the difference in cost of employing these, or are 
you going to waive them for American manufacturers as well as 
the foreign manufacturers?
    General Fullhart. Sir, I can take that one for the record.
    My understanding of the Buy American Act is that there are 
memorandums of agreement that have been signed that, in effect, 
many of the countries in Europe and others are treated as an 
equal.
    [The information follows:]

    No waivers have been processed with regard to the KC-X 
competition. On any future KC-X source selections, offerors 
will need to comply with current Defense Federal Acquisition 
Regulation Supplement guidance for the Buy American Act, cost 
accounting standards, international trafficking in arms 
regulations, the Foreign Corrupt Practices Act, and the Berry 
amendment.
    Specifically, the Buy American Act allows for acquisition 
of commercial derivative supplies from qualifying countries to 
include France. Pursuant to 10 U.S.C. 2533, the Secretary of 
Defense may enter into agreements with partners in national 
security for the purposes of the Buy American Act. These 
agreements are established through Defense Cooperation 
Agreement letters signed by the Secretary of Defense.
    The Department of Defense does not determine the 
applicability of Cost Accounting Standards (CAS). That is the 
prerogative of the CAS Board, a five member board, chaired by 
the Office of Federal Procurement Policy and is comprised of 
members of industry, academia, and government. The CAS Board 
regulations allow for modified coverage for foreign concerns 
and U.S. firms in certain circumstances. Most of our major 
trading partners have financial systems requirements similar to 
our cost accounting standards. However, modified coverage does 
require the application of CAS 401 and 402, which provide for 
consistency in estimating, accumulating, and reporting costs as 
well as consistency in allocating costs incurred for the same 
purpose. Also, CAS does not apply to commercial products 
utilized in the manufacture of an end item being delivered to 
the government and CAS does not apply to contracts and 
subcontracts with foreign governments as set forth in Federal 
Acquisition Regulation appendix 1 subpart 9903.2011. In this 
case, the KC-X tanker contract is compliant with CAS 
requirements.
    The Air Force did not waive the requirements of the 
international trafficking in arms regulations (ITAR). While 
there are elements of the KC-X tanker acquisition which are 
subject to ITAR restrictions, the KC-X program team verified 
that the competing contractors complied with the ITAR 
restrictions for the applicable elements.
    The Foreign Corrupt Practices Act (FCPA) is designed to 
impact the way U.S. firms do business in foreign markets. The 
Department of Defense did not waive the FCPA, which applies 
only to practices by foreign corporations. All offerors are 
required by section K of the Request for Proposal/contract to 
certify that they are in compliance with all laws and 
regulations.
    The National Defense Authorization Act for Fiscal Year 2007 
removed the specialty metals requirement from 10 U.S.C. 2533a 
(the ``Berry Amendment'') and established a new specialty 
metals requirement at 10 U.S.C. 2533b. The specialty metals 
requirement flows down to subcontractors and it now applies to 
procurement of ``end items, or components thereof', not just 
specialty metals. As a result of extensive pressure from 
industry, the National Defense Authorization Act for Fiscal 
Year 2008 granted additional flexibilities in sections 804 and 
844 to include and exception for commercial derivative military 
aircraft.
    This new exception for commercial derivative military 
articles allows contractors to certify that the contractor or 
its subcontractors have entered into agreements to purchase an 
amount of domestically melted or produced metal, in the 
required form, for use during the period of contract 
performance in the production of the commercial derivative 
military article.

    Mr. Tiahrt. So you are going to waive them for the American 
manufacturers as well as the foreign manufacturers?
    General Fullhart. Sir, I have no idea.
    Mr. Tiahrt. In order to treat them as equal, that would be 
a fair thing to do. But that is an ongoing problem that I think 
needs to be taken into consideration. Do you waive regulations 
for foreign suppliers that have a significant portion of this--
I mean, the first five airplanes, according to the EADS 
proposal will be built in France. So we are going to completely 
waive those regulations for those five and maybe the subsequent 
ones?
    I think that is an ongoing problem that needs to be 
addressed in this bid, because I don't know how you achieve a 
low cost versus best value if you don't take that into 
consideration.
    Also, what about proposals that have false pretenses 
employed in them? And I will tell you a little story because it 
is Army that did this instead of the Air Force, but it is a 
lesson learned that needs to be a OSD lesson learned.
    The light utility helicopter contract was awarded to EADS 
with a proposal that included work done in America to--it 
managed to, with the proposals, to meet Buy American standards; 
but then, once it was signed into contract, that work was 
pulled back to Europe. The airframe was pulled back, the 
avionics were pulled back, some of the fire walls were pulled 
back around the engine.
    And I know this because they were Kansas companies that 
were part of a successful bid, part of a successful 
manufacturing plan that, once it came into a contract, they 
just kept that work over in Europe. So there was a false 
pretense in obtaining the contract.
    What mechanism will you put in place to make sure that 
there are no false pretenses in their proposed manufacturing 
plan? Because that has a great deal of--if you make a decision 
based on the data in front of you, and then they change the 
rules of the game afterwards--and in the clause of every 
contract that I have looked at that comes out of EADS, there is 
a paragraph that says, We are going to make manufacturing 
decisions based on best economic principles for the company--
and I can understand that--but that is code that says, We are 
going to keep this work in Europe.
    And we know for a fact that what we saw in the last 
proposal, the work was going to stay in Europe for at least the 
first five.
    And the same thing happened in the light utility helicopter 
contract. The first five helicopters were built in Europe. And 
then a letter came to Spirit Aerospace in Wichita, Kansas, that 
said, you know, We have got this ongoing line in Europe; and we 
are doing okay and we think it would cost a little extra money 
to move this work to America, so we are just going to cancel 
our contract with you. And there was no penalty.
    And I asked the Army, what mechanism did you have in place? 
Zero. Nothing. Nada. No way to go back and say, By the way, you 
gave us a false premise, and there is a pretty good reason to 
believe that you misled us.
    So what mechanism do we have?
    And this is an ongoing problem. There needs to be a 
mechanism in place that promises made are promises kept. 
Because promises build hope, but keeping promises builds trust. 
And right now I don't trust the people that you awarded the 
contract to last time.
    So this is an ongoing problem. And I don't think you can 
have a low cost, best value evaluation without these mechanisms 
in place.
    General Fullhart. Well, sir, I appreciate those views, and 
I am certain that will be part of the discussion. It will be 
ongoing as the OSD and the Air Force--when we finally get 
together to talk about things, it will be part of the 
consideration.
    Mr. Tiahrt. You do hold them accountable for requirements. 
This ought to be a requirement.
    General Fullhart. Thank you, sir.
    Mr. Dicks. Would the gentleman yield just briefly?
    Mr. Tiahrt. Glad to.

                            INDUSTRIAL BASE

    Mr. Dicks. We had a hearing with Secretary Young. One of 
the things we brought out to him was, on every one of these 
procurements, you are supposed to do an evaluation of the 
impact on the U.S. industrial base.
    As far as I am concerned, I don't think that study was ever 
done. And since we are starting this acquisition again, I just 
want to reiterate to General Fullhart that we have to do that. 
That is a statute.
    We will be glad to get that to you so that you know; I 
don't think it was done last time; I think it was kind of 
waived by the Air Force. But we need you to--it is a 10 U.S.C. 
2440, implemented by FAR Part 34 and DOD instruction 5002, 
which require development of a program acquisition strategy 
which looks into the impact on the industrial base in the 
United States.
    Thank you, Mr. Chairman.
    Mr. Tiahrt. This illustrates my point, because if you had 
done an industrial impact--what was the title of it again, 
Norm?
    Mr. Dicks. 10 U.S.C. 2440.
    Mr. Tiahrt. If that had been conducted on the light utility 
helicopter based on the proposal, based on what is happening 
today, you would have two different scenarios.
    So a decision was made based on the first one, which was a 
false premise; and the impact is now felt with people who are 
looking for a job here in America. I mean, this is hometown 
stuff. This is stuff that we are all worried about.
    There are intellectual property repercussions. There are a 
whole lot of things that impact our industrial base that are 
based on a document that may or may not be fulfilled. And 
somehow we have to have the mechanism to say, Tell me anything 
you want, but whatever you tell me, I am going to hold you 
accountable for.
    General Fullhart. Yes, sir. I understand. Thank you.
    Mr. Tiahrt. Thank you, Mr. Chairman.
    Mr. Murtha. Ms. Kilpatrick.

                      TANKER REPLACEMENT TIMELINE

    Ms. Kilpatrick. Thank you, Mr. Chairman.
    Good morning, Generals. The awarding of the acquisition was 
let, pulled back. I am assuming now it is somewhere in house 
being relooked at. I understand the Secretary is very much 
involved in it.
    The first question from me is, will it harm our fleet, our 
defense capabilities, or any of that as we wait for the 
administration, the Congress, to act? I know that 40 years they 
can operate. Are we close to that or do we have another 2, 3, 4 
years to debate this?
    General Lichte. Well, we hope that it will happen soon. I 
can assure you that everyone has been involved with working 
with the old administration, and now the new administration, in 
laying everything out. As General Fullhart pointed out, the 
Secretary of Defense is just waiting for his Under Secretary 
for Acquisition, Technology and Logistics to be in place; and 
then we hope it is going to go.
    We have laid out the requirements from Air Mobility Command 
side. We have been talking about the need for a new tanker for 
a number of years. We have always known that because of the 
length of time that it will take, it will take us out until 
about 2040 before all the KC-135s are recapitalized; and we are 
doing the best we can with what we have.
    And so we just hope it accelerates. And we appreciate all 
the support we have been getting.
    Ms. Kilpatrick. So it must not be absolutely settled during 
this 111th Congress. You would like it, but we can still----
    General Lichte. No. It needs to be started because if it 
doesn't--first of all, if everything goes right, we don't see 
the first airplanes showing up until about 2015.
    On the tanker side, we have a number of KC-135s, but we 
also have KC-10s, 59 of them. They were supposed to be the 
bridge to the new tanker, but we haven't modernized those as 
well. So we have to get on or we will find ourselves at a 
tremendous shortage of tanker aircraft.
    General McNabb. Congresswoman, if I could add to that. I 
say it is my number one priority. There is no question about 
it. We need them sooner. We need them now. We needed them 
yesterday, because as soon as we get on with that, we will have 
a capability that I think will be essential to what we are 
trying to do around the world.
    Mr. Murtha. Would the gentleman yield? Go back to that 
2015. Start when you said 2015.
    General Lichte. 2015 is the time that, for air traffic 
control management, we need new avionics in the KC-10; 
otherwise, we are not allowed to fly in some of the sweet 
airspace--first of all, primarily in Europe, and then it 
expands around the rest of the world.
    That was the KC-10 that I was talking about.
    Mr. Dicks. The gentleman has a good point here.
    Let's ask a question: When he has got it, when would be the 
IOC if we got a decision in this year, when would be the 
initial operating capability?
    Mr. Murtha. We can work out a compromise in the 
supplemental. When would you get your first airplane out there?
    We tell you to buy the airplane.
    General Lichte. Well, as you know, both companies had 
different dates that they could get the aircraft out.
    Mr. Murtha. What is the first one that we could get out in 
the United States, built in the United States?
    Mr. Dicks. Two or 3 years?
    General Fullhart. Yes, sir, about 3 to 4 years; in that 
range because you have the development period, the testing 
period. Once you get through that, then you start delivering to 
the warfighter.
    Mr. Murtha. Is that because of the requirements you put on 
that are absolutely essential to the thing? These airplanes 
were already built, flying.
    General Lichte. These first ones would go out to Edwards 
Air Force Base and do the test to make sure that all our 
aircraft can refuel behind them, to make sure it has 
everything, and anything that was added or included--we have 
the performance data to make sure that our air crews are ready 
to fly them.
    And so I would expect to see it--as quickly as it comes, it 
is going to start flying. As soon as the aircraft arrives, we 
will start flying it at the test program. And then usually it 
is about close to 2 years of tests. And then it shows up--just 
like with the C-5M with the reengining, it is going to take a 
while.
    It has been in tests for a while. It is going to go through 
some operational tests, and then we put it on the line.
    Mr. Dicks. Mr. Chairman, it is much better if we did this 
from scratch. It would be 20 years 15 years--much shorter by 
having a commercial derivative.
    Mr. Murtha. Ms. Kilpatrick.

                              MIXED FLEET

    Ms. Kilpatrick. Never miss a plug. I like that, Chairman, 
over there.
    That was one thing. Then it talks about the mixed, which 
means to reinforce or something, or new fleet. I didn't hear a 
clear answer up here.
    Which is better? The cost, yes, you considered it, but I am 
not sure it is the only thing that you consider. Does it matter 
to the Air Force?
    And we are appropriators. And you all can't say much to the 
President and OMB and SDD and all that--that was the wrong 
acronym.
    But you know, if you can't say it, just say the other 
people make that decision.
    General McNabb. Obviously, the Secretary of Defense has 
been very clear on how he sees that. And obviously, Congressman 
Murtha, the chairman, has come on and said, Here are some 
different ways of looking at it.
    I think they are looking at all ways. I know that is kind 
of how I understand it. They are looking at every avenue and 
mix and how you might do that.
    I would also just say that from the standpoint of TRANSCOM, 
both of the bidders when they came in with the tankers, they 
came in with magnificent bids that would have met all the 
requirements that we needed.
    Ms. Kilpatrick. I don't want to go back to that.
    General McNabb. I would say that as long as it meets the 
requirements we have laid out, TRANSCOM is going to be happy. 
And right now everybody is coming in with bids that have more 
than met our requirements. So we are happy.
    Ms. Kilpatrick. Let me ask one other thing.
    I am going to leave that because we can go, in here, all 
day on that one.

                                 PIRACY

    Piracy, I keep hearing it is in one part of the world. And 
I know, General McNabb, it is also one of your priorities. What 
is the status of it? Are we there? I know you work with a 
coordinated effort here. Is it larger or smaller? Where are we 
going with that?
    General McNabb. Well, I do think that, as you say, it is a 
global problem. It is a global transportation problem that has 
to be dealt with. What we have done with our sealift fleet is, 
we have worked tactics, techniques and procedures along with 
the Navy to make sure that they have got a good concept of how 
we escort our ships through.
    We have gone out to industry and helped them with 
assessments to make sure that they are able--you know, they 
have got all the latest, here is how you deal with that. And I 
think that is all working very well; there have not been any 
attacks on our ships.
    It is a constant problem. It is one that I think we will 
have to live with and make sure that we are always thinking 
ahead about how do we do this. Again, it is not necessarily our 
Military Sealift Command ships. It is more our container ships 
that our commercial partners are carrying our stuff with it.
    We track that very carefully. We watch them. We have 
special ways of working with the Navy to make sure that they 
get escorted when required. All of those things are taking 
place.
    But it is one of those concerns I have every day.
    Ms. Kilpatrick. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Murtha. Thank you, Mr. Chairman.
    The gentleman from Georgia.

 INVENTORY, AIRCRAFT RETIREMENTS, CHINOOKS, C-130JS, AND C-5S VS C-17S

    Mr. Kingston. Thank you, Mr. Chairman. Gentlemen I have 
four unrelated questions. And what I was going to do is just go 
ahead and ask them; and whatever you can't get to, if you could 
answer it for the record.
    The first question has to do with the inventory, that we 
often interfere with your ability to control in terms of 
airplanes that you want to mothball. I think, actually, 
Congress did make some progress and gave you more flexibility. 
So I wanted to hear how that was going.
    The second question actually has to do with Chinooks in 
Afghanistan. I was talking to an Army Guard unit from Georgia 
yesterday, who will be using them. But I was wondering what the 
split was between Air Force and Army on Chinooks. Do we have 
enough in theater there? Getting back to what Rodney was asking 
in terms of transportation over there, and Guard versus regular 
Air Force, I just wanted a comment on that. I just would be 
interested in what you had to say.
    And then on the C-130Js, there were 34 in the fiscal year 
2008 supplemental. There were none requested in the 2009 
President's budget, and I was wondering if there would be any 
in the 2010 budget.
    And the last question was following up on Mr. Dicks's 
question about the reliability of the C-5 versus the C-17. And 
if I heard you correctly, you said that C-17 was at 86 percent, 
and the best C-5 was, I think, 46 percent. That is a huge 
disparity, so I was wondering if you could maybe tell us more 
about that difference. Because that being the case, it would 
appear to be, you know, let's just use C-17s.
    So those are my questions.
    General McNabb. Congressman, how about I hit the first two?
    On inventory, there is no question that as we get new 
aircraft, we like to have permission to retire the old. What 
really makes our system is the crews, the maintenance, the 
facilities, all of those. And so our ability to say, Hey, if we 
get new things, we need to retire the old because those crews, 
we need to transfer them over to the new assets.
    Many of the new assets can handle a higher utilization 
rate. They are much better, much more valuable, and we can make 
them much more useful by doing that. We need the maintainers to 
do the same thing. If we don't retire the old ones, we can't 
transfer them.
    So I would say, that ability to retire the old is 
absolutely essential.
    Mr. Kingston. Isn't it something like $3 million a week to 
maintain those soon to be, or hopefully to be, mothballed 
airplanes? I know it is a big cost. Do you know what it is?
    General McNabb. I can get that for the record. But, of 
course, it depends on which fleet we are talking about, what 
kind of storage we need to bring them in. But many times we are 
required to keep them on the ramp and keep them crewed and with 
maintenance and all of the others.
    [The information follows:]

    The initial in-processing cost for a C-5 aircraft entering 
Type 1000 Storage is $49,000. Twice a year the aircraft is 
inspected at a cost of $262/inspection (annually $524). Every 
four years there is a re-preservation; estimated at $33,000 for 
C-5 aircraft.

    But we need to get those young airmen moved across to the 
new assets so we take full advantage of the investment that is 
made. There is no question about that.
    The Chinooks, the Air Force, as far as I know, doesn't own 
any Chinooks, so----
    Mr. Kingston. It is all Army?
    General McNabb. All Army.
    And then I will let you all answer the 130J and the 
reliability issue.
    General Lichte. Let me circle back. Because the biggest 
issue for us was KC-135 retirement, KC-135E models in 
particular. This year we were granted permission to retire 
them, so by the end of this year, all the E models will be 
retired.
    It did cost money to go out and rotate the tires once a 
week, run the engines once a month. So that is where you were 
coming up with that figure.
    I don't think it was quite as high as $3 million, but when 
you factor in how much money it also costs to put it into what 
we call Type 1000 storage out in the desert--my term is a 
``bubble wrap'' around the airplane--that was expensive. We 
didn't think we needed to do that, but we were forced to do 
that.
    We have been given permission now to retire the rest of the 
E models. Some of them will remain in Type 1000 storage. Some 
of them have just been retired, so they will just sit in the 
desert. Then we can use them for parts on other airplanes.
    The same, by the way, for the 130 fleet, we are trying to 
do that.
    We still have restrictions on the C-5 fleet, which we can't 
retire any.
    With regard to the reliability, I will do that.
    I will let you talk about C-130Js.
    57.8 is the reliability for the C-5B, which is our youngest 
C-5 and the most modern C-5; we are trying to push that up to a 
reliability rate of 75 percent. And you are right, when you 
compare that even to the 86 percent of the C-17, we are hoping 
to get all the way up to 81 percent on the C-5. But still, the 
C-17 is more reliable.
    General Fullhart. Sir, with regards to fiscal year 2010, 
that is part and parcel of the ongoing dialogue that OSD is 
running. And I simply just don't have insights into that at 
this time.
    Mr. Kingston. We will know in 3 weeks.
    General Fullhart. Yes, sir.
    Mr. Kingston. Thank you.
    Thank you, Mr. Chairman.
    Mr. Murtha. Mr. Rogers.

                   AFGHANISTAN, IRAQ, MANAS AIR BASE

    Mr. Rogers. You are going to be given a lot more work to do 
in the next few months with the anticipated buildup in 
Afghanistan and the build-down in Iraq. Are you ready for that?
    And number two, what does the closing of the Manas Air Base 
in Kyrgyzstan do if that takes place to these needs?
    General McNabb. Yes, sir.
    What we have been doing to make sure that we have whatever 
General Petraeus needs on the ground in Afghanistan: We have 
been really working that hard with AMC and our own components 
to make sure that we are set. The portions we are doing are to 
make sure that we have more than one option on the ground and 
make sure that we have the air robust enough so that if, in 
fact, we have to take it in by air, we will be able to do that.
    General Lichte has heard me say on a number of times, if we 
had to do a Berlin airlift kind of deal tonight, you need to be 
ready to do that; and his folks have been working very hard on 
that. The way you do that is make sure that airfields--we make 
sure that we can do very quick turns on aircraft, make sure 
that if we can get parking ramp and you get the throughput 
going on the different airfields there in Afghanistan.
    We have been working that very closely with CENTCOM. And 
those are the kinds of things we have been working on. I think 
that the--we can provide this for the record.
    But what we have done is increase the throughput at 
Bastion, at Kandahar and Bagram specifically, in some cases 
quadrupled the throughput there by working together, sending in 
teams to be able to do that. And that is on the air side.
    On the ground side, you all know that we have been working 
on being able to come in also from the north, using what we 
call the ``Northern Distribution Network,'' to make sure that 
we can take commercial kinds of cargo through the north if we 
can. We do that with fuel now. And I think that that is--we 
have 800-plus containers in the Northern Distribution route 
now. And we want to make sure that we take advantage of those 
supply chains to get in there.
    We are working very closely with CENTCOM to make sure that 
we measure the flow that is going in there as they put the 
17,000 troops in. And I think that from the standpoint of 
making sure that we meter that and are thinking ahead of that, 
that is all being worked very closely again with CENTCOM and 
with the folks in the Pentagon.
    My take is, we want to make sure that everybody understands 
that they will not be slowed down because of our ability to 
resupply.
    I think when you brought up Manas, I say that Manas is 
useful but not essential because we always have other options. 
In some cases that may be a little more expensive but we have 
them. And we don't want anybody to feel like they can slow us 
down by holding an airfield hostage or saying, Hey, if you 
don't have this, we can really take you out. We don't want 
anybody to believe that because they can't. We have other 
options to be able to do that.
    Mr. Rogers. So you have no problem with the equipment and 
the capability and the strategic capability of flying into 
Afghanistan?
    General McNabb. No, sir. In fact, I mentioned earlier my 
thanks to this committee; because of what you have done in the 
past, decisions that were made in the last 15, 20 years in this 
committee, specifically supporting things like the 130J, like 
the C-17, like Tunner loaders, that have allowed us to be able 
to get the velocity and reliability on our aircraft up and to 
be able to go into these smaller airfields. That has paid huge 
dividends for us.

                       DEFENSIVE COUNTERMEASURES

    Mr. Rogers. One last question. In Afghanistan especially I 
would suspect that you would be susceptible to a lot of ground-
to-air attack. Are you equipped to handle that?
    General McNabb. Again, this committee has been superb in 
supporting us, our defensive systems and our tactics. We have 
been flying in Afghanistan, as you know. Many of you, if not 
all of you, have flown on our airplanes when they come in on 
night vision goggles and random approaches to make sure that 
every one is going to be a little bit different. So those kinds 
of tactics are what have allowed us to be able to maintain that 
flow that goes in there. My take is, that has really paid some 
big dividends for us.
    When I think about Afghanistan and I think about the 
throughput, the C-17 is a perfect asset for that, something 
Congressman Dicks--way back when we talked about that 
throughput model. Afghanistan is that place. If you end up 
saying, I have got only a small parking spot, but I am going to 
have airplanes go through here, and they are going to leave the 
engines running, dump the load in 15 minutes and be off again, 
so I can bring the next airplane in. That is the CONOPS that we 
have been working on.
    I will let General Lichte jump in here. But I have asked 
AMC. They have responded. They are all over this. But they know 
that they may be asked; our ultimate guarantor that we can get 
into Afghanistan and support General Petraeus is there. Again, 
the defensive systems is a big part of that. And again, the 
support of this committee has been huge.
    Mr. Murtha. Do you have the airplanes to do it?
    General McNabb. Yes, sir. As you said, the C-17, 130J, the 
kinds of assets you have given us, the C-27.
    You asked me, Chairman, earlier about how that would fit. 
Given the more dispersed ops, the ability to have tails becomes 
important as well. And, in fact, being able to bed down small 
tails in that area also is important. There are places that 
different assets really come of age. That is where the C-27 
fits.

                          MEDEVAC HELICOPTERS

    Mr. Murtha. CSAR takes 22 minutes to get somebody out of 
Afghanistan because you don't have enough helicopters. I told 
people, start lobbying for more helicopters and get them out in 
the field.
    Now, I know that the Air Force has stepped up some of their 
resources there. You don't have the resources, so twice as many 
people are dying in Afghanistan before they get to the 
hospital. That is what we are talking about.
    General McNabb. Right.
    Mr. Murtha. You could do it, but do you have the resources 
to do it? That is what this committee wants.
    Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    Mr. Murtha. Let me talk about a couple things we have done. 
We put the money in for the C-17. We put the money in for the 
C-130 years ago. We put money in for SL-7. The 1991 war, if you 
didn't have SL-7, you wouldn't get the equipment past where it 
was. We put money in for ships, all those things.
    So this Committee--and health care, we put money where we 
see there is a need. But if we don't get the information, then 
they give us hell on the floor. These guys get up here and they 
say, you shouldn't do this, you shouldn't do that.
    Well, our job is to appropriate money, but we have to have 
figures in order to do that.
    We can justify everything we put in this bill. Only 18 
people voted against this bill. When it leaves here, it stays 
the same until it goes to conference, and it doesn't change. 
And they get all kind of railing against it. And the Senate 
feels the same way. When we come to a compromise, the bills 
pass very handily.
    But information is the key, and we have got to have 
information from you or we can't do the things that we need to 
do to make sure the troops have what they need.
    Mr. Young.

                           TANKER REPLACEMENT

    Mr. Young. Mr. Chairman, thank you very much. I want to go 
back to the tanker issue for just a minute.
    A year ago when the tanker issue was really up in the air, 
I had the audacity to suggest, why doesn't the Air Force 
consider splitting the buy and having the two competitors both 
build tankers? I was ridiculed everywhere. I took raps from 
almost everybody who knew anything about the tanker issue. But 
today we are talking about doing just that. So I have got 
another weird suggestion that might not have any benefit today, 
might not ever have any benefit.
    Why not consider--when the Air Force decides what they want 
in this tanker, why not have both companies build the same 
aircraft, build the same tanker, the same suppliers for spare 
parts, the same types of maintenance, same types of equipment 
on the ground at airports? It is probably as weird as my first 
suggestion last year. But this is something that has been going 
through my own mind.
    General McNabb. Let me let General Fullhart talk about that 
from an acquisitions standpoint.
    General Fullhart. Sir, it is definitely an innovative idea, 
and I am not going to try to throw water on it.
    I think some of the things that we would need to consider 
in that kind of construct is, do we lose the savings that we 
currently envision in terms of taking something that is already 
established and having to create something out of whole cloth, 
in other words, something that is new?
    Certainly there is a business case to be made out there by 
companies that might be reluctant to share some of their own 
proprietary information. That is something they would have to 
work through, obviously.
    It is a fascinating idea. Perhaps as the time comes; we 
will have to wait and see.
    Mr. Dicks. Will the gentleman yield?
    Mr. Young. Sure.
    Mr. Dicks. I guess what I would say to the gentleman's 
question--and I always have great respect for the gentleman. He 
is always serious in trying to do the right thing.
    The advantage of this program is that you have these 
commercial planes already developed. So, I mean--you know, for 
them to build a 767, which would mean they would have to go 
through a whole development phase; or for Boeing to build an A-
330, they would have to go through a whole development. It 
would raise the cost dramatically. It would be like building a 
brand-new airplane.
    As we were talking about earlier, if you are going to do a 
brand-new airplane, it would take maybe 15 years to bring it 
in. So the whole idea here is to take these commercial planes 
off the shelf and then modify them for the military mission. 
And that saves us a ton of money; you can do that for $6 or $7 
billion.
    Now the reason Gates is against this is because--I mean the 
dual buy--is because, one, it would cost $6 or $7 billion to do 
both of them, so that is another pot of money. Then you would 
have to divide the buy.
    I know the Chairman thinks we could double the buy. But it 
would be better to double the buy on the low-cost, small, 
correct airplane--you know who I am thinking of--and that would 
drive the costs down.
    But to buy two different planes--and I would just also say 
to the gentleman, Pete Aldridge, when he made the first 
decision, buy 80, lease 20, which was overturned because of the 
scandal, he didn't even let Airbus compete because he said that 
they didn't have a plane that met their requirements.
    If you look at the GAO report on two important issues, an 
Airbus can't meet the requirements. They had to be modified 
under pressure from the other body in order to be able to even 
compete.
    So, again, I think the right thing to do is to stay with 
the commercial buy, pick one airplane and if we can enhance the 
spending for that, drive the cost down and buy more of them 
soon, that would be, I think, the best solution.
    Mr. Young. Well, I appreciate the gentleman's comments. And 
as usual, he is probably always right.
    Mr. Dicks. I am not necessarily right. I have been wrong 
many times.
    Mr. Young. I admitted that this was a strange suggestion 
today, as the one I made last year that you are all talking 
about now.
    Mr. Dicks. Not all of us.
    Mr. Young. If you are going to take an airplane off the 
shelf, why couldn't two contractors take the same airplane off 
the same shelf?
    Mr. Murtha. Okay, folks, we are going to solve this 
problem, and it is going to take a while, but we are going to 
work it out.
    Mr. Dicks. Mr. Chairman, can I ask another question?
    You are not going to end the hearing, are you?
    Mr. Murtha. I was going to end the hearing.
    Mr. Dicks. Can I just finish one thing?
    Mr. Murtha. The gentleman from Washington.

                           TANKER FUEL USAGE

    Mr. Dicks. You guys have your fuel charts up there. We sent 
you up fuel charts.
    Can you give them to them? We have got some more.
    Now here is what bothers me. This is what I was trying to 
say. But this is a Conklin & de Decker are a company that 
evaluates fuel consumption for commercial airplanes. So these 
are commercial numbers. These are not numbers that would relate 
to the military plane.
    But if you look at these numbers--let's just take the $100 
per barrel and let's cut it in half to $50. If you have the 
767-200ER versus the A-330, the difference in consumption--now 
this is 179 airplanes. They fly 750 hours per airplane per year 
and over a 40-year period.
    Now, General Fullhart remembers that the acquisition people 
made a mistake. They only had a 25-year life cycle. That is 
what the JROC had, 40. Mr. Young had to admit that they had to 
in the next go-round have a 40-year life cycle. So we are using 
a 40-year life cycle.
    The difference in fuel consumption at $100 a barrel is $25 
billion. Let's cut that to $50; It would be $12.5 billion. I 
mean, if that had been taken into account and evaluated, there 
is no way the A-330 could have won the competition to have the 
lowest cost. In fact, when the GAO redid the numbers, Boeing 
had the lowest cost and should have been awarded the contract.
    Do you have any comments? I mean, does this not make an 
impression on any of you up there about this fuel consumption 
thing, which was not taken into account?
    They accepted the numbers of the two contractors and didn't 
evaluate life cycle. And I have been given assurances that the 
next go-round we will have a valid life cycle. In fact, Mr. 
Murtha put language in the bill that says, you must do this and 
you must have an outside authority verify that these are the 
numbers.
    I would like you to take these numbers. Mr. Murtha wants to 
know what the numbers are on the KC-135E. I think you guys 
could look at these numbers and then look at the KC-135E and 
give us back what your assessment is. I mean, I think we have 
to get this straightened out because last time they didn't even 
evaluate it.
    And I would like to hear from you on this.
    Mr. Murtha. Let me say though, they don't make the decision 
this time. OSD is making the decision. So we could talk----

                          TANKER REQUIREMENTS

    Mr. Dicks. But they are developing their requirements and 
they are giving all that information to OSD. That is what you 
guys just said, that they are preparing information for the 
Secretary about how to do this.
    And the other thing, on those 800 requirements, Boeing 
vastly beat Airbus on those 800 requirements. That was not even 
looked at. And one of the criticisms of GAO was, you put out 
800 requirements, one of the guys met most of them or a huge--
it was like two-to-one at least, and that wasn't even 
evaluated. So that is another thing that bothers me.
    And then, of course, I took the chairman out to Everett, 
Washington, to see where they build 767s. Now that is a lot 
different than an open piece of ground down in Alabama, you 
know, where you haven't got any workers and you haven't got a 
factory. And yet the Air Force evaluation said that was a 
stronger proposal than Boeing with the 767 factory under way 
and proven machinists.
    And the other thing that bothers me--but I will stop here 
for the fuel numbers. I would like your comments on the fuel 
numbers.
    General Fullhart. Well, sir, I appreciate that information. 
And you are correct, we are looking at life-cycle costs. I am 
sure that will be part of this next round. So I will certainly 
take this back and appreciate your comments.
    Mr. Dicks. I appreciate that.
    [The information follows:]

    Although the Government Accountability Office did not find 
a basis to object to the Air Force's evaluation of fuel 
consumption costs during the first tanker competition, the Air 
Force is working with the Office of the Undersecretary of 
Defense (Acquisition, Technology & Logistics) Defense 
Procurement and Acquisition Policy Office to ascertain what 
level of detail and specific methodology to evaluate fuel 
consumption in the future competition.

    Mr. Murtha. Mr. Tiahrt.
    Mr. Tiahrt. We have heard a lot about a split buy, and last 
year there was a lot of criticism because one--the Boeing plane 
was supposedly not delivered yet. But today Boeing has 
delivered their airplanes to Japan and Italy, and they have 
flying booms that actually work. The KC-30 is delayed on their 
flying boom to Australia.
    And a boom is a complex piece of equipment. It is pretty 
hard to handle that surge of fuel and absorb it. So when we 
talk about a split buy, there are significant barriers for 
having a split buy just based on the technology that has not 
been proven yet today versus what has been proven today.
    We have an airplane that has been flying, that has been 
proven, that I think would be better to start more quickly like 
we had proposed back in 2003. We could have saved this country 
$15 billion had we moved forward back then.
    I want to go on record saying that there is a better one 
available.

                            VIP/SAM AIRCRAFT

    Mr. Kingston. Mr. Chairman, I don't want to move the topic, 
but I do have a question that is provincial. Gulfstream 
Aerospace announced today a layoff of 1,200 people, and in 
talking to their management, one of their concerns right now is 
this kind of anti-corporate jet discussion that is going on in 
the media. And I was wondering if--and I know that is happening 
to other aircraft manufacturers. That is not the only reason.
    I mean, the big reason, of course, is the recession. But 
does this concern the Air Force in terms of losing some of the 
manufacturing ability? And would that be of any consequence? Or 
does this just sort of happen?
    General Lichte. Certainly, over the years we have relied on 
Gulfstream. In fact, we have a number of C-20 type aircraft 
that are getting old, and we were planning on replacing them 
with the C-37Bs, from Gulfstream.
    You are right, there are a lot of comments out there on the 
system right now that will affect. However, quite frankly, I 
still think that the safe, comfortable and reliable 
transportation----
    Mr. Murtha. General, last year we tried to put three in. We 
didn't hear a word from the Air Force. It was like dead 
silence. I mean, you know, they are hurting, Gulfstream is. And 
you know, anything you guys can speak up and put in the budget 
helps.
    General Lichte. Obviously, those types of aircraft are very 
helpful, because I think it is very important for our leaders 
to include----
    Mr. Murtha. But it is not in the budget, General.
    General Lichte. The problem becomes dollars available, sir. 
What is more important? If you ask me what is more important, I 
am going to tell you I need the tanker more than I need another 
Gulfstream.
    Mr. Murtha. I understand that.
    But you see our problem. If we go through a budget, we want 
to buy as many as we can, to get the price down. We have to 
have information from you folks who are the experts in order to 
make that buy.
    So just keep in mind the problems we have because we are 
going to be marking up long before these damn studies that you 
guys are working on all the time come up.
    But I appreciate your time and your frankness and the 
committee will adjourn until sometime next week--10:00 a.m. 
Tuesday. Thank you very much.
    [Clerk's note.--Questions submitted by Mr. Murtha and the 
answers thereto follow:]

                          KC-135 Tanker Fleet

    Question. The Air Force has previously expressed concern that the 
KC-135 tanker fleet was suffering serious corrosion issues before the 
Global War on Terror even began.
    Has the Air Force evaluated what affect the high operations tempo 
of the KC-135 tanker fleet and the adverse conditions of the 
environment in theater had on the service life of these aircraft?
    Answer. The KC-135R/T fleet has experienced an average annual 
utilization (UTE) rate of 488 flying hours per aircraft between Fiscal 
Year 2004-Fiscal Year 2008. This UTE has negligible service life impact 
and negligible cost impact. However, certain specially configured KC-
135s (notably those with Multi Point Refueling System, Roll-On Beyond 
Line-of-Sight Enhancement and Special Operations Air Refueling) have 
recently experienced significantly higher utilization rates. These 
aircraft make up a small percentage of the overall fleet and are 
actively managed and monitored to minimize impact. Currently the data 
does not reflect any adverse conditions that we can attribute to 
environmental conditions in theater.

                          KC-135 R/T 5-YEAR UTE
                              (Avg Hrs/Yr)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
FY04.......................................................         479
FY05.......................................................         481
FY06.......................................................         475
FY07.......................................................         491
FY08.......................................................         513
------------------------------------------------------------------------

    Question. Given the operations tempo of the tanker fleet, does the 
Air Force still believe that the fleet is structurally viable to 2040, 
as stated in the ``KC-135 Economic Service Life Study,'' of February 
2001?
    Answer. The 2040 projection was based on use of the average tanker 
flying the fleet average flight hours until it reached the economic 
life of 39,000 hours. Certain configurations of KC-135, notably the 
Multi-Point Refueling System jets, have recently experienced 
significantly higher utilization rates based on their operational 
requirements. The Multi-Point Refueling System aircraft make up a small 
percentage (20 aircraft) of the overall fleet and are being monitored 
for any impact. If sustained at the current utilization rate without 
any upgrades, these aircraft will reach their economic service life as 
early as 2020.
    Question. What is the mission capability rate of the KC-135?
    Answer. The mission capability rate for the KC-135 fleet is 
trending along at an even rate. In Fiscal Year 2006 the rate ended at 
79.71 percent, in Fiscal Year 2007 at 79.35 percent and in Fiscal Year 
2008 the rate was 80.04 percent. For the first two quarters in Fiscal 
Year 2009 the rate is holding at 79.95 percent, which is the 
established KC-135 mission capable standard.
    Note. Mission capability rates only address unit possessed 
aircraft. To get a better picture of the overall fleet we also track 
aircraft availability (includes aircraft in depot status, etc). In 
Fiscal Year 2008 the KC-135 availability was 61.5 percent.
    Question. How many of the KC-135s cannot be deployed because of 
flight restrictions or the lack of a capability to repair them if they 
have problems in theater?
    Answer. As of February 28, 2009, 22 KC-135E models are grounded. 
All 37 KC-135E aircraft, including the 22 which are grounded, are 
scheduled for retirement in Fiscal Year 2009. There are no other KC-
135s restricted due to condition. In theater repair capability is not a 
limiting factor for any KC-135 deployment but because of operational 
limitations we do not deploy KC-135Es to the theater.

                       KC-135 Tanker Maintenance

    Question. The current fleet of KC-135 aircraft is almost 50 years 
old. Based on the Air Force recapitalization plan of 12 to 15 aircraft 
per year, some aircraft will be 80 years old by the time they are 
replaced. In order to maintain the fleet, many upgrades will have to be 
conducted leading to significant costs.
    Just last week, you were quoted about the cost of re-skinning aging 
KC-135s. When will this be started and at what costs?
    Answer.
                         discussion of approach
    KC-135 Skins Replacement has been manageable to date. Replacements 
in Programmed Depot Maintenance (PDM) have been limited and there is a 
reasonable amount of rework that can be accomplished before most of the 
skins require replacement. However, the lack of a methodology that 
accounts for the interaction of corrosion with fatigue generates 
uncertainty in the ability to accurately predict the degradation to the 
structure.
    A future skin replacement program may be necessary. The following 
assumptions were made to estimate the cost and schedule for replacing 
the skins. The dates we have forecast for replacement were selected to 
gain the most benefit from the work that may be accomplished, therefore 
the initiation date was schedule and not technically driven. 
Furthermore, to minimize the impact to aircraft availability, it was 
assumed that no more than 12 aircraft would be down at any one time, 
and the tasks were grouped to be accomplished concurrently. Each 
estimate uses current year (FY09) dollars and is per aircraft.
                             aft body skins
    Replacement of these skins is already programmed to be done as part 
of PDM FY12-FY17.
    Estimated cost per airplane: $0.3 million.
    Schedule: FY12-FY17, 416 aircraft.
    Max Aircraft Down: N/A-concurrent with PDM.
               upper wing and horizontal stabilizer skins
    These would be done concurrently, separate from PDM, in a speed 
line, and include replacement of substructure components that are 
important to continued use of the aircraft and accessible when the 
skins are removed.
    Estimated cost per airplane: $6.7 million.
    Schedule: FY16-FY34, 416 aircraft.
    Max Aircraft Down: 12 (at any one time)
              crown and center wing (wing box) upper skins
    This replacement is planned further in the future since recent 
experience has not indicated significant problems with corrosion or 
cracking. They are planned to be done concurrently in a speed line and 
separate from PDM. We have accounted for planned retirements in this 
increment.
    Estimated cost per airplane: $4.6 million.
    Schedule: FY26-FY34, 230 aircraft.
    Max Aircraft Down: 12 (at any one time)
    Question. What is the impact of fatigue cracking on the fleet and 
how will the Air Force address these issues? Is the cracking driven by 
usage or age? What are the costs of addressing the issue?
    Answer. To date fatigue cracking has not been a serious issue on 
the fleet. We continuously monitor the flying hours and use the 
Aircraft Structural Integrity Program (ASIP) to identify and monitor 
highly stressed areas of the aircraft and then repair or replace as 
necessary.
    Fatigue cracking is driven by usage.
    ASIP inspections are performed during programmed depot maintenance 
(PDM). As part of the ASIP program, individual aircraft receive a 
tailored set of inspections that monitor the aircraft for fatigue 
damage. The cost for the ASIP inspections during PDM runs from $75,300 
to $125,500 (300 to 500 man-hours) per aircraft. Replacement of the aft 
body skins is a fatigue issue and will begin in Fiscal Year 2012 at 
estimated costs of 1,200 maintenance man hours ($301,200) per aircraft.
    Note. Not asked in your question, but of significant concern, is 
the issue of corrosion which is driven by age, environment and design. 
In the coming years we will have to address major corrosion issues in 
the wing and horizontal stabilizers upper skins, the fuselage crown 
skins, landing gear trunnions, etc.
    Question. The KC-135 was manufactured in the 1950s as basically a 
handmade aircraft with minimal corrosion protection unlike the C-17 
that today uses laser precision tools with extensive corrosion 
protection.
    How have manufacturing techniques impacted the corrosion on the KC-
135? How is manufacturing different today?
    Answer. The KC-135 was manufactured with very little sealant 
between mating surfaces, light but strong corrosion prone materials, 
and fasteners were installed dry creating a corrosion cell. Spot welds 
also eliminated fasteners and provided a way to attach the multiple 
layers of skins. This combination of spot-welds and corrosion prone 
materials creates an ideal corrosion environment.
    Lessons learned have been incorporated as today's accepted industry 
practices. This includes installing fasteners wet with sealant, 
providing sealant on mating surfaces, chemical milled skins that 
eliminate mating surfaces, and availability of corrosion and stress 
corrosion resistant materials. Whenever possible, repairs performed in 
PDM use the most corrosion resistant material along with the industry 
standards for installation to prevent corrosion.
    Question. Please discuss material degradation from exposure. Is KC-
135 maintenance increasing in time and cost?
    Answer. Maritime environments, such as Kadena Air Force Base, 
Japan, MacDill Air Force Base, FL, and Hickam Air Force Base, HI, 
promote metal degradation due to the corrosive elements found in those 
atmospheres. Because the locations increase the rate of corrosion 
occurring to our aircraft, we typically rotate the aircraft out of 
severe corrosion environments every two to four years. This ensures 
impacts to any single aircraft are reduced. Additionally, to overcome 
environmental impacts and to reduce the overall maintenance required on 
the fleet, an aggressive corrosion control program was implemented. 
This includes shorter wash cycles for severe environments and treating 
the aircraft with corrosion preventative compounds. All new replacement 
materials are less corrosion prone.
    Programmed depot maintenance (PDM) hours have remained relatively 
constant since 2003. While the hourly rate changes yearly, the man-hour 
requirement for PDM has remained at approximately 28,000 maintenance 
man hours.
    Air Force cost models show that overall logistics costs for 
operating the KC-135 have continued to climb in constant year dollars 
and the models project continued growth in the future. Base level 
maintenance costs, engine overhaul and PDM costs account for nearly all 
the increases in logistics costs above inflation. PDM cost increases 
are largely due to increases in direct material.
    Question. Has the fleet experienced growth in depot possessed 
aircraft? What are the main drivers?
    Answer. Yes. The fleet has experienced growth in depot possessed 
aircraft. Depot possessed aircraft consists of aircraft in programmed 
depot maintenance (PDM), unprogrammed depot level maintenance (UDLM) 
and aircraft modifications (Mods). The table below shows the recent 
growth.

------------------------------------------------------------------------
                                      Number of A/C Depot Possessed
                               -----------------------------------------
                                    FY06          FY07          FY08
------------------------------------------------------------------------
PDM...........................           39            44            47
UDLM..........................            1             2             0
Mods..........................           15            24            29
    Totals....................           55            70            76
------------------------------------------------------------------------

    As indicated in the table above, there are a number of main drivers 
for this recent growth.
    PDM growth is driven by a couple of factors at the organic and 
contract sources of repair. One factor in the PDM growth is due to a 
change in the mix of major structural repairs (MSRs). While the overall 
number of MSRs has decreased, the MSR mix has changed to repairs which 
limit concurrent maintenance. Another factor in PDM growth is PDM flow 
days have increased resulting in increased PDM depot possessions. Flow 
days increased due to process changes, materiel support issues, and 
contract PDM issues which impacted production. Lean process and 
material supportability improvement efforts have been implemented to 
improve flow days. Contract PDM issues are directly related to two 
Government Accountability Office (GAO) protests and Court of Federal 
Claims (CoFC) lawsuit on the September 2007 PDM contract award. GAO 
ultimately ruled in favor of the Air Force, but the CoFC did not and 
directed a re-solicitation of the contract.
    Modifications growth is driven by two major modifications: Global 
Air Traffic Management (GATM) and Control Column Actuated Brake (CCAB). 
GATM was accelerated to more quickly provide this required capability 
to the warfighter. CCAB was implemented with an aggressive schedule to 
modify the KC-135 fleet as quickly as possible with this safety-
oriented modification. Though resulting in a short-term increase in 
depot possessed aircraft, the modifications will be accomplished sooner 
and in the long-term provide much needed capability.
    Question. What are the costs and available forecasts for the KC-
135? What about the costs for the airframe, engines, and avionics 
modifications? What about the availability due to programmed depot 
maintenance?
    Answer. Costs: The total funding associated with all KC-135 
aircraft modifications currently in-progress is $1.636 billion. The 
preponderance of this funding is associated with two major aircraft 
modifications: Global Air Traffic Management (GATM) and KC-135 
Communications Navigation Surveillance/Air Traffic Management (CNS/ATM) 
which is also known as Block 45. GATM began in 1999 and will complete 
in 2011, with a total program cost of $967.1 million (including spares) 
and modification of 419 C/KC-135 aircraft. Block 45 began in 2008 and 
will continue through 2021, with a total program cost of $587.0 million 
(including spares) and modification of 417 C/KC-135 aircraft. The 
remaining funding ($82.2 million) is associated with 21 avionics and 
airframe related modifications. Plans for two future avionics 
modifications scheduled to begin in Fiscal Year 2010 are estimated to 
cost $37.8 million.
    Availability: The fleet has experienced growth in depot possessed 
aircraft. Depot possessed aircraft consists of aircraft in programmed 
depot maintenance (PDM), unprogrammed depot level maintenance (UDLM) 
and aircraft modifications. The total number of aircraft in the depot 
possessed category has grown from 55 in Fiscal Year 2006, to 70 in 
Fiscal Year 2007, to 76 in Fiscal Year 2008. There are a number of main 
drivers for this recent growth.
    Growth in depot possessed aircraft is driven by two factors at the 
organic and contract sources of repair. One factor in the PDM growth is 
due to a change in the mix of major structural repairs (MSRs). While 
the overall number of MSRs has decreased, the frequency of MSRs 
limiting concurrent repairs has increased. The second factor in PDM 
growth is increased PDM flow days. Flow days increased due to process 
changes, materiel support issues and contract PDM issues which impacted 
production. Lean process and material supportability improvement 
efforts have been implemented to improve flow days. Contract PDM issues 
are directly related to two GAO protests and Court of Federal Claims 
(CoFC) lawsuit on the September 20 07 PDM contract award. GAO 
ultimately ruled in favor of the Air Force, but the CoFC did not and 
directed a re-solicitation of the contract. The CoFC decision is 
currently under appeal.
    Growth in depot possessed aircraft due to modifications is driven 
by two major modifications, Global Air Traffic Management (GATM) and 
Control Column Actuated Brake (CCAB).
    GATM, an upgrade to the aircraft's communication and navigation 
systems to enable free operation in civil airspace, was accelerated to 
more quickly provide this required capability to the warfighter. CCAB 
was implemented with an aggressive schedule to modify the KC-135 fleet 
as quickly as possible with this safety-oriented modification. Though 
resulting in a short-term increase in depot possessed aircraft, the 
modifications will be accomplished sooner and in the long term will 
provide much needed capability.

                       Fee-For-Service Refueling

    Question. The 2008 National Defense Authorization Act directed the 
Air Force to pursue a fee-for-service refueling capability over a five 
year period.
    What is the requirement for a contractor supplied capability?
    Answer. In our KC-X Analysis of Alternatives, commercial refueling 
services were evaluated. The analysis indicated that commercial 
services were not a viable permanent solution to replace the organic 
air refueling capability, but suggested the potential to augment the 
organic tanker fleet. It could be used to fill any potential shortfall 
that might occur while acquiring a new tanker.
    Question. Is the Air Force today not able to meet its needs for 
refueling?
    Answer. The Air Force meets current requirements for air refueling.
    Question. How would the Air Force structure the program?
    Answer. The program would be executed in two parts. The first part 
would be the preparatory period where the selected company or companies 
would be responsible for the boom modification, integration and 
certification of their chosen aircraft. We anticipate this would take 
two to three years. Once the aircraft and boom are certified, we would 
begin the service period of the program which is statutorily mandated 
at five years.
    Question. What is the cost of the pilot program?
    Answer. We are currently evaluating the data we received from the 
last request for information from industry. That data will help 
determine our acquisition strategy and the overall cost of the eight-
year program.
    Question. What type of aircraft do you foresee vendors attempting 
to use?
    Answer. Potential vendors who have responded to our requests for 
information have indicated potentially using a wide range of aircraft 
including the B-767, A-330, DC-10 and B-707.
    Question. Do you anticipate vendors using new aircraft or used?
    Answer. Potential vendors have indicated potentially using both new 
and used aircraft.
    Question. If the Fee-For-Service air refueling pilot program proves 
beneficial to the warfighter and the taxpayers will you re-evaluate the 
total number of KC-Xs required?
    Answer. It is essential that we meet national security requirements 
with an organic capability. The Fee-For-Service pilot program will help 
determine if augmenting that organic capability with commercial air 
refueling services is a good value to the taxpayer.
    Question. Would the companies flying the contract aircraft 
performing the refueling have the refueling boom and aircraft markings 
consistent with current KC-135 and KC-10 configurations?
    Answer. We will require markings to comply with currently accepted 
standards necessary to safely refuel receivers.

                    Other C-5 Modernization Programs

    Question. Due to the cost increases in the C-5 avionics 
modernization program, the Air Force reduced requirements and deferred 
some development activities to other programs. The Air Force waived 14 
operations requirements and deferred the correction of nearly 250 
deficiencies, to be addressed and funded in the re-engining and other 
future efforts.
    What is the status of waivers and deficiencies?
    Answer. A portion of prioritized outstanding deficiencies will be 
incorporated in the fielding of the next sustainment software build 
expected in June 2009. In addition, the C-5 Reliability Enhancement and 
Re-Engining Program Block Software Upgrade program and future 
sustainment software builds will address the remaining deficiencies 
dependent on the available funding and Air Mobility Command priority. 
Air Mobility Command is not experiencing operational limitations and is 
currently supporting the strategic airlift mission with over 49,000 
operational avionics modernization program flight hours.
    Question. How and when does the Air Force intend to fix these 
issues and at what cost?
    Answer. The Air Force will go through an iterative process and 
address the deficiency reports based on the available funding and Air 
Mobility Command priority. The effort will be scoped and the cost will 
be determined as we go through this iterative process.
    Question. Besides the avionics and re-engining modifications, what 
other major modifications does the Air Force believe are needed for the 
C-5? Why are they needed? When should these efforts start and what are 
the expected costs?
    Answer. There are several major modification efforts currently 
needed for the C-5 besides avionics and re-engining modifications: 
Structural repair initiatives and Large Aircraft Infrared 
Countermeasures (LAIRCM). The structural repair initiatives being 
addressed today are the repair/replacement of the C-5A/C Aft Crown Skin 
and the C-5A/C Contour Box Beam Fitting. These modifications are needed 
due to stress corrosion cracking (SCC) susceptibility of these 
components, leading to unsafe operating conditions. The C-5A Aft Crown 
Skin is projected to cost approximately $534 million if the Air Force 
decides to pursue as a modification. There are currently two aircraft 
participating in the validation/verification process. The C-5A Box Beam 
Fitting is projected to cost approximately $150 million if the Air 
Force decides to pursue as a modification. There is currently no 
funding in the budget for either of these projects and are proceeding 
on a ``repair as necessary'' basis. LAIRCM is needed due to the 
requirement for the large aircraft like the C-5 to operate in infrared-
threatened airspace, as stated in the LAIRCM operational requirements 
document 314-92, dated August 1998. The program was initiated in Fiscal 
Year 2007 for 52 C-5B/M aircraft and operates under an indefinite 
delivery, indefinite quantity contract for system acquisition/
installation. There are 15 funded aircraft in the Fiscal Year 2009 
budget.
    Question. How much does it cost today to maintain a C-5 that has 
not been modernized, one that has only received the avionics 
modernization, and one that has received both the avionics and 
reengining modifications?
    Answer. Operations and Support (O&S) costs are not available by 
specific tail number, we can only make predictions on the fleet-wide 
costs. The estimated O&S cost of the 111 C-5's if not modernized is 
$73.1 billion from 2005 through 2040. C-5 fleet instrumentation must be 
converted from analog to digital via modernization to provide 
capabilities needed to allow continued operations in European and 
Pacific airspace and address significant vanishing vendor issues.
    The O&S cost of the 111 C-5's if they only receive the avionics 
modernization is $84.4 billion from 2005 through 2040. The avionics 
modernization program is a capability improvement not a reliability 
improvement and allows access to ever-restrictive airspace. There are 
significant costs associated with hardware/software updates and new 
maintenance requirements for these capabilities.
    The O&S cost of the 111 C-5 Fleet that received both the avionics 
modernization and reengining modification is $66.6 billions from 2005 
through 2040. The re-engining modification is a reliability improvement 
and also increases fuel efficiency with new engines. It includes a mix 
of legacy systems, avionics modernizations and re-engining 
modifications aircraft following the production schedules that vary up 
to steady state of 59 C-5As under the avionics modernization program 
and 52 C-5Ms for the re-engining modifications.
    Question. What are the expected gains in reliability, 
maintainability, and availability of a modernized C-5?
    Answer. Even though the C-5 Avionics Modernization Program (AMP) 
will realize some ``reliability, maintainability, and availability'' 
improvements, such improvements were not the program focus. The initial 
intent of the program was to address issues with obsolete parts, 
diminishing manufacturing source issues, the All-Weather Flight Control 
System and Global Air Traffic Management compliance requirements. This 
resulted in replacing the existing flight and engine instrument system 
and the flight control system with integrated, state-of-the-art, and 
cost effective systems. The C-5 AMP implemented the applicable emerging 
Civil Aviation Authority requirements for communication, navigation, 
and surveillance for operation in the global air traffic management 
environment.

                          C-5 Oversized Cargo

    The C-5 is the only U.S. aircraft capable of carrying some 
oversized equipment such as generators and space launch systems.
    Question. How many C-5s are required for this unique capability?
    Answer. None. The C-5 program of record is not based on outsized 
cargo requirements. The Defense Department organic airlift requirements 
were studied and established in the 2000 Outsize/Oversize analysis of 
alternatives, the Mobility Capabilities Study 2005, the C-5 Nunn-
McCurdy breach, and subsequent Joint Requirements Oversight Council. 
The current combined C-5 and C-17 programs of record meet these airlift 
requirements. There are 12 C-5 unique outsized cargo items which are 
transported on an infrequent basis to support Department of Defense and 
NASA requirements.
    Question. Are there plans to retire equipment that must be carried 
by C-5s? If so, when?
    Answer. At this time, there are currently no plans to retire 
equipment that must be carried by a C-5.
    Question. Are there commercial carriers that could address this 
requirement?
    Answer. If the cargo delivery is not time sensitive, some outsized 
C-5 unique cargo, (i.e., truck with 100 kilowatt generator and truck 
with 475 BTU HVAC) could be moved via a commercial surface carrier. If 
delivery is time-sensitive, the AN-124 (a foreign flag carrier) is of 
similar size and would be able to carry some of the C-5 unique outsize 
cargo. However, the AN-124 cannot carry NASA cargo which is transported 
on our space cargo modified C-5Cs and it will not carry the outsized 
cargo of special operations nor that of classified users.

                         C-17 Operations Tempo

    Question. C-17s have been involved in a number of landing incidents 
in the Central Command Area of Operations of late, most notably just a 
couple of weeks ago when a C-17 landed at Bagram without its landing 
gear down. The Committee understands investigations are ongoing and is 
not looking for comment on the cause for each; however, the Committee 
is concerned these incidents may indicate a more serious problem.
    What can you tell us about the latest incident and what other 
incidents have occurred in theater with C-17s?
    Answer. Summarized below are a total of 12 C-17 landing incidents 
that have occurred in theater since January 2005. The accident 
investigation board for the latest incident is still in progress and 
its findings have not yet been released.

------------------------------------------------------------------------
                               Mishap
            Date                Class                Synopsis
------------------------------------------------------------------------
5 Jan 05                             A   Main landing gear lug assembly
                                          failed on landing.
6 Jun 05                             A   Hard landing following low
                                          visibility instrument
                                          approach.
7 Jul 05                             B   Landing gear damaged when
                                          aircraft encountered 4 to 5
                                          inches of standing water
                                          during landing rollout.
5 Aug 05                             A   Aircraft landed with right main
                                          landing gear off the runway.
29 Aug 06                             C  Underside of fuselage damaged
                                          during semi-prepared runway
                                          operations (i.e., dirt field).
5 Sep 06                              C  Underside of fuselage damaged
                                          during semi-prepared runway
                                          operations (i.e., dirt field).
18 Dec 06                             C  Tire failed during landing and
                                          damaged right main gear.
5 Jan 07                              C  Tire failed during landing and
                                          damaged left main gear.
9 May 07                              C  Underside of fuselage damaged
                                          during semi-prepared runway
                                          operations (i.e., dirt field).
24 Jul 08                             C  Hot brakes caused fuse plugs to
                                          deflate 6 tires.
23 Dec 08                             C  Aircraft veered off the runway
                                          during landing, un-commanded.
30 Jan 09                            A   Aircraft landed with the
                                          landing gear retracted.
------------------------------------------------------------------------

    Question. What is your estimate on how fatigued your crew is and 
your aircraft fleet?
    Answer. We have no indicators that lead us to believe the C-17 crew 
force is chronically stressed or fatigued at this time. C-17 
crewmembers have spent an average of 94.8 days TDY for the last 12 
months through February 2009. This compares to 74 days for C-5, 91.3 
for C-130, 122.8 for KC-10, and 118.9 for KC-135 crewmembers. The 
average number of days TDY for C-17 crew members has actually decreased 
by over 30 days annually in the past 3 years. Waivers are rarely ever 
granted to time-tested crew duty day limits or cumulative monthly 
flying hour limits. Air Mobility Command (AMC) leadership and aircraft 
commanders proactively manage crew fatigue work/rest cycles to mitigate 
the potential for fatigue. Furthermore, AMC uses an operational risk 
management program to predict and proactively adjust missions to reduce 
risk factors such as fatigue.
    AMC, Air Force Materiel Command, and Boeing have a joint process in 
place to analyze C-17 fleet equivalent flying hours (stress). Through 
close tracking of aircraft hours and specific aircraft stress points, 
plus appropriate fleet rotation, AMC maintains an active program to 
predict and manage the wear and tear on the C-17 fleet. Based on that 
analysis, we do not believe the C-17 aircraft fleet is currently 
fatigued.
    Question. Are some of the issues a result of young pilots that just 
do not have experience in a war environment?
    Answer. Pilot experience in a war environment is at the highest 
levels in the last two decades due to the support to operations in 
South West Asia. Air Mobility Command (AMC) uses an operational risk 
management program to predict and proactively adjust missions to reduce 
risk factors such as crew experience. For instance, operational risk 
management analysis dictated that Bagram airfield be designated as a 
``special aircrew'' airfield. This required aircrews with a higher 
level of experience in order to fly missions to Bagram. The two primary 
indicators of experience are the qualification levels of aircraft 
commander and instructor aircraft commander. Aircrew must have 
accumulated requisite amounts of flight experience, received a 
recommendation from unit leadership, and successfully passed a rigorous 
flight and academic training program to obtain these qualifications. 
AMC's aggregate C-17 pilot force is healthy (over 100% manned) in both 
these key instructor pilot and aircraft commander qualifications. Long-
term, the two prime factors that can erode pilot experience are poor 
pilot retention and/or insufficient pilot flying rates. Currently, the 
Air Force, AMC, and C-17s have near record pilot retention rates and 
are regularly flying at rates that exceed programmed requirements due 
to ongoing operations.
    Question. Is the constant operations tempo weighing too hard on the 
force?
    Answer. No. We do not believe the C-17 crew force is overly 
stressed at this time. C-17 crewmembers have spent an average of 94.8 
days TDY for the last 12 months through February 2009. This compares to 
74 day for C-5, 91.3 for C-130, 122.8 for KC-10, and 118.9 for KC-135 
crewmembers.
    We have also changed the way we utilize the C-17 to help reduce the 
operations tempo of the C-17 crew force. We now provide two squadrons 
of C-17s to the theater on a full time basis, negating the need to 
continually move assets back and forth to support intra-theater 
operations. This reduced the average TDY days for the C-17 crew force 
by almost 30 days annually.
    Question. What are your risk mitigation factors to combat a 
fatigued force?
    Answer. From an operational perspective, we use a multi-tiered risk 
analysis process. The mission planners, the squadron leadership, and 
the aircraft commander all analyze the risks of a given mission prior 
to execution using Operational Risk Management. If an increased risk is 
identified, it is mitigated either by changing the crew composition 
(for example adding more experienced crewmembers) or by changing the 
mission conditions (for example flying during daylight hours).
    As highlighted above, there is leadership involvement throughout 
the entire mission planning and execution chain to ensure we are 
providing the best resource, whether it is aircraft or aircrew to 
execute the mission.
    Part of the leadership involvement includes monitoring aircrew 
flying hours during the previous 30, 60 and 90 days. Regulations allow 
a maximum number of hours during each of those periods to ensure we are 
not overstressing the crew members.
    We also let our aircraft commanders make a safety call. During 
execution, if the aircraft commander deems that risk or fatigue may 
possibly endanger the mission, he or she is empowered to either lower 
the risk if possible or delay the mission until conditions improve.
    Above all, Air Mobility Command instills a culture of safety at all 
levels.
    Question. Has the Air Force considered increasing the crew ratio 
for strategic assets to address crew fatigue?
    Answer. Currently, the operations tempo of the C-17 is such that 
there has been no requirement to increase the crew ratio. We continue 
to monitor the crew force and don't see any issue with crew fatigue 
across the force. With additional C-17s coming on-line, the additive 
effect of those aircraft should also continue to push down the 
operations tempo on the entire C-17 fleet.
    Also, the C-17 has the highest crew ratio in the Mobility Air 
Forces (MAF) at 3.0 for the active component. Air Force Reserve Command 
(AFRC) C-17 associate units are manned at a 2.0 crew ratio. AFRC and 
Air National Guard unit equipped C-17 units vary between a 3.0 and 5.0 
crew ratio. The next highest crew ratio in the MAF is 2.25 for active 
component C-130s. The C-5 crew ratio is 1.8 for the active units, with 
an equivalent 1.8 for their Associate Reserve Units.

                        Future C-17 Procurement

    Question. The C-17 program of record has increased over the last 
several years. The 2006 Quadrennial Defense Review and the 2005 
Mobility Capabilities Study both determined a need for 180 C-17s to 
meet strategic airlift requirements; this number assumed that the 
entire C-5 fleet received avionics upgrades and new engines. In 2008, 
following a cutback in the C-5 modernization plans; officials stated a 
need for 190 aircraft. The two mobility studies are expected to 
identify airlift requirements and support decisions on future force 
size and mix.
    How do the ongoing mobility studies address the C-17s dual role in 
providing both a strategic and tactical airlift capabilities?
    Answer. The ongoing mobility studies utilize C-17s as either 
strategic or tactical aircraft while ensuring that no assets are 
utilized in both roles simultaneously. The studies are structured to 
model aircraft throughout their entire mission capability spectrum. The 
models themselves determine which role provides the maximum impact to 
closure and will utilize them in that capacity.
    Question. Will the studies quantify numbers expected to be used in 
a tactical intra-theater role and are these numbers then not considered 
available for meeting the strategic inter-theater requirements?
    Answer. Yes. The studies will quantify the number of C-17s utilized 
in a tactical intra-theater role. The studies are structured to model 
cargo and personnel flow from end-to-end and thus capture any 
platform's utility across the array of missions it can perform. The 
end-to-end modeling structure ensures assets are not in use in more 
than one mission simultaneously.

                 C-17 As Strategic and Tactical Airlift

    Question. The C-17 is the only airlifter capable of providing both 
strategic (inter-theater) and tactical (intra-theater) airlift.
    How and to what extent is the C-17 currently employed in a tactical 
role supporting operations in Iraq and Afghanistan?
    Answer. Currently, approximately 50 percent of Air Mobility 
Command's daily C-17 operations are directly supporting Iraq and 
Afghanistan with 28 percent of the C-17 sorties supporting intra-
theater (tactical) missions. Of those, the tactical missions include 
using the C-17 for airdrop to remote forward operating bases; airland 
sorties to fully-improved runways, short-field (assault) runways and 
semi-improved surface runways. The C-17 will also use night vision 
goggles during both inter-theater and intra-theater missions. Based on 
the threat, many of the C-17 missions also accomplish tactical arrival 
and departures in combination with the use of defensive systems, such 
as LAIRCM, to mitigate the potential threat.
    Question. Are its tactical airlift responsibilities expected to 
increase in the future?
    Answer. The C-17 is an extremely versatile and capable aircraft. As 
operations in Afghanistan increase, so will the requirement for air-
drop, semi-improved surface and air refueling operations. Airlift 
operations in Iraq will still be required to support the remaining 
forces in place, utilizing both intra-theater and inter-theater assets. 
Ultimately, the future requirement of the warfighter will dictate 
whether C-17s- will be needed to a greater extent in the tactical role. 
On a daily basis, command and control decisions are made to optimize 
the balance of C-17s and C-130s used in the tactical role.
    Question. Is it the only aircraft capable of delivering Army 
Stryker units today within the theater of operations and to more 
austere fields?
    Answer. The C-17 is not the only aircraft capable of delivering 
Army Stryker units. The C-5 is also capable of delivering Army Stryker 
units to theater airfields that can support it. The C-17, however, does 
have access to more austere airfields than the C-5.
    Question. What other equipment cannot be delivered intra-theater by 
the C-130 fleet?
    Answer. The C-130 can carry oversize equipment, bulk cargo, and 
passengers, but it cannot carry outsize equipment. Examples of outsize 
equipment include the Abrams M1 main battle tank, the AV8B Harrier 
aircraft, and the CH-47 helicopter. The C-17 can carry outsize 
equipment in addition to the equipment, cargo and passengers the C-130 
can carry.
    Bulk cargo can be loaded onto a 463L pallet and does not exceed 104 
inches in width, 84 inches in length or 96 inches in height. Oversize 
cargo cannot be loaded onto a 463L pallet but does not exceed 810 
inches in length, 117 inches in width or 96 inches in height. Outsize 
cargo exceeds 810 inches in length, 117 inches in width or 96 inches in 
height, but can be loaded onto C-17 or C-5 aircraft.

                  Joint Cargo Aircraft (JCA) Missions

    Question. The Joint Cargo Aircraft (JCA), now designated the C-27J, 
is a joint program between the Army and Air Force to procure, field, 
and sustain a multifunctional fixed wing cargo aircraft.
    Does the Air Force currently have a stated and validated need for 
the C-27J? Is it expected to replace any aircraft currently in 
inventory? What capability gap does it address? What is the analysis 
behind the 24 aircraft in the Air Force program of record?
    Answer. Yes. The Air Force has a Department of Defense validated 
need for the C-27J to support the Time Sensitive/Mission Critical (TS/
MC) resupply of Army forces. The C-27J is not expected to replace any 
aircraft currently in the Air Force inventory. However, the C-27J is 
expected to replace the Army's fleet of C-23s. The C-27J addresses TS/
MC resupply capability gap approved by the Joint Requirements Oversight 
Council. The foundation of the analysis behind the Air Force program of 
record is the May 2007 Department of Defense validated the JCA Analysis 
of Alternatives for 75 aircraft to meet Army TS/MC resupply demand. The 
Department of Defense directed this requirement would be met jointly by 
the Army with 54 aircraft and the Air Force with 24 aircraft.
    Question. Will the Air Force use the C-27J to perform intra-theater 
airlift operations as part of their common user pool or will it be 
dedicated to the Army's time sensitive cargo? Will Army aircraft be 
available for common user pool requirements? In a theater of 
operations, who will control scheduling and ownership of these assets?
    Answer. The Department of Defense Quadrennial Roles and Missions 
Review Report, dated January 2009, determined Air Force C-27Js will 
conduct Army direct support missions when requested and the Army will 
integrate its C-27Js into the common-user pool when available/
allocated. Scheduling control and ownership is done by the Deployment 
Distribution Operations Centers within geographic combatant command 
structures. It can better integrate and optimize distribution 
operations.
    Question. Will distributing the Air Force C-27J fleet among five or 
six Air National Guard bases hamper or enable satisfying the Army's 
time sensitive/mission critical missions?
    Answer. The Army's time sensitive/mission critical requirement is 
an in-theater need. Continental U.S. basing decisions should not affect 
in-theater utilization.

                      Mobility Capability Studies

    Question. The Department has two studies ongoing to help determine 
the proper size and mix of future airlift forces, a congressionally-
directed airlift requirements study by the Institute of Defense 
Analysis (IDA) and a mobility capabilities requirements study to 
project force requirement in 2016. Results from these studies, the 
timing, and use of information is crucial for making near-term 
decisions on C-17 procurement or shutting down the production line, C-5 
and C-130 modernizations, potential C-5 retirements, and future airlift 
options. Some officials believe the studies indicate a need for more 
airlift due to increased troop strengths, heavier Army equipment, 
establishment of the African Command, and decreased forward presence of 
U.S. forces.
    What are the preliminary results of the studies that can be shared 
at this time?
    Answer. The Congressionally-directed airlift requirements study by 
the Institute of Defense Analyses was submitted to the Congress in 
March 2009. It found the current program of record for airlift is 
adequate to meet the requirements identified in MCS for moderate 
acceptable risk. The Office of the Secretary of Defense (PA&E) and U.S. 
Transportation Command led Mobility Capabilities and Requirements Study 
2016 is in progress and there are no preliminary results available at 
this time. The report from that study is expected in December 2009.
    Question. Are there indications that more airlift or a different 
mix is needed?
    Answer. To date, there are no indications that more airlift or a 
different mix is needed. The Congressionally-directed airlift 
requirements study by the Institute of Defense Analyses (IDA) was 
submitted to Congress in March 2009. It found the current program of 
record for airlift is adequate to meet the requirements identified in 
MCS for moderate acceptable risk. The Office of the Secretary of 
Defense (PA&E) and U.S. Transportation Command led Mobility 
Capabilities and Requirements Study 2016 is in progress. The report 
from that study is expected in December 2009.
    Question. What kind and detail of information will be briefed, and 
when?
    Answer. The Congressionally-directed airlift requirements study by 
the Institute of Defense Analyses (IDA) was briefed to U.S. 
Transportation Command in December 2008 and submitted to Congress in 
March 2009. It found the current program of record for airlift is 
adequate to meet the requirements identified in MCS for moderate 
acceptable risk. The Office of the Secretary of Defense (PA&E) and U.S. 
Transportation Command led Mobility Capabilities and Requirements Study 
2016 is in progress. This study will assess the end-to-end Joint 
Deployment and Distribution Enterprise to determine the mobility 
capabilities and requirements needed to support the National Security 
Strategy in 2016. The report from that study is expected in December 
2009.
    Question.  When does the department expect to release its completed 
findings?
    Answer. The Department expects to release its findings in December 
2009.

             Mobility Capability Requirements Study Metrics

    Question. It was reported last year that Department of Defense 
officials had not yet decided on the metrics and plans for using 
metrics to inform the 2016 mobility requirements study. The prior study 
in 2005 lacked some important metrics and data to define and quantify 
capacity requirements as a basis for computing the size and optimal mix 
of airlift forces and for assessing the impacts of alternate force 
levels on achieving warfighting objectives
    (Has the Department of Defense decided which metrics to use in its 
study? What are they? Do these metrics include a specific strategic 
airlift requirement expressed in million ton-miles per day? What are 
the primary metrics for evaluating tactical airlift requirements?
    Answer. The Mobility Capabilities and Requirements Study has a set 
of 75 metrics arranged in three tiers. Tier I measures time definite 
delivery of units and sustainment and has direct impact on the 
warfighter. Tier II measures Availability of Joint Deployment and 
Distribution Enterprise Assets and Infrastructure. Tier II assets are 
watercraft, aircraft, ground transportation and infrastructure. Tier II 
metrics inform Tier I metrics. Finally, Tier III metrics are the basic 
measures that inform Tier II metrics and are used for analysis. Tails 
used and Million Ton Miles per Day are Tier III metrics.
    Question. Does TRANSCOM plan to use metrics, including a ton-miles 
per day metric, for the study in describing any gaps, shortfalls, or 
redundancies in capabilities for the C-17 and the C-5?
    Answer. The Mobility Capabilities and Requirements Study has a set 
of 75 metrics arranged in three tiers. Tier I measures time definite 
delivery of units and sustainment and has direct impact on the 
warfighter. Tier II measures Availability of Joint Deployment and 
Distribution Enterprise Assets and Infrastructure. Tier II assets are 
watercraft, aircraft, ground transportation and infrastructure. Tier II 
metrics inform Tier I metrics. Finally, Tier III metrics are the basic 
measures that inform Tier II metrics and are used for analysis.
    Tails used and Million Ton Miles per Day are Tier III metrics. 
These metrics will be used to describe any gaps, shortfall, or 
redundancies in capabilities for the C-17 and the C-5.
    Question. How will the study address the C-17's dual role in 
providing both strategic and tactical airlift capabilities? Do the 
studies quantify numbers to be used in a tactical intra-theater role 
and are these numbers then not considered available for the strategic 
inter-theater role?
    Answer. The study is structured to model cargo and personnel flow 
from end-to-end and thus capture any platform's utility across the 
array of missions it can perform. The end-to-end modeling structure 
ensures assets are not in use in more than one mission simultaneously.
    Question. To what extent will requirements include civil reserve 
air fleet requirements expressed in terms of passenger-miles per day 
metric and resulting overages and/or shortfalls expressed in the same 
metric?
    Answer. The Mobility Capabilities and Requirements Study plans to 
measure aircraft use in tails and Million Ton Miles per Day. There is 
no specific plan to express the requirement in terms of Million 
Passenger Miles per Day for civil reserve air fleet passenger aircraft, 
but the tails measurement of this metric can be transformed into 
Million Passenger Miles per Day.

                            Industrial Base

    Question. In the past few years, defense policy makers have 
expressed concern that further consolidation in the industry that 
designs and manufacturers U.S. military aircraft, which now consist of 
three prime contractors (in contrast to 11 in 1960), will cause the 
Department of Defense to acquire aircraft that are designed and 
produced in a far less competitive and innovative environment than they 
were in the past.
    Describe the military combat aircraft industry?
    Answer. Today's military combat aircraft industry consists of 
several tiers. The first tier consists of those few companies with the 
resources to provide the overall design and integration of systems into 
an airframe. The next tier consists of companies that produce major 
components, such as engines and avionics. Supporting these tiers are 
the firms that produce the various parts that make up the engines or 
major structural elements of the airframe and subsystems, such as 
integrated circuits, printed circuit boards, and metal or composite 
parts. At the foundation of the industry are the suppliers of the raw 
materials needed to fabricate all the parts.
    Question. With the limited number of vendors, is the U.S. military 
able to maintain a high level of innovation in the military aircraft 
industry?
    Answer. Yes. The U.S. military is able to maintain a relatively 
high level of innovation in the military aircraft industry. Although 
fewer in number today, vendors still have to compete for business in 
the military aircraft arena and it is in their own self-interest to 
attract and retain talented individuals capable of the creative 
thinking that leads to innovative, new ideas. This talent is not 
limited only to the design and development of new weapon systems; 
rather, today's military aircraft industry has shown itself to be 
adaptable at generating innovative ideas for incorporating new 
technologies into existing aircraft as well. Innovation can also come 
from sources outside the traditional aerospace industrial base as 
evidenced by new developments in unmanned aerial systems and in 
composite materials, both of which have military aircraft applications. 
In this regard, the Air Force Science and Technology Program is 
fundamental in funding and focusing innovative research with industry 
and universities in areas directly feeding into the military aircraft 
industrial base, such as turbine engines. In addition, programs such as 
the University Research Initiative, Defense Acquisition Challenge, and 
Small Business Innovation Research are another avenue by which 
innovation is stimulated and rewarded. The Air Force does not depend on 
a limited pool of vendors, but uses a variety of avenues to seek out 
and encourage innovation.
    Question. What are the prospects for innovation and competition in 
the military aircraft industry?
    Answer. Prospects for both innovation and competition in the 
military aircraft industry are still viable despite today's smaller 
number of prime contractors; however, when looking at the industry's 
second and third tier suppliers, prospects are a bit less favorable. 
The U.S. aerospace industry has been at the forefront of innovation 
since the development of manned flight. The early stages of the 
industry were marked by the rise of many competing firms with 
innovations occurring at a rapid pace. As the technology and industry 
matured, market forces resulted in some firms choosing to exit with 
others consolidating to improve their ability to compete. Today's 
operating environment for the U.S. aerospace industry is still marked 
by innovation, while competition is now on a more global level--the 
military aircraft industry, as part of this larger U.S. aerospace 
industry, is subject to the same forces that act upon the entire 
industry. It should also be noted that innovative technologies stemming 
from the Air Force Science and Technology Program and its partnership 
with industry feed into the military aircraft industrial base enhancing 
its competitive edge. This is especially true in the area of turbine 
engines.
    Question. What policy options does the U.S. military have 
concerning the consolidation of the U.S. aircraft industry?
    Answer. There really are no specific U.S. military policy options 
as regards the consolidation of the U.S. aircraft industry; however, 
when there are concerns over the potential impact consolidation might 
have on competition, the military can take actions such as funding the 
development of competing prototypes to ameliorate those concerns. In 
addition, early systems engineering and development of reliable cost 
estimates position the U.S. military to better negotiate the best value 
for its procurement dollars. Along these lines, a recent report by the 
Defense Science Board titled, ``Creating an Effective National Security 
Industrial Base for the 21st Century,'' recommended policy options to 
maintain competitive sources to include funding competitive suppliers, 
periodic competitions for system upgrades on major programs, and 
selecting two suppliers who would continue to compete for a share of 
the buy, among others. As long as the U.S. aircraft industry remains 
capable of effectively and efficiently providing for the needs of the 
warfighter, the focus of the U.S. military will be primarily on the 
products provided rather than the organization of that industry. Future 
Air Force warfighting capability needs and available funding will 
define the U.S. military aircraft industry.
    Question. What do you see as the future for mobility aircraft 
production capability?
    Answer. As in the past, the future capability to produce mobility 
aircraft will remain closely tied to the health of the U.S. aerospace 
industrial base as the military does not have the financial means to 
meet its current requirements while paying companies to maintain a 
``warm'' industrial capacity in terms of either engineering talent or 
facilities. There are many areas where the commercial aerospace 
industry and the military aircraft industry overlap. In the case of 
fighter aircraft, the area of intersection is limited. In the case of 
mobility aircraft, the area of intersection can be significant. Even a 
cursory review of the various mobility aircraft used in the past would 
reveal those uniquely designed and produced for the military, such as 
the Lockheed C-141 Starlifter or the Boeing C-17 Skymaster III, and 
those adapted by the military from a commercial aircraft design, such 
as the Douglas DC-3 (C-47 Skytrain) or the McDonnell Douglas DC-10 (KC-
10 Extender). In each case, the military benefits from having a viable 
commercial aerospace industry that can provide the engineering and 
design talent, as well as the facilities and supporting infrastructure 
of suppliers, to meet the infrequent demands of producing mobility 
aircraft.
    This is not to say that there are no areas of concern. Some aspects 
of any military aircraft require different engineering design 
considerations than those used for commercial aircraft and the military 
operating environment tends to be more demanding. Until near the end of 
the Cold War, the demands of the military enabled the aerospace 
industry to develop and maintain a cadre of engineers conversant with 
these military unique design considerations and to maintain the 
facilities for production of those aircraft. The industry also included 
a large manufacturing base upon which to draw. That operating 
environment has changed. The current cadre of designers and engineers 
is aging and there are few new military aircraft, either mobility or 
combat, under consideration. The C-17 production line will soon close 
with no replacement and, while the C-130 continues in production, it 
has become its own replacement using the same production facilities. As 
such, it is expected that the military will be more dependent on the 
health of the U.S. aerospace industry than previously.

           Large Aircraft Infrared Counter Measures (LAIRCM)

    Question. LAIRCM is designed to counter the increasing threat that 
large, slow-moving cargo aircraft face from shoulder-fired missiles and 
missiles launched from vehicles. The system automatically detects the 
heat-seeking missiles and puts out a signal to confuse its path and 
direct it away from the aircraft.
    What is the requirement for LAIRCM for the mobility fleet?
    Answer. The current requirement for Large Aircraft Infrared Counter 
Measures (LAIRCM) capability was defined in the 1998 Operational 
Requirements Document and the 2001 Operational Requirements Document 
Annex. Air Mobility Command previously established a requirement of 444 
LAIRCM-equipped aircraft. LAIRCM quantities are currently being 
readdressed in a Department of Defense-directed study. This study takes 
into account revised major contingency operations plans and threat 
progression since 2004, and results are due April 30, 2009.
    Question. How is the Air Force addressing the requirement?
    Answer. The Air Force is addressing the requirement through two 
ways: Adequate funding and ensuring growing requirements are documented 
within the Office of the Secretary of Defense. The Air Mobility Command 
funds, and seeks additional funds, to provide the increased protection 
of LAIRCM to as many aircraft as possible, ensuring enough aircraft 
remain available on a daily basis to support the warfighter's needs. 
LAIRCM quantities are currently being readdressed in an Office of the 
Secretary of Defense-directed study. This study takes into account 
revised Major Contingency Operations Plans and threat progression since 
2004. The results of this study are due April 2009.
    Question. How do you decide which aircraft will have this system 
installed and how do you develop the installation schedule?
    Answer. Air Mobility Command decides which aircraft will have 
LAIRCM installed based on operational capability requirements. Mission 
taskings into higher threat environments have driven the current 
installation priority order of the C-17, followed by the C-130, C-5, C-
40, C-37, C-20, KC-135, and KC-10 aircraft. Installation schedule is 
determined by the aircraft modification facility capacity and equipment 
procurement lead times.
    Question. What is the cost of the LAIRCM per aircraft?
    Answer. There are 17 different LAIRCM configurations with final 
costs depending on airframe type and configuration. The figures in the 
table below represent the final configuration costs per airframe. There 
have been lower costs based on ``lite'' configurations and/or use of 
baseline equipment. Equipment costs depicted in the table include costs 
for LAIRCM Line Replaceable Units, support, spares, and other costs. 
The C-130J cost depends on work scheduled to begin this year.
    Cost of LAIRCM per aircraft ranges between $4-$10 million

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                           Platform                             Install Costs   Equipment Costs    Total  Costs
----------------------------------------------------------------------------------------------------------------
C-17.........................................................             $2.0             $5.8             $7.8
C-5..........................................................              4.5              5.4              9.9
C-130 (various)..............................................              0.8              4.5              5.3
C-130J.......................................................            1-4              4-6             5-10
VIP Special Air Mission......................................            2-5              2-3.3            4-8.3
----------------------------------------------------------------------------------------------------------------

    [Clerk's note.--End of questions submitted by Mr. Murtha.]

 
                           W I T N E S S E S

                               __________
                                                                   Page
Coffey, Carole...................................................    55
Dodaro, G. L.....................................................    55
Donley, M. B.....................................................     1
Embrey, E. P.....................................................   431
Fullhart, Major General R. D.....................................   515
Heddell, G. S....................................................   353
Lichte, General A. J.............................................   515
McNabb, General D. J.............................................   515
Schinasi, K. V...................................................    55
Schwartz, General N. A...........................................     1
Sullivan, Michael................................................    55
Sutton, Brigadier General, L. K..................................   431
Thompson, Lieutenant General N. R., III..........................   283

                                  
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