    [Senate Hearing 111-100, Part 3]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 111-100, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2010

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

                                    HEARING

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1390

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2010 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
        PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER PURPOSES

                                   ----------

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   ----------

                                 JUNE 17, 2009

    [GRAPHICS NOT IN TIFF FORMAT

             Printed for the use of the Committee on Armed Services

                                  -----------

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    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                 2010--Part 3  READINESS AND MANAGEMENT SUPPORT

                                                      S. Hrg. 111-100 Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2010

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

                                    HEARING

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                       ON

                                    S. 1390

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2010 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
        PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER PURPOSES

                                   __________

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   __________

                                 JUNE 17, 2009

             Printed for the use of the Committee on Armed Services

    ?

                          COMMITTEE ON ARMED SERVICES

                         CARL LEVIN, Michigan, Chairman

    EDWARD M. KENNEDY, Massachusetts     JOHN McCAIN, Arizona
    ROBERT C. BYRD, West Virginia        JAMES M. INHOFE, Oklahoma
    JOSEPH I. LIEBERMAN, Connecticut     JEFF SESSIONS, Alabama
    JACK REED, Rhode Island              SAXBY CHAMBLISS, Georgia
    DANIEL K. AKAKA, Hawaii              LINDSEY GRAHAM, South Carolina
    BILL NELSON, Florida                 JOHN THUNE, South Dakota
    E. BENJAMIN NELSON, Nebraska         MEL MARTINEZ, Florida
    EVAN BAYH, Indiana                   ROGER F. WICKER, Mississippi
    JIM WEBB, Virginia                   RICHARD BURR, North Carolina
    CLAIRE McCASKILL, Missouri           DAVID VITTER, Louisiana
    MARK UDALL, Colorado                 SUSAN M. COLLINS, Maine
    KAY R. HAGAN, North Carolina
    MARK BEGICH, Alaska
    ROLAND W. BURRIS, Illinois

                       Richard D. DeBobes, Staff Director

                   Joseph W. Bowab, Republican Staff Director

                                     ______

                Subcommittee on Readiness and Management Support

                          EVAN BAYH, Indiana, Chairman

    ROBERT C. BYRD, West Virginia        RICHARD BURR, North Carolina
    DANIEL K. AKAKA, Hawaii              JAMES M. INHOFE, Oklahoma
    CLAIRE McCASKILL, Missouri           SAXBY CHAMBLISS, Georgia
    MARK UDALL, Colorado                 JOHN THUNE, South Dakota
    ROLAND W. BURRIS, Illinois

                                      (ii)
    ?

                                C O N T E N T S

                                  ----------

                        CHRONOLOGICAL LIST OF WITNESSES
        Military Construction, Environmental, and Base Closure Programs
                                 june 17, 2009

                                                                       Page

    Arny, Wayne, Deputy Under Secretary Of Defense, Installations and
      Environment....................................................     6
    Penn, Hon. B.J., Assistant Secretary of the Navy, Installations
      and Environment................................................    24
    Calcara, Joseph F., Deputy Assistant Secretary of the Army,
      Installations and Housing......................................    45
    Ferguson, Kathleen I., Deputy Assistant Secretary of the Air
      Force, Installations...........................................    54

                                     (iii)

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                                      2010

                                  ----------

                            WEDNESDAY, JUNE 17, 2009

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

        MILITARY CONSTRUCTION, ENVIRONMENTAL, AND BASE CLOSURE PROGRAMS

        The subcommittee met, pursuant to notice, at 3:07 p.m. in
    room SR-222, Russell Senate Office Building, Senator Evan Bayh
    (chairman of the subcommittee) presiding.
        Committee members present: Senators Bayh, Udall, Inhofe,
    Chambliss, Thune, and Burr.
        Committee staff members present: Leah C. Brewer,
    nominations and hearings clerk; and Jennifer L. Stoker,
    security clerk.
        Majority staff members present: Terence K. Laughlin,
    professional staff member; and Russell L. Shaffer, counsel.
        Minority staff members present: David M. Morriss, minority
    counsel; and Lucian L. Niemeyer, professional staff member.
        Staff assistants present: Mary C. Holloway and Breon N.
    Wells.
        Committee members' assistants present: Patrick Hayes,
    assistant to Senator Bayh; Jennifer Barrett, assistant to
    Senator Udall; Anthony J. Lazorski, assistant to Senator
    Inhofe; Clyde A. Taylor IV, assistant to Senator Chambliss; and
    Kevin Kane, assistant to Senator Burr.

            OPENING STATEMENT OF SENATOR EVAN BAYH, CHAIRMAN

        Senator Bayh. The hearing will please come to order.
        I'd like to express my appreciation to our witnesses for
    joining us today, and the people in the audience for your time,
    and my ranking member, Senator Burr, for his attendance and
    interest in the subject matter today.
        Today, the Subcommittee on Readiness and Management Support
    meets to review the military construction (MILCON) and
    environmental programs of the Department of Defense (DOD) and
    the fiscal year 2010 budget request for those programs.
    Additionally, we will review and receive testimony concerning
    the Department's overseas contingency operations request for
    fiscal year 2010, which was provided as part of the President's
    regular budget request this year; and finally, on the
    Department's Base Realignment and Closure (BRAC) request for
    fiscal year 2010.
        We welcome back Secretary Penn and Mr. Arny.
        The Chair would note, with particular pride, that Mr. Penn
    originally hails from the State of Indiana, an obvious sign of
    intelligence, which we appreciate. [Laughter.]
        Not to suggest that the others don't possess a similar
    quality, but----[Laughter.]
        We welcome two new witnesses this year, Deputy Assistant
    Secretary Joseph Calcara from the Army, and Kathleen Ferguson
    from the Air Force. Thank you both for joining us.
        Mr. Calcara, did I pronounce your name correctly?
        Mr. Calcara. Close enough, sir.
        Senator Bayh. My last name is mispronounced regularly, so I
    hope I did well. What is the correct pronunciation?
        Mr. Calcara. ``Cal-carra.''
        Senator Bayh. Thank you.
        Thank you all for testifying on such short notice. Because
    of the late arrival of the President's budget request and our
    committee's pending markup schedule, we, unfortunately, didn't
    have a very large window of time to schedule the hearing, so I
    appreciate your willingness to accommodate the short timeframe.
        We meet this afternoon to discuss DOD's MILCON, housing,
    and environmental programs, as well as the implementation of
    the 2005 BRAC round. We have many challenges to discuss here
    today.
        This year, we have before us again one of the largest
    funding requests for MILCON and BRAC in memory. The fiscal year
    2010 budget request for MILCON, BRAC, and family housing
    programs, totaling $24.3 billion, is just slightly less than
    last year's record amount.
        As our witnesses describe in their prepared statements,
    they are also responsible for billions of additional dollars
    requested for repair and maintenance, base operations, and
    environmental programs to keep those bases running.
        This year is one of transition between two different
    administrations and perhaps two different philosophical
    approaches to force posture and stationing. It also appears
    that your Services' MILCON budget requests have also deferred a
    number of decisions pending the results of the Quadrennial
    Defense Review (QDR), more than will likely be decided by that
    review, I suspect.
        I realize, for the Army in particular, you were handed some
    last-minute decisions and guidance from Secretary Gates, and
    have been scrambling a bit in order to put your program
    together. In some cases, you've had to accommodate changes to
    projects that have already been authorized and appropriated,
    and for which some contracts have already been awarded. The
    Army recently announced a reduction from 48 to 45 brigade
    combat teams (BCTs), with the reduction to come from Fort
    Carson, CO; Fort Stewart, GA; and Fort Bliss, TX. Last year,
    Congress authorized and appropriated almost $1.4 billion in
    fiscal year 2009 MILCON funds in preparation for the activation
    of those BCTs, which may not be needed now for that purpose.
        In addition, there is approximately $600 million more in
    fiscal year 2010 MILCON requests for barracks, health clinics,
    ranges, and schools associated with those three BCTs, which
    also may no longer be needed. We look forward to hearing your
    plans to accommodate those changes.
        The Navy's MILCON requests include $378 million in projects
    to begin what will eventually be a $4.0 billion MILCON bill
    associated with the relocation of 8,000 marines from Okinawa to
    Guam. However, the environmental impact statement (EIS) for the
    Guam facilities is not yet complete, and the Navy's Guam master
    plan has not been provided to Congress, as required.
        In addition, the Commandant of the Marine Corps recently
    indicated in testimony before the full Armed Services Committee
    that he had serious concerns about the ability to train his
    marines in Guam and the Northern Marianas, was concerned with
    the Government of Japan's ability to provide an adequate
    replacement facility for Marine Corps aviation elements in
    Okinawa, and that relocation plans would be subject to review
    during the forthcoming QDR. I look forward to the Navy's
    testimony on these points. I would also note that the Navy
    request includes significant funding for facilities to grow the
    Marine Corps.
        While the Air Force has a significantly smaller request
    than the other two Services, there are a number of MILCON
    projects that are planned for the U.S. Central Command area of
    responsibility that appear, on the surface to be--well, this
    testimony has been described--supplied to me by the staff--
    ``somewhat dubious.'' So, Ms. Ferguson, I look forward to
    hearing from you about that.
        These projects appear to have been developed on an ad hoc
    basis without having secured host-country agreements to protect
    our increasing investments. I look forward to discussing this
    issue during the hearing. I think that may involve some of the
    missile sites in the Czech Republic and elsewhere.
        Finally, fiscal year 2010 represents the last significant
    investment in MILCON in order to complete the BRAC 2005 round.
    I would like to know if there are any potential stumbling
    blocks to completing BRAC on schedule by September 2011.
        As for the environmental programs, the funding request for
    fiscal year 2010 remains largely consistent with previous
    years, with the exception of pollution prevention, which is
    significantly lower than that requested for 2008 and 2009.
        As for environmental restoration and remediation programs,
    the cleanup of unexploded ordnance, discarded military
    munitions, and munition constituents, continues to be of high
    interest to the committee. The National Defense Authorization
    Act (NDAA) for Fiscal Year 2007 set target dates for cleanup of
    these materials at active installations, formerly used defense
    sites, and BRAC sites. While progress is being made, current
    projections suggest that these dates may not be met. DOD must
    continue to press forward to address these important issues.
        Lastly, encroachment on the installations, particularly on
    our training and testing ranges, continues to be of concern at
    many locations around the country. One program that has seen
    significant success in reducing encroachment while conserving
    areas around those installations is the Readiness and
    Environmental Protection Initiative. The committee has
    encouraged greater use of this program in the past, and the
    program could be expanded even further in the future.
        I will note the presence of Senator Udall.
        Thank you for coming, Senator Udall, and your interest in
    these issues.
        I will now turn to Senator Burr for any opening remarks
    that you may have, and then, Senator Udall, if there's anything
    you'd like to add following Senator Burr, the subcommittee
    would be happy to hear from you.
        Senator Burr.

                   STATEMENT OF SENATOR RICHARD BURR

        Senator Burr. Thank you, Mr. Chairman. I want to also thank
    you for calling this important hearing to review the budget
    request for installations and environmental programs for fiscal
    year 2010.
        I also want to thank our witnesses for their dedicated
    public service. As I review their testimony and this budget
    request, I'm struck by the sheer magnitude of the range and
    difficulty of the issues. You deserve our gratitude and sincere
    appreciation for serving our Nation in this capacity.
        I want to recognize Mr. Arny. It's my understanding this
    may be your last appearance before this committee in managing
    installations and environment for the Secretary of Defense. I
    want to thank you publicly for your public service to this
    country.
        This is a unique budget year, in many ways, as we consider
    decisions and authorizations that will have far-reaching
    consequences. This budget request includes the first increment
    of construction totaling $378 million required to move 8,000
    marines and their families from Okinawa to Guam. This
    construction, when completed in 2014, may cost U.S. taxpayers
    well over $4 billion, with another $3 billion loan to pay off
    over time. This amount does not include plans by the Air Force
    to establish a strike capability on Guam, which will add
    another $500 million to the bill. The EIS to support the move
    is ongoing, but I know the Marine Corps has particular concerns
    with their ability to train in Guam. I look forward to hearing
    about plans to ensure that marines can train effectively once
    the move is completed.
        This budget request includes a request to authorize $116
    million for the Air Force to construct a new air base in the
    Omani desert. The total bill required to ensure our airmen can
    use the base will exceed $380 million.
        We have a similar proposal to spend over $60 million in
    Qatar for the second phase of a four-phase program that will
    require another $250 million to support over 6,200 U.S.
    military personnel at that Persian Gulf location.
        Add to these requirements the money needed to build
    barracks and operational facilities for our soldiers and
    marines, added to the end strength of the Army and the Marine
    Corps, as well as the $1.4 billion in fiscal year 2010 alone
    for facilities in Afghanistan, you don't have a lot left over
    to do much else at all. My guess is that budgets are only going
    to get tighter in the years to come. But, I can only guess
    that, since we don't have the benefit of a Future Years Defense
    Plan (FYDP) beyond 2010 to see how all these programs will be
    funded in the out years--excuse me, Mr. Chairman--I propose
    that this might----[Laughter.]
        Senator Bayh. I thought you were choking on all of the
    spending we were doing here. [Laughter.]
        Senator Burr. I think it's a culmination of healthcare
    finally getting to me. [Laughter.]
        Never fear, the government's here to take care of it.
    [Laughter.]
        ----I propose that this might be a good year to take a
    critical look at some of these projects and to make some hard
    decisions about holding back on the spending until we have a
    better idea of where we're going with regard to the QDR. We
    must avoid, at all costs, authorizing a project that becomes
    the bridge to nowhere, which is a real risk if we don't know
    for sure if the funding to make these projects complete and
    usable will be in future budgets. The taxpayers expect us to
    make prudent decisions.
        Turning to the environmental program, the Services continue
    to face significant environmental challenges that could impact
    their ability to deploy and maintain readiness. I'm
    particularly interested in hearing from Mr. Penn about recent
    revelations regarding the contamination of drinking water at
    Camp Lejeune from 1950 to mid-1980s. Recent developments have
    raised more questions than answers from many of my constituents
    who were stationed there during these periods.
        In May, the Agency for Toxic Substance Disease Registry
    (ATSDR) removed from its Web site the ATSDR 1997 Public Health
    Assessment on the impact of Camp Lejeune water contamination.
    In describing its rationale, ATSDR said that it did not fully
    take into consideration the documented presence of benzene in
    the water. After 12 years, ATSDR now says that they can't say
    for sure whether children or adults have been adversely
    impacted by exposures to volatile organic compounds in the
    water. ATSDR also says that it's conducting further studies to
    determine if past exposure can be linked to certain birth
    defects and childhood cancers, as well as other studies of
    illness.
        This month, the National Academy of Sciences has issued a
    report in response to a mandate from Congress. It also
    concluded that, while water systems at Camp Lejeune were
    contaminated, they cannot say for sure whether people at Camp
    Lejeune may have suffered adverse health outcomes as a result
    of their exposure.
        Even more disturbing for former marines and other residents
    of Camp Lejeune, the report concludes that, given inherent
    limitations in the data, additional research is unlikely to
    provide a direct basis for drawing more definitive conclusions.
    In other words, limbo forever.
        Again, these revelations have been leaving veterans and
    their families with more questions than answers. I'd like to
    know what the Department of the Navy and the Marine Corps plan
    to do next, and how they intend to answer the concerns of
    former marines, their families, and former employees of Camp
    Lejeune.
        Mr. Chairman, it's also come to my attention that Mr. Arny
    is a former Top Gun pilot; former Principal Deputy Assistant
    Secretary of the Navy, Shipbuilding Logistics; and former
    Senate Armed Services Committee professional staff member,
    serving on this committee from 1981 to 1984. He has also
    invited one of his two sons to attend this last public hearing
    that he's doing. The son attending the hearing, Commander Skip
    Arny, is a Top Gun pilot, flying F-18s. He just finished as the
    commanding officer of the Strike Fighter Weapons School at
    Naval Air Station (NAS) Lemoore, CA, and is getting ready for a
    tour as a defense attache in Poland. Following his dad's path,
    he's a 1990 graduate of the U.S. Naval Academy.
        His youngest son, Matt, is a lieutenant commander naval
    flight officer who recently returned from deployment to Iraq,
    Afghanistan, and Somalia, with the FA-103, onboard the USS
    Eisenhower, flying F-18s, as well, and is now attending the
    Naval War College in Newport, RI. He is also a Naval Academy
    graduate, 1993.
        Wayne, if it doesn't embarrass, could I ask your son,
    Commander Skip Arny, to recognize himself?
        Commander, thank you for your service.
        Mr. Arny. Thank you for that. [Applause.]
        Senator Burr. Thank you, Mr. Chairman.
        Senator Bayh. Thank you, Senator Burr.
        Senator Udall, any opening comments you'd like to make?
        Senator Udall. On that note, maybe Mr. Arny should start
    testifying right now. [Laughter.]
        Senator Bayh. It is a first for this subcommittee that
    testimony begins, to applause. [Laughter.]
        I'm sure it will end that way, too.
        Mr. Arny, we'll begin with you. Welcome back to this
    committee, where you served with great distinction.

      STATEMENT OF WAYNE ARNY, DEPUTY UNDER SECRETARY OF DEFENSE,
                     INSTALLATIONS AND ENVIRONMENT

        Mr. Arny. Thank you, sir. Chairman Bayh, Senator Burr,
    Senator Udall, I'm honored to appear before you today to
    discuss our MILCON program for 2010.
        I thank you for acknowledging my son, Skip. As you said, he
    recently finished Command of Fighter Weapons School at Lemoore,
    and we have the pleasure of having him and our grandchildren in
    the area. His brother, as you said, just finished up the tour
    at the War College, and is in training to command a squadron
    also at Lemoore. So, like it or not, my wife and I have spent a
    lot of time at Lemoore, and will continue to, as well as lots
    of time in Eastern Europe. Unfortunately, these two have never
    been stationed at the same base together for more than 3
    months.
        In the last 10 years, DOD has come a long way in improving
    the facilities and infrastructure in which our military and
    civilian workforce and their families work and live. We could
    not have progressed as far as we have without the continuing
    support of Congress, and, in particular, this subcommittee.
        Today, we manage over 500,000 facilities, worth over $700
    billion, located on approximately 29 million acres of land
    around the world. In comparison, about 10 years ago we had
    115,000 more facilities. The principal program that has helped
    us balance the infrastructure has been the BRAC authority. It's
    enabled us to close over 121 major installations and realign 79
    major bases after 5 rounds. The 2005 decisions alone affected
    over 800 locations and included 24 major closures, 24 major
    realignments, and 765 lesser actions.
        I'd also like to comment on the disposal process for these
    bases. We've been asked, as a Department, how we feel about
    pending legislation that would mandate no-cost economic
    development conveyances (EDC). We currently have a full range
    of conveyance mechanisms available to the Services, and they
    already include no-cost EDCs. We are, and always have been,
    open to this conveyance method, and are more than willing to
    review such requests, based on the needs of the local
    communities. Indeed, my data indicates that, since 2002, the
    Army has granted EDCs on 68 parcels for 32,000 acres. Now, of
    those, there were 23 parcels at no cost for 31,000 acres, and
    45 parcels at cost at 1,000 acres on 5 bases. The Navy has done
    8 no-cost EDCs for 4,000 acres.
        The Air Force has had 19 no-cost EDCs covering just under
    24,000 acres. But, to mandate no-cost EDCs would only advantage
    some locations, where potentially valuable property, where the
    taxpayers of the communities--with potentially valuable
    property, where the taxpayers of the rest of the Nation could
    perhaps benefit from participating in the profit from the
    development of that valuable property, especially the
    development of housing areas that don't bring permanent job
    growth, as is normally required of a no-cost EDC. Also, the
    Services are required to plow back any funds they receive from
    BRAC disposals into BRAC purposes, and that has primarily been
    to accelerate the required environmental cleanup of former BRAC
    bases. A mandated no-cost EDC would essentially be giving a
    particular community, that normally wouldn't qualify for it, a
    windfall profit that would divert money from the taxpayers.
        We will continue to evaluate the legislation we've been
    presented through the Department's legislative review process,
    but I wanted to give you this position, on the record.
        We also believe it is not enough just to close bases and
    move functions, we also need to conduct our business more
    efficiently, as prudent caretakers of the taxpayers' resource.
    I believe we are.
        An excellent example of this is joint basing. As part of
    BRAC 2005, we are forming 12 new joint bases from 26 separate
    bases to consolidate installation and management functions
    under one component. Five of the joint bases, involving 11
    installations, will reach full implementation in--October 1,
    2009; the remaining 7 joint bases will reach full limitation--
    implementation in October 2010, well ahead of the BRAC
    statutory deadline of September 2011.
        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 who owned them. With
    your help and vision, we put housing privatization authorities
    in place, and the private sector responded by delivering
    modern, affordable housing, and, with appropriate oversight, we
    ensured the Federal Government's needs were met. 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, the military departments are
    modernizing their facilities to increase the privacy and
    amenities in permanent-party bachelor housing. Using MILCON,
    much progress has been made, but there is still a need for
    almost $15 billion to complete the permanent-party buyout.
        Privatizing bachelor housing is one way to go, but it has
    unique challenges compared to family housing. We have seen
    recent innovative concepts, where the Army has added bachelor
    officer quarters and senior enlisted bachelor quarters to its
    existing family housing privatization projects. The Navy is
    mainly focusing its unaccompanied housing privatization efforts
    to bring shipboard junior enlisted sailors ashore. The first
    unaccompanied housing privatization pilot project was awarded
    in December 2006 in San Diego. The second was executed in
    December 2007 at Hampton Roads, VA. A third project is under
    consideration at the Jacksonville-Mayport area in Florida. Both
    of the awarded projects have demonstrated that, with this
    authority to pay junior enlisted members less than full housing
    Allowance Transformation and Realignment Agreements (ATARAs),
    we are on our way to a very successful enlisted privatization.
        Both of the awarded projects have demonstrated that, with
    this authority to pay junior enlisted members less than full
    housing ATARAs, we're on our way to very successful enlisted
    privatization.
        This year's budget signals yet another banner year for
    installations, with about $23 billion in MILCON and about $8
    billion in facilities sustainment, restoration, and
    modernization.
        At $23 billion, the MILCON program is very robust,
    especially when I compare it to the $8 billion to $9 billion
    levels we were receiving 10 years ago. Similarly, our
    sustainment budget this year is also more robust, as compared
    to 10 years ago.
        Although much remains to be done, we've made steady headway
    over the last decade, through two administrations, to improve
    the overall condition of our facilities inventory by using the
    facility sustainment model. It has given us a sound target by
    which to measure our sustainment budgets. As a consequence,
    we've been able to defend our requirements and increase our
    overall funding, in spite of significant competing demands.
        Recapitalization has been more challenging. We've moved
    away from believing a single recap rate expressed in years
    applied across myriad category types could provide a funding
    level that was rational and defendable, because it didn't work
    right.
        When I was with the Navy secretariat, I personally observed
    its inaccuracy as Hurricane Ivan hit Pensacola. The sudden
    infusion of restoration funds skewed the Navy's recap rate to a
    lower number than the targeted 67 years, but the condition of
    Navy facilities across the inventory did not improve. Because
    of this and other factors, I've directed my staff to revisit
    the facilities condition indices that the Federal agencies are
    mandated to include in their real property.
        My staff will work with DOD agencies to set up program
    guidelines for determining which facilities require priority
    for funding, reassessing how Q ratings are determined, and
    their frequency, and, most importantly, reestablishing how the
    Department uses master planning at the installation level and
    eventually in each of the overseas combatant command regions.
        In closing, Mr. Chairman, I sincerely thank you for this
    opportunity to highlight the Department's management of
    installation assets 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. We believe we're
    working on the right issues, and, while we cannot fix them
    overnight, we appreciate your continued support, and we look
    forward to working with you and this subcommittee to provide
    quality installations that our military forces and their
    families need and deserve.
        [The prepared statement of Mr. Arny follows:]
                        Prepared Statement by Wayne Arny
                                  introduction
        Chairman Bayh, Senator Burr, 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. Second, 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 servicemembers, 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 (MILCON) 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 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 the Department of Defense's (DOD) 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 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 servicemembers 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 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 end strength 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     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 and                      1,741           1,444
     Maintenance............................
    Chemical Demilitarization...............             134             147
    Family Housing Improvement Fund.........               1               3
    Energy Conservation Investment Program..              80              90
    Homeowners Assistance Program...........               5              23
                                             -------------------------------
      Total.................................          24,400          23,184
    ------------------------------------------------------------------------

        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. 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     Fiscal Year
                                               2009  Request   2010  Request
    ------------------------------------------------------------------------
    Sustainment (O&M-like) *................           7,482           7,799
    Restoration and Modernization (O&M-like            1,780           2,035
     plus) *................................
    Restoration and Modernization (MILCON)..           8,102           6,527
                                             -------------------------------
      Total SRM.............................          17,364          16,361
    ------------------------------------------------------------------------
    * Includes 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
    worldwide missions, the Department is improving its ability to contend
    with post-September 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 nontraditional 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 Congress. 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 2 years of the date the
    President transmitted the Commission's report to 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, TX,
    and Naval Air Station (NAS) Brunswick, ME, 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 health care 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, WA, to Fort Lewis, WA,
    and to transform the Medical Center at Keesler Air Force Base, MS, 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, TX,
    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, MD, 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, VA, 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 servicemembers and
    their families. Access to quality, affordable housing is a key factor
    affecting servicemember recruitment, retention, morale, and readiness.
    Through privatization and increases in housing allowances, DOD has made
    great strides in increasing servicemembers' 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, O&M
    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
    servicemembers 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 50 years. With privatization deal
    structures and an income stream in place, full revitalization will be
    completed within a 5- to 10-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 servicemembers 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 $18 million for the Army to
    construct 38 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 servicemembers. To date, the Army has added bachelor
    officer quarters and senior enlisted bachelor quarters to its existing
    family housing privatization projects at Fort Bragg, NC; Fort Stewart,
    GA; Fort Drum, NY; and Fort Irwin, CA. A fifth project is planned soon
    at Fort Bliss, TX. 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
    U.S.C. 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, VA, and a third project is
    under consideration at Jacksonville-Mayport, FL. 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 for Fiscal Year 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     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 7 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, NC; and buffering live-fire training ranges at Fort
    Carson, CO.
        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
    REPI 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 (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 U.S., 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 nongovernmental
    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 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
    DOD 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 5 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 decisionmaking.
        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 DOD. 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 Bayh. Thank you very much, Mr. Arny.
        Secretary Penn?

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

        Mr. Penn. Thank you. Chairman Bayh, Senator Burr, Senator
    Udall, I'm privileged to come before you today to discuss the
    Department of the Navy's installation efforts.
        Before I touch on a few highlights in the Department's
    overall facilities budget request, I'd like to take a moment to
    discuss the report released over this weekend related to past
    contaminated drinking water at Marine Corps Base Camp Lejeune,
    NC.
        It was the desire of this committee to evaluate the
    available scientific and medical evidence regarding
    associations between the prenatal, child, and adult exposure to
    drinking water contamination with trichloroethylene and
    tetrachloroethylene that resulted in the NDAA for Fiscal Year
    2007 requirement for the Navy to enter into an agreement with
    the National Academy of Sciences (NAS) to conduct a study.
        The National Research Council, which operates under the
    auspices of the NAS, concluded that the available scientific
    information does not provide sufficient basis for determining
    whether the population at Camp Lejeune has suffered adverse
    health effects as a result of exposure to contamination. It
    further concluded that research is unlikely to provide more
    definitive conclusions. The Department will thoroughly review
    and consider the Council's report, after which it will identify
    the next steps to take as it continues to work with the
    appropriate agencies, including the ATSDR.
        Finally, I want to underscore that, above all else, the
    long-term health effects and welfare of our extended Marine
    Corps family is our utmost concern. We will keep this committee
    apprised of the status as circumstances evolve.
        The Department of the Navy's fiscal year 2010 MILCON
    request of $3.8 billion 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 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
    had 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 investments money 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 Marine Corps 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've
    exhausted all land sale revenue. We've disposed of 93 percent
    of the prior BRAC properties, so there's not a lot 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 operation and maintenance
    costs.
        We have made significant progress in the past year in
    planning for the relocation of marines from Okinawa to Guam.
    The 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--
    fiscal year 2008 equivalent dollars--to complement our own
    fiscal year 2010 investment. We expect to see Japanese
    contributions deposited into our Treasury by July.
        Finally, sir, 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 personnel and their
    families.
        Thank you for your continued support and the opportunity to
    testify before you today.
        [The prepared statement of Mr. Penn follows:]
                      Prepared Statement by Hon. B.J. Penn
        Chairman Bayh, Senator Burr, and members of the subcommittee, I am
    pleased to appear before you today to provide an overview of the
    Department of Navy's (DoN) 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 resupply, 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.

        Our fiscal year 2010 request of $6.5 billion (which includes $433
    million for environmental programs) for Base Operating Support is only
    slightly greater than last year's request.
        The fiscal year 2010 military construction (MILCON) (Active plus
    Reserve) request of $3.8 billion is $674 million more than the fiscal
    year 2009 request. This growth in Department's MILCON 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. Thus, having virtually
    privatized all family housing located in the United States, at overseas
    and foreign locations where we continue to own housing we are investing
    in a ``steady state'' recapitalization effort to replace or renovate
    housing where needed.

        Our Base Realignment and Closure (BRAC) program consists of
    environmental cleanup and caretaker costs at prior BRAC locations, and
    implementation of BRAC 05 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 05 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 MILCON 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, WA;
            modifications to the P-8/MMA facility at Naval Air Station
            Jacksonville, FL; and the largest of the three projects at $227
            million--Pier 5 Replacement at Norfolk Naval Shipyard,
            Portsmouth, VA;
             $84 million to fund 11 airfield projects. Included
            among these projects are seven supporting the Joint Strike
            Fighter: six at Eglin AFB, FL and one at Edwards AFB, CA;
             $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, HI; a SERE school for SOCOM in Spokane, WA; and E-2D
            Trainer Facility at Naval Station, Norfolk, VA; and a flight
            simulator at NAS Pensacola, FL;
             $193 million to fund four ordnance related projects:
            the sixth of seven increments of the Limited Area Production
            and Storage Complex and the second of two increments of the
            waterfront security enclave fencing, both projects at Naval
            Submarine Base, Bangor, WA; constructs missile magazines at
            Naval Station Pearl Harbor, HI; and a torpedo exercise support
            building in Guam;
             $95 million to construct three enlisted training
            barracks, one each in Newport, RI; Eglin AFB and NAS Pensacola,
            FL;
             $126 million to fund four waterfront operations
            projects, which include dredging the entrance to the turning
            basin at Naval Station, Mayport, FL, 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, HI;
             $22 million to build base support facilities: Naval
            Construction Division Operations Facility and a centralized
            public works facility at Naval Base, Point Loma, CA; 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 MILCON 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, CA, and Camp
            Lejeune, NC, 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, CA,
            the Basic School at Quantico, VA, 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, VA;
             $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,
            NC, and Camp Pendleton, CA. Logistics operations will be
            enhanced with a new Port Operations facility at Marine Corps
            Support Facility, Blount Island, FL;
             $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, NC, and Camp Pendleton, CA. A new range will be
            provided in Hawaii.
             $122 million to construct maintenance facilities at
            Twentynine Palms, CA; Yuma, AZ; Beaufort, SC; and New River and
            Camp Lejeune, NC;
             $41 million for the construction of storage facilities
            at Twentynine Palms and Camp Pendleton, CA, and Cherry Point,
            NC; 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 MILCON appropriation request is
    $64 million, including $2 million for planning and design efforts, to
    construct three Reserve centers--one each at Luke AFB, AZ; Alameda, CA;
    and Joliet, IL. These funds will also be used to construct a C-40
    Hangar at Naval Air Station Oceana, Virginia Beach, VA; a parachute and
    survival equipment center in San Antonio, TX, and vehicle maintenance
    facility in Charleston, SC.
    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.
                             facilities management
    Facilities Sustainment, Restoration and Modernization (SRM)

    ------------------------------------------------------------------------
                                                     Fiscal Years
             Percent Sustainment         -----------------------------------
                                             2008        2009        2010
    ------------------------------------------------------------------------
    USN Budget..........................          82          90          93
    USN Actual/Plan.....................          83          90
    USMC Budget.........................          89          90          91
    USMC Actual/Plan....................         145          90
    ------------------------------------------------------------------------

        The Department of Defense uses a Sustainment model to calculate
    life cycle facility maintenance and repair costs. These models use
    industry-wide standard costs for various types of buildings and
    geographic areas and are updated annually. Sustainment funds in the
    Operation and Maintenance accounts are used to maintain facilities in
    their current condition. The funds also pay for preventative
    maintenance, emergency responses for minor repairs, and major repairs
    or replacement of facility components (e.g. roofs, heating and cooling
    systems). For Navy, funding includes Joint Basing investments which
    requirements have yet to transfer. Once they do, the rate will revert
    to 90 percent . . . k.
        Restoration and modernization (R&M) provides major upgrades of our
    facilities using MILCON, Operation and Maintenance, Navy Working
    Capital Fund, and BRAC, as applicable. Although the Office of the
    Secretary of Defense (OSD) fielded a new Facility Modernization Model
    to replace the previous ``67-year Recapitalization Metric'' that, too,
    has been deemed too amorphous a model and another is under development
    based on ``Quality'' or ``Q'' ratings. Nonetheless, in fiscal year
    2010, the Department of Navy is investing $2.27 billion in R&M funding.
    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
    MILCON 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 Reinvestment
    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 MILCON 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,
    $30 million 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.).
    Naval Safety
        The Department of the Navy strives to be a world class safety
    organization. In fiscal year 2008 we achieved our lowest rate ever
    recorded for total Class A Operational Mishaps.\1\ As of 24 April 2009,
    if our current pace continues, we would close out fiscal year 2009 with
    our lowest mishap rate ever recorded in six of the seven combined Navy
    and Marine Corps mishap categories that we track.
    ---------------------------------------------------------------------------
        \1\ A Class A mishap is one where the total cost of damages to
    Government and other property is one million dollars or more, or a DOD
    aircraft is destroyed, or an injury and/or occupational illness results
    in a fatality or permanent total disability. An operational mishap
    excludes private motor vehicle and off duty recreational mishaps.
    Mishaps exclude losses from direct enemy action.
    ---------------------------------------------------------------------------
        The Department is working to reduce fatalities and injuries
    resulting motorcycle and automobile mishaps on the Nations highways, to
    implement a culture across the Navy and Marine Corps that encourages
    openly sharing experiences and lessons learned. In addition to active
    involvement by all levels of leadership, we're also developing a
    corporate safety risk management IT system that will allow improved
    collection of safety data and provide analysis, metrics and lessons
    learned across the enterprise, as well as provide an IT tool to manage
    local safety and health programs.
        We have embraced the Occupational Safety and Health Administration
    (OSHA) Voluntary Protection Program (VPP), which fosters a cooperative
    relationship between management, labor, and OSHA to improve workplace
    safety. DoN has achieved ``Star'' status, OSHA's highest level of
    achievement, at 10 sites representing the majority of the VPP star
    sites in DOD. The Navy activities include all four Naval Shipyards, our
    largest industrial facilities. Our other Navy VPP Star sites include:
    the Navy Submarine Base in Kings Bay Georgia; Naval Air Station, Key
    West, Florida; Intermediate Maintenance Facility Puget Sound,
    Silverdale, WA; Weapon Station Charleston, SC, and Naval Hospital
    Corpus Christi, TX. Our first Marine Corps VPP Star Site is Logistics
    Base, Barstow, CA.
    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 servicemembers, 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 MILCON 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. 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 10 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 OSD,
            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 7 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
            MILCON; 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 8 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, NC, and Twentynine Palms, and Camp Pendleton, CA. 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, U.S.C. 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 7 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, FL, area and
    additional phases at San Diego and Hampton Roads using the public/
    private entities previously established.
                                  environment
    Environmental Management Systems
        The Department of the Navy is committed to improving mission
    performance through better environmental program management. An
    Environmental Management System (EMS) strengthens our management
    effectiveness and provides a framework for a continual improvement
    process. When properly implemented, EMS creates awareness and
    identifies environmental aspects and impacts of operations. It
    particularly highlights and prioritizes risks, promotes pollution
    prevention, incorporates best management practices, minimizes Notices
    of Violation and Non-Compliance through proactive compliance
    management, and tracks progress towards established environmental
    goals.
        The Department has made great strides implementing EMS across the
    Navy and Marine Corps installations world-wide. The Marine Corps
    achieved fully conforming EMS status in spring 2008, a year and a half
    ahead of the required implementation schedule. Navy has made tremendous
    progress as well. It is well positioned to implement EMS at all major
    installations in 2009. The Department is now planning for EMS
    sustainment and potential future enhancements for fiscal year 2010 and
    beyond to ensure maximum benefit from EMS.
    Natural Resources Conservation
        The Department of the Navy's natural resources conservation program
    continues to excel in the stewardship of our natural environment while
    fully supporting mission requirements. The basis of our program centers
    on development and implementation of Integrated Natural Resources
    Management Plans (INRMPs). These plans, currently in place at 88 DoN
    installations with significant natural resources, integrate all facets
    of natural resources management with the installation's operational and
    training requirements. Further, since these plans provide conservation
    benefits to species and their habitats, our installations are eligible
    for exclusion from formal critical habitat designation, eliminating a
    regulatory constraint and providing the needed flexibility to support
    the military mission and maximize the use of our training areas.
        Since the Endangered Species Act, section 4(a)(3)(B)(i), was
    amended in the NDAA for Fiscal Year 2004, the U.S. Fish & Wildlife
    Service and the National Marine Fisheries Service determined the
    effectiveness of DoN INRMPs outweighed the necessity to make 32
    Critical Habitat designations on DoN installations.
        DoN has also developed and implemented a web-based tool for
    measuring the effectiveness of Navy and Marine Corps Natural Resources
    Programs and overall ecosystem health as it relates to mission
    sustainability. The tool ensures leadership is making the investments
    necessary to protect natural resources, as well as the mission.
    Cultural Resources Program
        Cultural resources under the Department of Navy's stewardship
    includes infrastructure, ships, and objects of our Navy heritage;
    vestiges of our Colonial past; and Native American archaeology and
    resources. We take great pride in our heritage, and the many cultural
    resources on our installations serve as reminders of the long and
    distinguished course we have charted. The clear objective of the Navy's
    historic preservation program is to balance the Navy's current and
    future mission needs and our stewardship responsibility to the American
    taxpayer with our desires to preserve our cultural heritage for future
    generations. The primary mechanism to achieve these goals is an
    Integrated Cultural Resources Management Plan (ICRMP), which remains
    the key mechanism for gathering information about an installation's
    historic inventory, assess potential use/reuse candidates and ensure
    that our installation planners and cultural resources managers are
    working closely together.
        Our installations are filled with examples of historic preservation
    supporting and reinforcing the mission of a facility. We take very
    seriously our statutory obligations regarding historic properties. We
    work with OSD, the other Services, and other agencies such as The
    Advisory Council on Historic Preservation and State Historic
    Preservation Officers, tribal governments, and interested members of
    the public, to develop effective and efficient ways to balance our
    stewardship and fiscal responsibilities as part of our Shore
    Installation Management program.
        Historic buildings are a valuable part of our portfolio: Navy has
    been able to rehabilitate historic buildings in a way that supports
    mission requirements as effectively as newer buildings, with the added
    benefit of preserving historic property. The Washington Navy Yard (WNY)
    is an excellent example of this on a large scale. WNY is a showplace
    for adaptive use of historic properties, including ``green''
    renovations that reduce energy consumption, and the yard has served as
    the catalyst for a redevelopment of the M Street corridor that
    continues today. Using a combination of rehabilitated historic
    buildings and carefully designed new construction, we have been able to
    provide high quality work space for thousands of Navy employees while
    preserving an important historic district. From a practical and
    fiduciary perspective, the best opportunity to retain a historic
    building is to keep it in current mission use, appropriately renovated
    and maintained.
    Installation Restoration Program (IRP)
        The DoN continues to make significant progress remediating past
    contaminants. As of the end of fiscal year 2008, the Department has
    completed cleanup or has remedies in place at 83 percent of our 3,723
    contaminated sites at our active installations. We remain on track to
    have remedies in place or responses completed by 2014. The execution of
    the program follows a cyclical pattern as the internal DOD metrics are
    accomplished. Fiscal year 2007 saw a major push and achievement of many
    ``high risk'' sites meeting their cleanup milestones. The next
    milestone is for ``medium risk'' sites to achieve this milestone by end
    of fiscal year 2011. The fiscal year 2009 and fiscal year 2010
    resources are therefore focused on investigating the medium risk sites,
    evaluating cleanup alternatives, and selecting remedies. Fiscal year
    2011 will see another large spike in the number of sites achieving the
    cleanup milestone. The same pattern will occur for the ``low risk''
    sites from fiscal year 2012 through fiscal year 2014.
    Munitions Response Program (MRP)
        The DoN is proceeding with investigations and cleanup of Munitions
    and Explosives of Concern and Munitions Constituents at all Navy and
    Marine Corps locations other than operational ranges. The major focus
    through fiscal year 2010 is completing site inspections at all 257 MRP
    sites. Additional funding is addressing high priority sites at Vieques
    and Jackson Park Housing. Based on the results of the site inspections
    and the site prioritization protocol results, DoN will sequence more
    complete remedial investigations and cleanups starting in fiscal year
    2011. DoN plans to achieve cleanup or remedies in place at all MRP
    sites by fiscal year 2020.
    Operational Range Assessments
        Both the Navy and the Marine Corps completed environmental
    operational range assessments on all of their land-based operational
    range complexes by the end of fiscal year 2008. To date, neither the
    Navy nor the Marine Corps has had a release or threat of a release from
    an operational range to an off-range area that presents an unacceptable
    risk to human health and the environment.
    Navy Marine Mammals/Sonar R&D investments
        The Navy is taking a number of proactive steps to protect marine
    mammals from anthropogenic sound in the water. The Navy continues to
    make long-term investments in marine mammal research by supporting
    numerous universities, institutions, and technology businesses
    worldwide. Their studies will help answer critical questions in marine
    mammal demographics; establish criteria and thresholds to assess the
    effects of naval activities; develop effective mitigation and
    monitoring methods to lessen any potential effects; and continue to
    refine characteristics of the sound field.
    Marine Mammals/Military Readiness Activities
        Over the last 8 years, the Navy has been implementing its program
    of updating environmental documents on its major maritime range
    complexes and operating areas. As part of this effort, in 2008 and
    early 2009, the Navy signed Records of Decision for environmental
    impact statements (EISs) for the Hawaii Range Complex, the Southern
    California Range Complex, and the Atlantic Fleet Active Sonar Training
    areas. The U.S. Navy conducts the majority of its training involving
    the use of mid-frequency active sonar on these range complexes. As a
    result of completing these three EIS/OEIS and obtaining the associated
    environmental compliance documentation under the Endangered Species Act
    (ESA) and Marine Mammal Protection Act (MMPA), the Navy no longer
    needed an MMPA National Defense Exemption. Similar documentation for
    other range complexes will be completed in 2009 and 2010.
        Through the MMPA and ESA authorization processes, the National
    Marine Fisheries Service (NMFS) concluded that the proposed military
    readiness activities would have a negligible impact to marine mammals
    and will not jeopardize the continued existence of endangered marine
    mammal species in Hawaii, Southern California and off the East and Gulf
    Coasts of the United States. In this public process, NMFS reviewed and
    validated the 29 specific mitigation measures required by the 2-year
    January 2007 MMPA National Defense Exemption. Those measures enabled
    the Navy to employ MFA sonar in a manner that maintained testing and
    training fidelity during critical MFA sonar testing and training while
    providing environmentally sound protection to marine mammals.
    Importantly, the Navy has continued unilaterally to require these
    mitigation measures for those areas not yet covered by environmental
    compliance documentation.

                         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 fiscal year 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 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. OSD 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.\2\ Eighteen fiscal year
    2009 projects worth $256 million are on track to award this year. Some
    noteworthy projects include:
    ---------------------------------------------------------------------------
        \2\ 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, 6 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, ME, and consolidate the East Coast
    maritime patrol operations in Jacksonville, FL. 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 05 are
    substantially less than in previous rounds of BRAC. We have spent $148
    million in cleanup at BRAC 05 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 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 Bayh. Thank you, Secretary Penn. We appreciate your
    service very much.
        Mr. Calcara, I think we'll turn to you next, and then Ms.
    Ferguson.

     STATEMENT OF JOSEPH F. CALCARA, DEPUTY ASSISTANT SECRETARY OF
                  THE ARMY, INSTALLATIONS AND HOUSING

        Mr. Calcara. Thank you, Mr. Chairman. Good afternoon,
    Senator Burr and other members. I think Senator Udall stepped
    out.
        It's my distinct honor to present the fiscal year 2010 Army
    budget, which--in what has been an extremely challenging and
    dynamic year for us all, working with a compressed schedule. I
    really appreciate the tremendous support your staff and you
    have provided us over the years, and we look forward to
    continuing to work with you.
        Our budget is about $10 billion in the construction
    investment arena across fiscal year 2010. About $4.2 billion of
    it is tied to BRAC, which will allow us to complete, on time,
    what has been the largest base closure, for any Service, ever
    undertaken. The Army's BRAC 5 round is bigger than all four
    previous rounds combined, and we are on track to complete it,
    with this funding, by the deadline. There's about a billion
    dollars in contingency funding in there for our Operation
    Enduring Freedom (OEF) in Afghanistan. The rest of the money is
    tied to MILCON. As I know the question of the hour for the Army
    is, with the recent decision by the Secretary of Defense on 45
    brigades versus 48, how does that affect our budget?
        So, let me just address the top-line issues. You have my
    written statement for the record. I would request that you make
    it part of the record.
        Senator Bayh. So ordered.
        Mr. Calcara. Inside the MILCON request, including the
    Guard, the Reserve, housing, and MILCON, we have about $1.47
    billion tied to the brigade Grow the Army Initiative. About
    half of those dollars are tied to combat support and combat
    service support functions that are not affected by the brigade
    configuration. The population will be there. Those requirements
    are there. We need those projects.
        Of the remaining half of the $1.47 billion, about half of
    that is tied to housing and our MILCON for the Reserves. So,
    that leaves us with about half of half of half, or a quarter,
    of the $1.47 billion that we needed to revisit for prudent
    investment decisionmaking.
        Now, we met with your staff--I think it was last week--and
    we went through our plan. We looked at those dollars and have
    looked at requirements that still exist at Fort Carson, Fort
    Stewart, and Fort Bliss. Our recommendation is to take those
    dollars, in the case of Fort Stewart, for example, and buy out
    of relocatable facilities. We have a one-for-one match on
    brigade configuration facility category code. It will allow us
    to reduce the number of relocatables that we have left to buy
    out across the FYDP and bring our percentages up, in terms of
    being out of relocatable facilities, something you've asked us
    to do. We think it's the right thing to do.
        In the case of Fort Carson, we've looked at that location,
    and there we have chronic shortages. When the original brigades
    were stood up, the facilities were undersized, but, as we were
    on a critical timeline to get to 48, we allowed them to go as
    is. The dollars in the program in fiscal year 2010 will go back
    to Fort Carson and buy out of those substandard and capacity
    shortages that exist there. Again, we have population--brigade-
    centric population that marries up to those requirements.
        In the case of Fort Bliss, we have two brigades there--a
    fires brigade and another brigade--who currently have shortages
    in facilities. Our plan would be to continue with the
    investment there, which will allow us to efficiently and
    effectively contract at a lower cost structure than if we
    deferred it, pending the QDR decision. In all likelihood, at
    least one, or both, brigades coming back from Europe will wind
    up at Fort Bliss. That will be that much facility that we will
    not have to program in the out years if we allow those
    investments to continue.
        Otherwise, it has been a challenging year for us, working
    this. Again, I do appreciate your support, and I look forward
    to your questions.
        Thank you.
        [The prepared statement of Mr. Calcara follows:]
                    Prepared Statement by Joseph F. Calcara
                                  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 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, 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)....                 N/A        $426,491,000        $426,491,000
    Military Construction Army Reserve (MCAR)...........                 N/A        $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
    Base Realignment and Closure 95 (BCA)...............         $98,723,000         $98,723,000         $98,723,000
    Base Realignment and Closure 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
    ----------------------------------------------------------------------------------------------------------------

        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 Base Realignment and
    Closure (BRAC) appropriations and associated new authorizations.
    Army Modular Force
        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
        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 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
        The Global Defense Posture Realignment (GDPR) 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, NM, 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
        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 (AMF). 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 4
    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 5 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 years 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 warfighters,
    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
    Military Construction, Army
        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 U.S. 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, FL. In addition, we are requesting the
    fourth and final increment of funding, $102 million, for the Brigade
    Complex at Fort Lewis, WA. 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/AMF, 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 11 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, KY; 176 homes
    at Fort Wainwright, AK; 144 homes at Fort Polk, LA; 90 homes at Fort
    Irwin, CA; and, 78 homes at Fort Sill, OK. The improvements program
    also provides $11.9 million for equity contributions for 11 homes at
    Fort Bragg, NC, and 8 homes at Fort Eustis, VA, 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, AK, 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 U.S. 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 3 to 10 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 subaccounts: management,
    services, furnishings, and a small miscellaneous account. All
    operations subaccounts are considered ``must pay accounts'' based on
    actual bills that must be paid to manage and operate family housing.
        Utilities ($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) servicemembers 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 $23.225
    million. Total program estimate for fiscal year 2010, excluding ARRA
    expansion, is $41.98 million 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 $3.04 billion in funding for Sustainment, Restoration, and
    Modernization (S/RM) and $8.91 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 unprogrammed single soldier Basic Allowance for Housing,
    maximize barracks utilization, and reallocate soldier time away from
    non-warfighting 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 9 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.

        Senator Bayh. Thank you, Mr. Calcara.
        Ms. Ferguson?

     STATEMENT OF KATHLEEN I. FERGUSON, DEPUTY ASSISTANT SECRETARY
                    OF THE AIR FORCE, INSTALLATIONS

        Ms. Ferguson. Thank you, Mr. Chairman, Senator Burr. On
    behalf of America's airmen, it's my pleasure to be here today.
        I'd like to begin by thanking the committee for its
    continued support of your Air Force and the thousands of
    dedicated and brave airmen and their families serving our great
    Nation around the globe.
        Today, more than 27,000 airmen are deployed in support of
    ongoing OEF and Operation Iraqi Freedom, daily demonstrating
    their importance in support of joint combat operations. Within
    the Secretariat for Installations, Environment, and Logistics,
    we fully appreciate the efforts--we fully appreciate the impact
    our efforts have in support of these airmen, and how it affects
    their ability to positively influence our Air Force's
    warfighting abilities and capacity to counter hostile threats.
        MILCON, family housing, and BRAC programs form the
    foundation of our installation structure. Our installations
    serve as the primary 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 weapons
    systems, we recognize that we cannot lose focus on critical Air
    Force infrastructure programs. Our fiscal year 2010 President's
    budget request of $4.9 billion for MILCON, family housing,
    BRAC, and facility maintenance is a reduction from our 2009
    request of $5.2 billion. We intend to mitigate potential
    shortfalls in MILCON and facilities 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.
        One ongoing modernization effort within the Air Force that
    I'd like to mention is the Joint Strike Fighter (JSF). At the
    direction of the Secretary of the Air Force, we are taking a
    deliberate Air Force enterprise-wide look at all installations
    to bed down the JSF. This review will provide an open,
    transparent, repeatable, and defendable process to ensure the
    Secretary has appropriate and accurate information to make all
    JSF strategic basing decisions.
        In regards to military family housing, our master plan
    details our housing MILCON, operations and maintenance (O&M),
    and privatization efforts. Since last spring, we 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 almost 3,000 units under
    construction overseas.
        Our 2010 budget request for housing is just over $567
    million. The Air Force 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 O&M, utilities, and leases for the family housing program.
        BRAC 2005 impacts more than 120 Air Force installations.
    Unlike the last round of BRAC, where 82 percent of
    implementation actions affected the active Air Force, in BRAC
    2005 a full 78 percent of implementation actions affect the Air
    National Guard and 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
    MILCON--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'd like to
    emphasize, the Air Force 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
    effort, now entering its third year, continues to produce
    efficiencies and cost savings that enhance support for the
    warfighter, reduce the total cost of installation ownership,
    and free resources for the recapitalization of our aging Air
    Force weapons 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.
        Before I close, I'd like to highlight one additional area
    of importance to both the committee and the Air Force, and that
    area is the Air Force's stewardship of energy. 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 towards reducing our energy footprint and increasing our
    use of cleaner energy alternatives.
        Our new infrastructure energy strategy is founded on four
    pillars that are designed to improve current infrastructure,
    improve future infrastructure, expand renewables, and 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 are seeing potential
    indicators that our efficiency strategy is providing return on
    investment. In fact, between the 2003 baseline year and fiscal
    year 2008, the Air Force decreased energy intensity by 17.8
    percent.
        Mr. Chairman and Senator Burr, this concludes my remarks.
    Thank you and the committee again for your continued support
    for our airmen and their families. I look forward to your
    questions.
        [The prepared statement of Ms. Ferguson follows:]
                   Prepared Statement by Kathleen I. Ferguson
                                  introduction
        More than 27,000 airmen are currently deployed in support of
    Operations Enduring and Iraqi Freedom, 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, MFH, 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 (ICBMs),
    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, ND; FE Warren Air Force Base, WY; and Clear Air
    Station, AK. 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. By the beginning of fiscal year 2010 we will
    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 MFH 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 (EMS) 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 (DOD) 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, HI. The beddown of the F-35 also continues to be
    a priority, with eight projects supporting actions at Nellis Air Force
    Base, NV, and Eglin Air Force Base, FL.
        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, NM, two
    research facilities at Wright Patterson Air Force Base, OH, and
    upgrading electrical infrastructure at Hurlburt Field, FL. 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, FL. 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. Between the fiscal year 2003 baseline year and fiscal
    year 2008, the Air Force decreased energy intensity by 17.8 percent.
    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,
    with Air Force-wide water consumption decreasing 1.3 billion gallons
    from fiscal year 2007 to fiscal year 2008.
        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, and saving approximately $1 million
    per year. Through a congressional appropriation, F.E. Warren Air Force
    Base, WY, 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 and 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, NE. 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, FL, closing Kulis Air Guard Station in Alaska, or
    transferring Pope Air Force Base, NC, to the Army, the Air Force
    community as a whole--Active, Guard, and 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 MILCON projects;
    approximately $2.6 billion. Operations and Maintenance (O&M)
    expenditures closely follow at $926 million. This includes expenditures
    for civilian pay and moving expenses, supplies, equipment, travel, etc.
    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 $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 Under Secretary 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 decisionmaking
    processes and the appropriate property acquisition, management, and
    disposal tools.
        Even though the BRAC 2005 round did not significantly 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 2 (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.
    Further, the Air Force has removed nearly 2,900 acres from the National
    Priorities List at the former Griffiss Air Force Base in Rome, NY. This
    milestone marks a tremendous accomplishment for the Air Force's cleanup
    program. It also highlights the strong professional partnership that
    exists between the Air Force, the EPA, New York State Department of
    Environmental Conservation and the Griffiss Local Development
    Corporation, all of whom were indeed instrumental in promoting the
    development and reuse of the former Griffiss AFB property--a trend we
    hope to see maintained across all of our communities. This is a major
    milestone in the restoration program and provides opportunities for new
    economic growth at the former base.
        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 27,000 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 and our
    Prime Base Engineer Emergency Force 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, FL, 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 Bayh. Thank you, Ms. Ferguson.
        We're going to have 5-minute rounds. So, you'll let me know
    when my time is expired? Great.
        Mr. Arny, I'd like to start with you. Is there any reason
    to believe that the Services won't complete the BRAC process on
    time? You feel pretty good about how things are going?
        Mr. Arny. Yes, sir, we do. Yes, we've looked at it very
    closely, and we will meet the deadline. This question has been
    asked at each of the hearings we've been in, and all the
    Services agree.
        Senator Bayh. What's your understanding of where we stand
    on construction or missile defense sites in the Czech Republic
    and Poland? We had some testimony, just yesterday, from some
    officials involved in this area, and it appears that things are
    changing. But, we're being asked to appropriate some money for
    some sites that may be somewhat in flux. What's your
    understanding about that situation?
        Mr. Arny. The Department is currently conducting a
    Ballistic Missile Defense Review, and we think that'll review
    the rationale and requirements for the third site and explore
    alternatives that may exist. No final decisions have been made
    on that. From a policy perspective, we follow the lead of our
    policy----
        Senator Bayh. I understand. From our perspective, since no
    final decisions have been made, how are we supposed to
    appropriate the money?
        Mr. Arny. Sir, I can just say that we believe that the
    authorization and appropriations justified that there'll be
    sufficient funds to continue the program. We had a review of
    the Missile Defense Agency program ourselves, within house and
    in MILCON, and we think there's enough flexibility to handle
    the contingencies.
        Senator Bayh. You can understand why we'd ask the question.
        Mr. Arny. Yes, sir, it's why I have an answer right here.
    [Laughter.]
        Senator Bayh. Very good. Let me ask you one that you may
    not be prepared for, then. By the way, that's good staff work.
        I sit on the Select Committee on Intelligence and the
    Energy and Natural Resources Committee, and we've been briefed
    multiple times, as Senator Burr would know, recently about the
    vulnerability to cyber attack, possibly terrorist attack,
    focused on the Nation's power grid. In particular, some of our
    defense sites are vulnerable. If you wanted to attack a defense
    site, in some cases, you wouldn't strike it directly, you'd
    strike the civilian power upon which the site relies. Many of
    our facilities only have a few days' backup of kerosene for
    some reserve generators they have. So, it's a real
    vulnerability for us.
        What's going on to try and build in some redundant capacity
    so that, if such an event took place, some of our important DOD
    facilities wouldn't be brought down in a matter of days?
        Mr. Arny. Yes, sir.
        Senator Bayh. Because, as I understand it, if you take out
    some of these transformers and these--the power stations, it
    could be months before they get back online.
        Mr. Arny. We have looked at that, and we are continuing to
    look at it. There is a great debate going on within the
    Department. Some people have advocated islanding, where we
    could be completely self-sustained. If you recall, in the last
    decade, we were looking at privatizing our utilities. So, from
    my perspective it's a real approach avoidance. On our bases, we
    try to make sure that our critical facilities have sufficient
    backup for a long period of time. We're also looking at ways
    that we can benefit from power sources near us. As you've seen,
    we're putting photovoltaic at Las Vegas.
        Senator Bayh. Maybe some geothermal potential at some of
    the sites, that kind of thing?
        Mr. Arny. Exactly. You have to be careful how you work
    around the law on that. When the Navy put in 225 megawatts of
    geothermal at China Lake, back in the 1970s and 1980s, the law
    did not permit us to take any of that power. We're now
    developing about 30 megawatts at NAS Fallon. But, again, the
    way the procurement laws are written, it was much more
    beneficial for us to sell that power to the outside and take a
    cut on our electric grid.
        Senator Bayh. This is a matter of national security, so if
    you need some changes in the law to help us address this
    threat, please let us know what needs to be done.
        I'm in favor of saving money wherever possible, being as
    efficient as possible. This is actually an area where some
    redundancy, some duplicative capacity may be in order to
    protect defense sites, because if we're reliant on the civilian
    power grid, and that's vulnerable to attack, which we've been
    informed it is fairly vulnerable, then we have to anticipate
    that sort of thing. So, you let us know what needs to be done
    to help you address the situation.
        Mr. Arny. Absolutely. It's definitely an issue we're
    looking at. We don't want to be in the position, in my
    perspective, of you're sitting on the ridge in San Diego,
    overlooking a city that's black, and there on the other side of
    the Bay is Coronado, all lit up like a Christmas tree. That
    would last for about 24 hours before we would have to be
    dumping power to the outside. So, we are definitely considering
    it. We're trying to figure what the middle way is. If we do
    need any changes in the law, we'll come to you.
        Senator Bayh. The last thing I'll say, and then turn to the
    ranking member, is--there was a study done about some of these
    vulnerabilities that, unfortunately, found its way into the
    press, and some of the chatter suggests that the bad guys
    noticed that. So, this is not just hypothetical.
        Mr. Arny. Yes, sir.
        Senator Bayh. Senator Burr.
        Senator Burr. Secretary Penn, I think it's safe to say I'm
    deeply concerned with some of the conclusions that the NAS
    review came to as it related to Camp Lejeune, and specifically
    the water contamination.
        The report lists 14 disease and health conditions it
    concludes have limited or suggestive evidence of an association
    with human exposure to the chemicals identified in Camp
    Lejeune's water system.
        What is the Navy going to do to work with the scientific
    community to collect the additional information for former
    residents who are experiencing some adverse health conditions?
        Mr. Penn. Sir, after a thorough review and consideration of
    the report, the Marine Corps, who's responsible, will identify
    the next steps to take as it continues to work with the
    appropriate agencies, constituents, and potentially affected
    former residents. Thus far, we have over 137,000 former
    residents registered on our pipeline. We get a report, weekly,
    on the number of people that may have been exposed. We have
    over 43,000 phone calls coming in to the call center since
    then. We're not going to let our folks down.
        Senator Burr. I appreciate your answer, and I think what
    you read was the same thing you read in your opening statement.
    The potential population affected is 500,000. We've tracked
    down 137,000. The report recommends--and I want to quote from
    it, ``Policy changes or administrative actions that would help
    resolve the controversy should proceed in parallel with any
    current or future scientific studies.''
        So, what are the Navy's ideas about how it can move towards
    a resolution for the Navy and for former residents? The report
    said, ``Don't stop,'' and ``have a parallel effort to figure
    out how you move forward.'' When will we have that?
        Mr. Penn. I don't know exactly when we'll have it. I know
    the Marines are looking at it, as we speak.
        Senator Burr. Mr. Secretary, how long have we been looking
    at this?
        Mr. Penn. About 7 years, as I recall.
        Senator Burr. I think it's more like 12.
        Mr. Penn. Since I've been here 7 years.
        Senator Burr. It's growing hair and it smells. My hope is
    that we're going to find some path that we can confidently tell
    people we're going to pursue. I look forward to working with
    you on that.
        Mr. Secretary, let me also ask you what the status of the
    EIS is for the outlying landing field for East Coast Navy and
    Marines.
        Mr. Penn. The EPA directed us to include the F-35 in our
    EIS analysis, so that will probably add a year to the study.
        Senator Burr. What do you intend to do with the land that
    was purchased in Washington County?
        Mr. Penn. We have been trying to return the land to the
    individual we purchased it from, and we're in the process of
    trying to get some laws changed so we can do that.
        We cannot just go back to them and say, ``Okay, we no
    longer need your land. Here's your money back.'' We cannot do
    that.
        Senator Burr. Are you finding the public receptive to that?
        Mr. Penn. Yes, sir.
        Senator Burr. Okay.
        Mr. Calcara, the Army's recently completed transactions
    with local private partners to construct unaccompanied officer
    and senior enlisted barracks at Fort Bragg, Fort Stewart, and
    three other locations. From initial reports, these townhouse-
    style complexes seem to be a raging success.
        What are the pros and cons to using private developers,
    similar to housing privatization, to build and maintain Army
    barracks for junior enlisted personnel?
        Mr. Calcara. It is a rousing success. In fact, earlier
    today I met with the Residential Communities Initiative (RCI)
    partners in our semiannual meeting, and we are looking at doing
    it in other locations. The biggest issue with moving down to
    the lower ranks, obviously, is there is less cash flow to work
    with at the E1 to E4 level. The other issue that we have is, as
    we start looking at these projects in areas where there isn't a
    secondary market, the underwriters are asking for us to put in
    additional guarantees on occupancy, to forward-finance 1 year's
    worth of debt service, and some other controls, to offset what
    they perceive as liquidity risk. When you start adding those
    pieces into the transaction, we start bumping up against the
    financial controls under the RCI program.
        Senator Burr. Does it make economic sense over the life
    cycle of the barracks?
        Mr. Calcara. It does, but we have to be able to meet the
    statutory test of no more than 33 percent cash investment in
    the transaction----
        Mr. Arny. Senator Burr, if I could add on that. We had
    similar problems with family housing privatization when we
    started. We did smaller projects, and, as it because more
    successful and our personnel commands got used to it, we then
    began to expand to where the Services--Navy and--for instance,
    I think, start first--where we'd do major regions. Both my sons
    are at Lemoore, and I, frankly, never thought we'd ever
    privatize Lemoore, because the secondary market around it is--
    there isn't--very little. But, when you put that together with
    all of San Diego, that gives the bankers and the developers
    confidence that if they have shortages at Lemoore, they'll be
    able to make it up in the San Diego area. So, there are a lot
    of things we're doing. It's the right way to go.
        Senator Burr. My time's run out, but the Chair has allowed
    me to ask another question because it dovetails in this.
        Mr. Calcara, I have a question about the contracts used by
    the Army to manage housing privatization transactions involving
    partnerships. I read the testimony from last year, when
    Secretary Eastin stated that the Army's portfolio in asset
    management programs was strong and proactive. The overwhelming
    majority of the Army's housing inventories are now privatized
    and under the management of the partnership.
        DOD efforts over the past 10 years to increase the
    servicemembers' base allowance for housing has resulted in
    sizable reserves growing in housing privatization reserves
    accounts, which can be used to accelerate renovation and
    recapitalization activities. Eventually, though, the housing
    inventories for each transaction will reach a point of optimal
    performance, as measured by the occupancy rates, and reserve
    funds will still be growing. Can you provide your assessment of
    the current management practices used by the Army for housing
    privatization?
        Mr. Calcara. In terms of managing the reserve accounts, we
    are still in the development periods on virtually all of our
    projects. I think there is one project that we have finished
    the development period. So, what you're referring to, in terms
    of capital-reserves building, really doesn't occur until we get
    out of the development period, because we continually reinvest
    the dollars into the construction plan.
        I can tell you we are basically doing well in virtually
    every location.
        Senator Burr. Would you say you need to change the methods
    or process used by the Army to manage these partnerships?
        Mr. Calcara. I don't see a need to change it. I think what
    we are talking about, you may be hearing about, is the role of
    our consultants in supporting our transactions and oversight.
    They're taking a bigger role in government oversight on the
    transactions and using our consultants more in a deliverable-
    based, targeted approach, as opposed to a portfolio-wide
    application. It's not going to change what they're doing for
    us, it's just going to refine the way they do it for us.
        Senator Burr. I appreciate your answers. I would only say
    that, everywhere I've looked, this has been an incredibly
    successful program, everybody who's testified; more
    importantly, the folks who occupy it--probably to do a program
    like this in the most difficult place, on a base. I would only
    caution you, sometimes a little tweak here and a little tweak
    there don't come to the same outcome. You got something that
    works; stick with the model. If it isn't broke, don't fix it.
        Thank you.
        Mr. Arny. But, again, sir, that model grew. I looked back
    to the history of it before I got here, and we were doing
    single bases; in some cases, the Air Force was doing partial
    bases. As we got more experienced service-wide, all three
    Services, and including the Marine Corps, as well, we've
    expanded to larger projects. You're right, it's been a success,
    and we don't want to break it.
        Senator Burr. Thank you.
        Senator Bayh. Thank you, Senator.
        Senator Udall.
        Senator Udall. Thank you, Mr. Chairman.
        Mr. Calcara, if I could address the issue of the reduction
    of brigades under the President's budget--you're well aware of
    it; I think we all are--45 brigades now, out of an initial plan
    to have 48. It's three installations, including Fort Carson in
    my home State, are now left short of a brigade they've been
    planning for. I think you know, the State of Colorado, Colorado
    Springs community and our congressional delegation fought hard
    to get one of the Grow the Army brigades to be based at Fort
    Carson. The community made investments, based on the DOD's
    commitment that a new brigade was headed our way. We find
    ourselves short of a brigade. So, there are some outstanding
    questions I'd like to throw your way today.
        First, I'd be interested in knowing whether decisions have
    been made about where to put the 10,000 soldiers that will not
    be filling out these three BCTs. Where will they be based? Will
    any of them be going to Fort Carson?
        Mr. Calcara. The answer is, I don't have a definitive
    answer today. In fact, the Army is at the full population
    strength required in the Grow the Army Initiative. What we are
    looking at doing now is assigning increments of that population
    to current installations.
        In most cases, a place that has a brigade now, like Fort
    Carson, may, in fact, see as many as 3,500 going there anyway,
    without the additional brigade configuration, because the
    current brigades there now don't have the full population, or
    because we're reconfiguring combat support.
        So, what we did for the purpose of the analysis on
    investment was, we did assume that all 3,500 would not show at
    Fort Carson, which would be a worst-case scenario, and then
    looked at investments and capabilities, based on a reduction of
    3,500. We're still comfortable that what we've asked for in the
    fiscal year 2010 budget supports that population.
        What I'm telling you is, when the smoke clears on all of
    this, there probably will be some more growth at Fort Carson,
    incrementally, from the original 3,500 lost in that brigade.
        Senator Udall. This is, in part, tied to the Secretary of
    Defense's observation that we might be overstructured and
    undermanned, as I understand it.
        Mr. Calcara. It goes to thickening the force, yes.
        Senator Udall. Yes. We may be saying, we may be violently
    agreeing.
        Mr. Calcara. Yes, we're saying the same thing.
        Senator Udall. Let me move to the construction dollars that
    Fort Carson's been counting on to prepare for the new soldiers.
    It's my understanding that the MILCON dollars for range
    projects or program of an installation's population and force
    structure trigger across certain requirements thresholds, even
    without the BCT-47, which was originally planned for Fort
    Carson. Are there still sufficient training requirements at
    Fort Carson to justify the Army's fiscal year 2010 range
    projects at Fort Carson?
        Mr. Calcara. Yes, sir. In fact, there will still be some
    shortages after the fiscal year 2010 investment level, so we
    can, in fact, support everything that's been requested in
    fiscal year 2010 for Fort Carson.
        Senator Udall. That's good news and, I would argue,
    appropriate news, given the commitments on both sides that have
    been made.
        If I could, let me speak to the QDR broadly, but then
    specifically. It's my understanding that the QDR still approves
    relocating a Germany-based heavy BCT back into the United
    States in fiscal year 2013. It would seem to me that the top
    three best military value stationing alternatives for the Army
    would be Fort Carson and Fort Stewart--I'm sure Senator
    Chambliss would agree with me--and Fort Bliss--in no particular
    order. I didn't hear what you had to say in your opening
    statement. Did you say one or both of these brigades would go
    to Fort Bliss? I thought it would be decided in the QDR.
        Mr. Calcara. It would be decided in the QDR. What I said is
    that there is a potential that that could occur. Certainly,
    Fort Carson could--I would consider it competitive in the
    stationing decision. It is in the top-three tier of siting
    locations, tied to, not only military value, but capabilities
    and current investment that's there. I would tell you, though,
    to the extent that expansion of our ability to train there gets
    reduced, that would--I think it ultimately affects some of the
    decisionmaking on where the two brigades might go.
        Senator Udall. But, let me pursue that a little further. I
    heard you say Fort Carson is still in the running, so let me
    direct a question prefaced with a couple of comments.
        I think that you would agree that one of the key factors
    that go into a stationing decision is the training land an
    installation has. The more training land an installation has,
    the higher its military value and the better its stationing
    appeal. Congress has not approved expansion at its current
    maneuver site at Pinon Canyon, but, I would add, Fort Carson
    still has the second highest amount of training land of any
    installation in the country. So, here's the question. With or
    without the expansion, Fort Carson should be a strong
    stationing candidate if this Germany-based BCT is relocated.
    Would you agree?
        Mr. Calcara. I would conclude that it is in the top three,
    in terms of where we would site it. I would also tell you that,
    beside training, we look at growth capacity, power projection,
    and overall well-being to be supported for the soldier. So,
    there are three to four factors that play into that mix.
        My short answer would be, all things considered equal,
    obviously a location with greater training capacity has a
    higher chance of being selected than one who does not.
        Senator Udall. Thank you, Mr. Chairman.
        Senator Bayh. Thank you, Senator Udall.
        Mr. Arny. Senator Udall, I have to comment that--you have
    to understand, this is quite amazing to watch Mr. Calcara talk
    all these Army things, given that he started out as a Navy
    civil engineer.
        Senator Bayh. Right.
        Mr. Calcara. Working for Mr. Arny, by the way. [Laughter.]
        Senator Bayh. Senator Chambliss.
        Senator Chambliss. Obviously the Navy trained you well,
    you've adapted to the Army in great fashion. [Laughter.]
        Mr. Calcara. Hoo-aah. [Laughter.]
        Mr. Calcara. My staff is laughing. I don't say ``Hoo-aah''
    often. So, I appreciate it. [Laughter.]
        Senator Chambliss. I want to pick up there, where Senator
    Udall left off, because one of those other bases that's been
    left standing at the altar is, of course, Fort Stewart, in this
    process. Over the past 2 years, Army leaders repeatedly pressed
    local and government community leaders at Fort Stewart to make
    the investments that the Army encouraged the local community--
    and Hinesville, in Liberty County, is a small rural county, as
    you well know--but, they were pressed to make investments
    totaling over $450 million, which they did. We received some
    State money, but, basically, most of it was local money.
        The Army came down, briefed investment bankers and builders
    on several occasions in an effort to solicit their support,
    which--we got great community support, and they really stepped
    up to the plate. During the briefings, they showed both
    projected dates for new soldier arrival, unit deployment dates,
    and so forth.
        Additionally, DOD sent the Office of Economic Adjustment to
    Hinesville to assist the community in properly preparing for
    the reception of the BCT, and provided a grant to organize and
    conduct a study of what was required.
        In addition to private investment, Congress has
    appropriated $400 million in MILCON from 2006 to 2009,
    currently; $244 million is awarded on a contract, with a
    projected penalty of 30 percent if canceled. Some of this work
    was contracted as recently as May 10, 2009.
        Additionally, the dining facility, which is $15 million, is
    slated to be let for contract next week.
        Now, much along the lines of what Senator Udall asked about
    there, obviously the Secretary announced, on April 6, that the
    decision to stop the growth of the Army at 45 BCTs was a
    surprise. Then, on June 1, the Army announced that a BCT would
    not be stood up at Fort Stewart. This decision has had very
    serious and immediate consequences and impact on my home State,
    as well as directly on the community of Fort Stewart.
        That same June 1 decision, though, did state that Fort
    Stewart still would grow by about 4,500 soldiers by 2013.
        Now, there are a number of MILCON projects that we've
    talked about. Again, let me ask a question to you with respect
    to those. Where do those projects stand, in the eyes of the
    Army? Are they justifiable? Do we need to go forward with
    construction, as proposed?
        Mr. Calcara. Yes, sir. As I mentioned in the opening--I
    think you may have missed it--we are recommending to stay the
    course with investment at Fort Stewart to, not only correct
    what we think are facility deficiencies, but to also buy out of
    relocatable facilities sooner, which we were going to circle
    back and do in the out-years anyway.
        So, you're absolutely correct, we still see growth there of
    5,500. We think it's a wise thing to do to buy out of the
    relocatables. In fact, when we do make the final stationing
    decisions, we may, in fact, grow the 5,500 to a higher number
    as we thicken the force, as Senator Udall mentioned.
        Senator Chambliss. Yes. Is there the potential for still
    another BCT to come back from Germany, I believe, in about
    2013? The one I'm speaking of was to be located at White Sands
    Missile Range in New Mexico. I think a decision has been made
    not to bring it from Germany back to New Mexico. But, no
    decision's been made relative to where it will go. Is that
    correct?
        Mr. Calcara. That's correct, sir. The reason why we took
    New Mexico off the list was because it was a cost-prohibitive
    investment there. When we originally had 48, we had no room at
    the inn to put them anywhere else, and New Mexico became a
    target receiver location. Now that we're back to 45, we've
    taken White Sands off the table. Certainly Stewart would be in
    consideration for one of those brigades.
        Senator Chambliss. We're 280,000 acres, the largest Army
    base east of the Mississippi, and we look forward to bringing
    all those folks to Fort Stewart.
        Ms. Ferguson, I want to talk with you for a minute about
    our situation at Moody Air Force Base. We worked very hard last
    year to close this deal to transfer the former American Eagle
    projects to a new developer. I believe the developer that
    bought it was Pinnacle-Hunt. That was a very painful process
    for both the Air Force, as well as the Valdosta community to go
    through.
        Moody was one of, I think, three or four projects--I
    believe it was four projects----
        Ms. Ferguson. It was four projects.
        Senator Chambliss.--that were included in that
    privatization issue. The situation with respect to that project
    now, tell me where you think we are and where you see us going
    with respect to filling this gap of some 229 shortfall in
    houses that were anticipated for new airmen and airwomen coming
    into Moody.
        Ms. Ferguson. Okay. I first want to publicly thank your
    community, and specifically Judge McClain, for the work that he
    did in helping to get the project sold from American--to Hunt--
    from American Eagle, Carabetta-Shaw--or Carabetta to Hunt-
    Pinnacle. I was down there 2 weeks ago and actually bumped into
    Judge McClain at dinner, and he was really pivotal in helping
    make that closure go through in November of last year. So, we
    wanted to thank him publicly.
        While onsite down there, we took about a 4-hour tour of the
    housing at Moody just 2 weeks ago, saw significant
    improvements, certainly over the last year. Hunt-Pinnacle is
    working on 50 of the homes that American Eagle had partially
    out of the ground. Nineteen of those homes were accepted for
    occupancy on Monday, and families are beginning to move in,
    including the new wing commander.
        Senator Chambliss. He's getting the first house, I think.
        Ms. Ferguson. He's getting the first house. We toured the
    house when we were down there. It's a great-looking house.
        They're also doing a number of minor renovations in the
    Quiet Pines area. They're doing roof replacements, window
    replacements. We also went through the Courts. The Courts area
    is eventually going to be demolished, but Hunt-Pinnacle was
    really doing a good job of going in, replacing doors,
    carpeting, and making them quite nice for the families that are
    going in there. The Moody housing has great occupancy rate.
    We're hovering at 98 or 99 percent occupancy.
        But, as you point out, the project, as it is today, is not
    the project that it was originally, and we are still committed
    to finding a way to correct the shortfall in the community,
    both outside the fence and inside the fence. We know we still
    have a deficit to work there, and we're continuing to work that
    now. We're working a number of different options to try to
    close that gap, and we're hoping, within the next 6 to 9
    months, we'll be able to do that.
        Senator Chambliss. Yes. I thank the Air Force and you for
    really prompt attention to that matter, because it truly has
    been painful, as you observed from your viewing of it. Got such
    great potential down there, and to see all those houses
    literally falling down, in some cases, now, is a pretty sad
    sight.
        Mr. Chairman, with your indulgence, could I go back and ask
    one other quick question to Mr. Calcara?
        I should have included this in my statement to you with
    reference to the MILCON projects. Because we're going to see an
    increase in this population anyway, at Fort Stewart, of about
    4,500 over the next couple of years, in addition to the MILCON
    projects, does the Army not agree that, from the standpoint of
    providing schools for educating our children, that we need to
    move forward with the construction of additional classroom
    facilities for those additional children that'll be there as
    children of Army soldiers?
        Mr. Calcara. Sir, I'm unaware of any specific authority we
    would have to construct schools. My understanding is that our
    aid that's provided down there is through Impact Aid that's
    given to the Department of Education.
        Senator Chambliss. I didn't mean to implicate you had
    MILCON money for the construction of schools. But, we're going
    to have 4,500 soldiers, and they're going to bring families in,
    which means we need more classroom capability.
        Mr. Calcara. Yes, I think that's a reasonable conclusion,
    that, based on the demand analytics for a family size and your
    current school population characteristics down there, you would
    need more schools.
        Senator Chambliss. Yes. If there is any money in the
    budget--and I, frankly, can't remember if there is any specific
    MILCON money for schools, the Army would anticipate continuing
    with those projects.
        Mr. Calcara. Yes.
        Mr. Arny. But Senator, if I could, with DOD, unless the
    base has a Department of Defense Education Activity (DODEA)
    school system, which there are only a few bases in the States,
    the schools are all provided by the outside school districts.
    Some of our bases, we do provide land, so the school district
    can build on the base, if that's required, but unless it's a
    DODEA school, we do not provide MILCON for the construction of
    schools.
        Senator Chambliss. Staff has just reminded me of what I
    thought was a fact. There are two schools at Fort Stewart to be
    built in the fiscal year 2010 budget from MILCON monies.
        Mr. Arny. Then Fort Stewart must have a DODEA school
    system.
        Senator Chambliss. Yes. From the Army's standpoint, there
    is no reason not to continue with those two projects, I assume.
        Mr. Calcara. No, sir. You're absolutely correct. The
    population is growing by a minimum of 4,500 servicemembers and
    then their families.
        Senator Chambliss. Okay.
        Thank you, Mr. Chairman.
        Senator Bayh. Thank you, Senator Chambliss.
        Senator Thune.
        Senator Thune. Thank you, Mr. Chairman.
        I want to thank our panel for their testimony today, and
    responses to the questions, and for the important work that you
    do, day in and day out.
        I have a question I'd like to direct to the panel,
    generally, and whoever would care to respond to it. But, it's
    dealing with the whole of renewable energy projects near
    military training ranges or, for that matter, even 30 miles
    away from training ranges.
        The military is not particularly enamored and, some have
    argued, undercut renewable energy projects, due to issues like
    radar signature interference. That's had a chilling effect on
    renewable energy projects, which I think you have a number of
    training ranges that are in the desert, which have tremendous
    capacity for solar energy, for example. So my question is, what
    steps could be taken--could DOD take to work with the renewable
    energy industry to try and establish more of a presence in some
    of these remote areas that are often quite a distance from
    training ranges?
        Mr. Arny. Senator, that's an issue we're addressing. When I
    took over this job, I formed a Defense Energy Working Group in
    which all the Services participate, the engineers. That's an
    issue that's come up.
        Frankly, it's a matter of us educating the bases. There has
    to be a compromise. We're the largest single consumer of
    energy, when you consider our mobility fuels as well as base
    facilities, so we have to consider all the alternatives.
        Frankly, unless we own the land, if somebody wants to put a
    solar site, or wind, on private land, there's not much we can
    do. Now, obviously--from what you're telling me--and I've heard
    this, too--we're jawboning and causing a chilling effect. We
    have to reverse that. We have to work with people, look at
    alternatives.
        Now, I will tell you that these wind farms, with some of
    the kinds of radars we use, not only the blades are causing
    disruption of the radar, but it's also the turbulence
    downstream.
        But, again, if we have an area--we, DOD, have an area where
    we have exclusive use of that territory, then we'd better
    consider buying easements or buying land. We have to work with
    people who are trying to produce electricity, especially PV in
    the southwest, so that we can accommodate each other, so we
    understand each other's problems.
        Let's face it, a base commander and folks in the field get
    promoted by pushing their primary mission, which is testing or
    training or doing something else. We, as a Service, the
    Department and the Services, have to educate them to open their
    mind a little bit and look at alternatives.
        Senator Thune. I appreciate your answer to that, and I hope
    you will. I think there's a tremendous synergy in there, and
    opportunity to achieve a couple of critical objectives.
        Mr. Arny. We can't sit there--like I said, as a major
    consumer of energy--and say, ``You can't produce energy outside
    my base.''
        Senator Thune. Right.
        Mr. Arny. It's just incompatible.
        Senator Thune. Right.
        I have another question that's related to energy, a
    different subject. I'd like to direct this to Ms. Ferguson.
    But, last year, Secretary Donley signed the Air Force Energy
    Policy, which, among other things, establishes a couple of
    goals with respect to using alternative fuels in the Air Force
    aircraft fleet. One goal is to test and certify the aircraft
    fleet on a 50/50 alternative fuel blend by 2011. A follow-on
    goal is to require 50 percent of the Air Force's domestic
    aviation fuel requirement be an alternative fuel blend in which
    the alternative component is derived from domestic sources.
        From what I understand, an initiative to build a coal-to-
    liquid plant on Malmstrom Air Force Base in Montana was
    abandoned earlier this year, and a similar plan to build a
    plant in Alaska with a guaranteed 5-year contract is still up
    for grabs, with no takers.
        So, my question is, how well is the Air Force proceeding
    toward reaching these alternative fuel goals? How can the
    committee help the Air Force reach its goal of using
    domestically produced alternative fuel?
        Ms. Ferguson. I will have to take that for the record for
    you. I don't have enough data on that with me today.
        [The information referred to follows:]

        The Air Force is proceeding well towards reaching its alternative
    aviation fuel goals of certifying its aircraft fleet for use of a 50/50
    synthetic fuel blend by 2011 and the follow-on goal of being prepared
    to acquire 50 percent of the Air Force's domestic aviation fuel
    requirement via an alternative aviation fuel blend in which the
    alternative component is derived from domestic sources.
        The Air Force's Alternative Aviation Fuel Initiative encompasses
    certification and testing of synthetic fuel blends produced via the
    Fischer-Tropsch process and recently initiated efforts involving
    biomass-derived fuel blends.
        The Air Force is on track to certify its aircraft, applicable
    vehicles, and support equipment, and associated storage and
    distribution infrastructure for unrestricted operational use of a
    synthetic fuel blend by early 2011. The B-52, C-17, B-1B, and F-15 have
    been certified for unrestricted operations using the synthetic fuel
    blend and the F-22, KC-135, C-5, and T-38 are expected to be certified
    by the end of 2009. Certification of applicable support equipment and
    vehicles is over 90 percent complete. Full certification is expected by
    late 2009. Full certification of storage and distribution
    infrastructure is expected to be completed by 2010.
        In addition to the synthetic fuel blend certification, the Air
    Force initiated a biomass-derived aviation fuel certification program
    in January 2009. To support this effort, the Defense Energy Support
    Center is currently managing an active solicitation for up to 400,000
    gallons of renewable aviation fuel derived from biomass. Once the Air
    Force receives this fuel, it will be used to fulfill biomass-derived
    fuel blend certification efforts.
        Both certification efforts support the Air Force goal to be
    prepared to cost competitively acquire 50 percent of its domestic
    aviation fuel requirement by 2016 via an alternative fuel blend in
    which the alternative component is derived from domestic sources
    produced in a manner that is greener than fuels produced from
    conventional petroleum.
        While the Air Force appreciates both the Senator's and the
    committee's continued strong support of the certification efforts
    specifically and, more generally, the Air Force energy plans, programs,
    and strategies, no additional assistance is needed at this time.

        Senator Thune. Okay. I would be very interested in knowing
    that, Mr. Chairman, for the record. This whole initiative at
    Malmstrom was highly touted for a while, and it's just all of a
    sudden fallen off the grid. These other initiatives that the
    Air Force had undertaken, I think, are critically important.
    The Air Force is the largest user of fuels, obviously, and if
    we can use domestically produced alternative fuels here, it
    lessens the very dangerous dependence that we have on foreign
    energy.
        So, I would appreciate if you could get back to me on that.
        Ms. Ferguson. We'll get back to you.
        Senator Thune. Thank you. I appreciate your testimony and
    again, thanks for what you do.
        Mr. Chairman, I yield back.
        Senator Bayh. Thank you, Senator Thune.
        Mr. Calcara, I had a couple of questions for you. Let me
    ask you--the number of brigades was 42, correct? It was then
    proposed to increase the number of brigades to 48. Isn't that
    right?
        Mr. Calcara. Yes, sir.
        Senator Bayh. That has now been scaled back to 45. But, it
    was the increase from 42 to 48 that occasioned the proposal to
    station the three additional brigades at the three sites that
    will now not get them, correct?
        So, knowing what we know today, if the proposal had been
    45, as it is today, originally, there would have been no money
    proposed for those three additional sites. Isn't that true?
        Mr. Calcara. That's true. Yes, sir.
        Senator Bayh. Yet, we're now being asked to devote money to
    sites that otherwise there would have been none authorized, so
    that money would have been available to address the range of--I
    understand that there are needs at those sites; I heard your
    testimony, and I'm sure that's true.
        Mr. Calcara. Right.
        Senator Bayh. But, those funds would have been available to
    address all the needs facing the military in this area, at all
    the sites. I ask you, are these really the most pressing needs
    out there in your area of jurisdiction?
        Mr. Calcara. I think if you look at our plans for what
    amounts to the $335 million, or the 25 percent of that $1.4
    billion, most of it is going to take care of training barracks.
    It's going to get us out of relocatables, and it's going to
    correct what was originally capacity shortages----
        Senator Bayh. I know that. This is not a bridge-to-nowhere
    kind of situation.
        But, my point is that this would never have been authorized
    originally, and now we're being asked to devote it to this
    anyway. So, are there are really no more pressing needs than
    what is being proposed here at these three sites?
        Mr. Calcara. There's always other pressing needs. But, I
    guess I would say to you that we've read from you a strong
    policy imperative to correct our barracks, to get out of
    relocatable facilities, and to help sustain--or propel, I
    should say--the Army modular force. These investments will do
    those three things, which ranked very high in----
        Senator Bayh. So, it's just a coincidence that the most
    pressing needs in those particular areas happen to be at these
    three sites?
        Mr. Calcara. I wouldn't say it's a coincidence, but when we
    looked at the dollars potentially available for reinvestment,
    we did consider all other priorities across the Army. If we
    felt that we had higher-ranking priorities, we would come to
    you and suggest--we would have briefed you that, of the $335
    million, we think X should go to that, or Y to go to that. We
    recognized there was a unique situation. We did not intend to
    mislead anybody in the program.
        Senator Bayh. See why a taxpayer might be a bit skeptical
    that these three facilities were proposed to be expanded, and
    now that's no longer being proposed, and it just so happens
    that the money that would not have been authorized for them in
    the beginning is now the most pressing need facing the
    Department in this area? That seems to be rather remarkable.
        Mr. Calcara. I see your point, sir, but, again we felt that
    training barracks, relocatable facilities, and enabling the
    Army modular force had enough gravitas as our strategic
    priorities to sustain the investment decision.
        Mr. Arny. Mr. Chairman?
        Senator Bayh. Your testimony to the subcommittee is that
    there is not $1 that can be saved that was originally
    authorized for this?
        Mr. Calcara. No, sir, that's not true. We did identify, I
    believe, $190 million, in the session the other day we had with
    your staff, that was available.
        Senator Bayh. But, of these funds, there's nothing that
    could be saved that was originally authorized for these three
    sites.
        Mr. Calcara. I would take exception to the word ``saved.''
    I think our understanding is that we were going to use these
    dollars to buy out of requirements that we had, at some point
    in the process. Whether or not they should have been at the top
    of the order or the bottom--at a lower position, we did
    consider that, and we felt training barracks, modular force,
    were high priorities.
        Mr. Arny. Mr. Chairman, we at OSD did review the priorities
    with the Army, and agreed with them, as well.
        Mr. Calcara. The other point is, we've already discussed
    about our high military value locations across the Army, and
    they are, in fact, Bliss, Stewart, and Carson. So, in some
    ways, we are investing where we think our future is going to
    be.
        Senator Bayh. Let me ask the Navy about that. Apparently,
    the decision about where to locate the 8,000 marines from
    Okinawa is going to be decided in the QDR.
        Mr. Penn. No, sir. No, sir, that's not true. The QDR's
    going to decide the training areas that we will be using, as
    it's a joint training, all Services, the training in the
    Pacific.
        Senator Bayh. Right. The Commandant has expressed some
    concern about the ability to train the marines at Guam and the
    Marianas. Isn't that true?
        Mr. Penn. That's correct. That's training. Yes, sir.
        Senator Bayh. Okay. Let me ask you, then. How much of the
    size and composition of the Marine Corps move to Guam is being
    reconsidered and debated in the QDR process? None?
        Mr. Penn. Zero. That's correct.
        Senator Bayh. Richard, I'm going to turn to you, although,
    if you would indulge me for just a moment----
        Senator Burr. Sure.
        Senator Bayh.--I had a couple of questions for Ms.
    Ferguson.
        The proposal for the investment in Oman--as I understand
    it, we had invested in an airfield there before, and they're
    now running us out, because they would like to turn it into a
    civilian airport. Isn't that true?
        Ms. Ferguson. Sir, we've been there for quite a number of
    years, and between 1980--I think it's 1982 and 1989, the Air
    Force invested about $65 million for some War Reserve Materials
    (WRM) facilities there. The Omanis would like to use that area
    for more commercial aviation. The area is very cramped, and
    they've invested $200 million at the Al Musannah site for the
    Air Force, and would like the U.S. Air Force and the U.K. to
    move to that new site. These facilities provide the start of
    relocating those WRM facilities out there.
        Senator Bayh. Do you think we ought to get an agreement
    with them in place before we spend this money?
        Ms. Ferguson. My understanding is, we do have an agreement
    in place with the Omanis now for the two fiscal year 2010
    projects. I have some recent classified information that we can
    certainly share with the staffers, in another environment.
        Senator Bayh. Good. Given their previous behavior, it would
    be nice to nail this down before we spend the money.
        The base in Italy--I hope I'm pronouncing it correctly--
    Sigonella--I hope that's close enough--it's been, historically,
    underutilized by the Navy. Do you feel that we should more
    thoroughly explore using those Navy facilities for the Global
    Hawk basing before building another hangar facility which might
    only compound the underutilization situation?
        Ms. Ferguson. We have worked with the Navy, and we are
    being afforded the opportunity to use a temporary--a hangar, on
    a temporary basis, and the Navy has long-term plans for the
    remainder of the facilities, and they are not available to the
    Air Force for any long-term needs that the Air Force has to bed
    down the Global Hawk.
        Senator Bayh. Thank you, Ms. Ferguson.
        Mr. Arny. Mr. Chairman, if I could follow up for just a
    second on the Marine Corps training. The Commandant's concern
    is inadequate--I want to say ``unit training.'' But, that
    inadequacy exists now with the forces in Okinawa. We do not
    have adequate Marine Corps training throughout the Pacific. So,
    the movement to Guam, of 8,000 marines, leaving 10,000 in
    Okinawa, the EIS for Guam does include individual weapons
    training facilities in Guam. He's concerned that he doesn't
    have the kind of unit training he needs.
        The Secretary and the Deputy Secretary have committed to
    the Commandant that we will look at unit training in the
    Pacific, because the Army has some shortfalls, the Marines
    definitely have shortfalls, whether they move to Guam or they
    stay in Okinawa. So, it is an issue that goes beyond the move
    to Guam, and we are definitely going to look at it, and I
    believe there will be a separate study and a separate EIS to
    cover that.
        Senator Bayh. We just wanted to make sure we weren't
    spending money to build facilities on Guam that then we weren't
    going to end up utilizing.
        Mr. Arny. Absolutely not.
        Senator Bayh. Okay, great. Thank you very much.
        Senator Burr, forgive me. I need to get a briefing here
    before our markup coming up so if I could turn the gavel over
    to you, you promise you won't exceed our authority? [Laughter.]
        Senator Burr. We will not spend anymore money, I can assure
    you. [Laughter.]
        We might find some cuts while you're gone. [Laughter.]
        Senator Bayh. I'm not sure the Treasury has any more.
        Senator Burr. Things might move to North Carolina all of a
    sudden. [Laughter.]
        Senator Bayh. It's a good State. Thank you all very much. I
    appreciate your testimony here today, and your service to the
    country.
        Senator Burr [presiding]. As Senator Bayh said, we'd like
    to make sure that the investment we're making in Okinawa is an
    investment that can be utilized. I was going to ask Secretary
    Penn, but I'll ask you, Mr. Arny. Aside from the basic estimate
    of $4 billion for the U.S. investment, does the Department of
    the Navy have a detailed current estimate of cost to U.S.
    taxpayers to complete the initiative, including one-time
    construction costs and additional base operation cost?
        Mr. Arny. Sir, we're putting that plan together, and we'll
    be able to provide you that as we complete the planning process
    and as we complete the EIS, which is scheduled for completion
    in 2010. I've discussed with your staff, we're trying to get
    those numbers together now. The new Deputy Secretary is taking
    on the leadership of the Guam move, himself, and has a group,
    chaired by him, we are meeting every 2 weeks, to make sure that
    we get all this stuff in a package. I know we are a little bit
    late in getting some of that to you, but we definitely have a
    commitment to you and to the Japanese Government to get that
    movement in place, as well as all the other movements that take
    place, and to make sure they're properly funded. We will get
    the details to you as soon as we can.
        Senator Burr. It's clearly not an inexpensive move.
        Mr. Arny. No, sir, it is not.
        Senator Burr. We want to make sure that the investment is
    wise.
        Mr. Arny. Yes, sir.
        Senator Burr. Ms. Ferguson, let me turn to you. I want to
    talk specifically about the F-35. What's the current status of
    the EIS for the initial training site at Eglin?
        Ms. Ferguson. We signed a record of decision for the
    initial EIS back in February that allowed the delivery of 59
    airplanes there. We are in the process of kicking off the
    supplemental EIS, as required by the record of decision. In
    fact, just yesterday, I briefed the Air Force board on the
    proposal for the range of alternatives that will be considered
    in the supplemental EIS, and I brief that to the Chief and
    Secretary next week.
        The contract has been awarded for that activity, and our
    schedule anticipates having a new record of decision
    specifically on how to operate the 59, what it will require to
    mitigate the 59 in September 2010.
        Senator Burr. There's currently litigation on the move to
    Eglin?
        Ms. Ferguson. Currently, there's actually two components of
    legislation of litigation. One, there is a Freedom of
    Information Act request, and then there is also litigation that
    was levied by the community of Valparaiso over the National
    Environmental Policy Act.
        We have reached agreement--the Air Force, Department of
    Justice, have reached agreement for a 90-day stay with the
    city's attorneys. There's another meeting with respect to that.
    That was reached the first week in June, and there's another
    meeting with respect to that, on the 30th of June.
        Senator Burr. Potentially, when that stay goes away, if
    litigation is still pursued, what does that do to delaying our
    ability to meet the deadlines that we have for the purposes of
    training?
        Ms. Ferguson. Of course, I'm not the lawyer, I'm the
    engineer.
        Senator Burr. I think everybody in this room knows that in
    90 days, this is not going to be settled because we don't even
    have the EIS done taking into account the noise of the F-35.
        Ms. Ferguson. Right. It's probably best for me, rather than
    speculate, provide that for the record to the committee.
        [The information referred to follows:]

        On June 5, 2009, the United States District Court for the Northern
    District of Florida entered an order staying the National Environmental
    Policy Act (NEPA) litigation for a period of 90 days. Both parties
    requested the stay to allow them time to pursue a mutually acceptable
    resolution of the case without the need for further litigation. The
    stay will expire in early September, unless the parties seek to
    terminate it earlier or agree to another stay that the Court approves.
        While the case is stayed, the Air Force is able to continue the
    construction projects necessary to meet our base realignment and
    closure deadline. If the parties are unable to reach a settlement
    agreement, eventually the stay (either the current one or any
    subsequent stay) will be lifted or will expire. At that time, the
    plaintiff would likely file a motion for a preliminary injunction. In
    such a motion, the plaintiff would ask the Court to enjoin all
    construction activities associated with the Joint Strike Fighter (JSF)
    at Eglin Air Force Base (AFB) and to prohibit or limit the flying of
    JSF aircraft at Eglin AFB.
        If the Court denies the plaintiff's motion for a preliminary
    injunction, the Court could still decide to enjoin our ability to
    construct necessary facilities or to conduct flight training after a
    hearing on the merits.
        If the Court grants the plaintiff's motion for a preliminary
    injunction, some or all of the Air Force's construction activities
    could be halted. If this happened, we would not have facilities in
    place to meet our training deadlines. Similarly, if the Court enjoins
    our ability to fly the JSF, the Air Force, Navy, Marine Corps, and our
    international JSF partners would not be able to provide the training
    necessary to certify our initial cadre of JSF pilot instructors. We
    would also not be able to conduct the flight training required to
    produce the JSF pilots who will operate this weapons platform in the
    field.
        A preliminary injunction would remain in place until the Court
    heard the case on the merits and decided whether or not to make the
    preliminary injunction permanent. Practically speaking, the Air Force,
    and all others concerned, would be prohibited from taking action to
    establish the training center at Eglin AFB until such time as the Court
    determines that the Air Force has complied with NEPA.

        Senator Burr. Let me ask it in a different fashion, if I
    can. Is there a Plan B if, in fact, litigation drags out and
    Eglin is not an eligible place to stand up for this purpose?
        Ms. Ferguson. We don't have a Plan B. I can tell you the
    Air Force does not have a Plan B for it. BRAC directed the
    standup of the initial joint training site at Eglin, and the
    Air Force is working towards accomplishing that.
        Senator Burr. I'll hope that our staff converses with you
    about whether there should be a Plan B or not. I think it would
    be prudent to pursue that. There's enough of a challenge with
    the completion date of the F-35 and the gaps that it may cause.
    I'd hate to see a delay in our ability to train pilots in that
    new aircraft.
        Mr. Arny. Sir, there are ways to mitigate that, I believe--
    and, again, I'm not the lawyer, either, but I've been around
    enough of these EISs--we can mitigate; and if we can't, we will
    adapt and move as quickly as we can to train at other
    locations.
        Senator Burr. Thank you.
        Let me just go back to Secretary Penn real quick. I asked a
    question relative to the move from Okinawa to Guam while you
    were out. In response to a hearing question posed to you last
    year concerning the costs incurred over the long term by the
    Department of the Navy for rent payment to reimburse the
    Japanese Government for their investment in new housing in
    Guam, you said this, ``Impacts to the Navy's budget from this
    agreement continue to be assessed. Until final implementation
    details are determined, any additional impacts cannot be fully
    determined.''
        Do we have the final implementation details?
        Mr. Penn. No, sir, we do not. We probably will not have
    them until the record of decision. Once we go through the EIS,
    then we'll have all the numbers of the exact people, the mix
    that we'll be putting on Guam.
        We're building a city on Guam. We have 75 different EISs
    that we're conducting, and it's taking us a long time, longer
    than we thought, to put them all together.
        Senator Burr. Trust me, I get a full sense of the scope of
    what we're trying to do. What I'm desperately trying to do is
    get a sense of what is this going to cost us. I know what the
    initial cost is. I'm not sure that anybody has addressed for us
    what the overall cost of this is. I'd be willing to bet--is
    anybody in a position to tell me now?
        Mr. Arny. Sir, we could probably give you an estimate,
    based on the forces in our normal term and our normal
    multiplier effects. Part of it is resolving the laydown with
    the Marine Corps of which facilities go where. I know that Mr.
    Penn is wrestling through that on a daily basis. We could
    probably look at, like I said, based in Guam, what it's going
    to cost to sustain it.
        But, again, if you'd just give us a little more time, we
    are going to plan this, we're going to make this work, because
    it's of such strategic importance to us, not only for the
    Japanese-U.S. relationship, because now we'll have Japanese
    units training with our units in Guam, but also for the
    strategic necessity of the United States.
        Full disclosure--I represented the Government of Guam for
    10 years when I was in the private sector, and we never really
    had a plan to make use of the most forward-deployed piece of
    U.S. territory, for which we lost a lot of lives to retain in
    World War II. We're 3 hours by air from almost every part of
    the Pacific Rim. It is just such a key location, with a
    population that is so pro-American, pro-citizen, because they
    are American citizens--they've died in all the wars and enlist
    in higher percentage per capita than any other group in
    America. So, for our strategic needs as a Nation, it's
    absolutely essential to get this right. We're working very hard
    at it.
        Sir, some of the things we're doing, that we're not
    including in the Guam move, like we're putting carriers in
    there temporarily--in fact, one just arrived yesterday--so,
    we'll be taking carriers that, when they go to Western Pacific,
    Guam will be a visit for them. The Army will be putting a
    ballistic missile battery in, and the Air Force is going to be
    putting several things on there, as well. So, we're wrapping
    everything together. But, they're coming out of different
    funding pots.
        Senator Burr. I appreciate the answer. Were this a weapons
    platform, I would probably walk away and say, interagency,
    they're still trying to figure how much stuff they're going to
    put on it. That's why they can't identify what the overall cost
    is. It's not a weapons platform, it's a strategic base for the
    future.
        I hope you understand why I'm so persistent on this,
    because if, in fact, you can't provide the details to me, why
    should I authorize $378 million to proceed? If you can't tell
    me the overall cost of it, then how do I turn, a year from now,
    2 years from now, 3 years from now, and figure out, are you in
    line with exactly what you told us this was going to cost? Now,
    some of you may not be here, but I plan to be, so these are
    accountability methods that are going to be applied to me. I
    think there's probably a warning shot here that says, if we
    haven't decided everything that's going to be there, let's do
    it real quick, let's figure out what it's going to be, let's
    figure out what the partners' obligations are, let's figure out
    what ours are, but let's get the details before we start
    talking about the funding.
        Mr. Penn. We should have that very soon. We were hoping to
    have it by the end of next year.
        Senator Burr. Mr. Arny, do you have anything you wanted to
    add?
        Mr. Arny. No, sir. I think we can provide general long-term
    sustainment numbers for you, based on multiplier factors. We'll
    work with your staffs, too, as we refine these numbers, and get
    you numbers as quickly as we can.
        Senator Burr. Super.
        Again, on behalf of the chairman, let me thank all of you
    for your testimony today. It's invaluable. Again, we apologize
    for the expedited hearing, but we needed to do that to meet the
    timeframe.
        So, at this time, the subcommittee is adjourned.
        [Questions for the record with answers supplied follow:]
                Questions Submitted by Senator Claire McCaskill
                             relocatable facilities
        1. Senator McCaskill. Mr. Arny, in light of the findings of a June
    2009 Government Accountability Office (GAO) report sanctioned by title
    28, section 5, of Senate Report 110-77 (National Defense Authorization
    Act (NDAA) for Fiscal Year 2008) relative to problems with the
    Department of Defense's (DOD) handling of relocatable facilities, what
    specific measures either are being weighed or implemented by the DOD to
    address the lack of a comprehensive Office of the Secretary of Defense
    (OSD) strategy to manage and oversee the use and disposal of the
    approximate 4,000 relocatable buildings which have been procured on
    military installations and posts over the past 5 years?
        Mr. Arny. The following steps will be taken to improve the
    management and oversight of relocatable buildings:

             Clarify guidance on the definition of relocatable facilities;
             Develop a mechanism for collecting and maintaining complete
            and reliable data on the number of relocatable facilities used
            by the military Services and on the costs of acquiring them;
            and
             Develop and implement a strategy to help effectively manage
            the use, disposal, and redistribution of relocatable facilities
            across all the Services when redistribution is appropriate,
            including projected costs.

        2. Senator McCaskill. Mr. Arny, what is being done to address
    inaccurate reporting of the number of such relocatable facilities due
    in part to lack of a central OSD database and clear definition of what
    constitutes such a structure?
        Mr. Arny. The Department will take the necessary steps to address
    the inaccuracies. Once the definition of relocatable facilities is
    clarified, the Department will establish a more rigorous process for
    reporting the acquisition, use, and disposal of relocatable facilities.
    To the maximum extent possible, that reporting process will be
    incorporated into existing data collection systems that support
    facilities management.

        3. Senator McCaskill. Mr. Arny, how will DOD address
    characterization of relocatable structures as personal vice real
    property structures to facilitate their funding via operations and
    maintenance budgets vice the military construction (MILCON)
    appropriations process?
        Mr. Arny. Relocatable facilities are now characterized as personal
    property vice real property. Department of Defense Instruction 4165.56,
    Relocatable Buildings, states the following in paragraph 4.3:

            ``Relocatable buildings shall be accounted for as personal
            property, unless these facilities are authorized for
            procurement using construction procedures. In this case, the
            buildings shall be accounted for as real property.''

        4. Senator McCaskill. Mr. Arny, what is being done to address waste
    of public funds resulting from the procurement of new relocatable
    facilities rather than use of ones in storage or slated for demolition?
        Mr. Arny. As part of the review of policies and procedures
    pertaining to the acquisition, use, and disposal of relocatable
    facilities, the Department will consider options for the economic reuse
    of relocatable facilities to meet new requirements. Consideration will
    be given to the condition of the relocatables, their proximity to the
    location at which they are required, and the efficiency with which they
    can be moved from one location to another.

        5. Senator McCaskill. Mr. Arny, how much of the $7 billion that the
    DOD is scheduled to receive from the American Reinvestment and Recovery
    Act (ARRA) will be spent on relocatable facilities?
        Mr. Arny. None of the ARRA funding will be spent to acquire
    relocatable facilities.

        6. Senator McCaskill. Mr. Arny, what is the DOD specific course of
    action or strategy in place for the use of relocatable buildings
    specifically as it relates to a rapid drawdown of forces in Iraq and
    relocation to garrison facilities at bases in the United States, a
    continued implementation of the Base Realignment and Closure (BRAC) Act
    by 2011, and the Marine Corps and Army reaching its ``Grow the Force''
    initiatives 2 years ahead of schedule?
        Mr. Arny. Relocatable buildings will be used to provide temporary
    facilities until a permanent MILCON solution is available. Every effort
    will be made to minimize the use of relocatable facilities, and when
    they are required to retain them for the minimum amount of time.
                                     ______

                   Questions Submitted by Senator Mark Udall
               readiness and environmental protection initiative
        7. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, the Readiness and Environmental Protection Initiative (REPI)
    gives you the ability to work with State and local governments and
    conservation groups to protect land important to sustaining military
    readiness. How important has this program been in your efforts to
    ensure the long-range sustainability of your test and training
    installations, ranges, and airspace?
        Secretary Penn. REPI has been an effective tool in ensuring the
    long-range sustainability of the Navy's testing and training
    installations, ranges, and airspace by protecting military readiness,
    meeting priorities, and leveraging public funds. REPI has been embraced
    by its many stakeholders and partners as making a significant
    contribution to national defense while simultaneously advancing natural
    resource stewardship and land use planning goals and policies.
        Mr. Arny. REPI has contributed significantly to DOD's efforts to
    ensure the long-range sustainability of military installations, ranges,
    and airspace, and to preserve our ability to conduct the realistic
    testing and training that is vital to military operations and
    sustaining military readiness. REPI is a key tool in the Department's
    Sustainable Ranges Initiative to promote long-term readiness and
    sustainability. REPI funding has allowed the military Services to
    acquire easements from willing sellers for buffer lands that in many
    cases have represented the Department's only opportunities for
    preventing encroachment and preserving installation, range, and
    airspace capacity and flexibility. To date, REPI has protected over
    76,000 acres near 53 installations in 23 States, and has taken
    advantage of a 2-to-1 partner contribution ratio. REPI is also a
    valuable and vital tool in fostering important relations with key
    partners. DOD requirements and actions to sustain the training and
    testing missions are very compatible with partner missions and
    objectives--e.g., open space, recreation, preserving working lands,
    economic opportunities, and the conservation of natural resources--and
    DOD engagement promotes the power of innovative partnerships, all while
    generating significant political, community, and partner good will.
    These partnerships proactively address both mutual mission challenges
    and shared opportunities.
        Mr. Calcara. REPI is a key tool in the Army's Compatible Use Buffer
    (ACUB) Program that promotes long-term readiness and sustainability.
    REPI funding has allowed the Army to protect land with willing sellers
    and partners to prevent encroachment. ACUB is preserving Army mission
    capability and flexibility. To date, Army has expended $46.3 million in
    REPI funding to protect 40,903 acres at 25 Army installations. To that
    figure, Army contributed an additional $12.7 million in non-REPI funds
    and partners contributed an additional $91.2 million. REPI is also a
    valuable and vital tool in fostering important relations with key
    partners. Army requirements and actions to sustain the training and
    testing missions are very compatible with partner missions to conserve
    open space, recreation, working lands, economic opportunities, and
    other natural resources. These partnerships proactively address both
    mutual mission challenges and shared opportunities.
        Ms. Ferguson. REPI is a valuable tool in our encroachment toolbox.
    REPI has allowed the Air Force to help ensure compatible development at
    a number of our installations and ranges. Although this is not a viable
    strategy for all our installations and ranges, it allows us to broaden
    our outreach efforts by identifying common interests with organizations
    that in the past we would not have thought to include as part of our
    encroachment solution set.

        8. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, under the REPI, implementing section 2684a of title 10,
    U.S.C., every year the Services consider potential projects and submit
    a prioritized list of projects that have been validated at the Service
    headquarters as viable and necessary to ensure long-range
    sustainability. OSD, with input from the Services, then combines the
    list of projects submitted to create an integrated priority list (IPL)
    and allocates REPI funds to those projects based on that IPL. What was
    the total, in dollar terms by Service, of the REPI funding requirements
    submitted by the Services during the process to allocate fiscal year
    2009 REPI funding?
        Secretary Penn. Navy submitted $27.5 million for 12 projects.
        Mr. Arny. For fiscal year 2009, high demand for REPI projects
    resulted in the Services submitting 52 project proposals with a total
    funding requirement of $122.586 million. By Service, the Army's REPI
    funding requirement was $58.910 million for 25 projects, the Navy's
    REPI funding requirement was $27.503 million for 12 projects, the
    Marine Corps' REPI funding requirement was $14.959 million for 6
    projects, and the Air Force's REPI funding requirement was $21.214
    million for 9 projects.
        Mr. Calcara. The Army's REPI funding requirement was $58.9 million
    for 25 projects.
        Ms. Ferguson. The Air Force REPI submittal for fiscal year 2009
    totaled $21.214 million for nine projects.

        9. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, displayed by Service totals, how much REPI funding was
    provided by OSD in response to the Service project submission?
        Secretary Penn. OSD allocated $11.55 million for eight projects to
    the Navy.
        Mr. Arny. In response to Service requests for REPI funding, OSD was
    able to allocate $45.27 million to 39 projects. By Service, the Army
    received $20.49 million for 21 projects, the Navy received $11.55
    million for eight projects, the Marine Corps received $8.23 million for
    four projects, and the Air Force received $5.00 million for six
    projects.
        Mr. Calcara. For Army, of the $58.9 million submitted, $20.5
    million was funded by REPI.
        Ms. Ferguson. The Air Force was allocated $5 million for six
    projects.

                     land use and conservation partnerships
        10. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, DOD has been instrumental in establishing two regional
    partnerships, one in the southeast and one in the southwest, to address
    compatible land use and conservation at landscape scales. In addition
    to State and local governments and conservation groups, the regional
    partnerships increasingly involve efforts aimed at collaborative
    planning and action with other Federal agencies. In your view, have
    these regional partnerships been helpful in ensuring long-range
    sustainability?
        Secretary Penn. The Regional Partnership concept has been a leading
    force in improving interagency coordination and communication at the
    Federal level as well as at the State level. The Department of the Navy
    operates, tests, and trains over large areas of the United States and
    the ability to bring all the stakeholders to the table affords each of
    us the opportunity to broaden our perspectives, share information, and
    hopefully identify mutually agreeable solutions to land use
    compatibility issues. Regional partnerships work to prevent
    encroachment around military lands and provide a forum to discuss
    issues of common concern such as urban sprawl, loss of wildlife
    habitats, and sustainment of marine and coastal resources. From our
    perspective, these partnerships provide a forum that allows us to work
    regionally on land use concerns that affect the sustainment of our
    readiness training, introduction of new mission requirements, and the
    acquisition of new weapons systems. Through regional partnerships, the
    Navy and DOD have been successful in establishing effective working
    relationships with the States and Federal agencies in order to guide
    State and regional land use planning. For instance, we have been able
    to work with the State of North Carolina to identify working lands
    (e.g., farms, forests) whose development would adversely affect our
    ability meet our military readiness training requirements. This
    identification is leading to mutual efforts to protect these working
    lands from development via regional and local land use planning, and
    through the purchase of real property rights to ensure these lands
    remain undeveloped.
        Mr. Arny. DOD has been a key player in both the Southeast Regional
    Partnership for Planning and Sustainability (SERPPAS) and the Western
    Regional Partnership (WRP). Both SERPPAS and WRP have been helpful to
    date, though as the older of the two partnerships, SERPPAS has seen
    more concrete action. SERPPAS has been very helpful in: supporting
    landscape/ecosystem-scale collaboration among the Federal, State, and
    nongovernmental organization (NGO) partners for southern longleaf pine
    forest restoration; leveraging actions by partners that have resulted
    in sustaining compatible land uses that buffer DOD installations and
    ranges; increasing off-post habitat for endangered and threatened
    species; and providing economic benefits to private landowners. The
    value of the WRP will increase as it builds off SERPPAS's successes.
    WRP has identified several focus areas, including the identification
    and preservation of wildlife corridors and important habitat;
    sustainable land use; disaster preparedness; GIS mapping; and renewable
    energy issues. As SERPPAS and WRP continue to develop, these regional
    partnerships will complement and build on other long-range
    sustainability activities being undertaken by DOD and the military
    Services in partnership with other Federal agencies, State and local
    governments, conservation NGOs, and private landowners.
        Mr. Calcara. DOD led both the SERPPAS and the WRP. These regional
    partnerships have been helpful. As SERPPAS and WRP continue to develop,
    these regional partnerships should complement and build on other long-
    range sustainability activities being undertaken by the Army in
    partnership with other Federal agencies, State and local governments,
    conservation NGOs, and private landowners.
        Ms. Ferguson. The SERPPAS has focused a major portion of their
    efforts on ecosystem-scale collaboration among Federal, State, and
    nongovernmental partners for the southern longleaf pine forest
    restoration. The outcome of this collaboration will benefit the Air
    Force installations and ranges in the southeast that contain longleaf
    pine ecosystems. The WRP is in its infancy and has recently identified
    several focus areas, renewable energy, sustainable land use, GPS
    mapping, and disaster preparedness.
        As these partnerships mature we anticipate that they will
    complement other Air Force sustainability activities.

        11. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, how important is the engagement with other Federal agencies
    both within these regional partnerships and more generally?
        Secretary Penn. Engagement with other Federal agencies is critical
    to our ability to carry out our mission. We interact with other Federal
    agencies in their capacities as regulators, program managers, and land
    owners. For example, the establishment of renewable energy corridors
    and the potential impacts to training ranges and long range radar
    facilities is one area where the regional partnerships can be effective
    by sharing information and seeking solutions to critical site selection
    issues. Additionally, the ability to map military training routes and
    overlay those routes over maps of Federal lands provides some insight
    into potential land use compatibility issues in parks, wilderness, and
    reservations. Other issues, such as potential environmental impacts and
    air corridor usage, require close coordination with Federal agencies
    such as the Federal Aviation Administration (FAA), Department of
    Interior, and Environmental Protection Agency (EPA).
        Mr. Arny. The integration of conservation and land management
    planning and actions among Federal agencies within SERPPAS and WRP is
    very important to the regional partnerships' success and the success of
    long-term land use sustainability and military readiness. The missions
    of many Federal agencies can both complement and conflict with one
    another, and coordination and engagement through SERPPAS and WRP helps
    ensure that Federal resources are effectively leveraged and that
    partnerships work toward mutual benefits. Responsible management of
    public lands, particularly in the west, is key to the long-term
    sustainability of the military value of DOD installations and ranges
    that support operations, test, and training missions, and for
    conservation partnerships generally. Engagement in WRP allows the
    agencies to share GPS data and develop policy regarding renewable
    energy that will not encroach on DOD installations and will best
    benefit the environment and endangered species. Engaging with Federal
    agencies within these regional partnerships provides important
    incentives for State and local government integration of
    decisionmaking, while supporting the Federal agencies' abilities to
    carry out their respective missions. It also encourages the
    participation of private property owners in SERPPAS and WRP, as well as
    in compatible land and conservation efforts more generally.
        Mr. Calcara. It is very important that conservation and land
    management planning be integrated among Federal agencies. Conservation
    issues are usually regional in nature and transcend the boundaries of
    any specific agency landholdings such as a military installation, a
    national forest, national park, or refuge. Interagency coordination and
    partnerships are critical to resolving issues at the regional landscape
    level.
        Ms. Ferguson. The engagement with Federal agencies is extremely
    important. The Air Force has engaged with other Federal agencies for a
    number of years. We also endorse this concept at the State and local
    level. In the late 1980s the Air Force established a program of
    interagency/intergovernmental coordination/collaboration for a number
    of our programs and work areas. The OSD regional efforts have taken the
    concept of Federal agency engagement to a new level.

                     national resource conservation service
        12. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, in your 2009 Report to Congress submitted in accordance with
    section 2684a(g) of title 10, U.S.C., you noted that the ability to
    combine REPI funds with funds under the Farm and Ranchland Protection
    Program (FRPP) of the Department of Agruiculture's Natural Resource
    Conservation Service (NRCS) ``continues to reap great benefits for both
    programs.'' It is my understanding that the DOD-NRCS partnership has
    been critical to ongoing projects to protect Fort Sill, OK; Fort Riley,
    KS; Fort Campbell, KY; and a consortium of bases in South Carolina, as
    well as to other planned projects. However, I am advised that some
    technical changes made to the FRPP program in the 2008 farm bill
    threatens this collaboration and accordingly the projects to protect
    those key installations. Would the ability to continue these successful
    partnerships be helpful to your efforts to assure sustainability at
    those installations and at others where such collaboration was planned?
        Secretary Penn. Yes. The Regional Partnership concept has been a
    leading force in improving interagency coordination and communication
    at the Federal level as well as at the State level. The Navy operates,
    tests, and trains over large areas of the United States. The ability to
    bring all stakeholders together affords each the opportunity to broaden
    our perspectives, share information, and hopefully identify mutually
    agreeable solutions to land use compatibility issues. Regional
    partnerships work to prevent encroachment around military lands and
    provide a forum to discuss common issues such as urban sprawl, loss of
    wildlife habitats, and sustainment of marine and coastal resources.
    These partnerships provide a forum that allows the Navy to work
    regionally on land use concerns that affect the sustainment of
    readiness training, introduction of new mission requirements, and the
    acquisition of new weapons systems. Through regional partnerships, the
    Navy and DOD have been successful in establishing effective working
    relationships with State and Federal agencies to guide State and
    regional land use planning. For example, the Navy worked with the State
    of North Carolina to identify working lands (farms and forests) whose
    development would adversely affect the ability to meet military
    readiness training requirements. This identification is leading to
    mutual efforts to protect these working lands from development via
    regional and local land use planning, and through the purchase of real
    property rights to ensure these lands remain undeveloped.
        Mr. Arny. The Department would welcome initiatives to preserve FRPP
    support for DOD compatible land use partnerships. DOD partnerships with
    NRCS are vital to ensure sustainability at installations such as Fort
    Sill, Fort Riley, and Fort Campbell, and for others where such
    collaboration was planned. NRCS involvement at Fort Sill was key to
    buffering the installation's artillery training while also protecting
    prime agricultural soils and providing economic benefits to landowners.
    Particularly with economic hardship affecting many potential private
    and State conservation partners, projects that anticipated
    collaboration with NRCS, such as at Beale Air Force Base (AFB), CA, are
    scrambling to replace FRPP funding, and matching State and local
    funding will be further reduced. Without NRCS FRPP collaboration,
    similar compatible land use partnerships that would work to ensure our
    installations' sustainability will be at risk.
        Mr. Calcara. Anny partnerships with NRCS are vital to ensure
    sustainability at installations such as Forts Sill, Riley, and
    Campbell, and for others where such collaboration was planned. NRCS
    involvement at Fort Sill was key to buffering the installation's
    artillery training while also protecting prime agricultural soils and
    providing economic benefits to landowners. Particularly with economic
    hardship affecting many potential private and State conservation
    partners, projects that anticipated collaboration with NRCS are
    scrambling to replace FRPP funding. Without NRCS FRPP collaboration,
    similar compatible land use partnerships that would work to ensure our
    installations' sustainability will be thrown into question, and the
    Army welcomes Congress to act to ensure the continuation of FRPP
    support for these partnerships.
        Ms. Ferguson. The partnership with NRCS is important to
    collaborative planning efforts. The Air Force has had several REPI
    projects where FRPP funds were going to be part of the partner
    contribution. Unfortunately the recent change in the 2008 farm bill has
    resulted in impacts to Air Force REPI projects. For example, the
    partner for the fiscal year 2009 Beale AFB project is now scrambling to
    find funding. In addition, the economic downturn has dried up alternate
    sources of funds so it is unclear what the loss of FRPP funds will mean
    to this project. The ability to have these partnerships is an important
    asset for partnering efforts.

                            interagency partnerships
        13. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, in your 2009 Report to Congress submitted in accordance with
    section 2684a(g) of title 10, U.S.C., you noted that consideration was
    being given to ``initiatives to authorize even greater interagency
    collaboration'' in actions to ensure compatible land use and range
    sustainability. Would enhancements to your ability to form and
    implement interagency partnerships at the Federal level and to pool
    your resources with those of other Federal agencies help assure the
    long range sustainability of your testing and training installations,
    ranges, and airspace?
        Secretary Penn. The enhanced ability to form and implement
    interagency partnerships at the Federal level and to pool Federal
    agency resources would greatly help assure the long range
    sustainability of the Navy's testing and training installations,
    ranges, and airspace. Federal level interagency partnerships would
    promote more efficient and effective resource sharing and
    decisionmaking, which would enable the Navy to better meet its mission
    of installation, range, and airspace sustainability.
        Mr. Arny. Enhancing our ability to form and implement interagency
    partnerships at the Federal level, and to pool Federal agency
    resources, would significantly assist in our efforts to ensure the
    long-term sustainability and military value of our installations,
    ranges, and airspace to support operations, testing, and training.
    Facilitating interagency partnerships would allow for better resource
    sharing and informed decisionmaking, which can help maintain military
    readiness through installation, range, and airspace sustainability.
    Coordination of land use protection policy and actions among Federal
    agencies will be key to protecting the long-term viability of our
    installations and ranges. Pooling Federal resources and providing
    matching Federal funds would significantly extend the REPI program and
    the Department's ability to leverage State, local, and private
    resources, and achieve the greatest benefit from the use of REPI funds
    to acquire restrictive easements to preserve conservation and buffer
    lands.
        Mr. Calcara. Yes. Enhancing our ability to form and implement
    interagency partnerships at the Federal level, and to pool Federal
    agency resources, would significantly assist us in our efforts to
    ensure the long-term sustainability of our testing and training
    installations. In particular, an authority enabling the Army to pool
    funds with other agencies to fund with a one-time payment the perpetual
    management of lands. Pooling Federal resources and providing matching
    Federal funds would significantly extend the REPI program and the
    Department's ability to leverage State, local, and private resources,
    and achieve the greatest benefit from the use of REPI funds to acquire
    restrictive easements to preserve conservation and buffer lands.
        Ms. Ferguson. Long-term mission sustainability at our air
    installations and ranges will benefit from enhancements to the ability
    to form and implement interagency partnerships at the Federal and to
    pool Federal agency resources. These kinds of partnerships would
    enhance our ability to use the authority granted in 10 U.S.C., section
    2684a.

                                 climate change
        14. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, section 951 of the NDAA for Fiscal Year 2008 directed DOD to
    consider the effect of climate change on DOD facilities, capabilities,
    and missions, and to include those assessments in the upcoming
    Quadrennial Defense Review (QDR). Are you participating in that review
    with regard to the potential impacts of climate change on range
    sustainability, especially for coastal installations like Camp Lejeune
    and installations in arid regions such as the Mojave?
        Secretary Penn. Yes, the Department of Navy is working with DOD
    through the QDR to examine the capability to respond to the
    consequences of climate change as tasked by section 951 of the 2008
    NDAA. Specifically the Navy has established Task Force Climate Change
    (TFCC) in May 2009 to develop a roadmap for Navy action regarding
    climate change. The Marine Corps is planning and implementing projects
    and activities that support their ability to meet and sustain the
    mission of the Marine Corps. Examples of Marine Corps activities at
    installations include: (1) wildfire preparation management; (2) water
    conservation; (3) hurricane preparedness; and (4) natural resource
    management.
        Mr. Arny. Yes. The ongoing QDR is examining the capabilities of the
    Armed Forces to respond to the consequences of climate change, in
    particular, preparedness for natural disasters from extreme weather
    events and other missions the Armed Forces may be asked to support
    inside the United States and overseas, as tasked by section 951 of the
    2008 NDAA. All of the military departments and numerous other DOD
    agencies are participating in this effort. Some specific examples of
    what DOD and the military departments are doing to address climate
    change include:
    Office of the Secretary of Defense
             Strategic Environmental Research and Development Program
            (SERDP). SERDP, DOD's environmental research program, has
            initiated substantial work to understand and assess the impact
            of climate change to DOD installations. Work is ongoing to
            quantify the impacts of sea level rise, increased storm
            intensity and frequency, and potential changes to the coast
            line at DOD installations due to climate change. Areas of
            particular focus include installations like Camp Lejeune, and
            others in the Chesapeake Bay, the Gulf Coast, and southern
            California. This effort will both quantify the potential
            impacts and their significance to the military mission. Work is
            planned for fiscal year 2010 to assess multiple impacts to
            installation in arid regions across the southwest including
            installations in the Mojave desert. Information on these
            efforts has been provided to the upcoming QDR.
    Army
             Army Water Sustainability Study: Climate change predictions
            in the southeast and southwest United States indicate a
            potential for more severe and extended drought conditions. This
            ongoing study will evaluate the vulnerability of Army
            installations to potential water shortages over the next 30
            years.
    Navy
             Task Force Climate Change. The Navy established TFCC in May
            2009. TFCC is chartered to develop a roadmap for Navy action
            regarding the Arctic specifically, and climate change in
            general.
             Naval Studies Board Fiscal Year 2009 Study. Navy recently
            sponsored a Naval Studies Board study on the National Security
            Implications of Climate Change on U.S. Naval Forces (Navy,
            Marine Corps, and Coast Guard), to be completed late 2010.
    Air Force
             Climate Change Ongoing Reviews. To better understand both the
            projected threats posed to Air Force operations by climate
            change and the type of information that will be needed to
            inform climate change-related policy decisions, the Air Force
            has been monitoring public, private sector, and NGOs to
            identify relevant studies and analyses. Information gleaned
            from such analyses will inform future Air Force policy
            decisions regarding appropriate management and adaptation
            strategies.

        Mr. Calcara. Yes. As part of our ongoing involvement in the QDR,
    the Army is, as directed by section 951 of the NDAA for Fiscal Year
    2008, using mid-range projections of climate change from the
    Intergovernmental Panel on Climate Change (IPCC) 4th Assessment Report
    (2007) to determine the impacts of global climate change and their
    implications for national security and examine the capabilities to
    respond to the consequences of climate change inside the United States
    and overseas. This assessment is ongoing for Army installations and
    Army operational forces.
        Ms. Ferguson. The Air Force defers to OSD to answer questions on
    climate change affecting the DOD.

        15. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, Congress is now considering legislation to address climate
    change, including provisions to establish and fund natural resource
    adaptation plans and actions at the State level and at the Federal
    agency level. Should DOD participate in such planning in order to
    ensure that adaptation plans address DOD range sustainability?
        Secretary Penn. Yes. Navy should participate in climate change
    planning to ensure that adaptation plans address the long-term
    sustainability of DOD's ranges and other testing and training areas and
    other assets.
        Mr. Arny. Yes, DOD should participate in such planning in order to
    ensure that adaptation plans address the long-term sustainability of
    DOD's ranges and other testing and training areas, and its natural
    resources. DOD and the military departments are undertaking initial
    efforts to address climate change issues. Some representative examples
    of what DOD is doing to contribute to climate change adaptation efforts
    include:
    Office of the Secretary of Defense
             DOD Legacy Resource Management Program (Legacy). The Legacy
            program is investing in national and regional efforts that will
            assist the Department in defining an adaptation strategy that
            will support the long-term sustainability of its natural and
            cultural resources. Current initiatives include:

                     A partnership with the National Wildlife Federation,
                    the Association of Fish and Wildlife Agencies, the U.S.
                    Fish and Wildlife Service, and other Federal agencies
                    to develop a guidance manual that will summarize
                    currently available natural resource-focused
                    vulnerability assessment tools.
                     A Pacific Regional workshop in February 2010 that
                    will identify and prioritize potential management
                    strategies for listed and at-risk species expected to
                    be adversely affected by climate change.
                     A project to assess sea level rise scenarios on seven
                    North Carolina military installations in order to aid
                    decisionmaking regarding management of their natural
                    resources and infrastructure.

             DOD's SERDP has initiated research and demonstration
            activities related to climate change in terms of impact
            assessment, adaptation, and mitigation.

                     During fiscal year 2009, SERDP initiated four
                    research projects focused on developing the methods,
                    tools, and models necessary for DOD installations to
                    assess the potential impacts of sea level rise and
                    associated storm surge phenomena on installation
                    infrastructure.
                     Also during fiscal year 2009, SERDP has initiated
                    natural resource-related research projects associated
                    with southeastern ecosystems that focus on potential
                    climate change impacts to shoreline bird populations,
                    test adaptation strategies for coastal marsh plant
                    communities, and incorporate climate change into
                    setting recovery objectives for southeastern ecological
                    systems.

        Mr. Calcara. Yes, DOD and the military departments should
    participate in such planning in order to ensure that climate change
    adaptation plans for natural resources address the long-term
    sustainability of DOD's ranges and training areas. Climate change and
    the potential impacts to natural resources, especially those natural
    resources regulated under the Endangered Species Act, are of special
    concern to the Army. It is critical that the military be engaged in
    natural resources climate change adaptation plans and actions at the
    State level and at the Federal agency level to ensure the continued
    sustainability of our training areas and ranges.
        Ms. Ferguson. The Air Force defers to OSD to answer questions
    concerning DOD range sustainability.

        16. Senator Udall. Secretary Penn, Mr. Arny, Mr. Calcara, and Ms.
    Ferguson, would provisions to allow better integration of Federal
    efforts with regard to natural resource adaptation planning and
    implementation be helpful in your ability to respond to the impacts of
    climate change?
        Secretary Penn. The integration of global observation networks,
    content standards, indicators, and baseline information related to
    global climate change would assist the Department of Navy with
    vulnerability assessments for national security. Initiatives for data
    sharing and research among and between Federal agencies, academia,
    National Academy of Science, and others would be beneficial. Although
    still evaluating what our specific natural resource adaptation planning
    and implementation actions will encompass, Federal agencies are, on a
    national scale, addressing emissions of greenhouse gases by reductions
    mandated in Federal laws and Executive orders, most recently, Executive
    Order 13423. While the Navy has not identified substantial impediments
    to integration of Federal efforts in response to the impacts of climate
    change, provisions highlighting the cooperation of Federal agencies,
    promoting the exchange of relevant information, and fostering
    integration of Federal agency efforts would be a welcome addition to
    our ability to respond the challenges associated with climate change.
        Mr. Arny. DOD currently is taking steps to integrate its efforts,
    both internally and with other agencies. For example, DOD is working
    with the White House Office of Energy and Climate Change to develop an
    administration approach to climate change challenges. Since the mid-
    1990s, DOD and the military departments have incorporated into their
    approach to land and water management the principles of ecosystem-based
    management including one of its key tenets, adaptive management. These
    approaches not only have led to sustainable use of natural resources to
    support mission needs and meet stewardship requirements, but also may
    contribute to ecosystem resilience in the face of climate change.
    Maintaining ecosystem resilience is a key adaptation strategy given the
    uncertainty of potential impacts.
        The ongoing QDR is examining the capabilities of the Armed Forces
    to respond to the consequences of climate change, in particular,
    preparedness for natural disasters from extreme weather events and
    other missions the Armed Forces may be asked to support inside the
    United States and overseas, as tasked by section 951 of the 2008 NDAA.
    All of the military departments and numerous other DOD agencies are
    participating in this effort.
        Provisions to better integrate these and other DOD efforts with
    other Federal efforts would be mutually beneficial.
        Mr. Calcara. Yes. Provisions to better integrate all Federal
    efforts with regard to natural resource climate change adaptation
    planning and implementation would be mutually beneficial. Natural
    resources climate change adaptation planning is best addressed in a
    comprehensive manner at a regional landscape/ecosystem scale that
    transcends the boundaries of any specific Federal facility. A multi-
    agency coordinated effort to establish standardized climate change
    vulnerability assessment methods and risk-based adaptation plans for
    natural resources could ensure best science is used, all critical
    agency missions are addressed, and create an economy of scale for such
    plans and responses.
        Ms. Ferguson. The Air Force defers to OSD to answer questions
    pertaining to natural resource adaptation planning and impacts of
    climate change.
                                     ______

                  Questions Submitted by Senator Richard Burr
                         relocation of marines to guam
        17. Senator Burr. Secretary Penn, I have a few questions about the
    2005 agreement between the United States Government and the Government
    of Japan to relocate 8,000 marines from Okinawa to Guam. The agreement
    was reaffirmed in February 2009 and the budget request for 2010
    includes $378 million to start construction of facilities.
        Aside from a basic estimate of over $4.0 billion for the U.S.
    investment, does the Navy have a detailed current estimate of costs to
    U.S. taxpayers to complete this initiative, including one-time
    construction costs and additional annual base operations costs? If so,
    can you provide exactly what these costs will be? If so, are these
    costs based on the results of a master plan (MP) that details the
    actual facilities that will be constructed?
        Secretary Penn. Cost estimates, including annual base operations
    costs, to implement the Realignment Roadmap will not be available until
    the Environmental Impact Statement (EIS) and MP are completed in 2010.
    Unique to the negotiated timeline and circumstances of the Realignment
    Roadmap, the master planning process and efforts to comply with the
    National Environmental Policy Act (NEPA) are ongoing simultaneously and
    inform one another. Until the EIS and MP are completed, the original
    $10.2 billion cost estimate, with Japan contributing $6.09 billion and
    the United States contributing $4.18 billion, remains valid.

        18. Senator Burr. Secretary Penn, are these costs captured in the
    current Navy Future Years Defense Plan (FYDP) to accompany the 2010
    budget?
        Secretary Penn. We have captured a portion of those costs in the
    fiscal year 2010 President's budget submit, but as the DOD Comptroller
    has testified in other hearings, DOD does not have a fiscal year 2010
    FYDP that is consistent with current administration policy.

                    environmental impact statement for guam
        19. Senator Burr. Secretary Penn, the EIS to support the move of
    8,000 marines and their families from Okinawa to Guam is ongoing, but I
    know the Marine Corps has particular concerns with their ability to
    train in Guam. Are you aware of the concerns raised by the Marine Corps
    about the current plan for both individual marine training on Guam and
    collective training in the region?
        Secretary Penn. The Guam Military Buildup EIS covers individual
    skills training to support marines relocating to Guam in support of the
    Realignment Roadmap. Ranges planned on Guam and on DOD-leased land in
    Tinian in support of these relocating forces offer the opportunity for
    individual combat skills training. Transient units, whether United
    States, joint, or coalition, would have the opportunity to fall in on
    these ranges for individual skills sustainment training.
        The Department is well aware of and is planning for the Marine
    Corps' longer-term vision to address deficiencies with integrated,
    combined arms, collective-skills training in the Pacific region beyond
    what will be delivered as part of the Guam Military Buildup Program.
    These Marine Corps and other Service training requirements in the
    Pacific theater are being addressed in the current QDR process.

        20. Senator Burr. Secretary Penn, what is the Navy doing to address
    these concerns?
        Secretary Penn. Marine Corps and other Service training
    requirements in the Pacific theater, beyond individual skills training,
    are being addressed in the current QDR process, and will be considered
    as part of future budget submissions.

        21. Senator Burr. Secretary Penn, how are the Marine Corps'
    training needs being evaluated and included in the EIS process
    supporting the move to Guam?
        Secretary Penn. The Realignment Roadmap agreement between the
    United States and Japan designates the specific Marine Corps units to
    relocate from Okinawa to Guam. The Guam Military Buildup EIS is based
    on these units and covers the individual skills training necessary to
    support individual level readiness for these Marines. Other
    requirements for unit-level, collective-skills training, and the
    sustainment of Marine Air-Ground Task Force core competencies and
    readiness in the Pacific are being addressed in the QDR.

        22. Senator Burr. Secretary Penn, does the Navy consider the
    establishment of adequate training resources for marines on Guam and in
    the Mariana Islands to be a ``showstopper'' for the movement of marines
    to Guam?
        Secretary Penn. The inability for Marine units to sustain
    operational readiness would be a ``showstopper'' in the relocation to
    Guam. However, the Navy is committed to ensuring marines on Guam will
    have access to training necessary to sustain readiness. The Navy
    considers readiness of Marine units in the Pacific to be of the highest
    priority.
        Our current plan provides individual-skills training on Guam. Unit-
    level, collective-skills training requirements are currently being
    studied in the QDR.

        23. Senator Burr. Secretary Penn, the agreement between the two
    governments stipulates that ``tangible progress'' must be made towards
    completion of a Futenma Replacement Facility on Okinawa. Has the
    Governor of Okinawa approved the necessary environmental review actions
    needed to start building the Futenma replacement facility?
        Secretary Penn. No. The environmental review actions are ongoing.
    The Government of Japan, following its sovereign regulatory process,
    released the draft Environmental Impact Assessment for the Futenma
    Replacement Facility in April 2009.

        24. Senator Burr. Secretary Penn, what is the status of starting
    construction of the replacement facility and when will it be completed?
        Secretary Penn. On-land construction for those Camp Schwab
    facilities required in advance of the runway began in June 2008. The
    Government of Japan has authorized and appropriated $323 million to
    continue construction in the current Japanese fiscal year (April 2009-
    March 2010). We have been informed by the Japanese Government that
    their objective is to complete the replacement facility in 2014.

        25. Senator Burr. Secretary Penn, do you see funding or other
    concerns from the Japanese Government or from the United States that
    give you concerns about the timeframe for completing the move?
        Secretary Penn. DOD received Government of Japan funds in the
    amount of $336 million on July 27, 2009, to support construction on
    Guam in accordance with the Realignment Roadmap. I urge Congress to now
    demonstrate the U.S. commitment to the Roadmap by approving our fiscal
    year 2010 MILCON budget request of $378 million in fiscal year 2010.
    Failure to authorize and appropriate a comparable amount for fiscal
    year 2010 will place the Japanese $6 billion financial commitment to
    Guam at high risk. Furthermore, delays resulting from deferral of
    funding requirements into future years or reductions to the program,
    will only serve to increase the total cost of the Realignment to the
    United States and extend the time required to complete the move.

                           future years defense plan
        26. Senator Burr. Mr. Arny, Mr. Calcara, and Ms. Ferguson, the
    Senate has traditionally used the FYDP to assess the validity of MILCON
    projects requested by Members to be inserted into the defense bill. On
    May 15, 2009, the OSD Comptroller issued guidance to each Service
    Secretary titled ``Congressional Add Requests Guidance,'' which
    specified the only questions to be answered in response to a review of
    a Member request. I'd like to enter this letter into the record. Has
    each Service adhered to this guidance in response to queries about
    MILCON projects? If not, where has each Service deviated from the
    guidance and why?

        Mr. Arny. The Services adhered to the Congressional Add Requests
    Guidance issued by the OSD (Comptroller) in May.
        Mr. Calcara. The Army complied with the Congressional Add Requests
    Guidance when received from OSD(C) in late May. Prior to receipt of
    this guidance, Army used the normal screening process for MILCON add
    requests.
        Ms. Ferguson. The Air Force has strictly adhered to the guidance
    provided and only provided MILCON information in accordance with Office
    of Management and Budget (OMB) and OSD directives.

                        military family housing in korea
        27. Senator Burr. Mr. Calcara, regarding Army housing at Camp
    Humphreys, what is the current status of the Army initiative to partner
    with a private developer for the construction and operation of housing
    for U.S. military personnel and their families?
        Mr. Calcara. The project is on schedule to conduct the financial
    and real property closing for the first phase of Humphreys Housing
    Opportunity Project (HHOP) in the fall of 2009. The Army and HFC, (the
    developer) completed a ``mock closing'' July 7-9, 2009, and have
    finalized virtually all of the complex transactional documents. HFC is
    currently making good progress in negotiations with the Republic of
    Korea to obtain important assurances concerning the long-term
    utilization of property at U.S. Army Garrison (USAG) Humphreys. The
    developers' financial team of Merrill Lynch and Bank of America are
    finalizing underwriting and due diligence requirements in order to
    obtain the approximately $750 million phase-one loan.

        28. Senator Burr. Mr. Calcara, what is the schedule for
    construction?
        Mr. Calcara. The Army interprets this question to relate to the
    HHOP at USAG Humphreys. HHOP construction is divided into two phases:
    HHOP 1 and HHOP 2. Each construction phase is approximately 30 months
    long. HHOP 1 is presently scheduled to begin construction in the fall
    of 2009 and begin occupancy lease up in the fiscal year 2011 and fiscal
    year 2012 timeframe to coincide with unit moves under the Yongsan
    Relocation Plan. HHOP 2 is currently planned to begin construction in
    the fall of fiscal year 2011 with occupancy and lease up in fiscal year
    2013-fiscal year 2014.

        29. Senator Burr. Mr. Calcara, what is the total number of units
    currently planned to be constructed and the estimated total cost for
    the housing?
        Mr. Calcara. The Army interprets this question to relate to the
    HHOP at USAG Humphreys. The HHOP developer, HFC, will construct a total
    of 2,427 units in a mix of 3, 4, and 5 bedroom floor plans. Of the
    2,427 units, 1,416 will be constructed on a parcel designated as HHOP 1
    and 1,011 units will be constructed on a nearby parcel designated as
    HHOP 2. The HHOP 2 parcel has capacity for an additional 700+ units if
    requested; however, the Army's current requirement is satisfied with
    the 2,427 units. The total development budget for HHOP is approximately
    $1.3 billion sourced from developer equity and private sector
    financing.

        30. Senator Burr. Mr. Calcara, I note that, in the President's
    budget request for fiscal year 2009, $125 million was requested for the
    construction of 216 units in the first phase of family housing in
    Korea. Has this project been awarded? If not, what is the status of
    this project?
        Mr. Calcara. The fiscal year 2009 project was awarded on June 26,
    2009, at a cost of $124.9 million to construct three towers with 204
    housing units.

                  property disposal for defense base closures
        31. Senator Burr. Mr. Arny, I have a concern regarding the subject
    of the 2005 BRAC, specifically, the current policy on the disposal of
    property. DOD is authorized to dispose of BRAC property using a range
    of methods from transfers to another Federal agency to public benefit
    conveyances or public sales. DOD has the choice to convey property to
    local redevelopment agencies representing communities affected by BRAC
    for the purpose of economic development. From your testimony, DOD
    assesses the needs of the local community and the intended use of the
    property in determining the amount of compensation to be received in
    exchange for the economic development conveyance (EDC). You can receive
    an amount for the EDC that may range from fair market value to an
    amount less than fair market, to no cost to the conveyee, depending on
    the local economic conditions. What is the current policy of DOD
    regarding compensation for EDCs?
        Mr. Arny. Under applicable regulations at 32 CFR 174.10, the
    Secretary of the military department will review the application for an
    EDC and negotiate terms and conditions of each transaction with the
    Local Redevelopment Authority (LRA). The Secretary has discretion and
    flexibility to enter into agreements that specify the form of payment
    and schedule. The consideration may be in cash or in-kind and may be
    paid over time. Any amount paid in the future should take into account
    the time, value of money, and include repayment of interest.
        The Secretary concerned shall seek to obtain consideration at least
    equal to the fair market value, as determined by the Secretary. An EDC
    without consideration may be made if----

             (1) 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 7 years after the date of the initial
            transfer of property shall be used to support economic
            redevelopment of, or related to, the installation; and
             (2) 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
            decision.

        32. Senator Burr. Mr. Arny, does the Department have a position on
    proposed language by the House Armed Services Committee that would
    redefine the roles of EDCs and eliminates fair market value
    negotiations between eligible parties and DOD prior to conveyance?
        Mr. Arny. The Department strongly opposes House section 2711
    because it would mandate that all EDCs be at no-cost. Current law and
    implementing policy allows DOD to convey property at closed
    installations at fair market value or at no-cost, depending on the
    particular circumstances. The Department further opposes this provision
    because it changes the basic structure of EDCs such that they would be
    available for redevelopment that may not produce any long-term job
    generation. Such a change, when coupled with the requirement that the
    transfer be at no cost, would likely lead to subordinating all other
    conveyance mechanisms to this new and ambiguous method. The cumulative
    effect of these proposed changes diminishes the connection to job
    creation, makes it easier for LRAs to `flip' valuable properties they
    obtain at no-cost for profits that can be used for purposes unrelated
    to redevelopment of the property, and diminishes potential property
    disposal returns to Federal taxpayers. This section would create
    potential windfalls for certain communities with high value property,
    and for private sector developers working with those communities, at
    the expense of other communities where DOD might otherwise be able to
    accelerate environmental cleanup using property disposal proceeds. It
    creates unbalanced incentives for LRAs to seek free conveyance under
    this authority of any BRAC property that has commercial market value,
    leaving less valuable, less desirable property for DOD to try to
    dispose using public benefit conveyance authorities or other methods.
    DOD experience conveying over 400,000 acres of BRAC real property to
    date suggests that the current array of property conveyance
    authorities, including both cost and no-cost EDCs, provides appropriate
    flexibility to properly address the range of needs and circumstances
    encountered at closing installations and the communities that have
    hosted them. This provision would prevent the Department from tailoring
    the disposal method to meet the needs and circumstances of each local
    community.

        33. Senator Burr. Mr. Arny, what is your opinion on a proposal to
    require the compensation to the U.S. Government for an EDC to rely on
    actual market returns realized at the completion of the development as
    opposed to a negotiated amount?
        Mr. Arny. Current applicable statute and implementing regulations
    provide the military departments with flexibility to negotiate the
    terms and conditions of each transaction with the LRA. The military
    department has discretion and flexibility to enter into agreements that
    specify the form of payment and the schedule. The consideration may be
    in cash or in-kind, and may be paid over time. A proposal to require
    the compensation for an EDC to take a specific form, such as reliance
    on actual market returns realized at the completion of the development,
    may not fit every situation and would diminish the Department's ability
    to negotiate agreements that tailor the form and timing of payment
    depending on the unique needs and circumstances at each location.

        34. Senator Burr. Mr. Arny, are you currently considering
    applications for no-cost conveyances for the 2005 round of BRAC?
        Mr. Arny. At many BRAC 2005 locations, LRAs are still in the
    process of preparing and obtaining approval of their redevelopment
    plans, so the Department has only received two EDC applications at BRAC
    2005 locations to date. One of those applications proposes to pay
    consideration, and the other seeks conveyance at no-cost. We anticipate
    additional EDC applications as more LRAs complete and obtain approval
    of their redevelopment plans.

        35. Senator Burr. Mr. Arny, with what considerations are you
    evaluating these applications?
        Mr. Arny. Under regulations published at 32 CFR 174.9, the military
    departments consider the following factors, as appropriate, in
    evaluating an EDC application and the terms and conditions of the
    proposed transfer, including price, time of payment, and other relevant
    methods of compensation to the Federal Government:

             (1) Adverse economic impact of closure or realignment on the
            region and potential for economic recovery through an EDC.
             (2) Extent of short- and long-term job generation.
             (3) Consistency with the entire redevelopment plan.
             (4) Financial feasibility of the development, including market
            analysis and need, and extent of proposed infrastructure and
            other investments.
             (5) Extent of State and local investment, level of risk
            incurred, and the LRA's ability to implement the plan.
             (6) Current local and regional real estate market conditions.
             (7) Incorporation of other Federal agency interests and
            concerns, and applicability of, and conflicts with, other
            Federal surplus property disposal authorities.
             (8) Relationship to the overall military department disposal
            plan for the installation.
             (9) Economic benefit to the Federal Government, including
            protection and maintenance cost savings and anticipated
            consideration from the transfer.
             (10) Compliance with applicable Federal, State, interstate,
            and local laws and regulations.

        36. Senator Burr. Mr. Arny, what would be the impact to DOD
    programs if you were required to convey all property under EDC
    authorities at no cost?
        Mr. Arny. Conveying all property under EDC authorities at no cost
    would create potential windfalls for certain communities with higher
    value property, and for private sector developers working with those
    communities, at the expense of other communities where DOD might
    otherwise be able to accelerate environmental cleanup using property
    disposal proceeds. It creates unbalanced incentives for LRAs to seek
    free conveyance under this authority of any BRAC property that has
    commercial market value, leaving less valuable, less desirable property
    for DOD to try to dispose using public benefit conveyance authorities
    or other methods. This provision would prevent the Department from
    tailoring the disposal method and terms to meet the needs and
    circumstances of each local community.

        37. Senator Burr. Mr. Arny, would the Department still consider the
    EDC program a sensible way to dispose of BRAC property?
        Mr. Arny. If DOD were required to convey all property under EDC
    authorities at no cost, the EDC program would remain a sensible way to
    dispose of BRAC property in those cases in which, after consideration
    of the EDC evaluation factors published at 32 CFR 174.9, a military
    department determines that a no-cost EDC is appropriate based on the
    location-specific facts and circumstances. DOD believes, however, that
    requiring all EDCs to be at no-cost would create unbalanced incentives
    for LRAs to seek free conveyance under this authority of any BRAC
    property that has commercial market value, regardless of whether their
    particular situation merits that approach, leaving less valuable, less
    desirable property for DOD to try to dispose using public benefit
    conveyance authorities or other methods. Such a requirement would
    prevent the Department from tailoring the disposal method and terms to
    meet the needs and circumstances of each local community.

                          unexploded ordnance clean-up
        38. Senator Burr. Mr. Arny, clean-up of unexploded ordnance (UXO)
    at DOD's active installations and Formerly Used Defense Sites (FUDS) is
    a huge task estimated to cost almost $20.0 billion. DOD's funding
    levels, even after years of increases by Congress, would require
    decades to complete the job. The NDAA for Fiscal Year 2007 required DOD
    to meet its own goals to complete preliminary assessments at all active
    bases and FUDS by fiscal year 2007; complete site inspections (SIs) at
    those places by fiscal year 2010; and achieve a remedy in place or
    response complete (RIP/RC) by the end of fiscal year 2009 at all bases
    and installations closed under prior rounds of BRAC before 2005. What
    is the current status of achieving these legislative mandates?
        Mr. Arny. The Department has completed preliminary assessments for
    95 percent of munitions response sites (MRSs) at active installations
    and 99 percent of MRSs at FUDS. The Department has completed SIs for 51
    percent of MRSs at active installations and 58 percent of MRSs at FUDS.
    The Department has achieved RIP/RC at 67 percent of MRSs at all bases
    and installations closed under prior rounds of BRAC before 2005.

        39. Senator Burr. Mr. Arny, what firm date has been established for
    clean-up of property closed by the 2005 round of BRAC?
        Mr. Arny. The clean-up remedy, for UXO, will be in place for all
    BRAC 2005 installations by 2017.

        40. Senator Burr. Mr. Arny, last year's section 313 report
    estimated that the cost to clean up UXO at all active installations and
    FUDS was $17.8 billion and that another $902 million would be required
    to clean up UXO at bases and installations closed by all five rounds of
    BRAC. Last year's report provided no estimated date when all active
    installations, FUDS, and BRAC sites would be completed. What are the
    cost-to-completion estimates this year?
        Mr. Arny. The estimated cost to complete clean-up, including long-
    term management (LTM), at the Department's MRSs on active installations
    and FUDS is $18.4 billion. The estimated cost to complete clean-up,
    including LTM, at the Department's MRSs on BRAC installations is $972
    million.

        41. Senator Burr. Mr. Arny, what is the projected date by which all
    UXO clean-up will be completed?
        Mr. Arny. The Department has established the following goals to
    measure cleanup progress at its MRSs:

             Achieve RIP/RC at all MRSs at Active installations by the end
            of fiscal year 2020.
             Achieve RIP/RC at all MRSs at Legacy BRAC installations (i.e.
            BRAC I (1988), BRAC II (1991), BRAC III (1993), BRAC IV (1995))
            by the end of fiscal year 2009.
             Achieve RIP/RC at all MRSs at BRAC 2005 installations by the
            end of fiscal year 2017.

        The Department projects that it will achieve RIP/RC at 95 percent
    of MRSs at active installations by the end of fiscal year 2017; 69 MRSs
    are not projected to meet the goal. The Department projects that it
    will achieve RIP/RC at 95 percent of MRSs at Legacy BRAC installations
    by the end of fiscal year 2016; 15 MRSs are not projected to meet the
    goal. The Department projects that it will achieve RIP/RC at 95 percent
    of MRSs at BRAC 2005 installations by the end of fiscal year 2015;
    three MRSs are not expected to meet the goal.
        At this time, the Department has not established a goal for the
    completion of FUDS MRSs. We have deferred establishing this goal until
    the FUDS MRSs have been more fully characterized. The more complete
    information we have on each MRS, the more accurately we can set a
    challenging goal for the entire inventory of FUDS MRSs.

        42. Senator Burr. Mr. Arny, could Congress accelerate the time it
    will take to complete these clean-ups by increasing funding? If so,
    where could increased funding be best used?
        Mr. Arny. No, for active DOD installation MMRP projects increased
    funding will not accelerate the time it will take to complete cleanup
    at MRSs, because there are certain requirements inherent in the clean-
    up process that cannot be influenced by funding. For example, the
    Munitions Response Site Prioritization Protocol (MRSPP), published as a
    final Federal regulation on October 5, 2005, codified at 32 CFR Part
    179, was developed to assign a relative priority to each MRS, based on
    potential hazards and site conditions, to sequence sites for
    remediation and funding. One of the Department's policies identified in
    the MRSPP (at 32 CFR 179.4) is to ensure that the EPA, other Federal
    agencies, State regulatory agencies, tribal governments, local
    restoration advisory boards or technical review committees, and local
    stakeholders are offered opportunities to participate in the
    application of the MRSPP. These stakeholders are also involved in
    making sequencing recommendations, and are provided the opportunity to
    review and comment when sequencing changes are proposed, as well as
    throughout the process of MRS investigation, remedy selection, and
    clean-up. Additionally, the munitions response program is a complex and
    technically challenging remediation program that must carefully
    consider explosive safety risks within the Federal Comprehensive
    Environmental Response, Compensation, and Liability Act (CERCLA)
    response action process. While removal actions can address certain
    immediate hazards, long-term remedial action for MRSs with public
    access may not lend itself to quick or accelerated solutions.

                    clean-up of formerly used defense sites
        43. Senator Burr. Mr. Arny, for the last several years, Congress
    has increased the funding for clean-up of FUDS. For example, the
    President's budget for fiscal year 2008 was $250 million--an amount
    lower than the $254 million appropriated by Congress for fiscal year
    2007. Congress increased the amount for FUDS in fiscal year 2008 to
    $270 million, an increase of $20 million over the President's budget.
    How much has the Department requested for FUDS clean-up for fiscal year
    2009?
        Mr. Arny. The Department follows an established budgeting process
    to allocate funds for cleanup at FUDS and other defense sites. DOD
    components plan, program, and budget resources to meet the goals and
    objectives developed for the Defense Environmental Restoration Program
    (DERP). The DOD components use these goals and objectives to guide
    investment decisions and set restoration targets for each fiscal year.
    Each program may be adjusted based on site level data, goals, and
    objectives. The President's budget request for the FUDS program each
    year reflects this analysis.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                        Fiscal Year
                                             -------------------------------
                                               2007    2008    2009    2010
    ------------------------------------------------------------------------
    President's Budget Request..............    $243    $250    $258    $268
    Appropriated............................    $263    $286    $292
    ------------------------------------------------------------------------

        44. Senator Burr. Mr. Arny, how long will it take to clean up FUDS
    at the level of funding in the President's budget?
        Mr. Arny. The Department projects that it will meet its goal of
    achieving RIP/RC at 99 percent of all hazardous substance sites at FUDS
    by the end of fiscal year 2020. The Department also projects that it
    will achieve its goal of completing SIs at 79 percent of MRSs by the
    end of fiscal year 2010; the remaining SIs will be completed by the end
    of fiscal year 2013. Once the SIs have been completed, the Department
    will have a more accurate picture of the clean-up requirements at the
    MRSs on FUDS, and be better able to forecast clean-up requirements for
    military munition response sites.

        45. Senator Burr. Mr. Arny, if Congress increased the funding level
    for FUDS clean-up, could the Department effectively use the money to
    increase the level of effort and shorten the time line for completion?
        Mr. Arny. No. The Department provides adequate funding to complete
    FUDS conventional contamination clean-up by the end of fiscal year
    2020. The Department also provides adequate funding to complete SIs at
    MRSs on FUDS. Once these SIs are completed, the Department will have a
    more accurate picture of munitions response requirements, and will
    review funding levels to ensure they are sufficient for completing
    environmental restoration in a timely manner.

                                superfund sites
        46. Senator Burr. Mr. Arny, Mr. Calcara, and Ms. Ferguson, during
    2008, DOD was involved in a significant dispute with the EPA over
    cleaning up DOD Superfund sites and related Federal Facilities
    Compliance Agreements for DOD installations, particularly those of the
    Army and Air Force. Where are we now on the bases that were the subject
    of the Superfund clean-up dispute with EPA? How many bases were at
    issue?
        Mr. Arny. Four DOD installations--Air Force Plant 44, AZ; McGuire
    AFB, NJ; Tyndall AFB, FL; and Fort Meade, MD--were the subject of the
    dispute with the EPA. The Federal Facility Agreement (FFA) for Fort
    Meade was signed by the EPA, Army, Department of Interior, and the
    Architect of the Capitol on June 19, 2009, and is currently in the a
    45-day public comment period. The Air Force is in the process of
    finalizing negotiations with EPA on the FFA for McGuire AFB. The FFAs
    for Air Force Plant 44 and Tyndall AFB are currently being drafted with
    EPA and the respective State.
        Mr. Calcara. The Army had two installations that did not have
    signed FFAs--Fort George G. Meade and Redstone Arsenal. The Fort Meade
    FFA was signed by the EPA, Army, Department of the Interior, and the
    Architect of the Capitol on June 19, 2009. The Redstone Arsenal FFA is
    currently being discussed between the EPA and the Alabama Department of
    Environmental Management (ADEM), which has issued a permit to the Army
    under the Resource Conservation and Recovery Act (RCRA) and the
    corresponding Alabama statute to regulate the clean-up of Redstone
    Arsenal. Once those regulators determine their roles and
    responsibilities, the Army will be able to negotiate a final FFA. There
    was no dispute over clean-up at either of these installations.
    Investigation and clean-up efforts continued in cooperation with EPA
    and the State regulators during the dispute over the content of the
    FFA, and we are making good progress. In April 2009, Fort Detrick was
    placed on the National Priorities List (NPL). Although the law does not
    require the Army to begin negotiations of all FFA for Fort Detrick at
    this time, the Army and EPA have discussed scheduling the negotiation
    of this FFA in the near future.
        Ms. Ferguson. The Air Force defers to OSD to answer questions on
    clean-up of DOD Superfund sites.

        47. Senator Burr. Mr. Arny, Mr. Calcara, and Ms. Ferguson, at one
    point, Maryland was threatening to bring a lawsuit against DOD to force
    compliance with the cleanup at Fort Meade. What has happened?
        Mr. Arny. In December 2008, the State of Maryland sued the Army to
    enforce the RCRA Unilateral Administrative Order issued by EPA in 2007
    for Fort Meade. Pursuant to agreements between the United States and
    Maryland, the Court has extended the time for an answer to be filed
    until October 19, 2009. EPA has agreed to withdraw the RCRA Order when
    the FFA is finalized, which is currently expected to be in October of
    this year. The Army, EPA, Department of Interior, and Architect of the
    Capitol signed the FFA on June 19, 2009. The FFA public comment period
    was initiated on July 3, 2009, and will run for 45 days. After an
    additional period to consider any public comments the FFA will be
    final.
        Mr. Calcara. In December 2008, the State of Maryland sued to
    enforce the RCRA Unilateral Administrative Order issued by EPA in 2007.
    Pursuant to agreements between the United States and Maryland, the
    Court has extended the time for an answer to be filed until October 19,
    2009. The EPA will withdraw the RCRA Order when the FFA is finalized,
    which is currently expected to be in October of this year. The Army
    expects Maryland to dismiss the lawsuit when the FFA is finalized. The
    FFA public comment period began on July 3, 2009, and will run for 45
    days. After an additional period to consider any public comments, the
    parties to the FFA will decide if it requires any changes or can become
    final in its current form.
        Ms. Ferguson. The Air Force defers to the Army on questions
    pertaining to Fort Meade.

        48. Senator Burr. Mr. Arny, Mr. Calcara, and Ms. Ferguson, how many
    DOD installations that are on the Superfund list still do not have the
    details of the required clean-up worked out in a Federal Facilities
    Compliance Agreement with the EPA?
        Mr. Arny. DOD has 141 installations listed on the EPA's NPL, 132
    have signed interagency agreements, commonly referred to as FFAs.
    During negotiations the appropriate clean-up details will be
    incorporated into the FFA.
        Two of the nine installations without signed FFAs are Army
    installations--Redstone Arsenal, AL; and Fort Detrick, MD. The EPA,
    Army, and ADEM are currently negotiating the FFA for Redstone Arsenal.
    Fort Detrick was listed on the NPL in April 2009, and negotiations for
    the FFA have not been initiated.
        The seven remaining installations without signed FFAs are Air Force
    installations--Air Force Plant 44, AZ; Andrews AFB, MD; Brandywine
    Defense Reutilization and Marketing Office, MD; Hanscom AFB, MA;
    Langley AFB, VA; McGuire AFB, NJ; and Tyndall AFB, FL. All seven FFAs
    have been drafted and are in various stages of review within DOD, or
    are being negotiated with EPA.
        Mr. Calcara. Discussions regarding an FFA for Redstone Arsenal
    between EPA, the ADEM, and the Army are taking place. The clean-up work
    at Redstone Arsenal is currently regulated under an ADEM RCRA permit
    that provides for the details of all required response actions, subject
    to ADEM approval. In April 2009, Fort Detrick was placed on the NPL.
    Although the law does not require the Army and EPA to begin negotiation
    of an FFA for Fort Detrick at this time, the Army and EPA have
    discussed scheduling the negotiation of this FFA in the near future.
    For all of these installations, the details of the clean-up work have
    been fully coordinated with EPA, the State regulators, and the public
    for many years, and that will continue for the remaining clean-up
    actions.
        Ms. Ferguson. The Air Force defers to OSD to answer questions
    pertaining to DOD installations on the Superfund list.

        49. Senator Burr. Mr. Arny, Mr. Calcara, and Ms. Ferguson, do any
    of the clean ups of DOD sites on the Superfund list require additional
    funding in fiscal year 2010 in addition to that being sought in the
    President's budget to remain on schedule to achieve the required clean-
    up levels?
        Mr. Arny. No additional funding is required in fiscal year 2010 to
    ensure DOD sites remain on schedule to achieve required clean-up
    levels. Many of the remaining hazardous substance sites have complex
    clean-up requirements that will take several years to complete. DOD has
    appropriately planned, programmed, and budgeted for these sites to meet
    its clean-up objectives.
        Mr. Calcara. No additional environmental restoration funding is
    needed in fiscal year 2010 for the Army installation NPL sites. The
    Army has planned, programmed, and budgeted an adequate amount for the
    remaining necessary clean-up work.
        Ms. Ferguson. The Air Force defers to OSD to answer questions
    pertaining to additional funds needed for clean-up of DOD sites on the
    Superfund list.

                           navy litigation over sonar
        50. Senator Burr. Secretary Penn, what is the status of the Navy's
    litigation with California over sonar training in the crucial Southern
    California at-sea training ranges?
        Secretary Penn. We need to distinguish between the two cases that
    challenged Navy training in Southern California. In March 2007, the
    Natural Resources Defense Council (NRDC) and other plaintiffs first
    filed suit in the United States District Court for the Central District
    of California challenging major exercises in Southern California under
    the Marine Mammal Protection Act and NEPA. NRDC argued that the Navy
    should have completed a longer EIS rather than the 293-page
    environmental assessment it prepared before deciding to conduct a
    series of 14 major certification exercises off Southern California
    during the period from January 2007 through January 2009. NRDC sought a
    preliminary injunction pending the outcome of its challenge. In a
    companion case, the California Coastal Commission, an independent State
    agency, then filed a challenge related solely to alleged violations of
    the Coastal Zone Management Act. The State of California never filed a
    lawsuit on these issues and never participated in these lawsuits.
        While these two cases involve different statutes, both challenges
    involve concerns over impacts of sonar use on marine mammals during
    training activities in Southern California and mitigation measures
    which, if implemented, would have seriously threatened the Navy's
    ability to train effectively.
        In the NRDC case, the District Court granted an injunction
    completely prohibiting the use of mid-frequency active sonar (MFAS)
    during these exercises. After several appeals and more decisions by the
    District Court, during which the U.S. Court of Appeals for the Ninth
    Circuit ruled that the original injunction was too broad, the complete
    injunction was superceded by an injunction that included six
    restrictions on use of MFAS during these exercises. Because this
    tailored injunction still threatened the Navy's ability to train
    effectively, the Navy appealed, focusing on two of the six restrictions
    that imposed the most serious threats to the Navy's ability to train.
    These two restrictions involved a condition known as ``surface
    ducting'' and another that related to the size of the zone around the
    sonar that would require reduced sonar power or complete shutdown (the
    ``shutdown zone'') in the event a marine mammal was sighted.
    Specifically, the Navy determined that the surface ducting condition
    would ``unreasonably prevent realistic training'' and the shutdown zone
    would ``result in a significant, adverse impact to realistic
    training.'' The U.S. Supreme Court granted the Navy a writ of
    certiorari, and expedited the arguments based on the time-critical
    nature of the training. In November 2008, the Supreme Court held that
    the district court applied the incorrect standard for issuing a
    preliminary injunction and vacated the preliminary injunction as it
    applied to these two restrictions. Following this favorable U.S.
    Supreme Court decision, the California Coastal Commission dismissed its
    case against the Navy in December 2008.
        The Navy completed the last of the challenged exercises in December
    2008. In January 2009, the Navy completed the Southern California Range
    Complex EIS and the National Marine Fisheries Service issued the
    necessary incidental take authorizations under the Marine Mammal
    Protection Act and Endangered Species Act necessary for similar
    exercises to continue in the future and Navy has continued to train. In
    April 2009, the District Court dismissed NRDC's underlying cause of
    action as moot.

        51. Senator Burr. Secretary Penn, are you satisfied that the Navy
    can train effectively using active sonar not only in California, but in
    all other training locations, such as off Hawaii?
        Secretary Penn. At this time, the Navy can conduct effective
    training with MFAS on U.S. training ranges such as those located in
    Southern California, Hawaii, and east coast range complexes running
    from Virginia to northern Florida. There is the potential, however, for
    litigation imposed restrictions and additional regulatory requirements
    that could adversely affect Navy's ability to train effectively in the
    future. Further restrictions that interfere with the Navy's ability to
    train effectively for the Navy's number one threat--quiet enemy
    submarines--may require the Navy, at some point in the future, to
    return to Congress for assistance.
        Over the past 5 years, Navy has expended significant effort
    preparing environmental planning documentation and has been proactively
    engaged in permitting actions and consultations with cognizant Federal
    regulatory agencies, regarding training activities on its major
    training and testing ranges. Planning, permitting, and consultations
    for the remaining testing and training ranges is scheduled for
    completion in late calendar year 2010. The Navy has been working
    closely with the National Marine Fisheries Service to complete the
    permitting and consultation processes.
        The Navy continues to face other environmental challenges in
    fulfilling its statutory mandate to organize, train, and equip naval
    forces for combat due to other environmental laws, specifically with
    regard to requirements of the NEPA, the Coastal Zone Management Act,
    and the Endangered Species Act. Over the past several years, the Navy
    defended itself against four separate lawsuits wherein plaintiffs,
    relying on these environmental laws, sought to impose additional
    training restrictions on the Navy's use of MFAS that would
    significantly degrade military readiness. Without the U.S. Supreme
    Court's action in one case, Navy training would have been subject to
    the full impact of a District Court's preliminary injunction that could
    have precluded our ability to properly train and certify our forces,
    significantly increasing risk to our sailors and jeopardizing our
    national security. This case was vital to our Nation's security and the
    combat readiness of the U.S. Navy. In a separate lawsuit challenging
    Navy's worldwide MFAS training and testing, Navy and six environmental
    groups settled the case without imposing additional training
    restrictions but only after lengthy, expensive litigation. Favorable
    resolution of these cases, however, does not necessarily represent the
    end of such challenges that would prevent Navy from training and
    testing effectively with MFAS. Continued challenges could result in
    additional restrictions that would serve as the baseline upon which
    even more stringent restrictions could be imposed during subsequent
    litigation or by inclusion in permitting and consultation requirements.
    Further restrictions may necessitate the Navy's returning to Congress
    for assistance.

                             eis for f-35 lightning
        52. Senator Burr. Ms. Ferguson, as a result of a BRAC 2005
    decision, Eglin AFB, FL, was to be the Joint Initial Training Site for
    the F-35. The ongoing EIS to support the BRAC decision for basing joint
    initial training on the F-35 at Eglin has been threatened by
    controversy over the amount of noise the F-35 will produce and its
    impact on the local community. Litigation has threatened to delay the
    ability to stand up the training squadrons for the Air Force, Navy, and
    Marine Corps by the BRAC implementation deadline of September 2011.
    What is the status of the EIS for the F-35 Joint Initial Training Site
    at Eglin and what is the Air Force doing to ensure the ability to train
    on this new aircraft is available on time?
        Ms. Ferguson. The Air Force completed an EIS for the Joint Strike
    Fighter (JSF) Initial Joint Training Site in October 2008. The EIS
    evaluated the basing of 107 F-35 Primary Assigned Aircraft (PAA). Based
    on further consideration of potential noise impacts, mitigation
    measures, and public comments, the Air Force signed a Record of
    Decision in February 2009 allowing delivery of 59 F-35 PAA with flight
    operation limitations until the completion of a Supplemental EIS
    (SEIS).
        The Air Force is still working toward a goal of basing 107 F-35 PAA
    at Eglin. However, the SEIS will analyze the beddown and operational
    alternatives and mitigations for a full complement of the 59 F-35 PAA
    to include potential impacts of moving beyond 59 aircraft, to include
    the additional 48 aircraft. The SEIS is expected to be completed in
    September 2010.

        53. Senator Burr. Ms. Ferguson, the process of evaluating other
    training and operational squadron sites for the new F-35 has begun, but
    the start of a formal EIS process has been delayed from the planned
    original start date in early 2009. When will the EIS process start for
    training and operational bases for the F-35?
        Ms. Ferguson. We will begin the formal environmental analysis and
    conduct public meetings with communities around the candidate bases
    this fall.

        54. Senator Burr. Ms. Ferguson, what criteria are being evaluated
    to determine the range of potential alternative sites?
        Ms. Ferguson. The criteria is being finalized now and our plan is
    to make it available through a briefing to all interested Members of
    Congress and their staffs, which we expect to provide in early August
    2009.

        55. Senator Burr. Ms. Ferguson, will this criteria be publicly
    released?
        Ms. Ferguson. Yes, The Air Force will release the JSF criteria in
    early August 2009.

                 navy outlying landing field in north carolina
        56. Senator Burr. Secretary Penn, what is the status of the new EIS
    for an Outlying Landing Field (OLF) to support East Coast Navy and
    Marine Corps pilot training?
        Secretary Penn. The Navy continues to evaluate five sites, three in
    southeastern Virginia and two in northeastern North Carolina, for
    construction and operation of an additional OLF to support Field
    Carrier Landing Practice operations for all Carrier Air Wing (CVW)
    fixed-wing squadrons home based and transient to NAS Oceana and Naval
    Station Norfolk. The required environmental analysis and documentation
    is underway and progressing. With multiple Federal and State agencies
    involved, the Navy is scheduling the time required to complete data
    collection and analysis to ensure we have taken the necessary hard look
    under NEPA to make an informed decision.

        57. Senator Burr. Secretary Penn, what does the Navy intend to do
    with real estate purchased in Washington County, NC, which is no longer
    being considered as the site for the new OLF?
        Secretary Penn. The Navy has determined that no further requirement
    exists for the 1,163 acres purchased in Washington County, NC.
    Accordingly, the Navy is proceeding under normal Federal real property
    disposal procedures in compliance with the Federal Management
    Regulation dealing with real property disposal. After confirming that
    there is no foreseeable DOD military requirement, no special provisions
    regarding disposal of the property, and no other congressional
    legislative action that would provide such a provision, the Navy will
    report the property to GSA as excess property for disposal in
    accordance with applicable regulations.

        58. Senator Burr. Secretary Penn, is the Navy committed to
    addressing the concerns of local communities during the selection
    process? If so, how will those concerns be addressed?
        Secretary Penn. The Navy has been fully committed to addressing the
    concerns of local communities from the very beginnings of this new EIS
    process, and, to that end, has engaged in an ongoing outreach program
    with elected officials, businesses and business associations, and
    civic, community, educational, and veterans' organizations. This
    outreach has resulted in over 60 meetings over the last 24 months,
    allowing the Navy to better understand the concerns of local
    communities as we move forward in the EIS process.
        As we meet our responsibilities under the NEPA to prepare an EIS to
    inform a decision with respect to the five potential OLF sites, we
    remain fully committed to seeking public input and exhaustively
    examining alternatives prior to making a final decision. As such, we
    are working with agencies in the Commonwealth of Virginia and the State
    of North Carolina, NGOs, and public and private enterprises to identify
    economic and environmental opportunities to further benefit a local
    community hosting an OLF. These opportunities could include protection
    and enhancement of the natural environment, lease opportunities to
    increase community revenues, facilitation with community accepted
    development, and/or assistance in keeping the land in its natural state
    and preserving the vital rural way of life that these communities
    cherish. However, it is important to understand that the Navy does not
    wish to impose a vision of the future on any county or region, but as
    able, will provide assistance in implementing a local, community
    vision. To that end, it may be necessary in the future to seek
    additional authorities not allowed under current law to enable the Navy
    to address those concerns. The Navy will be better able to address such
    concerns once a preferred alternative is identified.
        However, one example of the Navy recognizing and addressing
    community concerns is in regard to the issue of private property and
    local tax losses, which have been central to any discussion on the OLF
    project from the outset. To address these community concerns, the Navy
    adjusted its requirement such that it will only seek to acquire
    property or property interests as necessary to meet the military
    mission, while concurrently providing the opportunity for landowners
    and residences impacted by the construction and operation of an OLF to
    voluntarily sell their property to the Navy.

                management of housing privatization transactions
        59. Senator Burr. Mr. Calcara, I have a question about the
    contracts used by the Army to manage housing privatization transactions
    involving partnerships. I read the testimony from last year when
    Secretary Eastin stated that the Army's Portfolio and Asset Management
    program was strong and proactive. The overwhelming majority of the
    Army's housing inventories are now privatized and under management of
    the partnership. DOD's efforts over the past 10 years to increase a
    servicemember's base allowance for housing has resulted in sizeable
    reserves growing in housing privatization reserve accounts, which can
    be used to accelerate renovation and recapitalization activities.
    Eventually though, the housing inventory for each transaction will
    reach a point of optimal performance as measured by occupancy rates,
    and reserve funds will still be growing. Please provide your assessment
    of the current management practices used by the Army for housing
    privatization.
        Mr. Calcara. The testimony that Secretary Eastin gave last year is
    still valid. The Portfolio and Asset Management program remains strong
    and proactive, and we continue to identify potential challenges and
    opportunities and to develop appropriate responses to ensure that the
    quality of life for soldiers and their families remains high. While
    reserve funds will continue to grow, those funds will be utilized to
    continue to replace and renovate the housing at each project to ensure
    that the condition of the homes remains at the levels required to
    sustain resident satisfaction and quality of communities. This
    sustainment program differentiates the Residential Communities
    Initiative (RCI) program from past initiatives with the private sector
    such as section 801 Build-to-Lease, Capehart, and Wherry housing
    programs. To determine the optimal use and investment of funds, the
    Army works with its partners to evaluate current capital market
    conditions, resident satisfaction survey results, the condition of the
    housing stock at each project, and the long-term needs of the project.
    Out-year planning is reviewed every few years and more frequently as
    the project nears the end of its initial development period. Relying on
    expertise from the private sector, we participate in decisionmaking
    related to balancing investment opportunities with capital
    requirements.

        60. Senator Burr. Mr. Calcara, do you see a need to change the
    methods or processes used by the Army to manage the partnerships? If
    so, are you in the process of evaluating potential changes to the
    Army's Portfolio and Asset Management program, and can you describe
    these changes?
        Mr. Calcara. No, I do not see a need to change the methods or
    processes used by the Army to manage partnerships. In 2006, the GAO
    conducted a review of the portfolio and asset management (PAM) programs
    of all three Services and determined that those of the Army and Air
    Force were strong, viable programs that provided mechanisms for the
    early identification and resolution of issues. The Army's PAM program
    is based on the investment management practices of one of the largest
    private sector real estate firms. The Army recognizes that any changes
    to the current program could jeopardize the Army's ability to assess
    the risk of its investments and could compromise the Army's ability to
    ensure appropriate execution of its military housing privatization
    projects.

                               use of sea ranges
        61. Senator Burr. Secretary Penn, the Navy is well underway with a
    programmatic effort to comply with the NEPA and the Marine Mammal
    Protection Act that involves completing an EIS for each of its major
    at-sea training ranges. This will require a sustained, dedicated effort
    by both the Navy and the regulatory agency, the National Marine
    Fisheries Service, since the letter of authorization for impacts on
    marine mammals must be renewed annually and must take into account the
    evolving science regarding how marine mammals are affected by sonar.
    Are you confident that the Navy and the regulatory agency have
    sufficient personnel and resources to meet the demand for renewal of
    these permits?
        Secretary Penn. I am confident that the Navy has sufficient
    personnel and resources to meet the critical milestones of its
    environmental compliance plan. We understand, however, that
    implementation of the Navy's plan has placed a significant new and
    continuing regulatory burden on the National Marine Fisheries Service
    (NMFS). NMFS plays a major role as a cooperating agency with the Navy
    in preparing environmental analyses under the NEPA and Executive Order
    12114, and in conducting regulatory processes under the Marine Mammal
    Protection Act and Endangered Species Act. NMFS itself can best speak
    to whether it could benefit from additional resources to meet its
    increased regulatory workload.

        62. Senator Burr. Secretary Penn, what would happen if the Navy and
    the regulatory agency did not complete the annual renewal process on
    time?
        Secretary Penn. The Navy would need to stop using the range for the
    regulated activity. If the renewal processes are not completed on time,
    the Navy would have to evaluate readiness levels and operational
    requirements and whether training schedules and corresponding
    deployments could be shifted to a time period when the annual renewal
    processes would be completed. The longer the delay in issuing renewals,
    the greater the impacts will be to military readiness and the Navy's
    ability to meet its operational requirements.
        The Navy's Fleet Response Plan (FRP) is at the heart of our
    training schedules. That plan ensures continuously available and surge-
    ready forces are prepared to respond to crisis; but FRP is also
    integral to preparations for scheduled deployments. Delays in any
    training causes ripple effects in several regards. First, individual
    unit skills could atrophy and require additional time to be regained.
    Second, delays in training could impact deployment of naval forces and
    their ability to timely relieve or support forces that are already
    deployed.

                             barracks privatization
        63. Senator Burr. Mr. Calcara, the Army has recently completed
    transactions with local private partners to construct unaccompanied
    officer and senior enlisted barracks at Fort Bragg, NC; Fort Stewart,
    GA; and three other locations. From initial reports, these townhouse-
    style complexes seem to be a raging success. What are the pros and cons
    to using a private developer, similar to housing privatization to build
    and maintain Army barracks for junior enlisted personnel?
        Mr. Calcara. I fully agree that the privatization of senior soldier
    unaccompanied personnel housing (UPH) has been very successful.
    However, our current position is that UPH privatization will be limited
    to single staff sergeants and above. Although there are many positive
    aspects of housing privatization (e.g., potential savings/cost
    avoidance of scarce resources, ability to fix and sustain barracks over
    the long-term, better amenities for soldiers, etc.), there are many
    challenges with the privatization of accommodations for our junior,
    single soldiers, i.e. barracks. Significant ``scoring'' issues by the
    OMB must be resolved before the Army can consider any barracks
    privatization projects. OMB would score such issues as mandatory
    assignments, equity contributions, or loan guarantees. Further, junior
    soldiers cannot be required to live in privatized barracks and would
    have to have the option to take their housing allowances and live off-
    post. The Army does not currently authorize these soldiers any housing
    allowances or to live off post, and there are concerns about how
    privatization can be balanced with the Army's Warrior Ethos and unit
    integrity. Other issues that must be addressed include extended
    deployments and use of the resident ``waterfall'' (possibility of
    civilian assignments into barracks).

        64. Senator Burr. Mr. Calcara, does it make economic sense over the
    life cycle of a barracks?
        Mr. Calcara. We do not know at this time. We are conducting an
    internal analysis to determine the feasibility of barracks
    privatization to supplement (not replace) the Anny's Holistic Barracks
    Strategy. All previous analyses will be considered and made part of the
    final analysis.

        65. Senator Burr. Mr. Calcara, what are the concerns within the
    Department of the Army with using a public-private venture to build and
    maintain junior enlisted barracks?
        Mr. Calcara. There are many challenges with the privatization of
    accommodations for our junior, single soldiers, i.e., barracks.
    Significant ``scoring'' issues by the OMB must be resolved before the
    Army can consider any barracks privatization projects. OMB would score
    such issues as mandatory assignments, equity contributions, or loan
    guarantees. Further, junior soldiers cannot be required to live in
    privatized barracks and would have to have the option to take their
    housing allowances and live off-post. The Army does not currently
    authorize these soldiers any housing allowances or to live off post,
    and there are concerns about how privatization can be balanced with the
    Army's Warrior Ethos and unit integrity. Other issues that must be
    addressed include extended deployments and use of the resident
    ``waterfall'' (possibility of civilian assignments into barracks).

        66. Senator Burr. Mr. Calcara, should the Army be directed by
    Congress to carry out barracks privatization initiatives for junior
    enlisted personnel?
        Mr. Calcara. No. If the Army is directed to privatize barracks,
    there may be some unnecessary, negative impacts on the Army. For
    example, the OMB would score the projects, thus costing the Army
    millions or billions of dollars unnecessarily, and it would put our
    entire MILCON program at risk. Further, privatization would negatively
    affect the Army's warfighting Ethos and culture. The Army is conducting
    an internal analysis to determine the feasibility of barracks
    privatization to supplement (not replace) the Army's Holistic Barracks
    Strategy. All previous reports and strategies will be considered and
    made part of the final analyses on the way ahead.

                        facilities for iraq redeployment
        67. Senator Burr. Mr. Arny and Mr. Calcara, the redeployment of
    U.S. forces from Iraq, a process DOD refers to as ``reposturing,'' will
    be a massive and expensive effort. As of March 2008, for example, there
    were about 173,000 pieces of equipment in Iraq, worth about $16.5
    billion, that will need to be returned to the United States. I have a
    few questions regarding the development of a comprehensive plan for
    reposturing U.S. forces from Iraq. Does DOD have agreed-upon guidance
    for environmental clean-up and the disposition of property, which could
    affect the time and cost of closing bases in Iraq? If so, can you
    describe the guidance?
        Mr. Arny. Guidance was developed and published in the form of an
    Operations Order by Multinational Force-Iraq covering reposture and
    drawdown that includes equipment disposition and environmental
    considerations. The process is based on a 140-day model for closure/
    transfer developed in Iraq and details turn-over standards for
    facilities.
        Disposition of Materiel (both equipment and supplies) will be
    accomplished utilizing the traditional 5-Step Redeployment Process
    (applied in order): Consume, Redistribute (or Redeploy), Transfer (in
    conjunction with Base turnover), Transfer (not in conjunction with Base
    turnover), and Dispose (through the Defense Reutilization and Marketing
    Office (DRMO) or Destroy). Equipment and supplies excess to theater or
    worldwide requirements will be considered for transfer utilizing
    available authorities (such as Foreign Military Sales, Foreign Excess
    Personal Property, or Excess Defense Articles).
        Guidance for environmental considerations provides for removal of
    stored hazardous and medical wastes, hazardous materials, insurgent
    chemicals, fuels, and U.S. controlled munitions, and for collection and
    disposal of solid waste. Additionally we will close and secure
    environmental systems such as water and wastewater systems, burn pits,
    dumps, landfills, and above and below ground storage tanks to the
    extent the Government of Iraq has not identified a follow-on use. We do
    not perform remediation for purposes of return of facilities. We are
    preparing environmental closure reports that document the environmental
    condition as we return the bases which can be used by the Government of
    Iraq to guide future actions and to protect the United States from
    unwarranted claims. This guidance takes into account our commitment to
    work with the Government of Iraq on potential future use of the
    facility to help minimize resources and time required.
        Mr. Calcara. I concur with Mr. Arny's response and have no further
    information to add.

        68. Senator Burr. Mr. Arny and Mr. Calcara, is there an associated
    estimate of the costs for this activity?
        Mr. Arny. No, the costs for individual components of base closure
    and return are not broken out.
        Mr. Calcara. I concur with Mr. Arny's response and have no further
    information to add.

        69. Senator Burr. Mr. Arny and Mr. Calcara, does DOD foresee the
    possibility of restrictive conditions on the use of facilities in
    Kuwait and other neighboring countries? If so, how will these
    restrictive conditions affect reposturing plans?
        Mr. Arny. The use of military facilities in Kuwait is governed by
    the U.S.-Kuwait Defense Cooperation Agreement. The United States will
    work with Kuwait and other regional partners on access to and use of
    facilities, and is prepared to address contingency requirements.
        Mr. Calcara. I concur with Mr. Arny's response and have no further
    information to add.

        70. Senator Burr. Mr. Arny and Mr. Calcara, will there be adequate
    infrastructure and facilities in the United States to house and provide
    work space for returning units?
        Mr. Arny. The Department will pursue all means available to provide
    adequate facilities for units returning from Iraq. That will include
    building new facilities, using vacant facilities, and purchasing or
    reusing relocatable facilities. In those cases where the immediate
    solution is not a permanent solution, the Department will implement a
    permanent solution as quickly as possible.
        Mr. Calcara. The acceleration of the Operation Iraqi Freedom (OIF)
    drawdown is expected to complicate the Army's already tightly
    synchronized facility support plan. The Army has a strategy to
    accommodate returning units, which includes new construction, vacant
    facilities, and where required, the use of temporary relocatable
    buildings until permanent facilities are built. Upon release of the
    United States Central Command OIF Drawdown Plan, the Army will gain
    greater fidelity on the impact of our installations and its ability to
    ensure adequate facility support.

           status of 2005 defense base realignment and closure round
        71. Senator Burr. Mr. Arny, according to GAO, ``The 2005 BRAC round
    is the biggest, most complex, and costliest BRAC round ever.'' Their
    recent report went on to say that ``DOD has made progress in
    implementing the BRAC 2005 round but faces challenges in its ability to
    meet the September 15, 2011, statutory completion deadline. DOD expects
    almost half of the 800 defense locations implementing BRAC
    recommendations to complete their actions in 2011; however, about 230
    of these almost 400 locations anticipate completion within the last 2
    weeks of the deadline.'' Will the Department meet the statutory
    deadline of September 15, 2011?
        Mr. Arny. Yes, the Department intends to meet the statutory
    deadline of September 15, 2011. The Department recognizes the unique
    challenges associated with implementing the more complex
    recommendations and the synchronization efforts required to manage the
    interdependencies among many recommendations. To apprise senior
    leadership of problems requiring intervention as early as possible, the
    Department institutionalized an implementation execution update
    briefing program in November 2008. These update briefings, representing
    83 percent of the investment value of all recommendations, provide an
    excellent forum for business plan managers to explain their actions
    underway to mitigate the impacts of problem issues. The business
    managers have and will continue to brief the status of implementation
    actions associated with recommendations which exceed $100 million on a
    continuing basis through statutory completion of all recommendations
    (September 15, 2011). The business managers are also required to brief
    other plans for which they have concerns.

        72. Senator Burr. Mr. Arny, are you requiring BRAC officials at
    both the Army and the Air Force to update their savings estimates in
    order to provide Congress with a realistic assessment of the value of
    this process?
        Mr. Arny. Because the Department considers the updating of savings
    estimates to be essential, it is requiring all components to update
    these estimates on a regular basis. While sufficient guidance already
    exists in the financial management regulation, additional emphasis on
    this effort is being provided during all BRAC program execution update
    discussions and in all business plan update approval documentation.
    Business plans serve as the basis for guiding BRAC implementation
    actions and specifying the required funding.

           impact of force structure decisions on host nation support
        73. Senator Burr. Mr. Calcara and Ms. Ferguson, this committee has
    encouraged DOD to work with nations hosting U.S. military personnel at
    bases and in local communities to develop partnerships in order to
    address housing, infrastructure, and community support requirements.
    These efforts allow U.S. taxpayer funds to be used for other critical
    mission requirements. Two recent decisions by the Army and the Air
    Force related to force structure in Germany has jeopardized ongoing
    initiatives for local governments to provide private resources for
    construction of housing and provision of other resources, and
    discourages any future cooperative efforts. What are the future
    possibilities for the German Government to be able to work with the
    Army and the Air Force to provide housing for U.S. military forces?
        Mr. Calcara. The U.S. Army in Europe continues to work very closely
    with German agencies to further housing and infrastructure initiatives.
    The U.S. Army strongly supports and pursues opportunities for Host
    Nation funding of infrastructure and housing. We are not aware of any
    ongoing initiatives with local governments being jeopardized. To the
    contrary, we have experienced recent success in the German State of
    Baden-Wuerttemberg with two German funded alternate construction
    partnerships affecting both family housing and community
    infrastructure.
        We have also experienced great success in the State of Hessen as
    they worked with city and Federal agencies to acquire real estate for
    housing and improved vehicular access to military facilities at
    Wiesbaden. We continue to meet with our Host Nation partners in
    Rhineland--Palatinate to develop an innovative rental partnership
    program that will potentially service the Baumholder military
    community.
        Finally, the State of Bavaria continues to assist with various
    build-to-lease initiatives that support the Grafenwoehr/Vilseck
    community. The environment remains positive as we continue hi-lateral
    discussions seeking burdensharing opportunities that are realistic and
    remain within the parameters of governing Status of Forces Treaty
    Agreements and accommodations protocols. We are optimistic about future
    possibilities for the German federal and state governments to assist in
    providing housing and infrastructure support to U.S. military forces.
        Ms. Ferguson. The Air Force was working, in close cooperation with
    the German Federal Real Estate Office, to facilitate a build-to-lease
    initiative for 271 housing units at Spangdahlem, AB Germany. The
    request for proposals, issued in June 2008, was based on the 2006
    Housing Requirements Market Analysis (HRMA) which projected
    requirements through 2011. The 2009 HRMA indicated a need for only 38
    units beyond the existing installation inventory and private sector
    supply. The build-to-lease proposals received in October 2008 totaled
    134 units. Through mutual agreement between headquarters USAFE and the
    German agencies it was determined that a reduced build-to-lease project
    for 38 units would not be financially viable. As a result, the build-
    to-lease initiative was cancelled. If the requirement increases at some
    future date, it can be pursued through cooperative efforts between the
    Air Force and the German Government.

        74. Senator Burr. Mr. Calcara and Ms. Ferguson, as for the future
    of Baumholder, what major units does the Army plan to station there?
        Mr. Calcara. At this time, the Army has not decided which major
    units to station in Baumholder. As soon as we reach a decision, we will
    notify the committees of concern.
        Ms. Ferguson. The Air Force defers to the Army on questions
    pertaining to Baumholder.

        75. Senator Burr. Mr. Calcara and Ms. Ferguson, how many personnel
    and families will end up being stationed at Baumholder?
        Mr. Calcara. The Army will have greater fidelity on the number of
    military personnel and families as soon as we decide which units to
    station in Baumholder.
        Ms. Ferguson. The Air Force defers to the Army on questions
    pertaining to Baumholder.
                                     ______

                   Questions Submitted by Senator John Thune
                             alternative fuel goals
        76. Senator Thune. Ms. Ferguson, last year, Secretary Donley signed
    the Air Force Energy Policy which, among other things, establishes a
    couple of goals with respect to using alternative fuels in the Air
    Force aircraft fleet. One goal is to test and certify the aircraft
    fleet on a 50/50 alternative fuel blend by 2011. A follow-on goal is to
    acquire 50 percent of the Air Force's domestic aviation fuel
    requirement via an alternative fuel blend in which the alternative
    component is derived from domestic sources. From what I understand, an
    initiative to build a Coal-to-Liquid (CTL) plant on Malmstrom AFB in
    Montana was abandoned earlier this year and a similar plan to build a
    plant in Alaska with a guaranteed 5-year contract is still up for grabs
    with no takers. How well is the Air Force proceeding toward reaching
    these alternative fuel goals?
        Ms. Ferguson. The Air Force is proceeding well towards reaching its
    alternative aviation fuel goals of certifying its aircraft fleet for
    use of a 50/50 synthetic fuel blend by 2011 and the follow-on goal of
    being prepared to acquire 50 percent of the Air Force's domestic
    aviation fuel requirement via an alternative aviation fuel blend in
    which the alternative component is derived from domestic sources.
        The Air Force's Alternative Aviation Fuel Initiative encompasses
    certification and testing of synthetic fuel blends produced via the
    Fischer-Tropsch (FT) process and recently initiated efforts involving
    biomass-derived fuel blends.
        The Air Force is on track to certify its aircraft, applicable
    vehicles and support equipment, and associated storage and distribution
    infrastructure for unrestricted operational use of a synthetic fuel
    blend by early 2011. The B-52, C-17, B-1B, and F-15 have been certified
    for unrestricted operations using the synthetic fuel blend and the F-
    22, KC-135, C-5, and T-38 are expected to be certified by the end of
    2009. Certification of applicable support equipment and vehicles is
    over 90 percent complete. Full certification is expected by late 2009.
    Full certification of storage and distribution infrastructure is
    expected to be completed by 2010.
        In addition to the synthetic fuel blend certification, the Air
    Force initiated a biomass-derived aviation fuel certification program
    in January 2009. To support this effort, the Defense Energy Support
    Center is currently managing an active solicitation for up to 400,000
    gallons of renewable aviation fuel derived from biomass. Once the Air
    Force receives this fuel, it will be used to fulfill biomass-derived
    fuel blend certification efforts.
        Both certification efforts ensure the Air Force will be prepared to
    cost competitively acquire 50 percent of its domestic aviation fuel
    requirement by 2016 via an alternative fuel blend in which the
    alternative component is derived from domestic sources produced in a
    manner that is greener than fuels produced from conventional petroleum.
        The Air Force examined the possibility of developing a CTL facility
    on Malmstrom AFB through an Enhanced Use Lease (EUL); however, SAF/IEI
    determined there were no viable responses to the RFQ and that proposed
    plant adversely impacts the mission of 341st Missile Wing. Currently,
    the Air Force is examining the feasibility, cost effectiveness, and
    environmental impacts of building siting a coal/biomass-to-liquid on or
    nearby Eielson AFB utilizing EUL authorities. The Air Force is working
    in partnership with the Fairbanks Economic Development Corporation and
    other local community officials. While a CTL plant could eventually be
    sited on Air Force property using EUL authorities or another public-
    private partnership agreement, the Air Force will not own, operate, or
    finance any plant.

        77. Senator Thune. Ms. Ferguson, how can this committee help the
    Air Force reach its goal of using domestically produced alternative
    fuel?
        Ms. Ferguson. The Air Force is currently certifying its aircraft,
    applicable vehicles and support equipment, and associated storage and
    distribution infrastructure for unrestricted operational use of a
    synthetic fuel blend by early 2011. Ultimately, the Air Force goal is
    to be prepared to cost competitively acquire 50 percent of the Air
    Force's domestic aviation fuel requirement via an alternative fuel
    blend in which the alternative component is derived from domestic
    sources produced in a manner that is greener than fuels produced from
    conventional petroleum by 2016. While the Air Force appreciates both
    the Senator's and the committee's continued strong support of the
    certification efforts specifically and, more generally, the Air Force
    energy plans, programs, and strategies, no additional assistance is
    needed at this time.

                      draft environmental impact statement
        78. Senator Thune. Ms. Ferguson, the Air Force has proposed to
    expand the Powder River Training Complex. According to a recent update,
    the draft EIS will probably be published early this summer and made
    available for public comment. What is the status of the draft EIS?
        Ms. Ferguson. The draft EIS has been extended due to mitigation
    procedures between the proponent and the FAA as well as weather issues.
    Representatives from the 28th Bomb Wing and the Western Service Area
    Air Force FAA liaison met with FAA representatives (Denver,
    Minneapolis, Salt Lake) at Ellsworth AFB in an effort to mitigate FAA
    concerns regarding Instrument Flight Rules access to airspace and local
    airports. Significant progress was made to resolve arrival and
    departure concerns as well as some issues related to the Air Traffic
    Control Assigned Airspace. Ellsworth AFB is revising operational data
    while the FAA generates the data regarding civil air traffic.

        79. Senator Thune. Ms. Ferguson, when do you expect the draft EIS
    to be completed and made available for public comment?
        Ms. Ferguson. We anticipate the draft EIS will be released in
    spring 2010 at the public hearings as part of the EIS development
    process.

        [Whereupon, at 4:45 p.m., the subcommittee adjourned.]