[Senate Hearing 111-124]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 111-124
 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2010

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   on

                           H.R. 3082/S. 1407

  MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION, THE DEPARTMENT OF 
   VETERANS AFFAIRS, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING 
               SEPTEMBER 30, 2010, AND FOR OTHER PURPOSES

                               __________

                         Department of Defense
                     Department of Veterans Affairs

                               __________

         Printed for the use of the Committee on Appropriations


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

                               __________



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                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
ROBERT C. BYRD, West Virginia        THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 JUDD GREGG, New Hampshire
PATTY MURRAY, Washington             ROBERT F. BENNETT, Utah
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
DIANNE FEINSTEIN, California         SAM BROWNBACK, Kansas
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota            SUSAN COLLINS, Maine
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
FRANK R. LAUTENBERG, New Jersey
BEN NELSON, Nebraska
MARK PRYOR, Arkansas
JON TESTER, Montana
ARLEN SPECTER, Pennsylvania

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

Subcommittee on Military Construction and Veterans Affairs, and Related 
                                Agencies

                  TIM JOHNSON, South Dakota, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
ROBERT C. BYRD, West Virginia        MITCH McCONNELL, Kentucky
PATTY MURRAY, Washington             SUSAN COLLINS, Maine
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
BEN NELSON, Nebraska                 THAD COCHRAN, Mississippi
MARK PRYOR, Arkansas                   (ex officio)

                           Professional Staff

                            Christina Evans
                             Chad Schulken
                          Andrew Vanlandingham
                       Dennis Balkham (Minority)
                         Ben Hammond (Minority)

                         Administrative Support

                             Renan Snowden
                         Katie Batte (Minority)


                            C O N T E N T S

                              ----------                              

                         Tuesday, May 12, 2009

                                                                   Page

Department of Defense:
    Department of the Army.......................................     1
    Department of the Air Force..................................    25

                         Tuesday, May 19, 2009

Department of Defense............................................    47
    Department of the Navy.......................................    85

                        Thursday, June 11, 2009

Department of Veterans Affairs...................................   107


   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2010

                              ----------                              


                         TUESDAY, MAY 12, 2009

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:38 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Pryor, Hutchison, and Murkowski.

                         DEPARTMENT OF DEFENSE

                         Department of the Army

STATEMENT OF LOUIS JEROME HANSEN, DEPUTY ASSISTANT, 
            SECRETARY OF THE ARMY (STRATEGIC 
            INFRASTRUCTURE) AND SENIOR OFFICIAL 
            PERFORMING DUTIES OF ASSISTANT SECRETARY OF 
            THE ARMY (INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
        JOSEPH F. CALCARA, DEPUTY ASSISTANT, SECRETARY OF THE ARMY 
            (INSTALLATIONS AND HOUSING)
        BRIGADIER GENERAL JAMES C. BOOZER, SR., DIRECTOR, OPERATIONS, 
            OFFICE OF THE ASSISTANT CHIEF OF STAFF FOR INSTALLATION 
            MANAGEMENT
        MAJOR GENERAL RAYMOND W. CARPENTER, ACTING DEPUTY DIRECTOR, 
            ARMY NATIONAL GUARD
        BRIGADIER GENERAL JULIA A. KRAUS, DEPUTY CHIEF, U.S. ARMY 
            RESERVE, DEPUTY COMMANDER FOR MANAGEMENT, RESOURCES, AND 
            SUPPORT


                opening statement of senator tim johnson


    Senator Johnson. Good afternoon. This hearing will come to 
order.
    I welcome everyone to today's hearing. We are here to 
discuss the President's fiscal year 2010 budget request for 
military construction and family housing.
    We will hear from two panels of witnesses representing the 
Army and the Air Force and the Reserve components. The first 
panel will be the Army.
    Our procedure is to have opening statements by the chairman 
and ranking member, followed by an opening statement from our 
witnesses. In addition to the oral statements, all prepared 
statements from our witnesses will be entered into the record.
    I request that our members limit their questions to 6-
minute rounds.
    Secretary Hansen, Secretary Calcara, General Boozer, 
General Carpenter, and General Kraus, thank you for coming 
today. We look forward to your testimony.
    The Army's fiscal year 2010 budget request for active and 
Reserve military construction and family housing is $5.25 
billion, which is a 41 percent decrease from the fiscal year 
2009 enacted level. The active component is down 24 percent 
from the fiscal year 2009 enacted level, and the Army Guard is 
down 54 percent. Only the Army Reserve is showing an increase. 
I hope that you will address this trend and the reasons for it 
in your opening statement.
    I am also interested in what impact the decision to reduce 
the Army's brigade combat team structure from 48 to 45 BCTs 
will have on the military construction, in particular on the 
stationing of Army forces in Europe and the global posture 
structure overall.
    The Army continues to face a number of budget pressures due 
to wars in Iraq and Afghanistan, the execution of the BRAC 
program, and the ``grow the force'' initiative. It is very 
important that adequate resources are available for the 
military construction projects needed to support these efforts, 
and I look forward to your assessment of the fiscal year 2010 
budget request.
    I now turn to my ranking member, Senator Hutchison, for her 
opening remarks.


               statement of senator kay bailey hutchison


    Senator Hutchison. Well, thank you. Thank you very much, 
Mr. Chairman.
    I appreciate your holding the hearing, and I thank all of 
the witnesses for coming and sharing the priorities that you 
have with us.
    The fiscal year 2010 budget request contains $7.5 billion 
for implementing BRAC construction. That is a 15 percent 
decrease from the fiscal year 2009 level. I understand that 
there is a request for $1.4 billion for overseas contingency 
operations that will be handled separately. So while we don't 
have all of your justifications yet for that, we will have to 
decide how that goes into this bill.
    But I hope today's discussions with the Army and the Air 
Force address how the Department intends to complete all of the 
BRAC-recommended actions before the statutory deadline of 
September 30, 2011. Since the largest portion of the BRAC 
request goes to the Army, I hope Mr. Calcara will be prepared 
to speak to that.
    Concerning the fiscal year 2010 budget request, I am 
concerned about the Army's investment in infrastructure in the 
United States. The active duty construction request is down 24 
percent from last year's enacted level, and the Guard request 
is down 46 percent. I am pleased to see that the Reserve 
component has requested an increase of 33 percent, but overall, 
the Army's $4 billion request is a 23 percent decrease. So I 
will look forward to Mr. Calcara discussing that.
    When we were considering the stimulus bill several months 
ago, I thought that we should be increasing our military 
construction and moving it up because, of course, we know that 
there is a FYDP, and if we push that up, it is money that we 
were going to spend anyway. We would just be creating jobs more 
quickly for Americans. That amendment did not see the light of 
day.
    Our U.S. installations at places like Fort Hood, Fort 
Bliss, and Fort Bragg offer large maneuver areas, automated 
ranges, modern simulator training, and few restrictions on 
nighttime flying and training. As a result, soldiers trained in 
the United States and deployed overseas are better prepared to 
fight on day one of a conflict than those stationed overseas, 
where our forces must contend with onerous training 
restrictions.
    Today, with our modern strategic deployment capabilities 
and the use of airlift and roll-on/roll-off ships, we can often 
project power from the United States faster than an overseas-
based unit. The Overseas Basing Commission recommendations that 
our committee drafted and were enacted, in those, the BRAC 
recommendations and the global defense posture that focuses on 
expanded allied roles and partnerships dictate that it is in 
our national interest to relocate more of our soldiers back to 
the United States and fulfill overseas training and contingency 
missions by deploying U.S.-based troops where needed.
    Stationing our troops in the United States provides more 
operational freedom of action, better training, and better 
family support than would be possible otherwise.
    I must also point out that our current military has more 
citizen soldiers than we have seen in a great many years. I am 
very concerned about the overall trend in military construction 
for our Guard and Reserve components.
    I would like to mention again this year the Army's new 
modular force plan, which will reorganize units into brigade 
combat teams. I understand this is about 80 percent complete 
now. The new plan calls for five new BCTs to be stationed at 
Fort Bliss, Fort Stewart, and Fort Carson.
    Now we are told that a European commander wants to keep two 
BCTs in Europe for up to 2 years longer than the Army 
originally planned. I have discussed this with General Casey 
and Secretary Gates, and I hope that Assistant Secretary 
Calcara will tell us how the plans for moving the infantry 
divisions from Europe to the United States are going.
    On the Air Force side, I look forward to the discussion 
with Assistant Secretary Ferguson concerning the construction 
program there as well. The Air Force's active duty construction 
request is 10 percent below last year's enacted level. The 
Guard component is requesting 56 percent less than last year, 
and the Reserve component 26 percent less.
    I hope we don't lose sight of the fact that our airmen must 
have facilities and family support infrastructure from which to 
work and live that is commensurate with their dedication.
    The Secretary of Defense outlined the four pillars of the 
Air Force's budget strategy--people, readiness, infrastructure, 
and modernization. I look forward to Secretary Ferguson 
discussing these priorities and how the Air Force can achieve 
them while taking such a risk in infrastructure.
    I understand the Air Force intends to downsize its total 
infrastructure budget and physical plant by 20 percent, the 20/
20 by 2020 plan, and I look forward to hearing more about this 
in an era of increased operational tempo.
    Joint basing is another subject I am interested in. As 
everyone knows, the BRAC provides--the former BRAC provided 12 
test joint bases. I hope the Air Force will speak today on how 
it proposes to operate a joint base and handle the real 
property issues on it since, in the present BRAC, the Air Force 
will be the lead in 6 of the 12 joint bases.


                           prepared statement


    I am particularly interested in how the Air Force will 
operate Joint Base San Antonio as it assumes the responsibility 
for Lackland, Randolph, and the Army base Fort Sam Houston.
    So thank you all for coming, and we look forward to your 
testimony.
    [The statement follows:]

           Prepared Statement of Senator Kay Bailey Hutchison

    Thank you, Mr. Chairman. I appreciate you holding this hearing 
today and am pleased to welcome representatives of the Army and the Air 
Force before the Subcommittee as we examine the President's fiscal year 
2010 budget request for military construction, family housing, and Base 
Realignment and Closure actions for the Department of the Army and the 
Department of the Air Force.
    The panel representing the Department of Defense will appear at our 
next hearing, and we'll discuss Department-Wide MILCON issues at that 
time. But for now I would just like to point out that the overall 
Department of Defense's military construction program, including 
military family housing and BRAC, is only $22.9 billion, an 18 percent 
decrease from the fiscal year 2009 enacted level. The fiscal year 2010 
budget request only contains $7.5 billion for implementing BRAC 
construction actions, a 15 percent decrease from the fiscal year 2009 
enacted level. Plus, I understand there is a request for $1.4 billion 
for overseas contingency operations that will be handled separately. We 
have not received all of the justification material yet and so the 
Committee will decide exactly how we will include this in our bill. I 
hope today's discussions with the Army and Air Force addresses how the 
Department intends to complete all of the BRAC recommended actions 
before the statutory deadline of September 30, 2011. Since the largest 
portion of the BRAC request will go to the Army, I hope Mr. Calcara 
will speak to it today.
    Concerning the fiscal year 2010 budget request before us today, for 
the base budget, I am concerned about the Army's investment in 
infrastructure in the United States. The active duty construction 
request is down 24 percent from last year's enacted level and the Guard 
request is down 46 percent. I am pleased to see that the Reserve 
component has requested an increase of 33 percent. But overall, the 
Army's $4 billion request is a 23 percent decrease. I look forward to 
Mr. Calcara's comments.
    As I said when we were considering the stimulus bill several months 
ago, we should be increasing our construction in the United States, not 
decreasing it. More military construction in the United States will 
enhance the quality of life for our soldiers, sailors and airmen, and 
it will provide much needed jobs for Americans. Our U.S. installations 
at places like Fort Hood, Fort Bliss and Fort Bragg offer large 
maneuver areas, automated ranges, modern simulator training and few 
restrictions on night time flying and training. As a result, soldiers 
trained in the United States and deployed overseas are better prepared 
to fight on Day One of a conflict than those stationed overseas where 
our forces must contend with onerous training restrictions. Today, with 
our modern strategic deployment capabilities and with the use of 
airlift and roll-on, roll-off ships, we can often project power from 
the United States faster than from overseas based units.
    For these reasons, and in order to provide military families with 
greater stability, the Pentagon made the decision several years ago 
that it is better to bring our troops home and station them in the 
United States whenever possible. In order to do that we must be 
committed to providing them with the quality infrastructure these brave 
men and women deserve.
    The Overseas Basing Commission recommendations, the BRAC 
recommendations and a Global Defense Posture that focuses on expanded 
Allied roles and partnerships dictate that it is in our national 
interest to relocate more of our soldiers back to the United States and 
fulfill overseas training and contingency missions by deploying U.S. 
based troops where needed. This is an admirable plan--one our service 
members, their families and our citizens are counting on. Stationing 
our troops in the United States will provide more operational freedom 
of action, better training, and better family support than would be 
possible otherwise. It will produce a stronger, more deployable, and 
more efficient Department of Defense.
    I must also point out that our current military has more citizen-
soldiers than we have seen in a great many years. I am very concerned 
about the overall trend in military construction for our Guard and 
Reserve components. These brave citizen-soldiers are making huge 
contributions to the Global War on Terror and I am keenly interested in 
seeing Guard and Reserve MILCON funding improve. Congress has always 
provided excellent support to the Guard and Reserve, but that should 
not provide an excuse for DOD to shortchange them in the budget 
process.
    I would like to mention again this year the Army's new Modular 
Force Plan which will reorganize units into Brigade Combat Teams 
(BCTs). I understand this transformation is nearly 80 percent complete 
now. The new plan calls for 5 new BCTs to be stationed at Fort Bliss, 
Texas; Fort Stewart, Georgia; and Fort Carson, Colorado. Now I 
understand that the European Commander (EUCOM) wants to keep 2 BCTs in 
Europe for up to 2 years longer than the Army originally planned. I 
have discussed this issue with General Casey and Secretary Gates and I 
hope Assistant Secretary Calcara will tell us how the plans for moving 
the infantry divisions from Europe to the United States are going.
    My State of Texas is the home for a large part of the Army. I am 
very pleased with the operational and infrastructure improvements to 
Fort Bliss, Fort Hood, and Fort Sam Houston, three very important 
installations in our national military preparedness. I am encouraged by 
the Army's emphasis on family support facilities at these and other 
bases around the country. I have said before, we have to take care of 
the soldiers and their families in order to retain these highly trained 
men and women.
    I look forward to the discussion with Assistant Secretary Ferguson 
concerning the Department of the Air Force's construction program as 
well. The Air Force's active duty construction request is 10 percent 
below last year's enacted level. The Guard component is requesting 56 
percent less than last year and the Reserve component is requesting 26 
percent less. I know the Air Force has historically been willing to 
risk infrastructure in order to fund modernization, but I hope we don't 
lose sight of the fact that our airmen must have the facilities and 
family support infrastructure from which to work and live that is 
commensurate with their dedication to our country.
    The Secretary of Defense outlined the four pillars of the Air 
Force's budget strategy as People, Readiness, Infrastructure and 
Modernization, in that order. I look forward to Assistant Secretary 
Ferguson discussing these priorities and how the Air Force can achieve 
them while taking such a risk in infrastructure. I understand the Air 
Force intends to downsize its total infrastructure budget and physical 
plant size by 20 percent, the ``20/20 by 2020'' plan, and I look 
forward to hearing more about how this will work in an era of increased 
operational tempo.
    Again, I am proud to say my home state of Texas has always been 
home to more Air Force personnel than any other State, just as we have 
always been the largest Army state. Starting with Air Force basic 
training at Lackland AFB, technical and NATO pilot training at Sheppard 
AFB, NATO undergraduate pilot training at Laughlin AFB, and instructor 
pilot training at Randolph AFB; and continuing with operational bases 
at Dyess and Goodfellow AFBs; there is quite a lot of infrastructure 
needs in just those bases alone. In addition we are currently prepared 
in San Antonio with the initial secure infrastructure equipment should 
the Air Force announce the home of the new 24th Air Force cyber mission 
will be there.
    Joint Basing is another subject I am very interested in. As 
everyone knows I have been a very strong advocate of fully funding the 
BRAC process, and I know that the 12 test joint bases are a result of 
BRAC recommendations. I hope the Air Force will speak today on how it 
proposes to operate a joint base and handle the real property issues on 
it, since the Air Force will be the lead at 6 of the 12 joint bases. I 
am particularly interested in how the Air Force will operate Joint Base 
San Antonio as it assumes the responsibility for Lackland, Randolph and 
Fort Sam Houston.
    Mr. Chairman, again I want to express my appreciation to you for 
holding this hearing. We have a full slate of issues today and I look 
forward to discussing them as we begin this new appropriations cycle.

    Senator Johnson. Thank you, Senator Hutchison.
    General Boozer, proceed.
    General Boozer. Sir, I am more than prepared to go ahead 
and start with my opening comments.
    Senator Johnson. Secretary Hansen, please proceed.
    General Boozer. Okay. Thank you, sir.

                    STATEMENT OF LOUIS JEROME HANSEN

    Mr. Hansen. Thank you, Mr. Chairman.
    Mr. Chairman, Senator Hutchison, distinguished members of 
the subcommittee, I am Jerry Hansen, the designated senior 
official currently performing the duties of the Assistant 
Secretary of the Army for Installations and Environment. And it 
is my pleasure to appear before you today on behalf of the 
Secretary and the Army to discuss the Army's military 
construction, family housing, base realignment and closure 
budget request for fiscal year 2010.

  QUALITY OF LIFE FOR SOLDIERS AND THEIR FAMILIES AND THE ARMY BUDGET

    First, we thank you all for your continued support to our 
soldiers and families serving our Nation around the world. As 
you know, the Army's strength is its soldiers and the families 
and Army civilians who support them.
    We try, with your support, to ensure the quality of life we 
provide our soldiers and their families is on par with the 
quality of their service. Our budget requests represent minimum 
required levels which, if approved, will enable soldiers and 
their families to receive the facilities, care, and support 
they need to accomplish the monumental tasks we expect of them 
while preserving the all-volunteer force.
    Our Army continues its largest organizational change since 
World War II as we transform to brigade-centric modular force, 
grow our end strength, and restation one-third of the force 
through base realignment and closure and global defense posture 
realignment.
    The Army's fiscal year 2010 military construction and 
overseas contingency operations budget requests include $10.4 
billion for military construction, Army family housing, and 
BRAC, a combined amount.
    As stewards of our Nation's resources, the Army requires 
each military construction project to attain a LEED silver 
rating--LEED being leadership in energy and environment design 
rating of at least silver to reduce total lifecycle cost and 
improve the environment. The Army plans to spend a significant 
sum over the next 5 years to invest in green buildings, to use 
less water, and to achieve 30 percent more energy efficiency in 
the process.
    Fiscal year 2010 is our final year of BRAC construction. 
Full implementation of the BRAC 2005 recommendations will 
enable the Army to become a more capable expeditionary force as 
a member of the joint team, while enhancing the well being of 
our soldiers, civilians, and family members living and working 
and training in our installations.
    The Army's remaining BRAC 2005 construction projects are 
scheduled for award by no later than the first quarter of 
fiscal year 2010. This will enable the major movement of units 
and personnel planned for fiscal years 2010 and 2011, with 
expected completion by the mandated BRAC 2005 deadline.
    The Army remains committed to achieving BRAC 2005 law and 
is on track to do so. With full and timely funding, we 
anticipate no impacts to movement schedules, training, or 
readiness.
    However, we have moved into a period where our construction 
timeline flexibility is extremely limited. Cuts and delays in 
BRAC funding have caused significant difficulties as we have 
implemented BRAC projects in the past, and any significant 
delay in fiscal year 2010 MILCON funding would significantly 
challenge our ability to meet the September 2011 deadline.
    Finally, Mr. Chairman, on April 6, 2009, the Secretary of 
Defense issued guidance to stop the growth of Army BCTs, 
brigade combat teams, at 45 versus 48, as you have mentioned. 
We understand this decision has caused significant concern, and 
we recognize the impact to communities that have made proactive 
investments to accept new units and families.
    At this point, no decisions have been made as to which BCTs 
will be affected. But this decision and its associated impacts 
are being worked with urgency through an expedited Quadrennial 
Defense Review process, and we will work the details very 
closely with Congress as soon as the impacts to the military 
construction projects are known.
    I am accompanied today by Mr. Joe Calcara, the Deputy 
Assistant Secretary of the Army for Installations and Housing; 
Brigadier General Jim Boozer, Director of Operations, 
representing the Assistant Chief of Staff for Installation 
Management and the Installation Management Command; Major 
General Ray Carpenter, the Deputy Director of the Army National 
Guard; and Brigadier General Julia Kraus, Deputy Commander and 
Deputy Chief of the Army Reserve for Management, Resources, and 
Support.

                           PREPARED STATEMENT

    We thank you again for the opportunity to appear before you 
today and for your continued support for America's Army, and we 
look forward to hearing your questions following brief remarks 
by the other panel members.
    I will be followed by General Boozer, sir.
    [The statement follows:]

               Prepared Statement of Louis Jerome Hansen

                              introduction
    Mr. Chairman and members of the Subcommittee, it is a pleasure to 
appear before you to discuss the Army's Military Construction, Family 
Housing, and Base Realignment and Closure budget requests for fiscal 
year 2010. Our requests are crucial to the success of the Army's 
strategic imperatives to Sustain, Prepare, Reset, and Transform the 
force. We appreciate the opportunity to report on them and respond to 
your questions. We would like to start by thanking you for your support 
to our Soldiers and their Families serving our Nation around the world. 
They are and will continue to be the centerpiece of our Army, and their 
ability to perform their missions successfully depends upon the staunch 
support of the Congress.
    The Army's strength is its Soldiers--and the Families and Army 
Civilians who support them. With your continuing support, we will 
assure that the quality of life we afford our Soldiers and Families is 
commensurate with the quality of their service. Our budget requests 
have been vetted to ensure they reflect the minimum requirement to 
maintain the All-Volunteer Force and ensure Soldiers and their Families 
receive the facilities, care, and support they need to accomplish their 
missions.
                                overview
         rebalancing the force in an era of persistent conflict
    Installations are the home of combat power and a critical component 
of the Nation's force generating and force projecting capability. Your 
Army is working hard to deliver cost-effective, safe, and 
environmentally sound capabilities and capacities to support the 
national defense mission.
    Our Nation has been at war for over 7 years. Our Army continues to 
lead the war efforts in Afghanistan and Iraq, as well as in defense of 
the homeland and in support of civil authorities in responding to 
domestic emergencies. Over time, these operations have expanded in 
scope and duration, stressing our All-Volunteer Force and straining our 
ability to maintain strategic depth. During this period, the Congress 
has responded to the Army's requests for resources, and that commitment 
to our Soldiers, their Families, and Civilians is deeply appreciated. 
Continued timely and predictable funding is critical as the Army 
continues to fight the wars in Iraq and Afghanistan, meet other 
operational demands, sustain our All-Volunteer Force, and prepare for 
future threats to the Nation.
    Our Army continues its largest organizational change since World 
War II, as it transforms to a Brigade centric modular force and grows 
the force to achieve an the Active Component of 547,400, a National 
Guard of 358,200, and an Army Reserve of 206,000 men and women. At the 
same time, we are restationing about one-third of the force through a 
combination of Base Closure and Realignment and Global Defense Posture 
Realignment actions. All of these initiatives have corresponding 
military construction requirements.
    The details of the Army's fiscal year 2010 request follow:

----------------------------------------------------------------------------------------------------------------
                                                                             Authorization of
          Military Construction Appropriation              Authorization      Appropriations     Appropriation
                                                              Request            Request            Request
----------------------------------------------------------------------------------------------------------------
Military Construction Army (MCA).......................     $3,116,350,000     $3,660,779,000     $3,660,779,000
Military Construction Army National Guard (MCNG).......            ( \1\ )        426,491,000        426,491,000
Military Construction Army Reserve (MCAR)..............            ( \1\ )        374,862,000        374,862,000
Army Family Housing Construction (AFHC)................        241,236,000        273,236,000        273,236,000
Army Family Housing Operations (AFHO)..................        523,418,000        523,418,000        523,418,000
BRAC 95 (BCA)..........................................         98,723,000         98,723,000         98,723,000
BRAC 2005 (BCA)........................................      4,081,037,000      4,081,037,000      4,081,037,000
Overseas Contingency Operations........................        923,900,000        923,900,000        923,900,000
                                                        --------------------------------------------------------
      TOTAL............................................      8,984,664,000     10,362,446,000     10,362,446,000
----------------------------------------------------------------------------------------------------------------
\1\ Not available.

    The Army's fiscal year 2010 Military Construction and Overseas 
Contingency Operations budget requests include $10.4 billion for 
Military Construction, Army Family Housing, and BRAC appropriations and 
associated new authorizations.
                        army modular force (amf)
    The Army continues to reorganize the Active and Reserve components 
into standardized modular organizations, increasing the number of 
Brigade Combat Teams (BCTs) and support Brigades to meet operational 
requirements and create a more deployable, versatile and tailorable 
force. The Army strategy is to use existing facility assets where 
feasible and program projects when not. The fiscal year 2010 request of 
$589 million will provide permanent facilities construction to support 
conversion of existing BCTs to new modern BCTs at Forts Wainwright, 
Carson, Lewis, and Bragg.
                          grow the army (gta)
    On April 6, 2009, the Secretary of Defense issued guidance to stop 
growth of Army BCTs at 45 versus 48. We understand this decision has 
caused some understandable concern in places that expected to receive 
the three additional BCTs, and we recognize the impact this decision 
could have on communities that have made significant investments to 
accept new units. We are working the details with urgency, but at this 
point, no final decisions have been made as to which BCTs will be 
affected. The Army is conducting a thorough analysis with the goal of 
balancing our force mix for the current fight while setting conditions 
to meet the future strategic environment. We are leveraging the ongoing 
Quadrennial Defense Review process and our force mix analysis to 
determine the proper balance. We will keep the Congress advised of our 
progress.
    In the meantime, it is crucial that the Army maintain currently 
planned fiscal year 2009 construction projects and fiscal year 2010 
construction, pending the analysis and decision by Army Senior Leaders, 
and recognizing that the vast majority of the facilities at Army 
installations are legacy systems still requiring modernization or 
replacement. Construction projects play an essential role in supporting 
our end strength growth to 547,400 as well as transforming our 
installations to support organizational changes. The fiscal year 2010 
requirement for BCTs is $404 million. Other Grow the Army facility 
support requirements, such as projects to support the combat support/
combat service support units, training base, quality of life, and 
support to the Army National Guard and Army Reserve growth, in fiscal 
year 2010 total $1.07 billion.
               global defense posture realignment (gdpr)
    The Global Defense Posture Realignment initiative ensures Army 
forces are properly positioned worldwide to support out National 
Military Strategy and to support the mission in Afghanistan. GDPR will 
relocate over 41,000 Soldiers and their Families from Europe and Korea 
to the United States by 2013. Over time, it will build a BCT Complex 
and support facilities at White Sands Missile Range, New Mexico, and 
operational, training, and support facilities at Fort Benning, Fort 
Bliss, Fort Riley, Schofield Barracks, and Camp Humphreys. As part of 
the fiscal year 2010 program, the Army requires $252 million to 
construct facilities in Bagram, Afghanistan and a warehouse in Kuwait. 
The total GDPR request is $524 million.
                  base realignment and closure (brac)
    The Army is requesting $4,081,037,000 for BRAC 2005, which is 
critical to the success of the Army's BRAC 2005 initiatives, and 
$98,723,000 for legacy BRAC to sustain vital, ongoing programs. BRAC 
2005 is carefully integrated with the Defense and Army programs of Grow 
the Army, GDPR, and Army Modular Force. Collectively, these initiatives 
allow the Army to focus its resources on installations that provide the 
best military value, supporting improved responsiveness and readiness 
of units. The elimination of Cold War-era infrastructure and the 
implementation of modern technology to consolidate activities allow the 
Army to better focus on its core warfighting mission. These initiatives 
are a massive undertaking, requiring the synchronization of base 
closures, realignments, military construction and renovation, unit 
activations and deactivations, and the flow of forces to and from 
current global commitments. Results will yield substantial savings over 
time, while positioning forces, logistics activities, and power 
projection platforms to respond efficiently and effectively to the 
needs of the Nation.
    Under BRAC 2005, the Army will close 12 Active Component 
installations, 1 Army Reserve installation, 387 National Guard 
Readiness and Army Reserve Centers, and 8 leased facilities. BRAC 2005 
realigns 53 installations and/or functions and establishes Training 
Centers of Excellence, Joint Bases, a Human Resources Center of 
Excellence, and Joint Technical and Research facilities. To accommodate 
the units relocating from the closing National Guard Readiness and Army 
Reserve Centers, BRAC 2005 creates 125 multi-component Armed Forces 
Reserve Centers and realigns U.S. Army Reserve command and control 
structure.
    The over 1,100 discrete actions required for the Army to 
successfully implement BRAC 2005 are far more extensive than all four 
previous BRAC rounds combined and are expected to create significant 
recurring annual savings. BRAC 2005 will enable the Army to become a 
more capable expeditionary force as a member of the Joint team while 
enhancing the well-being of our Soldiers, Civilians, and Family members 
living, working, and training on our installations.
                   brac 2005 implementation strategy
    All of our BRAC 2005 construction projects are planned to be 
awarded by the first quarter of fiscal year 2010. This will enable the 
major movement of units and personnel in fiscal years 2010 and 2011, 
with expected completion by the mandated BRAC 2005 deadline. The Army 
remains committed to achieving BRAC 2005 Law and is on track do so. 
With full and timely funding, there will be no impacts to movement 
schedules, training, or readiness. Fiscal year 2010 is our fifth and 
final year of BRAC construction. We have moved into a period where our 
construction timeline flexibility is exhausted. We cannot overstate the 
difficulties that cuts or delays in BRAC funding pose to the Army as we 
implement BRAC construction projects. If the Army program is not fully 
funded by October 2009, we will be significantly challenged to execute 
BRAC as intended.
                   brac 2005 fiscal year 2010 budget
    The Army's fiscal year 2010 budget request will continue to fund 
both BRAC and GDPR actions necessary to comply with BRAC 2005 Law. The 
Army plans to award and begin construction of 80 military construction 
projects, plus planning and design for fiscal year 2010 projects. This 
is estimated to cost $2.5 billion and includes five additional GDPR 
projects, 37 Army National Guard and Army Reserve projects, and an 
additional 38 Active Component projects.
    The BRAC budget request will also fund furnishings for BRAC 
projects awarded in fiscal year 2006, 2007, 2008, and 2009 as the 
buildings reach completion and occupancy. The request also funds 
movement of personnel, ammunition, and equipment associated with BRAC 
Commission Recommendations.
    In fiscal year 2010, the Army will continue environmental closure 
and cleanup actions at BRAC properties. These activities will continue 
efforts previously ongoing under the Army Installation restoration 
program and will ultimately support future property transfer actions. 
The budget request for environmental programs is $147.7 million, which 
includes munitions and explosives of concern and hazardous and toxic 
waste restoration activities.
                               prior brac
    Since Congress established the first Defense Base Closure and 
Realignment Commission in 1988 and then authorized the subsequent 
rounds in 1990, DOD has successfully executed four rounds of base 
closures to reduce and align the military's infrastructure to the 
current security environment and force structure. As a result, the Army 
estimates approximately $12.6 billion in savings through 2008--nearly 
$1 billion in recurring, annual savings from prior BRAC rounds.
    The Army is requesting $98.7 million in fiscal year 2010 for prior 
BRAC rounds ($5.3 million to fund caretaking operations and program 
management of remaining properties and $93.4 million for environmental 
restoration) to address environmental restoration efforts at 147 sites 
at 14 prior BRAC installations. To date, the Army has spent $2.95 
billion on the BRAC environmental program for installations impacted by 
the previous four BRAC rounds. We disposed of 181,345 acres (86 percent 
of the total acreage disposal requirement of 209,834 acres), with 
28,489 acres remaining.
         fiscal year 2010 overseas contingency operations (oco)
    This request supports the National Strategy for OCO. The request 
funds projects critical to the support of deployed war fighters, 
operational requirements for airfields, operational facilities, 
supplies, troop housing and infrastructure to ensure safe and efficient 
military operations in Afghanistan. A total of 74 projects that will 
fulfill the Department's immediate mission needs and urgent 
infrastructure requirements in theater are planned for a total of $828 
million.
                            army initiatives
    To improve the Army's facilities posture, we have undertaken 
specific initiatives or budget strategies to focus our resources on the 
most important areas--Range and Training Lands, Barracks, Family 
Housing, and Warrior in Transition Complexes.
    Range and Training Lands.--Ranges and training lands enable our 
Army to train and develop its full capabilities to ensure our Soldiers 
are fully prepared for the challenges they will face. Our Army Range 
and Training Land Strategy supports Army transformation and the Army's 
Sustainable Range Program. The Strategy identifies priorities for 
installations requiring resources to modernize ranges, mitigate 
encroachment, and acquire training land. The fiscal year 2010 request 
supports 25 projects, $178 million for Active Component training 
ranges.
    Barracks.--Providing safe, quality housing is a crucial commitment 
the Army has made to all of our Soldiers. We owe single Soldiers the 
same quality of housing that we provide married Soldiers. Modern 
barracks are shown to significantly increase morale, which positively 
impacts readiness and quality of life. The importance of providing 
quality housing for single Soldiers is paramount to success on the 
battlefield. The Army is in the 17th year of modernizing barracks to 
provide about 148,000 single enlisted permanent party Soldiers with 
quality living environments. Because of increased authorized strength, 
the requirements for barracks have increased in several locations, and 
for fiscal year 2010, a total of $711.5 million will be invested in 
3,592 new permanent party barracks spaces that will meet DOD's ``1+1'' 
or equivalent standard. These units provide two-Soldier suites, 
increased personal privacy, larger rooms with walk-in closets, new 
furnishings, adequate parking, landscaping, and unit administrative 
offices separated from the barracks. We are on track to fully fund this 
program by fiscal year 2013. The last inadequate permanent party spaces 
will be removed after the new barracks are occupied in fiscal year 
2015. For trainee barracks, the Army is requesting $535.9 million to 
build or upgrade 2,278 new spaces to standard. We are requesting funds 
to keep this program on schedule so we can eliminate all inadequate 
trainee barracks spaces, finishing funding with fiscal year 2015 and 
occupying the barracks in fiscal year 2017.
    Family Housing.--This year's budget continues our significant 
investment in our Soldiers and their Families by supporting our goal to 
continue funding to eliminate remaining inadequate housing and sustain 
housing at enduring overseas installations. The U.S. inadequate 
inventory has been funded to be eliminated by the end of fiscal year 
2007 through privatization, conventional military construction, 
demolition, divestiture of uneconomical or excess units, and reliance 
on off-post housing. For Families living off post, the budget for 
military personnel maintains the Basic Allowance for Housing that 
eliminates out-of-pocket expenses.
    Warrior In Transition.--The Army $1 billion budget for its Warrior 
in Transition (WT) Program funds military construction to facilitate 
command and control, primary care, and case management to establish a 
healing environment that promotes the timely return to the force or 
transition to civilian life. The fiscal year 2009 Overseas Contingency 
Operations requests $425 million in funding. The fiscal year 2009 
American Recovery and Reinvestment Act (ARRA) provided $100 million for 
two complexes and the fiscal year 2010 budget request will provide 13 
complexes for $503.5 million.
    Overseas Construction.--Included in this budget request is $437 
million in support of high-priority overseas projects. In Germany, we 
are requesting funds for barracks at Ansbach and Kleber Kaserne. In 
Korea, we are requesting funds to further our relocation of forces on 
the peninsula. This action is consistent with the Land Partnership Plan 
agreements entered into by the United States and Republic of Korea 
Ministry of Defense. Two vehicle maintenance shops and a Fire Station 
are included. Our request for funds in Italy continues construction for 
a BCT. We are also including Training Aids Facilities in Japan at Camp 
Zama and Okinawa. Additionally, approximately $678 million of our 
fiscal year 2009 Overseas Contingency Operations request will support 
military construction projects in Afghanistan for troop housing, 
airfield and operational facilities, infrastructure and utility 
systems, fuel handling and storage, and roads.
    Other Support Programs.--The fiscal year 2010 budget includes $153 
million for planning and design. As executive agent, the Army also 
provides oversight of design and construction for projects funded by 
host nations. The fiscal year 2010 budget requests $25 million for 
oversight of host nation funded construction for all Services in Japan, 
Korea, and Europe.
    Incremental Funding.--We are requesting the third increment of 
funding, $55.4 million, for the previously approved, incrementally 
funded, SOUTHCOM Headquarters at Miami-Doral, Florida. In addition, we 
are requesting the fourth and final increment of funding, $102 million, 
for the Brigade Complex at Fort Lewis, Washington. The budget also 
includes $23.5 million for a Brigade Complex-Operations support 
facility and $22.5 million for a Brigade Complex-Barracks/Community, 
both projects at Dal Molin, Italy. Finally, we are requesting the 
second increments for the Brigade Complexes at Fort Carson $60 million 
and Fort Stewart $80 million.
    The budget request also contains $23 million for unspecified minor 
construction to address unforeseen critical needs or emergent mission 
requirements that cannot wait for the normal programming cycle.
               military construction, army national guard
    The Army National Guard's fiscal year 2010 Military Construction 
request for $426,491,000 (for appropriation and authorization of 
appropriations) is focused on Transformation/Army Modular Force, 
Mission and Training, Grow the Army, planning and design, and 
unspecified minor military construction
    Transformation.--In fiscal year 2010, the Army National Guard is 
requesting $158.2 million for six projects in support of our modern 
missions. There are three aviation projects to provide facilities for 
modernized aircraft and changed unit structure. Also in support of the 
Modular Force initiative, we are asking for two Readiness Centers and 
one maintenance facility.
    Mission and Training.--Our budget request also includes $154 
million for 10 projects, which will support the preparation of our 
forces. These funds will provide the facilities our Soldiers require as 
they train, mobilize, and deploy. Included are two training facilities, 
six Range projects, and two Readiness/Armed Forces Reserve Centers.
    Grow the Army.--Under the category of Grow the Army, we are 
requesting $80 million for five Readiness Centers to improve the Army 
National Guard's ability to deal with the continued high levels of 
deployment.
    Other Support Programs.--The fiscal year 2010 Army National Guard 
budget also contains $24 million for planning and design of future 
projects and $10.3 million for unspecified minor military construction 
to address unforeseen critical needs or emergent mission requirements 
that cannot wait for the normal programming cycle.
                  military construction, army reserve
    The Army Reserve fiscal year 2010 Military Construction request for 
$374,862,000 (for appropriation and authorization of appropriations) is 
for Preparation, Transformation, other support, and unspecified 
programs.
    Mission and Training Projects. In fiscal year 2010, the Army 
Reserve will invest $45 million to prepare our Soldiers for success in 
current operations. Included in the mission and training projects is an 
Armed Forces Reserve Center and a Combined Arms Collective Training 
facility, which will be available for joint use by all Army components 
and military services.
    Grow The Army Projects.--The Army Reserve transformation from a 
strategic reserve to an operational force includes converting 16,000 
authorizations from generating force structure to operational force 
structure from fiscal years 2009 through 2013. In fiscal year 2010, the 
Army Reserve will construct 19 Reserve Operations Complexes in eleven 
states and the Commonwealth of Puerto Rico, with an investment of $304 
million to support the transformation. These projects will provide 
operations, maintenance, and storage facilities for over 6,000 Soldiers 
in 56 newly activating combat support and combat service support units 
and detachments.
    Other Unspecified Programs.--The fiscal year 2010 Army Reserve 
budget request includes $22.3 million for planning and design for 
future year projects and $3.6 million for unspecified minor military 
construction to address unforeseen critical needs or emergent mission 
requirements that cannot wait for the normal programming cycle.
                army family housing construction (afhc)
    The Army's fiscal year 2010 Family housing construction request is 
$273,236,000 for authorization, authorization of appropriation, and 
appropriation.
    The fiscal year 2010 new construction program uses traditional 
military construction to provide 38 new houses for Families with an $18 
million replacement project at Baumholder, Germany. The Army also 
requests $32 million to fund the final increment for three projects at 
Wiesbaden, Germany, to finish replacement housing that was fully 
authorized in fiscal year 2009. These projects will result in 
completing 250 homes for Army Families.
    The Construction Improvements Program is an integral part of our 
Family housing revitalization and privatization programs. In fiscal 
year 2010, we are requesting $161.4 million to increase scope of these 
existing privatization projects: 334 homes at Fort Knox, Kentucky; 176 
homes at Fort Wainwright, Alaska; 144 homes at Fort Polk, Louisiana; 90 
homes at Fort Irwin, California; and, 78 homes at Fort Sill, Oklahoma. 
The Improvements program also provides $11.9 million for equity 
contributions for 11 homes at Fort Bragg, North Carolina, and 8 homes 
at Fort Eustis, Virginia, that were required due to Base Realignment 
and Closure. Also, the fiscal year 2010 request supports $46 million 
for direct equity investment in support of the privatization of 1,242 
homes at Fort Richardson, Alaska, as part of the Joint Basing effort 
with Elmendorf Air Force Base.
    In fiscal year 2010, we are also requesting $3.9 million for 
planning and design for final design of fiscal year 2010 and 2011 
Family housing construction projects, as well as for housing studies 
and updating standards and criteria.
    Privatization.--Residential Communities Initiative (RCI), the 
Army's housing privatization program, continues to provide quality 
housing that Soldiers and their Families can proudly call home. The 
Army is leveraging appropriated funds and existing housing by engaging 
in 50-year partnerships with nationally recognized private real estate 
development, property management, and home builder firms to construct, 
renovate, repair, maintain, and operate housing communities.
    The RCI program will include 45 locations, with a projected end 
state of almost 88,000 homes--98 percent of the on-post Family housing 
inventory in the United States. At the end of fiscal year 2009, the 
Army will have privatized 44 locations, with an end state of over 
85,000 homes. Initial construction and renovation at these 44 
installations is estimated at $12 billion over a three to ten year 
development period, of which the Army will contribute about $2.0 
billion. Although most projects are in the early phases of their 
initial development, since 1999 through March 2009, our partners have 
constructed 18,769 new homes, and renovated 13,697 homes.
                 army family housing operations (afho)
    The Army's fiscal year 2010 Family Housing Operations request is 
$523,418,000 (for appropriation and authorization of appropriations). 
This account provides for annual operations, municipal-type services, 
furnishings, maintenance and repair, utilities, leased Family housing, 
demolition of surplus or uneconomical housing, and funds supporting 
management of the Military Housing Privatization Initiative. This 
request will support almost 17,000 Army-owned homes, both at home and 
in foreign areas. More than 9,000 residences will be leased and more 
than 80,000 privatized homes will be managed.
    Operations ($88.4 million).--The operations account includes four 
sub-accounts: management, services, furnishings, and a small 
miscellaneous account. All operations sub-accounts are considered 
``must pay accounts'' based on actual bills that must be paid to manage 
and operate Family housing.
    Utilities ($81.6 million).--The utilities account includes the 
costs of delivering heat, air conditioning, electricity, water, and 
wastewater support for Family housing units. The overall size of the 
utilities account is decreasing with the reduction in supported 
inventory.
    Maintenance and Repair ($115.9 million). The maintenance and repair 
account supports annual recurring projects to maintain and revitalize 
Family housing real property assets. Since most Family housing 
operational expenses are fixed, maintenance and repair is the account 
most affected by budget changes. Funding reductions result in slippage 
of maintenance projects that adversely impact Soldier and Family 
quality of life.
    Leasing ($205.7 million).--The leasing program provides another way 
of adequately housing our military Families. The fiscal year 2010 
budget includes funding for 9,036 housing units, including project 
requirements for 1,080 existing Section 2835 (``build-to-lease''--
formerly known as 801 leases), 1,828 temporary domestic leases in the 
U.S., and 6,128 leased Family housing units in foreign areas.
    Privatization ($31.8 million).--The privatization account provides 
operating funds for implementation and oversight of privatized military 
Family housing in the RCI program. RCI costs include selection of 
private sector partners, preparation of environmental studies and real 
estate surveys, and contracting of consultants. These funds support the 
preparation and execution of partnership agreements and development 
plans, and oversight to monitor compliance and performance of the 
privatized housing portfolio.
                     homeowners assistance program
    The Army is the DOD Executive Agent for the Homeowners Assistance 
Program (HAP); that is, the Army requests in its budget the funds 
needed by the DOD-wide program supporting all of the Services. In 
normal times, this program assists eligible military and civilian 
employee homeowners by providing some financial relief when they are 
not able to sell their homes under reasonable terms and conditions 
because of DOD announced closures, realignments, or reduction in 
operations when this action adversely affects the real estate market.
    The 2009 ARRA expanded HAP to provide benefits to: (1) seriously 
wounded Warriors in Transition (to include Coast Guard and DOD civilian 
employees) who relocate for medical treatment or medical retirement, 
from September 11, 2001 (No expiration date); (2) surviving spouses of 
fallen warriors and DOD and Coast Guard civilians killed while deployed 
in support of the Armed Forces, from September 11, 2001 (No expiration 
date); (3) BRAC 2005 impacted personnel assigned to relocating or 
closing organizations or installations, without proof that the DOD 
announcement caused markets to decline (Expires 2012, or an earlier 
date designated by the Secretary); (4) Service members with permanent 
change of station orders required to relocate during the home mortgage 
crisis (Expires 2012, or an earlier date designated by the Secretary). 
The ARRA expanded HAP is funded at $555 million.
    Excluding the ARRA expanded HAP, the fiscal year 2010 budget 
requests authorization of appropriations in the amount of $28.71 
million. Total program estimate for fiscal year 2010, excluding ARRA 
expansion, is $41.98M and will be funded with requested budget 
authority, revenue from sales of acquired properties, and prior year 
unobligated balances.
                       operation and maintenance
    The Army's fiscal year 2010 Operation and Maintenance budget 
includes $2.85 billion in funding for Sustainment, Restoration, and 
Modernization (S/RM) and $8.61 billion in funding for Base Operations 
Support (BOS). The S/RM and BOS accounts are inextricably linked with 
our military construction programs to successfully support our 
installations. The Army has centralized the management of its 
installations assets under the Installation Management Command to best 
utilize this funding. Centralized barracks management, also known as 
the First Sergeant's Barracks Initiative (FSBI), will standardize 
barracks management Army-wide, enhance single Soldier quality of life, 
reduce overall un-programmed single Soldier Basic Allowance for 
Housing, maximize barracks utilization, and reallocate Soldier time 
away from non-war fighting tasks. The FSBI provides top-quality 
oversight and management of daily barracks operations. The FSBI review 
committee completed review and validation of funding requirements for 
12 Installations. Implementing FSBI at these installations brings in 
about 55 percent of the Army barracks inventory.
                                summary
    Mr. Chairman, our fiscal year 2010 Military Construction and BRAC 
budget requests are balanced programs that support our Soldiers and 
their Families, Overseas Contingency Operations, Army transformation, 
readiness, and DOD installation strategy goals. We are proud to present 
this budget for your consideration because of what this budget will 
provide for our Army:
    Military Construction:
  --26 new Training Ranges/Facilities
  --$11 billion invested in Soldier/Family Readiness
  --$1.8 billion to Grow the Army
  --$524 million support the mission in Afghanistan
  --$828 million funds projects for Overseas Contingency Operations 
        mission in Afghanistan
  --Over 3,300 Soldiers training in 16 new or improved Readiness 
        Centers and Armed Forces Reserve Centers
  --20 New Army Reserve Operations Complexes
  --6,054 Soldiers get new Reserve Operations Complexes
  --Over 7,800 Soldiers training in nine new or improved Readiness 
        Centers and Armed Forces Reserve Centers
  --Six Ranges serving 166,000 men and women in our Armed Forces
    Base Realignment and Closure:
  --Statutory compliance by 2011 for BRAC
  --80 Military Construction projects
  --Planning & Design for fiscal year 2010--2010 Projects
  --Remaining NEPA for BRAC 2005 actions
  --Continued Environmental Restoration of 31,844 acres
    Base Operations Support:
  --Goal is to meet essential needs for all BOS programs: Base 
        Operations, Family, Environmental Quality, Force Protection, 
        Base Communications, and Audio/Visual.
    Sustainment/Restoration and Modernization:
  --Funds Sustainment at 90 percent of the OSD Facility Sustainment 
        model requirement.
    Our long-term strategies for installations will be accomplished 
through sustained and balanced funding, and with your support, we will 
continue to improve Soldier and Family quality of life, while remaining 
focused on Army and Defense transformation goals.
    In closing, we would like to thank you again for the opportunity to 
appear before you today and for your continued support for America's 
Army.

                  STATEMENT OF GENERAL JAMES C. BOOZER

    Senator Johnson. Thank you.
    General Boozer.
    General Boozer. Thank you, Mr. Chairman, Senator Hutchison, 
and distinguished members of the subcommittee.
    On behalf of the Army's senior leaders and the more than 1 
million soldiers that comprise our Army, I want to thank you 
for the opportunity to discuss the Army's fiscal year 2010 
military construction budget request. It is truly an honor to 
be here with you today to do that.
    I would like to extend our gratitude for this committee's 
support for our soldiers and programs over the years. Our brave 
men and women are performing their mission superbly, thanks to 
your continued support.
    Our $10.4 billion military construction request is crucial 
to the success of the Army's strategic imperatives to sustain, 
prepare, reset, and transform the force. Military construction 
plays a key role in each of these imperatives and is a key 
enabler in restoring balance and strategic flexibility in your 
Army.
    We are on track to achieve balance but need your continued 
support so we can sustain soldiers and their families, prepare 
soldiers for success in the current conflict, reset them when 
they return from combat, and transform them for an uncertain 
future.
    To do this, we must first sustain our soldiers and families 
by investing in quality housing and support programs, such as 
the Soldier-Family Action Plan. We have programs in place that 
will improve soldier and family programs and services, quality 
of healthcare, excellence in schools, youth services, and 
childcare, and expand education and employment opportunities 
for family members.
    We are committed to continuing to improve soldier and 
family quality of life to a level commensurate with their level 
of service and sacrifice to the Nation.
    We must also prepare our soldiers for success in the 
current contingency conflicts. To help achieve this goal, our 
fiscal year 2010 request includes $178 million for 25 new range 
projects, as well as $539 million for training barracks and 
$1.5 billion for Grow the Army military construction projects.
    The third imperative, reset, is about returning soldiers 
and equipment to conditions where they can unwind to prepare 
for future missions. The Army Medical Action Plan is one such 
program that incorporates care and services for wounded 
warriors and their families and provides world-class care to 
our warriors in transition for reintegration into the force or 
back to civilian life. We thank you for your support for this 
vital program as well.
    As part of the fourth imperative, transform, the creation 
of the Installation Management Command in October 2006 
continues our progress in centralized installation management 
and fosters more consistent, cost-effective, and accountable 
delivery of installation funding and services. We are well on 
our way to completing the largest transformation of the Army 
since World War II, and it is all being accomplished while in a 
conflict and with your committed support.
    To improve efficiency and effectiveness, we are reshaping 
installations through BRAC and global defense posture 
realignment while simultaneously converting to a modular force, 
growing the Army, and converting the Army Reserve components to 
an operational force. Our military construction request 
supports this intricately woven, tightly synchronized 
stationing plan.

                     MILITARY CONSTRUCTION PROJECTS

    I would like to reiterate Mr. Hansen's comments that we 
must receive full and timely BRAC funding in order to achieve 
the mandates of BRAC 2005 law. A delay in funding our $4 
billion BRAC request beyond October 2009 could place making the 
BRAC mandated September 15, 2011 deadline in jeopardy. Our 
flexibility over the years executing this program are all but 
gone.
    Finally, as Mr. Hansen has already stated, the Secretary of 
Defense's guidance to stop growth of Army BCTs at 45 versus 48 
is being thoroughly, deliberately, and expeditiously analyzed 
by the senior Army leadership. We will work this closely with 
this committee and your staffs. In fact, we meet with your 
staffs next week.
    The fiscal year 2009 and 2010 construction projects play an 
essential role in supporting our end strength of 547,000, as 
well as transforming our installations and facilities to 
support our modular design units. These ongoing investments 
will ensure soldiers and families have the modern facilities 
they deserve.
    In closing, our request for military construction, BRAC, 
family housing, and overseas contingency operations plays a 
critical role in allowing us to put the Army back in balance to 
sustain the current fight and confront the future.
    We thank Congress for its unwavering support of the Army's 
military construction programs over the years and ask for your 
continued support. Our goal is to have premier installations 
across the globe. Our soldiers and families deserve nothing 
less.
    Thank you. It is an absolute honor to be here with you 
today, and I look forward to your questions.

               STATEMENT OF GENERAL RAYMOND W. CARPENTER

    Senator Johnson. Thank you.
    Next is General Carpenter, a fellow South Dakotan. Please 
proceed.
    General Carpenter. Thank you, Mr. Chairman. It is great to 
see a fellow South Dakotan.
    And again, thank you for the opportunity to appear before 
you today to discuss the Army National Guard military 
construction budget request for fiscal year 2010.
    First, I must say thanks to this committee for its strong 
support of the National Guard in the past. Last year, the 
budget request for fiscal year 2009 asked for $539 million in 
Army National Guard military construction, which appropriated 
for 29 projects. The Congress provided that and more, actually 
appropriating for us an additional $197 million for 25 more 
projects. And we are profoundly grateful to this committee for 
that added support last year.
    Today, you have before you a budget request for fiscal year 
2010, which asks for $426 million to fund 21 projects in 18 
States. Those projects consist of readiness centers, ranges, 
Army aviation, fort facilities, training institutes, and 
maintenance shops. And we ask you to provide full funding for 
that request.

               ARMY NATIONAL GUARD MILITARY CONSTRUCTION

    The average age of Army National Guard Readiness Centers 
across our Nation is 41 years old, and 24 percent of those are 
over 70 years old. So the need for your continuing strong 
support is vital to the continued success of our Army National 
Guard.
    Moreover, in this time of economic trouble for our Nation, 
I would point out that the National Guard military construction 
funding is a uniquely effective means of stimulating local 
economies. Army National Guard facilities are not concentrated 
on large installations but are widely dispersed across America 
in more than 3,000 locations and communities.
    Finally, I would note that the Army National Guard 
Readiness Centers are very important parts of the community in 
which they are located and provide a day-to-day connection 
between the United States military and hometown America.
    Mr. Chairman, the Army National Guard is proud of its 
history, accomplishments, and service to our Nation. For the 
past 2 years, we have averaged in excess of 50,000 soldiers 
mobilized at any given time. And today, we are at 60,000 
soldiers mobilized, and those great citizen soldiers are a part 
of our Army National Guard and are on point for our Nation as 
we speak.
    The 21 projects that we have submitted are about people and 
readiness--training our soldiers, providing for their well 
being, and maintaining and sustaining our facilities and 
equipment to be ready for our Nation's call for State and local 
emergencies.
    I am grateful to be here today to represent those 366,000 
citizen soldiers, and I welcome your questions.
    I will be followed by General Kraus.

                  STATEMENT OF GENERAL JULIA A. KRAUS

    Senator Johnson. General Kraus.
    Chairman Johnson, Senator Hutchinson, distinguished members 
of the subcommittee; thank you for the invitation to appear 
before you today to discuss Army Reserve military construction. 
It is an honor to testify before you on behalf of Army Reserve 
soldiers, family members and civilians.
    In the midst of two ongoing wars and transformation efforts 
to grow, restation and modernize the Army, the Army Reserve is 
building new capability. In fiscal year 2010, we are requesting 
twenty one MCAR projects and will be involved in thirty five 
base realignment and closure (BRAC) projects.
    The Army Reserve fiscal year 2010 military construction 
request of $374,862,000 (for appropriation and authorization of 
appropriations) is for mission and training, grow the Army, 
other support, and unspecified programs.

                     MISSION AND TRAINING PROJECTS

    In fiscal year 2010, the Army Reserve will invest $45 
million to prepare our soldiers for success in current 
operations. Included in the mission and training projects is an 
Armed Forces Reserve Center and a Combined Arms Collective 
Training facility, which will be available for joint use by all 
Army components and military services.

                         GROW THE ARMY PROJECTS

    The fiscal year 2010 Army Reserve military construction 
request represents the second year of a 3 year plan to 
implement the transformation from a strategic reserve to an 
operational force. Nineteen Reserve operations complexes in 11 
States and the Commonwealth of Puerto Rico will be constructed, 
with an investment of $304 million, to support the 
transformation. This $304 million is 81 percent of the MILCON 
budget request. These projects will provide operations, 
maintenance, and storage facilities for over 6,000 Soldiers in 
56 newly activating combat service and combat service Support 
units and detachments.
    While the pace of construction is hectic and the resources 
committed are remarkable the Army Reserve has significant 
facility and infrastructure needs. We are working aggressively 
to address all our facilities and infrastructure requirements 
to ensure soldiers receive the best training and support 
possible and that we adequately support and maintain on-hand 
and inbound modular force equipment to ensure unit readiness.
    Thank you for your continued support for the men and women 
who serve in your Army Reserve and for the opportunity to brief 
the subcommittee on the state of Army Reserve military 
construction projects.
    This concludes my statement and I look forward to your 
questions. Thank you.

       HOMEOWNERS' ASSISTANCE PROGRAM (HAP) FOR MILITARY FAMILIES

    Senator Johnson. Thank you.
    Mr. Hansen, I am very interested in the Homeowners 
Assistance Program, or HAP. As you know, I added $555 million 
to the stimulus bill to extend homeowners' assistance to 
military families caught up in the mortgage crisis.
    Can you tell me about the status of implementing the 
expanded program, and what does the Army estimate that the 
total requirement will be to ensure that this assistance will 
be available to all qualified Army families?
    Mr. Calcara. Mr. Chairman, I will take that question. And I 
would like to thank you first for your leadership on that 
important program. I know you worked very hard, your staff, 
along with Ms. Evans, to help us get that in the ARRA program, 
and it is going to make a big difference for a lot of all 
members of the armed forces--not just the Army, but the Navy, 
the Marine Corps, the Air Force, and members of the Coast Guard 
as well.
    The Army is the executive agent for it, as you know. When 
we came in with plans to expand that authority, which goes back 
40 years, we had to scale the program to work within available 
resources. Over the last several weeks, we have had a cross-
functional team comprised of representatives of all the 
services shaping the program's entitlement structure. And we 
have finished that process and have drafted the final policy.
    Where we are now is because some of the benefits will be 
paid to nonmilitary members, such as surviving spouses and 
people who have retired, we need to get into the OMB rulemaking 
process. We are implementing that as we speak. We have had a 
meeting on it, I think, this week. We expect to get through 
rulemaking and start paying benefits in the latter part of 
June.
    We anticipate a tremendous response to this program and a 
lot of success, with at least 10,000 to 12,000 claims 
forecasted in the immediate future.
    Again, I thank you for your leadership on helping us get 
that program in place.

            ARMY NATIONAL GUARD MILITARY CONSTRUCTION BUDGET

    Senator Johnson. General Carpenter, the South Dakota Guard 
is in the process of constructing a joint forces headquarters 
in Rapid City. The Guard leadership in South Dakota has 
indicated a need for an additional $7.9 million to complete the 
project in this fiscal year.
    Could you give me an update on this project and the 
required funding? And did you need additional funding for 
fiscal year 2010?
    General Carpenter. Mr. Chairman, as you are well aware, the 
project was validated and initially funded in the military 
construction budget for the Army National Guard. We do have an 
additional request for $7 million based upon some additional 
requirements to that joint force headquarters project, which 
includes some additional units and some additional requirements 
that were not in the original 1390/91.
    We have reviewed that requirement and that request, and we 
found them to be valid and a requirement in terms of making 
that a complete project. So we expect that there would be some 
sort of funding to accommodate that.
    Senator Johnson. Mr. Hansen, over the past several years, 
Congress has provided funding to support the Army's Grow the 
Force initiative, including 48 brigade combat teams, or BCTs. 
Last month, the Secretary of Defense announced that the number 
of BCTs were to be stopped at 45.
    What impact will this have on the Army's military 
construction program, and will it have any impact in fiscal 
year 2010? What is the status of the Army's stationing plan in 
Europe, and when do you expect the Secretary to make a final 
decision on how many brigades will remain in Europe?
    Mr. Hansen. Yes, sir. With your permission, sir, General 
Boozer is geared to answer that one.
    General Boozer. Yes, thank you, Mr. Chairman.
    So, as you indicated, we all are aware of the Secretary of 
Defense's guidance on April 6 to stop growth of Army BCTs at 45 
versus 48, and we will reach the 45th brigade combat team in 
fiscal year 2010 when we stand up, activate 2d Brigade 1st 
Armored Division at Fort Bliss, Texas. That will get us to the 
45th brigade combat team.
    The Army's position concerning the Secretary's guidance is 
we currently want to maintain our construction projects for 
2009 and 2010 because it is both projects in 2009 and 2010 that 
construct facilities for those six Grow the Army brigades at 
Fort Carson, Fort Stewart, and Fort Bliss.
    As Mr. Hansen indicated in his opening comments, we are 
currently going through a very, very detailed analysis, a very 
deliberate analysis of the impacts and courses of action to how 
we would stop at 45 versus 48.
    We also know that in fiscal years 2012 and fiscal years 
2013, Mr. Chairman, as you mentioned, we are to bring those two 
brigades back from Germany--one in fiscal year 2012 to Fort 
Bliss, Texas, and one in fiscal year 2013 to White Sands 
Missile Range. Those two brigades, we are going to get informed 
by this accelerated Quadrennial Defense Review that is 
currently ongoing.
    The construction projects that we have planned in 2009 and 
fiscal year 2010 are critical, essential in supporting us in 
getting to our--and we have reached our end strength of 547,400 
soldiers that we are slightly above and have to bring that down 
to get back to our TAA.
    So these construction projects are critical in, one, 
providing facilities for our end strength. And so, our intent 
is to continue with those programs, maintain those programs, 
get informed by the QDR, get informed by the courses of action 
that we are working through now, and work this through.
    So we would ask for your patience and hope to be able to do 
this as quickly as possible. I wish I could give you a time. I 
know the Chief of Staff of the Army was engaged with Mr. 
Edwards in the HAC hearings, MILCON hearings last week. 
Certainly, we would have to have something done before the 
budget goes to the September conferences at the latest.

                            ARMY BCI GROWTH

    Senator Johnson. Thank you, General.
    Senator Hutchison.
    Senator Hutchison. I am not sure that I totally understood 
your answer, and I wanted to follow up on Senator Johnson's 
question. What effect will the stopping at 45 have on the 
statement of the commander at EUCOM--he is recommending that 
two of the brigades stay in Germany for 2 years longer.
    Are you saying that will not impact, that decision hasn't 
been made or that the stopping at 45 does not necessarily mean 
that the decision has been made that some would stay, that two 
would stay in Europe? If you could clarify for me?
    General Boozer. Yes, ma'am. And I am sorry for the 
confusion.
    The Army's position, one, is those two brigades will 
return, as I indicated, fiscal year 2012 and fiscal year 2013.
    Senator Hutchison. So the two----
    General Boozer. They are almost two separate issues.
    Senator Hutchison. Okay.
    General Boozer. The decision for the 45 is completely 
independent of the two brigades coming back from Germany. That 
issue, it will be reviewed during the QDR.
    Senator Hutchison. I understand. That is exactly the 
clarification I was looking for.
    So you are moving on schedule, as long as the MILCON stays 
on schedule, to move those troops as originally determined 
earlier in BRAC?
    General Boozer. Yes, ma'am.
    Senator Hutchison. Okay. And let me ask you also in the 
general BRAC arena if the budget that you have this year, plus 
last year, if you feel that you are on schedule for having all 
of the BRAC construction done within the September 2011 
timeframe?
    General Boozer. Yes, ma'am. I believe we are on schedule. 
We are on track. We are essentially halfway through the 
program. Over 180 projects of 326 are either complete or being 
constructed. That leaves us 146 projects remaining to execute.
    And our intent, with timely funding, is to advertise for 
projects during the fourth quarter of this year so that we can 
award them right at the start of first quarter 2010. But BRAC 
timeline we are on track now.
    Senator Hutchison. And do you feel like more money would 
help move anything further toward that deadline, or are you 
comfortable that we are on time and on budget?
    General Boozer. No, ma'am. I don't think additional funds 
would help at this point. It all has to do with capacity, and 
so I think we have maxed out capacity and maxed out funding for 
BRAC.
    Senator Hutchison. Thank you.

             EXPANSION OF RANGERS IN PINON CANYON, COLORADO

    Pinon Canyon, Mr. Hansen, as you know the Army has been 
trying to expand the ranges at Pinon Canyon, Colorado, for at 
least 2, maybe 3 years now but has been held up by 
environmental issues. And last year, this committee prohibited 
the Army from even advancing the environmental impact study to 
expand the ranges there. Actually, it was the full Senate that 
enacted that.
    So what is the option that the Army is looking at? Are you 
still going to push Pinon Canyon, or are you looking to expand 
ranges at other installations, seeing that the likelihood of 
expanding at Pinon Canyon is probably pretty slim?
    Mr. Hansen. Thank you, ma'am.
    The Army does not have the luxury of excess or surplus 
maneuver training land capacity at any of its installations, as 
you know. And we have legitimate needs for expanded training 
land to support the concentration of units in the United 
States, modular conversion to BCTs, training for operating 
environment, and continued environmental challenges to the 
Army's ability to fully access the land that it does currently 
own.
    And we do hope to continue to work in a cooperative fashion 
with the State of Colorado and local landowners, and it is 
hopeful we can arrive on a way ahead that meets the Army's need 
and also works for the landowners. We are seeking a win-win 
there, and we are certainly looking at other installations, 
too, and the decision on which three BCTs would be eliminated 
certainly is a big factor in all of these decisions.
    Senator Hutchison. When will you pull the plug on Pinon 
Canyon if you don't see a possibility? I mean, it seems pretty 
clear from the outside that is very remote right now. And I 
have tried to help on this, but it is not going anywhere. So 
when do you say, ``Here is plan B?''
    Mr. Hansen. We do not have a date on that yet, ma'am. But 
we certainly are----
    Senator Hutchison. Are you pursuing other options? Are you 
beginning to look for other places where you can expand other 
than Pinon Canyon?
    Mr. Hansen. Within Colorado, there are insufficient Federal 
lands within about a 200-mile radius of Fort Carson that are 
capable of supporting the required maneuver training, and 
Federal lands outside this area would entail additional 
transportation costs, increase convoy travel time, and increase 
the possibility of safety issues and unnecessary hazard to the 
force.
    So, and it would also have significant environmental 
restrictions. So we certainly are looking at expansion at all 
our facilities since we have----
    Senator Hutchison. Other places besides Colorado?
    Mr. Hansen. Yes, ma'am, as part of the decision on the 
three BCTs that we previously discussed, as well as the needs 
at Fort Carson.
    Senator Hutchison. Thank you.
    Mr. Hansen. Yes, ma'am.
    Senator Hutchison. Thank you, Mr. Chairman.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman. I appreciate your 
time on this.
    Let me start with you, if I can, Mr. Calcara, and that is 
we have some legislation here that we are working. It is S. 
590, Defense Communities Assistance Act of 2009. And let me 
start with a success story in a post BRAC environment. It is 
actually not in my State. It is in the ranking member's State 
of Texas.
    The Red River Commerce Park is 765 acres that was once part 
of the Red River Army Depot, and it was transferred via a no-
cost EDC 10 years ago. We have that same legislation this time 
to do no-cost EDCs. It now boasts nearly a million square feet 
of industrial commercial space, including a biodiesel 
production facility, 25 private housing units, a golf course, 
and over a dozen tenant companies employing nearly 1,000 
people.
    And from my standpoint, it is probably a lot cheaper in the 
long run on everybody to do a no-cost EDC than it is to try to 
convey the property some other way. I would like to hear your 
thoughts on the Army's position on trying to do some of the 
property that has been BRAC'd, so to speak, through no-cost 
EDCs.
    Mr. Calcara. Yes, sir. Our BRAC disposal strategy is 
contingent upon a number of factors, not to mention the reuse 
plan and the environmental issues on the site. We would prefer 
to keep all the tools available in the BRAC toolbox, including 
no-cost EDCs, cost EDCs, public benefit conveyances, and look 
at the entire suite of options before we unilaterally decide 
that all EDCs would be no cost.
    The Army believes the imperative here is to get the 
property back in productive reuse as quickly as possible. And 
in many cases, that requires investment of dollars for 
environmental cleanup that are otherwise not programmed.

        ENVIRONMENTAL CLEANUP OF LONE STAR ARMY AMMUNITION PLANT

    One of the strategies that we believe works best for that 
is to go to public market, bring private dollars to the table, 
and have cleanup done incidental to redevelopment. This reduces 
the cost of the cleanup in terms of funding it up front, gets 
the property redeveloped quicker, and also brings in private 
capital to supplement precious dollars that we would have to 
program for cleanup.
    So, in the end, the speed is one aspect of it. But it 
really becomes speed and productive reuse as quickly as 
possible--not just speed and transfer, but speed in getting the 
cleanup done.
    Senator Pryor. Let me ask this as a follow-up to that. The 
Lone Star Army ammunition plant, which is basically more or 
less adjacent property, as Senator Hutchison knows, was, again, 
BRAC'd in 2005. Do you know--do you have a sense of how much it 
has cost the Army to maintain that property since 2005?
    Mr. Calcara. I don't have the numbers available. The issue, 
of course, with Lone Star for us would not necessarily be a 
cost avoidance for caretaker. It is more where are we going to 
get the environmental dollars to clean it up and program it?
    What we would like to do with Lone Star is leverage the 
timber to reinvest back in the property for cleanup, to help 
not only expedite transfer, but clean up at a cost-effective 
basis.
    Senator Pryor. Do you remember, I thought we appropriated 
some money to do the cleanup?
    Mr. Calcara. We do have some dollars appropriated, but we 
do not believe those will be sufficient to get the property 
cleaned and back into reuse as quickly as if we did go to a 
public sale process to tap private markets.
    Senator Pryor. Do you know what your current timeline is on 
making the decisions around Lone Star?
    Mr. Calcara. We just received the reuse plan in here about 
30 days ago. We are studying it. We are looking to make some 
broad-based decisions later this summer.
    Senator Pryor. Mr. Hansen, do you have any comments on Lone 
Star and the approach that Army is taking with regard to the 
no-cost economic development conveyance?
    Mr. Hansen. Not beyond what Mr. Calcara said, sir.
    Senator Pryor. Let me ask, if I may, General Carpenter, 
about some training facilities available to National Guards 
around the country. I know that one of the things that we see 
that has obviously become more and more important in the last 
few years is the so-called ``live fire experience,'' where it 
may be urban warfare, and they need to simulate that as part of 
their training. For example, the Arkansas National Guard has to 
travel to Camp Shelby, Alabama, to do that.
    Have you looked at whether it is more cost effective to do 
the travel and to keep all the folks moving and take them 
offsite and out of State, in many cases hundreds and hundreds 
of miles away, and do that training versus just building 
training facilities in the home State? Have you all looked at 
that?
    General Carpenter. Sir, as an overall project in that 
arena, what we have seen in the last several years because of 
the increased number of brigade combat teams in the active 
Army, we have seen places where the Army National Guard has 
traditionally gone to train not being available because of the 
mobilization process and also because of the other tenants on 
the installation. For instance, the 256 Brigade out of 
Louisiana----
    Senator Pryor. Right.
    General Carpenter [continuing]. Struggles to get on Fort 
Polk now because of the training in the OPTEMPO in that 
particular arena. We have worked with 1st Army and are 
currently doing a study on those kinds of things that you have 
just outlined, sir. And the issue is where do we train the Army 
National Guard, and what is the proximity to that unit's home 
station?
    And so, between simulation and the live fire piece, we have 
that under study right now, and we would expect to have that 
study completed some time in the next year.
    Senator Pryor. Great.
    Thank you, Mr. Chairman.

             FISCAL YEAR 2010 BUDGET REQUEST FOR ARMY GUARD

    Senator Johnson. I will use my discretion to ask one more 
question. Mr. Calcara, the committee is concerned about the 
level of funding requested for the Army Guard and Reserve 
forces. The Guard and Reserves have been a critical component 
in our operations in Iraq and Afghanistan.
    Recently, Secretary Gates indicated that more Reserve 
components may be tapped for service in Afghanistan, and yet we 
see a 54 percent reduction in the fiscal year 2010 budget 
request for the Army Guard. Can you explain this reduction in 
funding, and what impact is it having on the backlog of needed 
Guard and Reserve construction projects?
    Mr. Calcara. Yes, Mr. Chairman.
    I think you need to look at the two sets of numbers in the 
request for each year, as opposed to the difference between 
what was enacted last year and this year's request. I don't 
believe the difference is that great. And as it tiers into the 
greater Army program of Grow the Army and global positioning, 
along with the increases in the Reserves, I think we are 
meeting all the current requirements that the Guard has for 
fiscal year 2010.
    We do have additional requirements that we are looking to 
rack and stack from 2011 through the FYDP, and we are working 
on that now. But I think if you compare the fiscal year 2009 
request to the 2010 request, there is about a 10 or 15 percent 
difference between the two numbers.
    Senator Johnson. Senator Hutchison.
    Senator Hutchison. I am through. Thank you.
    Senator Johnson. You may be excused.
    Senator Hutchison. Thank you all very much.
    Senator Johnson. Thank you.
                      Department of the Air Force

STATEMENT OF KATHLEEN I. FERGUSON, DEPUTY ASSISTANT 
            SECRETARY FOR INSTALLATIONS
ACCOMPANIED BY:
        GENERAL JOSEPH LENGYEL, COMMANDER, AIR NATIONAL GUARD READINESS 
            CENTER
        GENERAL HOWARD THOMPSON, DEPUTY TO THE CHIEF OF STAFF, AIR 
            FORCE RESERVE
    Senator Johnson. I am pleased now to welcome our second 
panel of witnesses, Ms. Kathleen Ferguson, Deputy Assistant 
Secretary of the Air Force for Installations; General Joseph 
Lengyel, Commander, Air National Guard Readiness Center; and 
General Howard Thompson, Deputy to the Chief of Staff for the 
Air Force Reserve.
    Thank you all for coming. We look forward to your 
testimony. And again, your full statements will be entered into 
the record.
    Ms. Ferguson, please proceed.
    Ms. Ferguson. Thank you, Mr. Chairman. On behalf of 
America's airmen----
    Senator Hutchison. Is your microphone on?
    Ms. Ferguson. That would be better, I guess.
    It is my pleasure to be here today, along with Generals 
Lengyel and Thompson from the Air National Guard and the Air 
Force Reserve.
    We would like to begin today by thanking the committee for 
its continued support of your Air Force and the many dedicated 
and brave airmen and their families serving around the globe.
    Today, more than 27,000 airmen are currently deployed in 
support of ongoing operations in Iraq, Afghanistan, the Horn of 
Africa, and many others, daily demonstrating their importance 
in support of joint combat operations. Within the Secretariat 
for Installations, Environment, and Logistics, we fully 
appreciate the impacts our efforts have in support of these 
airmen and how it affects their ability to positively influence 
our Air Force's warfighting capabilities and capacity to 
counter hostile threats.
    But before we begin, I want to tell you that we heard your 
concerns last year that the Air Force did not have enough funds 
in the future years defense plan (FYDP) and the Air Reserve 
components were not receiving enough of a share. The Air Force 
has increased funding across the FYDP by nearly $2 billion, and 
we have changed the way we allocate between the active Air 
Force, Air National Guard, and Air Force Reserve to give the 
Reserve components a larger share.
    MILCON, family housing, and BRAC programs form the 
foundation of our installation structure. Our installations 
serve as key platforms for the delivery of global vigilance, 
reach and power for our Nation, and our fiscal year 2010 
investments reflect a direct connection to this vital work.
    As we continue to focus on modernizing our aging weapon 
systems, we recognize we cannot lose focus on Air Force 
infrastructure programs. Our fiscal year 2010 President's 
budget request of $4.9 billion for MILCON, military family 
housing, BRAC, and facility maintenance is a reduction from our 
2009 request of $5.2 billion.
    This reflects an increase in MILCON and fact-of-life 
reductions due to the anticipated completion of the 
privatization of military family housing and BRAC 2005 round 
implementation.
    Using an enterprise portfolio perspective, we intend to 
focus our limited resources on the most critical physical plant 
components by applying demolition and space utilization 
strategies to reduce our footprint, aggressively pursue energy 
initiatives, continue to prioritize family housing, and 
modernizing dormitories to improve quality of life for our 
airmen.
    In regards to military family housing, our master plan 
details our housing MILCON operations, maintenance, and 
privatization efforts. Since last spring, we have completed new 
construction or major improvements on more than 2,000 units in 
the United States and overseas, with another 2,286 units under 
construction in the United States and 2,783 units under 
construction overseas.
    Our 2010 budget request for military family housing is just 
over $567 million. The request for housing investment is $67 
million to ensure the continual improvement of our overseas 
homes. Our request also includes an additional $500 million to 
pay for operations, maintenance, utilities, and leases for the 
family housing program.
    Now I would like to address our efforts in support of base 
realignment and closure. BRAC 2005 impacts more than 120 Air 
Force installations. Unlike the last round of BRAC, where 82 
percent of the implementation actions affected the active Air 
Force, in BRAC 2005, 78 percent of implementation actions 
affect the Air National Guard and the Air Force Reserve.
    In fact, the Air Force will spend more than $478 million on 
Air National Guard and Air Force Reserve BRAC MILCON projects. 
The Air Force's total BRAC budget is approximately $3.8 
billion, which the Air Force has fully funded. Our fiscal year 
2010 BRAC 2005 budget request is approximately $418 million, of 
which less than 20 percent is for BRAC MILCON projects. I would 
like to emphasize the BRAC program is on track to meet the 
September 2011 deadline.
    Air Force MILCON, military family housing, and BRAC 
initiatives will continue to directly support Air Force 
priorities. It is imperative we continue to manage our 
installations by leveraging industry best practices and state-
of-the-art technology.
    Our civil engineering transformation efforts, now entering 
the third year, continue to produce efficiencies and cost 
savings that enhance support for the warfighter, reduce the 
cost of installation ownership, and free resources for the 
recapitalization of our aging Air Force weapon systems.
    More importantly, these investments reflect effective 
stewardship of funding designed to serve our airmen in the 
field, their families, and the taxpayer at home.

                           PREPARED STATEMENT

    Mr. Chairman and Senator Hutchison, this concludes my 
remarks. Thank you and the committee again for your continued 
support of our airmen and their families, and we look forward 
to your questions.
    [The statement follows:]

               Prepared Statement of Kathleen I. Ferguson

                              introduction
    More than 27,000 Airmen are currently deployed in support of 
ongoing operations, daily demonstrating their importance in support of 
Joint combat operations. Within the Secretariat for Installations, 
Environment and Logistics (SAF/IE), we fully appreciate the impact our 
efforts have in support of these Airman and how it affects their 
ability to positively influence our Air Force's warfighting abilities 
and capacity to counter hostile threats.
    To that end, the men and women of SAF/IE are committed to ensuring 
our Air Force installations are right sized to support our forces, our 
combat systems have a robust logistics infrastructure for sustainment, 
and our forces have the necessary accessibility to the full spectrum of 
our environment to ensure combat readiness. In addition to our Airmen's 
combat readiness, we also appreciate how these same efforts support our 
Airmen and their families and ensure a Quality of Service commensurate 
with the contribution they provide to the defense of our Nation.
    Air Force Military Construction (MILCON), Military Family Housing 
(MFH), and Base Realignment and Closure (BRAC) programs form the 
foundation of our installation structure. Our Air Force installations 
serve as key platforms for the delivery of Global Vigilance, Reach and 
Power for our Nation, and our fiscal year 2010 investments reflect a 
direct connection to this vital work.
    As the Air Force continues to focus on modernizing our aging weapon 
systems, we recognize that we cannot lose focus on critical Air Force 
infrastructure programs. In order to maintain effective stewardship of 
the resources given to us, our fiscal year 2010 President's Budget of 
$4.9 billion for MILCON, BRAC, MFH, and facility maintenance is a 
reduction from our fiscal year 2009 request of $5.2 billion. We intend 
to mitigate potential shortfalls in MILCON and facility maintenance 
funding by bolstering our restoration and modernization programs as 
much as possible. Using an enterprise portfolio perspective, we intend 
to focus our limited resources only on the most critical physical plant 
components, by applying demolition and space utilization strategies to 
reduce our footprint, aggressively pursuing energy initiatives, 
continuing to privatize family housing and modernizing dormitories to 
improve quality of life for our Airmen.
    Our efforts are in direct support of and consistent with the Air 
Forces' five priorities, (1) Reinvigorate the Air Force Nuclear 
Enterprise, (2) Partner with the Joint and Coalition Team to Win 
Today's Fight, (3) Develop and Care for Airmen and Their Families, (4) 
Modernize our Air and Space Inventories, Organizations and Training, 
and (5) Recapture Acquisition Excellence. It is with these priorities 
in mind that I will outline our MILCON, Military Family Housing and 
BRAC efforts and the individual priorities they support.
             reinvigorate the air force nuclear enterprise
    The Air Force has a solemn responsibility and obligation to operate 
and maintain its portion of America's nuclear deterrent posture, which 
consists of land-based intercontinental ballistic missiles, nuclear-
capable bombers and dual capable fighters. Over the past several months 
the Air Force senior leadership team, along with the Office of the 
Secretary of Defense (OSD) and Interagency partners, have closely 
examined the Air Force nuclear enterprise and identified several areas 
for improvement.
    The results of these internal assessments reinforced the need to 
continually focus on nuclear sustainment and operations as well as the 
management of the weapons and their delivery platforms. A critical 
aspect of this effort includes the infrastructure and facilities 
providing the necessary life-cycle installation support of this vital 
mission. Air Force Civil Engineers and field experts are currently 
conducting Facility Condition Assessments of all nuclear-related 
facilities, which will provide detailed information on our 
infrastructure deficiencies directly supporting the nuclear mission. 
Projects will be developed, programmed, and prioritized appropriately 
to obtain the necessary funding required to correct any deficiencies.
    Additionally, the fiscal year 2010 President's Budget request 
includes an investment of $45 million in four infrastructure projects 
at Minot Air Force Base, North Dakota, FE Warren Air Force Base, 
Wyoming and Clear Air Station, Alaska. These projects include missile 
procedures, training operations and missile service complex facilities.
             develop and care for airmen and their families
    Airmen are the Air Force's most valuable resource and we remain 
committed to recruiting and retaining the world's highest quality 
force. As part of the American Recovery and Reinvestment Act of 2009, 
monies allotted to the Air Force support that effort. Over $260 million 
in MILCON will improve the lives of our Airmen and their families 
through MFH improvements, dormitory construction, and providing Child 
Development Center facilities and services.
Developing Airmen
    The Air Force must continue to ensure we are preparing Airmen for 
the challenges of today and tomorrow by providing quality facilities in 
which to train and operate. Our fiscal year 2010 budget request 
includes $39 million for three projects. We will construct a new 
recruit dormitory and basic military training facility giving incoming 
Airmen quality training facilities to start a career of service. 
Another highlight includes a C-5 Ground Training Schoolhouse addition 
for the Air Force Reserve Command.
Military Family Housing Program
    The MFH Master Plan details our Housing MILCON, operations and 
maintenance, and privatization efforts. Since last spring, the Air 
Force completed new construction or major improvements on over 2,000 
units in the United States and overseas, with another 2,286 units under 
construction in the United States and 2,783 units under construction 
overseas.
    Our fiscal year 2010 budget request for MFH is just over $567 
million. The Air Force request for housing investment is $67 million to 
ensure the continual improvement of our overseas homes. Investments 
will provide whole-house renovations for 365 units at two overseas 
bases and extend their useful life. Our request also includes an 
additional $500 million to pay for operations, maintenance, utilities 
and leases for the family housing program.
Housing Privatization
    Housing privatization continues to improve quality of life for our 
Airmen and their families. To date we have privatized approximately 
38,900 housing units at 44 bases. We have seen the delivery of over 
10,000 new or renovated homes and are currently bringing more than 200 
homes a month online. We will have leveraged more than $402 million in 
government investment to garner almost $6.3 billion in private sector 
total housing development, or $16 of private investment for each public 
tax dollar. With the support of Congress, we will continue to work 
toward our goal to privatize 100 percent of Military Family Housing in 
the Continental United States, Hawaii, Alaska and Guam by the end of 
fiscal year 2010.
Unaccompanied Housing (Dormitories)
    The Air Force Dormitory Master Plan is the cornerstone for 
developing requirements for unaccompanied housing. The budget request 
includes five dormitories worth $138 million. We will continue to 
replace existing dormitories at the end of their useful life with a 
standard Air Force-designed private room configuration under the 
``Dorms-4-Airmen'' concept. Simultaneously, our implementation of a 
``bridging strategy'' ensures we are investing Facility Sustainment and 
Restoration and Modernization funds into aging facilities to extend 
their useful life until MILCON replacements can be executed and to 
ensure we keep ``good dormitories good.''
Fitness and Child Development Centers
    Elevated operations tempo and increased home-station demands makes 
physical fitness an imperative for Airmen. Our fiscal year 2010 request 
includes two Fitness Centers worth $41 million. We also remain focused 
on providing our families with appropriate and nurturing child care 
facilities. We will continue to invest in these facilities which we 
believe are key to caring for Airmen and their families. This year's 
budget request includes two child development centers worth $20 
million.
Environmental Quality and Management Systems
    Our environmental management programs continue to ensure the most 
basic quality of life needs are met for our Airmen and surrounding 
communities: clean air, clean drinking water and healthy working and 
living conditions for our workforce and base residents. We have 
implemented a new environmental management approach at Air Force 
installations. Installations are now utilizing the Environmental 
Management System to identify environmental aspects of base operations, 
assess their impacts, and help commanders make informed decisions and 
investments to reduce environmental risks and compliance costs. Our 
installation commanders significantly reduced new environmental 
enforcement actions by 44 percent from fiscal year 2005 to fiscal year 
2008.
    We are also continuing our existing environmental quality and 
restoration programs. The fiscal year 2010 request includes just under 
$1 billion for direct-funded non-BRAC environmental programs such as: 
traditional environmental restoration activities, environmental 
compliance activities and projects, pollution prevention initiatives, 
environmental conservation activities, munitions response activities, 
and investment in promising environmental technologies. Our 
environmental restoration program is proceeding aggressively to clean-
up sites contaminated by past practices. The Air Force closed or has 
remedies in place at 89 percent of the contaminated sites and expects 
to have remedies in place at all sites by fiscal year 2012, 2 years 
ahead of the Department of Defense fiscal year 2014 environmental 
restoration goal.
  modernize our air and space inventories, organizations and training
    Modernizing our aging air and space inventories, organizations and 
training to prepare for tomorrow's challenges requires significant 
investment of $353 million for 34 projects. We will complete the 
planned F-22 beddown, including the two Air National Guard projects at 
Hickam Air Force Base, Hawaii. The beddown of the F-35 also continues 
to be a priority, with eight projects supporting actions at Nellis Air 
Force Base, Nevada and Eglin Air Force Base, Florida.
    We also continue to modernize our facilities in support of our 
larger aircraft by constructing seven new facilities supporting C-130 
operations and training. Other projects in this program include a 
consolidated communication facility at Cannon Air Force Base, New 
Mexico, two research facilities at Wright Patterson Air Force Base, 
Ohio and upgrading electrical infrastructure at Hurlburt Field, 
Florida. As part of our work to achieve balance across our portfolios, 
we continue to transform the enterprise by developing new concepts of 
operations, implementing organizational change, and integrating 
advanced technologies in installation support.
Energy Stewardship
    The Air Force has launched an aggressive program to invest in 
facility energy conservation and renewable energy alternatives. 
Recently, the Secretary of the Air Force signed a Mission Directive 
institutionalizing energy policy within the Air Force and driving more 
efficient energy management practices. Together, these policies will 
direct specific actions in the areas of operational processes, 
training, and installation management geared toward reducing our 
``energy footprint,'' and increasing our use of cleaner energy 
alternatives.
    Over the past year, we've stood up the Air Force Facility Energy 
Center (FEC) at the Air Force Civil Engineer Support Agency at Tyndall 
Air Force Base, Florida. The new FEC consolidates energy technical 
expertise and project management capabilities in order to leverage best 
practices across the force. The goal of this office is to develop and 
implement innovative energy solutions reducing our energy ``footprint'' 
at Air Force installations. In 2008, the Air Force Infrastructure 
Energy Strategic Plan was issued to guide the strategic and tactical 
direction of our energy program, a plan designed to balance supply-side 
energy assurance and demand-side energy efficiency. It incorporates the 
energy strategy of the 21st Century designed to meet the energy 
mandates outlined in the Energy Policy Act 2005 (EPAct 05), Executive 
Order (EO) 13423 and Energy Independence and Security Act of 2007 (EISA 
2007). The strategy maps the way ahead for meeting energy mandates 
through fiscal year 2015 and covers facilities infrastructure as well 
as fuel efficiency in our ground transportation fleet.
    The new infrastructure energy strategy is founded on Four Pillars 
that are designed to (1) Improve Current Infrastructure, (2) Improve 
future infrastructure, (3) Expand renewables, and (4) manage cost. We 
intend to achieve the Four Pillars by incorporating best business 
practices into our education and training programs, pursuing cultural 
change in our organizations, and improving our asset management. We see 
potential indicators that our efficiency strategy is providing return-
on-investment. In 2008, the Air Force energy intensity decreased by 
17.8 percent from the fiscal year 2003 baseline. The Air Force also 
developed a life-cycle cost-effective metering strategy to meet EPAct 
05, which mandates the installation of electric meters on required 
facilities by 2012. We recognize the value of metering and are already 
74 percent complete toward the goal. The Air Force is also making great 
strides in our water conservation program. In fiscal year 2008, we 
consumed 1.3 billion gallons less water than our fiscal year 2007 water 
usage.
    In the area of renewable energy, our strategy expands public and 
private partnerships by leveraging private sector capital to bring 
renewable power production to our bases at competitive prices. For 
example, in a partnership with state and local government and private 
industry, the photovoltaic (PV) solar array at Nellis Air Force Base, 
Nevada, the largest PV array in North America, generated 57,139 
megawatt-hours in fiscal year 2008. Through a Congressional 
appropriation, F.E. Warren Air Force Base, Wyoming, installed a 2,000 
kilowatt wind turbine in January 2009, adding to the two turbines 
already operational. Together the three wind turbines are capable of 
generating 6.7 million kilowatt-hours per year, enough to power 836 
homes. These and other renewable energy and conservation initiatives 
provide examples of how the Air Force is committed to not only meeting, 
but exceeding the goals of the new Executive Order with initiatives 
that provide long-term return-on-investment.
Sustainability
    With an eye toward improving future infrastructure, our traditional 
project goals of delivering high quality facility projects on schedule 
and within budget is expanding to include creation of functional, 
maintainable, and high performance facilities. Under EO 13423 and EISA 
2007, the Air Force employs the Federal Leadership in High Performance 
and Sustainable Building Guiding Principles to reduce total cost of 
ownership and improve energy efficiency and water conservation to 
provide safe, healthy, and productivity-enhancing facility 
environments. We also employ the U.S. Green Building Council's 
Leadership in Energy & Environmental Design (LEED) criteria in our 
designs. The LEED Green Building Rating System is the nationally 
accepted benchmark for the design, construction, and operation of high 
performance green buildings. In 2008, the Air Force certified its first 
LEED gold building at Offutt Air Force Base, Nebraska. This year, 100 
percent of Air Force-eligible MILCON projects will be capable of 
certification in LEED.
    The Air Force understands that it is not just new construction that 
needs this focus and attention. We have already begun the task of 
greening our existing building inventory and installation support 
platforms. Sustainability cannot just be about facilities, it has to be 
a holistic approach to include how we develop and sustain our 
installations. The vision is to build and shape sustainable communities 
using innovative solutions to lower the cost of installation support 
and provide more eco-friendly installations.
BRAC 2005 Execution Report Card
    BRAC 2005 impacts more than 120 Air Force installations. Whether 
establishing the F-35 Joint Strike Fighter Initial Training Site at 
Eglin Air Force Base, Florida, closing Kulis Air Guard Station in 
Alaska, or transferring Pope Air Force Base, North Carolina to the 
Army, the Air Force community as a whole--active, Guard, Reserve--will 
benefit from changes BRAC achieves.
    Unlike the last round of BRAC where 82 percent of the 
implementation actions affected the active Air Force, in BRAC 2005, 78 
percent of implementation actions affect the Air National Guard and Air 
Force Reserve. In fact, the Air Force will spend more than $486 million 
on Air National Guard and Air Force Reserve BRAC MILCON projects. In 
addition, many of the BRAC MILCON projects on active Air Force 
installations, like the C-130 facilities built or renovated at 
Elmendorf Air Force Base, or KC-135 facilities built or renovated at 
Seymour-Johnson and MacDill Air Force Bases, will benefit Air Reserve 
Component forces stationed there.
    The Air Force's total BRAC budget is approximately $3.8 billion, 
which the Air Force has fully funded.
    The Air Force's largest BRAC costs are for military construction 
projects; approximately $2.6 billion. Operations and Maintenance 
expenditures closely follow at $926 million. This includes expenditures 
for civilian pay and moving expenses, supplies, equipment, travel, etc. 
There are other BRAC expenses, as well. Other requirements include 
expenses for information technology, equipment procurement, and Air 
Force Reserve and Air National Guard training, to name a few, at $142 
million.
    Other BRAC programmed amounts include $132 million for military 
personnel expenses and environmental planning and cleanup.
    The Air Force's fiscal year 2010 BRAC 2005 Budget Request is 
approximately $418 million, of which less than 20 percent is for BRAC 
MILCON projects.
    The Air Force's primary focus in the fiscal year 2010 program is in 
budget areas other than BRAC MILCON because we are now more focused on 
personnel-related issues, relocating assets and functions, outfitting 
new and renovated facilities, procuring end-state necessities, and 
continuing environmental actions to realign and integrate the total 
force.
Joint Basing
    The Air Force has a long and successful history of working toward 
common goals in the Joint environment. The Air Force remains committed 
to ensuring all bases, Joint or otherwise, maintain their capability as 
weapon system platforms and meet our quality of life standards. To 
accomplish this we worked with our sister Services and OSD to establish 
common quality of life standards that ensure our personnel receive 
efficient installation support services.
    The Services are addressing many complex issues such as information 
technology integration, human resources planning, manpower and fiscal 
resources, and new organizational structures. A Senior Joint Base 
Working Group, led by the Deputy Undersecretary of Defense 
(Installations and the Environment) developed implementation policy to 
guide the transition of installation management functions and meet the 
BRAC timeline. The group is in the process of reviewing and 
coordinating the numerous details in the formal support agreements and 
implementation plans to establish each Joint Base. The five Joint Bases 
aligned in the first phase of implementation have developed 
comprehensive Memoranda of Agreement (MOA) establishing the 
relationships between the Services, and are now shifting their focus to 
the orderly transition of installation management functions by October 
2009. The seven Phase II installations are developing their MOAs now 
and will begin the transition of functions next year, and will complete 
the process by October 2010.
Legacy BRAC--Real Property Transformation
    The Air Force remains a Federal leader in the implementation of the 
management principles outlined in Presidential Executive Order 13327, 
Federal Real Property Asset Management. We continue to aggressively 
manage our real property assets to deliver maximum value for the 
taxpayer, improve the quality of life for our Airmen and their 
families, and ensure the protection and sustainment of the environment 
to provide the highest level of support to Air Force missions. The Air 
Force is achieving these goals through an enterprise-wide Asset 
Management transformation that seeks to optimize asset value and to 
balance performance, risk, and cost over the full asset life cycle. Our 
approach is fundamentally about enhancing our built and natural asset 
inventories and linking these inventories to our decision-making 
processes and the appropriate property acquisition, management and 
disposal tools.
    Even though the BRAC 2005 round did not reduce the Air Force's real 
property footprint, our current transformation efforts seek to ``shrink 
from within'' and to leverage the value of real property assets in 
order to meet our ``20/20 by 2020'' goal of offsetting a 20 percent 
reduction in funds available for installation support activities by 
achieving efficiencies and reducing by 20 percent the Air Force 
physical plant that requires funds by the year 2020.
Base Realignment and Closure Property Management
    To date, the Air Force has successfully conveyed by deed nearly 90 
percent of the 87,000 acres of Air Force BRAC 88, 91, 93 and 95, which 
we refer to as legacy BRAC, with the remainder under lease for 
redevelopment and reuse. The highly successful reuse of Air Force Base 
closure property led to the creation of tens-of-thousands of jobs in 
the affected communities. To complete the clean up and transfer by deed 
of remaining property, the Air Force is partnering with industry 
leaders on innovative business practices for its ``way ahead'' 
strategy. These include an emphasis on performance-based environmental 
remediation contracts, using such performance-based contracts on 
regional clusters of BRAC bases, and innovative tools such as early 
property transfer and privatization of environmental cleanup so that 
the cleanup efforts complement, rather than impede, the property 
redevelopment plans and schedules. Our objectives remain constant and 
clear: (1) provide reuse opportunities that best meet the needs of the 
Air Force and local communities, (2) move the process along smartly in 
each situation to get property back into commerce as soon as practical, 
and (3) provide transparency throughout the process. Of the 32 legacy 
BRAC bases slated for closure, the Air Force completed 20 whole-base 
transfers. Ten of the remaining 12 bases are targeted for transfer by 
the end of fiscal year 2010, while the last two (former George and 
McClellan Air Force Bases) will be transferred no later than the end of 
fiscal year 2012.
    As the Air Force transfers BRAC property for civic and private 
reuse, it is paramount we ensure any past environmental contamination 
on the property does not endanger public health or the environment. The 
Air Force will continue to fulfill this most solemn responsibility, as 
reflected in our fiscal year 2010 request of $116 million for legacy 
BRAC cleanup activities and another $20 million for BRAC 2005 cleanup 
activities. Recent progress at the former McClellan Air Force Base in 
Sacramento, once the most environmentally contaminated closure base 
within DOD, is a sterling example of the effective approach taken by 
the Air Force and the local community in fostering redevelopment of 
closure base property. As a result of previously unprecedented 
collaboration between the local community, the Environmental Protection 
Agency, State environmental regulators, the primary developer, and the 
Air Force on the privatization of cleanup of the base, the former base 
is quickly becoming the ``greenest'' business park in California. It is 
home to what will be the most energy-efficient computer data center in 
the Nation. The former base is also now home to North America's largest 
photo-voltaic solar panel manufacturing plant, a 1-million square foot 
joint venture facility called Opti-Solar. The plant will create 1,000 
green jobs producing 2,000 solar panels per day beginning in 2009.
    In summary, the Air Force's real property asset management 
framework involves an understanding and balancing of our mission needs 
and risks with market dynamics, the Federal budget, the condition and 
performance of our assets and the need to protect the environment.
     partner with the joint and coalition team to win today's fight
    America's Airmen are ``All In'' supporting the Joint and Coalition 
team to win today's fight with precision and reliability. Our fiscal 
year 2010 program includes $544 million for 28 projects directly 
connected to today's fight. Four projects valued at $198 million 
directly support U.S. Central Command by providing much needed in-
theater airlift ramp and fuel facilities, a war-reserve material 
compound, and a passenger terminal. Other projects include an aerospace 
ground equipment maintenance complex at Ramstein Air Base in Germany, a 
Global Hawk maintenance and operations complex at Naval Air Station 
Sigonella in Italy, and beddown facilities for Air Force air support 
and operations personnel with Army units. These investments provide 
direct returns by reducing backlog and waste in our logistics trail, 
and increase the capacity and efficiency of our fighting forces at 
downrange locations.
    Approximately 30,000 Airmen are currently deployed as part of 
Operations ENDURING FREEDOM and IRAQI FREEDOM. More than 3,000 of these 
Airmen are civil engineers, with over 40 percent of our deployed 
engineers filling Joint Expeditionary Tasking billets, serving side-by-
side with our sister Services. Our heavy construction Rapid Engineer 
Deployable Heavy Operational and Repair Squadron Engineers (RED HORSE) 
and our Prime Base Engineer Emergency Force (BEEF) engineers are well-
known in-theater for their ability to build and maintain expeditionary 
installations. Airmen continue to assist both Iraq and Afghanistan in 
building the capacity to provide self-governance. Since 2004, the Air 
Force has completed over $5.6 billion in major renovation or 
construction projects, giving the governments of Iraq and Afghanistan 
the capacity to provide basic services for its people. Whether it is 
serving on Provincial Reconstruction Teams, mitigating the threat of 
improvised explosive devices, standing up host nation Field Engineering 
Teams, or teaching aspiring engineers at the Afghan Service Academies, 
Airmen continue to demonstrate courage, commitment, and dedication in 
contingency operations. We are honored to serve with our Joint and 
Coalition team partners and will continue to support the Nation's call-
to-arms by providing unique engineering capabilities and the most 
talented installation support personnel available.
                    recapture acquisition excellence
    The Air Force remains committed to recapturing acquisition 
excellence and developing innovative solutions that enable smart 
business decisions. Through the Air Force Civil Engineer Strategic 
Sourcing Program Management Office at the Air Force Civil Engineer 
Support Agency at Tyndall Air Force Base, Florida, we are working to 
select and prioritize sourcing opportunities and oversee the efforts of 
other Major Command-initiated CE strategic sourcing efforts. The 
Program Management Office will capitalize on industry-best practices to 
reduce the cost of building systems and commodities while improving the 
delivery of support to our customers. Five strategic sourcing 
opportunities and a commodity cost review are currently in progress to 
identify sourcing strategies leading to regional or enterprise-level 
acquisitions. We organized a staff comprised of civil engineers, 
contracting officers and financial specialists to ensure we implement a 
well-integrated, cross functional approach aimed at determining the 
right investments for our enterprise.
                               conclusion
    Air Force MILCON, MFH and BRAC initiatives will continue to connect 
directly to Air Force priorities. It is imperative we continue to 
manage our installations by leveraging industry-best practices and 
state-of the-art technology. Our CE transformation effort, now entering 
its third year, continues to produce efficiencies and cost savings that 
enhance support for the warfighter, reduce the cost of installation 
ownership, and free resources for the recapitalization of our aging Air 
Force weapon systems. More importantly, these investments reflect 
effective stewardship of funding designed to serve our Airmen in the 
field, their families, and the taxpayer at home.

    Senator Johnson. Thank you, Ms. Ferguson.
    The fiscal 2010 Air Force budget request for military 
construction is about 10 percent lower than the 2009 request. 
Last year, the Air Force acknowledged that it was assuming a 
greater risk in construction funding to steer more funds into 
air and space assets.
    Is this year's budget request a continuation of that 
policy? Could you outline that risk that the Air Force is 
leveraging with the drop-off in funding for military 
construction?

        AIR FORCE RESERVE AND AIR NATIONAL GUARD MILCON FUNDING

    Ms. Ferguson. Yes, thank you.
    Overall, the Air Force has reduced our fiscal year 2010 
President's budget request from our fiscal year 2009 President 
budget request. In fiscal year 2009, our request for 
infrastructure programs was $5.2 billion. And this year, when 
you add MILCON, family housing, BRAC, and facility maintenance, 
we are right about $4.9 billion.
    We have increased in some areas and have decreased in 
others. In military construction, from one President's budget 
to the other President's budget, we have increased about $300 
million. We have increased our family housing maintenance count 
by about $200 million, predominantly in the energy area and to 
improve dormitories.
    And we have reduced funding in both family housing and 
BRAC, directly related to reduced requirements in both of those 
accounts. And that is good news because that reflects success 
in the program, and we do not need any additional funding 
beyond what we have asked for in this budget for either BRAC or 
family housing.
    Overall, if you look to see how we allocated the funds 
between the active and Air National Guard--and each the active, 
Air National Guard, and Air Force Reserve have seen increases 
from last year--our active request went up about 22 percent, 
the Air Force Reserve about 45 percent, and the Air National 
Guard went up about 273 percent. But as you do point out, it is 
lower than the appropriated amount, but the Air Force did 
increase--continues to take risk in infrastructure, but did 
increase our President's budget request above what we did have 
last year.
    Senator Johnson. Could you give me an update on the housing 
privatization efforts at Ellsworth Air Force Base?
    Ms. Ferguson. The Ellsworth Air Force Base project is part 
of a grouped project. It is in the concept development stage 
right now, and we anticipate coming over to the Hill to give a 
briefing within the next few months. But I will be happy to 
come over and give you more details on that.
    [The information follows:]
                  Ellsworth AFB Housing Privatization
    The Air Force will provide the Military Construction-Veterans 
Affairs Subcommittee, Senate Appropriations Committee a briefing on the 
housing privatization efforts at Ellsworth Air Force Base, South Dakota 
in July 2009.

    Senator Johnson. As a result of an OSD decision, the Air 
Force budget request does not include an updated FYDP. Last 
year, the Air Force Guard and Reserve FYDPs were very thin. 
What impact will the new FYDP policy have on the ability of 
Congress to provide additional funds for key Air Guard and 
Reserve priorities?

     FUTURE YEARS DEFENSE PROGRAM AND AIR RESERVE COMPONENT FUNDING

    Ms. Ferguson. At this time, OMB has asked the Department 
not to present any funding beyond fiscal year 2010 in our 
budget. Pending the additional guidance from the President and 
OMB beyond what is in our justification books, we are 
continuing to work with OSD on the development and release of 
anything beyond what we have provided in fiscal year 2010.
    Senator Johnson. General Lengyel and General Thompson, 
would you please give the subcommittee your assessment of this 
situation?
    General Lengyel. Yes, Mr. Chairman. Thank you for the 
question and the opportunity to comment.
    It is a concern to the National Guard bureau that 
potentially there are projects in the FYDP to accelerate. As 
you are well aware, the Air National Guard has been able to 
gain an average of $150 million or more in accelerations 
yearly. So the inability to do that could, in fact, hinder our 
ability to recapitalize our $14 billion plant.
    We hope perhaps that there is some way that we find a way 
to fund those projects into the FYDP so that they can be 
accelerated. But currently, we are playing as partners with the 
Air Force with the funds available in the program.
    Senator Johnson. General Thompson.
    General Thompson. Sir, we are just a microcosm of the 
overall Air Force, the same as the Air National Guard. Much 
smaller program, but we have the same concerns.
    We have a backlog that we would like to be able to 
accelerate. As with the Army that spoke earlier, our request 
last year of $19 million ended up an appropriation of $37 
million. Our request this year is $27 million. So we are--like 
the regular Air Force, our appropriation did exceed our 
request. So we thank you very much for that.
    So just as Joe mentioned, we will be in the same boat, all 
three components of the Air Force, if we cannot work some 
accelerations with you.
    Senator Johnson. General Lengyel and General Thompson, I am 
deeply concerned over the level of funding in the fiscal year 
2010 request for the Air Guard and Reserve. The Air Guard 
request is 60 percent below the fiscal year 2009 enacted level, 
and the Air Force Reserve request is nearly 26 percent below 
fiscal year 2009 enacted.
    This is not the first decrease we have seen in funding 
requests from the Air Guard and Reserve. What impact is this 
trend having on the Air Guard and Reserve MILCON program?
    General Lengyel. Well, sir, Mr. Chairman, once again I 
would comment that I see this budget as actually an improvement 
over the previous 2 year budgets for sure. Last year, I believe 
we had somewhere just over $34 million in current mission 
projects in the budget. This year, we are in excess of $120 
million.
    We are pleased and working again in concert with the other 
components in the Air Force to play by the same rules. I can 
tell you that like every other part in the Air Force, the Air 
National Guard received its top three priorities in MILCON 
projects, no different than anyone else.
    Competition for funding in the budget process is a 
challenge, but we are happy to say that with the Air Force, we 
are playing pretty much as one team. And we are treated no 
different, I would say, than any other part of the Air Force.
    Senator Johnson. General Thompson.
    General Thompson. Sir, I concur with General Lengyel. And 
the thing that I think is the difference this year than perhaps 
last year is we, as the Air Force, changed the business rules 
whereby the Reserve components received their percentages of 
the overall MILCON budget, which resulted in a more fair 
application of those percentages across our portfolio. So it is 
better than last year.
    Now, frankly, it is the difference between last year and 
this year was the wisdom of the Congress in accelerating some 
additions to the budget. But our requests are in line. We feel 
fairly treated. We are equal partners with the Air Force, and 
especially with the change in business rules, we are very 
satisfied with the way that we are treated as part of the Air 
Force team.
    Senator Johnson. Thank you.
    Senator Hutchison.
    Senator Hutchison. Well, I want to thank the chairman for 
asking about the Reserve issue because that has been a concern 
of mine as well.

            24TH AIR FORCE HEADQUARTERS MILCON REQUIREMENTS

    We are all waiting for the decision on the Cyber Command, 
as you can imagine, and I wondered what the MILCON requirements 
might be for the new 24th Air Force headquarters that will come 
with that Cyber Command?
    Ms. Ferguson. Ma'am, it would be premature for me to 
speculate at this time because the Air Force has not yet made 
an announcement on the basing location. But certainly, as soon 
as that is made, we can provide you and your staff an update on 
that.
    Senator Hutchison. Regardless of where it goes, have you 
done planning or is there nothing contingent in your budget 
request for any added building for that?
    Ms. Ferguson. There is nothing in our building request for 
Cyber Command right now. What I can describe is the process 
that we have gone through so far. As you know, the Air Force 
announced in January six locations that were going to be 
visited for possible beddown locations for Air Force Cyber 
Command.
    Space Command took the lead. They performed the site 
surveys at each of those six locations. And as they performed 
those six site surveys, they looked at what it would take to 
reach initial operating capability at that installation, and 
they looked at what it would take to get to final operating 
capability at that location.
    They also evaluated the installation based on six criteria 
that had been provided by the Secretary of the Air Force, and 
they included things like mission synergy, communications, 
bandwidth, availability of facilities, transportation, 
security, and off the top of my head, I can't remember the last 
one.
    But that has been ongoing, and right now, we are just 
waiting to make the announcement for the preferred location and 
the other reasonable alternatives. And at that time, the Air 
Force will begin to accomplish the environmental assessment for 
the beddown of Cyber Command.
    Senator Hutchison. So what then would be the timetable? If 
there is nothing in this year's budget request for generic 
military construction for that headquarters, what would then be 
the timetable for putting it into the FYDP or into a future 
budget?
    It just seems like you would want to stand it up as early 
as possible. And I would have thought you might have something 
set aside for that for whenever the announcement was made so it 
could be started immediately.
    Ms. Ferguson. Our anticipation is that it will be in the 
fiscal year 2011 budget request. If any MILCON is required to 
stand up Cyber Command or Cyber Numbered Air Force (NAF), that 
will be done in the fiscal year 2011 budget. And we will work 
an interim operations and maintenance (O&M) fix, O&M solution 
if required for the interim stand-up.

            JOINT BASING AND BRAC 2005 ROUND IMPLEMENTATION

    Senator Hutchison. Okay. Let me ask you the other issue 
that I had mentioned earlier, and that is the Air Force will be 
the lead on 6 of the 12 joint bases in BRAC. What are your 
preparations for that, and what is your thought of the way you 
will be putting those operations headquarters together for all 
the different services?
    Ms. Ferguson. Sure. And as you point out, they are through 
BRAC 2005, joint basing was directed at 12 installations, 12 
joint basing installations. The Air Force has lead at six of 
those installations, and we are follow at four. And we have 
been working very closely with OSD and our partners in the Army 
and the Navy to execute joint basing as directed by BRAC 2005.
    And OSD and the other services have basically broken down 
joint basing implementation into two phases, and Phase ones are 
underway right now. The memorandums of agreement have all been 
signed for the first five joint bases. In the first five, it is 
Naval Air Base Little Creek/Fort Story, Fort Myer/Henderson 
Hall, Andrews/Naval Air Station Washington, McGuire/Fort Dix/
Lakehurst, and then installations at Guam, both Andersen Air 
Force Base and Navy Region Guam.
    All the rest of the joint bases are in Phase II, and that 
does include Lackland Air Force Base, Fort Sam Houston, and 
Randolph Air Force Base. And I can tell you briefly, all of the 
Phase I bases have reached their initial operational capability 
today, and they will reach full operational capability, will be 
fully stood up on 1 October of this year.
    The Phase II MOAs--and I can talk to you specifically about 
Lackland/Fort Sam in just a second. All the Phase II MOAs are 
under development right now with an initial operational 
capability (IOC) for the follow-on for the Phase II bases in 
January 2010 with full operating capability in October 2010.
    Lackland Air Force Base, Fort Sam Houston, and Randolph Air 
Force Base are one of the last seven bases to go through this 
process I will describe for you. But there is a combination of 
folks here in Washington, DC helping to make this work, along 
with each of the major commands helping to make this work.
    And the next major milestone for Lackland Air Force Base/
Fort Sam Houston on May 22, the command structure at the major 
commands for both the Army and the Air Force will submit a 
draft memorandum of agreement to the Department of Defense for 
us to start looking at. And there will be a workshop that is 
held in San Antonio from the 9th to 12th of June.
    The anticipation for an MOA signature for Fort Sam Houston, 
Lackland Air Force Base, and Randolph Air Force Base will be 
the 22nd of September.
    Senator Hutchison. Could I just follow up with a quick 
question, and that is who will make the MILCON requests where 
there are joint bases? Will it be the lead, or will it be the 
service?
    Ms. Ferguson. It will be the lead for installation support 
functions. If there is a mission change, then it will be the 
requiring. So if there is an Army mission change on Fort Sam 
Houston, the Army would make that request. If it was for a 
regular mission support facility, like a gym or an 
administrative facility to replace something existing, the Air 
Force would do that as the lead for that joint base.
    Senator Hutchison. Thank you.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.

                  AMERICAN EAGLE HOUSING PRIVATIZATION

    Ms. Ferguson, let me ask, as you are very well aware 
because you have dealt with this for a long time, the Little 
Rock Air Force Base, along with bases in Georgia, 
Massachusetts, and Florida, was able recently to resolve a very 
complicated housing privatization issue. And the first question 
is could you give us just--give the subcommittee here a status 
report on all the bases, if you could, just kind of where that 
stands now and particularly where we started in terms of what 
our original goals were versus how many houses and how many 
refurbished houses we end up with now?
    Ms. Ferguson. Sure. And first, I want to thank you and your 
staff for all the work you helped us with as we did the work 
out of the American Eagle project. As you know, the American 
Eagle projects, the four projects were very difficult for us, 
and we appreciate the support of yourself and the other members 
as we worked through that.
    Specifically for Little Rock Air Force Base, the scope was 
reduced from 1,200 to 1,000 as we worked the restructured deal. 
And there was less new construction than what was in the 
original American Eagle project.
    The feedback we have got so far is the Hunt-Pinnacle team, 
the new project owner that is in there, has done a great job of 
bringing in new branding to the installation. They have done a 
tremendous job of taking care of some of the backlogs of 
maintenance, roof repair, storm damage repairs that were both 
at Little Rock and Moody Air Force Bases.
    And we have got great feedback from the installations on 
the work that they have done since they have gone in there in 
November. The Air Force has issued notice to proceed for 
demolition and construction, and Hunt-Pinnacle has begun work 
on the 10 partially completed houses that American Eagle 
started. And those houses should be complete in June. We should 
be able to start moving families into those 10 houses in June.
    The other things they are doing is they are demolishing 
some of that partial work that American Eagle had done that 
wasn't recoverable, and that should be done also. And starting 
in June, they should begin working on 131 new houses at Little 
Rock Air Force Base with work to be done in March 2011.
    Senator Pryor. If I recall, Little Rock has their set of 
issues, and Georgia, Massachusetts, and Florida, they are all a 
little different. But are they generally following on that same 
track that, in effect, the taxpayer is getting a little less 
than what we had originally bargained for? But the work is back 
on track and things are moving to, under the circumstances, a 
conclusion that is relatively satisfactory?
    Ms. Ferguson. Absolutely. Each one of them is similar. Each 
project is different in some respects. Some--at Patrick Air 
Force Base, we added some additional homes to the deal. 
Originally, it was all the houses were off base. We did roll in 
some houses that were on base to the deal.
    Part of the difficulty with the work out of American Eagle 
is there was some collapsed bonds. There wasn't enough money 
available to do what was done originally. And because of the 
financial crisis and the economy, we were unable to go out and 
get additional financing. So we had to live within the dollars 
that were available at the time.
    Work is progressing at all four bases. At Patrick Air Force 
Base, they are demolishing 111 houses right now, and those 
should be complete shortly. They have begun renovation of 435 
homes that were brought into the deal in the north and central 
housing.
    At Moody Air Force Base, they are completing 50 of the 
homes that American Eagle had started. And at Hanscom Air Force 
Base, I actually just came back from a trip to Hanscom Air 
Force Base and visited up there, and they are completing 26 
houses that American Eagle started. And they have done a great 
job.
    On the 1st and 2nd of June, I am traveling to Little Rock, 
Patrick, and Moody Air Force Bases to do another touch with the 
other three bases----
    Senator Pryor. Great.
    Ms. Ferguson [continuing]. To get hands on in how they are 
doing.
    Senator Pryor. Great. Thank you for doing that.
    Now let me ask, from this point moving forward, have you 
prepared a set of lessons learned, things that if you could go 
back, you would do them differently and a better game plan as 
we move forward? Do you have that?

                    AMERICAN EAGLE--LESSONS LEARNED

    Ms. Ferguson. Absolutely. We have learned a lot of lessons 
from American Eagle and not just the Air Force, but the Navy 
and the Army also did as well. And I will go through just a 
couple of things the Air Force has done and how we have changed 
our processes as we have taken lessons learned from American 
Eagle.
    The first thing we did is we centralized source selection 
authority, and actually, that authority resides with me and my 
office. Before, when we awarded the four American Eagle 
projects, there were different source selection authorities for 
each one of the four. They were all awarded within a 1-year 
time period. And so, we weren't able to see those things that 
were occurring across the Air Force.
    We have centralized construction management reporting to 
the Air Force Center for Engineering and the Environment down 
in San Antonio, and they have got standard construction 
reporting, and they have got financial and construction 
reviews. We monitor almost on a daily basis some key 
performance indicators. We monitor the construction schedules, 
the budgets, the financial indicators, the debt covenants, and 
the operating expenses.
    We do, along with our partners, do customer service and 
satisfaction surveys. We do a monthly in-depth review at my 
level of the execution of these projects. We have initiated 
also pretty robust development review visits where we send a 
team out from Air Force Center for Engineering and the 
Environment to go out and actually touch on the ground on a 
pretty frequent basis the issues that are happening there.
    Senator Pryor. I think all of that is good because I think 
actually privatization for housing does make a lot of sense, 
but we just have to make sure that we manage it properly.
    One last question on that specific deal, again, I think 
there were four bases involved in four different States. Is 
there anything right now that the Air Force is doing with 
regard to American Eagle? Any recourse, any lawsuit, trying to 
recover some of the lost money, or have we blacklisted them for 
future projects? What, if any, actions has the Air Force taken 
with regard to American Eagle?
    Ms. Ferguson. I will have to get you an update on that. 
They were working through--our general counsel is working 
through their review of the potential debarment, and we will 
get you an update on that. I just don't have a current status.
    [The information follows:]
                             American Eagle
    An ongoing investigation into American Eagle's conduct continues. 
As information is developed and made available through the 
investigation, the Air Force Suspension and Debarment Official will 
continue to monitor whether there exists a sufficient basis to require 
a suspension or debarment action to protect the Government's interests 
in accordance with 48 C.P.R. Subpart 9.4. In the meantime, as it 
relates to American Eagle's responsibility to be a contractor to the 
U.S. Government, before awarding a contract to American Eagle or any of 
the major corporate entities making up American Eagle, in accordance 
with 48 C.P.R. Subpart 9.1, contracting officers throughout the Federal 
Government will be required to make an affirmative determination of 
responsibility. The affirmative responsibility determination requires 
contracting officers to verify that prospective awardees (a) have 
adequate financial resources to perform a given contract; (b) be able 
to comply with the contract requirements; (c) have a satisfactory 
performance record; (d) have a satisfactory record of integrity and 
business ethics; (e) have the necessary capabilities to perform the 
contract; (f) have the necessary facilities to perform the contract; 
and (g) otherwise be qualified and eligible to receive an award. Apart 
from removing American Eagle from the housing privatization projects, 
at this time the Air Force has not initiated any other action against 
American Eagle.

    Senator Pryor. Thank you.
    Mr. Chairman, just so you will know, my thought is, if you 
have a company like American Eagle that just doesn't honor its 
obligations, its contracts it has made, my sense is they ought 
to be--there ought to be some sort of so-called ``death 
penalty'' for them or some sort of blacklist where for a period 
of years they just can't bid on these contracts.
    But anyway, we can talk about that in another context.
    Thank you.
    Senator Johnson. I will take that under advisement.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.

      COAL TO LIQUID FACILITY NEAR EIELSON AIR FORCE BASE, ALASKA

    Ms. Ferguson, I want to ask about a situation up north as 
it relates to Eielson and Fairbanks, the community that is the 
largest community in relation to that base there.
    Recognizing that the Air Force has embarked on this 
strategy to promote the development of synthetic fuels, one 
that I heartily endorse, last year in the fiscal year 2009 
Defense Appropriations Act, there were $5 million in O&M funds 
that was set aside, another $5 million in research and 
development funds that was set aside to study the feasibility 
of a coal-to-liquids facility near Eielson.
    And the Fairbanks North Star Borough, which is the local 
government there, has been working on this project for quite 
some time. They have defined several issues that they believe 
are very important to resolve in order to decide how to move 
this forward and whether to go forward with the project.
    The Air Force is now in the process of commissioning two 
studies now, and it is my understanding that the Fairbanks 
North Star Borough believes that these studies will not answer 
the questions about this project, which really do need to be 
answered now. And apparently, it wasn't up until just about a 
week ago that the Air Force actually met with the community 
leaders about the problem.
    The community leaders don't feel that the Air Force has 
been listening to their concerns, and the concern is that they 
will go forward, spend $10 million on studies that may have 
very little value.
    So the question that I have of you this afternoon is 
whether the Air Force is prepared to work with the leadership 
of the Fairbanks North Star Borough to address the concerns 
about how this $10 million is going to be spent?
    Ms. Ferguson. That is a great question. Absolutely, the Air 
Force is committed to work with the community of Fairbanks and 
the Fairbanks Economic Development Council (FEDC) up there as 
we work through how we spend this $10 million and how do we 
best support the community as we move forward.
    As you point out, there was a meeting just recently with 
the community that was on the 3rd of May, and the feedback I 
got out of the meeting is there was a lot of issues that were 
raised. And I think it helped to alleviate some of the concerns 
of the community at that time.
    And the purpose of the meeting was really to provide them 
an update as to where the Air Force was, and to be quite 
honest, it was hard for the Air Force to get started on this. 
It was an unusual earmark. We weren't quite sure how to work 
it, how to work it with the community. So I think that is why 
there was some delay in beginning to talk to the community.
    The folks at the local level were concerned, as you point 
out, on how the Air Force was going to go forward, what were 
the studies that we are going to do, how we were going to 
integrate the community in that. And I can tell you just a 
couple of things.
    The Air Force is really doing three studies. One is the 
research on the feasibility of a coal-to-liquid plant. Can it 
work up there? How will it work? What are the things that need 
to be done to make that work?
    And then the second thing is an environmental baseline 
study, which you have to do for any project. And then the third 
thing, and this may be one of the things the community is 
concerned about, is the mission compatibility study. How would 
a coal-to-liquid plant work alongside the existing missions or 
potential future missions at Eielson Air Force Base?
    So there are kind of three parallel studies all going on. 
Those will all come together mid to late summer, July-August 
timeframe. There is actually another meeting up there today 
with General Chandler, the Pacific Air Forces (PACAF) 
commander. And he is meeting with Mayor Whitaker and the FEDC 
folks today.
    And then there will be another follow-on meeting in late 
July, early August that talks about, the results of the 
preliminary studies and helps to map out a way forward.
    Senator Murkowski. Well, I am pleased to see that there is 
a greater level of communication. I think the community's 
concerns about how these dollars are going to be spent are good 
and fair and legitimate. And in order for this to work, there 
has got to be a full understanding as to how the project truly 
does play forward.
    And I appreciate--I have had an opportunity myself to sit 
in on the initial meeting, and you had all the stakeholders in 
the same room. And there was a great deal of energy and a great 
attitude about the feasibility of how we can really make this 
work. Since then, everything has kind of fallen by the wayside, 
and the level of communication has not been what it needs to 
be.
    So I would just encourage that there be that level of 
coordination and collaboration between the leadership within 
the Fairbanks community and the Air Force. So I appreciate 
that.

       BRAC 2005 CLOSURE OF KULIS AIR NATIONAL GUARD BASE, ALASKA

    And then one final question, and this relates to the 2005 
BRAC and Kulis Air National Guard Base there in Anchorage. We 
think, within the community, that this has been a win in terms 
of closures--a win for the Air Force and a win for the 
community. Because once Kulis moves then over to Elmendorf, the 
land that Kulis currently occupies can be put to economic 
development.
    So the question quickly to you is whether or not Kulis is 
on track and whether or not there is adequate funding to 
complete that BRAC process there at Kulis?
    Ms. Ferguson. Absolutely. Kulis Air National Guard Base is 
on track for September 15, 2011. And we do not need any 
additional funding. The Air Force has fully funded BRAC not 
just at Kulis, but across the Air Force.
    And we monitor the execution of that very closely. We do 
quarterly program management reviews. The last one was just 
under a month ago, and so far everything is on track and on 
budget.
    Senator Murkowski. Good. I always like good news like that.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. Thank you, Senator.
    I would like to thank all of our witnesses for appearing 
before the subcommittee today. We look forward to working with 
you this year on what is likely to be a very compressed 
schedule.
    For the information of members, questions for the record 
should be submitted by the close of business on May 15.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Daniel K. Inouye

                          f-22 for hawaii ang
    Question. Hawaii's Air National Guard will receive its allocation 
of twenty F-22 fighters in February 2011.
    Do you believe that the two projects requested in fiscal year 2010 
will be completed, or near completion, when the planes arrive?
    Answer. Given the above information that F-22 fighters will begin 
arriving at Hickam Air Force Base, Hawaii in February 2011, it is 
likely that the two projects requested in fiscal year 2010 will be 
underway, assuming the current President's Budget request is passed to 
provide funding at/near the start of the fiscal year in October 2010. 
However, it is unlikely that the two projects will be nearing 
completion when the fighters arrive.
    Question. Hawaii's Air National Guard will receive its allocation 
of twenty F-22 fighters in February 2011.
    Could you please explain the process by which priority was given to 
the F-22 military construction projects required at Hickam AFB?
    Answer. The Air Force prioritized basing locations through an 
integrated process that considered mission requirements, available 
space/facilities, timing of aircraft arrivals, and available military 
construction funding. Within this prioritization methodology, the 
Hickam Air Force Base, Hawaii projects were aligned against fiscal 
years 2010-2013. The Air National Guard conducted site surveys and Site 
Activation Task Forces at Hickam Air Force Base which were attended by 
representatives from the Headquarters Pacific Air Forces staff and the 
F-22 Systems Program Office as well as the host unit scheduled to 
operate the aircraft. Based on operational requirements, sequencing of 
construction, constructability of the available sites, and funds 
available through the military construction program, the first two 
projects were aligned against fiscal year 2010. These projects provide 
critical aircraft parking apron/taxiway pavements ($7 million) and the 
dedicated Low Observable/Composite Repair Facility ($26 million) needed 
to begin operating the aircraft from Hickam Air Force Base, Hawaii.
    Question. The Department of Defense recently announced its 
intention to halt production of the F-22 in fiscal year 2010. Plans to 
construct additional infrastructure at Hickam AFB for the F-22s, bed 
down and other support facilities, is scheduled to occur in the next 4 
years.
    What, if any, impact does the plan to discontinue production of the 
F-22, and changes to the F-22 allocations or scheduled delivery, factor 
into the prioritization of future F-22 projects at Hickam?
    Answer. The fiscal year 2010 President's Budget request shows 
aircraft arriving at the 154th Wing, Hickam Air Force Base, Hawaii 
beginning in the first quarter of fiscal year 2011. The total delivery 
is programmed to be completed with 18 primary aircraft authorized by 
the end of the first quarter of fiscal year 2012. Currently, there is 
no programmed impact to the prioritization of future F-22 projects at 
Hickam Air Force Base, Hawaii based on the Department of Defense's 
intent to halt production of further F-22 aircraft.
                short auxiliary fields (saaf) in hawaii
    Question. Hawaii's location in the Asia-Pacific region provides 
many opportunities and challenges to our military. Strategically 
located in the Pacific, Hawaii presents many unique challenges that 
include the ability to respond to threats in a vast geographic area, 
and when called upon, provide humanitarian assistance during times of 
disasters. Our military is engaged in Overseas Contingency Operations 
in Afghanistan and Iraq, which increased the pace of deployments for 
our men and women in uniform. These deployments require our service 
members to maintain a high level of training and readiness. One of the 
training requirements is proficiency to land on Short Auxiliary 
Airfields (SAAF). Hawaii does not have a SAAF runway for C-17 crews to 
complete their qualifications requirements, and must fly to the 
continental United States. This increases costs for the Air Force, 
results in a loss of valuable man-hours are lost, and increases the 
strain on the C-17s.
    Does the Air Force plan to budget for the construction of an SAAF 
in the State of Hawaii in the near future, and what annual costs are 
incurred by the Air Force in its current arrangement to maintain C-17 
crews' qualification requirements versus the cost of construction an 
SAAF?
    Answer. The Air Force is addressing the C-17 Short Auxiliary 
Airfield (SAAF) training requirements through our standard military 
construction program. The project proposed in support of this 
requirement competes against other existing requirements on an annual 
basis.
    The Air Force is minimizing costs associated with annual SAAF 
training requirements for Hickam Air Force Base, Hawaii C-17 aircrews 
by using simulated SAAFs on Kaneohe Bay Marine Corps Air Station or 
Kalealoa (John Rogers/Barbers Point Airfield). The use of these 
simulated SAAFs, such as a painted SAAF on the runway at Kaneohe Bay 
Marine Corps Air Station, requires a temporary 15th Operations Group 
Commander waiver to the Air Force C-17 SAAF training standard. Any 
initial or requalification C-17 aircrew training must be completed on 
an actual SAAF runway.
                                 ______
                                 

            Questions Submitted by Senator Mary L. Landrieu

          weapons load training facility at barksdale afb, la
    Question. With the delivery of the full President's Budget on 
Friday, my staff has completed an initial review of the military 
construction projects for the State of Louisiana. Our quick review has 
indicated just one Department of Defense project: A new ``Warrior in 
Transition Complex'', at Fort Polk, for our Wounded Warriors. My first 
question is for the Air Force. ``Reinvigorate the Nuclear Enterprise'' 
is currently, your number one service priority. The stand-up of Global 
Strike Command is a clear message of that stated priority. However, 
adequate training facilities are critical to sustaining this mission 
area. The 2nd Bomb Wing, located at Barksdale Air Force Base, has an 
urgent need for a new Weapons Load Training Facility. This facility 
will directly support training of our crews in the proper processes and 
procedures for nuclear and conventional munitions loading of the B-52. 
This facility, which directly supports the Air Force's number one 
priority, is currently not funded for fiscal year 2010.
    Can you explain why?
    Answer. Projects identified by the New Discovery review were 
prioritized and the most critical projects were funded first (two Minot 
Air Force Base, North Dakota facility projects in fiscal year 2010). 
The Weapons Load Training Facility is a solid Air Force military 
construction requirement. Currently, there are existing workarounds 
that temporarily allow mission accomplishment. This requirement will 
continue to be evaluated during the upcoming budget cycle and the 
Quadrennial Defense Review.
      milcon in the american recovery and reinvestment act of 2009
    Question. Just a few short months ago, The American Recovery and 
Reinvestment Act of 2009 provided the Department of Defense nearly $2.2 
billion in military construction funding. I'm disappointed that the 
State of Louisiana received none of this funding.
    For the Air Force.can you explain the process you followed to 
prioritize and submit military construction projects for this funding, 
to include your Guard and Reserve components?
    Answer. The Air Force received $310.1 million in military 
construction funds through the American Recovery and Reinvestment Act 
of 2009. The Military Construction funds were provided in the following 
categories: Air National Guard ($50 million), Child Development Centers 
($80 million), Troop Housing ($100 million), and Military Family 
Housing ($80.1 million). There were no funds provided for Air Force 
Reserve military construction activities.
    Air National Guard projects were selected from projects previously 
validated by the States and Air National Guard leadership. Several 
considerations were taken into account in project selection including: 
ability to award quickly, design complete projects ready for 
solicitation, State workload (including Wing Deployment status), and 
maximizing available funding at multiple locations.
    The Child Development Center (CDC) projects represent the top seven 
priorities in the Air Force's CDC construction program. Projects were 
previously prioritized by the major commands and Air Force Services 
during the fiscal year 2009 budget process.
    In selection of the troop housing, or dormitory projects, the Air 
Force followed the Air Force Dormitory Master Plan in selecting 
military construction projects. Additional consideration was applied 
with regard to the ability to execute projects quickly and maximizing 
the available ARRA funds.
    Lastly, two Military Family Housing military construction projects 
were selected based on the ability to execute the projects quickly. In 
the case of Malmstrom AFB, MT the project corrected structural safety 
deficiencies posing a threat to our Airmen and their families.
                         global strike command
    Question. Ms Ferguson, you played a lead role in the site selection 
process for Global Strike Command. In April 2009, the Air Force 
announced that Barksdale Air Force Base was the chosen location to bed 
down this new command. I understand that the Environmental Impact Study 
is still in progress. We're anxiously awaiting the final results. As 
we've previously discussed with both Secretary Donley and General 
Schwartz, the cyber innovation center, located just outside Barksdale 
Air Force Base, is a world-class facility, designed to house and 
support cyber technology development. Yet, it was constructed to 
support the Air Force. I'd encourage the Air Force and this committee, 
to consider this facility in both the short and long-term plans, as a 
realistic, cost-effective method of standing up Global Strike Command 
at Barksdale Air Force Base.
    What fiscal year 2010 funding has been requested to prepare for 
this transition, and to achieve the initial operating capability of 
Global Strike Command at Barksdale AFB, pending the EIS results? What 
is the Air Force's latest estimate for completing and announcing the 
Environmental Impact Study results?
    Answer. $20 million has been requested in the fiscal year 2010 
President's Budget to fund the provisional command's operations and 
transition of Global Strike Command to its final location. Currently, 
we estimate that the environmental assessment will be complete the 
final week of June with an announcement shortly thereafter.
          military command locations off military reservations
    Question. Military commands are traditionally located on a military 
base or post, with force protection being one of the driving 
requirements and benefits of doing so. However, one exception that 
comes to mind is the United States Southern Command, located in Doral, 
Florida. In fact, the new consolidated headquarters, authorized by the 
2008 National Defense Authorization Act, has paved the way for 
construction of their new headquarters on 55 acres of Florida-owned 
land immediately adjacent to the command's current facility. Both the 
current and the future headquarter buildings are located outside the 
confines of a military facility.
    What would prohibit a major command from being located off-base, 
even in an interim fashion?
    Answer. There are no regulatory requirements which would prohibit a 
military command (e.g., headquarters) from being located off-base; 
however, the exacting force protection requirements mandated by the 
Department of Defense would make an off-base location very costly. 
Department of Defense guidance, contained in various DOD instructions 
and Unified Facility Criteria, requiring stand-off distances from roads 
and other buildings, controlled perimeters, positive identification of 
persons accessing the facility and other stringent anti-terrorism and 
security measures are expensive to attain. When the U.S. Southern 
Command Headquarters relocated to Miami, Florida in 1997, the extensive 
array of anti-terrorism protective requirements were not yet 
established. We note that, due to the current anti-terrorism guidance 
and BRAC decisions, efforts are currently underway to re-locate 
significant Washington, DC-area headquarters staff elements from off-
base facilities to various military installations within the National 
Capitol Region for similar reasons.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 4 p.m., Tuesday, May 12, the subcommittee 
was recessed, to reconvene subject to the call of the Chair.]


   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2010

                              ----------                              


                         TUESDAY, MAY 19, 2009

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:38 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Pryor, and Hutchison.

                         DEPARTMENT OF DEFENSE

STATEMENT OF HON. ROBERT F. HALE, UNDER SECRETARY OF 
            DEFENSE (COMPTROLLER)

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Good afternoon. This hearing will come to 
order.
    I welcome everyone to today's hearing to discuss the 
President's fiscal year 2010 budget request for military 
construction and family housing. Today, we will hear from the 
Defense Department comptroller and from the Navy.
    Welcome to the students and faculty of my alma mater, the 
University of South Dakota.
    Our procedure is to have opening statements by the chairman 
and ranking member, followed by an opening statement from our 
witnesses. In addition to the oral statement, all prepared 
statements from our witnesses will be entered into the record.
    I request that our members limit their questions to 6-
minute rounds.
    Our first panel today will be the DOD comptroller, Mr. 
Robert Hale, and Mr. Wayne Arny, the Deputy Under Secretary of 
Defense for Installations and Environment. Mr. Hale, Mr. Arny, 
thank you for coming. We look forward to your testimony.
    The President's military construction budget request for 
2010 totals $22.9 billion, $2.1 billion below last year's 
request. I understand that the primary reasons for this 
decrease are decreasing requirements for base realignment and 
closure (BRAC) 2005 construction funding and for military 
family housing funding due to the progress made on 
privatization.
    However, this committee carefully watches funding for the 
Guard and the Reserves, and I notice that funding for the 
Guard, Army Guard is 26 percent below last year's request and 
54 percent below last year's enacted level.
    I am pleased to see funding increases for the other Reserve 
components, but I believe we can and should do more for our 
Guard and Reserve forces.
    Today, I would like to focus on several issues in the 
budget request, including the status of the services' Future 
Years Defense Plans, incremental funding, global basing, and 
the Homeowners Assistance Program. When we get to Navy issues 
with the second panel, I am very interested in the status of 
the marine buildup on Guam.
    We have a lot of ground to cover today. So I will limit my 
opening remarks.
    Senator Hutchison, would you care to make an opening 
statement?

               STATEMENT OF SENATOR KAY BAILEY HUTCHISON

    Senator Hutchison. Yes, Mr. Chairman. Thank you very much.
    I appreciate having this hearing, of course, and I look 
forward to discussing the overall construction needs that will 
be presented here today.
    It was just a year ago, Mr. Arny, that you and Mr. Penn and 
General Payne were here to discuss the fiscal year 2009 
request. As we begin the budget process for fiscal year 2010, 
there are several significant issues with the military 
construction budget.
    As the chairman mentioned, the overall request of $23 
billion is an 18 percent decrease from the 2009 level. This 
includes $7.5 billion to implement BRAC actions as that program 
continues to race to meet the 2011 statutory deadline.
    I understand we are coming to the end of the BRAC process, 
but this amount is nearly 15 percent below the 2009 enacted 
level and does not give the services much leeway in completing 
the immense program on time. I am anxious to hear from Mr. Arny 
on this program and how we are going to meet the 2011 deadline.
    Full funding of BRAC has been a priority of mine because it 
is the easiest target that we have had through the years. And 
people have borrowed from it, but we have assured that it was 
always paid back. So we want it to be used for making that 2011 
deadline.
    I also understand that the administration has a policy 
prohibiting the Office of the Secretary of Defense and the 
services from sharing the current FYDP with Congress. To go a 
step further, I know that the Guard and Reserve is required by 
law to present a FYDP to Congress but have been directed not 
to.
    In essence, you are asking Congress and this subcommittee 
to invest in a MILCON program without the knowledge of how 
these programs will fit into the larger defense posture. I know 
you have a Quadrennial Defense Review taking place that will 
not be completed until the fall, but I think it is the 
responsibility of the department to work with Congress on these 
plans.
    I don't see the wisdom of this policy, and especially since 
the subcommittee has a history of not allowing congressional 
inserts unless the project is a validated DOD requirement in a 
FYDP. We have been very disciplined about that.
    So I will ask both of you to speak to that, and I also want 
to talk about the brigade combat teams being lowered to 45, 
which we learned--well, we have learned in the news, but also 
we discussed at our last hearing with the Army. But I want to 
know how it is going to affect the overall DOD defense posture 
and the MILCON master plan.
    Last week, when we talked about the Army budget request, I 
brought up the subject of the lowering of the number of brigade 
combat teams. I received assurances at that time that the Army 
MILCON plan for the brigade combat teams at Fort Bliss has not 
changed and is proceeding accordingly. I was pleased to receive 
this assurance.
    I have discussed this issue with the Secretary of Defense 
and the Chief of Staff of the Army because I am concerned that 
we have the construction already in progress at Fort Bliss for 
the teams, as has been provided by the Department of Defense 
and BRAC. The Secretary of Defense and the Chief of Staff of 
the Army--and if either of you can discuss these decisions, I 
hope that you will.
    Also, the Army's desire to expand Pinon Canyon range at 
Fort Carson has been held up for over 3 years. Yet the Army 
told this subcommittee that they have not begun working on a 
plan B. In addition, I have to ask would it make sense to put 
another brigade combat team at Fort Carson if they don't have 
this training capacity?
    Also, relocating marines to Guam. We are moving 8,000 
marines from Okinawa to Guam and establishing a Joint Base 
Guam, combining the Navy base and Andersen Air Force Base, with 
the Navy as the lead. This will bring an additional 17,000 
people to the island. The Government of Japan is contributing 
$6 billion to the move and the United States $4 billion.
    After 3 years, we have yet to see a master plan to spend 
the $10 billion and have been told that the cost could be much 
higher. So I think it is time for us to see if there is a 
master plan and that this committee be able to know what it is 
so that we can appropriately plan for that.
    Also, it is against this backdrop that we begin to examine 
the budget request for military construction in the Department 
of the Navy. $3.8 billion is in the Navy request and the Marine 
Corps, and the Marine Corps, of course, has now--it 
successfully completed its increase to its end strength, and we 
need to talk about that with the second panel.
    I am anxious to hear from Secretary Penn, General Payne, 
and Admiral Handley about their needs and priorities for 2010. 
I support the Navy's emphasis on quality of life facilities, 
and I am sure that they remember that we talked about this last 
year and encouraged the Navy to do exactly that.

                           PREPARED STATEMENT

    The Marine Corps' growth to 202,000, as a result of the 
Grow the Force initiative, certainly is well planned, and I am 
pleased to see that the MILCON and housing request to train and 
house these additional personnel and their families is going 
forward in an expeditious manner.
    So, Mr. Chairman, I thank you for the hearing. I think that 
we have several items to discuss, and I look forward to hearing 
from the witnesses.
    [The statement follows:]

           Prepared Statement of Senator Kay Bailey Hutchison

    Good morning, Mr. Chairman. I would also like to welcome our 
witnesses and guests. Thank you for holding this hearing today as we 
examine the President's budget request for military construction and 
family housing for the Department of Defense, Base Realignment and 
Closure actions, and the Department of the Navy, including the United 
States Marine Corps. I look forward to discussing the overall 
construction needs of our soldiers, sailors and airmen with Mr. Hale 
and Mr. Arny, and the needs of the Navy and Marine Corps with Assistant 
Secretary Penn and General Payne. It was just a year ago when Mr. Arny, 
Mr. Penn and General Payne were here to discuss the fiscal year 2009 
request. Welcome back gentlemen, it is good to see you again.
    As we begin the budget process for fiscal year 2010, there are 
several significant issues with the military construction budget. 
First, the overall request of $23 billion is nearly an 18 percent 
decrease from the fiscal year 2009 enacted level. This includes $7.5 
billion to implement BRAC actions, as that program continues its race 
to meet the 2011 statutory deadline. I understand we are coming to the 
end of the BRAC process, but this requested amount is nearly 15 percent 
below the fiscal year 2009 enacted level and does not give the Services 
much leeway in completing this immense program on time. I am anxious to 
hear from Mr. Arny as to how this program is doing. We have to provide 
the right infrastructure for our soldiers, sailors, airmen and marines 
and their families. This is why fully funding and effectively 
implementing BRAC is so important. The sooner we can get our servicemen 
and women home and into new, state-of-the-art facilities, the sooner we 
will live up to our commitment to provide for them in a way that is 
commensurate with their service to our Nation.
Future Years Defense Program (FYDP)
    I understand that the Secretary of Defense has a policy that 
prohibits OSD and the Services from sharing the current FYDP with 
Congress. To go a step further, I know the Guard and Reserve is 
required by law to present the FYDP to Congress and the Secretary has 
directed them not to. In essence, you are asking Congress and this 
subcommittee to invest in a MILCON program without the knowledge of how 
these proposed projects will fit into the larger defense posture. I 
know you have a Quadrennial Defense Review (QDR) taking place that will 
not be completed until the fall, but I think it is the responsibility 
of the Department to work with Congress on these plans. I really don't 
see the wisdom of this policy, and frankly I am surprised at it, 
especially since this subcommittee has a history of NOT allowing 
Congressional inserts unless the project is a validated DOD requirement 
in the FYDP. I will ask you both to speak to this policy later in the 
hearing. When combined with new policy assertions, such as Secretary 
Gates' decision to cap the number of Brigade Combat Teams at 45, 
Congress needs to know how this will affect the DOD defense posture and 
the MILCON master plan.
Brigade Combat Teams (BCTs)
    Last week at the hearing on the Army budget request, I brought up 
the subject of the Army's Brigade Combat Team stationing plan, and I 
received assurances at that time that the Army MILCON plan for the 
Brigade Combat Teams at Fort Bliss has not changed and is proceeding 
accordingly. I was very pleased to receive that assurance. I have 
discussed this issue with the Secretary of Defense and the Chief of 
Staff of the Army because I am concerned that we do not disrupt the 
extensive construction already in progress at Fort Bliss.
Relocating Marines to Guam
    We are moving 8,000 Marines from Okinawa to Guam and establishing a 
Joint Base Guam, combining the Navy base and Anderson AFB, with the 
Navy as the lead. This will bring an additional 17,000 people to the 
island. The government of Japan is contributing $6 billion to make the 
move and the U.S. government has promised $4 billion.
    After 3 years of asking, we have yet to see a master plan to spend 
the $10 billion, and in fact, we understand the cost will be much 
higher. Before we commit the U.S. taxpayer to such a large move we 
would like to see a comprehensive master plan in order that Congress 
can provide the Department with the proper oversight. We were told by 
the Navy and the Marine Corps that they cannot speak to the out years 
or show us yearly project plans because of the FYDP restriction.
    A major issue holding up this planned move is the condition of the 
infrastructure on the island. Assistant Secretary Penn will speak to 
this in more detail, I'm sure, but since Mr. Arny is very familiar with 
the Island of Guam I look forward to his perspective.
    The electrical grid, water distribution system, and solid waste 
disposal capability are in serious need of repair and will not support 
the additional troops and their families. As such, will DOD pay the 
bill for upgrading the infrastructure for these utilities as part of 
the move? I think this question needs to be addressed, and without a 
master plan I think it will be difficult for all of us.
Navy and Marine Corps
    It is against this backdrop that we begin to examine the budget 
request for military construction. The Department of the Navy's $3.8 
billion budget request and the Marine Corps' successful efforts to 
increase its end strength is quite significant and I look forward to 
the discussion with the second panel.
    I am anxious to hear from Secretary Penn, Major General Payne and 
Rear Admiral Handley about their needs and priorities for fiscal year 
2010. I fully support the Department of the Navy's emphasis on quality 
of life facilities, which I'm sure they remember this subcommittee 
requested they keep in their plans. The Marine Corps' growth to 202,000 
as a result of the Grow the Force initiative certainly is well planned, 
and I am pleased to see the MILCON and housing request to train and 
house these additional personnel and their families.
    Every member of this subcommittee has worked on a bipartisan basis 
to support our troops and their families by providing the best 
facilities possible so they can work and live in the quality 
environment they deserve. I commend the Department for making quality 
of life a top priority.
    Thank you again Mr. Chairman for holding this hearing and I thank 
your staff for their assistance as well. I look forward to discussing 
these and other issues with our witnesses.

    Senator Johnson. Thank you.
    Secretary Hale, Mr. Arny, thank you again for appearing 
before our committee. Your prepared statement will be placed in 
the record. So I encourage you to summarize your remarks to 
allow for more time for questions.
    Secretary Hale.

                      STATEMENT OF ROBERT F. HALE

    Mr. Hale. Well, thank you, Mr. Chairman and Senator 
Hutchison, and thank the committee for all the support to our 
armed forces. We depend on the Congress for the resources we 
need to meet national security needs, and we appreciate your 
help.
    I will provide a brief overview of the budget with a focus 
on military construction and then ask Mr. Arny to provide the 
details.
    As you know, the President's base budget asks for $533.8 
billion of discretionary budget authority, up $20.5 billion, or 
about a 4 percent increase which amounts to a 2.1 percent 
increase after adjustment for inflation.
    This is a reform budget. I have worked in and around the 
defense budget for several decades now. We use that term 
loosely sometimes, but I do believe this is one of a handful of 
budgets that qualifies as a reform budget. If it is approved, I 
think it will change the way the department does business.
    The base budget lays out and the Secretary has described it 
in terms of some themes, and let me just mention them briefly 
because I think they are a good context for the discussion of 
MILCON.
    First, this budget affirms our commitment to take care of 
our people. For example, it fully funds all the personnel in 
the budget in the base portion rather than the more volatile 
wartime budget.
    Second, the budget tries to reshape the Department of 
Defense to focus more on the wars we are fighting today, while 
maintaining a balance of conventional capability. So, for 
example, we have added special operations personnel, to 
intelligence, surveillance, and reconnaissance, and we have to 
pay for these. We have completed the program of record for the 
F-22 and C-17 aircraft and do not propose additional 
procurement.
    And third, the budget reforms what we buy and how we buy 
it. There is a people side to this--for example, beefing up, 
reinvigorating our acquisition corps--but also a hardware side, 
as we looked at troubled programs in terms of cost, schedule, 
performance. As a result of our review, we recommended 
terminating or restructuring a number of programs, including 
the Future Combat System and missile defense.
    Turning to military construction, we have asked for $23 
billion for military construction and family housing. I think 
it meets all three of these themes or at least supports them, 
specifically taking care of our people and reshaping and 
modernization of the force.
    Overall, it is an 8.4 percent decline, as was mentioned in 
your opening statements. That sounds ominous, but it reflects 
our successful achievements, actually, in base realignment and 
closure and family housing privatization.
    BRAC is down 14.8 percent, but we have fully funded BRAC, 
and we expect to meet the September 2011 deadline. Family 
housing is down 38 percent, but that is because, as again you 
know, we have moved aggressively to privatize our family 
housing therefore, we don't need as much family housing 
inventory; construction funds in our own budget.
    We factor out these two categories, BRAC and family housing 
prioritization, MILCON is up by about 3 percent between fiscal 
2009 and fiscal 2010.
    The Department's base budget meets our key goals for 
military construction. We continue to invest in facilities that 
support Grow the Force, such as barracks, and brigade 
complexes. The base budget also provides facilities that keep 
pace with the fielding of new systems and capabilities as well 
as necessary training.
    The request includes a significant investment in 
recapitalizing aging medical facilities and schools, such as 
Warrior in Transition complexes. It also contains a substantial 
investment in the global defense posture, including 8,000 
marines moving from Okinawa to Guam.
    Before I leave the base budget, let me talk about the issue 
of the out-year plan. We are currently conducting the 
Quadrennial Defense Review and the program budget review. We 
will develop a 5-year plan as part of the fall budget review 
and submit it next year. For the moment, we don't have a plan 
beyond fiscal 2010 consistent with administration policy.
    It is not our desire to tell anyone they can't submit it. 
We don't have one to submit. So, for the moment, the only thing 
we can do is answer your fiscal 2010 questions in detail, and 
we can talk later about how we will work with you in regard to 
other issues. Because I understand that there are issues for 
this committee and others.
    Let me just mention briefly our wartime portion of the 
budget, which we now call the overseas contingency operations, 
or OCO. I like to call it Washington's newest acronym. We are 
asking for $130 billion for overseas contingency operations. 
This represents our best estimate of the full cost of funding 
our efforts in Iraq and Afghanistan in fiscal year 2010.
    I hope we do not have to submit a supplemental. But if the 
wartime situation changes or the President were to change his 
deployment plans, then we need to retain the right to request 
supplemental funding if necessary.
    The $130 billion for OCO includes $1.4 billion for military 
construction, all in Afghanistan. Given the limited pre-
existing infrastructure there, we need to build roads, runways, 
and parking aprons. There are a lot of things we need to build 
in support of our wartime effort.
    I also want to express my gratitude to the Congress for the 
$7.4 billion in defense-related funding that we received in the 
American Recovery and Reinvestment Act, ARRA, or it is easier 
to call it the stimulus bill. It is $4.3 billion for facility 
sustainment, restoration, and modernization, another $2.2 
billion for military construction, as well as the Homeowners 
Assistance Program and some energy investments and RDT&E.
    This additional funding will allow us to improve 
facilities, to reduce our backlog in a way we couldn't have 
otherwise done, and to help our people. For example, we are 
able to replace two hospitals and to construct child 
development centers, Wounded Warrior complexes and troop 
housing facilities.
    I am happy to report that there are more than 4,200 
projects funded by the stimulus bill in all 50 States, 2 
territories, and the District of Columbia. All the projects 
have been identified, and we are working as hard as we can to 
implement them. These projects will not only stimulate the 
economy, they will help improve the quality of life for our 
service members and their families.
    And lastly, Mr. Chairman, I would like to remind the 
committee that we recently submitted a supplemental request. 
The SAC has acted on it, and we very much appreciate the timely 
action. It includes $0.9 billion for military construction in 
Afghanistan, as well as another $1.4 billion for military 
construction in other critical areas, including Warrior in 
Transition complexes.
    We stand by to assist you, both of you or any other 
members, on both the fiscal 2009 supplemental request and the 
fiscal year 2010 request. To help our troops, we ask that you 
enact this remaining supplemental. We would like it by Memorial 
Day or as soon thereafter as possible. We really appreciate the 
speed with which both the Senate and the House are moving on 
the supplemental request.

                           PREPARED STATEMENT

    Again, on behalf of the men and women of the Department of 
Defense who are faithfully serving our Nation, thank you for 
your strong support.
    Thank you for the opportunity to testify. And after Mr. 
Arny completes his statement, I would be glad to try to answer 
your questions.
    [The statement follows:]

             Prepared Statement of the Hon. Robert F. Hale

    Mr. Chairman, members of the Committee, thank you for the 
opportunity to discuss the Military Construction component of the 
fiscal year 2010 budget request for the Department of Defense.
    On behalf of the men and women of the Department, I would like to 
begin by thanking the Committee for your continued support of America's 
Armed Forces. We depend on you and other Members of the Congress for 
the resources we need to meet our Nation's national security 
requirements.
    To start, I would like to provide a brief overview of our budget 
request and the amount we are asking for Military Construction. I will 
then ask Mr. Arny to speak in detail about the MilCon portion of the 
proposed budget.
Base Budget
    Mr. Chairman, the President's base budget requests $533.8 billion 
in discretionary authority for fiscal year 2010. That is an increase of 
$20.5 billion or 4 percent over the enacted level in fiscal year 2009. 
Taking inflation into account, the real growth in this request is 2.1 
percent.
    The base budget puts into action the overriding priorities laid 
down by Secretary Gates for the Department:
  --First, it reaffirms our commitment to take care of the all-
        volunteer force.
  --Second, it rebalances the Department's programs in order to 
        institutionalize and enhance our capabilities to fight the wars 
        we are in today and to defend against the scenarios we are most 
        likely to face in the years ahead, while at the same time 
        providing a hedge against other risks and contingencies.
  --And third, it reforms how and what we buy, by promoting a 
        fundamental overhaul of our approach to procurement, 
        acquisition, and contracting.
    The $23.0 billion Military Construction and Family Housing portion 
of our request supports those strategic objectives. This request 
represents a decline of 8.4 percent compared with the enacted level for 
fiscal year 2009.
    This decline can be attributed to our achievements on Base 
Realignment and Closure (BRAC) and housing privatization. Funding for 
BRAC 2005 declines by 14.8 percent, to $7.5 billion, as we move toward 
completing requirements. Family housing construction declines by 38 
percent, to $2.0 billion, reflecting the transition toward housing 
privatization.
    If we factor out those two categories--BRAC and housing 
privatization--we find a pattern of growth in Military Construction. 
The fiscal year 2010 request for this portion of Military Construction 
grows by 3.1 percent compared to fiscal year 2009 funding, to a level 
of $13.5 billion.
    The Department's base budget request meets our key goals for 
Military Construction. We continue to invest in facilities that support 
Grow the Force, such as barracks, brigade complexes, and quality of 
life projects. The base budget will provide facilities that keep pace 
with fielding of new systems and capabilities, as well as necessary 
training.
    The request includes a significant investment in recapitalizing 
aging medical facilities and schools and constructing Warrior in 
Transition complexes. It also contains a substantial investment in our 
Global Defense Posture, including the relocation of 8,000 Marines from 
Okinawa to Guam and investments at enduring locations in the CENTCOM 
and AFRICOM areas of responsibility.
Fiscal Year 2010 Overseas Contingency Operations
    As you are undoubtedly aware, the Department's fiscal year 2010 
request also includes a separate request for $130 billion to fund 
overseas contingency operations (OCO). This represents our best current 
estimate of war funding requirements, including funding for all forces 
currently approved by President Obama both for Iraq and Afghanistan. We 
do not plan on submitting a supplemental request. However, should 
policies or the wartime situation change significantly, the Department 
may need to seek supplemental funding.
    The $130 billion for the OCO budget includes $1.4 billion for 
Military Construction, all of which is to be spent in Afghanistan. 
Given the limited pre-existing infrastructure for our troops to occupy 
in that country, it is necessary to construct facilities to sustain, 
protect, and house them. Accordingly, this request includes operational 
facilities, such as runways and parking aprons, as well as associated 
support facilities, such as utilities, roads, housing, environmental 
projects, and dining facilities.
American Recovery and Reinvestment Act
    I want to express my gratitude for the $7.4 billion in Defense-
related funding that was included in the American Recovery and 
Reinvestment Act (ARRA). The ARRA includes nearly $4.3 billion for 
Facility Infrastructure Investments, $2.2 billion for military 
construction, $0.1 billion for the Energy Conservation Investment 
Program (ECIP), $0.3 billion for Research, Development, Test, and 
Evaluation (RDT&E), and nearly $0.6 billion for the Homeowners 
Assistance Program.
    This additional funding will allow us to improve the facilities 
where our military and civilian personnel work and live, to enhance 
energy efficiency in the recapitalization and construction of 
facilities, and to generate needed jobs to help stimulate the Nation's 
economy. For example, the construction funds will enable the Department 
to replace two hospitals and to construct child development centers, 
Wounded Warrior complexes, and troop housing facilities. I am happy to 
report that over 4,200 projects will be executed throughout all 50 
States, two territories, and the District of Columbia. Many of those 
projects are expected to be awarded in the near future.
    These projects will not only stimulate the economy; they will also 
improve the quality of life of our Service members and their families. 
And, as Secretary Gates has said, the all-volunteer force is America's 
greatest strategic asset. Caring for them must be our first priority.
Fiscal Year 2009 Supplemental
    Lastly, Mr. Chairman, I would remind the committee that we recently 
submitted a supplemental request to cover the remaining expenses of the 
war effort in fiscal year 2009, which includes $0.9 billion for 
Military Construction in Afghanistan. This request also includes $1.4 
billion for other critical construction improvements, such as Warrior 
in Transition complexes.
    We stand by to assist Members however we can on that request and on 
the entire fiscal year 2010 budget request, and we ask that you enact 
this remaining supplemental by the Memorial Day recess, or as soon 
thereafter as possible.
    Again, on behalf of the men and women of the Department of Defense 
who are faithfully serving our Nation, thank you for your strong 
support. And thank you for the opportunity to testify here today. After 
Mr. Arny completes his statement, I would welcome your questions.

    Senator Johnson. Thank you, Secretary Hale.
    Mr. Arny.
STATEMENT OF WAYNE ARNY, DEPUTY UNDER SECRETARY OF 
            DEFENSE (INSTALLATIONS AND ENVIRONMENT)
    Mr. Arny. Thank you, Chairman Johnson, Senator Hutchison.
    Thank you for your introduction. I am honored to appear 
before you today.
    In the last 10 to 20 years, the Department has come a long 
way in improving the facilities and infrastructure in which our 
military and civilian workforce and families work and live. We 
could not have progressed so far as we have without the 
continuing support of Congress and, in particular, the 
subcommittee.
    Today, we manage over 500,000 facilities, worth over $700 
billion, located on approximately 29 million acres. In 
comparison, about 10 years ago, we had 115,000 more facilities 
in our inventory, which is, in part, a testimony to our 
continuing efforts to right-size the Department's 
infrastructure to match our operational needs.
    A principal program that has helped us balance the 
infrastructure is the BRAC authority, and using that, we have 
been able to close over 121 major installations and realign 79 
major bases after 5 rounds. The 2005 decisions alone affect 
over 800 locations and include 24 major closures, 24 major 
realignments, and 765 lesser actions.
    As of the fiscal year 2010 President's budget, BRAC 
represents a $35.2 billion investment over 2006 to 2011 and $4 
billion in annual savings after full implementation.
    However, it is not enough to have closed bases and moved 
functions. At the same time, we have tried to focus on how we 
conduct our business so as to become more efficient caretakers 
of the taxpayers' resource.
    An excellent example of that is joint basing. As part of 
the BRAC 2005, we are required to form 12 new joint bases from 
26 separate existing bases so that installation management 
functions will be provided by one component and not two or 
three as it is currently.
    The joint basing implementation process is complicated. 
Almost 50 different areas of responsibility on these bases have 
been identified for consolidation, including food services, 
environmental management, child and youth programs, facility 
maintenance, and many others. But I can report that it is well 
on the way to achieving success.
    In January 2008, we began issuing a series of joint base 
implementation guidance documents and, for the first time, 
established a set of common definitions and standards for the 
installation support to be provided by each joint base. We 
established a schedule that divided the 12 planned joint bases 
into 2 implementation phases. Each joint base will develop a 
detailed implementation plan, including the personnel and 
financial arrangements for the combined base.
    Five joint bases involving 11 installations were placed 
into Phase I. They had an October 2008 milestone for initial 
operational capability (IOC), and this includes--I am sorry, an 
October 2009 date for full operating capability, or fall 
operational capability (FOC). This includes the transfer of 
personnel and funds.
    The remaining 7 bases involving 15 installations were 
placed into Phase II with an October 2010 FOC. The services 
have signed all the right agreements for the first five 
installations, and we have reached IOC on them. And we expect 
FOC for the second phase in October 2010, which is well ahead 
of our BRAC statutory deadline.
    And this is just the beginning of where I see the 
Department going in the application of full funding of common 
levels of service across all our bases.
    As for housing, a decade ago, we were maintaining over 
300,000 family housing units, two-thirds of which were deemed 
inadequate by the military departments. With this year's 
request, over 98 percent of DOD's housing inventory in the 
United States will be funded for privatization.
    With regard to barracks, it was about 17 years ago that we 
began an ambitious modernization program to increase the 
privacy and amenities in permanent party bachelor housing. 
Using military construction funding and a Government-owned 
business model, we have made a lot of progress, but there is 
still $15 billion to go. So we are looking at other ways to do 
it.
    We have begun--we are looking at ways to take off on our 
privatization of housing to do privatization of barracks. We 
have seen innovative concepts where the Army has added bachelor 
housing quarters and senior enlisted bachelor quarters to its 
existing family housing units at Fort Bragg, Fort Stewart, Fort 
Drum, Fort Irwin, and a fifth project is planned for Fort 
Bliss.
    In contrast, the Navy is mainly focused on unaccompanied 
housing privatization to bring shipboard junior enlisted 
sailors ashore using a special pilot project. Their first 
project was begun in December 2006 in San Diego, with a second 
in Hampton Roads in 2007, and a third project underway for 
Jacksonville/Mayport.
    Both of the first two have demonstrated that with the 
authority to pay junior enlisted members less than full 
housing, we can privatize single junior enlisted on a less 
costly basis--I would say less costly on a lifecycle basis than 
traditional Government-owned model. I view this as just a 
starting point and ask for the subcommittee's support in the 
department's continued progress to shift the mindset in which 
the Federal Government has to build and maintain to one where 
we only need to build and maintain what we can't privatize.
    This year's--in answer to one of the questions, this year's 
budget does signal a banner year for MILCON with about $23 
billion in military construction, $8 billion in facilities 
sustainment, restoration, and modernization. That level of 
military construction is very robust, especially compared to 
the $8 billion to $9 billion we were receiving only 10 years 
ago.
    Similarly, our sustainment budget this year is also more 
robust. Ten years ago, we used a percentage of unsubstantiated 
maintenance and repair backlog to come up with our budget 
request, and it didn't work. Although much remains to be done, 
we have made steady headway over the last decade to improve the 
overall conditions of our facilities by using a programmatic 
model.
    The development and use of the facilities sustainment model 
has given us a sound target to measure our sustainment budgets, 
and more importantly, we have been able to defend those budgets 
and defend those requirements in the budget process.
    Recap has been another problem. We tried to use 67 years on 
a recap model that didn't work. When I was with the Navy 
Secretariat, we saw that when we put a large amount of money 
into one place, as we did after Hurricane Ivan hit Pensacola, 
all of a sudden, with the sudden infusion of funds, our recap 
rate went way below the 67 years that we all knew we had only 
invested money in one base. It didn't take account for the 
other priorities we had.
    As I was dissatisfied with that model, I asked my staff to 
work with the services, go back to the basics, and we have 
reopened a dialogue using what are called ``quality ratings.'' 
We are required to report these under the Federal Real Property 
Advisory Group, which has mandated that all Federal agencies 
report these in our property records. We are going to--it gives 
you a Q rating for every building we own.
    We are looking at a method to go in, and we will start 
tracking those Q ratings and planning our budgets to keep those 
Q rating--will plan our budgets to make the Q ratings to the 
point where we believe they are satisfactory for all our 
services.
    In the summer, my staff will work closely with military 
departments to set up the program guidelines for determining 
which facilities require priority funding, assessing how those 
Q ratings are conducted and their frequency, and, most 
importantly, reestablishing how the Department views and uses 
master planning at the installation level.
    Also, in cooperation with our policy secretariat, the joint 
staff, the combatant commands, and the services, we hope to 
initiate joint installation master plans in each overseas 
combatant commander's region.

                           PREPARED STATEMENT

    In closing, I would like to thank you sincerely for the 
opportunity to testify on our installations. We believe we are 
working on the right issues now. And while we cannot fix them 
overnight, we appreciate your continued support and look 
forward to working with you and the subcommittee to provide the 
quality installations that our forces and their families need 
and deserve.
    Thank you, sir.
    [The statement follows:]

                    Prepared Statement of Wayne Arny

    Introduction.--Chairman Johnson, Senator Hutchinson, distinguished 
members of the subcommittee: I appreciate the opportunity to appear 
before you today to address the President's Budget request for fiscal 
year 2010 and to present an update on the status of our Nation's 
military installations.
    Overview.--Our installations are the platforms from which America's 
military capability is generated, deployed, and sustained. They play an 
essential part in addressing two principal objectives of the 
Department. First, they take care of our military forces, our most 
important asset. Secondly, they support and enhance our capability to 
meet the military challenges that we face today, and those that we may 
face in the coming years. Our installations provide training facilities 
for new recruits and career service members, maintenance shops and 
depots to repair and refit their equipment, and quality work and living 
spaces that warfighters and their families deserve. Our primary focus 
is to ensure that our military installations are capable of supporting 
the missions of our forces, today and in the future. To successfully 
provide this support, we focus our resources on programs and 
initiatives that will provide the necessary infrastructure in the most 
effective and efficient manner.
    America's military installations, including both their built and 
natural environments, must be managed in a comprehensive and integrated 
manner to optimize our investment in the assets needed to accomplish 
the mission. In the United States and overseas, the Department 
currently manages over 539,000 facilities, with a plant replacement 
value exceeding $700 billion, located on approximately 29 million acres 
of land. These assets must provide modern and safe work and training 
areas for our military forces, as well as quality housing.
    Before updating you on our fiscal year 2010 Installations and 
Environment programs, I'd like to talk briefly about the impact on our 
military infrastructure of two extremely important challenges facing 
our Nation. The first of these is Overseas Contingency Operations 
(OCO).
    Overseas Contingency Operations.--Military construction is a key 
enabler of OCO, directly supporting wartime operations by providing 
operational and support facilities at key locations. In April, the 
Department submitted its fiscal year 2009 OCO funding request for $2.3 
billion. This investment will help the Department execute realignment 
of forces into and within Afghanistan, by enabling strategic and 
operational flexibility and increasing Intelligence, Surveillance, and 
Reconnaissance (ISR) capabilities. The fiscal year 2009 request will 
also facilitate access to child care and improve support facilities for 
wounded warriors and their families.
    The fiscal year 2010 OCO request of $1.4 billion continues the 
important objective to increase the U.S. presence in Afghanistan, 
specifically the Regional Commands South and East. The facilities 
required to sustain, protect, and house these personnel include 
utilities, roads, housing, and dining facilities as well as 
environmental projects. The fiscal year 2010 OCO request will increase 
the capacity of air lines of communication, broaden logistics and 
intelligence capabilities, and provide the ability to reposition forces 
as the situation dictates.
    American Recovery and Reinvestment Act (ARRA) of 2009.--The other 
challenge is the downturn in the economy, and in response, the ARRA of 
February 2009. This effort will have a significant impact on DOD's 
facilities. The Department is applying the funding to enhance our 
ability to provide high quality installations and facilities and to 
improve our energy efficiency.
    The ARRA includes approximately $7.4 billion in Defense-related 
appropriations. The Military Construction (MilCon) and Operation and 
Maintenance (O&M) funds provided by the Act are available for 
obligation through the end of fiscal year 2013 and fiscal year 2010, 
respectively. The Department has identified over 4,200 projects in the 
following categories:
  --$4.2 billion in O&M accounts to improve, repair, and modernize DOD 
        facilities, including energy-related improvements
  --$1.3 billion in MilCon for hospitals
  --$240 million in MilCon for child development centers
  --$100 million in MilCon for warrior transition complexes
  --$535 million for other MilCon projects, such as housing for Service 
        members and their families, energy conservation, and National 
        Guard facilities
  --$300 million to develop energy-efficient technologies
  --$120 million for the Energy Conservation Investment Program (ECIP)
  --$555 million for a temporary expansion of the Homeowner's 
        Assistance Program (HAP) benefits for private home sale losses 
        of DOD military and civilian personnel
  --$15 million for DOD Inspector General oversight and audit of ARRA 
        execution
    In addition to providing much needed facility improvements and 
funding for important energy research programs in support of the 
national effort to achieve greater energy independence, the ARRA will 
also contribute to our ongoing efforts to ``green'' DOD's built 
infrastructure. In their baseline MilCon programs, the Military 
Services have taken the lead in ensuring a sustainable future for the 
Department by directing that new construction meets both the U.S. Green 
Building Council's Leadership in Energy and Environmental Design (LEED) 
Silver Certification standard and the Federal Leadership in High 
Performance and Sustainable Buildings Memorandum of Understanding. In 
executing ARRA projects, this type of forward thinking directly 
translates to 115 projects and $2.3 billion in the MilCon and military 
family housing construction programs designed and built to LEED Silver 
Certification standards.
    DOD is committed to ensuring that ARRA funds are expended 
responsibly and in a transparent manner that will further job creation, 
economic recovery, and the overall improvement of our military 
infrastructure. Over the coming months, we'll be keeping the Congress 
and the public apprised of our progress in executing these funds.
    Facilities Investment.--Now I would like present an overview of our 
Installations and Environment programs beginning with MilCon and 
related facilities investments. The fiscal year 2010 MilCon and Family 
Housing Appropriation request totals $23 billion, which is a decrease 
of $1.9 billion from the fiscal year 2009 budget request, but still 
compares very favorably with historic trends. The decreased funding is 
primarily in the Base Realignment and Closure (BRAC) and Family Housing 
programs, which I will discuss in more detail shortly. The budget 
request will enable the Department to respond rapidly to warfighter 
requirements, enhance mission readiness, and provide essential services 
for its personnel and their families. In addition to new construction, 
this funding will restore and modernize enduring facilities, while 
eliminating those that are excess or obsolete. A large part of the 
funding is targeted for initiatives to support the realignment and 
increase in endstrength of forces, projects to improve and update 
facilities, and projects needed to take care of our people and their 
families, such as family and bachelor housing, Warrior in Transition 
housing, and child development centers.

     COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS
      [President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
                                                    Fiscal year
                                         -------------------------------
                                           2009 request    2010 request
------------------------------------------------------------------------
Military Construction...................          11,283          12,835
NATO Security Investment Program........             241             276
Base Realignment and Closure IV.........             393             397
Base Realignment and Closure 2005.......           9,065           7,480
Family Housing Construction/Improvements           1,457             489
Family Housing Operations & Maintenance.           1,741           1,444
Chemical Demilitarization...............             134             147
Family Housing Improvement Fund.........               1               3
Energy Conservation Investment Program..              80              90
Homeowners Assistance Program...........               5              23
                                         -------------------------------
      TOTAL.............................          24,400          22,515
------------------------------------------------------------------------

    We are continuing ongoing initiatives to reshape and resize our 
infrastructure, and at the same time, we recognize that there will be 
localized growth in the facilities footprint to accommodate changes in 
force structure, end strength, and weapons systems. These efforts 
include facilities to support Army Modularity, Army and Marine Corps 
Grow-The-Force initiatives, and bed-down of new weapons systems such as 
the Joint Strike Fighter.
    While our basing initiatives continue the process of reconfiguring 
our overall physical plant, and acquiring facilities for future 
requirements, we cannot lose sight of the importance of maintaining and 
modernizing our existing facilities. It is imperative that we continue 
to invest in our existing infrastructure, and plan for the appropriate 
level of investment in all our facilities going forward.
    Facilities sustainment has been and continues to be the most 
important program to support the overall health of our inventory of 
facilities. Sustainment funds regularly scheduled maintenance and major 
repair or replacement of facility components expected periodically 
throughout the life cycle of a facility. Investing in sustainment 
prevents deterioration, maintains safety, and preserves performance. As 
you know, we use the Facilities Sustainment Model (FSM) to estimate the 
funding requirements for our facilities. The model uses benchmark costs 
from public and private sources which are updated on a regular basis. 
Our goal continues to be full sustainment of our facilities to optimize 
our investment and ensure readiness. The fiscal year 2010 President's 
Budget provides $7.8 billion for sustaining the Department's 
significant inventory, representing 91 percent of the FSM requirement.
    The second key element of our facilities investment program is 
recapitalization, which includes restoration and modernization, and is 
funded primarily with O&M and MilCon appropriations. Restoration 
includes repair and replacement work to restore facilities damaged by 
inadequate sustainment, natural disaster, fire, accident, or other 
causes. Modernization includes alteration of facilities to implement 
new or higher standards, accommodate new functions, or replace building 
components that typically last more than 50 years. The Department 
remains committed to maintaining a rate of investment in facilities 
recapitalization that will improve, modernize, and restore existing 
facilities, and replace them when it is more economical to do so. To 
that end, we're refining the way we calculate the required investment 
for recapitalization, and more closely aligning it with the actual 
condition of each facility. We will keep you apprised of our progress 
as we develop the new methodology.

                SUSTAINMENT AND RECAPITALIZATION REQUEST
               [President's Budget in Millions of Dollars]
------------------------------------------------------------------------
                                                    Fiscal year
                                         -------------------------------
                                           2009 Request     2010Request
------------------------------------------------------------------------
Sustainment (O&M-like) \1\..............           7,482           7,799
Restoration and Modernization (O&M-like            1,780           2,035
 plus) \1\..............................
Restoration and Modernization (MilCon)..           8,102           6,527
                                         -------------------------------
      TOTAL SRM.........................          17,364          16,361
------------------------------------------------------------------------
\1\ Includes Operation and Maintenance (O&M) as well as related military
  personnel, host nation, and working capital funds and other
  appropriations such as Research, Development, Test, and Evaluation
  (RDT&E)

    Separate and distinct from the BRAC process, we continue to right-
size our inventory through the elimination of excess and obsolete 
facilities. The Military Departments continue to maintain and execute 
robust disposal and demolition programs to improve the safety and 
aesthetics of our installations, to ensure that only essential 
facilities are retained, and to reduce overall operating costs. In 
fiscal year 2008, the Department eliminated 6 million square feet of 
unneeded facilities. Another 5.5 million square feet is projected for 
demolition in fiscal year 2009. The fiscal year 2010 request includes 
almost $200 million to eliminate approximately 8 million additional 
square feet of unneeded infrastructure.
    Global Defense Posture.--Now I'd like to tell you more about our 
initiatives to provide the right military facilities in the right 
location with the right capabilities, beginning with the status of our 
global restationing efforts. As we continue with planned posture 
changes to meet our world-wide missions, the Department is improving 
its ability to contend with post 9/11 security challenges and 
developing more relevant relationships and forward capabilities for 
21st century expeditionary operations. The fiscal year 2010 MilCon 
request supports the Department's efforts to strengthen our forward 
military presence, including facilities and infrastructure, and to 
transform overseas legacy forces, Cold War basing structures, and host-
nation relationships into a flexible network of access and capabilities 
with allies and partners. These efforts include:
  --Continued force posture realignments within and from Central Europe 
        which enable advanced training and flexible ground force 
        capabilities to support NATO's own transformation goals. The 
        European Command's transformation and recapitalization efforts 
        will require investments in fixed facilities, mobility, 
        prepositioning of equipment, and interoperability. Future 
        infrastructure requests will enable the elimination of 
        substandard housing and will include projects that support 
        continued transformation efforts.
  --Shifting our European posture south and east by transforming the 
        173rd Airborne Brigade in Italy, and establishing 
        infrastructure support for rotational presence in Romania and 
        Bulgaria. Permanent Forward Operating Sites and other training 
        facilities in Romania and Bulgaria have projected completion 
        dates of 2009 and 2011, respectively. In addition to supporting 
        a full-time training effort, Joint Task Force-East provides the 
        logistical base for United States Air Forces in Europe and 
        Special Operations Command Europe exercises in Eastern Europe 
        and Eurasia.
  --Continued progress toward future realignments in the Pacific as 
        part of U.S.-Japan force posture changes that will have far-
        reaching, beneficial impacts for the U.S.-Japan alliance, and 
        will shape our strategic posture throughout the Asia-Pacific 
        region. While Japan is shouldering most of the costs associated 
        with the planned posture changes per the Defense Policy Review 
        Initiative (DPRI), U.S. MilCon funds are necessary to complete 
        remaining facility construction and other infrastructure needs 
        on Guam. MilCon funding will provide projects such as utilities 
        and airfield pavement to bed-down Marine aviation at Andersen 
        Air Force Base, wharf improvements, and the relocation of a 
        military working dog facility at Naval Base Guam. Investments 
        are also needed to improve off-base infrastructure, including 
        selected roads and bridges required for throughput of necessary 
        construction materials.
  --Continued consolidation and restructuring of forces on the Korean 
        peninsula to strengthen our overall military effectiveness and 
        to prepare for transitioning wartime operational control of 
        Republic of Korea (ROK) forces to the ROK military forces by 
        2012. This includes relocating U.S. troops out of Seoul, 
        returning most of Yongsan Army Garrison to the ROK, and 
        consolidating remaining troops into two hubs south of Seoul. 
        This effort positions U.S. forces to better conduct combat 
        operations should deterrence fail on the Korean peninsula, and 
        makes the U.S. presence less intrusive on the Korean people. We 
        anticipate the ROK to continue funding much of the facilities 
        and infrastructure construction for this transition in 
        accordance with the amended Land Partnership Plan and Yongsan 
        Relocation Plan. However, MilCon funding is needed at Camp 
        Humphreys to support U.S. Army forces relocating from camps 
        north of the Han River.
  --Developing basic infrastructure and capabilities for current and 
        future operations in the U.S. Central Command area of 
        responsibility and other overseas contingency operation areas.
  --Enhancing contingency access through an array of sites in Africa 
        that serve as focal points for combined training, capacity 
        building, and broadened relationships with host nations and 
        other partners. MilCon funding is needed at Camp Lemonier, the 
        Department's enduring Forward Operating Site in Djibouti, to 
        support such requirements and improve infrastructure needs 
        within the U.S. Africa Command.
    The Department continues to maintain and strengthen host-nation 
partnerships supporting these posture changes. The fiscal year 2010 
global defense posture projects ensure strengthening of forward 
capabilities for OCO and other expeditionary non-traditional missions, 
commitment to alliance goals and collective defense capabilities, and 
enhanced deterrent capabilities for addressing future security 
challenges.
    Base Realignment and Closure (BRAC) 2005.--In addition to our 
global posture realignments, we continue to execute BRAC 2005, the 
largest round undertaken by the Department. After an exhaustive 
examination of over 1,200 alternatives, the Secretary of Defense 
forwarded 222 recommendations to the BRAC Commission for its review. 
The Commission accepted about 65 percent without change and its 
resulting recommendations were approved by the President and forwarded 
to the Congress. The Congress expressed its support of these 
recommendations by not enacting a joint resolution of disapproval by 
November 9, 2005, therefore, the Department became legally obligated to 
close and realign all installations so recommended by the Commission in 
its report. These decisions affect over 800 locations across the Nation 
and include 24 major closures, 24 major realignments, and 765 lesser 
actions. The BRAC Act required that the Department begin implementation 
of each recommendation within two years of the date the President 
transmitted the Commission's report to the Congress and complete 
implementation of all recommendations within 6 years of that date. The 
Department continues to monitor BRAC implementation to ensure we are 
meeting our legal obligation.
    Beyond the comparative size, it is important to note that BRAC 2005 
is the most complex round ever. This complexity is not merely a 
function of its magnitude, but is, to the largest extent, a function of 
the original goal established for this round: that BRAC 2005 would 
focus on the reconfiguration of operational capacity to maximize war 
fighting capability and efficiency. Focusing on operational capacity 
required that we appropriately assess the increased military 
capabilities we are achieving through these recommendations.
    We accomplished that requirement and, through BRAC, are 
significantly enhancing each capability. Two locations, Fort Bliss, 
Texas, and Naval Air Station (NAS) Brunswick, Maine, highlight what we 
are achieving. Fort Bliss is the largest operational Army BRAC 
movement. Approximately 15,000 Soldiers and their family members will 
move to Fort Bliss and the surrounding communities, and construction of 
BRAC operational facilities is moving ahead as planned in preparation 
for the arrival of the 1st Armor Division at Fort Bliss. In September 
2008, Soldiers of the 1st Brigade, 1st Armored Division took occupancy 
of the first Brigade Combat Team (BCT) Complex. Soldiers of the 4th 
Brigade, 1st Armored Division are now in temporary facilities and 
eagerly await completion of the second BCT complex scheduled for 
September 2009. The Army has programmed the construction of several 
quality of life facilities to support this growth including dental/
health clinics, a hospital, a child development center, a commissary, a 
physical fitness center, and youth centers.
    The closure of NAS Brunswick will reduce operating costs while 
allowing the single-siting of the East Coast Maritime Patrol (VP) 
community at NAS Jacksonville, Florida. NAS Jacksonville and NAS 
Brunswick are collaborating to ensure seamless relocation of five 
aircraft squadrons along with the realignment of the maintenance 
functions and various mission support groups. In preparation for the 
arrival of the first Brunswick aircraft, a new type II hangar 
construction project is on track for completion this month. It will be 
the home for the first returning Brunswick VP squadron which is 
currently deployed. The hangar, the Navy's largest, will provide 
maintenance spaces for all five Brunswick squadrons and will also be 
able to support the future transition to the P-8 Poseidon multimission 
maritime aircraft.
    A key component of this BRAC round was rationalizing medical 
infrastructure. This rationalization was needed to address the 
transformation in healthcare that has occurred since these facilities 
were constructed, and to adapt our facilities to the continuing changes 
in warrior care. At one end of the scale, BRAC enabled the Department 
to close seven small and inefficient inpatient operations, converting 
them to ambulatory surgery centers. BRAC also enabled DOD to realign 
medical operations from McChord Air Force Base, Washington, to Fort 
Lewis, Washington, and to transform the Medical Center at Keesler Air 
Force Base, Mississippi, into a community hospital. On the larger end 
of the scale, BRAC enabled DOD to realign two of its major military 
medical markets: San Antonio, Texas, and the National Capital Region 
(NCR). The strategic realignments in San Antonio of Brooke Army Medical 
Center and Wilford Hall medical center, and in the NCR of Walter Reed 
Army Medical Center and the National Naval Medical Center at Bethesda, 
Maryland, address critical needs to realign and consolidate key 
clinical and clinical research capabilities, undertake serious facility 
modernization requirements, as well as better matching facility 
locations and capabilities, achieving medical advances, and adapting to 
changing needs of wounded warriors.
    For the NCR, the fiscal year 2010 costs (including the $263 million 
included in the fiscal year 2009 supplemental request) are $2.4 
billion. As is the case with San Antonio, costs rose due to 
construction inflation, wounded warrior lessons learned, and unforeseen 
costs as the construction process has unfolded.
    Unique to the NCR is the effort to enhance and accelerate 
construction at Bethesda and Fort Belvoir, Virginia, as a result of 
lessons learned and the Department's commitment to implement the 
recommendations of the Independent Review Group (IRG) on Rehabilitative 
Care and Administrative Processes at Walter Reed Army Medical Center 
and National Naval Medical Center Bethesda. The IRG's April 2007 report 
recommended a variety of measures to improve medical care and that DOD 
accelerate BRAC projects in the NCR. In order to implement the report's 
recommendations and incorporate other war-related lessons learned, the 
Department committed to create Warrior Transition Unit facilities at 
the Bethesda Campus to enhance wounded warrior care, especially the 
outpatient convalescent phase. The Department also committed to 
enhancing inpatient facilities at both Fort Belvoir and Bethesda. These 
enhancements, together with a commitment to accelerate construction to 
ensure that the new facilities will be operational as soon as possible, 
required the investment of an additional $679 million. The fiscal year 
2008 supplemental appropriated $416 million.
    The BRAC 2005 Commission Report also calls for the transfer of 
installation management functions from 14 designated installations to 
12 other installations to create 12 Joint Bases. Joint basing calls for 
installations that share a common boundary or are in close proximity to 
consolidate installation management functions and the delivery of 
installation support functions while considering best business 
practices and ensuring warfighting capabilities are preserved or 
enhanced. The 12 Joint Bases will be established in two phases, with 
Full Operational Capability (FOC) for Phase I bases in October 2009 and 
Phase II bases in October 2010. At FOC, total obligation authority and 
real property will transfer from supported Component(s) to the 
supporting Component.
    The Department is using this opportunity to create the conditions 
for more consistent and effective delivery of installation support 
through Common Output Level Standards (COLS), which establish joint 
definitions, standards, and performance metrics for each identified 
installation support function that will be consolidated at each Joint 
Base.
    In its entirety, the BRAC program is substantial. As of the fiscal 
year 2010 President's Budget it represents a $35.4 billion requirement 
over 2006-2011 and $4 billion in annual savings after full 
implementation (after fiscal year 2011). The Department originally 
estimated BRAC 2005 investment using the Cost of Base Realignment 
Actions (COBRA) model at $21.1 billion (in constant fiscal year 2005 
dollars) with annual recurring savings of $4.4 billion. The COBRA model 
used in the analysis estimated costs based on standard factors to array 
the relative merit of options--it was never intended to be budget 
quality nor used for implementation planning. When compared to our 
current requirement, there is a $14.3 billion or 68 percent increase in 
COBRA-estimated costs. The increase was fully funded in the President's 
fiscal year 2010 budget request, and results primarily from inflation, 
changes in MilCon, environmental restoration and program management 
costs not included in COBRA, additional O&M to support fact-of-life 
cost increases, and construction for additional facilities to enhance 
capabilities and/or address deficiencies. The savings decrease is 
primarily a result of revised personnel eliminations.
    Almost 70 percent of the BRAC 2005 program supports MilCon 
requirements compared to 33 percent experienced in the previous rounds. 
In the BRAC 2005 round, DOD has now made decisions to:
  --Use new construction vs. renovated space (existing space diverted 
        to other needs)
  --Accommodate changes in unit sizes, functions or responsibilities by 
        increasing facilities, changing configurations, or building 
        additional facilities
  --Accept inflation factors exceeding previous planning factors 
        (delayed implementation compounds the inflation increase).
    Assisting Communities.--As we execute BRAC 2005, we continue to 
abide by the DOD policy that when implementing DOD actions that 
seriously affect the economy of a community, every practical 
consideration shall be given to minimizing the local impact. To that 
end, DOD provides economic adjustment assistance through its Office of 
Economic Adjustment (OEA) to help communities help themselves, using 
the combined resources of Federal, State, and local governments and 
private sector to support local initiatives.
    OEA, through the Defense Economic Adjustment Program (DEAP), 
continues to work with States, territories, and more than 147 
communities across the country impacted by the Department's continuing 
closure, downsizing, and mission-growth actions.
    Over two dozen locations are looking at unprecedented increases in 
military, civilian, and contractor personnel as a result of BRAC 2005, 
Global Defense Posture Realignment, Army Modularity, and Grow-the-Force 
activity. For most locations, OEA is providing overall planning support 
for personnel, procurement, and construction activity to prepare local 
adjustment strategies, including growth management plans, to support 
local mission growth. The challenge for many of these locations is to 
respond to myriad hard (road, schools, houses, water and sewer) and 
soft (public services, health care, child care, spousal employment) 
infrastructure issues that directly bear on the quality of life for our 
warfighters, their families, and the homeowners, businesses, and 
workers in the surrounding communities.
    A primary concern, particularly at this time of economic 
uncertainty, is how to apply scarce Federal, State, and local public 
resources with those of the private sector to carry out adjustments in 
local facilities and public services, workforce training programs, and 
local economic development activities. Needs for public investment, 
such as road improvements, water and sewer infrastructure, and school 
construction have emerged and OEA is working with each affected State 
and region to document these needs and bring them to the attention of 
other Federal Agencies for their consideration and assistance. To date, 
OEA has found over 50 critical projects that are ready to move forward, 
but need a total of $1.7 billion in Federal or other support. 
Communities also identified over 300 other mission-growth-related 
projects in various planning phases, at a total cost of $7 billion that 
had incomplete funding strategies. While OEA is presently bringing 
these needs to the attention of the U.S. Departments of Transportation, 
Commerce, Education, and Agriculture as the cognizant agencies where 
assistance might be made available, they are also seeking to update the 
information to account for current economic strains and those other 
growth efforts that may have information available.
    OEA, on behalf of DOD, has recognized Local Redevelopment 
Authorities (LRAs) for 116 locations to: provide leadership and speak 
on behalf of the impacted area with one voice; identify the impacts of 
closure across local businesses, workers, and communities; plan 
redevelopment and other economic development activities to lessen these 
impacts; and direct implementation of the redevelopment plan to respond 
to these actions. Approximately 96 redevelopment plans have been 
completed to date. When completed, redevelopment plans are submitted as 
part of a statutorily-mandated homeless assistance application to the 
U.S. Department of Housing and Urban Development (HUD), who, in turn, 
must review each application for compliance with statute prior to 
Military Department property disposal and the redevelopment effort 
going forward.
    The redevelopment plan is also significant at the Federal level 
because: (1) the Military Departments dispose of buildings and property 
in accordance with a record of decision or other decision document and, 
in preparing this decision document, give substantial deference to the 
LRA's redevelopment plan; and (2) other Federal agencies are to afford 
priority consideration to requests for Federal assistance that are part 
of the plan under Executive Order 12788, as amended, ``Defense Economic 
Adjustment Programs.''
    As with the growth-impacted communities, OEA is presently working 
with affected closure and downsizing communities to identify specific 
needs for ``public'' investment and expects to have a working estimate 
of those needs by this summer. In the past, these needs have included 
demolition, road alignments, infrastructure development, etc. With 
disposal for these locations yet to occur, communities will need some 
additional support from the U.S. Departments of Commerce (Economic 
Development Administration (EDA)), Labor ((Employment Training 
Administration (ETA)), and Agriculture (Rural Development 
Administration) through fiscal year 2014.
    The ability to support State and local economic adjustment 
activities, including road construction, infrastructure development, 
demolition and site preparation, workforce development, and general 
economic development is beyond the Department's capacities. 
Accordingly, the Department relies upon the Economic Adjustment 
Committee (EAC), through DEAP, as directed by Executive Order 12788. 
The EAC is comprised of 22 Federal Departments and Executive agencies, 
and among its functions is to: coordinate interagency and 
intergovernmental adjustment assistance; serve as a clearinghouse for 
the exchange of information between Federal, State, and local officials 
involved in the resolution of economic adjustment concerns resulting 
from DOD actions; and, afford priority consideration to requests from 
Defense-affected communities for Federal assistance that are part of a 
comprehensive base redevelopment or growth management plan.
    In response to previous BRAC activity, approximately $1.9 billion 
in Federal assistance was provided to assist affected States, 
communities, workers, and businesses. EDA, ETA, the Federal Aviation 
Administration, and OEA were the source of this funding. The response 
to date for BRAC 2005 has consisted of approximately $212 million, 
primarily from OEA and the Department of Labor. The BRAC support has 
concentrated on worker assistance, community economic adjustment 
planning for growth and downsizing, and coordinating public benefit 
property conveyances for downsizing communities.
    The EAC is chaired by the Secretary of Defense, and the Secretaries 
of Commerce and Labor are co Vice-Chairs. If affected States and 
communities are to benefit from these Federal resources, it will be 
important for the cognizant Federal programs to adequately source their 
staff and program budgets to respond. To date, we have not had much 
response to assist either growth- or downsizing-impacted areas. 
Moreover, the current Federal response to the national economic crisis 
has placed even greater stress on the cognizant agencies, with the 
effect of further subordinating needed attention for Defense-impacted 
communities. Accordingly, the intergovernmental coordination of 
adjustment assistance under the EAC will continue to be reviewed to 
further improve overall responsiveness to the needs of these States and 
communities.
    The Department has used the full range of transfer and conveyance 
authorities to dispose of real property made available in prior BRAC 
rounds (1988, 1991, 1993, and 1995). Property disposal is complete at 
205 of 250 prior BRAC locations where property became available for 
disposal, and local redevelopment efforts in turn have resulted in the 
creation of over 143,700 jobs, more than offsetting the 129,600 
civilian jobs that were lost across 73 prior BRAC locations where OEA 
is monitoring redevelopment activity.
    Improving The Quality of Housing. Just as the Department works to 
maintain the fabric of communities affected by BRAC, we also work to 
maintain the communities of our military installations. At the same 
time that our military installations must support the operational needs 
of warfighters, they must also provide for the quality of life of our 
Service members and their families. Access to quality, affordable 
housing is a key factor affecting service member recruitment, 
retention, morale, and readiness. Through privatization and increases 
in housing allowances, DOD has made great strides in increasing service 
members' housing choices. Privatization allows for rapid demolition, 
replacement, or renovation of inadequate units and the sale of units no 
longer needed. Privatization also enables DOD to make use of a variety 
of private sector approaches to build and renovate military housing 
faster and at a lower cost to American taxpayers.
    To date, the Military Services have leveraged DOD housing dollars 
by 10 to 1, with $2.5 billion in Federal investments generating $25 
billion in housing development at privatized installations. The fiscal 
year 2010 President's Budget request includes $2.0 billion for Family 
Housing, a decrease of $1.2 billion below the fiscal year 2009 enacted 
amount, for continued efforts toward reduction of inadequate units, 
operation and maintenance of government-owned housing, and the 
privatization of over 2,400 family housing units. Over 600 of these 
units support the Grow-the-Force initiative.
    The housing privatization program was created to address the 
oftentimes poor condition of DOD-owned housing and the shortage of 
affordable private housing of adequate quality for military service 
members and their families. Privatization allows the military services 
to partner with the private sector to generate housing built to market 
standards for less money and frequently better quality than through the 
MilCon process. Additionally, and almost of greater importance, the 
projects include 50 years of maintenance and replacement where 
necessary. Although nearly all projects have been awarded, we are still 
in the early stages of the program since the housing will be privately 
owned for fifty years. With privatization deal structures and an income 
stream in place, full revitalization will be completed within a five to 
ten-year initial development period.
    Military family housing requirements are changing at multiple 
installations due to BRAC, Global Posture, Joint Basing, and Grow-the-
Force. While some installations may find they have a surplus of 
housing, others may experience a deficit. No matter where military 
family housing is needed, our Service members and their families need 
access to safe, desirable, and affordable housing. The Military 
Services continue to evaluate installation housing requirements, and 
the opportunities to meet additional housing needs through 
privatization continue to expand.
    The fiscal year 2010 budget request also includes funding to 
eliminate inadequate family housing outside the United States. The 
budget request reflects a MilCon cost of $52 million for the Army to 
construct 138 family housing units in Baumholder, Germany.
    As it has increased the quality of family housing, privatization is 
also helping the Military Services provide quality housing for our 
unaccompanied Service members. To date, the Army has added bachelor 
officer quarters and senior enlisted bachelor quarters to its existing 
family housing privatization projects at Fort Bragg, North Carolina; 
Fort Stewart, Georgia; Fort Drum, New York; and Fort Irwin, California. 
A fifth project is planned soon at Fort Bliss, Texas. In contrast to 
the Army, the Navy is mainly focusing its unaccompanied housing 
privatization efforts to bring shipboard junior enlisted sailors ashore 
using a special pilot authority (10 USC 2881a). The first unaccompanied 
housing privatization pilot project was awarded in December 2006 at San 
Diego, the second was executed in December 2007 at Hampton Roads, 
Virginia, and a third project is under consideration at Jacksonville-
Mayport, Florida. Both of the awarded Navy pilot projects have 
demonstrated that, with partial Basic Allowance for Housing authority, 
privatization of single, junior enlisted personnel housing is less 
costly on a lifecycle basis than the traditional Government-owned 
model. The pilot projects have also demonstrated that through 
privatization, single members can enjoy a quality living environment 
more equitable with housing for their married counterparts and 
commensurate with the sacrifices they are asked to make.
    Energy Management. Just as we take responsibility for caring for 
our human resources, the Department also takes responsibility to wisely 
manage its energy resources. By aggressively implementing energy 
conservation measures, we are avoiding costs while improving utility 
system reliability and safety. The Department developed comprehensive 
policy guidance incorporating the provisions of the Energy Security and 
Independence Act of 2007. This guidance will continue to optimize 
utility management by conserving energy and water usage, and improving 
energy flexibility by taking advantage of restructured energy commodity 
markets when opportunities arise.
    The Department's efforts to conserve energy are paying off. DOD is 
the largest single energy consumer in the Nation and consumed $3.95 
billion in facility energy in fiscal year 2008. DOD facility energy 
consumption intensity has decreased nearly 11 percent since 2003. Our 
program includes energy efficient construction designs, aggregating 
bargaining power among regions and the Services to achieve more 
effective buying power, and investments in cost-effective renewable 
energy sources.
    DOD has significantly increased its focus on purchasing renewable 
energy and developing resources on military installations. In 2005, DOD 
set a goal to reach 25 percent renewable energy procured or produced by 
fiscal year 2025 and Congress placed this goal in the National Defense 
Authorization Act 2007. Even though the increasing cost of Renewable 
Energy Certificates drove down the percentage of renewable energy 
consumption in fiscal year 2008, I am pleased to report that the 
Department remains ahead of the curve, achieving 9.8 percent renewable 
energy procured and produced for fiscal year 2008.
    Renewable energy projects are consistently more expensive than 
similar conventional energy sources, resulting in limited opportunities 
that are lifecycle cost effective. Still, the Department has increased 
the use of Energy Conservation Investment Program (ECIP) funds for 
renewable energy projects from $5 million in fiscal year 2003 to $86 
million out of the $120 million provided for ECIP in the ARRA funding 
for 2009. Plans call for ECIP funding to increase $10 million per year, 
from $90 million in fiscal year 2010 up to $120 million in fiscal year 
2013, and renewable energy projects will continue to be a high 
priority.
    The Department began tracking water consumption in fiscal year 
2002. While the Energy Policy Act of 2005 did not articulate a specific 
water reduction goal, Executive Order 13423 includes a requirement of 2 
percent water reduction per year. By fiscal year 2007, DOD reduced 
total water consumption by 27 percent or 43.8 million gallons per year. 
While we continue to strive to exceed requirements, our prior 
achievements have set the baseline low, so continuing the trend will be 
a challenge. Even with the reduced baseline, DOD achieved a 2.9 percent 
reduction in water intensity in fiscal year 2008.
    Environmental Management.--In addition to our commitment to 
managing our energy requirements, we also recognize our natural 
infrastructure as a priority. The Department sustains the environment 
on our installations, not only to preserve these lands for our future 
generations, but also to maintain current and future readiness. The 
Department practices integrated planning to preserve the land, water, 
and airspace needed for military readiness while maximizing critical 
environmental protection. We maintain a high level of environmental 
quality in defense activities by integrating sustainable practices into 
our operations, acquisition of materials, and weapon systems. We 
protect and conserve natural and cultural resources and restore sites 
to productive reuse on more than 29 million acres. We strive to protect 
and to sustain the environment while strengthening our operational 
capacity, reducing our operational costs, and enhancing the well being 
of our soldiers, civilians, families and communities.

              COMPARISON OF ENVIRONMENTAL PROGRAMS REQUESTS
      [President's Budget in Millions of Dollars--Budget Authority]
------------------------------------------------------------------------
                                                    Fiscal year
                                         -------------------------------
                                           2009 request    2010 request
------------------------------------------------------------------------
Environmental Restoration...............           1,506           1,475
Environmental Compliance................           1,660           1,618
Environmental Conservation..............             330             323
Pollution Prevention....................             163             103
Environmental Technology................             212             225
Base Realignment and Closure (BRAC).....             455             554
                                         -------------------------------
      TOTAL.............................           4,327           4,298
------------------------------------------------------------------------

    Over the past 10 years, the Department has invested nearly $42 
billion in our environmental programs. In fiscal year 2008, we 
obligated $4.3 billion and in fiscal year 2009 we are executing another 
$4.5 billion for natural and cultural resource conservation, pollution 
prevention, cleanup, compliance, and environmental technology. The 
fiscal year 2010 budget request of $4.3 billion will enable us to 
continue to demonstrate leadership in protecting and preserving the 
environment on our installations.
    In fiscal year 2008, the Military Services invested $353 million in 
conservation programs to protect natural and cultural resources located 
on and near our installations. Our cultural resources include 
archeological sites, historic buildings, relics of prior civilizations, 
artifacts, and other national historic treasures.
    In 2008, the Department inventoried 480,706 acres and found 6,118 
new archaeological sites. The Department has surveyed a total of 
8,082,925 acres and has found 112,774 archaeological sites. The 
Department treated 2,602 of the sites to include stabilization, 
rehabilitation, monitoring, and protection in 2008. In 2009, the DOD 
will continue to sustain and manage its archeological and historic 
cultural resources. Some of the current activities include preserving 
the fabric, systems, historic character, and function of the DOD-built 
environment; maintaining readiness while protecting our heritage by 
incorporating cultural resources into installation planning; and 
consulting in good faith with internal and external stakeholders.
    The Department is also protecting its older properties, not only 
for historical interest, but for continued active use to support 
today's operational requirements. Over 32 percent of DOD's 344,000 
buildings are over 50 years old, and by 2025, more than 67 percent of 
the Department's buildings will exceed 50 years of age. Buildings that 
have passed the 50 year benchmark present a challenge to the 
Department, but also offer the potential for cost-savings and resource 
conservation. By using historic buildings and properties, instead of 
building new structures, the Department reduces its environmental 
footprint while retaining the properties' historic features. DOD's 
Cultural Resources Program ensures balance between responsible 
stewardship of this significant legacy with meeting the demands of 
defending our Nation.
    Our installations also steward some of the finest examples of rare 
native vegetative communities, such as old-growth forests, tall grass 
prairies, and vernal pool wetlands. As of April 28, 2008, the U.S. Fish 
and Wildlife Service (USFWS) listed 1,317 species as either threatened 
or endangered within the United States, nearly 350 of which inhabit DOD 
lands. DOD has a greater density of listed species than any other 
Federal agency: some 40 threatened or endangered species are found only 
on DOD installations. The Department prepares and implements Integrated 
Natural Resource Management Plans (INRMPs) for each installation with 
significant natural resources, that include land management and other 
actions to protect these endangered species. These plans, developed in 
coordination with the USFWS and State fish and wildlife agencies, have 
helped the Department avoid critical habitat designations at 35 
installations because the plans provide protection equal to or greater 
than what would be obtained if critical habitat had been designated for 
these endangered species. When coupled with our conservation efforts to 
protect species at risk and common species and their habitats before 
they become rare, INRMPs have provided increased flexibility in how DOD 
conducts its mission activities.
    The Department is executing $344 million in fiscal year 2009 
conservation efforts, of which $215 million is planned for recurring 
continuous conservation management activities, such as preserving 
habitat for at risk species and habitat vulnerable to global climate 
change. Additionally, $129 million is planned for non-recurring one-
time projects such as installation of exclusion devices to protect 
endangered of at-risk species habitats, development of automated 
acoustic technologies for monitoring migratory birds, and shoreline 
protection projects. Fiscal year 2009 Cultural Resource projects 
include identifying design efficiencies and LEED equivalence standards 
for historic buildings, and producing historic context studies for Cold 
War sites in the Pacific and rural industrial sites on DOD lands in the 
Southeast.
    The Department is requesting $323 million for fiscal year 2010 
conservation efforts, which includes $209 million in recurring funds 
for continuous conservation management activities and $114 million in 
non-recurring funds for one-time conservation projects associated with 
threatened and endangered species, wetland protection, or other 
natural, cultural, or historical resources.
    Since 1984, the Department has obligated $40 billion in the Defense 
Environmental Restoration Program (DERP), including an fiscal year 2009 
appropriation of $1.5 billion. Through DERP, the Department has 
restored 74 percent of those areas on installations or Formerly Used 
Defense Site (FUDS) that have been impacted by past defense activities, 
in cooperation with State agencies and the U.S. Environmental 
Protection Agency. DERP consists of two categories of sites; (1) 
Installation Restoration Program (IRP) sites which contain hazardous 
substances, pollutants, and contaminants, and (2) Military Munitions 
Response Program (MMRP) sites which contain unexploded ordnance and 
discarded military munitions. The Department applies a risk-based 
prioritization process to determine the order of cleanup for both IRP 
and MMRP sites. By the end of 2008, the Department had completed 
cleanup on 82 percent of IRP sites on active installations, 69 percent 
of IRP sites on FUDS, and 74 percent of IRP sites on installations 
closed or realigned in the first four rounds of BRAC and BRAC 2005. In 
fiscal year 2009, we are executing approximately $1.5 billion at active 
and FUDS locations and another $525 million at BRAC bases for 
environmental restoration efforts. These expenditures should enable us 
to complete cleanup at an additional 619 sites at active and FUDS 
locations and 154 sites at BRAC bases.
    For the MMRP, DOD has completed cleanup of military munitions at 33 
percent of sites at active installations, over 58 percent of BRAC 
installation sites, and 34 percent of FUDS. By cleaning up our sites on 
a ``worst first'' basis, we have significantly reduced the potential 
risk associated with many of the sites in our inventory. As we continue 
to make cleanup progress, we are emphasizing optimization of 
performance. Optimization efforts include considering green remediation 
technologies, reducing the number of cleanups involving long-term 
management, and achieving site close out in a timely manner. These 
efforts will reduce our long-term liability and ensure the expeditious 
return of these properties to productive reuse. Our fiscal year 2010 
budget request of $1.5 billion will help implement these improvements 
while continuing to make progress to complete our cleanups and close 
out the properties.
    The fiscal year 2010 budget request of $103 million for pollution 
prevention will enable DOD to continue to meet our solid waste 
diversion and recycling goals while reducing our operating costs. 
Striking a balance between mission requirements and environmental 
quality, the Department employs long-term solutions to eliminate 
hazardous material use in operations and weapon systems acquisition, 
promote the use of alternative fuels, and implement innovative 
pollution prevention technologies to reduce pollution to our air, 
water, and land. In 2008, the Department invested $162 million in 
pollution prevention programs, including recurring requirements such as 
solid waste diversion and recycling, hazardous material reduction, and 
green procurement. In fiscal year 2008 the Department diverted 3.9 
million tons or 63 percent of our solid waste from landfills, avoiding 
approximately $260 million in landfill costs. Additionally, the 
Department has reduced hazardous waste disposal by 37 percent from 
calendar year 1996 to 2007. The Department is also effectively managing 
air quality, reducing hazardous air pollutant emissions at our 
installations by 24 tons from 2006 to 2007. To further reduce waste and 
resource consumption, in 2008 the Department updated its Green 
Procurement Program (GPP) strategy, which encourages Military Services 
to purchase environmentally preferable products and services. Through 
the GPP, the DOD has become a leader in green procurement, and we 
continue to make further improvements to GPP, most recently issuing 
policy direction requiring DOD contracting officers to use a contract 
provision giving preference to bio-based products. In fiscal year 2009, 
we are executing $165 million for pollution prevention, with another 
$103 million planned for fiscal year 2010. These levels of investment 
will enable DOD to continue to meet our diversion and recycling goals 
while reducing our operating costs.
    In fiscal year 2008, the Department obligated $1.54 billion for 
environmental compliance activities, including an $83 million MilCon 
investment in new construction projects to build drinking water 
facilities, wastewater treatment facilities and above ground fuel 
storage tanks that comply with Safe Drinking Water and Clean Water Act 
requirements. Clean water and clean air are essential to the health and 
well being of our communities and ecosystems. DOD management practices 
reduce discharged pollutants, leverage water conservation 
opportunities, and protect watersheds. Our drinking water program has 
consistently provided over 3,550,000 men, women, and children living 
and working on our installations with safe drinking water. The 
Department also manages over 1,600 water pollution control permits for 
our wastewater and storm water treatment systems, which achieved an 
overall 95 percent rate of compliance in 2008. Our fiscal year 2009 
appropriation included another $1.67 billion to upgrade treatment 
facilities and meet new and expanding permit requirements. Our fiscal 
year 2010 budget request of $1.6 billion will enable the Department to 
continue to sustain our air, water, and land resources to maintain 
operational readiness and enhance the health and welfare of surrounding 
communities, and the natural environment.
    Emerging Contaminants.--Our experiences with mission and 
environmental consequences associated with perchlorate, ozone-depleting 
substances, and other chemicals with evolving regulatory standards 
indicate a need to establish a program to make earlier, better-
informed, risk management decisions regarding these emerging 
contaminants (ECs). This new program is already helping us better 
protect human health and the environment, and enhance military 
readiness. Simply put, the EC program identifies risks early in the 
process, before regulatory actions take place or materials become 
unavailable, thus protecting our people, assets, and the mission.
    We have established a three-tiered process to (1) look ``over-the-
horizon'' and identify chemicals and materials with evolving science 
and regulatory interest; (2) assess the risks to human health, the 
environment, and DOD's mission; and (3) develop appropriate risk 
management options for DOD program managers. Twenty-one EC impact 
assessments have been completed for chemicals that include explosives, 
fuel constituents, corrosion preventatives, fire-fighting foams, and 
industrial degreasers. Examples of risk management options resulting 
from these assessments include conducting research to fill basic 
science gaps, improving material handling and personal protection 
practices, developing new or improved remediation technologies, and 
developing less toxic substitute materials or processes. One of the 
major thrusts of the program is to work closely with the DOD industrial 
base to conduct lifecycle analyses regarding less toxic alternative 
chemicals for use in weapons platforms, systems and equipment. A 
significant recent example of a risk management action is a new DOD 
policy to minimize the use of hexavalent chromium, a known carcinogen, 
throughout DOD.
    Because of the many national policy issues related to ECs, we 
continue to work with a number of Federal and State regulatory 
agencies, industry, academia, and professional organizations. In 
particular, we formed an EC working group with the Environmental 
Protection Agency (EPA) and the Environmental Council of States (ECOS) 
to address and discuss EC issues. Four important work products, 
including procedures for dealing with new ECs, have been completed and 
endorsed by all parties and are publically available on the ECOS, EPA, 
and DOD websites.
    We are also working in partnership with a new Industry-University 
Cooperative Research Center, initiated by the National Science 
Foundation, to focus on emerging contaminant research. Some of this 
effort will be geared to helping Federal agencies and industry use 
safer chemicals and materials for improved long-term sustainability.
    Sustaining the Warfighter.--All of our efforts with regard to both 
our built and natural infrastructure are because, simply put, our 
Nation's warfighters need the best training and equipment available. 
This means sustaining our vital training and test range and 
installation infrastructure. Incompatible land use in the vicinity of 
DOD installations and ranges continues to challenge training and 
testing sustainability. Particular challenges from incompatible land 
use include noise complaints from new neighbors, concerns about smoke 
and dust, diminished usable airspace due to new structures or growing 
civil aviation, a loss of habitat for endangered species, and a 
compromised ability to test and train with the frequency needed in time 
of war.
    History has demonstrated that effective training of U.S. troops has 
a direct impact on their success on the battlefield. Reliable access to 
operational ranges and supporting installations is needed to sustain 
that training. In 2002, Congress provided statutory authority to use 
O&M funds to create buffers around our ranges and installations. Using 
this authority, DOD established the Readiness and Environmental 
Protection Initiative (REPI), and has worked with willing partners to 
cost-share compatible land use solutions that benefit military 
readiness and preserve natural habitat. In fiscal year 2005, REPI 
leveraged $12.5 million of O&M Congressional funding to secure $55 
million worth of buffer land and easements, encompassing 13,939 acres 
at seven installations. In fiscal year 2006, with $37 million of O&M 
funding, REPI secured over $93 million worth of buffer land and 
easements, encompassing 33,521 acres.
    Overall in fiscal year 2007, REPI initiated 27 projects in 17 
States; in fiscal year 2008, REPI funded 36 projects in 19 States. 
Already, $23.2 million from fiscal year 2007 and fiscal year 2008 
funding has secured $74 million of buffer land, encompassing 28,378 
acres. For fiscal year 2009 REPI identified an additional 39 projects 
in 21 States for funding. Congress appropriated $56 million for REPI in 
fiscal year 2009. Such REPI and partner funding has resulted in 
projects providing clear benefit to the military mission, such as 
protecting the Navy's one-of-a-kind La Posta Mountain Warfare Training 
Facility in California; keeping training areas open at Marine Corps 
Base Camp Lejeune, North Carolina; and buffering live-fire training 
ranges at Fort Carson, Colorado.
    After several years of implementing REPI projects, DOD asked the 
RAND Corporation to assess the program's effectiveness. In 2007, RAND 
issued its report, titled The Thin Green Line: An Assessment of DOD's 
Readiness and Environmental Protection Initiative to Buffer 
Installation Encroachment. The report found that REPI projects, as in 
the case of the installations noted above, have proven effective in 
relieving military training and testing activities from encroachment 
pressures and in strengthening joint readiness.
    According to RAND, REPI also helped improve the natural environment 
and the quality of life in communities where the projects were located. 
The environmental benefits of REPI projects have included helping to 
preserve habitat, biodiversity and threatened and endangered species; 
protecting wildlife corridors; and safeguarding water quality and 
supply. REPI also was shown to improve local economies and the 
reputation of installations with surrounding communities; for example, 
the project near NAS Fallon in Nevada has helped preserve productive 
local agricultural land and the continued viability of local farms.
    Many of the challenges facing DOD are also of mutual concern to 
other Federal agencies and State governments. These issues can and do 
cross administrative boundaries, demanding cooperative action at the 
regional level. The Department is partnering regionally with State 
governments and Federal agencies to identify and address such shared 
concerns. These partnerships are proving essential to sustaining our 
ranges and installations, as well as to furthering our partners' goals 
and missions. For example, DOD continues to work with State governments 
and other Federal agencies in the Southeast Regional Partnership for 
Planning and Sustainability--or SERPPAS. The States of Alabama, 
Florida, Georgia, North Carolina, and South Carolina are engaged with 
the military and other Federal agencies in this important regional 
initiative. Through the SERPPAS process, the partners are promoting 
better planning related to growth, the preservation of open space, and 
the protection of the region's military installations. A similar effort 
is now getting underway in the southwestern United States, a region of 
critical military training and testing importance that is facing myriad 
growth and environmental challenges.
    DOD continues to work closely with other Federal agencies to 
sustain military readiness. One major thrust is to ensure that wind 
farm projects and energy transmission corridors are compatible with 
military readiness activities. The Department also coordinates with the 
Department of Homeland Security to ensure that our military readiness 
activities and infrastructure in border regions are compatible with new 
security measures. The Department's sustainability program continues to 
reach out to non-Federal partners, working regularly with State, 
county, and local governments, Tribal, and non-governmental 
organizations on issues of mutual concern to seek win-win solutions. 
Meanwhile, overseas, DOD continues to develop mission sustainment 
procedures with host nations. The Department looks forward to further 
building upon all of these efforts to ensure that warfighters' current 
and future training and testing opportunities remain unrivaled.
    Additionally, DOD's Office of Economic Adjustment (OEA) has managed 
the Joint Land Use Study (JLUS) program since 1985. JLUS is a 
cooperative land use planning effort between affected local governments 
and military installations that seeks to anticipate, identify, and 
prevent growth conflicts by helping State and local governments better 
understand and incorporate technical data developed under Service Air 
Installation Compatible Use Zone, Range Air Installation Compatible Use 
Zone, Operational Noise Management Program, Encroachment Action Plan, 
and Encroachment Control Plan studies into local planning programs. 
When a Service believes an installation may be experiencing 
incompatible development problems, or that there is likelihood for 
incompatible development that could adversely affect the military 
mission, the Service may nominate the installations for a JLUS to OEA. 
All the Services takes advantage of the JLUS program, finding it an 
effective tool for bringing communities and the military together to 
mutually address development issues and needs.
    Safety and Health Risk Management.--A significant responsibility 
associated with Installations and Environment is the management of the 
Department's safety and health programs. Over the last year, the 
Department experienced some improvement in its safety and health 
performance, but we have a way to go.
    In 2005, the Department published policy (DOD Directive 4715.1E) 
that required implementation of management systems for safety and 
health (similar to environmental management systems described by the 
International Standards Organization (ISO) 14000 series of standards) 
emphasizing the integration of safety and health into day-to-day 
operations. By ``operationalizing'' safety and health, we make safety a 
part of every process and operation.
    We are encouraging commanders to meet and exceed tough performance-
based criteria for a managed safety and health system and proving it by 
achieving ``Star'' recognition in the Occupational Safety and Health 
Administration's Voluntary Protection Program (VPP). Installations 
holding VPP Star Status undergo an independent review of their programs 
and must be among the best, having injury and illness rates at or below 
the national average. So far, the Department has 22 Star Sites to date; 
we anticipate more than 36 Star Sites by the end of fiscal year 2009 
and we further expect that number to increase every year. Recently, the 
Pentagon began its journey toward Star recognition.
    Operationalizing safety applies to every aspect of the Department's 
missions. In preparing for basing changes on Guam, we, through the 
Department of Defense Explosives Safety Board, developed a 
comprehensive Military Munitions Annex to the Guam Joint Military 
Master Plan. This effort sought to fully harmonize the receipt, 
storage, maintenance, transportation, and use of military munitions by 
the Department of Defense and Department of Homeland Security 
organizations on Guam. Explosives safety risks on Guam have been 
identified and strategic recommendations will result in risks from 
military munitions being eliminated or mitigated. Furthermore, 
operationalizing safety improves the entire operation, by improving 
munitions support to execution of war plans and contingencies and 
optimizing munitions processes. We are continuing this effort by 
integrating explosives safety into all facets of operational planning.
    In the area of Strategic Human Capital Management, my organization, 
along with the entire Department, is focused on human capital planning 
emphasizing improved competency-based workforce planning. In 
establishing ``Functional Community Managers'' for: Safety and Health, 
Explosives Safety, Fire and Emergency Services, and Expeditionary 
Environment Safety and Occupational Health (ESOH), we will implement a 
comprehensive strategy to ensure a strong safety and health workforce 
that is able to meet the challenges of today and the future. Our 
Functional Community Managers, bringing first hand knowledge of 
competencies needed, work in partnership with the Department's Human 
Resource experts to ensure the Department is positioned to acquire and 
retain the talent it needs to meet current and future mission 
requirements.
    The ability to send our people home from work healthy and safe is 
of paramount concern. The number of civilian injuries is one measure of 
our success in managing safety and health. For our civilian employees, 
we reduced the lost time injury rate over the last five years by 13 
percent. We continue to seek improvements to prevent all mishaps and 
the resulting injuries and losses. Operating motor vehicles continues 
to be the most significant mishap threat to our military members. We 
have reduced the number of military fatalities for all privately-owned 
motor vehicles on public highways from 308 in fiscal year 2002 to 260 
in fiscal year 2008--a 16 percent reduction. However, for motorcycles, 
we are part of a national trend in increasing motorcycle fatalities. 
Nationally, motorcycle fatalities increased by 58 percent from 2002 to 
2007. DOD fatalities increased from 71 to 124 for fiscal year 2002 to 
fiscal year 2008--a 75 percent increase. We are continuing to develop 
programs and initiatives to address this negative trend.
    Operating military vehicles in Iraq and Afghanistan is also a 
significant risk, with 24 motor vehicle fatalities in fiscal year 
2008--a reduction from a peak of 59 motor vehicle fatalities in fiscal 
year 2005. Our military members have met the combined threats from 
Improvised Explosive Devices and poor roadways with increased training 
and experience in operating tactical vehicles, and by improved 
survivability of crashes from increased seat belt use, gunner's 
harnesses, and rollover training.
    In early 2009, Installations and Environment published policy that 
defines ``all-hazards'' emergency management for DOD installations 
worldwide. DOD installations now have consistent guidance to improve 
their compatibility with their civilian counterparts and a management 
structure focused on preparing for and responding to emergencies 
regardless of the hazard. Our ability to seamlessly interact with 
civilian responders will make us much more effective in times of 
disaster. We are continuing to work with other offices in DOD to 
eliminate unnecessary redundancy and confusion at the time of an 
emergency and provide holistic emergency response on and around our 
installations.
    Integrating Business Management.--Accomplishing the diverse 
missions of the Installations and Environment community requires 
integration across organizational boundaries. We have made great 
progress with our initiatives to improve the efficiency of the 
Department's business processes. We are working to develop and 
implement common data standards across the Military Departments and 
Defense Agencies, modernize business systems, and enable audit-ready 
processes. In the Installations and Environment community, we have 
three key business transformation efforts: real property 
accountability, environmental liabilities, and hazardous materials 
information management.
    The Department manages almost 60 percent of the Federal 
Government's buildings and structures--over 539,000 assets worldwide. 
Each Military Department has a separate system to manage their share of 
this property. Several years ago we conducted research and hired a top 
ranked information technology firm to help us develop our business 
system modernization strategy. We determined, based upon the firm's 
recommendation and the Military Service leadership's concurrence, that 
building a single system would not be the optimal solution. Instead, we 
decided to develop DOD-wide standards and upgrade or replace the 
existing systems so that they can be interoperable across DOD. To 
achieve this goal, we developed common data standards and reengineered 
business processes. As of September 30, 2009, all of DOD's primary real 
property systems will be interoperable, ensuring that accurate, timely, 
and reliable real property information is available for more 
transparent management decision making.
    In addition to the data and business process standards initiatives, 
we are also working to modernize our systems. Many of the existing, 
government-built legacy systems use outdated technology and do not 
apply current industry best practices. Led by my organization, the 
Military Services are in the process of acquiring new commercial off-
the-shelf systems or upgrading their current systems to comply with the 
standards. To further integrate real property information for 
Department-level analysis, my office is building the real property data 
hub that will provide real-time accessibility to data.
    Uniquely identifying each of our real property assets is 
fundamental to real property accountability. Our Real Property Unique 
Identifier Registry is at full operational capability. These unique 
identifiers allow us to establish linkages within our systems between 
facilities, equipment and people. The registry includes address 
information on all DOD installations and sites and we are working with 
other DOD functional communities to ensure that physical location 
information used across DOD comes from one authoritative source--the 
Registry.
    The ability to share data with the communities that surround our 
installations is a key component in our ongoing efforts to sustain 
military readiness. My organization is working with stakeholders across 
the Federal Government on aligning geospatial data standards so that 
data sharing can take place between the local and Federal communities. 
We have recently integrated geospatial data requirements into the 
Department's Business Enterprise Architecture, which will further 
expand interoperability opportunities in DOD.
    On the environmental management side, my office has been leading 
efforts to standardize and streamline the complex processes required to 
accurately value and report environmental liabilities. We are 
developing a blueprint for implementation of the reengineered business 
processes in the Department's enterprise resource planning systems.
    To minimize future needs for environmental cleanup and to ensure 
safety of our personnel, ready access to complete and accurate 
hazardous material information is critical. We are working to improve 
availability of timely, accurate, consistent, and complete product 
hazard data for use across the Department.
    In summary, our business transformation efforts are helping the 
Department efficiently share information and best practices across 
organizational boundaries. As the Services modernize their systems and 
achieve interoperability, the Department will gain access to secure, 
reliable information crucial for effective management of assets, and 
ultimately reducing costs and improving performance across all of DOD.
    Conclusion.--In closing, Mr. Chairman, I sincerely thank you for 
this opportunity to update you on our work in Installations and 
Environment on behalf of the Department of Defense. To meet the ever 
changing warfighting landscape, our military must be flexible and 
responsive and our installations must adapt, reconfigure, and be 
managed to maximize that flexibility and responsiveness. I appreciate 
your continued support and I look forward to working with you to 
provide the quality installations that our military forces need and 
deserve.

    Senator Johnson. Thank you.
    Secretary Hale, as you know the Secretary of Defense has 
put a hold on providing Congress with updated FYDPs for 2010. 
This committee works very closely with the authorizers to 
ensure that the projects we fund are mission critical and are 
in the MILCON pipeline.
    Public Law 104-196 requires the National Guard bureau to 
prepare and to submit to Congress an annual FYDP. Doesn't the 
current guidance fly in the face of that law? And can you 
suggest another way for this committee to do its due diligence 
and vet military construction projects if we cannot determine 
whether the projects are in the FYDP?

                                  FYDP

    Mr. Hale. Well, Mr. Chairman, as I said, we don't have an 
out-year plan, and it is not without precedent. It was the same 
situation in 2001 and 1993 at the beginning of the Bush and 
Clinton administrations.
    We need to go through the Quadrennial Defense Review and 
the fall program and budget review in order to have a plan that 
fully fits with the administration's priorities. So it is not 
that we are not trying to give it to you. We don't have one.
    I understand that it creates problems. We have a year-old 
FYDP, which you have. It is not consistent with administration 
policy, but it is at least a start. And we would be glad, if 
there are specific projects, to try to work with you to provide 
what information that we can.
    I know it is a difficult situation, and we need to help you 
all we can, but there is no out-year plan and this not by 
design. Frankly, it takes 6 to 9 months to create a FYDP. We 
had about 3, and we made major changes in the Fiscal 2010 
budget, and it just didn't all add up. I mean, there is no way 
we could have gotten it done.
    Senator Johnson. Would you please take a message back to 
the Secretary and urge him to reconsider what I believe is a 
very unhelpful policy for both Congress and the services?

                              FULL FUNDING

    Secretary Hale, have you sought authority to increment 
projects from the OMB, and what is your position, as the one 
who writes the checks, on incremental funding?
    Mr. Hale. I believe in full funding, Mr. Chairman, with 
limited exceptions. I think it is the right way on both sides 
of the river. It requires that we face up to the full cost of 
the projects, whether it is military construction or aircraft 
or ships.
    Now there are limited exceptions, certainly with advanced 
procurement on the weapons side, and I know that we have 
sometimes incrementally funded military construction. But I 
think they ought to be rare exceptions, and it does violate 
OMB's policy. And so, we are not doing it in this budget, and I 
believe that is the right way to go. Again, I think it is 
consistent with transparency and accountability to face the 
full cost of projects.
    Senator Johnson. Even, for example, the fiscal year 2010 
budget request includes $800 million for a National Security 
Agency project in Utah and $226.9 million for a pier 
replacement project in Virginia. There is no way the Department 
could execute that amount of money for a single project in 1 
year.
    Mr. Hale. Well, MILCON is 5-year money so we have plenty of 
time to obligate it. I think that that is not the issue in my 
mind. There may be some projects that are so large that they 
just create unacceptable budget spikes. In those cases, we may 
need to look at some kind of incremental funding.
    But I will repeat my statement. I believe full funding is 
the right way on both sides of the river, and I would want to 
see incremental funding it, I have my way, as a fairly rare 
exception.
    Senator Johnson. Yes. Mr. Arny, what is the status of the 
two brigade combat teams in Germany? And how can the Department 
go forward with MILCON projects, including some that were 
funded last year, when we don't know how this issue will be 
resolved?
    Mr. Arny. Mr. Chairman, I defer to my Army colleagues when 
you talk to them. But as I understand the BCT issue, we are not 
changing the force structure in terms of troops, but we are 
changing the organization. We are looking as part of the global 
posture review exactly how we will change the structure. But we 
believe for 2010, our military construction is needed, no 
matter what the end result is in terms of the number of BCTs.

                            INFLATION POLICY

    Senator Johnson. Secretary Hale, the OMB's construction 
pricing guide is generally not as responsive to changing 
economic conditions as the private sector. Is the Department 
working with OMB to develop a pricing system that is more 
timely and agile than the current system?
    Mr. Hale. Are you thinking mainly of inflation adjustments, 
Mr. Chairman?
    Senator Johnson. With the current economic environment, are 
you seeing any significant trends with regard to bids versus 
cost estimate?
    Mr. Hale. Well, unfortunately, I think that we probably 
have solved temporarily the problem of high inflation in the 
construction industry with the recession. But let us hope that 
ends quickly.
    You know, we do accept generally OMB inflation indices, and 
I think we will continue to do that. I understand there may be 
certain areas in the construction industry when the economy is 
recovered that have extraordinarily high rates of inflation for 
special reasons.
    I mean, my personal reaction to that is that we ought to 
look at the projects in that area and cost them in a way that 
takes into account special circumstances rather than trying to 
build in some new deflator, which will be a challenge with 
regard to OMB and to derive an inflator. So that would be my 
suggested way to go.
    But it is not a problem at the moment, unfortunately. Yes, 
I think we are seeing bids that are lower than we expected, and 
let us just hope it doesn't last too long.
    Senator Johnson. Thank you.
    Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman.
    I just wanted to follow up on one of the questions that the 
chairman asked, and that is the FYDP for the Guard and Reserve. 
Are you taking the same position, even though it is in the law 
that they have to provide a FYDP, that it can't be done? Or are 
you making an exception there?
    Mr. Hale. Well, they don't have one either in the sense 
that we have not gone through the process that would determine 
a level of military construction for the actives or the Guard 
that is consistent with overall administration policy.
    Again, I understand the problem. We can go back to the last 
FYDP. It is at least some guide, although I think you have to 
understand it is not consistent with current administration 
policy. And on specific projects, we can try to work with the 
committee to provide what information we can.
    I know it is not an ideal solution, but I think it is a 
common one at the beginning of administrations. You have 2 
months to do something that normally takes 9, and we need the 
output of the Quadrennial Review and the fall budget and 
program review before we have a worked-out Future Years Defense 
Plan.
    Senator Hutchison. Are you prepared to say what is not part 
of the current administration's plans that was a policy of the 
previous administration?
    Mr. Hale. No, not beyond fiscal 2010. I mean, in fiscal 
2010, we can, of course. But that is the problem. We don't have 
that information. We really haven't gone through the review 
process.
    I think, inevitably, a number of the projects that are in 
the 2010 or the 2011 and out-year columns of the fiscal 2009 
FYDP will stay. I mean, we don't redo everything. But some 
won't. There will be new ones, and some will come off. So I 
don't know a better solution than to try to work with you if 
there are individual projects.
    It isn't a gag order. It is not that we are trying to stop 
people from supplying information. It is that we don't have the 
information.
    Senator Hutchison. Would you be prepared to say that the 
BRAC that Congress enacted is going to continue as Congress has 
directed?
    Mr. Hale. Yes. I mean, I think we are close enough. I am 
going to ask Wayne Arny to correct me if I am wrong, but we are 
pretty close on that. I mean, after all, we have a detailed 
plan in fiscal 2010, and September 2011 is the goal. So I don't 
know what 2011 will look like, but it has got to be coming down 
sharply at that point.
    We are going to do BRAC as it was stated by the Congress, 
that is to fully fund it.
    Senator Hutchison. And the military construction that would 
prepare for it?
    Mr. Arny. Yes. The Secretary----
    Mr. Hale. Yes. Do you want to add to that?
    Mr. Arny. The Secretary did commit to that in even this new 
administration we would fully fund BRAC.
    Senator Hutchison. Mr. Arny or Mr. Hale, either of you can 
answer this, but it is back to my question on Fort Carson and 
Pinon Canyon. Are you looking in your QDR about the 
difficulties that clearly we are facing with Pinon Canyon? And 
as you know, when I asked last week, the Army said they really 
didn't have a plan B for not having that training capability 
that they certainly expected to have when a new brigade combat 
team was scheduled to move to Fort Carson.
    My question is, is there going to be a plan B pretty soon? 
Because no one seems to be fighting all of the environmental 
concerns about Pinon Canyon, and should we begin to start 
looking at a different priority than for that brigade combat 
team, especially with the lowering of the number and perhaps 
that that one might be directed somewhere else?
    Mr. Hale. Do you want to take it?
    Mr. Arny. Ma'am, I think we can safely say that all the 
factors involved in those basings are being taken into 
consideration.
    Senator Hutchison. It would be part of the expectation of 
this committee and Congress that you would have a plan B that 
would be part of the Quadrennial Review. If Pinon Canyon is 
going to be off limits, and I think this administration is 
pretty strong on the environmental concerns with Pinon Canyon--
and at least Secretary Salazar has been very plain about it--so 
are you looking at a near term for making decisions on that?
    Mr. Arny. I cannot say specifically, but I know that the 
Army in their plans are going to look at all the factors that 
affect their training when they make their decision. I am sorry 
I can't be more specific than that.
    Senator Hutchison. But timetable for the decision?
    Mr. Arny. I would say within the next few months as part of 
the QDR.
    Senator Hutchison. That is what I was trying to find out.
    The buildup on Guam, where do we stand on a plan for that? 
And there have been a lot of reports of infrastructure needs--
--
    Mr. Arny. Difficulties.
    Senator Hutchison. Yes, difficulties. Where do we stand on 
addressing those and coming forward with a plan that we know is 
going to be able to be executed within the $10 billion that has 
been allocated?
    Mr. Arny. We are working very hard in the services 
especially, especially the Navy, to put together the 
environmental impact statement, which is more than just the 
environmental impact statement. It has less to do with the 
environment than it does with the lay-down and the mitigation 
of that.
    Included in that will be the planning for how to put the 
buildings in, the raw things that you expect, but also the 
mitigation on how we will do, how we will mitigate in the 
private sector, how we will bring in the workforce because the 
island does not have a workforce large enough to support that 
level of construction, how to work with the port, with the 
power, with housing, with all the aspects.
    And like I said, a major part of that will be included in 
the environmental impact statement. This is the--since the 
advent--we have built bases, obviously, in the past. But we 
have never built one this big since the advent of the 
environmental impact statement.
    So it is a very complex operation. We have to take into 
account far more different laws and effects than we did before. 
And I would say that I would defer my answer to the Navy as to 
the specifics, but it would be within a matter of months to 
have that plan.

                                  GUAM

    Mr. Hale. I would like to add to that and just underscore 
the administration remains fully committed to moving the 
marines off Okinawa and into Guam. We have signed an agreement 
with the Japanese, and we remain fully committed. We know there 
are significant challenges, and we will work through them.
    Senator Hutchison. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Pryor, do you have any questions 
or comments?
    Senator Pryor. I do, Mr. Chairman. Thank you for having 
this hearing and your attention to this.
    Secretary Arny, let me ask you, if I may, about the Office 
of Economic Adjustment, which obviously helps when a base or a 
facility is being downsized. Can you, if you know about 
specifically the Pine Bluff Arsenal, which is in Arkansas, but 
the other facilities around the country who are going through 
the process of destroying their chemical weapons, I think we 
are going to lose somewhere in the neighborhood of 1,100 jobs 
at Pine Bluff.
    Do you have any progress report on that and any plans that 
you are making for not just Pine Bluff, but the other 
facilities?
    Mr. Arny. I have a paper that I am going to look at here 
and refresh myself. But I can say that OEA does have a 
responsibility and is funded to provide communities that are 
growing or decreasing, whenever there is a change that we in 
the Department cause, they are required by law to go in and 
assist with grants for funding and also advice.
    I don't know that Pine Bluff specifically, but I could 
almost guarantee you that they will be--because OEA works for 
me, and we have got people scattered all over the country. We 
will be working with the community to help them recover and 
take into effect that downsizing.
    Senator Pryor. That would be great. And if you could just 
keep us posted on that, that would be great.
    I know the community is very supportive of the arsenal and 
all the things that the arsenal does, even though they handle 
some very dangerous material there. But nonetheless, they are 
very, very supportive, and I just want to make sure they have a 
good transition and, hopefully, come through this thing in good 
shape.
    Let me ask also, if I may, about really the advent of 
unmanned aerial vehicles (UAVs), which didn't exist just a few 
years ago. And now I think we have thousands of them in our 
inventory.
    A lot of those are in theater right now, but there will be 
a day when I think we will need a pretty sizable UAV training 
system here in this country. And of course, you all have to 
work through those issues with the FAA about having rated 
pilots versus just other folks flying these, and it gets into a 
big airspace issue.
    Is the DOD in the process right now of lining up more 
airspace and looking for new areas where they can meet the 
needs of this rapidly growing technology?
    Mr. Arny. Senator, as a rated pilot myself, this sounds 
like a union issue. I want to make sure that there is nothing 
but rated pilots working these.
    I will look into that for you. It had popped on my scope, 
and I don't have an answer. I will work with the services. I 
would be amazed if the Air Force, the Army, and the Navy who 
are working with UAVs are not--I know it is a rated pilot 
because in the magazines that I get monthly, I see discussions 
on both sides of it.
    So I will get an answer back for you, but I would be 
dumbfounded if they are not trying to consider that now.
    [The information follows:]

    The Military Services are faced with expanding UAV inventories at 
bed-down locations throughout the CONUS. These UAV forces require use 
of the Federal Aviation Administration National Airspace System (NAS) 
for training purposes to meet mission readiness. Like the Air Force, 
all the services are focused on integration of these expanding UAV 
training requirements into the NAS. The Army, perhaps more than the 
other services, is taking on a growing UAV mission without benefit of a 
significant pre-existing inventory of airspace over or around its 
ranges. The Navy and the USMC also must identify and secure access to 
appropriate training space as their UAV missions and inventories 
expand. In the case of the Navy, such access is required both over land 
and at sea.
    The Office of the Deputy Under Secretary of Defense for Readiness 
(DUSD(R)) is leading a UAV Tiger Team to address specifically the 
challenges of UAV training within the NAS and to develop a multi-
Service UAV Training Airspace Plan that will accommodate increasing UAV 
training requirements in the CONUS. The UAV Tiger Team is represented 
by all Military Services, the Office of the Secretary of Defense (OSD), 
the Joint Staffs, and the military testing community. UAV training and 
airspace experts will convene to assess and develop strategies that 
seek to include UAV training within the NAS in ways similar to the 
training activities of military aircraft within the NAS to the extent 
possible. These strategies will inform the UAV Training Airspace Plan. 
The UAV Tiger Team will convene in the summer of 2009 and will continue 
until the UAV Training Airspace Plan is complete in 2010. The UAV 
airspace effort is being coordinated with other ongoing UAV planning 
activities within DOD, and is part of the broader sustainable ranges 
initiative within OSD.

    Senator Pryor. Yes. That would be great. And another 
question is just the money involved. And is this one that takes 
money, or is it more just working out agreements with FAA, et 
cetera? And we just need to be prepared for the future because 
I think UAVs will have a big presence in the future for our 
military needs.
    And one other thing, and this is also sort of a space 
issue, and I know there are a lot of bases, et cetera, that are 
constrained by various geographical considerations around their 
areas of operation. But your air and land ranges, as I 
understand it, you are getting to a point, at least in some 
areas, where those ranges are used--I don't want to say 
overused, but they are kind of hitting the max. They are 
bumping up against the ceiling in terms of the amount of 
training that can be done at those, especially, as I understand 
it, at Eglin and at Fort Bragg.
    But do you know anything about that, or have you been 
working on that issue to make sure that there is sufficient air 
and land ranges?
    Mr. Arny. Not about those specifically, but in my time in 
the Navy and here, we have been working very hard over the last 
10 to 15 years on finding ways to fight encroachment. Our 
Readiness and Environmental Protection Initiative (REPI) 
program has been very active, with help from the Congress, 
where we go out and buy easements on land around our bases and 
around our ranges to make sure that we have buffer zones.
    And frankly, where--as we tried to do with Pinon Canyon, 
where we think we need more ranges, we will go out and try to 
acquire land. I know in the Navy, we acquired land down in 
Mississippi in a range down there. I know the Marine Corps is 
looking to expand 29 twentynine Palms.
    So where we can and where it is required, we will use 
military construction funding and other land acquisition to 
expand it. Where we feel we have enough ranges, but we need 
buffer zones, then we are using REPI and other programs, 
cooperative programs with the private sector.
    In the Pensacola area, the local community is very active. 
The local community will actually buy up land around the bases 
to ensure that they are okay.
    Senator Pryor. Right. I think that Eglin may have an issue 
with the F-35 Joint Strike Fighter going there----
    Mr. Arny. Yes, sir. I believe that is more of a perceived 
noise issue than it is actually a training range issue, and we 
will have to work through it. And if you look at--I was down in 
San Antonio, at an Air Force base down there, and in the 1930s, 
the ideal was you put all the housing and admin facilities 
between the two runways. Well, nowadays, you wouldn't think 
about doing that.
    So it is a matter of things have changed. Oceana on the 
east coast has a lot of housing around it. In the 1950s, we 
bought 18,000 acres in the San Joaquin Valley and easements on 
another 12,000 acres to build the Naval Air Station Lemoore, 
where both of my sons have been.
    So it is a different mentality, and we have to accommodate 
it as things move.
    Senator Pryor. Thank you.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. Secretary Hale and Mr. Arny, thank you so 
much, and you may be excused.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted to Hon. Robert F. Hale

             Questions Submitted by Senator Mitch McConnell

    Question. In fiscal year 2009, Fort Knox received funding from the 
Department of Defense to widen portions of Wilson Road, an on-base 
road, which leads to the Human Resources Center of Excellence on the 
installation. The amount only funded half of the project, however. Why 
was this project only partially funded? When will it appear on the 
Future Years Defense Plan?
    Answer. The East Access Road Improvements fiscal year 2008 military 
construction project (project number 66549 for $6.7 million) was 
authorized and appropriated at the scope requested. The project scope 
included widening the main access corridor from Wilson Gate to 
Eisenhower Avenue to four traffic lanes, improving road drainage, 
upgrading traffic signals, relocating overhead utility lines 
underground, installing curbs and gutters, and adding reflectorized 
pavement markings.
    This project was an emergency requirement included in the fiscal 
year 2008 President's Budget. It supports a Grow the Army Brigade 
Combat Team and the Base Realignment and Closure relocation of the 
Human Resources Command to Fort Knox. As a result, insufficient design 
was performed, which led to a poor estimate of construction material 
quantities for milling and paving, as well as inadequate drainage and 
safety features. The lack of proper design, coupled with increased 
labor, construction material, and fuel costs caused the project to lose 
scope in order to stay within funding limits. An Above Threshold 
Reprogramming (Congressional authorization for projects greater than $2 
million or 125 percent of the programmed amount) was considered to 
achieve full scope, but funding was not available.
    East Access Corridor Improvements (project number 70261 for $6.4 
million) has been developed to capture the lost scope and will compete 
in future budget cycles.
    Question. Ireland Army Community Hospital at Fort Knox is one of 
the oldest hospitals in the Army. A study was to be undertaken to 
examine whether the facility needed to be replaced. What is the status 
of that report? When will it be submitted to Congress?
    Answer. The U.S. Army Medical Command (MEDCOM) recognizes the need 
to ensure medical treatment capabilities at Fort Knox match the needs 
of the supported beneficiary population. In the first quarter of fiscal 
year 2009, MEDCOM funded a planning effort to determine the scope, 
capabilities, siting, and cost for an Ireland replacement facility. 
Analysis of population, workload, services, and network are now 
complete. Facility requirements associated with this analysis are in 
development and will be complete in July with final deliverables to 
follow. The outcome of the planning effort will be used to program the 
project for a future budget submission. The MEDCOM Commanding General 
would be happy to meet with you later this summer to share the results 
of the planning process and the proposed facility solution.
    Question. By law, DOD must complete disposal of the chemical 
weapons stockpile at Blue Grass Army Depot by 2017. What is the Army's 
long-term plan to take advantage of the Blue Grass Army Depot's 
capabilities following completion of the chemical weapons disposal 
efforts?
    Answer. Blue Grass Army Depot is a very valuable component of the 
Army's Industrial Base. Its mission is and will continue to be to 
support the Joint Warfighter by safely providing a wide range of high 
quality Defense products and services at the right price, place, and 
time.
    Currently, Blue Grass Army Depot conducts Standard Depot Operations 
(store, issue, receipt, inspect, maintain, and demilitarize) for 
conventional and non-standard (Special Forces unique) ammunition and 
missiles, as well as Chemical Defense Equipment (CDE). On a daily 
basis, Blue Grass ships critical munitions and CDE to Joint SOF and 
conventional units worldwide for both training and combat use. 
Routinely, on a quarterly basis, Blue Grass Army Depot supplies 
munitions for the CENTCOM ammunition resupply vessel with critical 
munitions in support of OIF/OEF.
    In addition to Standard Depot Operations, Blue Grass also produces 
kits and ships weapons system, combat vehicle and ammunition components 
to fill critical Warfighter requirements. Recent examples of this 
industrial capability include MRAP add-on armor, overhead wire 
mitigation kits, and Gunner Restraint Kits. Ammunition specific 
component production examples include 81mm mortar piston plates and 
mortar tail fin sections. Blue Grass Army Depot also conducts container 
(MILVAN and Ammunition unique) refurbishment and repair, as well as 
fabrication and heat treatment of MIL SPEC ammunition pallets. Blue 
Grass Army Depot commercial tenants also provide additional, non-
ammunition SOF support.
    Blue Grass Army Depot plans to fully utilize critical capability 
remaining on the Depot at the completion of the Chemical weapons 
demilitarization mission. This would include those ammunition storage 
structures currently storing chemical munitions and administrative 
facilities constructed in support of the Chemical Demilitarization 
mission.
    Question. What is the planned arrival date for Fort Knox's brigade 
combat team?
    Answer. The 3d Brigade, 1st Infantry Division is programmed to 
relocate from Fort Hood, Texas, to Fort Knox, Kentucky, on October 16, 
2009.
                                 ______
                                 

              Question Submitted by Senator Susan Collins

    Question. Mr. Hale, We need more emphasis on military construction 
to properly modernize and maintain the industrial infrastructure to 
support our military in the 21st century. For example, Portsmouth naval 
Shipyard in Kittery, Maine, has had to depend on Congressional plus-up 
funding in order to get many of the new facilities they need. While 
these projects have been reviewed, approved and included in the out 
year Program Objective Memorandums (POMs), the Navy continues to not 
include them in their budget requests.
    What more can be done to ensure that all of the Navy's repair and 
support facilities have all of the needed equipment and military 
construction required to perform their missions?
    Answer. The Department of the Navy applies a prioritized 
methodology in determining which projects are included in its Military 
Construction request. The infrastructure investment development 
incorporates the following factors: (1) a top down programmatic 
approach, which incorporates strategic investment guidance from the 
Chief of Naval Operations; (2) Global Shore Infrastructure Plans (GSIP) 
identify capability gaps; and (3) an analytical decision process. There 
are three weighted criteria which determine priorities. These include 
strategic guiding principles (e.g. mission alignment, condition based 
maintenance/recap), shore capability areas (e.g. operations, training), 
and components of the shore investment model (e.g. capacity, 
condition). The described process provides for a prioritized executable 
global Navy construction program.
                                 ______
                                 

                   Questions Submitted to Wayne Arny

               Questions Submitted by Senator Mark Pryor

    Question. On February 26th 2009, I wrote you a letter requesting 
data in regard to property disposal. My intent was to better understand 
the performance of conveyances and how they relate to the creation of 
jobs, particularly with respect to the Economic Development Conveyance 
(EDC). It is my understanding that the purpose of EDCs, that proceed 
from land disposition, is to advance the economic development and job 
creation objectives of communities. Last week in front of this 
Committee, I asked your Army colleague, Mr. Calcara, his thoughts on 
those tools available by DOD to convey surplus land.
    I am very interested in your thoughts on this matter. While it is 
DOD policy to fully utilize all appropriate means to transfer property 
at installations closed or realigned under the base closure law, to 
include public benefit transfers, EDCs at cost and no-cost, and 
negotiated or public sales, can you explain to this Committee how DOD 
makes decisions as to which conveyance is best suited for a particular 
community?
    Answer. In consultation with the Local Redevelopment Authority 
(LRA), DOD considers many local community factors as well as the 
characteristics of the property itself when making property disposal 
decisions. These factors include the redevelopment plan for the 
property prepared by the LRA, potential environmental impacts pursuant 
to analysis under the National Environmental Policy Act, environmental 
condition of the property, zoning, and applicable statutory and 
regulatory requirements associated with each property conveyance 
authority, property value, and other relevant factors. As indicated in 
my response to your letter dated April 30, 2009, DOD has used the full 
range of conveyance authorities to address the wide variety of 
circumstances encountered at communities which have hosted closing 
installations. It is also common to convey the property at larger 
closing installations in multiple parcels using different conveyance 
authorities for different future uses based upon consideration of the 
factors described above.
    Question. In regard to no-cost EDC requests, how much consideration 
does the DOD give today's economic climate when negotiating with Local 
Redevelopment Authorities (LRAs) for communities who have been BRAC'd?
    Answer. The Secretary concerned has discretion and flexibility to 
structure an EDC that can be tailored to local needs to assist local 
job creation/recovery activities and base redevelopment. This is done 
in close collaboration with the Local Redevelopment Authority (LRA) and 
local economic conditions are an important factor considered. 
Specifically, as set forth in the governing regulation (32 CFR Part 
174), the Secretary concerned will consider the following factors, as 
appropriate, in evaluating the application and the terms and conditions 
of the proposed transfer:
  --Adverse economic impact of closure or realignment on the region and 
        potential for economic recovery through an EDC.
  --Extent of short- and long-term job generation.
  --Consistency with the entire redevelopment plan.
  --Financial feasibility of the development, including market analysis 
        and need and extent of proposed infrastructure and other 
        investments.
  --Extent of State and local investment, level of risk incurred, and 
        the LRA's ability to implement the plan.
  --Current local and regional real estate market conditions.
  --Incorporation of other Federal agency interests and concerns, and 
        applicability of, and conflicts with, other Federal surplus 
        property disposal authorities.
  --Relationship to the overall Military Department disposal plan for 
        the installation.
  --Economic benefit to the Federal Government, including protection 
        and maintenance cost savings and anticipated consideration from 
        the transfer.
  --Compliance with applicable Federal, State, interstate, and local 
        laws and regulations.
    Under the applicable statutory authority, a no-cost EDC may only be 
made if:
  --the LRA agrees that the proceeds from any sale or lease of the 
        property (or any portion thereof) received by the LRA during at 
        least the first seven years after the date of the initial 
        transfer of property shall be used to support economic 
        redevelopment of, or related to, the installation; and
  --the LRA executes the agreement for transfer of the property and 
        accepts control of the property within a reasonable time after 
        the date of the property disposal record of decision.
    Question. In particular to no-cost EDCs, would you happen to 
roughly know how long it takes for an acre of BRAC property to be 
conveyed (by disposal type) or how long it typically take for an acre 
of BRAC property to be productively reused?
    Answer. There is really no ``typical'' BRAC property conveyance 
situation. Every closing base, and surrounding community, has unique 
features that affect the length of time to convey property, the 
disposal methods, and reuse implementation period. In some cases, where 
there is strong market demand, immediate public use needs, little 
investment required to achieve reuse, and minimal environmental cleanup 
concerns, property has been conveyed and reused relatively quickly 
after the base closes. At other locations where market demand is 
limited, substantial investment is required to enable the desired 
reuses, and/or environmental conditions require significant effort and 
regulatory involvement to resolve, conveyance and reuse occurs more 
slowly.
    As Chairman of the Senate Special Operations Forces Caucus, I am 
concerned with the realignment of the 7th Special Forces Group (SF0) 
from Fort Bragg, NC to Eglin Air Force Base, FL. While gunnery and 
artillery ranges are critical for the 7th SF0 to continue to maintain a 
high level of combat readiness, the available shooting ranges at Eglin 
are currently being used by Air Force Special Operations AC-130 
Gunships.
    Question. With both entities in extraordinarily high demand in 
support of operations in Iraq and Afghanistan, how is the DOD planning 
to redesign air and land ranges to ensure a seamless transition for 
training and preparedness?
    Answer. Air Force and Army Special Operations officials have worked 
closely to ensure the Army's 7 SFG Airborne (A) move to Eglin AFB is 
seamless and preserves optimum training capabilities for all Eglin 
range complex users.
    The Air Force Special Operations Command (AFSOC) and 7 SFG (A) 
estimate approximately 10-20 percent of their local missions will be 
bi-lateral in nature, which will evolve as the SFG (A) moves to Florida 
and begins operations. Joint training opportunities should increase as 
AFSOC and 7 SFG (A) further develop training scenarios. Eglin ranges 
are centrally scheduled. Schedules are de-conflicted to maximize 
training opportunities for all users. 7 SFG (A) requires 14 live-fire 
training ranges that currently do not exist at Eglin AFB. The Army has 
funded 11 of the 14 ranges through DOD's Military Construction program, 
and worked with Eglin range managers to optimally site them. The Army 
and the Air Force have also agreed on the locations for the remaining 
three ranges that are competing for funds within DOD's priorities.
    Eglin range managers have also established ground maneuver areas to 
support 7 SFG (A) non-live-fire training activities. Activities in 
these areas will have little to no impact on other Eglin range users.
                                 ______
                                 

              Question Submitted by Senator Susan Collins

    Question. Although I am encouraged by this good news, I continue to 
be concerned about the lack of alignment between the branches' funding 
timelines, which could increase the overall cost to the taxpayer and 
threaten the viability of the project itself.
     Can you assure us that you will work with the Maine Congressional 
Delegation to ensure that these facilities are constructed making the 
most efficient use of taxpayer dollars, and fulfill the requirements of 
both the Army National Guard and the Marine Corps?
    Answer. My office will continue to monitor the efforts of the Maine 
Army National Guard (MEARNG) and the Naval BRAC Office both of which 
have achieved mutual goals to allow their projects to stay on track for 
successful execution. Two Joint Forces site development projects 
programmed under two separate appropriations, in two separate years are 
planned for the Brunswick Naval Air Station (NAS). The MEARNG will 
control a 51-acre parcel of land on the Brunswick NAS under a Federal 
license upon transfer from the Navy. The Department of Navy maintains a 
requirement to provide a project for the U.S. Marine Corps Reserves 
(USMCR) at Brunswick as well. There are a number of constraints, which 
render only 10 acres of the site as tenable for development. The site 
is currently envisaged to accommodate both the MEARNG requirements as 
well as the USMCR requirements. The Adjutant General--Maine (TAG-ME) 
has reviewed the Navy's Site Proposal and concurs with placement; staff 
is drafting a request to issue an execution directive for the 
appropriate real estate instruments to move forward.
                         Department of the Navy

STATEMENT OF HON. B.J. PENN, ASSISTANT SECRETARY OF THE 
            NAVY (INSTALLATIONS AND ENVIRONMENT)
    Senator Johnson. I am pleased now to welcome our second 
panel of witnesses--the Honorable B.J. Penn, Assistant 
Secretary of the Navy (Installations and Environment); Major 
General Eugene G. Payne, Jr., Assistant Deputy Commandant for 
Installations and Logistics, Facilities Division; Rear Admiral 
Mark A. Handley, Deputy Commander, Navy Installations Command 
Director Ashore Readiness Group.
    Thank you all for coming. We look forward to your 
testimony, and again, your full statements will be entered into 
the record.
    Secretary Penn, please proceed.
    Mr. Penn. Thank you, Mr. Chairman.
    Chairman Johnson, Senator Hutchison, members of the 
subcommittee, it is a privilege to come before you today to 
discuss----
    Senator Johnson. The microphone.
    Mr. Penn. How is this?
    Senator Johnson. Okay.

                      STATEMENT OF HON. B.J. PENN

    Mr. Penn. Chairman Johnson, Senator Hutchison, members of 
the subcommittee, it is a privilege to come before you today to 
discuss the Department of the Navy's installation efforts. I am 
joined this afternoon by Major General Payne, the Marine Corps 
Assistant Deputy Commandant for Installations and Logistics, 
and Rear Admiral Handley, Director of the Navy's Shore 
Readiness Division.
    I would like to touch on a few highlights in the 
Department's overall facilities budget request, a healthy $14.4 
billion, or 9.2 percent of the Department's TOA. In MILCON, 
fiscal year 2010 continues the Marine Corps Grow the Force 
initiative with a $1.9 billion investment, targeted primarily 
at infrastructure and unit-specific construction required to 
move marines from interim facilities and provide adequate 
facilities for new units.
    The fiscal year 2010 MILCON budget also provides funds for 
the first five construction projects to support the relocation 
of marines from Okinawa to Guam in the amount of $378 million.
    Our fiscal year 2010 budget request complies with the 
Office of Management and Budget policy and the DOD Financial 
Management Regulation that establishes criteria for the use of 
incremental funding. The use of incremental funding in this 
budget has been restricted to the continuation of projects that 
have been incremented in prior years. Otherwise, all new 
projects are fully funded or are complete and usable phases.
    In family housing, our budget request of $515 million 
reflects the continuation of investment funding for locations 
where we still own and operate military family housing and 
where additional privatization is planned. Prior requests 
reflected an accelerated program to address additional housing 
requirements associated with the Marine Corps Grow the Force 
structure initiatives.
    The Navy and Marine Corps have privatized virtually all 
family housing located in the United States. Where we continue 
to own housing at overseas and foreign locations, we are 
investing in a steady-state recapitalization effort to replace 
or renovate housing where needed. Our request also includes 
funds necessary to operate, maintain, and lease housing to 
support Navy and Marine Corps families located around the 
world.
    Regarding legacy BRAC, we continue our request for 
appropriated funds in the amount of $168 million, as we 
exhausted all land sale revenue. We have disposed of 93 percent 
of the prior BRAC properties, so there is little left to sell, 
and the real estate market is not as lucrative as it was 
several years ago. We expect only limited revenue from the sale 
of Roosevelt Roads in Puerto Rico and other small parcels.
    With respect to the BRAC 2005 program, our budget request 
of $592 million represents a shifting emphasis from 
construction to outfitting and other operations and maintenance 
costs. One success story I would like to highlight comes from 
New Orleans, which still struggles to recover from the 
aftermath of Hurricane Katrina.
    We entered into a 75-year leasing agreement with the 
Algiers Development District in September 2008. In exchange for 
leasing 149 acres from Naval Support Activity New Orleans, the 
headquarters, marine forces Reserves, will receive 
approximately $150 million in new facilities.
    Demolition began recently, and we have established 
temporary quarters for the commissary so that military 
personnel, retirees, and their families still have access to 
this quality of life service during construction. We continue 
to work with Algiers Development District to ensure this 
partnership's successful outcome.
    We have been able to hold down our own cost increases to a 
modest 2 percent for the implementation period of 2006 through 
2011.
    We have made significant progress in the past year in 
planning for the relocation of the marines from Okinawa to 
Guam. The environmental impact statement (EIS) for Guam is 
underway, with a targeted Record of Decision in time for 
construction in fiscal year 2010.
    The Government of Japan ratified the international 
agreement on May 13, 2009 and appropriated $336 million in 
fiscal year 2008 equivalent dollars to complement our own 
fiscal year 2010 investment. We expect to see Japan's 
contribution deposited in our Treasury by July.

                           PREPARED STATEMENT

    Finally, it has been an honor and privilege to serve this 
great Nation and the men and women of our Navy and Marine Corps 
team--the military and civilian leadership, personnel, and 
their families. I thank each of you for your continued support 
and the opportunity to testify before you today.
    [The statement follows:]

                  Prepared Statement of Hon. B.J. Penn

    Chairman Johnson, Senator Hutchison, and members of the 
subcommittee, I am pleased to appear before you today to provide an 
overview of the Department of Navy's investment in its shore 
infrastructure.
                  the navy's investment in facilities
    Our Nation's Sea Services continue to operate in an increasingly 
dispersed environment to support the Maritime Strategy and ensure the 
freedom of the seas. This requires an ever strong foundation of 
installations from which to re-supply, re-equip, train, and shelter our 
forces. We must continue to make smart infrastructure investments to 
prepare for the future and secure the peace abroad. Our fiscal year 
2010 shore infrastructure baseline budget totals $14.3 billion, 
representing 9.2 percent of the DON's fiscal year 2010 baseline request 
of $156 billion. 



    The fiscal year 2010 military construction (active+reserve) request 
of $3.8 billion is $674 million more than the fiscal year 2009 request. 
This growth in Department's military construction program is primarily 
due to the continuation of the Marine Corps' ``Grow the Force'' 
``initiative and the inclusion of the first capital investments to 
support their realignment of forces from Okinawa to Guam.
    The fiscal year 2010 Family Housing request of $515 million 
represents a 32 percent decrease from the fiscal year 2009 request. It 
is helpful to examine the table at left to put this decrease in 
perspective. Prior year family housing construction requests reflected 
an accelerated program to address additional housing requirements 
associated with Marine Corps force structure initiatives. The Navy and 
Marine Corps have continued to invest in housing, including both the 
recapitalization of overseas housing as well as additional 
privatization to address housing requirements. The fact that the 
investment in family housing construction has decreased should be seen 
as an indication that we have ridden the ``crest of the wave.''



    Our BRAC program consists of environmental cleanup and caretaker 
costs at prior BRAC locations, and implementation of BRAC 2005 
recommendations.
    As in fiscal year 2009, we must seek appropriated funds in fiscal 
year 2010 in the amount of $168 million for Legacy BRAC activities as 
we have exhausted land sales revenues. We anticipate some limited 
future revenue as we move to dispose of the former Naval Station 
Roosevelt Roads in Puerto Rico and some other smaller property sales. 
We will use revenue from these future sales to accelerate cleanup at 
the remaining prior BRAC locations.
    The fiscal year 2010 BRAC 2005 budget request of $592 million 
represents a significant shift from construction to Operation & 
Maintenance funds as our focus turns to outfitting facilities with 
equipment and materiel and supporting the physical relocation of 
personnel, rather than constructing new or renovating existing 
structures, as one might expect as the statutory deadline approaches. 
Although we are on track to meet the September 15, 2011 deadline, we do 
face some significant challenges ahead.
    Here are some of the highlights of these programs.
                         military construction
    The DON's fiscal year 2010 Military Construction program requests 
appropriations of $3.8 billion, including $169 million for planning and 
design and $12.5 million for Unspecified Minor Construction.
    The active Navy program totals $1.1 billion and includes:
  --$302 million to support three intermediate and depot level 
        maintenance projects: the second increment of the CVN 
        replacement pier at Puget Sound Naval Shipyard, Bremerton, 
        Washington; modifications to the P-8/MMA facility at Naval Air 
        Station Jacksonville, Florida; and the largest of the three 
        projects at $227 million--Pier 5 Replacement at Norfolk Naval 
        Shipyard, Portsmouth, Virginia;
  --$84 million to fund 11 airfield projects. Included among these 
        projects are seven supporting the Joint Strike Fighter: 6 at 
        Eglin AFB, Florida and 1 at Edwards AFB, California;
  --$42 million to fund four expeditionary operations projects at Camp 
        Lemonnier, Djibouti, which include an ammunition supply point, 
        security fencing; road improvements, and a fire station;
  --$86 million to fund five training projects: a submarine learning 
        center in Guam; the Asia-Pacific Center in Honolulu, Hawaii; a 
        SERE school for SOCOM in Spokane, Washington; and E-2D Trainer 
        Facility at Naval Station, Norfolk, Virginia; and a flight 
        simulator at NAS Pensacola, Florida;
  --$193 million to fund four ordnance related projects: the 6th of 7 
        increments of the Limited Area Production and Storage Complex 
        and the 2nd of two increments of the waterfront security 
        enclave fencing, both projects at Naval Submarine Base, Bangor, 
        Washington; constructs missile magazines at Naval Station Pearl 
        Harbor, Hawaii; and a torpedo exercise support building in 
        Guam;
  --$95 million to construct three enlisted training barracks, one each 
        in Newport, Rhode Island; Eglin AFB and NAS Pensacola, Florida;
  --$126 million to fund four waterfront operations projects, which 
        include dredging the entrance to the turning basin at Naval 
        Station, Mayport, Florida to enable nuclear carriers to transit 
        the channel without risk to the propulsion system, and Charlie 
        One Wharf replacement (unrelated CVN homeporting) also at 
        Mayport. The remaining two projects are the second phase of the 
        waterfront development project at Naval Support Activity, 
        Bahrain, and the final increment of the magnetic silencing 
        facility at Naval Station, Pearl Harbor, Hawaii;
  --$22 million to build base support facilities: Naval Construction 
        Division Operations Facility and a centralized public works 
        facility at Naval Base, Point Loma, California; and
  --$83 million for planning and design efforts.
    The active Marine Corps program totals $2.7 billion (of which $1.9 
billion is for ``Grow the Force''), a $705 million increase over the 
fiscal year 2009 Military Construction request. This cost increase is 
due to the initial construction investment in Guam and a continued 
emphasis on Grow the Force.
  --$323 million for the construction of unaccompanied housing at Camp 
        Pendleton, Twentynine Palms, California, and Camp Lejeune, 
        North Carolina in a continuation of the Commandant of the 
        Marine Corps' initiative to improve the quality of life for 
        single Marines;
  --$200 million to provide quality of life facilities such as dining 
        facilities, physical fitness centers, and fire houses at 
        Twentynine Palms, San Diego, and Camp Pendleton, California, 
        the Basic School at Quantico, Virginia, and Camp Lejeune, 
        Cherry Point and New River in North Carolina;
  --$109 million to construct new recruit barracks and student 
        billeting supporting the School of Infantry and the recruit 
        training at Camp Pendleton and for the Basic School in 
        Quantico, Virginia;
  --$977 million to build infrastructure to support new construction. 
        These projects include communications upgrades, electrical 
        upgrades, natural gas systems, drinking and wastewater systems, 
        and roads. These projects will have a direct effect on the 
        quality of life of our Marines. Without these projects, basic 
        services generally taken for granted in our day-to-day lives, 
        will fail as our Marines work and live on our bases;
  --$744 million to fund operational support projects such as those 
        needed for the stand-up of V-22 aircraft in North Carolina and 
        California; and operational units in Camp Lejeune, North 
        Carolina and Camp Pendleton, California. Logistics operations 
        will be enhanced with a new Port Operations facility at Marine 
        Corps Support Facility, Blount Island, Florida;
  --$140 million to provide training improvements for aviation units 
        and Marine Corps Security Force training at Quantico, VA, and 
        Marines training at the School of Infantry at Camp Lejeune, 
        North Carolina, and Camp Pendleton, California. A new range 
        will be provided in Hawaii.
  --$122 million to construct maintenance facilities at Twentynine 
        Palms, California, Yuma, Arizona, Beaufort, South Carolina, and 
        New River and Camp Lejeune, North Carolina;
  --$41 million for the construction of storage facilities at 
        Twentynine Palms and Camp Pendleton, California and Cherry 
        Point, North Carolina; and
  --$84 million for planning and design efforts.
    With these new facilities, Marines will be ready to deploy and 
their quality of life will be enhanced. Without them, quality of work, 
quality of life, and readiness for many Marines will have the potential 
to be seriously degraded.
    The Navy and Marine Corps Reserve Military Construction 
appropriation request is $64 million, including $2 million for planning 
and design efforts, to construct three reserve centers--one each at 
Luke AFB, Arizona; Alameda, California; and Joliet, Illinois. These 
funds will also be used to construct a C-40 Hangar at Naval Air Station 
Oceana, Virginia Beach, Virginia; a parachute and survival equipment 
center in San Antonio, Texas, and vehicle maintenance facility in 
Charleston, South Carolina.
Fully-funded and Incrementally-funded MILCON Projects
    Our fiscal year 2010 budget request complies with Office of 
Management and Budget Policy and the DOD Financial Management 
Regulation that establishes criteria for the use of incremental 
funding. The use of incremental funding in this budget has been 
restricted to the continuation of projects that have been incremented 
in prior years. Otherwise, all new projects are fully funded or are 
complete and usable phases. However, as the cost of complex piers and 
utilities systems rise above the $100 million and even $200 million 
threshold, compliance with the full-funding policy drives both Services 
to make hard choices regarding which other equally critical projects 
must be deferred into the next year.
Meeting the Energy Challenge
    In August 2006, I directed that all new Department of Navy 
facilities and major renovations be built to U.S. Green Building 
Council ``LEED Silver'' standards starting in fiscal year 2010. For 
military construction projects, we met the requirement a year earlier, 
in fiscal year 2009. This year we began including sufficient funds for 
major renovations where the work exceeds 50 per cent of the facility's 
plant replacement value.
    With funds provided through the American Recovery and Reinvest Act 
(ARRA) we are able to leverage current technological advances to reduce 
energy demand and increase our ability to use alternative and renewable 
forms of energy for shore facilities as well as in our logistics 
processes. This technology improves energy options for our Navy today 
and in the future. Of the $1.2 billion in ARRA funds that have been 
provided to Navy, $577 million in Operation and Maintenance, Navy; 
Operation and Maintenance, Marine Corps, and Military Construction has 
been applied to projects that will reduce our fossil fuel energy 
consumption. Major investments include $169 million to install 
photovoltaic systems, $71 million for advance metering installation, 
$30M for the energy conservation improvement program (ECIP), $9 million 
for geothermal energy development, and $31 million for energy 
improvements in various facilities, (such as critical repairs to major 
utilities systems, HVAC replacement, etc.).
Encroachment Partnering
    The Department of the Navy has an aggressive program to manage and 
control encroachment, with a particular focus on preventing 
incompatible land use and protecting important natural habitats around 
installations and ranges. A key element of the program is Encroachment 
Partnering (EP), which involves cost-sharing partnerships with States, 
local governments, and conservation organizations to acquire interests 
in real property adjacent and proximate to our installations and 
ranges. The Department prevents development that is incompatible with 
the readiness mission, and our host communities preserve critical 
natural habitat and recreational space for the enjoyment of residents. 
Navy and Marine Corps have ongoing EP agreements at 14 installations 
and ranges nationwide, with additional agreements and projects planned 
in fiscal year 2009. EP has been a highly effective tool for addressing 
encroachment threats from urban development and is a win-win for the 
Department and our host communities.
    In fiscal year 2008, Navy and Marine Corps completed partnership 
acquisitions on 16,662 acres. Funding for those purchases of land and 
easements included a combined contribution from DOD and DON of $11.72 
million, which was matched by similar investments from partner 
organizations. In fiscal year 2009, Navy and Marine Corps received an 
additional $19.78 million from the DOD Readiness and Environmental 
Protection Initiative program, which will be combined with funding from 
the Department and our partner organization.
                                housing
    The following tenets continue to guide the Department's approach to 
housing for Sailors, Marines, and their families:
  --All service members, married or single, are entitled to quality 
        housing; and
  --The housing that we provide to our personnel must be fully 
        sustained over its life.
    With the support of Congress, and particularly this Committee, we 
have made great strides in improving the quality of life for our 
members and their families over the past years. These include:
  --Funds programmed and contracts in place to eliminate inadequate 
        family housing in the Navy and Marine Corps.
  --A robust military construction program to meet the Marine Corps' 
        unaccompanied housing needs.
  --Successful execution of the first two unaccompanied housing 
        privatization projects within the Department of Defense.
    Despite these achievements, there remain challenges that we face as 
a Department. A detailed discussion of the Department's family and 
unaccompanied housing programs, and identification of those challenges, 
follows:
                             family housing
    As in past years, our family housing strategy consists of a 
prioritized triad:
  --Reliance on the Private Sector.--In accordance with longstanding 
        DOD and DON policy, we rely first on the local community to 
        provide housing for our Sailors, Marines, and their families. 
        Approximately three out of four Navy and Marine Corps families 
        receive a Basic Allowance for Housing (BAH) and own or rent 
        homes in the community. We determine the ability of the private 
        sector to meet our needs through the conduct of housing market 
        analyses that evaluate supply and demand conditions in the 
        areas surrounding our military installations.
  --Public/Private Ventures (PPVs).--With the strong support from this 
        Committee and others, we have successfully used PPV authorities 
        enacted in 1996 to partner with the private sector to help meet 
        our housing needs through the use of private sector capital. 
        These authorities allow us to leverage our own resources and 
        provide better housing faster to our families. Maintaining the 
        purchasing power of BAH is critical to the success of both 
        privatized and private sector housing.
  --Military Construction.--That Military construction (MILCON) will 
        continue to be used where PPV authorities don't apply (such as 
        overseas), or where a business case analysis shows that a PPV 
        project is not feasible.
    Our fiscal year 2010 budget includes $146 million in funding for 
family housing construction and improvements. This amount includes $79 
million for the Government investment in continued family housing 
privatization at Camp Lejeune and includes funding for an addition to a 
Department of Defense school. It also includes the replacement or 
revitalization of Navy housing in Japan, Korea, and Spain where the 
military housing privatization authorities do not apply. Further, there 
are proposed projects in Guam, unrelated to the Realignment of Marine 
Forces that would replace or revitalize existing homes there. Finally, 
the budget request includes $369 million for the operation, 
maintenance, and leasing of remaining Government-owned or controlled 
inventory.
    As of the end of fiscal year 2008, we have awarded 30 privatization 
projects involving over 61,000 homes. As a result of these projects, 
nearly 20,000 homes will be renovated and over 21,000 new or 
replacement homes will be built. (The remaining homes were privatized 
in good condition and did not require any work.) Through the use of 
these authorities we have secured approximately $8 billion in private 
sector investment from approximately $800 million of our funds, which 
represents a ratio of almost ten private sector dollars for each 
taxpayer dollar.
    While the military housing privatization initiative has been 
overwhelmingly successful, there are challenges in this program area as 
well. They include:
  --The Current Economic Climate.--In the current economic climate, we 
        have seen a dramatic curtailment in the amount of private 
        financing available for our future military housing 
        privatization projects/phases. This, in turn, affects plans for 
        future construction and renovations. We are working with the 
        Office of the Secretary of Defense, the other Services, and the 
        lending community on ways in which we might mitigate such 
        impacts and preserve our ability to leverage private capital on 
        future projects/phases.
  --Program Oversight.--There has been a great deal of attention 
        focused by Congress on the Service's oversight of housing 
        privatization projects in the wake of difficulties experienced 
        by some partners. We take seriously our responsibility to 
        monitor the privatization agreements to ensure that the 
        Government's long term interests are adequately protected. We 
        have instituted a portfolio management approach that collects 
        and analyzes financial, occupancy, construction, and resident 
        satisfaction data to ensure that the projects remain sound and 
        that the partners are performing as expected. We conduct 
        meetings with senior representatives of our partners and, where 
        necessary, resolve issues of mutual interest. Where our 
        projects have encountered difficulties, appropriate corrective 
        actions have been taken. For example, we had concerns regarding 
        performance of the private partner in our Pacific Northwest 
        project. We worked with that partner to sell its interest to 
        another company which has a record of good performance with 
        military housing privatization projects.
    Perhaps the most important measure of success of our privatization 
program has been the level of satisfaction on the part of the housing 
residents. To gauge their satisfaction, we used customer survey tools 
that are well established in the marketplace. As shown at right, the 
customer surveys indicate a steady improvement in member satisfaction 
after housing is privatized. 


Unaccompanied Housing
    Our budget request includes $527 million for 14 unaccompanied 
housing projects (included 6 training barracks) at seven Navy and 
Marine Corps locations. The budget continues the emphasis on improving 
living conditions for our unaccompanied Sailors and Marines.
    Our current inventory consists of over 157,000 unaccompanied 
housing spaces for permanent party Sailors and Marines. These represent 
a wide mix of unit configurations including rooms occupied by one, two, 
or more members. There are challenges, however, which the Department is 
committed to address.
  --Provide Homes Ashore for our Shipboard Sailors.--The Homeport 
        Ashore initiative seeks to provide a barracks room ashore 
        whenever a single sea duty sailor is in his or her homeport, so 
        they need not live on the ship. The Navy has made considerable 
        progress towards achieving this goal through military 
        construction; privatization and intensified use of existing 
        barracks capacity. In his May 6, 2009 testimony before the 
        House Appropriations Committee, Subcommittee on Military 
        Construction, the Chief of Naval Operations committed to 
        providing housing ashore for all junior sea duty Sailors by 
        2016 at the Interim Assignment Policy standard (55 square feet 
        of space per person). The inclusion of $88 million in funding, 
        in the ARRA, for a new barracks in San Diego is helping us meet 
        this goal. The Navy's long term goal is to achieve the OSD 
        private sleeping room standard (90 square feet per person).
    Commandant's BEQ Initiative.--It is the Commandant of the Marine 
Corps' priority to ensure single Marines are adequately housed. Thanks 
to your previous support, in fiscal year 2009 the Marine Corps will 
make significant progress toward fulfilling this priority. Your 2009 
appropriation of $1.2 billion in MILCON funding for Marine Corps 
barracks will result in the construction of approximately 12,300 
permanent party spaces at eight Marine Corps installations. Your 
continued support of this initiative in our fiscal year 2010 proposal 
will allow us to construct an additional 3,000 new permanent party 
barracks spaces. With this funding we will stay on track to meet our 
2014 goal. The fiscal year 2010 request for bachelor housing will 
provide eight barracks projects at Camp Lejeune, North Carolina, and 
Twenty-Nine Palms, and Camp Pendleton, California. We are also 
committed to funding the replacement of barracks' furnishings on a 7-
year cycle as well as the repair and maintenance of existing barracks 
to improve the quality of life of our Marines. These barracks will be 
built to the 2+0 room configuration, as have all Marine Corps barracks 
since 1998. This is consistent with the core Marine Corps tenets for 
unit cohesion and teambuilding.
Unaccompanied Housing Privatization
    The Navy has also executed two unaccompanied housing privatization 
projects using the pilot authority contained in section 2881a of Title 
10, United States Code. In March we cut the ribbon on the Pacific 
Beacon project in San Diego. Pacific Beacon includes 258 conveyed units 
targeted for unaccompanied E1-E4 sea duty Sailors and 941 newly 
constructed dual master suite units targeted for E4-E6 Sailors. 



    The second unaccompanied housing privatization project is in 
Hampton Roads (executed in December 2007) and included the conveyance 
of 723 units in seven buildings on Naval Station and Naval support 
Activity Norfolk and the construction of 1,190 dual master suite units. 
The first of three construction sites opened in November 2008 and the 
remaining units are scheduled for completion in 2010.
    The Navy is continuing to evaluate candidate locations for the 
third pilot project, including the Mayport/Jacksonville, Florida area 
and additional phases at San Diego and Hampton Roads using the public/
private entities previously established.
                     relocating the marines to guam
    The fiscal year 2010 budget request includes $378 million to 
construct facilities in support of the relocation. The Government of 
Japan, in its JFY-2009 budget (which runs April 1, 2009 through March 
31, 2010) has provided a comparable amount and we expect to receive 
their contribution in June. The graph at right identifies the projects 
each funding stream constructs. 



    The Department of Defense recognizes that the condition of Guam's 
existing infrastructure could affect our ability to execute the 
aggressive program execution and construction schedule. Construction 
capacity studies, assessments of socioeconomic impacts, and the 
development of the Environmental Impact Statement (EIS) have 
demonstrated that, in particular, Guam's road network, commercial port, 
and utilities systems are in need of upgrades.
    Roadway, intersection, and bridge upgrades are required to handle 
the flow of materials from the port to work sites. Through the Defense 
Access Road (DAR) program, DOD is working to identify, certify as 
eligible for funding, and consider in future DOD budgets the need for 
improvements to roadways, intersections, and bridges that are critical 
to executing the construction program. Five road improvement projects 
have been certified by Transportation Command's Surface Deployment and 
Distribution Command under the DAR program and more are under 
consideration. Existing deficiencies in the island's road system and 
long-term traffic impacts due to the projected population increase are 
being considered in partnership between Guam Department of Public Works 
and the U.S. Federal Highway Administration. These efforts are 
occurring in parallel in order to ensure compatibility and mutual 
benefit to DOD and the Guam community.
    The Port of Guam requires near and long-term improvements. The Port 
Authority of Guam and the U.S. Maritime Administration (MARAD) signed a 
memorandum of understanding to improve the port by developing an 
adequate master plan and implementation of a Capital Improvement Plan. 
These plans will develop the port into a regional shipping hub that 
will serve both military and civilian needs in the region in the long 
term. Near-term improvements to the port are underway, including the 
recent delivery of three refurbished cranes that will become fully 
operational soon. With these upgrades and improvements to materials-
handling processes, the Port of Guam should be able to accommodate 
throughput to sustain the expected $1.5-2.0 billion per year in 
construction volume.
    Of the total $6.09 billion Japanese commitment included in the 
Realignment Roadmap, $740 million is for developing electric, fresh 
water, sewer, and solid waste infrastructure in support of the 
relocating Marine Corps forces. Analysis of utilities options indicates 
that developing new, stand-alone systems may not be cost-effective. DOD 
is collaborating with the Government of Guam to understand its needs 
and to determine the feasibility of water, wastewater, solid waste and 
power solutions that are mutually beneficial and acceptable to DOD, the 
civilian community and the regulatory agencies. Japan's contribution to 
the utilities special purpose entity is but one example of how bringing 
private investment through public-private partnerships may be part of 
the solution to Guam's infrastructure problems.
    Relocation to Guam represents a strategic opportunity for the 
United States that we must get right. Our strategy is to identify 
options that will support DOD missions, provide the widest possible 
benefit to the people of Guam, be technically and financially 
supportable by current and future utilities providers, and be 
acceptable to Government of Guam and environmental regulators. A 
business model is being developed to support these requirements while 
ensuring the interests of the U.S. Government and the GOJ are met. The 
EIS is addressing both interim and long-term solutions as they relate 
to infrastructure on Guam.
    DOD's Office of Economic Adjustment (OEA) has provided the 
Government of Guam with grants totaling more than $4.5 million to 
support environmental, financial and planning studies; staffing; and 
community outreach programs. Additionally, the Department of Defense is 
working with other Federal agencies to determine what appropriate roles 
DOD and other Federal agencies can play in helping Guam to address 
necessary infrastructure and services improvements on Guam, as noted by 
recent Government Accounting Office reviews. Additionally, the 
Department will ensure that Guam's local economic adjustment 
requirements, as they are known at the time, are provided to the 
Economic Adjustment Committee, chaired by the Secretary of Defense and 
the Secretaries of Commerce and Labor as co-Vice Chairs.
    We recognize the potential for significant socioeconomic effects on 
Guam with the introduction of off-island workers who will support the 
construction program. In order to minimize negative effects, we are 
collaborating with the Government of Guam to develop a program for the 
equitable and safe treatment of all workers, including Guam residents, 
workers from the Commonwealth of the Northern Mariana Islands (CNMI), 
Hawaii and the U.S. mainland, and any necessary H2-B laborers. We are 
evaluating methods to have contractors manage safety, medical, housing, 
transportation, and security for their workers, taking into account 
potential long-term positive side benefits that different solutions may 
have on the Guam community.
Environmental Impact Statement
    As it is designed to do, the National Environmental Policy Act 
(NEPA) process and associated studies are helping us identify and 
address environmental issues and constraints. A key milestone to 
executing the realignment in the established timeframe is achieving a 
Record of Decision on a schedule that allows for construction to begin 
in fiscal year 2010. The target for a Record of Decision is January 
2010. We realize there are significant and complicated issues that need 
to be addressed in this study, and the interests of the public need to 
be protected. This is a complex EIS, as it considers not only the 
relocation of the 8,000 Marines and their dependents, but also a Navy 
proposal for a transient nuclear-powered carrier capability at Apra 
Harbor, and an Army proposal to station a ballistic missile defense 
capability on Guam. However, we remain on an aggressive schedule to 
finish the final EIS by the end of 2009, with a Record of Decision 
following. To that end, we are holding informal discussions with 
regulatory agencies early and often to uncover and address issues of 
concern well in advance of the formal review process; we are 
streamlining existing internal and external review and approval 
processes with regulatory agencies and other external partners; and we 
are conducting concurrent internal DOD reviews to expedite approval of 
the EIS for distribution and publication. We will share with the 
Congress significant issues that emerge during the EIS process.
                 prior brac cleanup & property disposal
    The BRAC rounds of 1988, 1991, 1993, and 1995 were a major tool in 
reducing our domestic base structure and generating savings. The 
Department has achieved a steady State savings of approximately $2.7 
billion per year since fiscal year 2002. All that remains is to 
complete the environmental cleanup and property disposal on portions of 
16 of the original 91 bases and to complete environmental cleanup on 15 
installations that have been disposed.
Property Disposal
    By the end of fiscal year 2008, we have disposed of 93 percent of 
the real property slated for closure in the first four rounds of BRAC. 
Throughout that time, we have used a variety of the conveyance 
mechanisms available for Federal Property disposal, including the 
Economic Development Conveyance (EDC) that was created for BRAC 
properties. Ninety-one percent of the Department of the Navy real 
property was conveyed at no cost. From the remaining 9 percent, the 
Department of Navy has received over $1.1 billion in revenues via a 
variety of conveyance mechanisms. Nearly all of this revenue has been 
generated since fiscal year 2003. Since then, we have used these funds 
to accelerate environmental cleanup, and to finance the entire 
Department of the Navy prior BRAC effort including caretaker costs from 
fiscal year 2005 through fiscal year 2008. 



    These funds have enabled us to continue our environmental clean-up 
efforts at 31 installations. We have used these funds to accelerate 
cleanup at Naval Shipyard Hunters Point, CA, as well as Naval Air 
Station Alameda, CA, enabling us to be closer to issuing Findings of 
Suitability to Transfer or conveyance of the property for integration 
of environmental cleanup with redevelopment.
Land Sale Revenue
    Despite our success in using property sales to augment funding for 
environmental cleanup and property disposal, as well as recover value 
for taxpayers from the disposal of Federal property, future revenues 
are very limited. In fiscal year 2009, we resumed our budget requests 
for appropriated funding.
Prior BRAC Environmental Cleanup
    The Department has spent about $4.0 billion on environmental 
cleanup, environmental compliance, and program management costs at 
prior BRAC locations through fiscal year 2008. We project an increase 
in the cost-to-complete of about $172 million since last year. Nearly 
all of this cost increase is due to additional munitions cleanup at 
Naval Air Facility Adak, AK, Naval Shipyard Mare Island, CA, and Marine 
Corps Air Station El Toro, CA. The increase is also associated with 
additional radioactive contaminations at Naval Station Treasure Island, 
CA, Naval Air Station Alameda, CA, and Naval Shipyard Mare Island, CA.
                        brac 2005 implementation
    The Department has moved expeditiously from planning to the 
execution of the BRAC 2005 Program. The Office of the Secretary of 
Defense has approved all 59 Navy-led business plans. Additionally, 24 
other service-led business plans with some form of Navy equity have 
been approved. The Department's BRAC 2005 Program is on track for full 
compliance with statutory requirements by the September 15, 2011 
deadline. However, some significant challenges lie ahead.
Accomplishments
    In total, the Department awarded 85 of 118 BRAC construction 
projects with a combined value of $1.4 billion.\1\ Eighteen fiscal year 
2009 projects worth $256 million are on track to award this year. Some 
noteworthy projects include:
---------------------------------------------------------------------------
    \1\ Three fiscal year 2008 projects valued at $14 million remain to 
be awarded.
---------------------------------------------------------------------------
  --In July 2008, the Department awarded a $325 million project to co-
        locate Military Department Investigative Agencies at Marine 
        Corps Base, Quantico, VA. When complete it will combine almost 
        3,000 personnel from the Department of Defense (DOD) and the 
        Services' Investigative Agencies. It also includes the 
        construction of a collocated ``School House'' for the Joint 
        Counterintelligence Training Academy (JCITA) as well as nearby 
        roadway improvements. Combined together, these actions will 
        significantly enhance counterintelligence synchronization and 
        collaboration across DOD.
  --In less than 12 months since business plan approval, nine projects 
        for a combined $222 million were awarded at Naval Air Weapons 
        Station, China Lake, CA, Naval Weapons Station, Indian Head, 
        MD, and Dahlgren, VA, in support of the Department's effort to 
        consolidate and create a Naval Integrated Weapons & Armaments 
        Research, Development, Acquisition, Test, and Evaluation 
        Center. Two projects worth $39 million are projected to award 
        next month.
Helping Communities
    Fifteen impacted communities have established a Local Redevelopment 
Authority (LRA) to guide local planning and redevelopment efforts. The 
DOD Office of Economic Adjustment has been providing financial support 
through grants and technical assistance to support LRA efforts. Of 
these 15 communities, six reuse plans have been approved by the 
Department of Housing and Urban Development (HUD). Three communities 
are still preparing their plans with submissions planned for later this 
year. At the installations where the reuse plans have been completed, 
the Department has initiated the National Environmental Policy Act 
documentation for disposal of those properties.
Land Conveyances and Lease Terminations
    By the end of fiscal year 2008, the Department disposed of 43 
percent of the property that was slated for closure in BRAC 2005. These 
disposal actions were completed via lease termination, reversions, and 
Federal and DOD agency transfers. Of interest is the reversion of 
Singing Island at Naval Station Pascagoula and the Dredge Spoil 
Material Area at Naval Station Ingleside, transfer of the tidal area of 
Naval Weapons Station Seal Beach Detachment Concord to the Department 
of the Army, and disposal of 78 percent of the reserve centers slated 
for closure.



    The Department has also closed or realigned 38 of 49 Naval Reserve 
Centers, Navy Marine Corps Reserve Centers, Navy Recruiting Districts, 
Navy Regions, and Navy Reserve Readiness Commands. Seven of these were 
disposed in 2008. The 2009 Plan includes transfer of 144 acres at Naval 
Air Station Atlanta, Reserve Centers at Orange, TX, and Mobile, AL, and 
75 acres from Naval Station Pascagoula to the Air Force.
NSA New Orleans, LA
    In September 2008, the Department and the Algiers Development 
District (ADD) Board entered into a 75-year leasing agreement. We 
leased 149 acres of Naval Support Activity New Orleans West Bank to the 
ADD in exchange for up to $150 million in new facilities to support 
Headquarters, Marine Forces Reserve.
    Simultaneously, the Department finished construction, relocated 
from New Orleans, and formally opened the new Commander, Navy Reserve 
Force Command Headquarters in Norfolk, VA. In their new $33 million, 
90,000-square foot facility, the 450-man command is in very close 
proximity to the Department's U.S. Fleet Forces Command as well as the 
Joint Forces Command. This proximity means better communication between 
active and reserve forces, including more face-to-face meetings with 
local commands.
Naval Air Station Brunswick, ME
    The Department's largest BRAC 2005 operational action will close 
Naval Air Station Brunswick, Maine, and consolidate the East Coast 
maritime patrol operations in Jacksonville, Florida. The cornerstone of 
this relocation is a $132 million aircraft hangar scheduled for 
completion and occupation in May 2009. This project represents the 
Department's largest patrol squadron hangar, and it will serve to 
maintain all five P-3 squadrons. It is also designed for the future 
transition to the P-8 Poseidon aircraft. The first relocating P-3 
Squadron deployed from Naval Air Station Brunswick occurred in November 
2008 and will return directly to their new home in Jacksonville.
Naval Station Ingleside/NAS Corpus Christi, TX
    Significant progress was also made to prepare facilities to 
relocate eight Mine Counter Measure (MCM) ships from Naval Station 
Ingleside, TX to Naval Base San Diego, CA. The Department re-evaluated 
its infrastructure footprint in the greater San Diego area and elected 
to change from new construction to renovation of existing facilities, 
thereby saving more than $25 million in construction costs. These ships 
will start shifting homeport this spring, with completion later in the 
calendar year.
Joint Basing
    Two of four Joint Base Memorandums of Agreement (MOAs) where the 
Department is the lead component have been approved. The MOA for each 
joint base defines the relationships between the components, and 
commits the lead component to deliver installation support functions at 
approved common standards. Resources--including personnel, budget, and 
real estate--transfer from the Supported component(s) to the lead. 
Joint Basing has two implementation phases, with Phase I installations 
scheduled to reach full operational capability in October 2009, and 
Phase II installations in October 2010. The four Department-led joint 
bases are Little Creek-Fort Story (Phase I), Joint Region Marianas 
(Phase I), Anacostia-Bolling (Phase II), and Pearl Harbor-Hickam (Phase 
II).
Environmental Cost to Complete
    Given the relatively few number of closures, the absence of major 
industrial facilities, and the extensive site characterization, 
analysis, and cleanup that has occurred over the last several decades, 
the Department's remaining environmental liabilities for BRAC 2005 are 
substantially less than in previous rounds of BRAC. We have spent $148 
million in cleanup at BRAC 2005 locations through fiscal year 2008. The 
majority of this has been spent at Naval Air Station Brunswick, ME and 
Naval Weapons Station Seal Beach Detachment Concord, CA. Our remaining 
environmental cost to complete for fiscal year 2009 and beyond is $99 
million. This estimate is $8 million higher than last year's estimate 
due to additional munitions, groundwater, and landfill cleanup and 
monitoring at Naval Air Station Brunswick, ME, Naval Weapons Station 
Seal Beach Detachment Concord, CA, and Naval Air Station Joint Reserve 
Base Willow Grove, PA.
Financial Execution
    The execution of our fiscal year 2006-2008 funds is now at nearly 
90 percent. This is a significant improvement over the same period last 
year and further demonstrates our shift from planning to execution and 
accelerated implementation. We are also on track to obligate over 90 
percent of our fiscal year 2009 funds by the end of the fiscal year. We 
appreciate the efforts of Congress to provide these funds early in the 
fiscal year, which directly contributed to our success.
Challenges
    Although we are on track to meet the September 15, 2011 deadline, 
we do face some significant challenges ahead. Seven major construction 
projects at Naval Air Weapons Station China Lake, CA and Naval Weapons 
Station Indian Head, MD require complex site approvals and 
certifications for operation from the Department of Defense Explosive 
Safety Board. Additionally, Correctional Facilities require 
certification before occupancy. The Department plans to closely manage 
construction so that it completes in time to conduct the necessary 
certifications.
    Several complex move actions require close coordination with other 
services and agencies. While they remain on track for timely 
completion, we must maintain effective and continuous coordination to 
succeed.
              meeting the construction execution challenge
    We have outlined how our facilities investment continues at a 
record setting pace, and the Department's execution agent, the Naval 
Facilities Engineering Command (NAVFAC), is ready to meet the demand. 



    While market conditions exacerbated by world-wide natural disasters 
led to lagging execution rate during fiscal year 2006, NAVFAC has 
drastically reduced carryover despite a 60 percent increase in contract 
awards, as the graph depicts. Smart acquisition strategies and vigorous 
management in the field continue to reduce the carryover.



    Special consideration is being given to executing the construction 
program in Guam. To the maximum extent possible NAVFAC will apply 
criteria and standards that enable offsite construction methodologies. 
This will not only reduce the importation of raw construction materials 
to the island but it also helps to minimize the socio-economic impact 
by reducing the off-island labor required. NAVFAC continues to make 
concerted efforts to reach out to Small Business enterprises, and will 
also utilize a variety of contracting vehicles, such as the, 8(A) 
Multiple Award, HUBZONE Multiple award, and the new Small Business 
Global Multiple Award that is pre-award status.
                               conclusion
    Our Nation's maritime forces operate closely with other joint 
forces allies, and coalition partners, delivering the main tenets of 
our Cooperative Strategy for 21st Century Seapower: protecting the 
homeland, preventing conflicts, and when necessary, winning our 
Nation's conflicts. To fulfill this challenge we must ensure our 
Sailors and Marines have the training, education, and tools necessary 
to prevail in conflict and promote peace abroad. The Department of 
Navy's (DON) investment in our shore infrastructure represents our 
deepening commitment to this goal. Our installations are where we 
homeport the Fleet and her Marine forces, train and equip the world's 
finest Sailors and Marines. Our fiscal year 2010 budget supports a 
forward posture and readiness for agile, global response.
    Thank you for your continued support and the opportunity to testify 
before you today.

    Senator Johnson. Thank you, Mr. Penn.
    Major General Payne.
    General Payne. Sir, I have no statement this afternoon.
    Senator Johnson. Rear Admiral Handley.
    Admiral Handley. Sir, it is a privilege to be here again in 
front of this committee, yourself, Senator Hutchison. And 
again, no formal statement, but will defer to your questions.

                                  GUAM

    Senator Johnson. General Payne, the Commandant of the 
Marine Corps, General Conway, recently testified on DOD's plan 
to move 8,000 marines and 9,000 dependents from Japan to Guam. 
He suggested that the $4 billion cost estimate for the move is 
way short of what the move will really cost.
    Could you comment on the projected cost of the Guam buildup 
and what the military is doing to ensure the adequacy of 
essential services on the island?
    And I believe there is some concern over the availability 
of training ranges on Guam. If the marines could not acquire an 
adequate training range co-located with its forces, will the 
move to Guam still make any sense?
    General Payne. Yes, sir. I would be glad to comment on 
that.
    I think the Commandant's comments pertained to several 
things in particular. When the initial budget for Guam, the $10 
billion budget, was developed, it did not include 
considerations for infrastructure improvements on the island of 
Guam because at that time, quite frankly, I don't think we knew 
the extent of what improvements might be required.
    Since then, it has become apparent that the island of Guam 
does need some assistance on those infrastructure improvements. 
So that would be additive to the $10 billion.
    And in regards to the other comment you made, which is 
absolutely correct, sir, and that is with respect to the 
ranges. Our analysis to date indicates that we can put some 
small arms ranges on Guam, but there are larger weapon systems 
and combined arms training, in particular, that will have to be 
at other ranges. And it is our intent at this point to analyze 
the viability of putting those ranges in the Northern Mariana 
Islands, principally the islands of Tinian and Pagan.
    And the reason that it is difficult to pinpoint the 
specific additive cost today is that the analysis is still 
underway on Guam relative to the infrastructure, and we have 
not had an opportunity to analyze, from an EIS standpoint, and 
understand what mitigation may be required concerning the range 
possibilities in the Northern Mariana Islands.
    Senator Johnson. General, so many strategic issues are 
going to be dependent on the outcome of the upcoming QDR, 
including the Guam buildup. What impact might the QDR have on 
the plan to build up our forces in Guam?
    General Payne. Sir, that is an excellent question, and I am 
not one to second-guess the QDR. But I could speculate to the 
extent that I think it is going to give us guidance relative to 
potential force capabilities required on Guam in order to 
support the Combatant Commander.
    I don't think it is going to be terribly detailed. I think 
it is going to address, however, the Combatant Commander's 
requirements and will give the Marine Corps some guidance in 
that regard. We do not, in any way, anticipate that it is going 
to negate the current plan to move to Guam and move marines and 
marine families to Guam.

                             NNMC AND WRAMC

    Senator Johnson. Admiral Handley, the BRAC plan for the 
relocation of Walter Reed to the Bethesda Naval Medical Center 
campus includes two traffic mitigation projects to be funded in 
fiscal year 2010 and 2011. Could you outline the cost and 
nature of these projects?
    Admiral Handley. Mr. Chairman, I will have to get back to 
you on the specific ones within the BRAC program. That doesn't 
necessarily fall under my direct purview. But I do recognize 
that there were mitigation projects involved with the Bethesda 
project, and we will get those specific details to you, sir.
    [The information follows:]

    The Army is the BRAC Business Plan lead and funding agent 
for the issue outlined in this question. JTF CAPMED is the lead 
in administering the budget and realignment functions. The Navy 
is the construction agent for the Bethesda receiver site and 
from this perspective provides the following answer.
    Traffic mitigation measures at the National Naval Medical 
Center will be on both the Medical Center Campus and outside 
the Campus gates. Improvements on Campus, including access 
roads, gate houses, and anti-terrorism/force protection 
measures as well as construction of a truck inspection station 
and small visitor's center, will result in enhanced access to 
the Campus and superior security measures. Funding for the 
Campus improvements is currently budgeted at $26 million ($18.4 
million in fiscal year 2010 and $7.6 million in fiscal year 
2011). Outside the Campus gates, the Navy has worked closely 
with Montgomery County and the Maryland State Highway 
Administration to design improvements which facilitate greater 
access to the Campus from public transportation and major 
thoroughfares. DOD has committed $1 million of the budgeted $26 
million to improve a turn lane at the Campus North Gate to 
provide safer access to the Campus for cross traffic on 
Rockville Pike/Hwy 355. Consistent with the results of the 
Environmental Impact Statement (EIS), the DOD has submitted a 
needs report to the Defense Access Road (DAR) Program 
requesting certification of improvements to the Medical Center 
Metro Station as eligible for DOD funding. If the proposal is 
certified, an additional $20 million of DOD BRAC funds would be 
available in fiscal year 2011 to enhance access to the station 
from the east side of Rockville Pike/Hwy 355.

    Senator Johnson. How far along in planning is the proposal 
to connect the Metro to the hospital? If the elevator and 
tunnel turn out to be too difficult or expensive, is there a 
plan B?
    [The information follows:]

    The Washington Area Metro Authority (WMATA) is currently exploring 
a number of options to enhance access to the Medical Center Metro 
Station. These options include:
  --No build with improvements at grade
  --Elevator entrance on the east side of Rockville Pike, including 
        improvements at grade and three high-speed elevators on the 
        east side of Rockville Pike
  --Shallow pedestrian tunnel underneath Rockville Pike approximately 
        30 feet in length
  --Shallow pedestrian tunnel plus an elevator entrance on the east 
        side of Rockville Pike (a combination of Options 2 and 3, 
        without the upgraded crosswalk)
  --Pedestrian Bridge crossing over Rockville Pike
    WMATA is currently evaluating the business case for each of these 
options and vetting them with the general public. We rely on WMATA to 
define the way ahead while remaining convinced improvements need to be 
made if we expect more Medical Center staff to take advantage of the 
Metro option for commuting.

    Admiral Handley. Sir, again, my apologies for not having 
that one on hand today. But again, that is, as you have 
outlined, the current plan. I am not personally familiar with a 
backup plan for that but will look specifically into that and 
get specific details back to you and your staff.
    Senator Johnson. With the additional funding for Walter 
Reed and Fort Belvoir in the supplemental, what is the target 
date for completion?
    [The information follows:]

    The Supplemental funding directed for the National Naval Medical 
Center (NNMC) Bethesda will support completion of the Defense Base 
Realignment and Closure (BRAC) Commission related construction in time 
to meet the BRAC mandated deadline of September 2011. At present, the 
major additions to NNMC Bethesda are scheduled to be complete by 
October 2010 thus providing adequate time to outfit and occupy these 
buildings prior to the BRAC deadline. Specifically, the supplemental 
funding for NNMC Bethesda will support the construction of the new 
wounded warrior enlisted quarters, a new fitness center, an additional 
administrative facility, and a new parking garage. These facilities, 
which are scheduled for completion in July and August of 2011, are 
needed to support the patient and staff increases that are anticipated 
as we move toward creation of the Walter Reed National Military Medical 
Center.
    The construction at Fort Belvoir is the responsibility of the U.S. 
Army.

    Admiral Handley. Again, my apologies on that. I know there 
is a 2011 deadline, and that, I believe, as Secretary Arny 
previously testified, that we are on track for the BRAC 
requirements for 2011 as well.

                                  GUAM

    Senator Johnson. General Payne, the budget request includes 
over $700 million for military construction in Guam. How can 
Congress determine the validity of those projects without a 
FYDP to see how they fit into the long-range plan for Guam?
    General Payne. Well, we certainly are understanding of the 
desire for a longer-range plan. But in answer to the fiscal 
year 2010 projects in particular, these are all projects that 
essentially address infrastructure needs. They are projects 
that include the haul road, upgrade to the wharfs, and other 
infrastructure projects that, quite frankly, we think would set 
the stage for any growth on Guam whatsoever.
    Senator Johnson. Senator Hutchison.
    Senator Hutchison. Mr. Chairman, I think--I don't really 
have questions.
    The Guam issue, I think you have covered well, and I just 
believe that, in general, the Navy has done well in focusing on 
quality of life issues. And the Marine Corps I think is doing 
well in preparing for its end strength increase. And so, we 
want to continue to monitor that and also help in every way 
possible.
    I think the Guam issue is one that we really need to work 
together to plan for and assure that we are doing everything to 
make that transition as seamless as it can be, but I think you 
realize that. So we will work with you and try to accommodate 
that need.
    Thank you very much.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. I would like to thank all of our witnesses 
for appearing before the subcommittee today. We look forward to 
working with you in what is likely to be a very compressed 
schedule.
    For the information of members, questions for the record 
should be submitted by the close of business on May 22.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

            Questions Submitted by Senator Daniel K. Inouye

    Question. The Pearl Harbor Naval Shipyard's motto is, ``We Keep 
Them Fit to Fight.'' It has a proud and storied legacy which includes 
the tireless work by the Shipyard's workers in the days and years 
following December 7, 1941. Hawaii will be in receipt of the new 
Virginia-class submarines. The decision by the Navy to position its 
latest class of submarines is attributable to the importance of 
stability in the Asia-Pacific region. Though our focus is trained on 
the Middle East, the Asia-Pacific region is home to serious concerns 
such as the potential of North Korean long-range ballistic missiles. To 
this end, the Virginia-class submarines will silently keep watch on 
this vast area of ocean.
    Would it be fair to characterize our force's broad-spectrum 
capabilities as being dependant on the ability of those charged with 
the maintenance and upkeep? Furthermore, would it be fair to 
characterize the infrastructure to ensure the long-term viability of 
these state-of-the-art-submarines as a complementary component to the 
maintenance and readiness of our forces, keeping them, ``Fit to 
Fight,'' and support our national security
    Answer. The force's broad-spectrum capabilities, including those of 
our state-of-the-art-submarines, are strongly linked to our ability to 
maintain those ships. The ship depot maintenance program provides the 
maintenance necessary to sustain the Navy's global presence and to 
support the Navy's force structure goals by ensuring that ships receive 
the required life cycle maintenance to reach their Expected Service 
Life (ESL). Ship depot maintenance provides funding for ship and 
submarine scheduled and unscheduled maintenance conducted by both 
public shipyards and private sector contractors. This program directly 
supports the Surface Warfare Enterprise, Naval Aviation Enterprise and 
the Undersea Enterprise by providing units ready for operational 
tasking. We value the long tradition of excellence and dedication 
embodied by the Naval Shipyard workforce.
    Question. I appreciate the difficult budgetary decisions that must 
be made with regard to military construction. The basic infrastructure 
that supports our war fighters and their equipment, while bereft of 
eye-catching appeal, provides a strong foundation for our military. 
Each Shipyard faces its own set of challenges, and Pearl is no 
different. The Shipyard's modernization plan seeks to address the 
challenges the industrious employees have managed to work-around. 
Regrettably, this is a less than ideal situation, and I am concerned 
that Pearl's infrastructure needs are being continually pushed down the 
road. Neglecting the smaller projects places strain on existing 
infrastructure and the workforce, that may lead to larger more serious 
problems, and potentially places people at risk of injury.
    The current business model seems to be short-sighted, only 
addressing the most immediate infrastructure problems at the Shipyard. 
This is not the most cost-effective way in which to ensure its 
longevity and viability. Could you please clarify how projects are 
given priority? Is the current approach more, or less, cost-effective 
for the Navy given the finite amount of annual resources provided for 
Shipyard construction?
    Answer. In PB10 the Navy changed its MILCON process from a bottom-
up, advocacy-based process to a top-down capabilities-based process 
designed to holistically integrate warfare/provider enterprise 
requirements. The Navy's strategic MILCON guidance is based on the 
Chief of Naval Operations (CNO) Shore Investment Strategic Guidance. 
This guidance focuses on Mission and Quality of Life/Workplace, with a 
goal to achieve the lowest life cycle facility costs.
    Specific projects are developed at the installation level and 
validated regionally in accordance with the top-down guidance. The Navy 
assesses each prospective MILCON project through a structural model 
aligned to Navy priorities. This objective structural model assessment 
leads to a prioritized ranking of all MILCON requirements and forms the 
basis of the Navy MILCON program.
    Shipyard projects are evaluated and prioritized in the same manner 
as, and with, all Navy MILCON requirements. Each fiscal year shipyard 
projects meet or exceed the minimum capital investment requirements of 
U.S.C. Title 10 Section 2476 (Minimum capital investment for certain 
depots). The fiscal year 2010 Budget Submission included two MILCON 
projects valued at $296 million in support of Norfolk Naval Shipyard 
and Puget Sound Naval Shipyard and Intermediate Maintenance Facility, 
comprising 27 percent of the total Navy MILCON program.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 3:41 p.m., Tuesday, May 19, the subcommittee 
was recessed, to reconvene subject to the call of the Chair.]


   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2010

                              ----------                              


                        THURSDAY, JUNE 11, 2009

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:30 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Murray, Reed, Nelson, Pryor, 
Hutchison, and Murkowski.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY
ACCOMPANIED BY:
        GERALD M. CROSS, MD, FAAFP, ACTING UNDER SECRETARY FOR HEALTH
        PATRICK W. DUNNE, UNDER SECRETARY FOR BENEFITS
        STEVE L. MURO, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS
        RITA A. REED, ACTING ASSISTANT SECRETARY FOR MANAGEMENT
        ROGER W. BAKER, ASSISTANT SECRETARY FOR INFORMATION AND 
            TECHNOLOGY

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. The meeting will come to order. I welcome 
Secretary Shinseki and those accompanying him to the 
subcommittee. The leadership has announced that there will be a 
conference meeting regarding the supplemental at 3 o'clock, so 
we had to start this hearing early. I want to thank the 
secretary for accommodating this change. We are going to have 
to compress the hearing today, so I would like to waive all 
opening statements from members and go straight to the 
secretary's testimony. This will allow more time for senators 
to ask questions. The secretary's statement will be made part 
of the record as any member wishing to submit theirs. I request 
that our members limit their questions to 6 minutes. Again, 
thank you Secretary Shinseki for appearing before the committee 
today.
    Senator Hutchison, do you have any comments you would like 
to make?
    Senator Hutchison. Mr. Chairman, let's go forward. I think 
you're right to try to compress the hearing.
    Senator Johnson. Secretary, you may proceed.

                     STATEMENT OF ERIC K. SHINSEKI

    Secretary Shinseki. Thank you Chairman Johnson, Ranking 
Member Hutchison, other distinguished members of the committee. 
Thank you as always for this opportunity to discuss the 
President's budget for the Department of Veterans Affairs.
    I'm pleased to be joined today by VA's senior leadership, 
and I'd like to take a few seconds just to introduce them. 
Beginning on my far left Under Secretary Pat Dunne, who takes 
care of our benefits administration. Next to me is Acting 
Assistant Secretary for Health, Dr. Gerald Cross. To my right 
Acting Assistant Secretary for Management, Rita Reed. To her 
right Acting Under Secretary for Memorial Affairs, Steve Muro, 
and then to the far right Assistant Secretary for Information 
and Technology, Roger Baker.
    Let me also acknowledge the presence of leaders of our 
veterans service organizations in the audience today. We, in 
fact, are partners as advocates for our Nation's veterans.
    In my short tenure as Secretary, every Member of Congress 
who has welcomed me back to Government has almost in the same 
breath asked me to do more, better, faster for our veterans 
longstanding needs that they face and need help on. I guess I 
would tell you that your individual and your collective 
devotion to our veterans is clear to me from my visits with 
you. Clear, comprehensive, and unwavering. And so, Mr. 
Chairman, to you and the members of this committee I want to 
express upfront my thanks for your support of VA, first to care 
for those veterans, and most especially for the generous 
appropriations in some years past when budgets were lean. You 
ensured that we were able to meet mission for those veterans.

                           PREPARED STATEMENT

    Veterans are our sole reason for existence. In today's 
challenging economic environment we must be diligent stewards 
of every dollar if we are to deliver timely, high quality 
benefits and services to the men and women we serve. The growth 
in funding for fiscal year 2010 is significant, I will say that 
upfront. We accept the responsibility for being accountable and 
showing measurable returns on this investment that we've been 
entrusted with. I will do everything possible to ensure the 
funds Congress appropriates will be used to improve the quality 
of life for veterans and the efficiency of our operations. So 
with those comments, Mr. Chairman, thank you for this 
opportunity, and I look forward to your questions.
    [The statement follows:]

              Prepared Statement of Hon. Eric K. Shinseki

    Mr. Chairman, Senator Hutchison, distinguished members of the 
Committee: Thank you for this opportunity to present the President's 
2010 budget for the Department of Veterans Affairs (VA). The 
President's vision for the Department is to transform VA into a 21st 
Century organization that is Veteran-centric, results-driven, and 
forward-looking. This transformation is demanded by new times, new 
technologies, new demographic realities, and new commitments to today's 
Veterans. It requires a comprehensive review of the fundamentals in 
every line of operation the Department performs.
    VA's budget request for 2010 provides the resources for this 
transformation that will take more than one year to complete. It 
provides the resources to move the Department closer to achieving the 
President's vision for VA, and will help ensure that Veterans--our 
clients--receive timely access to the highest quality benefits and 
services we can provide and which they earned through their sacrifice 
and service to our Nation.
    Some have complained that, in the past, VA has been seen as 
difficult and bureaucratic in providing for our Nation's Veterans. 
Change requires strong leadership amidst finite resources to improve 
access, quality, safety, timeliness, and advocacy for the care and 
services we provide to our Veterans. This is not about nibbling around 
the edges of change.
    The President's budget request for 2010 provides the Department 
with resources needed to become a 21st Century organization as the 
Department's leadership develops further the individual investments 
currently in the Budget to better align with evolving Departmental 
priorities.
    The President has requested that I do two things--first, transform 
VA into a 21st Century organization, and second, to ensure that we 
approach Veterans care as a lifetime initiative, from the day the oath 
is taken until they are laid to rest. With this budget, the 
transformation begins.
    At present, the budget request contains four major categories of 
transformational activity collectively designed to initiate the process 
of creating a 21st Century VA. These transformational initiatives 
include creating a reliable management infrastructure, delivering 
ongoing services, making progress on Departmental priorities, and 
instituting important new initiatives to meet the needs of Veterans 
today and tomorrow.
    VA's request for 2010 is nearly $113 billion--an increase of over 
$15 billion, or 15.5 percent, from the 2009 enacted budget. This is the 
largest 1-year percent increase for VA requested by a President in over 
30 years.
    I would like to take this opportunity to highlight how this budget 
will help VA begin the transformation in these four areas.
    First, Management Infrastructure. In order to transform VA, we must 
begin with ourselves. Transformation must start within our own doors. 
VA will create a reliable management infrastructure that expands or 
enhances corporate transparency at VA, centralizes leadership and 
decentralizes execution, invests in leader training, and focuses on 
research and development on 21st Century requirements. This 
infrastructure also is a key to dramatically improved client services 
and enhanced responsiveness to the needs of Veterans and all VA 
stakeholders. Examples include increasing investment in training and 
career development for the VA career civil service; improving capacity 
to manage IT services and major programs; employing a suitable 
financial management system to track expenditures; and achieving 
significant realignment of VA's acquisition processes for improved 
transparency of and accountability for spending across the VA.
    Second, delivering and maintaining ongoing services. Transformation 
does not mean throwing out the baby with the bath water. What it does 
mean is that we must identify the things that work best and improve 
upon them. Some of the services that we can improve upon, and must 
improve upon, are our ongoing services provided to Veterans on a daily 
basis, such as care for polytrauma, substance abuse, mental health, and 
preventive health care. Such activities include access to the highest 
quality care, delivered at best-in-class facilities, and powered by 
excellence in medical research. These also encompass fair, consistent, 
and rapid processing of benefits claims, memorial services that honor 
service to the Nation, and evolving needs, such as rural care and 
outreach, care for homeless Veterans, Veterans' families, and women's 
health care.
    Third, the 2010 budget will provide VA with sufficient resources to 
continue to make progress on Departmental priorities. VA will assess 
and revitalize core programs that have already been recognized by the 
VA and Congress as important to improving quality and access to 
services for Veterans. These programs provide access for additional 
Priority 8 Veterans; improve interoperability and coordination between 
the Department of Defense (DOD) and VA; increase investment in mental 
health and telemedicine; and continue the development and 
implementation of the Post-9/11 GI Bill. Progress on these initiatives, 
begun in 2009, will be sustained in 2010 to ensure that VA follows 
through on its existing commitments.
    Lastly, transformation is about making bold moves to introduce 
entirely new concepts of best business practices that lead the 
organization into the 21st Century. The fiscal year 2010 budget request 
will enable new approaches to meet emerging needs that change the way 
VA serves Veterans. The on-going work of the VA's Transformation Task 
Force will further inform the development of these elements. And while 
these four areas of transformation represent the opportunities 
presented by the 2010 budget, below are specific examples to 
demonstrate how these funds will help our Veterans thorough their 
entire service lifetime, beginning at the day they take their oath.
  the transformation from within--increasing investment in training, 
          career development and other organizational reforms
    In order to transform VA, we must begin with a commitment to 
critically assess ourselves. Transformation must start within our own 
doors. The transformation of VA will require many organizational 
reforms to better unify the Department's efforts on behalf of Veterans. 
These will take time and may even result in up-front costs within our 
overall budget, but all are designed to save taxpayer dollars over time 
while ensuring VA successfully accomplishes its mission. Lastly, where 
we can save costs to our Veterans, without impacting quality of care, 
or diminishing our core mission, we will be sound stewards of the 
taxpayer dollar. Some of these key reforms are presented below.
Increasing Investment in Training and Career Development
    The 2010 budget will help ensure that VA's workforce will remain 
leaders and standard-setters in their fields. The Department will 
continue to grow and retain a skilled, motivated, and client-oriented 
workforce. Training and development (including a leader development 
program), communications and team building, and continuous learning 
will all be components of reaching this objective.
Establishing an Office of Analysis and Evaluation
    The Department will establish an office with robust program 
analysis and evaluation capability. This office will conduct in-depth 
reviews of VA programs and operations, and will assess their return on 
investment. These independent evaluations will help inform program and 
budget decision-making.
Enabling Improved Communications
    The Department will invest in a virtual forum and related services 
to enable better communications with Veterans, Veterans Service 
Organizations, Congress, and other government agencies.
Implementing Management Control Systems for Acquisitions
    This initiative will allow VA to gather and use information to 
assist senior leadership in steering the Department toward its 
strategic objectives. This will involve allocating resources, 
motivating employee behavior, and evaluating performance.
Improving Medical Collections
    The Department expects to receive nearly $2.9 billion from medical 
collections in 2010. About $8 of every $10 in extra collections will 
come from increased third-party insurance payments, with the vast bulk 
of the remaining collections growth resulting from rising pharmacy 
workload. The 2010 budget supports the establishment of additional 
consolidated patient account centers (CPACs) that help maximize the 
efficiency and effectiveness of VA's medical collections program 
through standardized processes, accountability for results, improved 
decision support capabilities, and more stringent internal controls. 
The implementation of six more centers from 2009 to 2011 will generate 
approximately $1.7 billion in additional revenue during the next 
decade.
    In addition to investing in VA to provide the best quality of care 
to our Veterans, we are rededicating ourselves to improving our VA 
infrastructure, construction and logistics, to provide Veterans with 
the comfort in knowing that they will always have a place to go to seek 
their care that they can call their own.
new construction and funding the new office of the assistant secretary 
              for acquisition, construction, and logistics
Establishment of a New Office of Acquisition, Construction, and 
        Logistics
    The President's 2010 budget request is so firmly committed to this 
goal, that it includes funding for the establishment of a new Office of 
the Assistant Secretary for Acquisition, Construction, and Logistics. 
The necessity of this new office is highlighted by the $1.921 billion 
in capital funding for VA in the 2010 budget. Our request for 
appropriated funds includes $1.194 billion for major construction 
projects, $600 million for minor construction, $85 million in grants 
for the construction of State extended care facilities, and $42 million 
in grants for the construction of State Veterans cemeteries.
    The 2010 request for construction funding for our health care 
programs is $1.584 billion--$1.077 billion for major construction and 
$507 million for minor construction. All of these resources will be 
used to further renovate and modernize VA's health care infrastructure, 
provide greater access to high-quality care for more Veterans, closer 
to where they live, and help resolve patient safety issues.
  --Major Construction Initiatives. Within our request for major 
        construction are resources to continue five medical facility 
        projects already underway:
    --Orlando, Florida ($371.3 million)--complete a new medical center 
            consisting of a hospital, medical clinic, community living 
            center, domiciliary, and full support services;
    --Denver, Colorado ($119.0 million)--replacement medical center on 
            the same campus as the University of Colorado Hospital 
            complex in Aurora, consisting of an inpatient medical 
            center, spinal cord injury and community living center, and 
            research building;
    --Bay Pines, Florida ($96.8 million)--inpatient and outpatient 
            facility improvements;
    --San Juan, Puerto Rico ($42.0 million)--seismic corrections to the 
            main hospital building; and
    --St. Louis, Missouri ($19.7 million)--medical facility 
            improvements and cemetery expansion at Jefferson Barracks.
  --New Facilities. Major construction funding is also provided to 
        begin seven new medical facility projects:
    --Livermore, California ($55.4 million)--design and land purchase 
            for new community-based outpatient clinic in East Bay, 
            expanded community-based outpatient clinic and new 
            community living center in the Central Valley, and 
            minimally invasive procedure center at the Palo Alto VA 
            Medical Center;
    --St. Louis, Missouri ($43.3 million)--design new inpatient bed 
            tower, emergent response unit, spinal cord injury beds, 
            intensive care unit beds, and clinical expansion at the 
            John Cochran Division;
    --Canandaigua, New York ($36.6 million)--design new community 
            living center and new domiciliary/residential 
            rehabilitation facility;
    --Long Beach, California ($24.2 million)--design new mental health 
            center and community living center;
    --Brockton, Massachusetts ($24.0 million)--design new long-term 
            care spinal cord injury unit;
    --San Diego, California ($18.3 million)--design new spinal cord 
            injury building and renovations to provide a community 
            living center and hospice unit; and
    --Perry Point, Maryland ($9.0 million)--design new community living 
            center.
  --Minor construction.
    Minor Construction is an integral component of our overall capital 
program. In support of the medical care and medical research programs, 
minor construction funds permit VA to realign critical services; make 
seismic corrections; improve patient safety; enhance access to health 
care; increase capacity for dental care; enhance patient privacy; 
improve treatment of special emphasis programs; and expand research 
capability. Further, minor construction resources will be used to 
comply with energy efficiency and sustainability design requirements.
    We are requesting $162.9 million in construction funding to support 
the Department's burial program--$112.2 million for major construction 
and $50.7 million for minor construction. Within the funding we are 
requesting for major construction are resources for gravesite expansion 
and cemetery improvement projects at two national cemeteries--Abraham 
Lincoln ($38.3 million) and Houston ($35.0 million).
    VA is requesting $25.5 million for land acquisition in the major 
construction account. These funds will be used to purchase land as it 
becomes available in order to quickly take advantage of opportunities 
to ensure the continuation of a national cemetery presence in areas 
currently being served. All land purchased from this account will be 
contiguous to an existing national cemetery, within an existing service 
area, or in a location that will serve the same Veteran population 
center.
    VA's commitment to our clients does not end at building a world-
class, 21st Century Veterans healthcare and benefits organization. We 
also have an obligation to ensure that America never forgets their 
sacrifices. The 2010 Budget assures that the legacy of honoring our 
Veterans continues.
    Although the foundation of transformation is laid first internally, 
by focusing on our own transformation within the walls of VA, at the 
end of day, we are judged by our performance, not our promises. The 
President has charged VA with providing for our Veterans for their 
entire lifetime. The President's 2010 Budget allows VA to focus on this 
continuity of care earlier than ever before.
                      one life continuity of care
    One of VA's highest priorities is to ensure that active and Reserve 
component Veterans returning from service in Operation Enduring Freedom 
and Operation Iraqi Freedom receive everything they need to 
effortlessly make their transition from active military service to 
civilian life. The Department will take all measures necessary to 
provide them with timely benefits and services, to give them complete 
information about the benefits they have earned through their military 
service, and to implement streamlined processes that simplify their 
interactions with VA.
Early Transition Initiatives
    The most effective way to ensure servicemembers receive continuous 
care from military service to civilian life is to begin the transition 
process at the time they are sworn in for active duty. VA will continue 
to collaborate with DOD to facilitate the transition of military 
personnel into civilian status through a uniform approach of both 
registering into VA and accessing electronic records data. This will 
involve the development and implementation of a Joint Virtual Lifetime 
Electronic Record that will contain both administrative and medical 
information, resulting in improved delivery of benefits and assuring 
the availability of medical data to support the care of patients shared 
by VA and DOD. This will be achieved while maintaining the privacy and 
security of servicemembers' and Veterans' personal information.
Developing and New Partnerships with DOD
    The Department will continue to partner with DOD to establish and 
administer programs to support this continuity of care, including 
participation in demobilization events, the Yellow Ribbon Reintegration 
Program, the Center of Excellence in Psychological Health and Traumatic 
Brain Injury, and others. Our facility-to-facility collaborations 
foster improved care coordination and delivery at the local level and I 
will continue to work with Secretary Gates to ensure this continuum of 
care is supported and addressed at the highest levels. To this end, I 
am establishing a new VA/DOD Collaboration Office with dedicated 
staffing to support our efforts at the Departmental level.
    As our Veterans move from DOD to VA as their principal care 
provider, we must ensure that we are poised to address their specific 
needs. This requires that VA look at the most effective ways to meet 
the needs of this latest generation of Veterans. We will strive not to 
repeat the mistakes of the past, and ensure that once Veterans are 
fully under our care, we are poised to deliver the specialty health 
care and services that they need and that this budget will provide.
Meeting Emerging Needs of All Veterans Across All Generations
    In addition to this newest generation of veterans, we must ensure 
that the budget addresses the needs of all Veterans, across all 
emerging demographics. This includes funding initiatives for women 
Veterans, the growing elderly population of Veterans, and Veterans 
living in rural areas. VA's request for 2010 provides the resources 
required to treat nearly 6.1 million patients as they enter our system 
of care. This is 474,000 (or 9 percent) above the patient total in 2008 
and is 122,000 (or 2 percent) higher than the projected number in 2009.
Advance Appropriations for VA Medical Care
    The President and I share the concern that the care our Veterans 
receive should never be hindered by budget delays. The Administration 
plans to work with the Congress to develop a specific advance 
appropriations proposal for the VA Medical Care program.
        funding care for a new and changing veteran demographic
Meeting the Medical Needs of Women Veterans
    The 2010 budget provides $183 million to meet the gender-specific 
health care needs of women Veterans, an increase of $15 million (or 9 
percent) over the 2009 resource level. The delivery of enhanced primary 
care for women Veterans is one of VA's top priorities. The number of 
women Veterans is growing rapidly and these women are increasingly 
reliant upon VA for their health care. More than 450,000 women Veterans 
have enrolled for care and this number is expected to grow by 30 
percent in the next five years. We will soon have 144 full-time Women 
Veterans Program Managers serving at VA medical facilities. They will 
function as advisors to and advocates for women Veterans to help ensure 
their care is provided with the appropriate level of privacy and 
sensitivity.
Expanding Care for Veterans in Rural Areas
    The Department appreciates the additional resources provided by 
Congress for rural health care initiatives. Using some of these 2009 
funds as well as additional resources we are requesting in 2010, VA's 
budget includes $440 million to implement the President's initiative to 
continue improving access to medical care for Veterans in rural and 
highly rural areas, including use of rural health resource centers, 
mobile clinics, rural health consultants, and outreach. VA will also 
continue to expand its telehealth program which is the largest of its 
kind in the world. Where appropriate, the Department will provide fee-
basis access to mental health professionals when VA services are not 
reasonably close to Veterans' homes.
Emerging Elder and Long-term Care
    VA's budget for 2010 contains more than $5.9 billion for long-term 
care, a rise of $663 million (or 13 percent) over the 2009 resource 
level. About 60 percent of the additional resources will support 
institutional care while 40 percent will be devoted to expanding non-
institutional long-term care services. We anticipate increased demand 
for long-term care services resulting from severe injuries, such as TBI 
and polytrauma.
    The Department's 2010 request includes $1.2 billion for non-
institutional long-term care, an increase of $265 million (or 28 
percent) over 2009. By enhancing Veterans' access to non-institutional 
long-term care, VA can provide extended care services to Veterans in a 
more clinically appropriate setting, closer to where they live and in 
the comfort and familiar settings of their homes. These services 
include adult day health care, home-based primary care, purchased 
skilled home health care, homemaker and home health aide services, home 
respite and hospice care, and community residential care. During 2010 
we will increase the number of patients receiving non-institutional 
long-term care, as measured by the average daily census, to nearly 
91,000. This represents a 25 percent rise above the level we expect to 
reach in 2009.
Funding Care for Newly Qualified Veterans (Priority 8)
    Building on the resources provided by Congress in 2009 for VA to 
begin a gradual expansion of health care eligibility for non-service-
disabled Veterans earning modest incomes (Priority 8 Veterans), the 
President's Budget includes funds to expand eligibility to this group 
for the first time since 2003. This year, VA will open enrollment to 
Priority 8 Veterans whose incomes exceed last year's geographic and VA 
means-test thresholds by no more than 10 percent. We estimate that 
266,000 more Veterans will enroll for care by the end of 2010 due to 
this policy change. Furthermore, the budget includes a gradual 
expansion of health care eligibility which will enable over 500,000 
Veterans who were previously not eligible for VA medical care to enroll 
by 2013. This expansion of health care eligibility will be accomplished 
while improving the timeliness of care and maintaining the quality of 
VA health care that already sets the national standard of excellence.
Funding Care for OEF/OIF Veterans
    The number of patients who served in Operations Enduring Freedom 
and Iraqi Freedom will rise to over 419,000 in 2010. This is 61 percent 
higher than in 2008 and 15 percent above the projected total this year. 
In 2010 we are requesting $2.1 billion to meet the health care needs of 
Veterans who served in Iraq and Afghanistan. This is an increase of 
$463 million (or 29 percent) over our medical resource requirements to 
care for these Veterans in 2009. The treatment of this newest 
generation of Veterans has allowed us to focus on and improve treatment 
for PTSD as well as TBI, including new programs to reach our Veterans 
at the very earliest stages of these conditions.
     enhancing outreach and services for mental health care and tbi
    VA's 2010 budget includes nearly $4.6 billion for mental health 
care, an increase of $288 million, or 7 percent, above the 2009 
resource level. These resources will allow the Department to expand 
inpatient, residential, and outpatient mental health programs. A key 
element of VA's program expansion is integrating mental health services 
with primary and specialty care. Veterans receive better health care 
when their mental and physical needs are addressed in a coordinated and 
holistic manner.
PTSD and TBI Commitments
    This budget allows us to continue our effort to improve access to 
mental health services across the country. We will continue to place 
particular emphasis on providing care to those suffering from post-
traumatic stress disorder (PTSD) as a result of their service in 
Operations Enduring Freedom and Iraqi Freedom. The Department will 
increase outreach to these Veterans as well as provide enhanced 
readjustment and PTSD services. Our strategy for improving access 
includes expanding our tele-mental health program, which allows us to 
reach thousands of additional mental health patients annually, 
particularly those living in rural areas.
    To better meet the health care needs of recently discharged 
Veterans, the 2010 budget enables VA to expand its screening program 
for depression, PTSD, TBI, and substance use disorders. The Department 
will also enhance its suicide prevention advertising campaign to raise 
awareness among Veterans and their families of the services available 
to them.
    VA's 2010 budget contains $298 million for the care of Veterans 
with TBI, an increase of $41 million (or 16 percent) over the 2009 
resource level. TBI and polytrauma are serious conditions that Veterans 
injured as a result of their service in Operations Enduring Freedom and 
Iraqi Freedom experience, and we must find even more ways to address 
their needs. While VA's Polytrauma System of Care is unique in its 
expertise and capabilities, we are learning more every day about 
effective treatments. The additional resources in 2010 will help ensure 
these Veterans receive the specialized care they require.
Investments in New Vet Centers to Address Unique Mental Health 
        Challenges of Combat
    In 2010, VA will open 28 new Vet Centers providing readjustment 
counseling services to Veterans, including those suffering from PTSD. 
The Department will also improve access to mental health services 
through our community-based outpatient clinics. Where appropriate, we 
will provide fee-basis access to mental health providers when VA 
services are not reasonably close to Veterans' homes. We will also 
expand use of Internet-based mental health services through 
``MyHealtheVet,'' which provides an extensive degree of health 
information to Veterans electronically. These steps are critical to 
providing care to Veterans living in rural areas.
    In addition to identifying and funding care for the evolving 
Veteran demographic, VA must commit adequate resources to addressing 
the needs of today's Veteran, and that can only be accomplished with 
adequate funding for research. The President's 2010 budget allows us to 
commit dramatically increased resources to research.
  increasing investments in research and other health care initiatives
    The 2010 budget provides $580 million for medical and prosthetic 
research, an increase of $70 million (or 14 percent) over the 2009 
resource level. Our request will fund nearly 2,400 high-priority 
research projects to expand knowledge in areas critical to Veterans' 
health care needs, most notably in the areas of mental illness ($74 
million), aging ($51 million), acute and traumatic injury ($46 
million), military occupations and environmental exposures ($43 
million), and cancer ($41 million).
Groundbreaking Research Initiatives
    Some of this research will focus on TBI and polytrauma, including 
studies on blast force-related brain injuries, enhancing diagnostic 
techniques, and improving prosthetics. We will strengthen our burn 
injury research to improve the rehabilitation and daily lives of 
Veterans who have suffered burns. VA will also enhance research on 
chronic pain, which afflicts approximately two of every five recently 
discharged and enrolled Veterans. And the Department will also advance 
research on access to care, particularly for Veterans in rural areas, 
by studying new tele-medicine efforts focused on mental health and 
PTSD.
    One of our highest priorities in 2010 will be to continue our 
aggressive research program aimed at improving the lives of Veterans 
returning from service in Operations Enduring Freedom and Iraqi 
Freedom. The President's budget request for VA contains $299 million 
devoted to research projects focused specifically on Veterans returning 
from service in Afghanistan and Iraq, an increase of $20 million (or 7 
percent) over the 2009 resource level. The new research initiatives 
will focus on post-deployment mental health, spinal cord injury, 
sensory loss, TBI and other neurotrauma, and pain.
    The President's request for research funding will help VA sustain 
its long track record of success in conducting research projects that 
lead to clinically useful interventions that improve the health and 
quality of life for Veterans and the general population. Recent 
examples of VA research results that have direct application to 
improved clinical care include the successful use of tele-medicine to 
improve Veterans' mental health status, quality of life, and 
satisfaction with care; better understanding the specific factors 
leading to the development of osteoporosis; delineating the critical 
brain structures involved in components of learning and memory that are 
important for improving care for Veterans with brain injury and memory 
disorders; improving treatment for Veterans suffering from the combined 
effects of hepatitis C and depression; and utilizing deep-brain 
stimulation to improve the quality of life for patients suffering from 
advanced Parkinson's disease.
    The 2010 budget for medical care provides funds for VA to 
strengthen its focus on critical ongoing programs and new initiatives 
that will improve care and clinical outcomes for Veterans. Certain new 
initiatives that support overall transformation include:
Patient Centered Care
    The Veterans Health Administration (VHA) will deploy a patient-
centric care model called Veteran Centered Care, based on best 
practices in private sector health care, which will result in a fully 
engaged prevention partnership between Veteran, family, and health care 
team, established through healing relationships and provided in optimal 
healing environments in order to improve health outcomes and the 
Veteran's experience of care.
Medical Home and Care Coordination
    The patient centered medical home is a team based model of care 
that provides continuous, first contact, comprehensive care to maximize 
health and functionality. The model focuses on preventive health care 
and emphasizes a holistic approach that addresses the medical, 
psychological, and social needs of the patient. These teams consist of 
medical professionals, mental health providers including behaviorists, 
nurses, nutritionists, and care coordinators. These models can be 
adapted to meet the specific needs of unique patient populations such 
as those with advanced heart disease.
Leveraging Technology in Health Care Services
    As part of our continued operation and improvement of the 
Department's electronic health record system, VA is seeking $360 
million for development and implementation of the Veterans Health 
Information Systems and Technology Architecture (HealtheVet) program. 
Facets of the program have already received national accolades as a 
model for improving online accessibility of health records. This is $47 
million (or 15 percent) above the estimated resource commitment for 
this key project in 2009. HealtheVet will equip our health care 
providers with the modern technology and tools they need to improve the 
safety and quality of care for Veterans.
    Until HealtheVet is operational, we need to maintain the VistA 
legacy system. This system will remain operational as new applications 
are developed and implemented. This approach will mitigate transition 
and migration risks associated with the move to the new architecture. 
Our budget provides $116 million in 2010 for the VistA legacy system.
Health Care Spending Summary
    In total, the President's 2010 request includes total budgetary 
resources of $47.4 billion for VA medical care, an increase of $4.6 
billion (or 11 percent) over the 2009 resource level (which excludes $1 
billion for non-recurring maintenance projects, including renewable 
energy and efficiency projects, supported through resources from the 
American Recovery and Reinvestment Act). Our total medical care request 
is comprised of funding for medical services ($34.7 billion), medical 
support and compliance ($5.1 billion), medical facilities ($4.7 
billion), and resources from medical care collections ($2.9 billion).
    As we focus on the new medical care services and delivery 
mechanisms needed to transform VA care, we must ensure that we do not 
repeat the mistakes of the past, and disassociate the injuries from the 
full social and economic impacts of those left untreated, or whom we 
simply cannot reach. This budget allows us to address some of the 
social and economic impacts that we cannot address with health care 
alone, such as addressing homelessness and providing other economic 
benefits.
                         combating homelessness
    The President has committed to expanding proven programs and 
launching innovative services to prevent Veterans from falling into 
homelessness. The 2010 budget provides more than $3.2 billion for 
homeless Veterans programs. This includes $2.7 billion to furnish 
health care to homeless Veterans and $500 million for other programs 
providing supportive services, which help to break the cycle of 
homelessness among the estimated 131,000 Veterans who are homeless on 
any single night.
Joint Initiatives
    The budget provides $26 million for VA to work with the Departments 
of Housing and Urban Development, Labor, Education, Health and Human 
Services, and the Small Business Administration, in partnership with 
non-profit organizations, to reduce homelessness. This pilot project 
coordinates VA's efforts with programs of partner agencies and non-
profits to target Veterans who are most at risk of becoming homeless. 
It aims to maintain stable housing for Veterans while continuing to 
provide them with support services and ongoing medical care.
    In addition, this historic budget allows us to set our Veterans up 
for success well into the future by investing now in their education 
and in the future financial stability of America by educating the next 
greatest generation of Veterans.
   automating the application for and delivery of education benefits
    The Department is on target to implement the Post-9/11 Veterans 
Educational Assistance Act starting August 1, 2009, and began signing 
up Veterans online for this program on May 1, 2009. VA is pursuing two 
parallel strategies to successfully implement this new education 
program, both of which are fully supported by the resources presented 
in the 2010 budget.
Short Term Strategy
    The short-term strategy relies upon a combination of traditional 
claims processing and modifications to existing IT systems. Until a 
modern eligibility and payment system can be developed, VA will 
adjudicate claims manually and use the existing Benefits Delivery 
Network to generate benefit payments to schools and program 
participants. This budget includes funds to hire and maintain the 
additional staff required.
Long Term Strategy
    The long-term strategy is the development and implementation of an 
automated system for claims processing. The Department has teamed with 
the Space and Naval Warfare Systems Command to address the necessary IT 
components of this strategy. They are the premier systems engineering 
command for the Department of the Navy. The automated solution will be 
available by the end of calendar year 2010, by which time full 
operational control of the automated system will be in VA's hands.
Dramatic Increase in the Number of Educational Beneficiaries
    As a result of the Post-9/11 Veterans Educational Assistance Act, 
we expect the number of education claims to rise dramatically. We 
anticipate in excess of 2 million education claims in 2010, a total 8 
percent higher than the number we projected for 2009 and 25 percent 
above the 2008 total. Despite this significant growth in workload, the 
resources provided in the President's 2010 budget will allow us to 
maintain our program performance for two key measures. The timeliness 
of processing original education claims will be at least as good as the 
level (24 days) we estimated for 2009, while the average time it takes 
to process supplemental claims will be no higher than the estimated 
level (10 days) for 2009.
    Of import, this program will invest in knowledge and education for 
our latest generation of Veterans.
          providing additional economic stability to veterans
Providing Greater Benefits to Veterans Who Are Medically Retired from 
        Service
    In addition, the President's 2010 budget provides for the first 
time concurrent receipt of disability benefits from VA in addition to 
DOD retirement benefits for disabled Veterans who are medically retired 
from service. Presently, only Veterans with at least 20 years of 
service, who have service-connected disabilities rated 50 percent or 
higher by VA, are eligible for concurrent receipt. Receipt of both VA 
and DOD benefits, for all who were medically retired from service, will 
be phased in starting in 2010. The estimated VA costs in 2010 are $47 
million.
Improving Compensation and Pensions
    A major challenge in improving the delivery of compensation and 
pension benefits is the steady and sizeable increase in workload. The 
volume of claims receipts is projected to reach 972,000 in 2010--a 5 
percent rise from the 2009 level and a 23 percent increase since 2005.
    The number of Active Duty service members as well as Reservists and 
National Guard members who have been called to active duty to support 
Operations Enduring Freedom and Iraqi Freedom is one of the key drivers 
of new claims activity. This has contributed to an increase in the 
number of new claims, and we expect this pattern to persist, at least 
for the near term. An additional reason that the number of compensation 
and pension claims is climbing is the Department's commitment to 
increased outreach. We have an obligation to extend our reach as far as 
possible and to spread the word to Veterans about the benefits and 
services VA stands ready to provide.
    Disability compensation claims from Veterans who have previously 
filed a claim comprise about 55 percent of the disability claims 
received by the Department last year. Many Veterans now receiving 
compensation suffer from chronic and progressive conditions, such as 
diabetes, mental illness, cardiovascular disease, orthopedic problems, 
and hearing loss. As these Veterans age and their conditions worsen, VA 
experiences additional claims for increased benefits.
Increasing Number of Beneficiaries Receiving Compensation
    The growing complexity of the claims being filed also contributes 
to our workload challenges. For example, the number of original 
compensation cases with eight or more disabilities claimed increased 
from 43,700 in 2005 to 61,600 in 2008. Nearly 27 percent of all 
original compensation claims received last year contained eight or more 
disability issues. In addition, we expect to continue to receive a 
growing number of complex disability claims resulting from PTSD, TBI, 
environmental and infectious risks, complex combat-related injuries, 
and complications resulting from diabetes. Claims now take more time 
and more resources to adjudicate. Additionally, as VA receives and 
adjudicates more claims, a larger number of appeals are filed from 
Veterans and survivors, which also increases workload in other parts of 
the Department, including the Board of Veterans' Appeals and the Office 
of the General Counsel.
Addressing Innovative Ways to Decrease Waiting Time for Benefits
    VA will address its ever-growing workload challenges in several 
ways. For example, we will enhance our use of IT tools to improve 
claims processing. In particular, our claims processors will have 
greater online access to DOD medical information as more categories of 
DOD's electronic records are made available through the Compensation 
and Pension Records Interchange project. We will also strengthen our 
investment in a paperless claims processing infrastructure, to reduce 
our reliance upon paper-based claims folders and enable accessing and 
transferring electronic images and data through a Web-based 
application. This infrastructure will also dramatically increase the 
security and privacy of Veteran data. The existing Virtual VA 
repository will be sustained until the more robust enterprise paperless 
infrastructure is developed and deployed. The Department will continue 
to move work among regional offices in order to maximize our resources 
and enhance our performance. Also, the Department will demonstrate 
improved timeliness and quality of service resulting from the recent 
expansion of the Benefits Delivery at Discharge program at all regional 
offices, demobilization sites, military installations, and VA health 
care facilities.
    As a result of staffing increases, more efficient claims processes, 
and enhanced use of IT tools, we expect to lower the average number of 
days to complete rating-related compensation and pension claims to 150 
days in 2010. This represents a 29-day improvement (or 16 percent) in 
processing timeliness from 2008 and an 18-day (or 11 percent) reduction 
in the estimated amount of time required to process claims this year.
    In addition, we anticipate that our pending inventory of disability 
claims will fall to about 302,000 by the end of 2010, a reduction of 
more than 78,000 (or 21 percent) from the pending count at the close of 
2008. At the same time we are improving timeliness, we will also 
increase the accuracy of the compensation rating decisions we make, 
from 86 percent in 2008 to 90 percent in 2010.
    As we press to build momentum on our forward leaning initiatives, 
it is with the sense that, every day we stand still, we face 
irrelevancy. The future moves at the pace of the micro-chip processor, 
and we must invest in technology to remain relevant. This budget 
provides a serious down-payment on leveraging technology to transform 
VA into a 21st Century Organization.
    processing benefits claims in a paperless environment and other 
                        critical it investments
    Leveraging information technology (IT) is crucial to achieving the 
President's vision for transforming VA into a 21st Century organization 
that meets Veterans' needs. Key concepts of the transformation include 
creating an electronically based benefits system to speed processing 
and address the backlog; integrating service member information from 
DOD with all VA information about a Veteran to create a seamless 
transition from warrior to Veteran; using Customer Relationship 
Management (CRM) techniques to work proactively with Veterans and 
provide them with a view of all of their VA benefits; ensuring 
continued innovation of the award winning Computerized Patient Record 
System and VISTA medical records systems; and creating ``anywhere, 
anytime'' access to VA by developing multiple access channels for 
information and transactions.
    IT is an integral component of VA's health care and benefits 
delivery systems.
    VA depends on a reliable and accessible IT infrastructure, a high-
performing IT workforce, and modernized information systems that are 
flexible enough to meet both existing and emerging service delivery 
requirements. Only in this way can we ensure system-wide information 
security and the privacy of our clients.
Meeting Vital IT Needs
    The President's 2010 budget for VA provides more than $3.3 billion 
to meet these vital IT requirements. This is $559 million (or 20 
percent) above the 2009 resource level (which excludes $50 million made 
available through the American Recovery and Reinvestment Act). Almost 
all of the Recovery Act funds will be used to develop IT solutions 
associated with the implementation of the Post-9/11 Veterans 
Educational Assistance Act.
    The 2010 budget provides $144 million to continue moving toward the 
President's goal of reforming the benefits claims process to make VA's 
claims decisions timely, accurate, and consistent through use of 
automated systems. VA's paperless processing initiative expands on 
current paperless claims processing already in place for some of our 
benefits programs. It will strengthen service to Veterans by providing 
them the capability to apply for and manage their benefits on-line. It 
will also reduce the movement of paper files and further secure 
Veterans' personal information. The initial features of the paperless 
processing initiative will be tested in 2010, and by 2012, we expect to 
implement an electronically based benefits delivery system.
Funding for New Technology
    The Department is requesting $86 million for the Financial and 
Logistics Integrated Technology Enterprise (FLITE) system. This is an 
increase of $38 million (or 78 percent) from the 2009 resource level. 
FLITE is being developed to address a long-standing internal control 
material weakness and will replace an outdated, non-compliant core 
accounting system that is no longer supported by industry.
    We recently completed an in-depth analysis of our patient 
scheduling program. I have directed a similar review of all our major 
IT programs to evaluate program performance against cost and schedule 
milestones. Changes in how we manage IT projects include use of 
standard templates to ensure completeness and consistency of 
development and testing processes, initiation of an IT competency 
assessment, and formation of integrated project teams, such as the 
Post-9/11 GI Bill team to ensure close collaboration between IT and 
education program experts.
    In total, within VA's total IT request for 2010, nearly $2.4 
billion (or 72 percent) will be for IT investment (non-payroll) costs, 
while the remaining $939 million (or 28 percent) will provide for 
payroll and administrative requirements.
Benefits Spending Summary
    In summary, the Department's 2010 resource request for General 
Operating Expenses (GOE) is just over $2.2 billion. Within this total 
GOE funding request, more than $1.8 billion is for the management of 
the following non-medical benefits administered by the Veterans 
Benefits Administration (VBA)--disability compensation; pensions; 
education; vocational rehabilitation and employment; home loan 
guaranty; and insurance. Our request for GOE funding also includes $394 
million to support General Administration activities.
    Funding for VBA in 2010 will be $364 million (or 25 percent) higher 
than the 2009 resource level (which excludes $157 million from the 
American Recovery and Reinvestment Act). Almost all of the resources 
provided to VBA through the Recovery Act will be used to hire 1,500 
additional staff to support the processing of compensation and pension 
claims; 500 of these will be permanent employees who will replace staff 
losses through attrition while the other 1,000 will be temporary 
employees hired under term appointments. The temporary employees will 
conduct follow-up actions to expedite claims development and perform 
other administrative activities to free up claims decision-makers to 
handle more complex claims processing tasks.
  service to the last breath and beyond--funding the memorials to our 
                                 heroes
    The President has charged me with caring for our Veterans until 
they take their last breath. The VA's commitment, however extends 
beyond the last solemn ceremony and last note of Taps. We are committed 
to continuing the memories of our heroes with the dignity and respect 
they deserve. The Recovery Act funds available to the National Cemetery 
Administration (NCA) will be used for national shrine projects, energy 
projects, monument/memorial repairs and other non-recurring maintenance 
activities, and equipment purchases.
Increasing Memorial Services
    The resources requested for 2010 will allow us to meet the growing 
workload at existing cemeteries by increasing funding for contract 
maintenance, supplies, and equipment, continuing the activation of new 
national cemeteries, and maintaining our cemeteries as national 
shrines. VA expects to perform 111,500 interments in 2010, or 4 percent 
above the estimate for this year. The number of developed acres (8,015) 
that must be maintained in 2010 is 3 percent greater than the 2009 
estimate.
Improving Memorial Services
    Our budget request includes an additional $1.6 million to continue 
daily operations and to begin interment activities at the last three of 
the six new national cemeteries established by the National Cemetery 
Expansion Act of 2003. Burial operations at Bakersfield National 
Cemetery in California, Alabama National Cemetery in the Birmingham 
area, and Washington Crossing National Cemetery in southeastern 
Pennsylvania are expected to begin by the end of calendar year 2009.
Expanding Memorial Services and Access for Veterans
    The President's resource request for VA provides $38 million in 
cemetery operations and maintenance funding to address gravesite 
renovations as well as headstone and marker realignment. When combined 
with another $26 million in minor construction, $2 million in non-
recurring maintenance, and $1 million for monument and memorial 
preservation, VA is requesting a total of $67 million in 2010 to 
improve the appearance of our national cemeteries which will help us 
maintain cemeteries as shrines dedicated to preserving our nation's 
history and honoring Veterans' service and sacrifice.
    With the resources requested to support NCA activities, we will 
expand access to our burial program by increasing the share of Veterans 
served by a burial option within 75 miles of their residence to 90 
percent in 2010. This is 3.1 percentage points above our expected 
performance level for 2009.
    In addition, we will maintain the level of service to our clients 
that resulted in VA's national cemetery system receiving the highest 
rating in customer satisfaction for any Federal agency or private 
sector corporation ever surveyed as part of the American Customer 
Satisfaction Index (95 out of a possible 100 points). We expect that 98 
percent of our survey respondents in 2010 will rate the quality of 
service provided by national cemeteries as excellent and 99 percent of 
survey respondents will rate the appearance of national cemeteries as 
excellent. These performance levels will reinforce that the 
Department's cemetery system is a model of excellence in providing 
timely, accessible, and high-quality service to Veterans and their 
families.
Memorial Spending Summary
    The President's 2010 budget request for VA includes $242 million in 
operations and maintenance funding for the NCA. This is $12 million (or 
5 percent) above the 2009 resource level (which excludes $50 million 
provided through the American Recovery and Reinvestment Act).
                                summary
    At the end of the day, none of these reforms can be implemented by 
money alone without investments in our own internal growth and 
development. As a people-centric organization, investments in training 
recruiting, and educating the best workforce for our Veterans will take 
a priority in my tenure as the Secretary of the Department of Veterans 
Affairs. If we make those investments, and commit to true 
organizational change, we will succeed, if we do not, we will fall 
short of major transform.
                                closing
    Veterans are VA's sole reason for existence and my number one 
priority. In today's challenging fiscal and economic environment, we 
must be diligent stewards of every dollar and apply them wisely to 
deliver timely, high-quality benefits and services to Veterans whom we 
serve. While we recognize the growth in funding that we are requesting 
in 2010 is significant, we also acknowledge the responsibility, 
accountability, and importance of showing measurable returns on that 
investment. You have my pledge that I will do everything possible to 
ensure that the funds Congress appropriates to VA will be used to 
improve both the quality of life for Veterans and the efficiency of our 
operations.
    Organizational transformation is a challenging task that requires 
changes in culture, systems, and training. This will require resources, 
but it will also demand commitment and teamwork. The entire Department 
is dedicated to serving the needs of Veterans in the 21st Century and 
every VA employee has a stake in transformation to meet those needs.
    Leadership will continually assess and re-assess the necessary 
funding resources for transformation. It should be expected that these 
bold new initiatives will result in adjustments to the budget request 
within the 2010 topline during the next several months. The results of 
this ongoing management decision-making process--in partnership with 
the Congress--will be a budget that starts the VA down a path toward 
becoming a model for 21st Century governance.
    I am confident that Congress and VA can work together to achieve a 
common goal on Veterans.

    Senator Johnson. Mr. Secretary, as you know, we are likely 
to provide advance appropriations for fiscal year 2011 medical 
care. We will need to know very quickly what the VA's estimates 
for 2011 are if we are to include them in this year's bill. 
When do you expect to be able to give this committee an fiscal 
year 2011 estimate for the medical care accounts?
    Secretary Shinseki. Mr. Chairman, I am, in fact, in 
meetings with OMB as I was preparing to come over here to do 
just that. I hope to have some numbers this week that I would 
like to share with you as soon as those negotiations are 
complete.
    Senator Johnson. Mr. Secretary, I was pleased to see that 
the VA has requested $250 million in the fiscal year 2010 
budget to continue the Rural Health Initiative that was started 
in 2009. How do you plan to use the funding requested in the 
fiscal year 2010 budget?
    Secretary Shinseki. Well, Mr. Chairman, actually as it 
turns out, the $250 million that was provided to us in 2009 
about $90 million of that will actually be executed, and so 
there will be a carryover of about $190 million. So in 2010 we 
are looking at a $440 million set of funds to disperse. We will 
be looking at mobile rural health clinics, and four pilot 
sites, outreach clinics, three regional rural health resource 
centers, and a host of other initiatives pilot as well as 
programs put into place that I'd be very happy to provide you 
some more detail on for the record.
    Senator Johnson. What process do you have to evaluate the 
success of projects funded under this initiative?
    Dr. Cross. Sir, for our projects we have built in an 
evaluation component to make sure that from the very beginning 
we collect data to ensure that over time we can tell if the 
project is successful.
    We're doing some very innovative work in this rural health 
initiative. Some of them may not turn out to be successful. We 
want to know that, and we want to discontinue those and focus 
on the ones that are. So we decided to build that into the 
program from the very beginning, capture the data, monitor it 
closely, and then make some decisions over time as to what 
really works best.
    Senator Johnson. Secretary Shinseki, the VA has requested 
an increase of more than a half billion dollars for IT. How 
much of this increase is for staffing and administrative 
expenses, and how much is for system development?
    Secretary Shinseki. Mr. Chairman, I'm going to let Mr. 
Baker pick up on that initially, and I'll play clean up to him.
    Mr. Baker. Thank you, sir.
    There are substantial staffing increases in that increase, 
primarily in the field working in the hospitals and the 
regional offices providing customer support to the 
administrations and their efforts to work with the veterans. 
There's $182 million according to my sheet here for staffing 
increases. Again, primarily in the field as well as increases 
for key items like interoperability with the Department of 
Defense from an information standpoint, the FLITE Financial 
System so that we have good strong financial management, and 
increases in medical IT and benefits IT, both to support staff 
increases in those areas, and to support improvements in the 
process of speed of response, network speed, those sort of 
things. Again, most of the increases aimed at supporting the 
folks in the field doing the real work, working with the 
veterans.
    Senator Johnson. This past year the VA has had to put the 
replacement of the scheduling system on hold due to failures in 
the development process. This is very disappointing to say the 
least. What are your plans to improve the way IT systems are 
developed to ensure that we don't repeat this failure, and how 
do you plan to improve oversight of development projects?
    Secretary Shinseki. Mr. Chairman, I don't think there's 
anybody more disappointed in the fact that we had to put in 
place a strategic pause with the scheduling replacement project 
than I was. We have put in place a set of procedures that are 
going to govern us going forward, everything from oversight 
boards to how we set projects up for success. I'll let Mr. 
Baker, Assistant Secretary Baker talk about the details of 
that, but what I've asked that we do is to go through and look 
at every program that we have in our IT projects, and subject 
them all to the same level of scrutiny that we've just gone 
through with scheduling, and out of which we have gotten 
significant learning on how to do this better.
    Mr. Baker. Thank you, sir.
    We are looking at a substantial change in the way that we 
manage information technology programs at Veterans Affairs, and 
plan on briefing your staff on the details of this in the 
coming week.
    We've reviewed approximately 282 ongoing development 
programs at the department, and that initial review was on 
analyzing certain aspects such as were they on schedule, were 
they on budget, did they have sufficient staff to complete the 
project successfully. Although it's preliminary, the results of 
that review is fairly clear that we need a substantial change. 
And as I said, we will bring that forward next week, but we 
have to make certain that we implement for our programs clear 
decision criteria, better control of the programs, decreased 
infusion of new requirements in the middle of the program, 
clear participation of the internal customer that will be 
receiving the new system, and the success of the program, clear 
attention from the vendor that's working on this and their 
participation and success, and most fundamentally important we 
need to increase the probability of success for these programs. 
We do not have a good track record now as Secretary Shinseki 
said. It is one of the first things that I felt I needed to 
focus on, and it will be one of the first things that we bring 
forward to tell you about how we're going to fix that problem.
    Senator Johnson. Time is running out but I want to raise 
the issues of problems in the coordination between the VA and 
the Indian Health Service. Mr. Secretary as you get settled in 
at the VA, I want to work with you to see how coordination can 
be improved.
    Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman. Mr. Chairman, I 
would just say to the Secretary and the Assistant Secretary 
that I too am very concerned about the IT situation, so I would 
like to ask that we have a report back to the committee on what 
you are doing, both in the management governance structure, 
which was mentioned in the Inspector General's report, and also 
the project management plan for the implementation of the 
subprojects, just the whole thing obviously needs to be pretty 
much turned upside down I think. So I'm hoping that you would 
report back to us specifically on that. I know you're aware of 
it, so that's something we would look at.
    And then I want to say I'm very pleased that we are doing 
so much in the areas of research and mental health. I do 
believe that the Veterans Administration is giving the proper 
emphasis on mental health now, and also medical research, and I 
hope, General Shinseki that we will be able to work the 
problems out with the gulf war syndrome research so, that can 
go forward. It's mid-process, and I think it is very important 
that we continue that research.
    Secretary Shinseki. Senator, I just want to assure you we 
are in dialogue. It's my interest that this goes forward, and 
we have some technical contract details here to work out, and I 
think with cooperation on both sides we can get there.
    I just want to reinforce for you that we have 
significantly, we've invested in mental illness, mental health 
issues with dollars this year and 2010, and I'm comfortable 
we're doing more and better in terms of TBI and the 
relationship with poly-trauma, other aspects of the mental 
health portfolio.
    Senator Hutchison. I'm very pleased about the investment 
that you're going to make in the fifth poly-trauma center in 
our country that will be in the veteran's facility that's 
already a great one, but I think this will add so much in San 
Antonio.
    I wanted to ask you about another issue, and that is the 
transfers from the medical services account. Since fiscal year 
2005, Congress has provided more than $12 billion above the 
Department's request, much of which has gone into our medical 
services accounts. However, during the last 3 fiscal years the 
Department has requested significant transfers out of that 
account into other accounts that the VA has chosen. In fiscal 
year 2008 it was $1 billion out of medical services. In fiscal 
year 2009, the Department submitted $260 million request less 
than 2 months into the fiscal year. And I guess my concern is 
that this sort of undermines the appropriations process where 
we want to know that the money we're putting in is being used, 
and this year the Department is requesting $3.7 billion more in 
medical services. So my question would be are you satisfied 
that $3.7 billion increase is needed for medical services and 
will be used for medical services, and can you tell the 
committee that we will not be seeing transfers out of that 
account into other accounts outside of our process?
    Secretary Shinseki. The amount of money going into medical 
services is needed, Senator. I would like to assure the 
committee that I will do everything possible not to have to 
come up with another request for funds transfer. I think in 5 
months I've been able to get to the bottom of most of the 
issues that I needed to be educated on. This one regarding 
funds transfers out of medical services into the IT account has 
a history that goes back probably a couple of years ago when we 
centralized IT and we took all these assets from various 
places. We didn't clean up the accounts and ensure that funding 
was aligned with it. I'm comfortable that we have done a better 
job this year, and I do not intend to request funds transfer 
again this year, but I still have some things to discover.
    Senator Hutchison. Thank you, Mr. Secretary. One more 
question, and that is I had written you this year after meeting 
a veteran in a wheelchair in Houston, Texas and he had been 
able to acquire a service dog through private donations, and I 
wrote you a letter and said that this is an authorization that 
you have for veterans, especially veterans in spinal cord 
injuries, not blindness related but spinal cord injury related. 
And the service dogs apparently are very helpful in maneuvering 
these people and helping them. My question--you had written me 
back, and you had said that you would look into it, and I just 
wondered if there was any report about the capability of 
providing service dogs for this particular type of injury.
    Dr. Cross. Yes, ma'am. At the direction of the Secretary we 
have looked at this closely. We're moving forward. The key 
thing that we're doing at this time is developing a directive 
that describes what the requirements would be, what the scope 
of the program would be. We're even putting information in when 
we do this, and when we put the directive out we'll put out 
information on our website relative to this as well as to guide 
dogs, which, of course, we've been using for decades very 
successfully. And so there is work underway on this. It's 
moving forward through the staffing and evaluation process 
right now, but progress is being made in that regard.
    Senator Hutchison. Okay.
    Secretary Shinseki. Senator, I owe you a response that 
describes the program, and I will do that.
    Senator Hutchison. Okay.
    Secretary Shinseki. We've just begun the preliminaries to 
see what a requirement is, what it takes to train a dog to that 
standard, and how do we ensure that the patient to whom we've 
assigned the dog is capable of caring for the dog as well as 
being cared for by the dog, so we have some details to work 
out. I think there's good experience here. We ought to be able 
to put a program together.
    Senator Hutchison. Okay. I understand that would be 
certainly something that would have to be flushed out because 
it's a new type of help, but I appreciate your looking into it, 
and we'll look forward to hearing more from you. Thank you very 
much.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman, and thank you Mr. 
Secretary for being here today, and for the courtesy of our 
visit earlier this year. Congratulations. Thanks to all of your 
colleagues who are here as well.
    As we've discussed, I've worked with past Secretaries to 
highlight the deterioration and infrastructure deficiencies 
that the current Omaha VA Medical Center, and while you and 
your staff have been very helpful to us year after year in the 
past, VA personnel have told me that Omaha didn't meet a 
certain priority in one area, and then told me the next year 
that it didn't meet criteria in another area, and so I was 
frustrated to see this year that 11 facilities freshly appeared 
as higher priorities than Omaha in the President's budget. And 
one reason is that Midwest facilities do not have access to 32 
out of the 100 possible points used for scoring VA construction 
projects because they don't have special emphasis or seismic 
risk. We do have earthquakes in Nebraska. Just recently we had 
one in the northern part, but here we are in a race to the goal 
line, but we seem stopped at the 32 yard line. And so Secretary 
Peek last year commissioned a study of the Omaha VA's 
deficiencies, and apparently the review was completed but the 
report as you mentioned is not available to you as of right 
now. Can you tell me what consideration will be given to that 
report, and how the findings might be used to correct any 
problems?
    Secretary Shinseki. Senator, I understand that the report 
has just arrived in the VA. I haven't had a chance to look at 
it. I've got people vetting it.
    Senator Nelson. Uh-huh.
    Secretary Shinseki. I understand that there is a series of 
criteria for scoring and that results in a standing of various 
projects. I have an appreciation for why those criteria. I 
mentioned that the seismic criteria is there because in our 
case several years ago a catastrophic failure of one of our 
hospitals left a number of people killed and injured, so it has 
been introduced since 2000 or shortly thereafter. What I can't 
explain today is why it carries the weighting it does in 
relation to others. I'd like to do that. I'd like to get in 
there and study it for myself, understand it and I'd like get 
your insights and share with you what I've learned as we look 
at the project list.
    Senator Nelson. I appreciate that, and I'll be looking 
forward to getting together.
    Maybe you can help me with this. Have the Department 
personnel decided that last year's rankings were inaccurate, or 
should we see the budgets, the President's budget and 
understand that the VA facility needs have changed dramatically 
from last year? You may not be able to answer that either until 
you've had the report, but to see 10 or more facilities jump 
ahead on the basis of last year's report is cause for some 
concern. It seems like either the playing field is not quite 
level with the criteria, or that it's certainly tilted a 
different way. So I'm anxious to get your response on that.
    Secretary Shinseki. I'll be happy to respond.
    Senator Nelson. And I really am frustrated in that 
prioritization model that seismic risks rank higher than the 
entirety of the facility's actual condition, and whether it's a 
specialized center of excellence, which is again located in 
population centers, is worth nearly double the condition of the 
facility. So I hope that as you review the report you will also 
perhaps deal with the question of who really should develop the 
criteria, and with the question of whether Congress needs to 
have some responsibility here for approving at least reviewing 
and/or approving the criteria because it does seem to raise 
serious questions of fairness and consistency. If you can't 
know what the criteria are going to be next year because it 
changed since last year, I don't know how you can plan ahead 
with your facility. So I look forward to working with you. I 
know that you will do an excellent job of reviewing the report 
and we'll have that chance to sit down and go through that.
    Secretary Shinseki. Thank you, Senator.
    Senator Nelson. Thank you, Mr. Chairman.
    Senator Johnson. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Secretary, I want to thank you for the time that you 
spent with me in my office several weeks ago. I appreciated the 
conversation, and just the very good discussion that we had. I 
also am pleased to report, I don't know if you are aware but 
the vacant decision review officer position that we had talked 
about has now been filed, so we greatly appreciate that, and 
we're looking forward to moving with that.
    During the visit that we had in late May, we spent a fair 
amount of time talking about the challenges that Alaska 
veterans who live off the road system, who live in the bush in 
the very rural areas, the challenges that they have in 
accessing their VA healthcare benefits, and we talked about 
those who are diagnosed with PTSD really having to dip into 
their own pockets $1,000 for an airplane ticket to get into 
town to visit a counselor and the concerns. At that time we 
discussed the scope of the problem, and I'm sure that within 
this short time period you have not, you haven't figured out 
the solutions to it, and I can appreciate that but I guess I 
just want the assurance that you recognize that we have a 
problem and a situation that is more than a bit unique up 
there, and that you and your staff are working to help us as we 
try to help those veterans.
    Secretary Shinseki. Senator, as I said earlier in my 
opening comments, and as I indicated to you in your office, 
caring for veterans is our primary mission, that's veterans 
wherever they live. I also mentioned that geography in the 
United States by definitions used in the VA have three 
categories. There are urban, rural, highly rural, and then I'm 
not sure what category we use for those areas where there are 
no roads and you can't get into them. I know that's a part of 
the geography you're dealing with.
    I've asked our VHA to start thinking about how we take care 
of veterans in those areas, and let me just ask Dr. Cross to 
provide just some insight, some of which will seek out 
partnerships with the tribal healthcare program.
    Dr. Cross. Senator, I think it's fair to say that we need 
to adapt our services to meet the environment that they're 
provided in, and to meet the needs of those veterans. I think 
certainly the Alaska environment provides unique challenges for 
us, so we have to be especially innovative. I notice that some 
of the things that we're doing in our rural health initiatives, 
and some of the things that we were doing anyway I think will 
be of some benefit in this direction. Specifically in regard to 
the kind of things what we now call outreach clinics, very 
small clinics that we can adapt to small, more rural 
environments as I believe that we're putting in Juneau, and I 
think we're working on one for Homer as well. Also, the new C 
Block in--correct me on my pronunciation, Mat-Su?
    Senator Murkowski. Yes.
    Dr. Cross. Mostly we have to look at other things, and that 
means where the individual can receive the service, perhaps 
without traveling at all. And that's where I think the total 
health initiatives come in to play very much because without 
regard to weather, without regard to location, we can make 
those work in more environments even where there are no roads 
perhaps. Also, just getting the kind of service so the 
individual does not have to come see us, so our mechanism to 
provide medication by mail or through other delivery mechanisms 
so they don't have to actually come and visit the pharmacy I 
think is uniquely beneficial in that environment. I think we 
have much to learn and much to be innovative, much innovation 
to bring forward in regard to our veterans in Alaska, and I 
look toward to working on that.
    Senator Murkowski. I appreciate that, not only your 
comments but, Mr. Secretary, your acknowledgment that perhaps 
we need to look at Alaska as a unique and different situation, 
a different set of facts, and we need to be a little more 
creative, a little more nimble in how we approach, how we 
deliver these benefits because our veterans should not be 
denied benefits just because of where they chose to live. We 
want to work with you on that. I would extend the offer again 
to come up to Alaska and see for yourselves. We have been doing 
some great things within the IHS system, and we'd like to see 
how we can integrate that within the VA.
    You mention some of the opportunities for pilots. When we 
spoke, Mr. Secretary, we talked about the rural healthcare 
pilot, which was supposed to roll out on the first of June, it 
hasn't rolled out yet. I understand it's going to be coming out 
on the 11th, but I had written to you expressed some concerns 
about some of the things that we didn't see in that. There was 
a lack of involvement with the provider community, exclusion of 
southeast Alaska, and exclusion of behavioral health from the 
pilot. I know that is something that you are looking at to 
address those concerns. I don't know if you have any update at 
this point in time, but when we look to the pilots I think it 
is important that we're making sure that this is not just 
something that somebody has thought of back in their office, 
whether it's in Anchorage or Seattle, or back here in 
Washington, but they're actually working within those local 
communities, within those regions to make them work. If you 
care to comment on that I'd appreciate it, but again I extend 
that offer to come north and work with us up there as well.
    Secretary Shinseki. I'm happy to visit in the summertime, 
Senator.
    Senator Murkowski. He has already said he has no interest 
to come up in the winter, I don't understand.
    Secretary Shinseki. But before then we'll be sure to get to 
these issues.
    Senator Murkowski. Thank you. I appreciate it.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman. Thank you, 
Mr. Secretary and ladies and gentlemen, and thank you Mr. 
Secretary for your visit to the Providence VA. It was a 
wonderful trip, and it shows your commitment to our veterans, 
and your constant effort to get out and walk the front lines, 
so I thank you for that. That's something that you've done for 
a long, long time, sir.
    Let me focus just a moment on veterans homelessness. I'll 
say parenthetically I had the occasion to have supper along 
with colleagues, along with Admiral Mullen the chairman, and we 
spent a long, long time talking about this because as someone 
who is responsible for these young men and women in uniform, he 
feels a continuing responsibility to the veterans who have 
fought and served, and too many are on the streets. In the 
fiscal year 2009 funding bill, there was an inclusion of $10 
million for a demonstration program under HUD to prevent 
homelessness among veterans, and HUD was directed to be the 
leader on the project, but to coordinate with the Veterans 
Administration and Labor Department. I simply want to hear from 
you or your colleagues whether this coordination is ongoing, 
what might be the status of the project.
    Secretary Shinseki. Senator, it's ongoing. In fact, the 
number of vouchers have been doubled with Secretary Donovan's 
assistance out of HUD, so that program continues. He and I have 
sat on a committee, coalition that deals with homelessness. 
This is something that he and I are both working in conjunction 
with other department heads. We've described homelessness as 
sort of the last step in opportunities to solve some problems, 
and so we do have this one and we are linking it to other 
actions that have to do with healthcare, substance abuse, 
mental health, jobs, education, all the things that could 
interrupt the cycle.
    Senator Reed. As always, sir, you've anticipated my next 
question which is in the fiscal year 2010 budget the President 
has requested $26 million for the VA to work in partnership 
with HUD, Labor, Education, HHS, Small Business and nonprofits 
to reduce homelessness. You will be in charge of that for the 
Veterans Administration, is that the way the concept is?
    Secretary Shinseki. That's my contribution to the work 
effort, and I know that other departments have money set aside 
to work.
    Senator Reed. In terms of the structure, you know, the 
chairman of the board if you will, will that be you, Mr. 
Secretary?
    Secretary Shinseki. It's about to change. I am the current 
chair, and it's about to turn over to Secretary Donovan, and so 
between the two of us we will continue working on the 
committee.
    Senator Reed. You will be, I presume given the nature of 
the agency, trying to leverage both VA programs, and HUD 
programs, and other programs--that's the whole essence of it.
    Secretary Shinseki. Right.
    Senator Reed. Let me do this, let me invite you to, and 
your colleagues to give us any ideas you believe that are 
necessary to further reduce the problem of veterans 
homelessness. Again, we could stand here and make long 
speeches, we all could, about what a remarkable shame it is to 
have men and women who serve with distinction now not finding a 
place. In fact, Admiral Mullen was talking about young veterans 
of Iraq and Afghanistan in their 20's in California who are 
essentially homeless.
    Secretary Shinseki. Right.
    Senator Reed. So this is something we've got to do, and I 
want to work with you and I'm sure all my colleagues do and the 
chairman to address this issue.
    Secretary Shinseki. Senator, I would tell you that about 6 
years ago the number of homeless veterans on the streets was 
about 195,000; 200,000. Today it's 131,000 and a year after, 
they've been taken off the street, put through our program of 
18 months to two years, and then a year after they graduate 
with pretty good results on being employed, and living 
independently. 131,000--I just spoke to a gathering of the 
coalition here a couple weeks ago, and I said five years at 
zero, we're moving to zero now. I'm not naive, I know there are 
no absolutes here, and I know that there will be, you know, 
more homeless veterans generated in the meantime, but my sense 
is if I didn't put zero as a target, we'd be somehow far off, 
further off the mark rather than giving it our best efforts. 
That hasn't been cleared by the folks who look at budgets yet, 
so I'm a little out ahead of them, but that's the intent.
    Senator Reed. I thought that was Chairman Hutchison and 
Johnson. I thought those were the ones.
    Secretary Shinseki. I just had to qualify my statement.
    Senator Reed. Very good. Thank you, Mr. Secretary.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, and thank you for making yourself available to me 
recently. Thank you for changing your schedule.
    Let me ask something that is interesting to me, and 
something you talk about as transforming the VA and changing 
the mindset there, and I think what you're talking about is 
really changing the culture in the VA. Would you give us your 
thoughts on how you plan to go about doing that?
    Secretary Shinseki. Senator, I think changing any large 
organization is pretty challenging, and I think any 
organization that has a long and proud history of contributions 
to the country like the VA has is also challenged to hear 
someone like me come in and talk about change, but I do think 
that looking at where we are, where we need to go that's an 
appropriate time that we talk about transforming ourselves.
    The President has asked us to do this for the 21st century, 
and so we are looking at new approaches and new outcomes for 
the VA, engraining new ways of thinking and acting, practicing 
new ways of working with each other, delivering services better 
than we ever have before.
    This is a work in progress. We're putting together a plan, 
but it talks about changing the climate at the VA, instilling 
in our folks the sense of advocacy for veterans. It's a slight 
change in our approach to our duties, but when you advocate for 
something, you tend to respond differently and you clearly send 
signals that are vastly different to the people, your clients 
that you're serving. So that requires a training program that 
touches all of our civil servants, talks about electronic 
health records that we've committed to upgrading, and along 
with DOD agreed that we're going to create a virtual electronic 
record that will govern youngsters from the time they serve in 
uniform until the time they arrive in our ranks as veterans, to 
the time that we lay them to final rest. A lot of good movement 
in that particular category. The President had both Secretary 
Gates and I stand up with him and announce we were going to do 
it, so we're moving in that direction.
    Centralization oversight of contracting, $13 billion to 
contract in the VA, and it's divided up in a number of 
different areas, and what lacks is synergy, discipline, and 
oversight, and so we're moving to bring that into order.
    Senator Pryor. Can I interrupt here, because I did want to 
ask that specifically.
    Secretary Shinseki. Okay.
    Senator Pryor. You envision that as being a separate office 
within VA where all the purchasing and acquisitions office, how 
is that going to be?
    Secretary Shinseki. Well, I'm looking for authorization, in 
fact, in this budget to establish a new office with an 
Assistant Secretary for Acquisition, Logistics, and 
Construction. We created an office less than a year ago, 
bringing together disparate contracting authorities. What I 
need to do is elevate this to Assistant Secretary level to 
provide the oversight that is needed to get us the efficiencies 
that we need.
    Senator Pryor. One of the concerns there, I think you're on 
the right track, and I like everything you've said, but one of 
the concerns there would be by creating a new office are you 
creating another layer of bureaucracy or another little section 
of the maze there, or are you really cutting through some of 
that and streamlining your operations?
    Secretary Shinseki. The intent is for it to be smaller than 
larger, and it's to bring together assets that are already 
significantly disbursed, and get some efficiency out of it so 
we have discipline and oversight.
    Senator Pryor. Let me ask you about an area that we get 
some complaints on sometimes in our office. As you can imagine 
like a lot of other senators, we have a person in our Little 
Rock office that that's pretty much all they do is work on VA 
cases, and try to help veterans through the system. One of the 
complaints we hear is this kind of a, I guess I'd call it a 
proof of service requirement where often times when a person 
goes in it's up to the veteran to prove that they served, but 
these records could be decades old.
    Secretary Shinseki. Sure.
    Senator Pryor. That can get very, very difficult if not 
impossible. I'm seems to me that between the VA and the DOD we 
would have all, you the Government, we would have all the 
records that we could somehow produce and verify the records if 
we needed to do that. We have those resources and not the 
veterans. Can we talk about that?
    Secretary Shinseki. It's a little bit of--I'm going to turn 
it over to Admiral Dunne here in a bit because he over watches 
our benefits administration, but it's a little bit of what I 
mentioned earlier here about advocacy. If we're advocating for 
veterans, our approach is going to be just different. Another 
aspect of this is the virtual electronic record that both DOD 
and VA have agreed on, and what that means is a youngster puts 
on a uniform, automatically is enrolled in the VA, and 
therefore this search for records at some time later is 
precluded because all those records are, in fact, in place, 
electronically shared, and available when the disability claim 
is initiated. This is a little harder than just talking about 
it, and so we are hard at work with DOD to come to those common 
protocols and let me turn to Admiral Dunne here.
    Admiral Dunne. Senator, in the meantime until we can get 
electronic records, we are first exercising what's considered 
our duty to assist, and so whenever we do get a claim from a 
veteran, we will take on the responsibility to work with DOD 
and track down those records.
    One of the things which we've accomplished recently as a 
result of our collaboration with DOD is to establish points of 
contact at each of the services so that when a regional office 
is trying to find a specific record, and often times the Guard 
and Reserve records are the most difficult ones to find, then 
we can go straight to the relevant service and identify this 
specific record that we need for a veteran, and get their 
assistance in providing it, but we will if there is any record 
or piece of evidence which a veteran needs for their claim, we 
will take on the responsibility of doing the search to find 
their records.
    Senator Pryor. Thank you. Thank you, Mr. Chairman.
    Senator Johnson. Senator Murray.
    Senator Murray. Thank you very much Chairman Johnson and 
Senator Hutchison for having this hearing today. General 
Shinseki welcome, it's good to see you as well, and to all of 
your folks who are working so hard.
    I recently came across a VA report that was called 
``Provision of Primary Care to Women Veterans,'' which 
highlighted a number of problems preventing the highest quality 
of primary care being provided to women veterans in the VA. 
This report found that women veterans are underserved at the 
VA, that primary care delivery for women veterans at the VA is 
fragmented, that women receive lower quality care than their 
male counterparts, that there are an insufficient number of 
clinicians in the VHA with specific training and experience in 
women's health issues, and that the VA's policy for women's 
health is inconsistent.
    While the challenges that are outlined in that report are 
concerning, I do want to commend you, Mr. Secretary, and the 
members of the work group that prepared that report including 
Dr. Patricia Hayes, for really putting together a very thorough 
report on the VA's commitment to providing quality 
comprehensive healthcare for our women veterans. I wanted to 
ask you today can you tell this committee what concrete steps 
the VA is taking now that they have this report to eliminate 
those disparities?
    Secretary Shinseki. I'm going to let Dr. Cross fill in some 
of the details that go to the technical issues, but as we've 
discussed before and as I've indicated, there is a major change 
coming in our population in veterans. In the next 10 years, 15 
percent will be women, and so I am looking for the opportunity 
to put in place programs, to begin putting in place programs 
today that are going to be in place 10 years from now. We just 
need to do that.
    Senator Murray. It is the fastest growing population in the 
VA, so I appreciate that.
    Secretary Shinseki. It is, and a larger percentage of our 
women veterans coming out of OIF/OEF are, in fact, coming to us 
for care, 44 percent of that population. Whatever the 
population overall, the population today of veterans in this 
country is something around 23 million, that will adjust over 
time, but whatever that number is, whether it's 20 million or 
18 million, 15 percent is going to be a huge percentage, and we 
need to do things that, that report is outlining for us as 
corrections that need to be made, and that's part of the reason 
we asked for that report.
    Senator Murray. I'd just like to know what you're doing now 
to address those concerns.
    Dr. Cross. Senator Murray, with your permission I'll 
mention a couple of the things that we're doing, and then I'll 
be frank about a couple of the challenges that I'm concerned 
about. There's a lot going on in regard to advancing the cause 
for women's health within the VA. You certainly know about the 
women's health coordinators, the program managers that we put 
in 143 sites already, and I think I have one site to go, and 
then several more sites where we're going to put points of 
contact as well. You know that we're interested in outreach, 
and so we are concerned that some women have not yet used our 
services or come to see us, so we are making arrangements to--
we did this with the OEF/OIF we set up a contract with someone 
to call OEF/OIF veterans and say how are you doing, can we be 
of any help to you, have you tried the VA, are you aware of our 
services. We're going to do this specifically now for women, 
specifically targeted with information, specifically targeted 
with the type of questions that we ask to engage them. We're 
supporting legislation, or we have testified on this for 
newborn care, the training, the environment of care. Patti and 
I have talked about a program to move that forward, to make 
sure that our environment of care in our primary care clinics 
especially is as well-adapted for privacy and all the needs of 
women veterans.
    Senator Murray. Are you doing one stop primary care visits 
for women veterans at all of our VA facilities?
    Dr. Cross. At each of our primary care sites we want to 
have the capability to provide most of their needs in that 
regard. I think what you're referring to is GYN exams and those 
kinds of things.
    Senator Murray. Correct.
    Dr. Cross. That's where we're going.
    Senator Murray. We're going there. Okay.
    Dr. Cross. I really dislike the idea of you get this 
service at this place, and that service at this place, even if 
it's within the same hospital, particularly if you have to come 
back for another appointment. That's not the design that I'm 
interested in. We looked at quality in regard to women's 
healthcare, and we monitor this very closely. We also compared 
with our civilian sector. There's still a gap, and even in our 
system where cost may not be an issue and we provided even such 
things as flu shots where women don't get them quite as 
frequently as we think they should.
    Senator Murray. Right.
    Dr. Cross. Having said that, we're doing better than our 
civilian colleagues on those same measures. That doesn't give 
me much comfort. I need to do better within our own system, so 
those are the kinds of things that we are pushing forward to 
make a difference in regard to women's healthcare.
    Senator Murray. Okay. Well, I want to continue to work on 
this issue. Senator Hutchison and I and other women senators 
are pushing hard on a women's health bill that we hope to get 
out----
    Senator Hutchison. Yes.
    Senator Murray [continuing]. At some point. And we will 
continue to push you on this, just so you know, and we expect 
to hear progress on a lot of the work, but I'm glad we're 
finally together and focused on it. That is a major step 
forward.
    Mr. Secretary, as you know, State veterans homes are an 
integral part of our VA's long-term care system, and according 
to the GAO they provide more than 50 percent of the VA's 
patient workload in nursing homes. Under current law the VA can 
provide up to 65 percent of the cost of constructing or 
renovating one of these State veterans homes through the 
account which includes grants for State extended care 
facilities. We included $150 million in the economic recovery 
package for the construction of additional State veterans homes 
through this program. And as you know, a number of States now 
have either withdrawn or deferred their applications for this 
Federal funding because of their large budget deficits. That 
lack of State matching funds is especially problematic in areas 
where the VA is closing down longterm care facilities, and I am 
now working on legislation to give the VA authority to provide 
grants that cover a larger proportion of these construction 
costs in certain emergency situations. For example, if a State 
is facing a massive budget shortfall, and the proposed State 
veterans home is intended to replace a closed VA operated 
facility. Do you have any thoughts about that?
    Secretary Shinseki. Not at the moment, Senator. Let me get 
into the details of what you're describing here,----
    Senator Murray. Yes.
    Secretary Shinseki [continuing]. And provide you a better 
answer for the record.
    Senator Murray. Okay. I'm very concerned about this, and I 
know it's impacting my State and a number of other States, and 
as a result we're working on this legislation. And I'd like to 
work with you and whoever you tell us so we can move that 
forward.
    Secretary Shinseki. Absolutely. I'm dealing with a 
situation like this in at least one other State and trying to 
figure out what options we have.
    Senator Murray. Okay. Good.
    Secretary Shinseki. I'll work with you on that.
    Senator Murray. Great. And I am also interested in the 
issue of veterans unemployment. I know you talked about working 
with the Department of Defense and Department of Labor to 
address that problem, so I look forward--my time is up at this 
point, but I look forward to having more conversations with you 
about that.
    Secretary Shinseki. Absolutely.
    Senator Murray. I'm very concerned about these men and 
women who are coming home and don't have a job, and where we've 
left them. So I appreciate dialogue with you about that in the 
future. And finally, Mr. Chairman, before I turn the mike back 
over, I know you're coming up to Spokane, in my home State in a 
little over a month for the VA wheelchair games that are 
occurring there. You should know that every one from the 
veterans to the community members, all the Spokane VA 
employees, to their medical center director, Sharon Hellman: 
they've all been working very, very hard to make those games a 
success, so we look forward to seeing you out in our State for 
that very important event.
    Secretary Shinseki. Thank you, Senator.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. Senator Pryor, do you have any additional 
questions?
    Secretary Shinseki, I want to thank you and your colleagues 
for appearing before this subcommittee today. I look forward to 
working with you this year.
    For the information of members, questions for the record 
should be submitted by the close of business on June 16.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted by Senator Tim Johnson

    Question. Secretary Shinseki, could you please provide me with some 
information regarding Project Hero? I am concerned about the size and 
scope of the pilot program. The program is supposed to augment care by 
the VA, not replace it. My understanding is that one of these pilots is 
currently operating in South Dakota. Can you provide me with the annual 
cost of that specific program?
    Answer. Project Healthcare Effectiveness through Resource 
Optimization (HERO) is a pilot program that augments VA care and helps 
Veterans access the local health care they need when the medical 
expertise or technology is not readily available within the Department 
of Veterans Affairs. The ultimate goal of Project HERO is to ensure 
that all health care delivered by VA, either through VA providers or 
community partners, is of comparable quality and consistency for 
Veterans. All care is still managed by VA.
    Project HERO contracts do exist in South Dakota as part of VISN 
23's involvement in the demonstration effort. The two VAMCs in South 
Dakota that are part of Project HERO are the Sioux Falls VA Medical 
Center and the VA Black Hills Health Care System in Fort Meade and Hot 
Springs. Thus far in fiscal year 2009, Sioux Falls expended $222,209 
and Black Hills expended $104,427 for the health care and associated 
services involved in the provision of that care. This represents only 
7.9 percent of the total purchased care expenditures in Sioux Falls and 
1.4 percent in Black Hills.
    Question. How much is the VA spending annually on this program?
    Answer. Project Hero contract expenditures for the four VISNs where 
the contracts are operational (VISNs 8, 16, 20, and 23).

                                             DISBURSED DOLLAR AMOUNT
----------------------------------------------------------------------------------------------------------------
                                                                                  VISN Budgets
                          Timeframe                              Project HERO     (8, 16, 20 &     Project HERO
                                                                Disbursements         23)            percent
----------------------------------------------------------------------------------------------------------------
Fiscal year 2008 \1\.........................................       $7,797,071   $8,973,617,617             0.09
Fiscal year 2009 \2\.........................................       26,370,526    9,470,719,115            0.28
----------------------------------------------------------------------------------------------------------------
\1\ Project HERO Disbursements Jan-Sep 2008, VISN Budgets are obligations as of Sep 30, 2008.
\2\ Project HERO Disbursements through May 2009, VISN Budgets (VERA allocation, reimbursements and collections)
  are as of May 31, 2009.

    Question. How does the VA, both at the local level and at 
headquarters, oversee the quality of care provided through Project 
HERO?
    Answer. The Project HERO Program Management Office (PMO) ensures 
Veterans receive VA-comparable care through a clinical quality 
management program. The Project HERO Governing Board, comprised of 
leaders from VA, Veterans Health Administration (VHA) and participating 
VISNs, oversees quality, reports on Project HERO activities, and 
approves changes in terms, quantities, or conditions of the Project 
HERO contracts.
  --The PMO tracks patient safety events, accreditation/credentialing 
        status, clinical information returned to VA for continuity of 
        care, and timely access to care.
  --Humana Veterans Healthcare Services (HVHS) and Delta Dental track 
        and trend quality and safety events, as well as complaints and 
        grievances, and provide peer review oversight.
  --The PMO surveys Project HERO patients and compares the results with 
        the VA Survey of Healthcare Experiences of Patients (SHEP). 
        Overall satisfaction with HVHS providers is 73 percent and 
        overall satisfaction with Delta Dental services is 91 percent.
    Question. What procedures are in place to ensure that contract 
providers make proper referrals to the VA or outside the VA when 
veterans need specialty care or other referrals?
    Answer. VA providers determine when referrals are needed and 
whether or not non-VA care is appropriate. When care is referred 
outside VA, whether through Project HERO, another contract vehicle or 
through Fee care, VA remains responsible for reviewing recommendations 
for further care and determining the appropriate venue.
    Question. Where else are pilots operating--both by VISN and by 
health care system?
    Answer. Project HERO operates within four Veterans Integrated 
Service Networks (VISNs): 8, 16, 20 and 23.
    VISN 8: VA Sunshine Health Care Network.--Includes southern Georgia 
and most of Florida. It does not include Puerto Rico or the U.S. Virgin 
Islands. The stations included in this VISN are: Bay Pines, Miami, West 
Palm Beach, Gainesville/N.FL/S.GA, and Tampa/Orlando.
    VISN 16: South Central VA Health Care Network.--Includes Oklahoma, 
Arkansas, Louisiana, Mississippi and portions of the States of Texas, 
Missouri, Alabama, and Florida. The stations included in this VISN are: 
Alexandria, Gulf Coast (Biloxi), Fayetteville, Houston, GV Montgomery 
(Jackson), Central AR HCS (Little Rock), Muskogee, New Orleans, 
Oklahoma City, and Overton Brooks (Shreveport).
    VISN 20: Northwest Network.--Includes Washington State, Oregon, 
most of the State of Idaho, and one county each in Montana and 
California. It does not include Alaska. The stations included in this 
VISN are: Boise, Portland, Roseburg, Puget Sound, Spokane, Walla Walla, 
and South Oregon Rehab Center (White City).
    VISN 23: VA Midwest Health Care Network.--Includes Iowa, Minnesota, 
Nebraska, North Dakota, South Dakota, and portions of northern Kansas, 
Missouri, western Illinois, western Wisconsin, and eastern Wyoming. The 
stations included in this VISN in addition to Sioux Falls and Black 
Hills are: Fargo, Fort Meade, Minneapolis, Nebraska-Western Iowa 
(Omaha/Grand Island/Lincoln), Central Iowa, Iowa City, and St. Cloud.
                                 ______
                                 

            Questions Submitted by Senator Mary L. Landrieu

    Question. Has the Department finalized the design and cost estimate 
for the New Orleans VA Hospital? If so, could you please provide me 
that cost and what it includes? Did you eliminate aspects of the design 
to reduce cost? If so, is the design scalable to allow for later 
additions with additional funds?
    Answer. Schematic design has been completed for the New Orleans 
project, and design development is underway. The Department's Five Year 
Capital Plan submitted along with the fiscal year 2010 budget 
identifies the cost as $925 million. The total cost of the project will 
be dependent upon whether LSU can commit to a joint energy and utility 
plant feeding both hospitals. As the design progresses, VA is 
considering changes to aspects of the design to reduce cost, but 
maintain the capacity to meet the health care needs of Veterans that 
will be served by the new facility. The project is being designed to 
accommodate future expansion, and construction will be phased to allow 
it to start as soon as design is complete. Additional funding will be 
requested in a future budget to complete later phases of the project.
    Question. Will the delay with the LSU facility have an impact on 
the timeline for the VA Hospital?
    Answer. VA's design and construction timeline can proceed 
independent of the LSU facility. The cost of VA's facility, however, 
depends upon LSU committing to a joint energy and utility plant feeding 
both hospitals. If a decision on a combined plant cannot be reached by 
the time VA concludes the design development phase in December 2009, VA 
will have to move forward with building its own utility plant.
    Question. The notion of using electronic medical records and 
enhanced IT tools to serve the veterans is a good step in the right 
direction. My office has received many letters detailing how difficult 
it has been for certain veterans to file claims and receive benefits 
simply because the process is disorganized and inefficient. How long do 
you believe it will take to implement these electronic processes? And 
once implemented, how long until we see a positive turnaround on 
processing claims?
    Answer. The Veterans Benefits Administration (VBA) is currently 
working to transform its benefits delivery model to a paperless 
environment. A key benefit of this transformation is a common method 
for Veterans' self-service, which will greatly enhance access to both 
general and claim-specific information and allow Veterans to directly 
submit evidence in support of their claims.
    VBA will enhance its technical capabilities through a phased 
deployment strategy to facilitate continuous improvements in benefits 
delivery and claims processing. Coupled with technology, VBA is 
implementing a comprehensive business transformation strategy supported 
by an industry leader in business transformation and organizational 
change management. The business transformation contractor assists VBA 
in maximizing the capabilities of planned technology. VBA's goal is to 
be processing in a substantially paperless environment by the end of 
2012.
    Question. Coming from a State that is consistently under threat 
from with hurricanes and flooding, one of my primary concerns is care 
of our elderly citizens' and disabled veterans' during these natural 
disasters. When veterans are displaced due to these natural disasters, 
does the VA have solid emergency plans for their VA facilities treating 
veterans at the time of the disaster? If a veteran cannot return to his 
or her home immediately, how do you provide them instructions for how 
to receive medical care in displaced locations?
    Answer. Yes, VHA does have solid emergency plans for VA facilities 
treating Veterans at time of disasters. The Veterans Health 
Administration plans, organizes, equips, trains and exercises for 
disasters and emergencies common to their environment and in accordance 
with both The Joint Commission standards for Emergency Management and 
the National Incident Management System. VHA has developed a 
Comprehensive Emergency Management Program (CEMP) that ensures all VA 
medical centers develop, update, test and evaluate their emergency 
operations plans and programs on a continuous basis. VHA facility plans 
encompass extension facilities, such as outpatient clinics, community 
living centers, domiciliary units and home-based primary care programs.
    During a disaster, VHA medical center executives determine whether 
to shelter in place or evacuate their facility, based primarily on the 
safety of Veterans and employees. Utilizing a decision support system 
that weighs the disaster risk to the facility against the need to 
safely move Veteran patients, the VHA medical center director's 
decision is coordinated with the Veterans Integrated Service Network 
(VISN) Director and the VA Corporate Operations Center in consultation 
with the Deputy Under Secretary for Health for Operations and 
Management (DUSHOM).
    Question. As you know, there is a huge crisis in our country 
concerning homeless veterans. What sort of ideas or programs do you 
have concerning States, such as Louisiana, for when natural disasters 
strike and the homeless veterans are left behind or displaced?
    Answer. There has been a long term effort to provide services for 
Veterans and families in need of homeless services. Our latest effort, 
the Housing and Urban Development--Veterans Affairs Supported Housing 
(HUD-VASH) Program, has already shown great results in serving Veterans 
families including women Veterans and Veterans with children. A total 
of 315 Housing Choice Vouchers (section 8) HUD-VASH vouchers have been 
allocated to provide permanent housing resources for Veterans and 
families in Louisiana over the last 2 years. We know based upon our 
transitional housing program that these programs address the conditions 
you describe regarding displaced homeless Veterans. The VA's Homeless 
Providers Grant and Per Diem Program has a total of 348 (223 post 
Katrina) authorized beds at 14 locations with community non-profit 
providers in Louisiana.
    Question. Speaking about creating an environment of advocacy and 
change within the Department of Veterans Affairs is a positive idea. 
Perhaps there could be more jobs created within the Department for 
veterans to act as advisers during this process of change? Going 
further, perhaps homeless veterans could be identified and trained to 
give support to the new program and use their knowledge of veterans 
needs to teach those who are creating policy? Have you considered such 
an approach?
    Answer. The Department of Veterans Affairs is very committed to 
achieving a high ratio of Veterans among its workforce. Your suggestion 
to identify new ways of reaching out to Veterans--including homeless 
Veterans--is a welcome one that can help further the effort to employ 
Veterans. I also agree that the VA will be successful only if it 
listens to our Veterans to better understand their needs and to better 
serve them in the future.
    There are some ways in which the VA currently works with homeless 
Veterans to help them gain employment. These include the Compensated 
Work Therapy Program and Recovery Model programs. As we undergo 
development of new efforts to meet new Veteran needs in the 21st 
Century, we will explore how to enhance our effort to train Veterans to 
work at the VA. I welcome your suggestions in this ongoing effort.
    Further expanding on the idea of the importance of Veteran 
experience, I would note VA's Office of Mental Health Services has 
developed Recovery Model programs focusing on peer to peer support for 
Veterans helping Veterans. Homeless Veterans Programs and Psychosocial 
Programs have embraced the recovery model. VA has hired Veterans as 
peer support positions in recovery programs. VA has hired Veterans 
discharged from the Compensated Work Therapy Program. VA will explore 
the feasibility of having homeless and formerly homeless Veterans from 
the CWT program assist with the development of services and program 
policy.
    Question. Last year VA was directed to establish an office for 
survivors, a desk that would have staff focused on survivor issues. 
When will that office be operational?
    Answer. The Office was created on December 22, 2008 and set up 
under the Office of the Secretary. Four employees were immediately 
detailed to the Office to start working on the mission as defined by 
Congress. A Director and one permanent employee have been selected and 
the remaining personnel will be chosen soon. The Office has been 
gathering baseline data to see what VA offers for survivors and 
dependents. We've been evaluating various programs, such as comparing 
CHAMPVA to TRICARE. The law States CHAMPVA needs to offer the same or 
similar benefits as TRICARE. We've finished with our analysis and are 
evaluating recommendations for improvement in CHAMPVA.
                                 ______
                                 

                Question Submitted by Senator Mark Pryor

    Question. The DOD and VA have taken crucial steps toward creating a 
Joint Lifetime Electronic Record (VLER), as announced by President 
Obama on April 9, 2009. (The vision for this initiative is for all 
current and future service members, Veterans, and eligible family 
members to have a VLER that will encapsulate all data necessary to 
uniquely identify them and ensure the delivery of care and benefits for 
which they are eligible).
    What do you think about VLER and where are we in the funding 
process to begin to implement its collaboration with in the Services?
    Answer. The Virtual Lifetime Electronic Record is extremely 
important to Veterans, VA and our service providers. We have moved 
quickly to assign staff to aggressively develop VA's vision, plan and 
approach for delivering a VLER capability. VLER is a critically 
important endeavor that will incorporate not only collaboration between 
VA and DOD but also include other Federal agencies and private 
industry. Current activities include development, review and acceptance 
of VA's VLER Strategic Vision by the JEC, redrafting of the Interagency 
Program Office's operating charter to mitigate issues regarding its 
functions and authority, extensive outreach to HHS, assessment of 
integration opportunities within the existing IT investment portfolio 
to ensure the effectiveness and efficiency of resourcing for VLER 
initiatives, and drafting and development of the master plan for VLER 
demonstrations that would leverage existing IT investments and 
initiatives. With respect to the specific question of funding, initial 
start-up funding will be provided to support a program office for VLER. 
Because the 2010 budget request had already been prepared prior to VLER 
start-up, 2010 funds will need to be identified within existing 
resources to proceed with VLER. Assessment of the IT investment 
portfolio is also required in order to evaluate whether or not current 
investments might be leveraged directly to support VLER.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

    Question. Mr. Secretary, it is everyone's goal to leverage 
information technology to have veterans seamlessly transition from the 
DOD to the VA. However, an Inspector General's audit of VA IT projects 
revealed that 40 are on OMB's Management Watch List, and 37 are on 
OMB's High Risk IT Project List. The Inspector General cited those 
projects as being poorly planned and poorly performing and singles out 
the HealtheVet Project as ``not having a comprehensive project 
management plan to guide the development and integration of sub-
projects.'' One of these sub-projects, a scheduling application, 
recently failed during its deployment at the cost of 8 years and $167 
million. The report also States that the HealtheVet program ``lacks a 
fully implemented governance structure.'' As a result, the project 
completion date has slipped from 2012 to 2018. Mr. Secretary, the VA 
plans to invest $360 million in 2010 and $11 billion overall into a 
project that is said to be poorly planned and poorly performing. This 
project is of great importance to our veterans, and I do not want it to 
fail.
    Given the recent failure of the scheduling application and last 
month's Inspector General reports, how do you justify a 30 percent 
increase in Information Technology spending to $3.3 billion when so 
many of your projects and programs seem to lack basic IT project 
management oversight? How will you fix this management capability?
    Answer. The actual increase in information technology spending 
requested for 2010 is 20 percent and supports a number of high priority 
development projects such as Chapter 33, FLITE, and the Paperless 
Delivery of Benefits Initiative. A large part of the requested increase 
is to hire more IT staff, directly addressing cited weaknesses in IT 
project management oversight. Another significant increase is to 
maintain and strengthen our IT infrastructure.
    The VA has taken strong steps and a proactive approach towards 
addressing IT project management weaknesses. The Department has 
directed that IT projects be managed using incremental development 
methodologies. This approach requires close collaboration between 
developers and business owners to produce substantive deliverables on a 
6-month schedule to achieve near-term, incremental successes. This 
approach provides more transparency to management, ensuring potential 
risks and failures are identified and effectively addressed earlier in 
the development life cycle. All new VA IT projects must utilize 
incremental development methodology and be compliant with the VA's 
newly implemented Program Management Accountability System (PMAS), 
while existing IT projects must adopt both incremental development and 
PMAS compliance within one calendar year.
    Question. To improve the oversight role of this subcommittee, can 
you please provide us with additional details relating to all IT 
projects and programs, including HealtheVet, that will receive proposed 
funding in fiscal year 2010? Specifically, will the Department produce 
a list of defined requirements, a detailed cost schedule, and a 
timeline on a project-by-project basis.
    Answer. The Office of Information and Technology is in the process 
of collecting information relative to your questions and will provide a 
response to the Committee not later than July 31, 2009.
    [The information follows:]

    The Department of Veterans Affairs (VA is in the process of 
reworking its existing Guide and Service Dog program. As part of this 
effort, VA has already drafted new regulations that are currently 
undergoing review prior to their submission to the Federal Register. 
After an opportunity for public response to these regulations, VA will 
then review the public comments, edit the regulations as may be 
necessary, and then submit the regulations for final publishing.
    During this process, Guide and Service Dogs will continue to be 
provided to eligible Veterans whose attending physicians have 
documented an individual Veteran's identified need. Pending 
implementation of our new program and publication of the new 
regulations, VA will continue to work with accredited organizations to 
provide dogs to Veterans at no charge. VA will also continue to support 
the payment of the dogs' veterinary care and supportive hardware as 
required assistive devices.
    Subject to the number of public comments resulting from the public 
comment period, VA anticipates that the final version of the Guide and 
Service Dogs regulations will be published in the Federal Register 
prior to December 30th, 2009.
                               background
  --VA IT Consolidation initiate in 2007
    --Primary purpose is to improve the results of VA IT investments
  --Replacement Scheduling Application Failure
    --VA commitment to review all ongoing development programs
  --New Secretary/Deputy Secretary/CIO confirmed
    --Significant Senate questioning on how to address program issues
                      analysis of ongoing programs
  --280+ programs reviewed to date
  --8 program attributes analyzed
  --Many programs exhibit signs of trouble
    --Greater than 13 months behind schedule
    --Greater than 50 percent over initial cost estimate
    --Decrease in software quality between releases
    --Inadequate skills to complete program
  --Substantial change is required
                        incremental development
  --All new VA IT projects/programs must use an incremental development 
        approach
    --Frequent customer delivery milestones
      --At most every 6 months
    --Customer must test and accept functionality
  --To be approved for investment, a program or project must have:
    --An identified customer sponsor
    --Program plan that documents frequent delivery milestones
    --Documented, agreed to requirements for initial milestones
    --Clear plan for necessary program disciplines
    --Clear access to necessary program resources
    --Customer, program, and vendor acceptance of PMAS
    --Jointly established success criteria
            program management accountability system (pmas)
  --All incremental development programs will be managed rigorously to 
        schedule
    --A program/project will be halted on its third missed customer 
            delivery milestone
  --Once halted, substantial changes must be made before the program 
        can restart
    --Need for program/project will be re-assessed
    --Program approach will be re-assessed
    --Make/buy and program design decisions will be re-assessed
    --New Program Manager will be assigned (rotational/training 
            assignment)
    --A portion of the government program staff will be reassigned 
            (rotational/training)
    --All service contracts will be re-visited
    --New program plan must be approved
  --Flexibility can be earned
    --Multiple successful milestones between strikes
    --Clear improvement in management between first and second strike
    --Significant advance warning of missed milestone provided to CIO
                        program manager benefits
  --Clear decision criteria
    --Impact on schedule will drive program choices
  --Better program control
    --Success factors must be in place before program start
  --Decreased requirements creep
    --Impact on schedule will force hard decisions
    --New requirements factored into later release schedules
  --Clear customer participation
    --Must test and approve each release
    --Clearly impacted by program halt
  --Clear vendor attention and participation
    --Motivated to help program meet milestones
  --Increased probability of successful program
                              va benefits
  --Eliminate ``big bang'' program/project failures
  --Near-term visibility into troubled programs
    --Able to provide help if possible
    --Avoid long-term failures
  --Better insight into scarce resources
  --Frequent deliveries to customer ensures program/project 
        functionality, quality, response, etc.
  --Increased probability of successful programs
                             implementation
  --Incremental development is required for all new IT programs/
        projects starting as of 6/15/2009
  --All incremental development programs will be managed by PMAS 
        effective 6/15/2009
  --VA will pause a number of Programs/projects identified as in 
        jeopardy
    --Program plan re-cast for incremental development
    --New plan must be PMAS compliant
    --New program plan must be approved by CIO before program resumes
  --Within one year, all VA IT programs and projects will be 
        incremental development/PMAS compliant
    --Programs that remain within 10 percent of original program plan 
        (schedule, cost, function) may be excepted
    Question. Mr. Secretary, you have mentioned your plans to 
``transform the VA into a 21st Century organization.'' We would like to 
work with you as you embark on such a large undertaking.
    Can you please clarify what these new initiatives are and from what 
appropriations account you intend to fund them?
    Answer. Transformation of the VA into a 21st century organization 
will take more than one year, but the fiscal year 2010 budget is the 
first real opportunity for VA and the Congress to move out on this 
important mission. Our review of the VA fundamentals is still in 
process. We have heard from stakeholders, and will continue to partner 
with them at every opportunity to improve our service to Veterans. Much 
of our review is informed by Congressional input and I greatly value 
those contributions.
    VA is focusing its transformation efforts to more efficiently and 
effectively deliver care and benefits, enhance the Veteran experience 
in all interactions with the VA, and improve awareness and access to VA 
services. Our work to date has already identified a number of 
opportunities to change VA in fundamental ways that will benefit our 
client--the Veteran--while doing things smarter and more effectively.
    As part of an ongoing review of all VA programs and spending, the 
VA leadership is developing new initiatives to be implemented in fiscal 
year 2010 that improve quality, increase access, and enhance 
performance while controlling costs. These build upon the efforts 
already in the fiscal year 2010 request and augment several major new 
initiatives already underway, including the implementation of the Post 
9/11 GI Bill, the most extensive educational assistance program 
authorized since the original GI Bill, and the extension of care to 
265,000 Priority 8 Veterans. In addition, VA and The Department of 
Defense have partnered to create a Virtual Lifetime Electronic Record 
to ensure that soldiers leaving the Armed Services are quickly and 
easily transitioned into the VA.
    We are in the process of identifying additional opportunities to 
adjust our investment portfolio for the benefit of Veterans. These new 
initiatives will not change the fiscal year 2010 budget top line.
    Question. Mr. Secretary, Congress's 2010 Budget Resolution includes 
a provision that would allow for advance appropriations for the VA's 
medical care accounts, meaning fiscal year 2011 funding could be 
provided during the 2010 appropriations cycle. I know you have publicly 
supported the idea of advance appropriations, but it was not included 
in the President's fiscal year 2010 budget request. If Congress decides 
to provide an advance appropriation, I want to be sure the Department 
can provide us with an accurate estimate so we can properly budget for 
the health care network that supports our Nation's veterans.
    Does the Department have the ability to provide the Congress with 
an accurate estimate of its fiscal year 2011 requirements during this 
year's appropriations cycle, or do you need more time to work on it?
    Answer. Yes, VA provided the request for advance appropriations for 
fiscal year 2011 to Chairman Johnson in a letter from Secretary 
Shinseki on June 12, 2009, as a result of Chairman Johnson's request 
for this information during the June 11, 2009, Appropriations Hearing.
    Advance appropriations will help support a reliable and timely 
resource stream to support the delivery of accessible and high-quality 
medical services to our Veterans. It also builds on the solid 
foundation set in the President's fiscal year 2010 budget as we take 
the early first steps to transform VA into a 21st century organization.
    VA is seeking support for a request for advance appropriations for 
fiscal year 2011 of $48.183 billion for the three medical care 
appropriations to support estimated growth to 6.1 million patients. 
This would represent an increase of 8.3 percent over the President's 
fiscal year 2010 appropriation request of $44.498 billion. The fiscal 
year 2011 total is comprised of $37.136 billion for Medical Services, 
$5.307 billion for Medical Support and Compliance, and $5.740 billion 
for Medical Facilities. In addition to the appropriated resource level 
we anticipate collections in the amount of $3.355 billion, for a total 
advance appropriations resource level of $51.538 billion.
    This estimate is based in part on the VA Enrollee Health Care 
Projection Model (VA model) using fiscal year 2008 as the base year, 
which is the most recent actual data available. The model continues to 
support the initiative of providing additional enrollment access for 
over 500,000 previously ineligible Priority Group 8 Veterans by 2013. 
Our estimate also includes resources for programs that are not 
projected by the VA model. These programs include long-term care, the 
Civilian Health and Medical Program of the Department of Veterans 
Affairs, Vet Centers, and the State home per diem program.
    The advance appropriations estimate will ensure timely funding at 
the beginning of fiscal year 2011 for VA's three medical care 
appropriations. We have made significant improvements over the past 
years in calculating and monitoring our resource needs. The Department 
and the Office of Management and Budget are in agreement on this 
request. We will continue to jointly monitor medical care cost and 
performance indicators on a monthly basis and will make any needed 
adjustments to the requested fiscal year 2011 advance appropriation 
level during the regular process of formulating the President's fiscal 
year 2011 Budget this fall. In addition, funding for new medical care 
program initiatives will be considered in the formulation of the 
President's Budget later this year. It is during this process that we 
will also identify the resources needed to support medical information 
technology and capital construction program budgets.
    Question. Do you intend to include more than ``Health Care'' in 
your estimate of the financial need for 2011.
    If yes, why not just include the ``Health Care'' needs in your 
estimate and submit the new initiatives and other accounts for the 
normal appropriations review process?
    Answer. VA included only the three medical care appropriations in 
the request we sent to Congress on June 12, 2009, for fiscal year 2011 
advance appropriations.
    Question. Does OMB plan to submit an estimate for 2011?
    Answer. VA submitted a request for fiscal year 2011 advance 
appropriations to Congress on June 12, 2009, for the three medical care 
appropriations. VA and OMB are in agreement on this request.
    Question. Mr. Secretary, the Department has a significant unfunded 
liability on its major construction projects. Currently in 2009, the 
Department has 14 ongoing projects that are partially funded, with a 
cumulative remaining need on those projects of more than $2.8 billion. 
Despite this need, the Department is proposing to start 7 new projects 
in its fiscal year 2010 request. This would increase the Department's 
unfunded liability to nearly $4.5 billion for ongoing projects.
    Does the Department have a Five-Year Capital Plan to guide its 
major construction projects that often span several fiscal years? If 
so, will the Department please provide that Five-Year Capital Plan to 
the subcommittee?
    Answer. While the Department does submit a Five Year Capital Plan 
with its Congressional Justifications each year, it is important to 
note that this plan will most likely change in the out-years based upon 
various factors including: the actual annual major construction funding 
appropriation provided; schedule changes for any current partially-
funded projects, and the incorporation of additional new projects added 
and scored during the capital investment process in future budget 
cycles. That said, it is the Department's policy to prioritize 
partially funded projects from previous years, provided those projects 
are ready to execute within the budget year.
                                 ______
                                 

             Questions Submitted by Senator Mitch McConnell

    Question. The proposed VA hospital in Louisville is currently 
stalled.
    In addition to the project in Louisville, what other VA hospital 
construction projects have a pending site selection process?
    Answer. Other than Louisville, VA is not in the site selection 
phase related to the construction of new or replacement hospitals at 
any other location.
    Question. How long have these other projects been awaiting site 
selection? When can we expect the VA to select a site in Louisville?
    Answer. The Department has contracted with the architectural firm 
selected to design the new facilities to conduct a feasibility study to 
further explore the potential for locating the facilities at the site 
of the existing VA medical center on Zorn Avenue. The study will also 
evaluate the location near the University of Louisville in downtown 
Louisville and consider the potential of an unidentified green field 
site elsewhere in the metropolitan area. This study is scheduled to be 
completed in October of this year. It is expected that before the end 
of the calendar year, the Department will select the preferred location 
of the facilities. At that time, environmental due diligence in 
accordance with the National Environmental Policy Act will be conducted 
which will then permit the final decision on the site to be made.
                                 ______
                                 

             Questions Submitted by Senator Lisa Murkowski

    Question. The Alaska Legislature recently authorized Governor Palin 
to seek VA funding to establish Alaska's first State Veterans Cemetery 
which will be sited in Interior Alaska. However, I understand that VA 
funding for projects like this may not be immediately available due to 
a shortfall in Veterans Cemetery funding which places new projects on a 
waiting list. How much funding would the VA require to eliminate this 
shortfall? Based upon expected funding levels for the State Veterans 
Cemetery program how long would you have to expect that the State of 
Alaska would have to wait between the date upon which it submits its 
application for the cemetery and the date it would actually receive VA 
grant funding?
    Answer. The State of Alaska submitted a preapplication for the 
Fairbanks Veterans Cemetery on March 23, 2009, and was assigned Federal 
Application Identifier (FAI) AK-09-01. On March 27, 2009, State 
Cemetery Grants Service notified Mr. Jerry Beale, Director, Alaska 
Veterans Office that the project was viable and would be ranked with 
all other pending preapplications in the fiscal year 2010 Priority 
List. The priority list is annually developed, is approved by the 
Secretary, and is the basis for providing grant opportunities during 
the fiscal year. To be ranked in the highest group, States and tribal 
governments must submit legislation authorizing the project and the 
certification that funds for architectural and engineering fees are 
available to begin the project by the August 15 deadline. These fees 
are reimbursable to grant recipients. We have been in recent contact 
with Mr. Verdie Bowen, Administrator, Office of Veterans Affairs, 
requesting the signed legislation and funds certification. It is 
expected to be submitted by the State prior to the deadline. The 
project would be developed to serve the 10,800 veterans in the 
Fairbanks/North Star area.
    Until the August 15, 2009, deadline is reached and the fiscal year 
2010 Priority List is approved, it is not possible to estimate the 
funds needed to offer the State of Alaska a grant opportunity.
    Projects are ranked in accordance with Title 38 CFR 39.7. The 
Alaska project would be ranked in Priority Group 2 with 10,800 unserved 
Veterans. The priority groups are defined as follows:
  --Priority Group 1.--Projects needed to avoid disruption in burial 
        service that would otherwise occur at existing Veterans' 
        cemeteries within 4 years of the date of the preapplication. 
        Such projects would include expansion projects as well as 
        improvement projects (such as construction of additional or 
        replacement facilities) when such improvements are required to 
        continue interment operations.
  --Priority Group 2.--Projects for the establishment of new Veterans' 
        cemeteries.
  --Priority Group 3.--Expansion projects at existing Veterans' 
        cemeteries when a disruption in burial service due to the 
        exhaustion of existing gravesites is not expected to occur 
        within 4 years of the date of the preapplication.
  --Priority Group 4.--Other improvement projects to cemetery 
        infrastructure such as building expansion and upgrades to roads 
        and irrigation systems that are not directly related to the 
        development of new gravesites.
    It is anticipated that 32 projects in priority groups 1 and 2 will 
be on the fiscal year 2010 Priority List. The value of those projects 
is $170 million. It is anticipated that not all projects in priority 
groups 1 and 2 will submit the documentation and will not rank high 
enough to receive a fiscal year 2010 grant opportunity. In fiscal year 
2009, there were 11 such projects with a value of $44 million.
                                 ______
                                 

              Questions Submitted by Senator Thad Cochran

    Question. The Departments of Defense and Veterans Affairs are 
moving forward with jointly operated hospitals and clinics in several 
areas where existing facilities are co-located. One such facility is in 
my State of Mississippi.
    After Hurricane Katrina, Keesler Medical Center and the Biloxi VAMC 
used a ``centers of excellence'' approach to identify the best services 
at each of the two facilities and consolidate those services when 
possible and practical. Some activities are completely consolidated, 
with staffs working side-by side with one another, and other services 
have a partnership where they have the capability to ``trade'' doctors 
and nurses when required. In 2007, Keesler Medical Center and the Gulf 
Coast Veterans Health Care System in Biloxi were granted official 
joint-venture status.
    Currently, DOD and VA are working towards complete consolidation 
between the North Chicago VAMC and the Naval Great Lakes Health System 
in Chicago. They are finding many obstacles along the way regarding 
funding mechanisms, facilities ownership, personnel transfer, and 
information technology. For example, one of the biggest issues 
impacting all future joint venture sites is the lack of a common 
medical record between the Department of Defense and the Department of 
Veterans Affairs. Consequently, staff must learn both systems when 
working at a joint venture facility, which is neither time- nor cost-
efficient.
    Joint cooperation has provided great benefit to veterans and 
service members in the Gulf Coast region. However, the Air Force 
Surgeon General expressed concerns that complete consolidation between 
Keesler and Biloxi VAMC could be a detriment to the Air Force mission.
    Question. Secretary Shinseki, can you comment on the current 
relationship between Keesler and Biloxi VAMC, and give me your thoughts 
on the impacts of complete consolidation there?
    Answer. The Keesler Air Force Medical Center (81st Medical Group) 
and the Biloxi VA Medical Center (VA Gulf Coast Veterans Health Care 
System) have maintained a supportive and collaborative relationship for 
decades. Hurricane Katrina inflicted heavy damage on both medical 
centers. Following Katrina, TRICARE Management Activity and VA 
developed a strategy to maximize sharing/joint services. In 2007, 
developing Centers of Excellence (COE) became the preferred strategy. 
Although sharing between the facilities has a long history, complete 
consolidation of Keesler/Biloxi is not the goal. The two medical 
centers are in close proximity. This offers each the flexibility to 
meet their core mission requirements while sharing services where and 
when appropriate. The COE model is clinically focused. It emphasizes 
joint communication and planning. Meetings are conducted at all levels 
to maintain the day-to-day management structure of each medical center.
    Question. Is the VA moving forward with complete consolidation at 
Keesler or any other joint venture sites?
    Answer. The current focus is consolidation where it makes sense 
rather than consolidation of all services. Both medical centers will 
retain independent management and operations. They will share oversight 
of all joint activities. Because of challenges based on differences in 
medical records, business rules and regulations, each COE will, by 
necessity, be carefully evaluated prior to the implementation of new 
sharing agreements. In June 2008, Keesler/Biloxi developed a COE 
Concept of Operations to evaluate progress towards consolidation based 
on a domain-based level of interface matrix that tracks nine domains 
that includes: clinical services, facilities, staffing, business 
processes, management/governance, information management and 
information technology, logistics, education and training, and 
research.
    Each domain is evaluated based on movement along a five-element 
continuum--(1) separated, (2) coordinated, (3) connected, (4) 
integrated and, (5) consolidated. Not all nine domains will end at the 
consolidated state depending on the circumstances and the feasibility 
of doing so. The process is measured and deliberate. Joint Incentive 
Funds (JIF) were used to develop and refine the COE concept. JIF funds 
in fiscal year 2007 provided resources for a Joint Magnetic Resonance 
Imaging (MRI) Center and a Joint Cardiovascular Care Center at Keesler. 
In fiscal year 2008 the JIF provided funding to administratively 
support the COE implementation. Pending JIFs would fund the renovations 
of space for joint use at Keesler, and establish infrastructure for 
Joint Business Operations. Joint initiatives currently include a Sleep 
Lab on the Biloxi Campus and a Joint Women's Health Clinic. Other 
sharing initiatives are in various stages of planning and development.
    Question. Has the VA considered duplicating the model at Keesler/
Biloxi VAMC at other joint venture sites?
    Answer. An Executive Management Team at Keesler/Biloxi meets bi-
monthly to set priorities and provide oversight on the sharing or 
realignment of services. This group quickly realized there are 
overlapping areas of responsibilities along the Gulf Coast. The team 
expanded and now includes: the Commander, 81st Medical Group, Keesler 
AFB; the Director, VA Gulf Coast Veterans Health Care System; the 
Commanding Officer, Naval Hospital Pensacola, Florida; and the 
Commander, 96th Medical Group, Eglin AFB, Florida. The Under Secretary 
of Defense (Personnel and Readiness) met with the Deputy Secretary of 
Veterans Affairs in March 2008 to discuss developing model programs for 
Joint Ventures that included the domain-based levels of interface. Four 
locations were selected: Biloxi, Mississippi; Las Vegas, Nevada; 
Denver, Colorado; and Honolulu, Hawaii. A Joint Market Opportunities 
Work Group provides assistance and assesses progress at each site using 
the domain-based levels of interface tool. They report to the VA/DOD 
Joint Executive Council.

                         CONCLUSION OF HEARINGS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 2:23 p.m., Thursday, June 11, the hearing 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Arny, Wayne, Deputy Under Secretary of Defense (Installations and 
  Environment), Department of Defense:
    Prepared Statement of........................................    58
    Questions Submitted to.......................................    81
    Statement of.................................................    55

Baker, Roger W., Assistant Secretary for Information and 
  Technology, Department of Veterans Affairs.....................   107
Boozer, Brigadier General James C., Sr., Director, Operations, 
  Office of the Assistant Chief of Staff for Installation 
  Management, Department of the Army, Department of Defense......     1

Calcara, Joseph F., Deputy Assistant, Secretary of the Army 
  (Installations and Housing), Department of the Army, Department 
  of Defense.....................................................     1
Carpenter, Major General Raymond W., Acting Deputy Director, Army 
  National Guard, Department of the Army, Department of Defense..     1
Cochran, Senator Thad, U.S. Senator From Mississippi, Questions 
  Submitted by...................................................   141
Collins, Senator Susan, U.S. Senator From Maine, Questions 
  Submitted by...................................................80, 82
Cross, Gerald M., MD, FAAFP, Acting Under Secretary for Health, 
  Department of Veterans Affairs.................................   107

Dunne, Patrick W., Under Secretary for Benefits, Department of 
  Veterans Affairs...............................................   107

Ferguson, Kathleen I., Deputy Assistant Secretary for 
  Installations, Department of the Air Force, Department of the 
  Defense:
    Prepared Statement of........................................    27
    Statement of.................................................    25

Hale, Hon. Robert F., Under Secretary of Defense (Comptroller), 
  Department of Defense:
    Prepared Statement of........................................    54
    Questions Submitted to.......................................    79
    Statements of................................................47, 51
Hansen, Louis Jerome, Deputy Assistant, Secretary of the Army 
  (Strategic Infrastructure) and Senior Official Performing 
  Duties of Assistant Secretary of the Army (Installations and 
  Environment), Department of the Army, Department of Defense:
    Prepared Statement of........................................     7
    Statement of.................................................     6
Hutchison, Senator Kay Bailey, U.S. Senator From Texas:
    Prepared Statements of....................................... 4, 50
    Questions Submitted by.......................................   136
    Statements of................................................ 2, 48

Inouye, Senator Daniel K., U.S. Senator From Hawaii, Questions 
  Submitted by..................................................42, 104

Johnson, Senator Tim, U.S. Senator From South Dakota:
    Opening Statements of....................................1, 47, 107
    Questions Submitted by.......................................   133

Kraus, Brigadier General Julia A., Deputy Chief, U.S. Army 
  Reserve, Deputy Commander for Managemen, Resources, and 
  Support, Department of the Army, Department of Defense.........     1
    Statement of.................................................    17

Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions 
  Submitted by...................................................   134
Lengyel, General Joseph, Commander, Air National Guard Readiness 
  Center, Department of the Air Force, Department of Defense.....    25

McConnell, Senator Mitch, U.S. Senator From Kentucky, Questions 
  Submitted by..................................................79, 140
Murkowski, Senator Lisa, U.S. Senator From Alaska, Questions 
  Submitted by...................................................   140
Muro, Steve L., Acting Under Secretary for Memorial Affairs, 
  Department of Veterans Affairs.................................   107

Penn, Hon. B.J., Assistant Secretary of the Navy (Installations 
  and Environment), Department of the Navy, Department of Defense    85
    Prepared Statement of........................................    87
    Statement of.................................................    85
Pryor, Senator Mark, U.S. Senator From Arkansas, Questions 
  Submitted by..................................................81, 136

Reed, Rita A., Acting Assistant Secretary for Management, 
  Department of Veterans Affairs.................................   107

Shinseki, Hon. Eric K., Secretary, Department of Veterans 
  Affairs:
    Prepared Statement of........................................   108
    Statements of..............................................107, 108

Thompson, General Howard, Deputy to the Chief of Staff, Air Force 
  Reserve, Department of the Air Force, Department of Defense....    25


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                                                                   Page

Additional Committee Questions...................................    79
Full Funding.....................................................    73
FYDP.............................................................    73
Guam.............................................................    77
Inflation Policy.................................................    74

                      Department of the Air Force

Additional Committee Questions...................................    42
Air Force Reserve and Air National Guard Milcon Funding..........    33
American Eagle...................................................    39
    Housing Privatization........................................    37
    Lessons Learned..............................................    39
BRAC 2005 Closure of Kulis Air National Guard Base, Alaska.......    41
Coal to Liquid Facility Near Eielson Air Force Base, Alaska......    40
Develop and Care for Airmen and Their Families...................    28
Ellsworth AFB Housing Privatization..............................    34
Future Years Defense Program and Air Reserve Component Funding...    34
F-22 for Hawaii ANG..............................................    42
Global Strike Command............................................    44
Joint Basing and BRAC 2005 Round Implementation..................    36
Milcon in the American Recovery and Reinvestment Act of 2009.....    44
Military Command Locations off Military Reservations.............    44
Modernize our Air and Space Inventories, Organizations and 
  Training.......................................................    29
Partner With the Joint and Coalition Team to Win Today's Fight...    32
Recapture Acquisition Excellence.................................    32
Reinvigorate the Air Force Nuclear Enterprise....................    27
Short Auxiliary Fields (SAAF) in Hawaii..........................    43
24th Air Force Headquarters Milcon Requirements..................    35
Weapons Load Training Facility at Barksdale AFB, LA..............    43

                         Department of the Army

Army:
    BCI Growth...................................................    20
    Family Housing:
        Construction (AFHC)......................................    12
        Operations (AFHO)........................................    13
    Initiatives..................................................    10
    Modular Force (AMF)..........................................     8
    National Guard Military Construction.........................    16
        Budget...................................................    19
BRAC 2005:
    Budget.......................................................    10
    Implementation Strategy......................................     9
Base Realignment and Closure (BRAC)..............................     9
Environmental Cleanup of Lone Star Army Ammunition Plant.........    22
Expansion of Rangers in Pinon Canyon, Colorado...................    21
Fiscal Year 2010:
    Budget Request for Army Guard................................    24
    Overseas Contingency Operations (OCO)........................    10
Global Defense Posture Realignment (GDPR)........................     9
Grow the Army (GTA)..............................................     8
    Projects.....................................................    17
Homeowners Assistance Program....................................    13
    For Military Families........................................    18
Military Construction:
    Army:
        National Guard...........................................    11
        Reserve..................................................    12
    Projects.....................................................    15
Mission and Training Projects....................................    17
Operation and Maintenance........................................    13
Prior BRAC.......................................................    10
Quality of Life for Soldiers and Their Families and the Army 
  Budget.........................................................     6
Rebalancing the Force in an Era of Persistent Conflict...........     8

                         Department of the Navy

Additional Committee Questions...................................   104
BRAC 2005 Implementation.........................................    96
Family Housing...................................................    91
Guam...........................................................101, 103
Housing..........................................................    90
Meeting the Construction Execution Challenge.....................    99
Military Construction............................................    88
NNMC and WRAMC...................................................   102
Prior BRAC Cleanup & Property Disposal...........................    95
Relocating the Marines to Guam...................................    93
The Navy's Investment in Facilities..............................    87

                     DEPARTMENT OF VETERANS AFFAIRS

Additional Committee Questions...................................   133
Analysis of Ongoing Programs.....................................   137
Automating the Application for and Delivery of Education Benefits   116
Combating Homelessness...........................................   115
Enhancing Outreach and Services for Mental Health Care and TBI...   113
Funding Care for a New and Changing Veteran Demographic..........   112
Implementation...................................................   138
Increasing Investments in Research and Other Health Care 
  Initiatives....................................................   114
Incremental Development..........................................   137
New Construction and Funding the New Office of the Assistant 
  Secretary for Acquisition, Construction, and Logistics.........   110
One Life Continuity of Care......................................   111
Processing Benefits Claims in a Paperless Environment and Other 
  Critical IT Investments........................................   117
Program:
    Management Accountability System (PMAS)......................   138
    Manager Benefits.............................................   138
Providing Additional Economic Stability to Veterans..............   116
Service to the Last Breath and Beyond--Funding the Memorials to 
  our Heroes.....................................................   118
The Transformation From Within--Increasing Investment in 
  Training, Career Development and Other Organizational Reforms..   110
VA Benefits......................................................   138

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