[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.]

                                 
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