[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        THURSDAY, APRIL 7, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:01 p.m. in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Landrieu, Reed, Nelson, Pryor, 
Kirk, and Hoeven.

                         DEPARTMENT OF DEFENSE

                   Office of the Secretary of Defense

STATEMENT OF HON. ROBERT F. HALE, UNDER SECRETARY OF 
            DEFENSE (COMPTROLLER)
ACCOMPANIED BY DR. DOROTHY ROBYN, DEPUTY UNDER SECRETARY FOR 
            INSTALLATION AND ENVIRONMENT

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Good morning. This hearing will come to 
order.
    I welcome everyone to today's hearing to discuss the 
President's fiscal year 2012 budget request for military 
construction (MILCON) and family housing for the Department of 
Defense (DOD) and the Department of the Navy.
    Our first panel today will be the DOD Comptroller, Bob 
Hale, and Dr. Dorothy Robyn, the Deputy Under Secretary for 
Installations and Environment.
    Secretary Hale, Dr. Robyn, thank you for coming. We look 
forward to your testimony.
    I remind my colleagues that, in order to reserve the 
majority of the time for questions, our procedure will be to 
have opening statements by the chairman and ranking member, 
followed by opening statements from the witnesses.
    The President's MILCON and family housing budget requests 
for fiscal year 2012 totals $14.8 billion, nearly $4 billion 
less than last year's request. This decrease is due primarily 
to reduced requirement for base realignment and closure (BRAC) 
funds. I note that the deadline for BRAC completion is this 
September, and I hope that you can give us an update on where 
we are on completing the program.
    These are austere times, and I understand that every agency 
must tighten its belt. However, I remain concerned about the 
level of construction funding for the Guard and Reserve. While 
I realize that last year was a high mark for the Army Guard, I 
note that all of the Guard and Reserve accounts are down this 
year, with the exception of the Air Force Reserve. In the past, 
the Guard and Reserve have benefited from earmarks and 
congressional plus-ups. That does not appear to be an option 
this year.
    I know that relocation of marines from Okinawa to Guam 
remains a top priority for the Department. I know that DOD has 
faced many obstacles in getting this effort off the ground. I 
look for a progress report on the Guam relocation, as well as 
other major challenges facing the Department.
    Senator Kirk, would you care to make an opening statement?

                     STATEMENT OF SENATOR MARK KIRK

    Senator Kirk. Thank you, Mr. Chairman. I would.
    I would note that our MILCON request of $14.8 billion is 
down $4 billion, or 21 percent, from the fiscal year 2011 
budget request, largely due to the near completion of BRAC 
2005. The budget request proposes to reduce Active-Duty MILCON 
by $1.5 billion, or 12 percent, and to reduce Guard and Reserve 
construction by 14 percent, to $1.2 billion, compared to the 
fiscal year 2011 request, although the Air Force Reserve 
construction request reflects a 325-percent increase--that's 
returning, actually, to a more normal level. I'm particularly 
worried on some of the accounts and the funding levels, but 
there are some issues that I would highlight.
    I would note that the bill has a request for about $146 
million for the State of Illinois, including in my old 
congressional district at Great Lakes--and, great to see that.
    Some of the questions that I hope we deal with today is, 
regarding a future bed-down for two brigade combat teams in 
Germany, and whether we will actually fund that, or we will 
bring one or both of them home.
    There's no published cost right now for full-tour 
normalization in Korea, and I'm particularly worried about the 
cost of that proposal. My understanding is, it's about 54,000 
dependents on the peninsula, with housing and schools. I would 
note DOD just sent over a list of the largest noncombatant 
evacuation orders in our history, and the largest one--one that 
I participated in as a Pentagon staffer in July 2006--was for 
14,000, and this would be far in excess, if we ever had to get 
the people that we would bed down in Korea out of there 
quickly.
    I'm also worried about--no master plan or releasable total 
cost for the facilities in Guam. Now, we did have this old 
chart which showed a big bed-down--this is, I think it's a 
fiscal year 2009 chart--showing how this thing would be staged 
in Guam, and where we would go. I guess the administration 
hasn't been able to update it. But my hope, for Mr. Hale, is 
you would be able to do that--to give us, and this 
subcommittee, some greater clarity over our Guam adjustments, 
especially in light of the Fukushima disaster. Would the 
Japanese have the cash to be able to come through on their 
commitments? And we are certainly looking forward to Secretary 
of Defense and Secretary of State April 29 meetings as to what 
they can tell us about that.
    I'm concerned on the Guam side that the U.S. military 
commitment to Guam, which is vast and necessary, in my view, 
should, first, include a huge missile defense architecture--
because this thing is going to have one big bullseye on it. And 
we would want to--need to protect this investment. Second, the 
Environmental Protection Agency now estimates the water and 
power requirements alone for DOD would now total not the 
original estimate which I see here, of $300 million, but more 
like $1.3 billion. And it would seem that we would need to 
realign our expenses with those new estimates.
    I'd also like your estimate on the $100 million request for 
Bahrain--a $45 million water development phase and a $55 
million bachelor officer quarters--given the instability in 
that region and where we go.
    So, with those few, couple of noncontroversial issues, Mr. 
Chairman, I turn it back to you.
    Senator Johnson. Secretary Hale, Dr. Robyn, thank you again 
for appearing before our subcommittee. Your prepared statement 
will be placed in the record, so I encourage you to summarize 
your remarks to allow more time for questions.
    Secretary Hale, please proceed.

                SUMMARY STATEMENT OF HON. ROBERT F. HALE

    Mr. Hale. Well, thank you, Mr. Chairman, members of the 
subcommittee. And thanks for the opportunity to discuss the 
MILCON and facilities portion of the fiscal year 2012 budget. 
Your support is essential if we are to provide America's 
service men and women with the infrastructure and facilities 
that they need to meet our national security requirements.
    To put our MILCON and family housing budgets in 
perspective, I'd like to start with just a very brief overview 
of the overall budget. And then I'll offer some comments from a 
financial perspective on some of the issues that have already 
been raised, and then turn to Dr. Robyn for more details on the 
MILCON and family housing.
    Mr. Chairman, for DOD as a whole, we're requesting $553 
billion of budget authority for fiscal year 2012. This will 
equip and sustain a military at war, and one currently involved 
in major operations in Libya and Japan.
    We'll devote those requested fiscal year 2012 funds to 
meeting three key priorities: First, reaffirming our commitment 
to take care of the All-Volunteer Force, which includes a 1.6-
percent military pay raise, family support programs, and 
substantial healthcare programs. Second, re-balancing the 
Department's capabilities so we can prevail in current 
conflicts, including heavy investments in unmanned aerial 
vehicles and cyberwarfare activities. And third, enhancing our 
capabilities for conflicts we may face in the future through 
substantial investments in tactical aircraft, ships, ground 
vehicles, missile defense, and much more.
    The budget also seeks efficiencies throughout DOD. We 
propose savings of $178 billion through 2016. The Department as 
a whole saves $78 billion and uses that to accommodate a 
reduction in our top line, which is in support of the 
administration's deficit control efforts. The military services 
identified another $100 billion in savings, and they will 
retain and invest those savings to meet high priority 
warfighter needs.
    Some of these efficiencies affect MILCON and facilities. 
For example, the Army chose to make modest reductions in MILCON 
funding, while retaining sustainment funding for existing 
facilities. The Navy and Air Force generally retained planned 
MILCON funding, but they are pursuing a new approach to 
prioritization they believe will permit modest reductions in 
spending for facility sustainment.
    Turning to the MILCON and family housing request, as you 
know, it's $14.8 billion--that's less than our previous 
requests over the last 4 years, as the chairman mentioned, due 
largely to declining investments in BRAC, but also because of 
reductions in global defense posture and grow-the-force 
initiatives. Of the $14.8 billion invested, $12.5 billion is 
for MILCON, including important new quality-of-life programs 
consistent with our first and highest priority goal to take 
care of our people. The request includes funding to begin 
recapitalizing the Landstuhl hospital--the first stop for 
wounded service members--and $550 million to replace or 
modernize 15 schools for military dependents. Additionally, our 
plan over the next 5 years is to replace or recapitalize more 
than one-half of Department of Defense Education Activity 
(DODEA) schools over the next few years. Our request also 
includes $0.6 billion--$600 million--for BRAC, and another $1.7 
billion for family housing.
    In addition to the base budget, we're asking for $178 
billion for overseas contingency operations, primarily in 
Afghanistan and Iraq. No new funds are requested for fiscal 
year 2012 for MILCON in the overseas contingency operations 
budget.
    I'd like to say a few words from a comptroller standpoint 
about some key programs. First, budgets for MILCON have 
increased rapidly in recent years, increasing from $5.1 billion 
in fiscal year 2000 to $13.1 billion in fiscal year 2012, an 
average growth of 8.1 percent a year, making MILCON the 
fastest-growing defense appropriation during this period of 
time. While this growth by itself doesn't suggest cutting back 
on MILCON funding, all defense spending will have to be 
reviewed as we seek to slow the growth in the overall defense 
budget.
    There are a few items of significant interest. One is BRAC. 
Most of the 222 BRAC recommendations have been completed or 
will be finished by the statutory deadline of September 15. As 
a result, we're requesting only $600 million to fund BRAC-
related caretaker and environmental restoration activities. 
While the great majority will be completed, there are a few 
recommendations that are at risk of not meeting the BRAC 
deadline. We're doing all we can to complete them within the 
current BRAC law, but it's going to be tight for some of these. 
They are certainly at risk.
    A second issue concerns Guam and the planned relocation of 
personnel. We asked for $452 million last year in the fiscal 
year 2011 budget. That request raised a lot of questions that 
were posed earlier. More recently, the tragic earthquake and 
tsunami have raised new questions. So far, we have not seen a 
change in Japanese policy toward the relocation issue, but we 
are also looking forward to the two-plus-two meeting in late 
April for further discussion of that issue.
    We have asked for, what we view as, a fairly modest amount 
of funding--$181 million for fiscal year 2012--for Guam-
related, Marine Corps-related, moves to Guam--for two utility 
infrastructure projects. We know that we need to supply more 
information to the Congress about the relocation, including 
some final estimates of costs, and hope we get more clarity 
after the two-plus-two meetings. At the same time, and 
especially in view of the major contributions the Japanese have 
already made--we have $837 million of Government of Japan money 
in our budget or in our bank right now--we do ask that the 
Congress support what we view as a fairly modest request for 
funding for the Marine Corps-related moves--the $181 million I 
mentioned.
    [The information follows:]

    Given the current fiscal environment, the Department continues to 
conduct analyses and assessments of the necessary infrastructure and 
associated costs required for the relocation of marines to Guam. We 
understand the significant investment necessary to accomplish this 
initiative and are committed to ensuring fiscal discipline throughout 
the process. I look forward to providing an update when our assessment 
is complete and opportunities to minimize costs are identified.

    Mr. Hale. A third issue involves United States troops in 
Europe. We've been in consultation with European allies 
concerning a number of brigades stationed there, but as of this 
hearing we have not reached a final decision. I do expect that 
decision, and the announcement of that decision, to be 
imminent. Until we have a final decision, we are not requesting 
in this 5-year plan any MILCON funds to return any brigade 
combat teams from Europe to re-station them in the United 
States.
    Finally, I need to mention what is the most serious 
financial problem facing DOD today, and that's the lack of an 
appropriation for the DOD for fiscal year 2011. We're on our 
sixth continuing resolution, which is causing serious problems. 
We've had to delay awards of ship and vehicle contracts, which 
has caused problems for our vendors and postponed delivery of 
needed weapons; readiness has been harmed; the Army and the 
Marine Corps have--temporary civilian hiring freezes. For 
example, we can't replace a tank mechanic when that job becomes 
open. Our people have been greatly affected. The Navy has 
sought to preserve funding flexibility by cutting back on the 
time between issuing travel orders and the move itself--which 
puts a strain on military families.
    MILCON has not been spared the effects of these continuing 
resolutions. As of March 23, we had 140 approved major MILCON 
projects, totaling $3.1 billion, that have been placed on hold. 
We're ready to make the awards to contractors, but we can't do 
that under a continuing resolution. We're delaying everything 
from maintenance hangars to barracks--22 of those projects are 
quality-of-life initiatives. And it will be difficult for an 
already understaffed contracting workforce to catch up once the 
Congress acts on an appropriation. I fear the continuing 
resolutions have already led to substantial inefficiencies--I 
know they have. And this problem will grow rapidly if we remain 
on continuing resolutions. And I might add, it will be much 
worse if we go through a Government shutdown of any substantial 
length.
    Secretary Gates has called the continuing resolution a 
crisis at our doorstep. I couldn't agree more. To put it 
simply, DOD and the other Government agencies need an 
appropriation for fiscal year 2011, and we ask your help in 
achieving that goal.
    In conclusion, Mr. Chairman, I believe the fiscal year 2012 
budget request is prudent, given the needs of the armed forces 
and the economic situation in which we find ourselves. The 
budget requests a reasonable and responsible MILCON and family 
housing program in our view, and I urge your support.

                           PREPARED STATEMENT

    Let me end by thanking you and the members of the 
subcommittee for the strong support of the men and women of the 
U.S. military.
    That concludes my statement. And after Dr. Robyn finishes, 
I'll be glad to join in answering questions. Thank you.
    [The statement follows:]
               Prepared Statement of Hon. Robert F. Hale
    Mr. Chairman, members of the subcommittee, thank you for the 
opportunity to discuss the military construction (MILCON) and 
facilities portions of the fiscal year 2012 budget for the Department 
of Defense (DOD).
    Your continued support is essential if America's All-Volunteer 
Force is to have the infrastructure and facilities it needs to ensure 
the national security of the United States and to carry out required 
missions around the world.
    To put the MILCON and family housing requests into context, I would 
like to provide a brief overview of the President's budget for the 
entire Department. Then I will highlight a few key financial issues 
related to facilities. My colleague, Dr. Dorothy Robyn, Deputy Under 
Secretary for Installations and Environment, will follow with the 
details on the MILCON program.
                          base budget request
    Mr. Chairman, the Department's budget for fiscal year 2012 requests 
$553.1 billion in discretionary budget authority. This represents a 
real increase of 3.6 percent over the levels of the present continuing 
resolution, and about 1.5-percent real growth over the omnibus defense 
bill that was marked up by the Congress last December.
    The budget reflects the administration's commitment to the defense 
budget that is needed to equip and sustain a military at war. Before 
making this proposal, the President carefully balanced our national 
security needs with our economic security, taking into account the 
Federal deficit.
    The budget for fiscal year 2012 also continues the reform agenda 
that Secretary Gates launched in fiscal year 2010. This year's budget 
places greater focus on reforms of DOD's organization and business 
processes.
    More specifically, the fiscal year 2012 budget continues and 
reinforces key priorities laid down by Secretary Gates for the 
Department:
  --One, it reaffirms our commitment to take care of the All-Volunteer 
        Force, which we consider our greatest strategic asset. We 
        propose a 1.6-percent military pay raise, $8.3 billion for 
        family support programs, and $52.5 billion for military 
        healthcare;
  --Two, the fiscal year 2012 base budget continues the rebalancing of 
        the Department's capabilities in order to improve our ability 
        to prevail in current conflicts, such as the unconventional war 
        in Afghanistan. To that end we plan to invest $4.8 billion to 
        purchase unmanned aerial vehicles and $2.3 billion for cyber 
        activities;
  --Finally, our budget maintains and enhances our capabilities for the 
        conflicts we may face in the future. Included are a 
        restructured but substantial Joint Strike Fighter program, a 
        new tanker program, an aggressive shipbuilding program, and a 
        new ground combat vehicle.
    This budget also seeks to make the most of taxpayer resources by 
introducing efficiencies across the Department. Specifically, we are 
proposing savings of $178 billion for the Future Years Defense Program, 
which encompasses the period from fiscal year 2012 through fiscal year 
2016. The armed services have identified savings of $100 billion, most 
of which they will retain and reinvest in higher priorities to support 
the warfighter. The Department as a whole has identified $78 billion in 
savings to accommodate a topline reduction over the same 5-year period. 
This topline reduction supports the President's program to hold down 
the Federal deficit.
                military construction and family housing
    The MILCON and family housing portion of this budget supports these 
objectives. We are asking for $14.8 billion for MILCON and family 
housing. The fiscal year 2012 MILCON request is significantly less than 
it was in the previous 4 years due to declining investments in base 
realignment and closure (BRAC), as well as reductions in Global Defense 
Posture and Grow-the-Force initiatives.
    Of the $14.8 billion requested, $12.5 billion is for MILCON, 
including $1.9 billion for 41 new barracks, six new physical fitness 
centers, four new child development centers, and four chapels. The 
request also includes funding to begin recapitalizing the Landstuhl 
hospital, which is the first stop for evacuated wounded servicemembers, 
and $550 million to replace or modernize 15 DOD Education Activity 
(DODEA) schools to serve military dependents. Our plan is to replace or 
recapitalize more than one-half of the 194 DODEA schools over the next 
few years.
    In addition, the fiscal year 2012 budget includes $0.6 billion for 
BRAC-related environmental clean-up and caretaker costs and $1.7 
billion to fund construction, operation, and maintenance of Government-
owned family housing worldwide. This investment will help to provide 
quality, affordable housing to U.S. military personnel and their 
families.
              request for overseas contingency operations
    Besides the base-budget request for DOD, the President has 
requested $117.8 billion to fund overseas contingency operations, 
mainly in Afghanistan and Iraq. This amount is $41.5 billion less than 
was requested in fiscal year 2011, primarily because of declines in 
overseas contingency operations funding as we transition to a civilian 
operation in Iraq.
    No new funds are requested for MILCON in the fiscal year 2012 
budget. The MILCON request last year was $1.2 billion and included 
funding for troop housing in Afghanistan, as well as operational and 
support facilities.
    I would point out that the fiscal year 2012 overseas contingency 
operations budget does include $524 million for the Office of Security 
Cooperation-Iraq (OSC-I). The OSC-I, which will be funded jointly by 
the Departments of State and Defense, will execute our Foreign Military 
Sales program in Iraq. OSC-I will help to ensure the continuation of 
military-to-military relationships that advise, train, and assist 
Iraq's security forces. In order to provide timely assistance and 
enable the transition to a civilian-led mission in Iraq, we need to 
begin funding OSC-I initiatives in fiscal year 2011 and continue to 
support the OSC-I requested funds in fiscal year 2012. DOD needs 
legislative authority (which includes authority to construct and 
renovate facilities) to provide this assistance. We ask the Congress to 
include that in the DOD appropriation bill for fiscal year 2011 and to 
sustain the authority in fiscal year 2012.
                       trends and specific issues
    Last, I would like to say a few words from the Comptroller's 
standpoint about several specific MILCON programs that Dr. Robyn will 
describe shortly.
    Budgets for the MILCON appropriation have grown rapidly in recent 
years, rising from $5.1 billion in fiscal year 2000 to $13.1 billion in 
the fiscal year 2012 budget. Growth has averaged 8.1 percent a year 
over this period, making MILCON the fastest growing of all defense 
appropriations over this stretch of years. Rapid growth does not by 
itself suggest that we should slow the growth or reduce MILCON funding. 
But, as overall growth in the defense budget slows, MILCON will need to 
be examined carefully. Indeed, the Congress has already begun reducing 
MILCON requests in markups of the fiscal year 2011 budget.
    As defense budgets tighten, we need to be sure that we are 
investing every MILCON dollar wisely and that we have sought 
efficiencies and streamlining wherever possible. As we formulated the 
fiscal year 2012 budget, we considered several issues that bear on 
these goals.
    One is BRAC. As I mentioned already, most of the 222 BRAC projects 
have been completed or will be finished by the statutory deadline of 
September 15, 2011. As a result, our MILCON request for fiscal year 
2012 includes only $0.6 billion to fund BRAC-related caretaker and 
environmental restoration expenses. The great majority of projects will 
be completed on time. We are experiencing delays on a handful of 
projects, but we will do all that we can to comply with the current 
law.
    A second issue concerns Guam and the planned relocation of 
personnel and dependents of the Third Marine Expeditionary Force now in 
Okinawa. The fiscal year 2011 MILCON request included $452 million for 
related costs. That request has raised various congressional concerns 
about the viability of the move and our agreements with the Japanese 
Government. More recently, the earthquake and tsunami in Japan have 
raised a number of new questions. At present, the relocation plan 
remains in effect. We are requesting modest funding for the move-
related MILCON budget for fiscal year 2012--specifically, $181 million 
to fund two utility infrastructure projects that will support future 
construction on Guam. We understand that we need to provide the 
Congress with more information about the relocation. At the same time, 
and especially in view of substantial Japanese contributions to the 
Guam relocation, we ask for congressional support of the relatively 
modest fiscal year 2012 funding request for this initiative.
    A third issue that has yet to be resolved involves United States 
troops in Europe. In view of the NATO strategic review and overall 
United States capabilities in Europe, we have been in ongoing 
consultations with our European allies and partners concerning the 
number of Army brigades stationed there. But we have not reached a 
final decision. Pending a final decision, our fiscal year 2012 budget 
does not request any MILCON funds to return brigade combat teams from 
Europe.
    I should add that facilities funding and all costs for business 
operations were examined closely as we sought efficiencies during 
formulation of this year's budget. The Army chose to make some modest 
reductions in MILCON funding by sustaining existing facilities. The 
Navy and Air Force generally sustained their MILCON funding but elected 
to pursue a new approach to prioritization that they believe will 
permit modest reductions in spending for facilities sustainment.
    fiscal year 2011 continuing resolution--a crisis at our doorstep
    Finally, I cannot fail to mention the most serious financial issue 
we face today: the lack of an appropriation for the DOD for fiscal year 
2011. The continuing resolutions under which we have been operating are 
causing serious problems and generating substantial inefficiencies. We 
have had to delay awards of ship and vehicle contracts, causing 
problems for vendors and postponing delivery of weapons needed by our 
troops. Readiness has been harmed because of maintenance delays and 
hiring freezes that prevent DOD from replacing needed personnel. Our 
people have been hurt as, for example, the Navy has sought to preserve 
funding flexibility by cutting back on the time between issuing travel 
orders and the move itself.
    MILCON has not been spared during these continuing resolutions. As 
of March 23, 2011, 140 needed projects totaling $3.1 billion have been 
placed on hold. We are delaying everything from maintenance hangars to 
barracks, and it will be difficult for an already understaffed 
contracting workforce to catch up once the Congress acts on an 
appropriation. I fear that the continuing resolutions will engender 
substantial inefficiencies.
    Secretary Gates has called the continuing resolution a crisis at 
our doorstep, and as the Department's comptroller I couldn't agree 
more. To put it simply, DOD and the other Government agencies need an 
appropriation, and we ask your help in achieving that goal.
                               conclusion
    In conclusion, I believe that the fiscal year 2012 budget is 
prudent, given the needs of the armed forces and the economic situation 
in which we find ourselves. The budget supports a reasonable and 
responsible MILCON and family housing program. I urge your support for 
this request.
    Again, Mr. Chairman, I want to thank you and the members of the 
subcommittee for your strong support of the men and women of the DOD. 
That concludes my statement. After Dr. Robyn completes her statement, 
we will both be glad to answer your questions.

    Senator Johnson. Thank you, Secretary Hale.
    Dr. Robyn.

                 SUMMARY STATEMENT OF DR. DOROTHY ROBYN

    Dr. Robyn. Thank you, Chairman Johnson, Ranking Member 
Kirk, members of the subcommittee. Thank you for the 
opportunity to testify on the President's budget request for 
MILCON.

                         MILITARY CONSTRUCTION

    I want to talk briefly about three areas--MILCON, BRAC, and 
then installation energy.
    Bob has really covered very well most of the points that I 
was going to make in my opening statement. I have a much longer 
written statement on MILCON. We're targeting three key areas 
that he's highlighted--operational requirements, 
recapitalization of our DODEA schools, both here and overseas. 
This is a 6-year, $4 billion effort to rebuild or recapitalize 
134 schools and, in the process, make them models of energy 
efficiency and the kind of technology that really stimulates 
student learning. And then, the third target area is medical 
infrastructure--$1.1 billion to upgrade our medical 
infrastructure.
    Let me just briefly mention two other points under MILCON. 
I want to note that we're requesting only $1.7 billion for 
family housing, and that's largely for family housing on our 
bases overseas. A decade ago if I had been testifying on our 
budget, the amount requested for family housing would have been 
much closer to the amount requested for MILCON.
    The reason the number is so low for family housing is the 
tremendous success of privatized housing. We now provide very, 
very high quality housing for our families on U.S. bases using 
private developers. They have an incentive to build it right, 
to maintain it. They have to compete in order to attract and 
retain tenants, because service members can go elsewhere. It is 
the most successful effort to improve quality of life that I am 
certain that my office has been associated with. And we were a 
major champion of it in the face of a lot of resistance. So, I 
take every opportunity to plug that.
    And finally, let me underscore Bob's comments on Guam. We 
are very aware of the information that you want and that, we 
are re-looking at costs and timelines. But we're limiting our 
requests this year to two infrastructure projects totaling $181 
million, one of which we would be doing in any event. It 
involves Anderson Air Force Base. Given the substantial 
contribution that the Japanese Government has already made to 
the Guam relocation, we are asking for your support of the 
relatively modest fiscal year 2012 funding that we're 
requesting.

                      BASE REALIGNMENT AND CLOSURE

    Second, with respect to BRAC, as Bob said, we're in the 
final year of implementing BRAC 2005, with all 222 
recommendations required to be completed by September 15. We 
are facing challenges in about five or six actions. We're 
working diligently to ensure that we satisfy our legal 
obligations. Once implementation is completed, we will realize 
an estimated $4 billion a year in savings. So, this will be the 
biggest, BRAC, both in terms of what, cost up front, but also 
in terms of the savings.
    One particular concern--and I know it's one this 
subcommittee has monitored closely--is the impact of BRAC on 
communities that are gaining as opposed to losing troops and 
facilities. And a key issue here is the impact on local 
congestion--local transportation networks. Last year your bill 
directed the National Academies of Science to study the effect 
of BRAC on local transportation networks, and we worked with 
the Academy to do that study. It's a very good study. It 
focuses on the Defense Access Roads (DAR) program, and the need 
to revise the criteria for funding under the DAR program. We 
are doing that. It will take us some time, but I guarantee you, 
it will represent a change in policy under the DAR program, and 
it will make it easier for us to mitigate adverse traffic 
impacts caused by the Department's actions, particularly in 
highly congested urban areas.
    The final BRAC point I would like to make has to do with 
joint basing--the consolidation of 26 installations into 12 
joint bases--something that could not have been done without 
the forcing mechanism of BRAC. This process, which my office 
has overseen, has been very, very difficult. It is hard to get 
an Air Force base and an Army base to, in effect, merge. It's 
like a corporate merger, and as with a corporate merger, the 
cultural differences are the hardest to overcome. But we're 
succeeding. We are getting the predictable consolidation 
benefits--economies of scale. But we're seeing something 
unexpected, and that is that these joint base commanders, faced 
with these parallel and often conflicting service requirements, 
are out of necessity, coming up with cross-cutting, very 
innovative business processes--approaches that we can leverage 
throughout the entire Department. So, joint bases are becoming 
incubators for innovation. And, I don't think anybody 
anticipated that. It makes sense when you think about it. It's 
a happy result of joint basing.

                          INSTALLATION ENERGY

    Finally, let me speak briefly about what we're doing about 
installation energy. The energy we use on our installations is 
important for two reasons. One is mission assurance. Our 
installations support combat operations more directly than ever 
before. We pilot unmanned aerial vehicles (UAVs), perform 
intelligence analysis, and even deploy long-range bombers from 
our domestic permanent installations. These bases, in turn, 
rely on an electricity grid that experts tell us is vulnerable 
to major disruption due to natural or manmade causes. That's a 
concern.
    The second reason energy is important to the Department is 
cost. We have more than 300,000 buildings--$2.2 billion square 
feet of space. That's 12 times as much as GSA, 3 times as much 
as Walmart. Our energy bill just for installations is 
correspondingly large--$4 billion a year. With an eye toward 
lowering that energy bill and improving the energy security of 
our installations, we're pursuing a multifaceted strategy--
we're using our MILCON and our sustainment budgets, 
supplemented by third-party financing, to drive the effort to 
make our buildings more energy efficient. We're taking steps to 
make our installations more secure in the event of a major 
disruption to the grid--renewable energy is critical here, as 
is investment in microgrid technology.
    And finally, we are using our installations as a virtual 
test bed to demonstrate next generation energy technology--
technology that can dramatically reduce our energy performance, 
but that faces major hurdles to commercialization because of 
the nature of the building and energy industry. For those 
technologies that prove effective in these test bed 
demonstrations, we can use the substantial demand by our 
installations to help create a market, much as the Defense 
Department has done historically with computers, GPS, the 
Internet and many other things.
    These efforts to green military installations are good for 
the environment, to be sure. But that's not the main reason 
we're pursuing them. The main reason is cost-savings and 
mission assurance. These are smart investments for the 
Department, and they will pay for themselves many times over.

                           PREPARED STATEMENT

    Thank you again for the opportunity. I look forward to your 
questions.
    [The statement follows:]
                Prepared Statement of Dr. Dorothy Robyn
    Chairman Johnson, Senator Kirk, and distinguished members of the 
subcommittee: Thank you for the opportunity to present the President's 
fiscal year 2012 budget request for the Department of Defense (DOD) 
programs to support installations, installations energy, and the 
environment.
    Installations are the military's infrastructure backbone--the 
platform from which our soldiers, sailors, airmen, and marines 
accomplish their missions. Installations have long supported the 
maintenance and deployment of weapons systems and the training and 
mobilization of combat forces. Increasingly, they have an even more 
direct link to the warfighter, by providing ``reachback'' support for 
combat operations. Our installations are also becoming more important 
as a staging platform for homeland defense missions.
    Installations affect not just our mission effectiveness but the 
very quality of life that our servicemembers and their families enjoy. 
Families' satisfaction with the most critical services they receive--
housing, healthcare, childcare, on-base education--is linked to the 
quality and condition of our buildings and facilities.
    My testimony addresses four key topics:
  --First, international and domestic basing decisions, including the 
        buildup of marines in Guam and the 2005 base realignment and 
        closure (BRAC) process;
  --Second, the Department's management of the built environment, 
        including the programs that support MILCON, family housing, and 
        sustainment and recapitalization;
  --Third, our strategy for improving the energy efficiency and energy 
        security of our installations; and
  --Fourth, our programs for protecting the natural environment.
         the global picture: international and domestic basing
Global Basing
    To project power globally, the Department must have the right mix 
of military forces and facility infrastructure at strategic locations. 
My office supports the Department's strategic security objectives by 
ensuring that decisions about international basing of troops and 
facilities are the product of joint planning and rigorous analysis. We 
also seek to leverage existing infrastructure wherever possible. As 
examples, we are assisting the services with planning for the U.S. 
Forces Korea transformation initiatives, the recapitalization and 
consolidation of the Landstuhl Regional Medical Center in Germany, and 
the relocation of thousands of marines and their families from Okinawa 
to Guam.
            Rebasing Marines From Okinawa to Guam
    The realignment of marines from Okinawa to Guam represents a major 
change in our force posture in Asia. It is designed to further several 
strategic goals. First, it will strengthen our alliance with Japan by 
relieving longstanding pressures associated with our presence in 
Okinawa. Second, it will ensure the long-term presence of United States 
forces in Japan and the Western Pacific. Third, by making better use of 
Guam's strategic advantages, it will more effectively array United 
States forces to deal with the complex and evolving security 
environment in Asia.
    The United States is unlikely to get another opportunity to craft a 
strategic realignment that both enhances our regional force posture and 
incorporates substantial funding from a key ally--in this case, the 
Government of Japan, which has pledged more than $6 billion. As a 
testament to its commitment to the realignment plan, Japan has already 
provided $834 million in direct funding for construction and has 
another $582 million in its current budget, $415 million of which will 
go to improve Guam's utilities infrastructure.
    The President's fiscal year 2012 budget request includes $181 
million for construction projects to support the marines relocation to 
Guam. Our request includes another $33 million for projects to address 
the socioeconomic impact of the buildup, including a repository for the 
preservation of artifacts unearthed during MILCON as required by the 
National Historic Preservation Act. Recognizing that the strategic 
value of the buildup warrants a ``whole-of-government'' approach, the 
fiscal year 2012 budget request also includes $34 million in 
commitments from other Federal agencies. These projects will yield 
long-term benefits for U.S. military forces as well as help mitigate 
the impact of the marked increase in Guam's population that a major 
MILCON program and the subsequent realignment will produce. They will 
also demonstrate our commitment to working with the Government of Guam, 
whose support for the relocation is key. As one indication, Guam last 
month signed the ``Programmatic Agreement'' required under the National 
Historic Preservation Act, which paves the way for MILCON by 
establishing protocols for the preservation of artifacts that we 
uncover.
    The movement of marines from Okinawa to Guam gives us a rare 
opportunity to build an installation from the ground up. We intend to 
take full advantage of this opportunity, using contemporary urban 
planning techniques to avoid sprawl and minimize land use. We will also 
integrate modern energy technology and sustainability practices to 
create an enduring base that meets our current and future requirements 
while minimizing impact on the local community and the island's natural 
resources.
Domestic Basing: Base Realignment and Closure
    Turning to domestic basing, we are in the final year of 
implementation of BRAC 2005, with all 222 recommendations required to 
be completed by September 15. While the Department is facing challenges 
to meeting that schedule in a few cases, we are working diligently to 
ensure that we satisfy our legal obligations. Once implementation is 
completed, we expect to realize an estimated $4 billion in annual 
savings.
    While our investments are creating economic opportunities for 
communities experiencing growth as a result of BRAC, some of those 
communities feel that the Department has ignored potential adverse 
effects. One particular concern is the impact of growth on local 
transportation networks. Although we have the authority to mitigate 
transportation impacts of BRAC through the Defense Access Road (DAR) 
program, we have been criticized for defining those impacts too 
narrowly. In response to congressional direction, the National Academy 
of Sciences studied the effects of BRAC on local transportation, and we 
plan to revise the DAR funding criteria based on the findings of this 
recently completed study. This revision will make it easier for us to 
mitigate adverse traffic impacts caused by the Department's actions, 
particularly in congested urban areas.
    A significant action under BRAC 2005 that my office has championed 
is the consolidation of 26 installations into 12 joint bases. Joint 
bases represent a fundamental change in our approach to installation 
management. Predictably, we are beginning to realize efficiencies from 
this initiative, many of them the result of economies of scale. For 
example, consolidating all recycling operations at Joint Base McGuire-
Dix-Lakehurst saved $1 million in facility and equipment requirements 
and reduced overall contract costs by $200,000 annually. Far more 
important, however, is that our joint base commanders--faced with 
parallel and often-conflicting service rules and requirements--are 
successfully implementing new, cross-cutting business processes. This 
ability to transcend traditional practices and develop innovative 
solutions to longstanding inefficiencies is key to positioning 
ourselves for future, Department-wide reforms.
    I had the opportunity to meet personally with most of the joint 
base commanders in February at our program management review. I am 
excited about the prospects for using joint bases as ``incubators for 
innovation,'' as one joint base commander put it. I also continue to be 
encouraged by their can-do attitude and dedication to providing the 
highest quality service, not only in support of the military missions 
on their sites, but to servicemembers and their families as well.
    Finally, one of the key tools for disposing of property under BRAC 
is the economic development conveyance (EDC), which was created in 1994 
to promote the rapid transfer of BRAC property for job-creating 
economic development. In recent years, EDC conveyances have been 
delayed by complicated negotiations over the value of one-of-a-kind 
parcels of property. As negotiations dragged on, the Department paid 
for property maintenance and the community was unable to redevelop the 
property and create jobs. Last year, the Congress amended the statutory 
authority underlying EDCs to remove the requirement that the Department 
seek to obtain fair market value for an EDC. The amended law also 
provides explicit authority for the Department to use flexible tools 
for determination of ``consideration'' (payment), such as so-called 
``backend'' financing. We are finalizing a regulation that will 
implement these much-needed amendments to the EDC law, and we hope to 
issue it soon. Our goal is to simplify and accelerate the EDC process 
by allowing both communities and the Department to share in the success 
of redevelopment efforts.
                     managing our built environment
    The President's fiscal year 2012 budget requests $14.8 billion for 
military construction (MILCON) and family housing--a decrease of 
approximately $4 billion from the fiscal year 2011 requested level. 
This decrease primarily reflects the decline in investment needed as we 
approach the end of BRAC 2005.

                 MILCON AND FAMILY HOUSING BUDGET REQUEST, FISCAL YEAR 2012 VS. FISCAL YEAR 2011
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Change from fiscal year 2011
                                                    Fiscal year     Fiscal year  -------------------------------
                                                   2011 request    2012 request       Funding       Percentage
----------------------------------------------------------------------------------------------------------------
Military Construction...........................       $13,705.7       $12,006.4       -$1,699.3             -12
Base Realignment and Closure IV.................           360.5           323.5           -37.0             -10
Base Realignment and Closure 2005...............         2,354.3           258.8        -2,095.5             -89
Family Housing Construction/Improvements........           356.8           373.7           +16.9              +5
Family Housing Operations & Maintenance.........         1,448.7         1,318.2          -130.5              -9
Family Housing Improvement Fund.................             1.1             2.2            +1.1            +100
Homeowners Assistance Program...................            16.5             1.3           -15.2             -92
Chemical Demilitarization.......................           125.0            75.3           -49.7             -40
Energy Conservation Investment Program..........           120.0           135.0           +15.0             +13
NATO Security Investment Program................           258.9           272.6           +13.7              +5
                                                 ---------------------------------------------------------------
      Total.....................................        18,747.5        14,767.0        -3,980.5             -21
----------------------------------------------------------------------------------------------------------------

Military Construction
    We are requesting $12.5 billion for ``pure'' MILCON--i.e., 
exclusive of BRAC and family housing. This request addresses routine 
needs for construction at enduring U.S. and overseas installations and 
for specific programs such as the NATO Security Investment Program and 
the Energy Conservation Investment Program. In addition, we are 
targeting MILCON funds in three key areas.
    First, and most important, we are supporting operational mission 
requirements. MILCON is key to initiatives such as Grow the Force and 
the Global Defense Posture Realignment, as well as to the fielding of 
modernized and transformational weapon systems such as the F-22, the F-
35, and the MQ-9. Our budget request also includes a range of mission 
support facilities--for Special Operations Forces, Guard, and Reserve 
units, and the Army's transformation into a brigade-centric, modular 
force.
    Second, the President's budget request supports the continued 
recapitalization of our DOD-dependent schools here in the United States 
and overseas. We are now in the second year of a 6-year plan to repair 
or replace all 134 schools that were in poor or failing physical 
condition. The fiscal year 2012 budget request includes $550 million to 
recapitalize 15 of these schools.
    Third, the fiscal year 2012 budget request includes more than $1.1 
billion to upgrade our medical infrastructure. By modernizing our 
hospitals and related facilities, we can improve healthcare delivery 
for our servicemembers and their families, and enhance our efforts to 
recruit and retain personnel. Our budget addresses projects that 
directly affect patient care by improving and expanding existing 
facilities, and providing additional capacity to support Grow the Army. 
It also allows us to continue improving the medical research facilities 
that support vital chemical-biological defense efforts.
Facilities Sustainment and Recapitalization
    In addition to investing in new construction, we must maintain, 
repair, and recapitalize our existing facilities. The Department's 
sustainment and recapitalization programs strive to keep our inventory 
of facilities mission capable and in good working order. The fiscal 
year 2012 budget request includes $8.8 billion for sustainment and $9 
billion for recapitalization (restoration and modernization) of our 
facilities.
    Sustainment represents the Department's single most important 
investment in the health of its facilities. It includes regularly 
scheduled maintenance and repair or replacement of facility 
components--the periodic, predictable investments an owner should make 
across the service life of a facility to slow its deterioration and 
optimize the owner's investment.

             SUSTAINMENT AND RECAPITALIZATION BUDGET REQUEST, FISCAL YEAR 2012 VS. FISCAL YEAR 2011
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Change from fiscal year 2011
                                                    Fiscal year     Fiscal year  -------------------------------
                                                   2011 request    2012 request       Funding       Percentage
----------------------------------------------------------------------------------------------------------------
Sustainment (O&M & MILPERS).....................          $9,042          $8,835           -$207              -2
Recapitalization (O&M, MILCON, MILPERS, RDT&E)..           4,583           9,031          +4,448             +97
                                                 ---------------------------------------------------------------
      Total.....................................          13,625          17,866          +4,241             +31
----------------------------------------------------------------------------------------------------------------

    We use a facilities sustainment model (FSM) based on industry 
benchmarks to estimate the annual cost of regularly scheduled 
maintenance and repair for different types of facilities. Our policy 
calls for the services to fund sustainment at no less than 90 percent 
of the FSM-generated estimate. For fiscal year 2012, however, the Navy 
and Air Force have opted to take risk, funding sustainment at only the 
80 percent level.\1\ As a result, our fiscal year 2012 budget request 
funds sustainment DOD-wide at only 86 percent of the FSM-generated 
estimate.
---------------------------------------------------------------------------
    \1\ The Navy and Air Force believe they can manage this risk by 
prioritizing their sustainment needs. However, the recent flooding of 
the U.S. Strategic Command headquarters demonstrates how difficult it 
is to do this: the flooding was due in part to a history of 
insufficient preventive maintenance at what is a mission-critical 
facility.
---------------------------------------------------------------------------
    Recapitalization (restoration and modernization) serves to keep the 
inventory of facilities modern and relevant, extend the service life of 
individual facilities, and restore capability lost due to man-made or 
natural causes. Compared with sustainment, recapitalization needs are 
harder to forecast because they are a function of change--in functional 
standards (e.g., a new requirement for the configuration of enlisted 
housing rooms), in available technology (e.g., new lighting fixtures 
and next-generation boilers) and even in the mission that the facility 
supports. The fiscal year 2012 budget requests $9 billion for 
recapitalization--$4.4 billion more than the fiscal year 2011 request. 
This reflects an increased emphasis by the Army and Air Force on 
upgrading their existing facilities.
    Finally, demolition (including deconstruction to recycle and reuse 
building parts) is an important tool in any recapitalization effort. 
Our fiscal year 2012 budget requests $409 million to eliminate more 
than 17 million square feet of facilities--a demonstration of our 
commitment to demolish what we no longer need or cannot economically 
repair.
Family and Unaccompanied Housing
    Housing is key to quality of life--in the military no less than in 
the civilian world. The fiscal year 2012 budget requests $1.7 billion 
for family housing, which supports our goal of having 90 percent of 
family housing in good or fair condition starting in fiscal year 2012.
    The services have relied largely on privatization to address a dual 
problem: traditionally, much of the military-owned family housing was 
in poor condition, and military families often could not find 
affordable rental housing in the local economy. In my view, 
privatization of family housing--where the services partner with the 
private sector to generate housing built to market standards--is the 
single most effective reform my office has carried out. First, it is 
extremely cost-effective; with an investment of only $2.7 billion, the 
services have generated $27 billion in privatized housing--a 10:1 
leverage ratio. Moreover, the private owners are responsible for 
maintenance and operation, including necessary recapitalization, for 
the full 50 years of the project. Second, the housing is of high 
quality; most of it is more appealing to young families than what the 
MILCON process would produce. Finally, the private owners have a strong 
incentive to maintain the housing because they need to be able to 
attract and retain military tenants.

                      FAMILY HOUSING BUDGET REQUEST, FISCAL YEAR 2012 VS. FISCAL YEAR 2011
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Change from fiscal year 2011
                                                    Fiscal year     Fiscal year  -------------------------------
                                                   2011 request    2012 request       Funding       Percentage
----------------------------------------------------------------------------------------------------------------
Family Housing Construction/Improvements........          $356.8          $373.7           $16.9              +5
Family Housing Operations & Maintenance.........         1,448.7         1,318.2          -130.5              -9
Family Housing Improvement Fund.................             1.1             2.2            +1.1            +100
Homeowners Assistance Program...................            16.5             1.3           -15.2             -92
                                                 ---------------------------------------------------------------
      Total.....................................         1,823.1         1,695.4          -127.7              -7
----------------------------------------------------------------------------------------------------------------

    For Government-owned family housing, the fiscal year 2012 budget 
requests $374 million to replace or improve 2,412 units at U.S. bases 
and enduring locations overseas. We are requesting an additional $1.3 
billion to operate and maintain 42,000 units worldwide.
    The Department is committed to improving housing for its 
unaccompanied servicemembers as well. In past years, we have made 
sizable investments in this area to support initiatives such as BRAC, 
global restationing, force structure modernization, and Homeport 
Ashore, a Navy program to move sailors from their ships to shore-based 
housing. The fiscal year 2012 budget request includes about $1.7 
billion for construction of new and replacement projects for nearly 
15,000 unaccompanied servicemembers.
    As the Department nears the goal it set for new construction of 
unaccompanied housing, we are shifting the focus to long-term 
sustainment of the modernized inventory. My office has worked closely 
with the Comptroller to establish quality standards and performance 
goals for sustainment of unaccompanied housing. In this year's budget 
process, we instituted a key performance goal: 90 percent of 
unaccompanied housing should be in good or fair condition by the end of 
fiscal year 2017.
                        managing our energy use
    The performance of an installation is increasingly linked to its 
management and use of energy. Installation, or facilities, energy is 
important for two reasons. First, it represents a significant cost. In 
2010, DOD spent $4 billion, or 26 percent of the Department's energy 
bill, on facilities energy. Second, facilities energy is key to mission 
assurance. According to the Defense Science Board, DOD's reliance on a 
fragile grid to deliver electricity to its bases places critical 
missions at risk.\2\ Most installations cannot manage their demand for 
and supply of power and are thus vulnerable to intermittent and/or 
prolonged power disruption due to natural and manmade disasters.
---------------------------------------------------------------------------
    \2\ ``More Fight--Less Fuel,'' Report of the Defense Science Board 
Task Force on DOD Energy Strategy, February 2008.
---------------------------------------------------------------------------
    The Department has three interrelated goals with respect to 
facilities energy:
  --Reduce energy usage and intensity;
  --Increase renewable and onsite (distributed) energy generation; and
  --Improve energy security.
    Our strategy directly reflects those goals. First, and most 
important, we are reducing the demand for traditional energy through 
conservation and energy efficiency. The Department spends almost $18 
billion a year to sustain, restore, and modernize our existing 
facilities. As part of this process, we are retrofitting our buildings 
with energy efficient components and systems, such as improved 
lighting, high-efficiency HVAC systems, double-pane windows, energy 
management control systems and new roofs. As well as relying on their 
own budgets, the services are using third-party financing, such as 
energy savings performance contracts, to pursue facility sustainment 
and recapitalization projects.
    In addition to retrofitting existing buildings, we are taking 
advantage of new construction to incorporate more energy-efficient 
designs, material, and equipment into our inventory. All new 
construction must meet the Leadership in Energy and Environmental 
Design (LEED) Silver standard and/or the five principles of high-
performance sustainable buildings. In either case, new construction 
must exceed the energy efficiency standard set by the American Society 
of Heating, Refrigerating and Air-Conditioning Engineers by at least 30 
percent.
    Second, the Department is increasing the supply of renewable and 
alternative energy on our installations. Our installations are well 
situated to support solar, wind, geothermal, and other forms of 
renewable energy. The geothermal plant at Naval Weapons Center China 
Lake in California provides 270 MWs of power to the State's electrical 
grid--enough to supply a small city; and Nellis Air Force Base in 
Nevada has the second largest solar array in North America. Although 
opportunities for utility-scale solar may be limited (one impediment is 
the lack of water), the roofs of our buildings represent a major 
resource. For example, in Hawaii, the 5,900 units of privatized Army 
family housing feature rooftop photovoltaic (PV) solar panels, making 
this the world's largest residential PV project. As a matter of policy, 
the Navy and the Marine Corps now require that all new roofs and roof 
replacements incorporate solar panels or some other green feature. 
Although the services are using their own budgets for smaller renewable 
projects, most large projects are privately financed.
    Third, we are striving to improve the energy security of our 
installations, with an emphasis on the risk from potential disruptions 
to the commercial grid. The Department is participating in interagency 
discussions on the magnitude of the threat to the grid and how best to 
mitigate it. Closer to home, we are looking at how to ensure that we 
have the energy needed to maintain critical operations in the face of a 
major disruption. As required by the National Defense Authorization Act 
(NDAA), the Department recently gave the Congress a preliminary plan 
for identifying and addressing areas in which electricity needed to 
carry out critical military missions on DOD installations is vulnerable 
to disruption. The development of renewable and alternative energy 
sources on base will be one element of this effort: in combination with 
other investments such as smart microgrid technology, renewable and 
onsite energy sources can help installations carry out mission-critical 
activities and support restoration of the grid in the event of 
disruption.
    As DOD strives to improve its energy efficiency and security, 
accurate, real-time information about energy use is essential. To 
borrow the oft-used phrase, you can't manage what you can't measure. My 
office is developing policy guidance that will require the services to 
meter a larger share of their energy consumption. We are also leading 
the effort to develop a DOD-wide energy information management system. 
Leading firms such as Wal-Mart have such a system, and so should DOD. 
Toward that end, we have defined a standard set of energy information 
management requirements and are assessing which information management 
technologies (future and current) will best support them.
    Although the Department is steadily improving its installation 
energy performance, we have failed to meet key statutory and regulatory 
goals for the last 2 years. We fell well short of the 2010 goal for 
energy intensity (15-percent reduction relative to 2003) largely 
because of the Army's performance. On another key metric, use of 
renewable energy, while we are on track to meet the NDAA target 
(produce/procure 25 percent of electricity from renewable sources by 
2025), we missed the Energy Policy Act target (7.5-percent renewable 
use by 2013). (The key reason for that disparity is that the NDAA 
criteria allow for inclusion of China Lake, DOD's largest source of 
renewable energy, whereas the EPACT criteria do not.) See the appendix 
for more detail.
Fiscal Year 2012 Budget Request
    Let me highlight two programs in our fiscal year 2012 budget 
request that are particularly important to the Department's energy 
strategy--the Installation Energy Test Bed and the Energy Conservation 
Investment Program (ECIP).
            Installation Energy Test Bed
    We are requesting $30 million in fiscal year 2012 for energy 
technology demonstrations by the Environmental Security Technology 
Certification Program (ESTCP).\3\ ESTCP began these demonstrations--
known as our Installation Energy Test Bed--as a $20 million pilot 
effort in 2009. Seeing the value of these demonstrations, in 2010, the 
Department directed $30 million from ECIP, a flexible MILCON line, to 
ESTCP to continue the test bed. This year, we are seeking to fund the 
test bed as the research, development, test and evaluation activity it 
is. It is a high leverage program that we believe will produce major 
savings.
---------------------------------------------------------------------------
    \3\ As discussed in section IV below, we are also requesting $33.6 
million for ESTCP for environmental technology demonstrations. These 
two demonstration programs appear as separate lines under ESTCP in the 
President's fiscal year 2012 budget request.
---------------------------------------------------------------------------
    The purpose of the test bed is to demonstrate new energy 
technologies in a real-world, integrated building environment so as to 
reduce risk, overcome barriers to deployment, and facilitate wide-scale 
commercialization. The rationale is straightforward. Emerging 
technologies offer a way to cost effectively reduce DOD's facility 
energy demand by a dramatic amount (50 percent in existing buildings 
and 70 percent in new construction) and provide distributed generation 
to improve energy security. Absent outside validation, however, these 
new technologies will not be widely deployed in time for us to meet our 
energy requirements. There is an extensive literature on the 
impediments to commercialization of emerging technologies for the 
building energy market. Among other problems, the first user bears 
significant costs but gets the same return as followers. These barriers 
are particularly problematic for new technologies intended to improve 
energy efficiency in the retrofit market, which is where DOD has the 
greatest interest.
    It is in DOD's direct self-interest to help firms overcome the 
barriers to deployment and commercialization of their technology. We 
have a vast inventory of buildings--nearly 300,000 structures and 2.2 
billion square feet of space--3 times the footprint of Wal-Mart and 10 
times that of the General Services Administration. Given what we spend 
to power our facilities ($4 billion a year), the potential cost-savings 
are significant.
    One indication of the value of this approach is that Wal-Mart, the 
largest private-sector energy consumer in the United States, has its 
own test bed. Wal-Mart systematically tests innovative energy 
technologies at designated stores to assess their performance and cost 
effectiveness. For technologies that prove to be cost effective (not 
all of them do, which is itself a valuable finding), Wal-Mart deploys 
them in all of its stores. This approach has helped Wal-Mart 
dramatically reduce its energy consumption. But whereas Wal-Mart's 
focus is narrow because all of its stores are identical (big-box 
design), the military needs solutions for a diverse mix of building 
types and sizes--everything from barracks and office buildings to 
aircraft repair depots and data centers.
    ESTCP has successfully piloted the test bed over the last 2 
years.\4\ Each year, ESTCP has issued a solicitation inviting private 
firms, universities, and Government labs to identify emerging 
technologies that would meet DOD installation needs. The response has 
been huge--in 2010, ESTCP received more than 300 proposals from leading 
corporations in the building energy sector, small startups with venture 
capital funding and the major Department of Energy (DOE) labs. Teams 
made up of technical experts from inside and outside of DOD and service 
representatives familiar with the installations' needs review the 
proposals, and winning proposals (ESTCP has selected about 15 percent 
of the ones submitted) are matched up with a service and an 
installation at which to demonstrate the technology. ESTCP expects some 
of the projects to begin to show results this year.
---------------------------------------------------------------------------
    \4\ The approach is similar to one that ESTCP has used since 1995 
to demonstrate innovative environmental technologies on DOD sites and 
in doing so help them transition to the commercial market. As discussed 
in section IV below, ESTCP has a strong track record of reducing DOD's 
environmental costs.
---------------------------------------------------------------------------
    The test bed has five focus areas:
  --Advanced components to improve building energy efficiency;
  --Advanced building energy management and control;
  --Smart microgrid and energy storage to improve energy security;
  --Tools and processes for design, assessment, and decisionmaking for 
        energy use and management; and
  --Renewable energy generation on DOD installations.
    The test bed requires no new physical infrastructure; rather, it 
operates as a distributed activity whose key element is the systematic 
evaluation of new technologies, both to determine their performance, 
readiness and lifecycle costs, and to provide guidance and design 
information for future deployment across installations.
    The timing for an energy test bed is ideal--one reason the response 
from industry has been so strong. The Federal Government is investing 
significant resources in building energy research and development 
(R&D), largely through the DOE, and the private sector is making even 
larger investments as evidenced by the growth of venture capital 
backing for ``cleantech.'' As a structured demonstration program linked 
to the large DOD market, the ESTCP test bed can leverage these 
resources for the military's benefit.
Energy Conservation Investment Program
    The second key program to highlight is the Energy Conservation 
Investment Program (ECIP). The fiscal year 2012 budget requests $135 
million for ECIP, a $15 million increase compared to our fiscal year 
2011 request. ECIP has a long history of producing savings for the 
services, and we are reorienting the program to give it even greater 
leverage.
    ECIP traditionally has funded small projects that promise a 
significant payback in reduced energy costs, and the services have 
relied heavily on it to achieve their energy goals. Although ECIP has 
enjoyed strong support in the Congress and elsewhere, it is and will 
remain a relatively small program. Thus, it can achieve only a fraction 
of the Department's energy goals. Moreover, the services are 
establishing and funding their own, much larger programs aimed at 
improving their energy performance.
    In keeping with the Department's growing focus on energy, I 
recently issued policy guidance designed to change the role that ECIP 
will play--from one of funding the services' routine energy projects to 
one of leveraging their now-larger investments in ways that will 
produce ``game-changing'' improvements in energy consumption, costs 
and/or security. To illustrate, ECIP projects should have the following 
types of goals:
  --Dramatically change energy consumption at an individual 
        installation, e.g., by fundamentally improving the performance 
        of the power or steam plant;
  --Implement across multiple installations a technology validated in a 
        demonstration program sponsored by DOD (e.g., the installation 
        energy test bed) or DOE;
  --Integrate technologies designed to achieve different goals (e.g., 
        energy efficiency and energy security) to realize synergistic 
        benefits;
  --Integrate distributed generation and storage technologies to 
        improve supply resiliency for critical loads; and
  --Implement energy security or net-zero energy installation plans, 
        especially at those installations where such investments 
        leverage partnerships with DOE.
    In terms of implementation, this new vision for ECIP means that my 
office will no longer use financial payback as the sole criterion for 
judging the merits of potential projects. In evaluating a candidate 
project, we will now give as much weight to its energy impact 
(reduction in BTUs) as to its financial payback, and we will give 
secondary consideration to the impact of the project on the nominating 
installation's energy security.
    As this change reflects, ECIP is now part of a portfolio approach 
in which the services can pursue the most financially attractive energy 
projects via third-party financing, such as an energy savings 
performance contract, or through their own budgets. ECIP will support 
projects that will have a big impact on the services' energy efficiency 
and energy security but that cannot be justified under their internal 
funding strategies.
                   protecting the natural environment
    The Department has long made it a priority to protect our natural 
and cultural resources: as the Marine Corps puts it, ``A country worth 
fighting for is a country worth preserving.'' The Department protects 
the environment on our installations, not only to preserve 
irreplaceable resources for future generations, but to ensure that we 
have the land, water, and airspace we need for military readiness. Over 
the last 10 years, the Department has invested $42 billion in its 
environmental programs, and our steady level of expenditure has 
produced quality results. In fiscal year 2012, we are requesting $4.3 
billion to continue this legacy of leadership.

                   ENVIRONMENTAL PROGRAM BUDGET REQUEST, FISCAL YEAR 2012 VS. FISCAL YEAR 2011
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Change from fiscal year 2011
                                                    Fiscal year     Fiscal year  -------------------------------
                                                   2011 request    2012 request       Funding       Percentage
----------------------------------------------------------------------------------------------------------------
Environmental Restoration.......................          $1,539          $1,467            -$72            -4.7
Environmental Compliance........................           1,570           1,551             -19            -1.2
Environmental Conservation......................             320             380             +60           +18.8
Pollution Prevention............................             117             104             -13           -11.1
Environmental Technology........................             216             227             +11            +5.1
BRAC Environmental..............................             445             521             +76           +17.1
                                                 ---------------------------------------------------------------
      Total.....................................           4,207           4,250             +43            +1.0
----------------------------------------------------------------------------------------------------------------

Environmental Conservation
    Our installations are home to some of the finest examples of rare 
native vegetative communities, such as old-growth forests, tall grass 
prairies, and vernal pool wetlands. DOD has a greater density of 
endangered and threatened species than any other Federal agency. Of the 
1,372 species considered threatened or endangered by the Fish and 
Wildlife Service (FWS), more than 420 inhabit DOD land. Nearly 40 
threatened and endangered species are found exclusively on DOD 
installations. The Department develops plans to protect the natural 
environment while maintaining support for mission requirements in 
coordination with the FWS and its State counterparts. These plans have 
helped us maintain flexibility for mission activities, avoiding 
critical habitat designations while providing equal or greater 
protection for endangered species.
    In addition to natural resources, the Department is responsible for 
thousands of archaeological sites, historic buildings, and other 
cultural resources. DOD owns or manages the Nation's largest inventory 
of Federal historic properties and continues to use many of these 
historic properties to meet mission requirements. Using these 
properties reduces DOD's environmental footprint and retains 
significant cultural resources for future generations. In addition, 
many older buildings have features that we consider to be ``green'' 
today, such as high ceilings to encourage air circulation, large 
windows to provide maximum natural light and operational shutters to 
reduce heat gain.
    The Department is requesting $380 million in fiscal year 2012 for 
environmental conservation, which includes $226 million in recurring 
funds for ongoing activities and $154 million in nonrecurring funds for 
one-time projects directed at threatened and endangered species, 
wetland protection, or other natural, cultural, and historical 
resources. This represents an increase of 18.8 percent over the fiscal 
year 2011 request. Specifically, the Navy has increased its request to 
meet legal requirements of conservation laws and regulations, primarily 
in support of offshore range environmental impact statements and 
consultations under the Marine Mammal Protection Act and the Endangered 
Species Act. The Army has increased its request as well to more 
accurately reflect program requirements.
Environmental Restoration
    The Defense Environmental Restoration Program provides funds for 
two types of environmental cleanup. The Installation Restoration 
Program (IRP) manages the cleanup of hazardous substances, pollutants, 
and contaminants--things that cause human health concerns. The Military 
Munitions Response Program (MMRP) manages the cleanup of unexploded 
ordnance and discarded military munitions--things that may explode. The 
cleanup occurs at three types of locations:
  --Active military bases;
  --Bases closed through the BRAC process; and
  --Other formerly used defense sites.
    By the end of 2010, the Department, in cooperation with State 
agencies and the Environmental Protection Agency, had completed cleanup 
activities on 79 percent of IRP sites, and it is now monitoring the 
results. For MMRP sites, the comparable figure is 40 percent. The 
Department determines the order of cleanup for both IRP and MMRP sites 
on the basis of risk. By cleaning up the ``worst first,'' we reduce our 
long-term liability and expedite the return of properties to productive 
reuse.
    We are requesting $2 billion for fiscal year 2012 to clean up IRP 
and MMRP sites. (This includes both $1.5 billion for environmental 
restoration and $521 million for BRAC environmental.) The budget 
request for environmental restoration is $72 million less than it was 
in fiscal year 2011, primarily because of a reduction in the Army's 
MMRP requirement. At the same time, we are asking for $76 million more 
than in fiscal year 2011 for BRAC environmental to support requirements 
at Army and Navy BRAC installations.
Pollution Prevention
    The Department employs a number of strategies to reduce pollution 
of our air, water, and land. They include eliminating the use of 
certain hazardous materials in our operations and weapon systems, 
promoting the use of alternative fuels and green products, and 
implementing innovative technologies. These and other strategies lower 
our lifecycle costs, improve mission capabilities, and protect our 
assets.
    Investments in pollution prevention pay dividends. In 2010, the 
Department diverted 3.9 million tons or 62 percent of our solid waste 
from landfills, avoiding approximately $176 million in landfill 
disposal costs. We reduced hazardous waste disposal by 8 percent from 
2008 to 2009. Our installations also effectively manage air quality; 
they reduced hazardous air pollutant emissions by 420 tons, or 25 
percent, from 2008-2009.
    The President's budget requests $104 million for pollution 
prevention in fiscal year 2012, a reduction of $13 million from our 
fiscal year 2011 request. This decrease reflects the growing maturity 
of the pollution prevention program--having completed activities that 
require significant investment to reduce pollution after the fact, the 
Department is now focusing on the more cost-effective strategy of 
preventing pollution in the first place, for example, by influencing 
the planning and design of weapons systems.
Environmental Compliance
    Clean water and air are essential to the health and well-being of 
our communities and ecosystems. The Department maintains a high level 
of compliance with environmental laws and regulations--although 
environmental regulators performed more than 3,000 inspections in 
fiscal year 2010--a 30-plus-percent increase from 10 years ago--DOD was 
subject to enforcement actions for only 9 percent of these inspections, 
which is an all-time low.
    Our fiscal year 2012 budget requests $1.6 billion for environmental 
compliance--a negligible ($19 million) decrease from last year's 
request. This steady level of investment will enable the Department to 
continue to protect the environment while maintaining operational 
readiness.
Environmental Technology
    A key part of DOD's approach to meeting its environmental 
obligations and improving its performance is its pursuit of advances in 
science and technology. The Department has a long record of success 
when it comes to developing innovative environmental technologies and 
getting them transferred out of the laboratory and into actual use--on 
our installations, in our depots and in the very weapon systems we 
acquire.
    To accomplish this, the Department relies on two closely linked 
programs--the Strategic Environmental Research and Development Program 
(SERDP) and the Environmental Security Technology Certification Program 
(ESTCP). SERDP is the Department's environmental science and technology 
program; its mission is to address high-priority cross-service 
environmental requirements and develop solutions to the Department's 
most critical environmental challenges. Through a competitive process, 
it invests in applied research and advanced technology development 
guided by DOD users needs but executed by the leading research 
establishments in both the private and public sectors. It has a 
balanced portfolio of projects ranging from high risk leap-ahead 
technologies to fundamental engineering needed to solve critical near 
term problems. SERDP has a superb track record; as one of the only R&D 
programs aimed at reducing DOD operating costs, it has saved the 
Department billions of dollars in environmental cleanup costs, avoided 
liability costs, and reduced weapons system maintenance and lifecycle 
costs.
    One reason SERDP has been so successful is the complementary role 
played by ESTCP, the Department's environmental test and evaluation 
program. SERDP and ESTCP are managed out of a single program office. 
ESTCP's mission is to transition technology out of the laboratory. It 
does this by demonstrating the technology in a real-world setting, such 
as a clean-up site on a military installation or at an aircraft 
maintenance depot. This ``direct technology insertion'' has proven key 
to getting regulators and end users to embrace new technology.
    One area where SERDP and ESTCP have excelled is the development of 
technologies to detect unexploded ordnance (UXO). Current clean-up 
methods cannot discriminate between scrap metal and hazardous UXO; as a 
result, contractors must dig up hundreds of thousands of metal objects 
in order to identify and remove just a few pieces of UXO. Because this 
process is so labor-intensive, it is very expensive; the estimated cost 
to clean up UXO on known DOD sites is an eye-popping $17 billion. 
However, 10 years of investment by SERDP and ESTCP have yielded 
technologies that can discriminate between UXO and harmless metal 
objects with almost perfect reliability. This is a remarkable 
achievement and one that many clean-up experts thought was impossible. 
Based on estimates from the 2003 Defense Science Board Task Force on 
Unexploded Ordnance, implementation of reliable discrimination 
technologies can reduce DOD's projected cost for UXO cleanup by 75 
percent--or up to $12 billion.
    ESTCP has recently funded live-site demonstrations to acquire the 
data needed to validate, gain regulatory approval for and fully 
transition these technologies into the field. We are proposing to 
accelerate these demonstrations so that the technology is ready by 
2015, when the services undertake major UXO clean-up efforts. 
Recognizing that the challenges go beyond technology, we are addressing 
other potential impediments to the deployment of new technology. We are 
talking with environmental regulators to gain their endorsement, 
working with contracting offices so that contracts allow for early 
adoption, and cooperating with industry to encourage embrace of the new 
technology.
    The fiscal year 2012 budget request includes $66.4 million for 
SERDP and $33.6 million for ESTCP for environmental technology 
demonstrations. (The budget request for ESTCP includes an additional 
$30 million for energy technology demonstrations, as discussed in 
section III above.) Of the $33.6 million requested for ESTCP, $7.5 
million will go to support the accelerated program of UXO live-site 
demonstrations.
    The overall budget request for environmental technology for fiscal 
year 2012 is $227 million. In addition to SERDP and ESTCP, this request 
includes funding for the services' environmental R&D activities. The 
services' investments focus on service-unique environmental technology 
requirements and complement the larger SERDP and ESTCP investments, 
which address those issues that are common across the services. SERDP 
and ESTCP work closely with the services in order to coordinate and 
leverage these investments.
Compatible Development
    Encroachment is a growing challenge to the military mission, 
particularly our test and training activities. I want to highlight two 
efforts which I spearhead that are designed to deal with this 
challenge.
            Readiness and Environmental Protection Initiative
    DOD's ability to conduct realistic live-fire training and weapons 
system testing is vital to preparing troops and the equipment they use 
for real-world combat. Sprawl, incompatible land use and other forms of 
encroachment put the Department's training and testing missions at risk 
and reduce military readiness. For example, lights from developments 
near installations reduce the effectiveness of night vision training, 
and land development that destroys endangered species habitat pushes 
those species onto less developed military lands, resulting in 
restrictions on testing and training.
    A key tool for combating encroachment is the Readiness and 
Environmental Protection Initiative (REPI). Under REPI, the Department 
partners with conservation organizations and State and local 
governments to preserve buffer land around our installations and 
ranges. Through its unique cost-sharing partnerships, REPI has directly 
leveraged the Department's investments by two-to-one. The indirect 
benefits are even greater; by helping to preserve buffer land, the 
Department avoids much more costly alternatives, such as training 
workarounds and investments to replace existing testing capability. In 
the current real estate market, where property is more affordable and 
there are a great many willing sellers, REPI is a particularly good 
investment.
    The President's fiscal year 2012 budget requests $54.2 million for 
REPI, an increase of $15 million over our fiscal year 2011 request.
            Renewable Energy Siting
    Although most renewable energy projects are perfectly compatible 
with the military mission, in some cases, they can create a conflict. 
Until recently, the process through which DOD reviewed proposed 
projects and handled disputes was opaque, time-consuming, and ad hoc, 
and the resulting delays were costly for industry and for our partners 
elsewhere in governments. Spurred in part by section 358 of the fiscal 
year 2011 NDAA, we have moved aggressively to develop a timely, 
transparent review process and to pursue technological fixes that allow 
for compatible energy siting.
    We have made rapid progress. Even before the President signed the 
NDAA into law, we had created the DOD Energy Siting Clearinghouse to 
provide a ``one-stop shop'' within the Department for developers and 
other Government agencies. The Clearinghouse has conducted aggressive 
outreach to industry, other Federal agencies, environmental advocacy 
groups, and State and local governments. Among other things, the 
Clearinghouse hosted a conference with key interagency stakeholders to 
analyze the backlog of renewable energy projects filed with the Federal 
Aviation Administration and the Department of the Interior's Bureau of 
Land Management, focusing on protecting critical military mission 
requirements as we promote energy independence. We are also engaged in 
Department of the Interior's efforts to open public lands and the Outer 
Continental Shelf to renewable energy generation--ensuring that we do 
this in a way that preserves military testing, training, and homeland 
defense capabilities.
    At the same time, the Clearinghouse has worked with interagency 
partners on R&D to promote mission compatible renewable energy, with an 
emphasis on technology to mitigate the impacts of wind turbines on 
radars. DOE has been an enthusiastic collaborator, and we are planning 
to host an interagency field evaluation of existing mitigation 
technologies in the near future. Through the Interagency Policy 
Committee on the Air Domain, we are looking at options to accelerate 
the process for upgrading older surveillance radars and set the stage 
for long-term solutions.
    Renewable energy is vital to America's future security and economic 
vitality and it need not be incompatible with the preservation of the 
Department's irreplaceable test and training ranges and its radar-based 
surveillance network. We are making great strides in learning how to 
minimize the impacts of renewable energy projects on vital military 
missions. This effort will help give our Nation a clean, reliable, and 
secure energy future.
                               conclusion
    My office takes seriously our mission to strengthen DOD's 
infrastructure backbone--the installations that serve to train, deploy, 
and support our warfighters. Thank you for your strong support for the 
Department's installation and environment programs and for its military 
mission more broadly. I look forward to working with you on the 
challenges and opportunities ahead.

                                Appendix

                 key facilities energy and water goals
    There are four key statutory and regulatory goals related to 
installation's consumption of energy and water:
  --Reduce energy intensity (BTUs per square foot) by 3 percent per 
        year, or 30 percent overall, by 2015 from the 2003 baseline 
        (Energy Independence and Security of 2007). Under DOD's high-
        priority performance goals, the interim target is a 21-percent 
        reduction by the end of 2012.
  --Increase use of renewable energy to 7.5 percent in 2013 and beyond 
        (Energy Policy Act of 2005 (EPACT)); and produce or procure 25 
        percent of electricity consumed from all renewable sources by 
        the end of 2025 (National Defense Authorization Act of 2007 
        (NDAA)). Under DOD's high-priority performance goals, the 
        interim NDAA target is 12 percent by 2012.
  --Reduce consumption of petroleum (gasoline and diesel) by 
        nontactical vehicles by 30 percent by 2020 (Executive Order 
        13514, October 2009).
  --Reduce potable water consumption intensity by 2 percent per year, 
        or 16 percent overall, by 2015 from the 2007 baseline 
        (Executive Order 13514, October 2009).
    DOD reduced its energy intensity by only 11.2 percent from 2005-
2010, compared to the goal of 15 percent. A key factor has been the 
demands on the Army related both to the movement of troops and 
equipment to and from Afghanistan and Iraq and to the completion of the 
BRAC process (as Army closes some facilities and moves to others, the 
lights are on in two locations).
    DOD increased its consumption of renewable energy by 4.1 percent, 
compared to the 2010 EPACT target of 5 percent. By contrast, we met the 
fiscal year 2007 NDAA goal (produce or procure 25 percent of 
electricity consumed from all renewable sources) by achieving 10.4 
percent compared to the target of 10 percent.
    With respect to consumption of petroleum by nontactical vehicles, 
the Department fell short of the target--DOD achieved a 6.6-percent 
reduction in its petroleum use from the 2005 baseline, compared to the 
target of 10 percent. The Department continues to pursue replacement of 
nontactical fleet vehicles with more efficient models, alternative fuel 
vehicles, and hybrid electric vehicles to decrease petroleum fuel 
demand.
    Finally, the Department far exceeded the 2010 goal for reducing the 
intensity of our potable water consumption. DOD reduced its potable 
water consumption intensity by 13 percent from 2007-2010, compared to 
the goal of 6 percent. From 2007-2009, we reduced the water consumption 
intensity of our facilities by 4.6 percent. This dramatic improvement 
is due to the combination of an aggressive program to detect leaks 
followed up by a program to repair them.

    Senator Johnson. Thank you for your opening statements.
    We will limit the first round of questions to 6 minutes per 
member. We can have additional rounds should we need them.
    Senators will be recognized in their order of their 
arrival.
    Secretary Hale, before we turn to the fiscal year 2012 
budget request, I would like to talk to you about the fiscal 
year 2011. We're facing a Government shutdown in less than 36 
hours if an agreement cannot be reached on a long-term 
continuing resolution.
    I have several questions, including: What impact would a 
shutdown have on military personnel, on operations and military 
bases, both here and overseas? Will our troops be paid? What 
impact would a shutdown have on the Guard and Reserve?

                          GOVERNMENT SHUTDOWN

    Mr. Hale. Well, Mr. Chairman, the answers to all of your 
questions are negative, unfortunately. I managed through the 
shutdown in 1995 as the Air Force Financial Manager. I see no 
good that came of it. I think the same would be true here. I 
very much hope this does not happen.
    But, let me try to be more specific. If appropriations 
lapse on midnight on April 8, we go into a situation where 
we're governed not by the priorities of the Congress or the 
administration--by a very specific set of laws and exceptions 
to the Antideficiency Act. Essentially, we can maintain 
services that maintain the safety of life, and protection of 
property. That will allow us to carry on most of the military 
operations--Afghanistan, transition in Iraq, Libya, and the 
Japanese operation all could continue. So, we could continue 
the key areas related to national security.
    But many support operations would have to be terminated. We 
would direct all of our military personnel to continue working. 
A substantial proportion of our civilian personnel, though, 
would have to be put on no-notice nonpay furlough status. We 
don't have any authority, once appropriations lapse, to 
disperse funds--or, very limited authority. So, we couldn't pay 
any of our people--military or civilian--for any work, after 
the shutdown occurred. So, to give you an example--a specific 
one: For the April 15 payday, which is the next one coming up, 
the pay period for the military is the 1st through the 15th, so 
we could only pay through the 8th. It'll be roughly one-half a 
payday for military personnel if we shut down on the 8th and it 
continues through the 15th. These people have kids to feed and 
mortgages, just like we all do. I think it will be a serious 
problem. But we have no alternative. These are prescribed by 
the law.
    The civilians--actually, the pay period is through April 9. 
So, that first payday will be pretty much complete for most 
civilians, just because of the nature of the pay period. So, it 
is disruptive. It's harsh and unfair to our people. I hope this 
does not happen. I've devoted most of my week to shutdown 
planning, and I've never had a stronger feeling that I'm likely 
to have wasted a week of my life, than in this case. I very 
much hope this doesn't happen.
    Senator Johnson. Would a shutdown affect work on any MILCON 
projects or essential services such as DOD schools, clinics, or 
daycare or youth centers?
    Mr. Hale. Yes. We will keep some of them open. Much of the 
MILCON projects are done by contractors, and if that contract 
is funded, and if there are Federal civilians who are in what's 
called ``excepted activities'' that can supervise it, that work 
could go on. We would maintain the childcare centers as a 
readiness issue. We would maintain emergency medical services--
that's a safety of life issue. But we would have to defer any 
elective surgery for dental or medical, so it's going to be 
disruptive in that sense.
    The routine activities at the bases would stop. The 
military personnel would be there, but many of the civilians 
are going to be furloughed, and so a lot of the routine 
activities at our bases would come to a halt.
    Senator Johnson. Secretary Hale, in the past, DOD has 
maintained that the Guam rebasing effort is contingent on Japan 
making tangible progress to relocate some marines within 
Okinawa. The Department has defined tangible progress as the 
signing of a landfill agreement by the Governor of Okinawa to 
build a new airfield for the marines.
    Has this definition changed? Is a landfill agreement still 
the benchmark? Or is the configuration of the airfield the new 
standard?

                                  GUAM

    Mr. Hale. Well, I think we need an overall plan and a cost 
estimate. And I understand--I'm going to ask Dr. Robyn, 
Dorothy, if she would add more detail here--but I think some of 
those benchmarks continue. And I think we all recognize and 
hope that, coming out of the two-plus-two talks and other 
efforts, that we will get a clear view of where we're heading 
on Guam.
    Do you want to say more on that?
    Dr. Robyn. Well, I think one of my colleagues from policy 
testified last week on this, and I would prefer to let the 
policy part of DOD answer this.
    I think you're exactly right--signing the landfill 
agreement has traditionally been seen as the thing that we 
would look for before we would move troops to Guam. I think--my 
colleague stressed that there is a continuum of actions on the 
part of the Japanese Government, including investment, that can 
constitute tangible progress. We are not backing away, and I 
think my colleague made that clear. But we can't move troops 
off of Okinawa to Guam unless we're absolutely sure that we 
will get the Futenma replacement facility. That issue brought 
down the former Prime Minister of Japan. It's a controversial 
issue. And so, we have to have a clear commitment.
    Senator Johnson. When do we think the Governor of Okinawa 
will sign the landfill agreement?
    Dr. Robyn. I think we will know more later. Senator Kirk 
referred to the two-plus-two meeting with Secretary Gates, 
Secretary Clinton and their Japanese counterparts, later this 
month.
    Senator Johnson. Senator Kirk.
    Senator Kirk. Thank you.
    I want to pick up where the chairman left off with regard 
to Guam. I'm worried that you guys would be pushed into trying 
to sell us an agreement that was tangential progress instead 
of, you know--the question in these budget times is, are we 
going to build the base or not?
    Mr. Hale. Right.
    Senator Kirk. It increasingly looks like we're not. And 
with the cash flow problems of the Japanese Government, I would 
have a pretty dim view of how this thing is going to go, 
because they have an astronomical money requirement, because 19 
miles around a key part of their territory is now useless for 
quite some time.
    I'm wondering, Bob, you know, I worked very much with your 
predecessors, Dov and Tina, and so I know you know the answer--
what's Libya costing us per day, per week?

                                 LIBYA

    Mr. Hale. Well, let's see. If I remember the numbers we 
sent to the Congress yesterday, it was, the total cost is $608 
million. The weekly costs are confusing over this period, 
because there was such a high cost at the beginning. We have 
estimated that if the operations continue at roughly the 
planned level, it will be about $40 million a month, so I guess 
it'd be about $10 million a week.
    Senator Kirk. About $10 million a week?
    Mr. Hale. I would underscore the uncertainty in that 
estimate, given that we're not sure exactly----
    Senator Kirk. Well, you've got a little lower operating 
tempo, because you took U.S. combat aircraft off the mix in it.
    Mr. Hale. Right. And the $40 million assumes the planned 
reduction which is going on right now in our operating tempo.
    Senator Kirk. Right. I notice that you just sent up a 
notification to the subcommittee to cancel $123 million for 
Kandahar Airfield, which is the center of gravity of the 
largest military effort for the United States. Is that what 
we're going to see further as Libya kind of eats our budget?
    Mr. Hale. I don't think they're related, but I think I need 
to take that for the record. I'm not sure of the details.
    Have we got any on that?
    Okay. I think I need to get back to you with that one.
    [The information follows:]

    The cancellation of the Kandahar Airfield construction projects is 
not related to Operation Unified Response. As stated in the Department 
of the Air Force notification letters dated April 4, 2011, the 
cancellation was due to a comprehensive and rigorous evaluation of all 
planned, but unawarded, major construction projects in Afghanistan. The 
evaluation, necessitated by changing strategic requirements on the 
ground, concluded that the limited operational benefit does not warrant 
this substantial investment. Thus, these projects are being removed 
from the list of fiscal years 2010-2012 overseas contingency operations 
construction requirements.
    Generally, Libya costs are incurred in the operation and 
maintenance (O&M) appropriation. The Department has no authority to 
reprogram from the military construction appropriation to the O&M 
appropriation.

    Senator Kirk. Yes. On Guam, can you guys update this after 
the 29th? This would be----
    Dr. Robyn. Yes. We are.
    Senator Kirk. My guess is, we roll to markup around July. 
And so----
    Dr. Robyn. Yes.
    Senator Kirk [continuing]. This would be enormously 
helpful.
    Mr. Hale. We understand we owe you better information.
    Dr. Robyn. Yes.
    Mr. Hale. We owe ourselves better information, too, I mean.
    Senator Kirk. Yes. And we have a policy maker set of 
meetings on the 29th, and then----
    Dr. Robyn. Yes.
    Senator Kirk [continuing]. Some visibility on that.
    Dr. Robyn. Senator Kirk, could I just, in, make one point 
in response to your--very, very legitimate, too--question, 
whether the Japanese Government is going to be able to continue 
to focus on this issue as they did before. But, it's worth 
noting that over the weekend the Japanese Diet passed by a 
majority--both parties--the Special Measures Agreement, which 
is what specifies how much they will contribute toward the 
stationing costs for U.S. forces. That Special Measures 
Agreement, along with the facilities improvement program, 
represent Japan's host government, host nation support to 
United States forces. It's a substantial amount. It's $1.8 
billion a year.
    Senator Kirk. Right.
    Dr. Robyn. So, at least in that respect, they are trying 
hard to send a message that ``We're not backing off. We are 
full speed ahead on the United States-Japan alliance.''
    Senator Kirk. I just--just make sure that it's not 
tangential progress. We're either going to build a runway 
across a bay, or we're not.
    Dr. Robyn. Right.

                            KOREA TOUR NORM

    Senator Kirk. And that obviously affects the bill that the 
chairman has to put together, and the rest of the Senate.
    For Korea, full norm, phase 1, phase 2, phase 3 costs how 
much?
    Mr. Hale. We only have an estimate for phase 1. It was 
nominal. We do not yet have estimates for phases 2 and 3. We 
are working on that actively as part of the President's budget 
2013 review.
    You raised some questions that need to be answered as well 
about the risks involved there. There are some benefits, too. 
As you know, they, I think you met with General Sharp.
    Senator Kirk. Right.
    Mr. Hale. He feels strongly on this issue. But we don't 
have a cost estimate yet.
    Senator Kirk. The worry is, phase 1 is the camel's nose 
under the tent, and then you sock it to us on phase 2 and 3, 
which, this, you know, this bill is going down so fast in, 
money-wise. How the, you know, and I notice, and the Secretary, 
when he signed off on this, he signed the memo and it said 
that, ``I am signing off on this, but I'm not telling you when 
or how much we're going to do any of this,'' which is about as 
weak as you can get. Yeah. Here it is. So, it was to the 
question, September 23, 2010, ``SECDEF directed USFK and 
service to proceed with a full TN for Korea, as affordable, but 
not according to any specific timeline.'' That's about as weak 
as you can get. And we might be able to say, yeah, we'd like to 
do this, but not according to any appropriations timeline 
either.
    Mr. Hale. As I say, we are looking at this. We haven't made 
a request in the fiscal year 2012 request. I'm not going to be 
able to answer your question, because we haven't decided what 
to do----
    Senator Kirk. Right.
    Mr. Hale [continuing]. About tour normalization. We 
understand it's potentially expensive. There are potential 
benefits. We've got to weigh the two----
    Senator Kirk. Yes.
    Mr. Hale [continuing]. In the context of our fiscal 
realities.
    Senator Kirk. Here's my worry. We defended Korea for 50 
years----
    Mr. Hale. Right.
    Senator Kirk [continuing]. Unaccompanied tours. And while 
everybody would like to be accompanied, as the United States 
borrows 40 cents of every $1 and we have sovereign debt crises 
in Portugal, Argentina, Ireland, and potentially Illinois, the 
question is----
    Last question--plan B for Bahrain? You know, because these 
countries are flipping on a moment's notice. How are we rolling 
on thinking about where else we could put MILCON to support the 
Fifth Fleet if Bahrain goes----
    Mr. Hale. Well, I don't have a clear plan B. I mean, it's a 
pretty fluid situation over there. We are obviously looking at 
our investments, and we'll have to consider them. I'm not in a 
position to tell you exactly what we're going to do.
    Senator Kirk. I've run out of time, Mr. Chairman.
    Senator Johnson. Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman. And I so 
appreciate your support of many of the priorities that I've had 
serving with you on this subcommittee.
    I look forward, Mr. Ranking Member, to serving with you, 
the new senator from Illinois.
    Dr. Robyn, I was very pleased with your comments, as a very 
strong supporter of privatizing housing for families. I've 
served on this subcommittee now for about 8 years, and it's 
been a high priority of several of us on this subcommittee. So, 
could you just give another minute or so about the benefits of 
privatized family housing? And are we going to be able to use, 
maybe, some of the same strategies for individual soldier 
barracks? And I understand the revenue streams are different. 
But----
    Dr. Robyn. Yes.
    Senator Landrieu [continuing]. Is there any thought that 
you've given to some potential privatization for single 
soldiers?
    Dr. Robyn. Yes. Thank you. That's a--thank you for that 
question.
    I worked on this issue when I was in the Clinton White 
House. And it was a Clinton administration initiative to push 
housing privatization. We faced opposition internally from the 
services, from a lot of members on the hill, and most of all, 
from the Office of Management and Budget (OMB). Frank Raines, 
when he was the OMB----
    Senator Landrieu. I remember these battles. And----
    Dr. Robyn. He saw----
    Senator Landrieu [continuing]. I'm glad to see we have won.
    Dr. Robyn [continuing]. The light. He recognized that the 
private sector was actually bearing risk. But, we had 200,000 
inadequate units at the time. Family housing in many, many 
places was an embarrassment, and it was a real detriment to the 
quality of life for families. And that turned around. We fixed 
the incentive problem the day that we allowed for 
privatization. The private developers have an incentive to do 
it right initially, to maintain it. It just, it has worked 
very, very well.
    We are experimenting with it, with barracks. There are a 
couple of experiments underway. My sense is that the reluctance 
there is more of a cultural thing--that, for example, the 
Marine Corps really wants to have the young marines together in 
a building, and they don't want the prospect of someone from 
the outside being part of that, which has to be part of housing 
privatization. You have to tell developers, ``If we can't fill 
it with military people, you can bring in--''
    Senator Landrieu. Well, I'd like you just to pursue that. 
And you seem a very open and innovative kind of leader. And 
that's exciting.
    Because, Mr. Chairman, I've walked through some of the 
barracks at Fort Polk in Louisiana, and I'm quoted in our 
newspaper--and I'll say it again--In some of the barracks where 
we're asking our soldiers, I would literally not want----
    Dr. Robyn. Yes.
    Senator Landrieu [continuing]. To see pets or animals kept 
in some of these facilities. That's how bad some of these 
single barracks are. And it's not fair, when we're asking 
these, you know, young men--some of them are all stationed--
and, men and women--stationed temporarily at Fort Polk. But a 
lot of our soldiers, because we're a joint training base, come 
in and out. So, it's sort of the last room they stay in before 
they go to Afghanistan or Iraq. I know things aren't great in 
Afghanistan and Iraq. But I've also traveled and seen some of 
the opportunities that our soldiers have. And it's actually 
much better over there than their home base here.
    Dr. Robyn. Yes.
    Senator Landrieu. And it's just not fair. I'm proud that 
we're making efforts on the family housing.
    Now, this is a more local question. We have some reserve 
space. We were part of BRAC, like a lot of other communities 
were. We actually had the BRAC commission change their initial 
view relative to the, one of the facilities in New Orleans. The 
bottom line is we have some extra capacity at the Marine 
Reserve Center. So, as you're looking for efficiencies, 
greening of buildings, you know, are you being mindful of 
places that don't have encroachment problems, that have 
capacity problems, that, you know, have buildings already 
constructed that could absorb some, you know, additional troops 
or missions or operations? And would you look into the one----
    Dr. Robyn. Yes. I think that's----
    Senator Landrieu [continuing]. On the west bank of New 
Orleans?
    Dr. Robyn. That's a great question. I know we do it 
sometime--and Barksdale is a an example----
    Senator Landrieu. Yes.
    Dr. Robyn [continuing]. Of putting--but I, I'm frankly not 
sure we do it as exhaustively as we should.
    Senator Landrieu. Well, I'm going to send you some, a 
write-up on that.
    And then, finally, I'm going to send you a question, 
because again, it's very--it's parochial, but it's important to 
our State. We run, I think, according to my information, one of 
the most scrambled alert units in the country out of Belle 
Chasse, Louisiana, for the southern part of the United States. 
Our Louisiana National Guard operates, they've been operating 
out of mold trailers, mold-infested trailers now for some time. 
So, I just wanted to bring that to your attention. Please put 
it on the list.
    Dr. Robyn. Okay.
    Senator Landrieu. It's very important. Whether it's for 
homeland security or drug interdictions, or hurricanes, for 
that gulf coast region to have that kind of protection and 
reach. So, I'll follow up with a written comment.
    Dr. Robyn. Good. Thank you.
    [The information was not available at press time.]
    Senator Landrieu. And thank you, Mr. Chairman.
    Senator Johnson. Senator Reed.
    Senator Reed. Mr. Chairman, Senator Hoeven just--thank you, 
sir.

                          GOVERNMENT SHUTDOWN

    Thank you for your service. I just want to follow up on 
some of the questions that the chairman opened up with, with 
respect to a potential shutdown. You indicated that DOD 
childcare centers would be open. Would the DOD school system 
remain open also?
    Mr. Hale. Yes. That's our plan.
    Senator Reed. The other aspect here, obviously, is, the 
civilian workforce, except for very few individuals for safety 
purposes, would be furloughed. They would not be entitled to 
any type of unemployment benefits because they still are at 
work? Or would they----
    Mr. Hale. I've seen questions about that from OMB, and 
there were suggestions we need to look further into it. So I'm 
not sure that's true. I think it might depend on how long the 
furlough, or, the shutdown went on.
    Senator Reed. So, there is a possibility of, if they're 
furloughed that they would actually be entitled----
    Mr. Hale. I think there's a possibility. But I don't want 
to speak definitely to that, because I'm not certain.
    Senator Reed. It's an important policy question and, it'll 
rapidly become an important personal question for----
    Mr. Hale. I hope not. But it may.
    Senator Reed. I understand.
    Mr. Hale. Incidentally, just to follow up, there will be a 
substantial number of our civilians who will be directed to 
work.
    Senator Reed. Right.
    Mr. Hale. All of those who are in direct support of these 
so-called excepted activities. It may close to half of our 
civilian workforce.
    Senator Reed. Okay. I would suspect that's not 
geographically, sort of, distributed. Well, let me ask it 
another way. You know, there is the impact, which you're 
looking very closely at, within the confines of military 
organizations. But it's the surrounding communities, like 
Newport, Rhode Island; Fayetteville, North Carolina; Lawton, 
Oklahoma; and many, many, many others that this could be a huge 
impact in terms of----
    Mr. Hale. Yes. I mean, it won't be, it won't depend on 
geography. It will depend on which of these missions are deemed 
excepted. And in the case of civilians, whether they are in 
direct support of those missions.
    Senator Reed. All right.
    Mr. Hale. So, it'll be a limited number of financial 
managers, for example, that we'll keep in order to handle the 
funding associated with so-called excepted activities.
    Senator Reed. Okay.
    Mr. Hale. The same with legal, acquisition. But many 
maintenance personnel will be laid off, or, furloughed, I 
should say----
    Senator Reed. Right.
    Mr. Hale [continuing]. On unpaid status.
    Senator Reed. And, typically, my experience has been, those 
individuals would be more in local air bases, Navy bases, than 
in Washington, DC, or in a headquarters where the nature of the 
responsibilities, but----
    Mr. Hale. You know, Senator Reed, it's going to vary. I'll 
give you an example. I oversee an audit agency. The great 
majority of them will end up being furloughed because that's 
not something we can say is safety of life. On the other hand, 
you know--we'll have a lot of people furloughed in the 
Pentagon.
    Senator Reed. I understand. Let me ask now, you talked 
about the interruption in pay. And just to be very clear, 
individual military personnel serving in Afghanistan will stop 
receiving pay as of April 8. Their pay period April 15 will be 
one-half a pay period. And they will not receive pay again 
until the Government once again----
    Mr. Hale. That's correct. At the time we get an 
appropriation, because we're directing all them to work, we 
will pay them retroactively.
    Senator Reed. Fine.
    Mr. Hale. But, they've got to pay their mortgage. And----
    Senator Reed. I understand.
    Mr. Hale [continuing]. I will say, in 1995 credit companies 
were helpful here again. I don't want to make this sound good. 
I don't want to have it happen. But, they were willing to work 
with military personnel in 1995 when we went through this. If 
we have to do it, and please----
    Senator Reed. Right.
    Mr. Hale [continuing]. Try not to make this happen. If we 
have to do it, I would hope maybe they would be forgiving this 
time, too. And I hope it's short if it has to happen.
    Senator Reed. Let me ask, in terms of overseas operations, 
contracting in the field for life support, mess support, et 
cetera, can that continue, or----
    Mr. Hale. Yes. In general, if a contract is funded--and, 
again, what we're dealing here is a set of rather arbitrary 
laws. Not mission priorities.
    Senator Reed. Right.
    Mr. Hale. But if a contract is funded, then it can continue 
so long as the managers deems there's a level of supervision 
that's available. And in the case of overseas support, say, the 
lawcap contracts, they would be in support of so-called 
excepted activities----
    Senator Reed. Okay.
    Mr. Hale [continuing]. So even if they ran out of funds, we 
could reissue that contract under the Exceptions to the 
Antideficiency Act. So, we'll be able to continue a number of 
the contracts, including those that support the war in 
Afghanistan. It is certainly Secretary Gates' desire that we 
not interfere with that operation, or the transition in Iraq, 
nor Libya, nor Japan. And we'll do everything we can to avoid 
it.
    Senator Reed. Let me ask--and this is slightly outside your 
line, but it impacts so dramatically on the operations of 
military forces--about the ability of your counterparts in 
Afghanistan and Iraq--the Department of State, USAID, et 
cetera. Do they operate, to your knowledge, under the same 
general rules, or----
    Mr. Hale. Well, they'll operate under the same general 
rules--safety of life, protection of property. What I can't 
speak to, and I don't want to try, is----
    Senator Reed. Right.
    Mr. Hale [continuing]. Exactly how all that will affect 
them. It's arcane enough in the DOD and----
    Senator Reed. Right.
    Mr. Hale [continuing]. I call it ``dancing on the head of a 
fiscal law pin.'' I mean, I've never been as intimate with our 
fiscal lawyers as I have been over the last couple of weeks. 
So, I can't answer exactly how USAID would be affected.
    Senator Reed. All right. I understand. Thank you very much, 
Mr. Comptroller, and Doctor. Thank you for your service.
    Senator Johnson. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman. I appreciate it.
    And I want to thank both Secretary Hale and Secretary Robyn 
for being here today, and for your work on behalf of our 
military.
    It's amazing to think we've been at war for over a decade--
more than one war. And the work they've done is, and continue 
to do is absolutely incredible. And the work you do to support 
them is incredibly appreciated, and, of course, tremendously 
important, not just for our country, but for freedom-loving 
people around the world.
    I think this subject's probably been brought up, and I 
apologize if I'm covering some ground that you may have already 
covered. But, specifically, I'd like to ask you to address the 
``no new starts'' language that's currently in the continuing 
resolution for fiscal year 2011, both in terms of what that 
means for important projects that you have, some cases ongoing, 
but specifically, projects where the funding is there but have 
not been started yet--there may even have been design work 
done, but those projects have not been started. So, please 
address it, both in terms of fiscal year 2011, but then also 
fiscal year 2012. Because obviously, 1 year has an impact on 
the next.
    In my own State, you know, we have Air Force bases that 
building for new missions, be that bombers or remotely piloted 
aircraft, Global Hawk, so on and so forth, and they're 
facilities that you've indicated you need--and rightly so--to 
continue those missions. So, please, if you would, take 1 
minute----

                               NEW STARTS

    Mr. Hale. Sure.
    Senator Hoeven [continuing]. To address, both in terms of 
the continuing resolution fiscal year 2011, and then also 
fiscal year 2012.
    Mr. Hale. Well, in terms of the continuing resolution, we 
have no authority for new starts. It's a technical definition. 
But in simple terms, if we haven't told the Congress about it 
and you haven't taken some action, it's a new start, and we 
can't do it. As I said in my opening statement, we have as of 
March 23, 140 major MILCON projects that are ready to award are 
in the process of awarding, that we cannot award--maintenance 
bays, hangers, everything; a lot of quality-of-life initiatives 
involved as well; $3.1 billion worth of projects.
    What worries me is we've got a contracting workforce that 
to some extent right now is treading water. It's understaffed 
to start with, and somewhat under-experienced. I don't know if 
they can catch up. They'll try. They're dedicated people. But I 
fear that we have engendered some inefficiencies from which we 
won't be able to recover. But we'll try. And when we get an 
appropriation we'll certainly move forward.
    In terms of effects on fiscal year 2012, you know, it won't 
be good. There'll be a backlog they're trying to catch up with. 
They've got to do that before they get on to fiscal year 2012. 
But please don't take that as a reason not to give us a timely 
budget in fiscal year 2012, please. We need, I hope, to move 
back to more normal order with regard to the budget. I've dealt 
with budgets for more than 30 years. I've never seen a year 
like this, and I never want to see another one.
    So, we're essentially dead in the water in MILCON and many 
other things. We weren't, for example, able to award the 
contract on January 31 for the second Virginia-class submarine. 
We had to cancel a Stryker Mobile Gun System contract. There 
are dozens of examples, whether for money reasons or new 
starts, that we have had to make unfortunate changes because of 
the continuing resolution. We need an appropriation.
    Senator Hoeven. So, what happens if that language remains 
in there relative to your fiscal year 2011 MILCON projects?
    Mr. Hale. We can't start even the whole year. It would be a 
disaster. But we couldn't, I mean, we've got no----
    Senator Hoeven. So, it needs to be addressed?
    Mr. Hale. Yes. Please. Right now.
    Senator Hoeven. I agree with you.
    Dr. Robyn, any comments you might have in that regard?
    One of those submarines is going to be the USS North 
Dakota, too, so, that's really important but--right, secretary, 
or, Senator Kirk? Do you agree with that?
    Senator Kirk. Absolutely.
    Senator Hoeven. But you make a good point. Not only do you 
need the authority to move forward with these projects because 
of, mission-critical, but cost-savings, right? I mean, we want 
to enable you to realize these cost-savings. And that's a, you 
know, from getting this work going, and doing it in a way where 
you do it as cost-effectively as possible. And so we need to 
give you the ability to do that.
    If you would address for maybe just a few minutes two 
things: One is housing. We see this move to go to privatization 
of housing. What's your sense of how that's working, not just 
in terms of cost--and that's very important because we need to 
do everything we can, you know, to manage this debt and deficit 
situation and maximize our dollars, and support our incredible 
military--but, how's the privatization working? What's the 
sense from the troops? If you would, address that for just a 
minute.
    And then, take 1 minute also to talk a little bit about the 
Guard. We've put a tremendous amount of wear on the Guard, so 
address their--not just MILCON, but, you know, their equipment 
and those needs as well. So, the housing privatization issue, 
and the Guard, if you would.
    Dr. Robyn. Housing privatization. Let me give you two 
numbers: $2.7 billion and $27 billion. The first is how much 
the Defense Department has put into privatized housing, and the 
second is how much private developers have put in. So, we have 
leveraged our $2.7 billion by a factor of 10. And we have 
gotten beautiful housing in exchange for that, because the 
private developers have an incentive to build stuff that will 
be attractive to young families who have a choice. They have 
their choice to go live in town, and they want to retain those 
tenants, as well. So, it fixes the incentive problem. Also, it 
is better quality housing to start with. The problem was, the 
services chronically under-invested in it. They simply didn't 
invest in it. And so, housing privatization was a kind of a 
stop us before we kill again. Don't let us do this. Take this 
away from us, and let it be done by somebody that has the right 
incentives.
    So, I think it's been very positive. Senator Landrieu asked 
whether we could do more of it with barracks, and I think we're 
doing that on an experimental basis. I think there are a number 
of other areas, the kinds of things that are done on 
installations lend themselves to commercial provision. In the 
United Kingdom all their installation services are provided by 
an outside contractor. I'm not necessarily pushing that. But I 
think the concept can be expanded beyond private housing, you 
know, family housing, and utilities, which is the other area.
    Senator Hoeven. Great. That's good to hear.
    Dr. Robyn. Good. I'm not, Guard----
    Do you have an answer on the Guard?
    Senator Hoeven. Guard resources, they----
    Dr. Robyn. Resources.
    Senator Hoeven. You know, with all they've been doing over 
the last 10 years, do you have a sense that they're keeping up 
in terms of their needs?

                           GUARD AND RESERVE

    Mr. Hale. I think we've learned that the Guard has always 
been very helpful, and continues to be--probably even more so 
over these last 10 years--in the ground forces than has ever 
been the case. I think they are clearly part of the team. There 
are sometimes differences between the Congress and the 
executive branch, frankly, on how much resources we ought to 
devote. But they get a careful look within our budget 
considerations, or deliberations. So, I think that they are 
reasonably resourced within the dollars that we have available.
    Senator Hoeven. Excuse me, Chairman, for going over my time 
here. I apologize.
    Ten years, and the tempo for them has been incredible as 
well, so, again, very important with their mission here at home 
that we provide them with the support that they need, as well. 
So, I appreciate that.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman.
    And I want to thank both our witnesses for being with us 
today.
    Dr. Robyn, am I pronouncing that right?
    Dr. Robyn. Yes.
    Senator Pryor. Okay. I thought I was. But I wanted to make 
sure. Dr. Robyn, you may not remember, but last year we talked 
a little bit about the Pine Bluff Arsenal. And if I recall, we 
talked about DOD's Office of Economic Adjustment, because that 
arsenal used to have about 17 percent of the U.S. stockpile of 
chemical weapons. And all that now has gone away--all of the 
chemical weapons have been destroyed--and they're now 
dismantling the facility, described in the terms of the treaty 
with, it used to be the Soviet Union, now with Russia. So, 
they've been on budget, ahead of schedule, and they've done 
really well there.
    And I just talked to the folks in Pine Bluff, and they've 
actually told me that there's been a very good working 
relationship with the OEA, that, I think there's a $600,000 
adjustment grant. And they're working through all the 
appropriate channels to try to secure an extension of that 
grant, because they felt like, that that facility has a lot of 
positive assets. So, I'm going to try to help in that process 
as best I can. And I'd like to ask your agency to take a look 
at the extension request and help if you can, and hopefully 
continue to build on that positive relationship there.
    I don't know if it's appropriate for you or someone on your 
team to come down and look at the facility. I think that 
arsenal--maybe like some other installations around the 
country--but, I think that arsenal in particular is a real 
asset for the DOD and for our Nation. They do so many different 
things there--of course, they used to store the chemical 
weapons. But the fact that they make white phosphorus there, 
and they have a very diverse set of things that they do 
already, and a lot of potential capabilities. And I think it 
helps if folks from the DOD see it and realize what we could be 
doing there. So, at some point I'd like to work with your 
office or your team, and see if you all could come down.
    Now, on arsenals, generally--not just on Pine Bluff--as I 
understand it--and I'm not sure who this should go to. This 
maybe more for you, Mr. Hale. On arsenals generally--and, of 
course, including Pine Bluff, but not exclusively Pine Bluff--
acquisition officials have a responsibility for identifying 
requirements that can be manufactured within existing 
Government-owned arsenals for conducting make-or-buy analyses, 
and for having these requirements manufactured within 
Government-owned facilities when the make-or-buy analysis 
demonstrates that this is possible. And, as I understand it, 
that's based on a number of laws. And, I guess my question is 
general: How's the DOD doing on that? Because I look at the 
arsenal, and I know that DOD is very busy and is acquiring 
things, has a lot of needs. And I feel like we have capacity 
there that we're not really tapping into. Now, I don't know if 
that's true at the other arsenals, but what's your sense of how 
we're doing with that?
    Dr. Robyn. I don't. I'd like to take the question for the 
record. I am part of Acquisition, Technology and Logistics. And 
I'm always interested in how we go about procuring things. So, 
I don't know----
    Senator Pryor. All right.
    Dr. Robyn [continuing]. The answer.
    Senator Pryor. I think----
    Mr. Hale. I mean, I can add that we do ``analyses of 
alternatives,'' they're called, for all major projects--whether 
they're weapons or arsenals. And they are typically done partly 
by our functional managers, but also participation of 
analysts--for example, our Cost Analysis and Program Evaluation 
Group, and some in my shop. And they attempt to be analytic and 
lay out a range of reasonable alternatives--prices and 
assessments of capability--and provide our managers with 
information to make a decision.
    I think it's a good process--not always perfect, but a good 
one. And I'm sure it's done for the ones you're talking about. 
I don't know the specifics, so I'll have to defer to Dorothy 
and take that question for the record.
    Senator Pryor. Okay. Good. I'll look forward to hearing 
from both of you on that, then.
    [The information follows:]

    Subsection ``a'' of the Army Arsenal Act (10 U.S.C. 4532(a)) states 
that ``the Secretary of the Army shall have supplies needed for the 
Department of the Army made in factories or arsenals owned by the 
United States, so far as those factories or arsenals can make those 
supplies on an economical basis.''
    Army policy to execute this requirement is contained in Army 
regulation 700-90, ``Army Industrial Base Process''. As provided for in 
that regulation, Army program executive officers (PEOs) are required to 
conduct Arsenal-Act make-buy price analyses for items they manage. The 
U.S. Army Materiel Command (USAMC) participates in PEO price analyses 
and USAMC also prepares these analyses for USAMC-executed items. Thus, 
both the managing PEO and USAMC participate in all price analyses; if 
there is a disagreement over the results or disagreement that an 
Arsenal Act analysis should be conducted for an item not previously 
produced at an arsenal, the matter is referred to the Assistant 
Secretary of the Army (Acquisition, Logistics and Technology) 
(ASA(AL&T)) because that office has oversight of industrial base 
policy.
    While the Arsenal Act calls for making all needed supplies in the 
arsenals, it is clear that the arsenals cannot literally make all of 
the widely varying types of supplies the Army needs. The scope of 
supplies subjected to the Arsenal Act analysis is limited to those to 
which they are capable. Differences of opinion between PEOs and USAMC 
on what supplies are within arsenal capability may be similarly 
elevated for review by the ASA(AL&T) for resolution.

    Senator Pryor. And the other thing is, I know that you all 
have both, either in this setting or other settings, have 
talked about C-130s and the Little Rock Air Force Base, and how 
they do the training there, and how important the C-130s are. 
So, I appreciate you all recognizing that because, again, we 
don't make them there, but we do the training there. And the C-
130J models are coming online, and during the last BRAC, the 
BRAC folks were actually fairly generous to Little Rock Air 
Force Base, to try to help them concentrate even more on that.
    So, I really didn't have any other questions, Mr. Chairman. 
I may have a few for the record, but I want to thank our 
witnesses for being here today.
    Dr. Robyn. Thank you.
    Senator Johnson. Thank you, Senator Pryor.
    And thank you, Secretary Hale and Secretary Robyn, for your 
testimony and your service to our country. You may be excused.
                         Department of the Navy

STATEMENT OF HON. JACKALYNE PFANNENSTIEL, ASSISTANT 
            SECRETARY OF THE NAVY (ENERGY, 
            INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
        REAR ADMIRAL DAVID M. BOONE, DIRECTOR, SHORE READINESS 
            DIVISION, OFFICE OF THE CHIEF OF NAVAL OPERATIONS, AND VICE 
            COMMANDER (NAVY INSTALLATIONS COMMAND)
        MAJOR GENERAL ROBERT R. RUARK, ASSISTANT DEPUTY COMMANDANT 
            (INSTALLATIONS AND LOGISTICS, FACILITIES)

    Senator Johnson. I am pleased to welcome our second panel 
of witnesses.
    Secretary Jackalyne Pfannenstiel is Assistant Secretary of 
the Navy for Energy, Installation and Environment; Major 
General Robert R. Ruark, Assistant Deputy Commandant for 
Installations and Logistics; and Rear Admiral David M. Boone is 
Director of the Shore Readiness Division.
    This year's MILCON budget for the Navy and the Marine Corps 
is $2.5 billion--down $1.4 billion from the fiscal year 2011 
request. The Navy Reserve account is also down from the fiscal 
year 2011 request by $35 million--a 57-percent decrease.
    As I said earlier, I understand that we all must make hard 
choices in these difficult economic times. But I hope we are 
not starving our Reserve forces at a time when they are being 
asked to do so much for our national security.
    Additionally, I'm concerned about the progress and pace of 
funding for the move of marines from Okinawa to Guam. It would 
seem that our partners in this venture, the Japanese, may have 
some fiscal challenges ahead relating to the earthquake and 
tsunami recovery. I hope to hear the Navy's opinion on the 
status of the Guam buildup.
    Again, thank you all for coming. We look forward to your 
testimony.
    Madam Secretary, I understand that you will give the only 
opening statement. Your full statement will be entered into the 
record, so I encourage you to summarize in order to leave more 
time for questions. Please proceed.
    Ms. Pfannenstiel. Thank you, Chairman Johnson, Senator 
Kirk.
    I'm pleased to be here with you today to provide an 
overview of the Department of the Navy's investment ashore 
infrastructure. As you noted, with me here today are Major 
General Ruark and Rear Admiral Boone.
    The Department's fiscal year 2012 budget request includes a 
$13.3 billion investment in our installations, to include 
MILCON, facility sustainment restoration and modernization, 
BRAC, family housing, environmental, and base-operating 
support.
    The MILCON request of $2.5 billion is, as you noted, 
significantly less than our fiscal year 2011 request of $3.9 
billion, primarily due to the completion of the Marine Corps 
barracks initiative and a more deliberate pace for the Guam 
buildup.
    The MILCON request does provide further investment to 
relocate marines from Okinawa to Guam. The Marine Corps 
relocation, along with other DOD efforts to realign forces and 
capabilities to Guam, represents a unique opportunity to 
strategically realign the U.S. force posture in the Pacific for 
the next 50 years.
    This is a major effort, and one that we must get right for 
both our military families and the people of Guam. I'm pleased 
to share with you that we recently achieved an important 
milestone in the realignment--the finalization of the 
Programmatic Agreement. After 3 years of consultations, we may 
now move forward with executing MILCON associated with the 
realignment and with preparing a record of decision for the 
training ranges.
    Fostering a long-term positive relationship with the people 
of Guam is essential to the success of the Marine Corps' 
mission in the Pacific. The finalization of the Programmatic 
Agreement is evidence that the Government of Guam, the Guam 
Legislature, and the DOD can work together on solutions to meet 
common goals.
    This is an important year in the realignment program. The 
start of construction is imminent, and additional contracts 
will be awarded over the next few weeks and months at a pace 
that is sustainable within Guam. Building on the fiscal year 
2010 and fiscal year 2011 projects, the projects we're 
requesting for fiscal year 2012 will enable future vertical 
construction, support the introduction of off-island workers, 
and support future operations. Further, the Government of 
Japan's fiscal year 2011 request includes financing for 
critical utility projects which will support relocating marines 
in the long run and the ramp-up of construction in the near 
term.
    The Department is on track to implement BRAC 2005 
realignments and closures by the statutory deadline of 
September 15, 2011. Going forward, our fiscal year 2012 budget 
request of $26 million enables ongoing environmental 
restoration, care taking, and property disposal efforts at BRAC 
2005 installations.
    The Department has made significant progress during this 
past year, and to date has completed 328 of the 485 realignment 
enclosure actions as specified in our established business 
plans. Additionally, the Department has increased its 
investment to support President Obama's Energy Challenge and 
Secretary Mabus's aggressive energy goals to increase energy 
security, reduce dependence on fossil fuels, and promote good 
stewardship of the environment.
    We have requested $1.2 billion for fiscal year 2012 and 
$4.4 billion across the Future Years Defense Program for shore 
and operational energy efficiencies.
    Members of the subcommittee, your support of the 
Department's fiscal year 2012 budget request will ensure that 
we build and maintain the facilities our sailors and marines 
need to succeed in their military and humanitarian missions, 
even as the challenges we face multiply.

                           PREPARED STATEMENT

    Thank you for the opportunity to appear before you today. I 
look forward to answering any questions you may have.
    [The statement follows:]
              Prepared Statement of Jackalyne Pfannenstiel
    Chairman Johnson, Senator Kirk, and members of the subcommittee, I 
am pleased to appear before you today to provide an overview of the 
Department of the Navy's (DON's) investment in its shore 
infrastructure.
                  the navy's investment in facilities
    Our Nation's Navy-Marine Corps team operates globally, having the 
ability to project power, effect deterrence, and provide humanitarian 
aid whenever and wherever needed to protect the interests of the United 
States. Our shore infrastructure provides the backbone of support for 
our maritime forces, enabling their forward presence. The Department's 
fiscal year 2012 budget request includes a $13.3 billion investment in 
our installations, a decrease of more than $1.6 billion from last year.
    The fiscal year 2012 military construction (MILCON) (Active and 
Reserve) request is $2.5 billion. Although significantly less than the 
fiscal year 2011 request, it represents continued investment in 
quality-of-life and mission requirements, a continued emphasis on 
energy conservation, and implementation of the Defense Policy Review 
Initiative to relocate marines from Okinawa to Guam.
    The fiscal year 2012 family housing request of $469 million 
represents a 15-percent decrease from the fiscal year 2011 request. The 
Navy and Marine Corps continued to invest in housing, particularly the 
recapitalization of our overseas housing. Having virtually privatized 
all family housing located in the United States, we are investing in a 
``steady state'' recapitalization effort to replace or renovate housing 
at overseas and foreign locations where we continue to own housing.
    Our base realignment and closure (BRAC) program consists of 
environmental cleanup and caretaker, and property disposal costs at 
prior round BRAC and BRAC 2005 locations.
    We do not foresee much potential for large revenue from land sales, 
which were used to fund the Legacy BRAC program from fiscal year 2005 
through fiscal year 2008. Thus, we again seek appropriated funds in 
fiscal year 2012 in the amount of $129 million. Should land sale 
revenue accrue from the disposal of any BRAC property sales, we will 
reinvest them to accelerate cleanup at the remaining BRAC locations.
    The fiscal year 2012 BRAC 2005 budget request of $26 million 
supports ongoing environmental restoration, caretaker, and property 
disposal efforts. The Department has made significant progress in 
implementing the BRAC 2005 recommendations during the past year, and to 
date has completed 328 of 485 realignment and closure actions as 
specified in our established business plans and we are on track for 
full compliance with statutory requirements by the September 15, 2011 
deadline.
    Our fiscal year 2012 request for base-operating support (BOS) is in 
excess of $7 billion. The BOS program finances shore activities that 
support ship, aviation, combat operations, public safety, and family 
quality-of-life programs for both Active and Reserve components.
    Finally, the Department's budget request is increased to $1.2 
billion fiscal year 2012, and $4.4 billion across the Future Years 
Defense Plan, to support Secretary Mabus' aggressive energy goals to 
increase energy security, reduce dependency on fossil fuels, and 
promote good stewardship of the environment. The fiscal year 2012 
program funds three MILCON projects to decentralize steam plants, 
continues research and development in operational energy efficiencies 
for the tactical fleet, and will enable the services to increase the 
energy efficiency of its infrastructure.
    Here are some of the highlights of these programs.
                         military construction
    The DON's fiscal year 2012 MILCON program requests appropriations 
of $2.5 billion, including $87 million for planning and design and $23 
million for unspecified minor construction.
    The Active Navy program totals $1.1 billion and includes:
  --$190 million to fund five Combatant Commander projects:
    --a bachelor quarters;
    --a taxiway enhancement;
    --an aircraft logistics apron at Camp Lemonnier, Djibouti;
    --a bachelor quarters; and
    --the fourth phase of the waterfront development in Bahrain.
  --$195 million to fund four energy savings and security projects:
    --a steam system decentralization at Naval Support Activity, 
            Norfolk, Virginia;
    --a steam system decentralization at Naval Support Activity, South 
            Potomac (Indian Head, Maryland);
    --a steam system decentralization at Naval Station Great Lakes, 
            Illinois; and
    --an electrical distribution system replacement at Pacific Missile 
            Range Facility, Hawaii.
  --$128 million to fund a bachelor quarters at Naval Station Norfolk, 
        Virginia in support of the Chief of Naval Operations' Homeport 
        Ashore Initiative; and
    --a fitness center at Naval Base Coronado, California.
  --$208 million to fund five nuclear weapons security projects:
    --the first increment of a second explosives-handling wharf;
    --explosives handling;
    --wharf security force facility; and
    --waterfront restricted-area security enclave at Naval Base Kitsap, 
            Washington; and
    --waterfront restricted-area land/water interface and security 
            enclave at Submarine Base Kings Bay.
  --$114 million to fund five projects to achieve initial/final 
        operational capability requirements for new systems:
    --a P-8A trainer facility;
    --a P-8A hangar upgrade, and a broad area maritime surveillance 
            operator training facility at Naval Air Station 
            Jacksonville, Florida;
    --a MH-60 R/S rotary maintenance hangar at Naval Base Coronado, 
            California; and
    --an E-2D aircrew training facility at Naval Base Ventura County, 
            California.
  --$15 million to fund Massey Avenue corridor improvements at Naval 
        Station Mayport, Florida in support of homeporting a nuclear 
        capable aircraft carrier by 2019.
  --$198 million to fund additional critical Navy priorities:
    --a controlled industrial facility at Norfolk Navy Shipyard, 
            Virginia;
    --an applied instruction facility at Eglin Air Force Base;
    --an aircraft prototype facility at Naval Air Station Patuxent 
            River;
    --an integrated dry dock water treatment facility at Naval Base 
            Kitsap, Washington;
    --a Navy information operations command FES facility at Naval 
            Station Pearl Harbor, Hawaii; and
    --a potable water plant modernization at Naval Support Facility 
            Diego Garcia.
  --$42 million for planning and design efforts.
    The Active Marine Corps program totals $1.4 billion and includes:
  --$59 million for the construction of unaccompanied housing at Camp 
        Lejeune and Quantico in a continuation of the Commandant of the 
        Marine Corps' initiative to improve the quality of life for 
        single marines;
  --$48 million to provide quality-of-life facilities such as a child 
        development center, a dining facility, and a physical fitness 
        center at 29 Palms and Quantico;
  --$28 million to construct student billeting for the Basic School in 
        Quantico, Virginia;
  --$301 million to build infrastructure to support new construction. 
        These projects include road improvements and drinking and 
        wastewater systems. 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;
  --$514 million to fund operational and maintenance projects such as 
        those needed for the MV-22 aircraft at Camp Pendleton and Joint 
        Strike Fighter at Beaufort and Yuma; and operational units in 
        Camp Lejeune, New River, Cherry Point, 29 Palms, Barstow, and 
        Hawaii;
  --$127 million to provide training facilities and ranges at Camp 
        Pendleton, Camp Lejeune, 29 Palms, and Quantico;
  --$75 million to support professional military education by providing 
        facilities at Marine Corps University in Quantico;
  --$9 million for land expansion for Marine Air Ground Task Force 
        large-scale training exercises at 29 Palms;
  --$156 million for facilities necessary to support the relocation of 
        marines to Guam; and
  --$42 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 
$26 million to construct an Armed Forces Reserve Center at Pittsburgh, 
Pennsylvania, and a Marine Corps Reserve Training Center at Memphis, 
Tennessee. Additionally, $18 million has been realigned to the 
Department of the Army to construct a joint Navy, Marine Corps, and 
Army Reserve complex at Indianapolis, Indiana.
Fully Funded and Incrementally Funded Military Construction Projects
    Our fiscal year 2012 budget request complies with Office of 
Management and Budget Policy and the Department of Defense (DOD) 
Financial Management Regulation that establishes criteria for the use 
of incremental funding. The fiscal year 2012 request includes $78 
million to support the first increment of a second explosives-handling 
wharf at Naval Base Kitsap, Washington. Follow-on increments will be 
submitted in future budget requests. Otherwise, all new projects are 
fully funded or are complete and usable phases.
                         facilities management
Facilities Sustainment, Restoration and Modernization
    DOD uses a sustainment model to calculate lifecycle 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). The fiscal year 
2012 budget request funds sustainment at 80 percent and 90 percent for 
the Navy and Marine Corps, respectively. To maximize support for 
warfighting readiness and capabilities, the Navy reduced its facilities 
sustainment posture to 81 percent of the DOD facilities sustainment 
model; joint bases are funded to 90 percent of this model. The Naval 
Academy, Naval War College, and Naval Postgraduate School are funded to 
100 percent of this model. Additionally, the Navy has targeted the 
allocation of sustainment funds to increase the sustainment and 
maintenance of unaccompanied housing. As a result, the Navy has 
minimized operational impacts and ensured the safety of our sailors and 
civilians by prioritizing maintenance and repair efforts for facilities 
that directly affect mission operations such as piers, hangars, and 
communications facilities as well as unaccompanied housing and family 
support centers.
    Restoration and modernization (R&M) provides major upgrades of our 
facilities using MILCON, operation and maintenance, Navy Working 
Capital Fund, and BRAC, as applicable. In fiscal year 2012, the DON is 
investing nearly $1.5 billion in R&M funding.
Naval Safety
    Protecting DON's sailors, marines, and civilian employees and 
preserving the weapon systems and equipment entrusted to us by the 
American people remains one of our highest priorities. I consider 
continual improvement of our safety performance to be an integral 
component to maintaining the highest state of operational readiness for 
our Navy-Marine Corps team. During fiscal year 2010, the DON once again 
achieved record-setting mishap rate reductions in numerous key mishap 
categories. The Department is successfully tracking toward becoming a 
world-class safety organization, where, in step with civilian industry 
leaders, no avoidable mishap or injury is considered the cost of doing 
our business.
    The Secretary of Defense established a goal to achieve a 75-percent 
reduction in baseline fiscal year 2002 mishap rates across DOD by the 
end of fiscal year 2012. By the end of fiscal year 2010, the DON 
exceeded the DOD-wide mishap rate reduction in three of the four mishap 
categories being tracked by the Office of the Secretary of Defense.
    During fiscal year 2010, we continued our Department-wide assault 
to reduce the loss of sailors and marines to fatal accidents on our 
Nation's highways. Over the past 5 years, we lost on average 53 sailors 
and marines to automobile and motorcycle accidents. In fiscal year 
2010, we brought those losses down to just 34, our lowest number ever 
recorded. While we achieved unprecedented reductions in highway 
fatalities during fiscal year 2010, we still find these losses 
untenable--we can and must do better.
    In fiscal year 2010 DON achieved our best year ever recorded for 
total class A operational mishaps.\1\ While this represents a 
significant achievement, fiscal year 2010 was the fourth consecutive 
fiscal year we achieved, ``best year ever recorded'' in this category. 
Additionally, fiscal year 2010 marked DON's best year ever recorded for 
the number of off-duty/recreational fatalities \2\ and for the rate of 
class A aviation flight mishaps.
---------------------------------------------------------------------------
    \1\ A fiscal year 2010 class A mishap is one where the total cost 
of damages to Government and other property is $2 million 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.
    \2\ Off-duty/recreational fatalities do not include off-duty deaths 
resulting from automobile, motorcycle, or pedestrian/bicycle mishaps.
---------------------------------------------------------------------------
    Our efforts also focus on achieving continual improvement in the 
reduction of workplace injuries. By the end of fiscal year 2010, the 
Department had achieved Voluntary Protection Program ``Star'' status, 
the Occupational Safety and Health Administration's highest level of 
achievement, at 14 sites. These activities include all four naval 
shipyards, our largest industrial facilities. Additionally, over the 
past 8 years, we have reduced the Navy and Marine Corps civilian lost 
day rates (due to injury) by 45 percent and 51 percent respectively.
Encroachment Partnering
    DON 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, 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. Encroachment 
partnering agreements help prevent development that would adversely 
impact existing or future missions. These agreements also preserve 
important habitat near our installations in order to relieve training 
or testing restrictions on our bases. The program has proven to be 
successful in leveraging DOD and DON resources to prevent encroachment.
    DOD provides funds through the Readiness and Environmental 
Protection Initiative (REPI) that are used in conjunction with Navy and 
Marine Corps operations and maintenance funds to leverage acquisitions 
in partnership with States, local governments, and nongovernmental 
organizations. For fiscal year 2010, the Marine Corps acquired 
restrictive easements over 8,191 acres. REPI and Marine Corps funds 
totaled and $8.7 million while the encroachment partners provided $11 
million. The Navy acquired 1,908 acres of restrictive easements with 
combined REPI and Navy funds of $9.36 million and $6.4 million provided 
by partners.
    To date, the marines have acquired restrictive easements for 32,408 
acres of land with $49 million of REPI and Marine Corps funding. 
Encroachment partners have contributed $54 million. The Navy has 
acquired 9,851 acres of restrictive easements to date with $28.4 
million of REPI and Navy funding, and $35.5 million contribution from 
encroachment partners.
Compatible Development
    Vital to the readiness of our fleet is unencumbered access to 
critical water and air space adjacent to our facilities and ranges. An 
example is the outer continental shelf (OCS) where the vast majority of 
our training evolutions occur. The Department realizes that energy 
exploration and off-shore wind development play a crucial role in our 
Nation's security and are not necessarily mutually exclusive endeavors. 
Therefore, we are engaging with the other services, the Office of the 
Secretary of Defense, and the Department of the Interior to advance the 
administration's energy strategy. We are poised to coordinate with 
commercial entities, where feasible, in their exploration and 
development adjacent to installations and our operating areas along the 
OCS that are compatible with military operations. However, we must 
ensure that obstructions to freedom of maneuver or restrictions to 
tactical action in critical range space do not measurably degrade the 
ability of Naval forces to achieve the highest value from training and 
testing.
                                 energy
    DON is committed to implementing a balanced energy program that 
exceeds the goals established by the Energy Independence and Security 
Act of 2007, Energy Policy Act of 2005, National Defense Authorization 
Act of 2007 and 2010, Executive Orders 13423 and 13514. We place a 
strong emphasis on reducing our dependence on fossil fuels, reducing 
overall energy consumption, increasing energy reliability, and 
environmental stewardship. The Department is a recognized leader and 
innovator in the energy industry by the Federal Government and private 
sector as well. Over the past decade, DON has received almost one-
quarter of all of the Presidential awards and nearly one-third of all 
of the Federal energy awards. Additionally, DON has received the 
Alliance to Save Energy ``Star of Energy Efficiency'' Award and two 
Platts ``Global Energy Awards'' for Leadership and Green Initiatives.
Organization
    The Secretary established a Deputy Assistant Secretary of the Navy 
for Energy (DASN-Energy) to consolidate the Department's operational 
and installation energy missions in the Office of the Assistant 
Secretary of the Navy for Energy, Installations and Environment ASN. 
The consolidation of both operational and installation energy 
portfolios under the DASN-Energy has led to a more concentrated focus 
on the Secretary of the Navy's priority of Energy Security and Energy 
Independence. At the service level, energy efficiency is being 
institutionalized by the Chief of Naval Operations (CNO) and the 
Commandant of the Marine Corps (CMC). The Navy Energy Coordination 
Office and Marine Corps Expeditionary Energy Office drive energy 
efforts and initiatives within the services.
    From the Secretary down to the deck plate sailor and the marine in 
the field, the Department is committed to meeting our aggressive energy 
goals. We all view energy as an invaluable resource that provides us 
with a strategic and operational advantage.
Naval Energy Vision, Priorities, and Goals
    As part of the Secretary of the Navy's priority on energy, DON is 
committed to a Naval energy vision that states ``The Navy and Marine 
Corps will lead the DOD and the Nation in bringing about improved 
energy security, energy independence, and a new energy economy.''
    With this vision, the Secretary of the Navy has set two priorities 
for Naval energy reform: energy security and energy independence. 
Energy security will be achieved by utilizing sustainable sources that 
meet tactical, expeditionary, and shore operational requirements and 
force sustainment functions, and having the ability to protect and 
deliver sufficient energy to meet operational needs. Energy 
independence will be achieved when Naval forces rely only on resources 
that are not subject to intentional or accidental supply distributions. 
As a priority, DON's energy independence will increases operational 
effectiveness by making Naval forces more energy self-sufficient and 
less dependent on vulnerable energy production and supply lines.
    With his vision and priorities, the Secretary of the Navy set forth 
five energy goals to reduce DON's overall consumption of energy, 
decrease its reliance on petroleum, and significantly increase its use 
of alternative energy. Meeting these goals requires that the Navy and 
Marine Corps value energy as a critical resource across maritime, 
aviation, expeditionary, and shore missions. DON will lead the Navy and 
Marine Corps efforts to improve operational effectiveness while 
increasing energy security and advancing energy independence. DON will 
achieve the Secretary of the Navy's goals by adopting energy efficient 
acquisition practices, technologies, and operations.
    The five goals are:
  --By 2020, 50 percent of total DON energy will come from alternative 
        energy resources;
  --By 2020, DON will produce at least 50 percent of shore-based energy 
        requirements from alternative resources;
  --DON will demonstrate a Green Strike Group in local operations by 
        2012 and sail the Great Green Fleet by 2016;
  --By 2015, DON will reduce petroleum use in commercial vehicles by 50 
        percent; and
  --Evaluation of energy factors will be used when awarding contracts 
        for systems and buildings.
    As part of these ambitious energy goals, the Secretary of the Navy 
released The Department of the Navy's Energy Program for Security and 
Independence. This strategic roadmap provides guidance and direction to 
the Navy and Marine Corps. In addition, the CNO and CMC are developing 
strategic plans, baselines, and metrics to outline energy requirements, 
funding, profiles, and milestones for achieving energy efficiency and 
security. The strategy requires action across the DON and is the 
responsibility of every individual member.
Energy Funding
    DON has budgeted $1.2 billion in fiscal year 2012 and approximately 
$4.4 billion across the Future Years' Defense Plan for energy 
initiatives. Our strategy focused on reducing our dependence on 
petroleum, lowering our energy cost, and complying with Federal 
legislation and energy mandates. This focus on energy investment will 
result in cost-savings that will allow DON to continue to aggressively 
pursue the Secretary of the Navy's priorities and goals.
    Operation and Maintenance, Navy.--Projects funded would include 
testing/certification of Great Green Fleet fuel, propeller coatings, 
hull coatings, advanced metering infrastructure, simulator upgrades, 
aviation and maritime i-ENCON and facility energy audits, and facility 
energy efficiency upgrades.
    Operation and Maintenance, Marine Corps.--Projects funded would 
include completion of mandated energy audits, mobile electric power 
equipment units, advanced power systems, renovate HVAC system to 
increase efficiency, and complete SMART metering projects.
    National Defense Sealift Fund/Other Procurement, Navy.--Projects 
funded would include large medium-speed roll-on/roll-off light 
upgrades, shore power management/monitoring systems, and ship engine 
automation upgrades.
    Military Construction, Navy.--Funds would go toward solar array 
construction projects, energy efficiency upgrades, critical asset 
energy security enhancements, advanced metering, ground-source heat 
pumps, small-scale wind projects, and steam line distribution upgrades.
    Research, Development, Test and Evaluation.--Projects funded would 
include testing of hybrid electric drive, Fleet Readiness R&D Program, 
the shipboard energy dashboard, landing craft air cushion efficiency 
initiatives, water purification technologies, man-portable electric 
power units, and energy storage and distribution.
    Achieving these priorities and goals will present challenges for 
the Navy and the Marine Corps. Final success will depend on 
advancements on technology maturity, resource availability, alternative 
fuel availability, and business process transformation. However, with 
the investments budgeted for energy, DON is taking the leadership role 
within DOD for this success.
Success
    We are on track to meet all our goals, and throughout 2010, we 
demonstrated progress through an assortment of energy programs, 
partnerships, and initiatives. Our F/A18, dubbed ``The Green Hornet'' 
reached Mach 1.7 as part of the test and certification process using a 
50-50 blend of Camelina-based JP-5. We also successfully conducted 
tests on the MH-60 Seahawk helicopter, and ran a Riverine command boat 
on renewable biofuel. These tests represent milestones for the 
Secretary of the Navy's goal of sailing the Great Green Fleet in 2016. 
The USS Makin Island, using a hybrid-electric drive to dramatically 
lower its fuel usage at slow speeds, will generate lifecycle savings of 
millions of dollars at today's fuel prices. And we are not stopping 
there. We will continue to move forward with installation of a similar 
system on new construction DDGs and look at the feasibility of 
retrofitting the fleet with these systems in the course of routine 
shipyard availabilities.
    Additional energy initiatives that will reduce the energy 
consumption of our ships and make them more efficient are propeller and 
hull coatings. Stern flaps will also assist in reducing energy 
consumption. And when we look to our future Navy, advanced materials 
used on our propellers, energy storage and power management systems, 
and advanced propulsion technology will make our warships more 
efficient while still allowing them to meet their combat capability.
    And the Navy is not alone in implementing change. Last year, the 
Marine Corps tested equipment that could be deployed on battlefields at 
their experimental forward operating bases (ExFOB) at Quantico and 
Twenty-Nine Palms. Technologies tested at the ExFOB are now deployed 
with marines in Afghanistan. Solar power generators and hybrid power 
systems are reducing the amount of fossil fuel needed to operate in a 
combat zone. By deploying these technologies, the Marine Corps has 
proven that energy efficiency means combat effectiveness.
    In addition to these tactical and platform applications, we have 
implemented a number of energy projects at our facilities ashore. We 
are actively exploring for new geothermal resources to augment our 
existing 270 MW geothermal power plant at China Lake. Solar multiple 
award contracts in Hawaii and the Southwest will allow for large-scale 
solar projects to be built on our installations. And we are looking at 
developing our wind resources, exploring Waste-to-Energy projects and 
developing ocean power technology.
    We are also aggressively conducting facility energy audits while 
completing installation of ``smart'' electric metering to implement a 
wide range of facility energy efficiency measures. By the end of this 
year, more than 27,000 meters will be installed in our existing 
facilities and provide the means to better measure the amount of energy 
we are consuming. This will allow for our energy managers to provide 
``real-time'' feedback to our leaders on our installations. At the same 
time, we continue to ensure that new construction is at a minimum LEED 
Silver. By exceeding building efficiency standards, we will be able to 
meet mandated efficiency goals and drive down our need for conventional 
energy sources.
    The Secretary of the Navy is committing DON to transform its 
requirements-setting, acquisition, and contracting processes to 
incorporate energy efficiency into decisions for new systems and 
buildings. Our Preferred Supplier Program (PSP) was developed as a tool 
to reward contractors with favorable contract conditions that have 
demonstrated superior performance in the area of cost, schedule 
adherence, quality of product/services and business relations. 
Evaluation factors for energy efficiency performance include energy 
benchmarking, goal setting, and measurement and verification. PSP has 
been renamed Superior Supplier Program and transferred over to the 
Office of the Director, Defense Research and Engineering in early 2011. 
And in October of last year, the Secretary of the Navy Green Biz Opps 
site was launched in partnership with the Small Business Administration 
(SBA) as a way to partner with small businesses and highlight the 
opportunities within DON.
    Communication and awareness are critical to achieving the Secretary 
of the Navy energy goals. DON is exploring how to implement and 
maintain culture change initiatives, beginning with education and 
training, to ensure that energy management is understood by all 
personnel to be a priority in tactical, expeditionary, and shore 
missions. Energy awareness campaigns will be used to encourage personal 
actions that show commitment to energy program goals.
    DON will continue to cultivate strategic partnerships with existing 
and new organizations to leverage our energy goals. By partnering with 
Federal agencies, such as the Department of Energy, the Department of 
Agriculture, the National Aeronautics and Space Administration (NASA), 
and SBA, we are raising the awareness at all governmental levels of the 
strategic importance of energy within DON. In addition, we are working 
with academic institutions and private industry to bring innovative 
ideas and approaches to the forefront.
    Our budget request asks for continued support of these and similar 
projects in order to enhance our efficiency and maximize our move to 
greater independence and more resilient infrastructure.
                                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.
    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.--With the strong support from this 
        subcommittee and others, we have successfully used public/
        private venture (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 2012 budget includes $101 million in funding for 
family housing improvements (including planning and design). This 
request provides for the revitalization of more than 400 Navy and 
Marine Corps housing units in Japan, Spain, and Cuba. The budget 
request also includes $368 million for the operation, maintenance, and 
leasing of remaining Government-owned or controlled inventory. As of 
the end of fiscal year 2010, we have awarded 38 privatization projects 
involving more than 63,000 homes. These include more than 43,000 homes 
that will be constructed or renovated. (The remaining homes were 
privatized in good condition and did not require any work.) Through the 
use of these authorities we have secured approximately $9 billion in 
private-sector investment from approximately $1.6 billion of our funds, 
which represents a ratio of more than $7 in private-sector dollars for 
each taxpayer $1.
Unaccompanied Housing
    Our budget request includes more than $267 million in funding for 
the construction of unaccompanied housing to support more than 2,300 
single sailors and marines. This includes $59 million to support 
requirements to continue implementation of the Commandant of the Marine 
Corps program to construct sufficient housing so that no more than two 
single marines are required to share a sleeping room. The budget 
request also includes an $81 million unaccompanied housing project in 
Norfolk, Virginia to support the Chief of Naval Operations commitment 
to achieve the Navy's ``Homeport Ashore'' objective by 2016.
    The following are areas of emphasis within the Department regarding 
housing for single sailors and marines:
      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 toward achieving this goal through MILCON, 
        privatization, and intensified use of existing barracks 
        capacity. The Chief of Naval Operations is committed to 
        providing housing ashore for all junior sea-duty sailors by 
        2016.
      Commandant's Bachelor Enlisted Quarters Initiative.--It is the 
        Commandant of the Marine Corps' priority to ensure single 
        marines are adequately housed. Thanks to your previous support 
        of this initiative, the Marine Corps will make significant 
        progress toward fulfilling this priority. MILCON funding since 
        fiscal year 2008 for the Marine Corps barracks initiative will 
        result in the construction of approximately 25,500 new 
        permanent party spaces at multiple Marine Corps installations. 
        Your continued support of this initiative in our fiscal year 
        2012 proposal will allow us to construct an additional 800 new 
        permanent party barracks spaces. With this funding we will stay 
        on track to meet our 2014 goal. The fiscal year 2012 request 
        for bachelor housing will provide two barracks projects at Camp 
        Lejeune, North Carolina; and Quantico, Virginia. 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.
      Condition of Unaccompanied Housing.--The Department continues to 
        address the challenge of improving the condition of existing 
        Navy and Marine Corps unaccompanied housing. The Navy has 
        increased its level of restoration and modernization funding 
        targeted to unaccompanied housing across the Future Years' 
        Defense Plan to ensure that 90 percent of the Navy's 
        unaccompanied housing inventory is adequate by fiscal year 
        2022. With the construction of a large amount of new housing 
        under the aforementioned Commandant's Bachelor Enlisted 
        Quarters Initiative, almost 90 percent of the Marine Corps' 
        unaccompanied housing is now considered adequate.
                              environment
    In fiscal year 2012, the DON is investing more than $1 billion in 
its environmental programs across all appropriations. This level of 
investment has remained relatively consistent over the past few years:
  --Fiscal year 2010--$1,117 million;
  --Fiscal year 2011--$1,094 million; and
  --Fiscal year 2012--$1,221 million.
    Additionally, the relative distribution of environmental funding 
across the environmental programs, as displayed within the following 
chart, has also remained stable.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Within this mature, stable environment, DON continues to seek to be 
a Federal leader in environmental management by focusing our resources 
on achieving specific goals and proactively managing emerging 
environmental issues. Many of these emerging environmental issues for 
fiscal year 2012 present unique challenges as well as provide 
environmental leadership opportunities for DON.
Compliance--Sustainability
    The Department's environmental budget invests significantly in 
complying with existing regulations. Going beyond just simply 
maintaining compliance, the Department's compliance budget in fiscal 
year 2012 incorporates a vision of sustainability into our ability to 
operate into the future without decline--either in the mission or in 
the natural and manufactured systems that support our mission. 
Sustainability is seen by DON as a means of improving mission 
accomplishment and reducing lifecycle costs that apply to all DOD 
mission and program areas. DON has instituted many policies and 
practices implementing sustainability tenets including retrofitting/
constructing buildings and expeditionary base camps to optimize energy 
and water use, adopting goals for renewable energy use on facilities, 
and conducting integrated solid waste management.
    The Department recognizes that many key issues facing DOD can be 
addressed through smart investments that improve sustainability, such 
as energy efficiency, energy management, renewable energy, water use 
efficiency, the reduced use of toxic and hazardous chemicals, and solid 
waste management.
    As an example of solid waste management, Naval Facilities 
Engineering Command Southwest recently completed a large demolition and 
environmental remediation project at Naval Security Group Activity 
Skaggs Island (Skaggs Island). Skaggs Island is located 40 miles 
northeast of San Francisco near the north shore of San Pablo Bay in 
Sonoma County. It is bounded on all sides by estuarine sloughs and 
surrounded by salt marsh wetlands beyond the island's levees. Naval 
Security Group Activity Skaggs Island was commissioned at this site on 
May 1, 1942, during World War II and was an active communications base 
for 51 years. The project was able to recycle 6,437 tons of material 
from demolition of approximately 140 buildings in preparation for the 
property to be transferred to the Fish and Wildlife Service to become a 
part of the San Pablo Bay National Wildlife Refuge. Concrete and 
asphalt were processed for use in a local highway project. All metals 
were diverted to salvage yards, and the wood was processed with other 
materials and used as cover material in a landfill.
National Ocean Council
    The National Ocean Council (NOC) is a Cabinet-level body 
established by Executive order in June 2010. There are 27 Federal 
agencies tasked to engage in developing a comprehensive national ocean 
policy which uses ecosystem-based management and coastal and marine 
spatial planning as foundational building blocks. The Executive order 
mandates spatial planning for maximized compatible use. The DON equity 
in this Executive order is extensive: for the first time, comprehensive 
spatial planning is being conducted in our exclusive economic zones 
including the Western Pacific, Alaska and the Arctic, the Gulf of 
Mexico, and the Caribbean. The DON ability to train and test in our 
current operating areas must be protected. DON is supporting the NOC in 
a variety of activities, including collecting and developing 
information about military activities in the coastal and marine zone, 
writing strategic plans, providing staff and administrative support, 
and participating in plans to produce regional coastal and marine 
spatial plans.
    The Department participates in numerous interagency ocean-policy 
working groups formed under the NOC. These include but are not limited 
to the U.S. Extended Continental Shelf Task Force, the Arctic Policy 
Group, the Ocean Science Technology ad hoc biodiversity Interagency 
Working Group (IWG), Ocean Social Science IWG, Ocean Education IWG, 
Ocean Acidification IWG, the Facilities and Infrastructure IWG, the 
Ocean and Coastal Mapping IWG, the Interagency Ocean Observing 
Committee, and the Climate Change Adaptation Task Force. DON and the 
Joint Chiefs Staff are leading a new IWG tasked with writing the 
``Ocean, Coastal, and Great Lakes Observations and Infrastructure'' 
Strategic Action Plan (SAP), and are co-chairs for the ``Changing 
Conditions in the Arctic'' and ``Coastal and Marine Spatial Planning'' 
SAPs. In addition, the Navy provides a full-time NOC staff member who 
serves as the primary liaison to the National Security Staff, and 
provides administrative oversight for the Federal Advisory Ocean 
Research and Resources Advisory Panel.
Chesapeake Bay
    After issuing the Chesapeake Bay Strategy in May 2010, the 
Department has and continues to demonstrate environmental leadership 
working with the other Federal agencies to achieve Chesapeake Bay 
restoration goals. DON represents DOD as the executive agent for the 
Chesapeake Bay program. As such, DON has participated with the Federal 
Leadership Council to ensure that the Strategy sets forth aggressive, 
measurable, and attainable goals to restore the health of the 
Chesapeake Bay, a national treasure. DON is working with the States as 
they develop their watershed implementation plans. Our goal is to 
identify our nutrient and sediment sources, prioritize areas for 
nutrient and sediment reduction projects, and implement these projects 
to meet or exceed our reduction targets. DON recently sponsored a 
meeting with the Maryland Governor and Environmental Protection Agency 
Administrator to partner on means to meet the DOD, DON, and State goals 
to restore the health of the Chesapeake Bay. We are planning a similar 
event with Virginia later this year. Through these and other 
conservation efforts, DON is truly leading by example.
Natural Resources Conservation
    DON Natural Resources Program managers continue to provide 
installation Commanders with special subject matter expertise, products 
and services necessary to ensure they can test, train, and execute 
construction projects with as little environmental constraint as 
possible, while also protecting the natural resources under our 
stewardship. The basis of our conservation program centers on the 
preparation and implementation of integrated natural resources 
management plans (INRMPs). These plans, currently in place at 89 DON 
installations with significant natural resources, integrate all facets 
of natural resources management with the installation's operational and 
training requirements. DON works closely with our Federal and State 
partners as well as other stakeholders to ensure our INRMPs remain 
current and effective. One of our primary objectives is to implement 
conservation measures to protect threatened and endangered species and 
their habitat which can help to reduce protected species related 
regulatory constraints. The Department has been very successful in 
protecting and conserving natural resources on our installations and 
near-shore areas while ensuring our installation Commanders have the 
land, sea, and airspace necessary to test and train in a realistic 
manner.
    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 provides leadership with the information 
necessary to focus scarce funds in the right place to protect and 
conserve valuable natural areas and habitats while also protecting 
mission integrity.
Cultural Resources Program
    Cultural resources under the DON's stewardship include 
infrastructure, ships, and objects of our Navy and Marine Corps 
heritage; vestiges of our colonial past; and Native American/Alaskan 
Natives/Native Hawaiian/Native Pacific Islander 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 and of those who lived on the lands before they were 
incorporated into our bases. The clear objective of the Department's 
cultural resources program is to balance our current and future mission 
needs with our stewardship responsibility to the American taxpayer and 
our desires to preserve our cultural heritage for future generations. 
The primary mechanism to achieve these goals is an integrated cultural 
resources management plan, which remains the key mechanism for 
gathering information about an installation's history and resource 
inventory, assessing potential use/reuse candidates with our built 
environment and ensuring that our installation planners and cultural 
resources managers are working closely together to protect cultural 
resources while supporting the DON mission.
    Our installations have many success stories in which proactive 
management of cultural resources supported and reinforced the mission. 
We take very seriously our statutory obligations regarding historic 
properties. We work with the other services, and other agencies such as 
the Advisory Council on Historic Preservation and State historic 
preservation officers, tribal governments, Native Hawaiian 
Organizations, Native Alaskans, and interested members of the public, 
to develop effective and efficient ways to balance our stewardship and 
fiscal responsibilities. We are also developing a new Web-based tool 
for measuring the effectiveness and efficiency of DON cultural 
resources stewardship and mission support.
    Historic buildings, which are a significant element of our cultural 
resources, are a valuable part of our portfolio and the Department has 
been able to rehabilitate historic buildings in ways that support 
mission requirements as effectively as new construction, with the added 
benefit of preserving historic property. Of particular concern is 
energy efficiency and how to retrofit systems to be more efficient 
while preserving character-defining features. In 2011, the Commandant's 
House at the Marine Barracks Washington (a national historic landmark) 
will have photovoltaic panels installed on small portions of the roof 
to help send the message out to the Marine Corps that alternative 
energy and historic preservation goals are not mutually exclusive.
Installation Restoration Program
    The DON continues to make significant progress remediating past 
contaminants. As of the end of fiscal year 2010, the Department has 
completed cleanup or has remedies in place at 86 percent of the 3,834 
contaminated sites on active installations. The DOD goal to have 
remedies in place or responses completed by the year 2014 was 
established in 1996 when the department had 3,256 known contaminated 
sites. Over the past 15 years the Department has identified 578 
additional sites requiring cleanup. We have been working aggressively 
to achieve remedy in place or response complete for all sites by 2014. 
As of the end of fiscal year 2010, we are projecting 46 sites will not 
meet this DOD goal. We consider this a huge success that we have 
accomplished site cleanup at both our original inventory of sites as 
well as 532 additional sites in this time period. Also, DOD expanded 
the universe of Defense Environmental Restoration Program-eligible 
sites in 2008. Since that time, we have identified an additional 107 
sites. These sites do not have established metrics, but we are working 
with DOD to establish appropriate metrics to also bring these sites to 
successful completion in the coming years.
Munitions Response Program
    DON is proceeding with investigations and cleanup of Munitions and 
Explosives of Concern and Munitions Constituents at all Navy and Marine 
Corps munitions response sites. Our major focus through fiscal year 
2010 was completing site inspections at all 330 Munitions Response 
Program (MRP) sites. We successfully completed 97 percent of these 
inspections. The 3 percent not inspected were because several newly 
discovered sites were added into the program late in the process. These 
site inspections will be completed in fiscal year 2011. Additional 
funding has also been obligated to address high-priority sites at 
Vieques and Jackson Park Housing. DON has used the results of the 
completed site inspections to prioritize the next phases of work for 
all sites starting in fiscal year 2011. DON plans to achieve cleanup or 
remedies in place at all MRP sites (except Vieques) by fiscal year 
2020.
Camp Lejeune
    The Department remains committed to finding answers to the many 
questions surrounding the historic water quality issue at Camp Lejeune. 
Scientific/medical studies on this issue continue to investigate 
whether diseases and disorders experienced by former residents and 
workers are associated with their exposure to contaminated water at 
Camp Lejeune. We continue to fund research initiatives, including 
several ongoing Agency for Toxic Substances and Disease Registry 
(ATSDR) health studies. Additionally, the Marine Corps funded a 
congressionally mandated National Academies National Research Council 
(NRC) review, which was released June 13, 2009. In total, the 
Department has provided approximately $28 million in funding for 
research initiatives, including nearly $27 million to ATSDR and more 
than $900,000 to the National Academy of Sciences. This total includes 
$3.9 million to fund ATSDR for fiscal year 2011. In order to ensure 
total transparency and advance efforts to find answers for our marines, 
sailors, their families, and civilian workers, DON continues to provide 
full and timely access to all pertinent information that we possess on 
this subject.
Marine Mammals
    DON is continuing its focused research and monitoring programs 
addressing marine mammals and anthropogenic sound. The Navy is 
investing more than $25 million per year to continue research into the 
effects of sound on marine mammals, develop products and tools that 
enable compliance with marine mammal protection laws for Navy training 
and operations, provide a scientific basis for informed decisionmaking 
in regulatory guidance and national/international policy, continue 
research to define biological criteria and thresholds, and to predict 
location, abundance, and movement of high-risk species in high-priority 
areas.
                     relocating the marines to guam
    The fiscal year 2012 budget request includes $181 million for 
facilities in support of the relocation. The projects provide the 
horizontal infrastructure (utilities, site improvements, etc.,) 
necessary to enable subsequent vertical construction and/or support 
Marine Corps operations. The Government of Japan, in its Japanese 
fiscal year 2011 budget (which runs April 1, 2011 through March 31, 
2012) has requested a comparable amount of $167 million for facilities 
and design. The Japanese fiscal year 2011 budget request also includes 
$415 million in funding for utilities financing, pursuant to the 
Realignment Roadmap, for water and wastewater projects. This financing 
will be applied to make improvements to wastewater treatment plants 
off-base, and to the DON's water system on-base that will interconnect 
with Guam's water system.
    The Marine Corps relocation, along with other DOD efforts to 
realign forces and capabilities to Guam, represents a unique 
opportunity to strategically realign the U.S. force posture in the 
Pacific for the next 50 years. This is a major effort and one we must 
get right. The DOD recognizes the Congress' concerns regarding 
execution of the Guam military realignment and is taking steps 
necessary to resolve critical issues that will allow the construction 
program to move forward.
    The Guam community has been a gracious host to military personnel 
and families for decades. As we ask the people of Guam to now host a 
new Marine Corps base, the Department recognizes that close partnership 
with the Government and people of Guam is essential so that a long-
term, positive relationship is fostered. The effort to relocate 
thousands of marines and their family members is complex and though 
there remain issues which separate the Department and the Government of 
Guam, we are committed to working together to address issues such as 
cultural preservation, land use, and lessening the impacts on the 
community.
    As such, the Department has outlined four pillars that will guide 
the approach to the coordinated effort to execute the military 
realignment. By committing to these four pillars, the Department is 
demonstrating its willingness to listen and respond to the concerns of 
the people of Guam.
    First, the Department recognizes the added strain that the 
relocating marines and their family members will place on Guam's 
infrastructure and is committed to the pursuit of ``One Guam.'' 
Improvements to quality of life on Guam will result from direct 
investments in projects to improve and upgrade civilian infrastructure. 
These projects include those which are directly related to the military 
realignment, such as upgrades to the commercial port, roads, and 
utilities systems; and those identified by the Government of Guam as 
necessary to support the community's socioeconomic needs. The 
Department has committed to work with other Federal agencies to 
advocate for support for Guam's needs so that the One Guam vision can 
become a reality.
    Second, the Department understands and supports the great emphasis 
the people of Guam place on protecting the island's precious natural 
resources. We will do our part to protect resources and achieve a 
``Green Guam'' by developing the most energy efficient facilities 
possible and supporting Guam's efforts to develop sustainable and 
renewable energy projects. We have projects underway with the Guam 
Power Authority, Guam Waterworks Authority, University of Guam, 
Department of Energy, and other Federal agencies to bring public and 
private funds to Guam for sustainable projects. We will work with the 
University of Guam's Center for Island Sustainability to develop and 
secure funding for green programs.
    Third, as discussed in further detail below, the preferred 
alternative site for the live-fire training range complex on Guam that 
was identified in the final environmental impact statement (EIS) would 
require restricted access for safety reasons to the culturally 
significant sites of Pagat village and cave when the ranges are in use. 
Over the past year, the people of Guam made it clear that our plan to 
provide access to the area only during times when the ranges were not 
active was unacceptable and had to be changed. In response, we have 
developed options that will ensure that access to Pagat village and 
cave will be available 24 hours per day, 7 days per week.
    Fourth, we recognize that land is a valued and limited resource in 
Guam. In response to concerns regarding the expansion of our footprint 
on Guam, we have committed to a ``net negative'' growth in the amount 
of property controlled by DOD. This strategy means that at the 
completion of the military realignment, the Department's footprint will 
be smaller than it is today, which directly responds to longstanding 
concerns regarding land use on Guam.
    On Guam, the military realignment is viewed as a Federal Government 
action, not just a DOD effort. In addition to the concerns noted above 
that are directly related to the military realignment, Guam's leaders 
and members of the community are seeking support from across the 
Federal Government to resolve several longstanding issues. In our role 
as a partner to the Government of Guam we have committed to advocate 
for Guam's needs in Washington, as demonstrated by the Department's 
support for the Guam Loyalty Recognition Act. A whole-of-Government 
approach, including the participation of Federal agencies and the 
Congress, is necessary to demonstrate that the Federal Government at 
large is sensitive to the concerns of the people of Guam as we prepare 
to ask them to host an increased military presence.
    The Government of Japan remains committed to both the realignment 
of Marine Corps forces to Guam and the Futenma replacement facility. Of 
the $6.09 billion Japanese share, $834 million in direct cash 
contributions have been received to date. The Government of Japan has 
also committed to making concrete progress on the Futenma replacement 
facility, with a formal decision on the configuration of the runway 
expected in the spring of 2011. The Department is confident in the 
progress made to date and is satisfied with Japan's commitment to these 
realignments.
    A record of decision (ROD) for the Guam military realignment was 
signed in September 2010. The ROD included decisions on the locations 
of the Marine Corps main cantonment, family housing, aviation and 
waterfront operations, training on the island of Tinian in the 
Commonwealth of the Northern Mariana Islands, and selection of 
utilities and road improvement solutions to support the military 
realignment effort. Action was deferred on a transient CVN pier, 
pending additional coral surveys and studies under the National 
Environmental Policy Act; and on the site specific location of a live-
fire training range complex on Guam, pending resolution of the National 
Historic Preservation Act section 106 consultation process. The first 
two U.S.-funded MILCON projects were awarded following the ROD; 
however, intrusive design, construction, and award of additional 
projects were delayed pending resolution of the section 106 
consultation process. In March 2011, we completed the section 106 
process with the finalization of a programmatic agreement. Now that 
this significant milestone has been achieved, we will begin 
construction and award additional contracts. The Department will also 
consider recent input to issue a ROD for the live-fire training range 
complex on Guam.
    Partnership with the Government of Guam and the Guam community is 
central to the success of the marine relocation. Over the past year, 
senior Department leadership has engaged the Government of Guam to 
better understand the community's concerns, identify potential 
solutions, and develop a way forward in implementing the program. From 
these discussions we now better understand concerns regarding issues 
such as access to cultural sites and the expansion of DOD's footprint. 
However, as training is essential for Marine Corps forces, the 
Department also shares the Congress' concern with ensuring Marine Corps 
training requirements can be delivered on Guam. With respect to the 
preferred alternative site for location of a live-fire training range 
complex in the Route 15 area--property which is not currently within 
DOD's inventory--the Department has committed to conduct training 
activities in a manner which will allow unfettered access to the Pagat 
Village and Pagat Cave historical sites should the Route 15 site be 
selected in the ROD for training. Additionally, the Department has 
communicated to the Governor of Guam and the Guam Legislature that, 
following the completion of the realignment, DOD will have a smaller 
footprint than it has today. This commitment will directly address 
concerns regarding an expanding DOD footprint on Guam. This concept is 
currently in the early stage of development. Studies will be conducted 
to determine if missions can be relocated and assess any potentially 
underutilized properties. As a result of these discussions, the 
Governor of Guam has stated publicly his willingness to discuss land 
use issues with the Department. The goal is to have an agreement in 
principle with the Governor by the fall of 2011, allowing formal land 
negotiations to commence once appropriate congressional approval for 
land acquisition has been received. The Department will continue to 
update the Congress on land use matters and the status of informal 
discussions with the Government of Guam.
    The Department recognizes concerns from both the public and other 
Federal agencies regarding Guam's existing and future infrastructure 
and socioeconomic needs. DOD has worked closely with both the 
Government of Japan and with Guam's utilities providers to identify 
utility system improvement projects for Japanese financing which both 
support the relocating marines and improve Guam's systems. As discussed 
earlier, in its Japanese fiscal year 2011 budget the Government of 
Japan has requested $415 million of its required $740 million 
contribution in utilities financing. The projects which will be 
financed by this funding will provide utility system upgrades that are 
critical enablers to the construction program. Specifically, they will 
provide for upgrades and improvements to wastewater treatment plants 
which will support the off-island workforce and future population 
growth associated with the Marine Corps realignment, as well as 
treatment, production and storage for potable water on-base. As noted 
in the Navy's National Environmental Policy Act documents, these 
projects are critical mitigations to alleviate the impact of the 
population increase from the military realignment program.
    The Department is committed to improving the quality of life for 
both the people of Guam and the military personnel who make the island 
their home. The final EIS acknowledges that the military realignment 
will affect Guam's social services, such as education and medical 
facilities, due to the added demand on services to Guam as a result of 
potential population growth that may result from the military 
realignment. If the issues surrounding existing infrastructure and 
other major socioeconomic issues impacting Guam are left unaddressed, 
we risk creating disparity between conditions on- and off-base and 
losing the support of the people of Guam, which will adversely affect 
our ability to achieve our mission. The DOD is committed to ensuring 
this does not happen, and is leading the effort to coordinate an 
interagency approach to ``One Guam''. The DOD-led, interagency Economic 
Adjustment Committee (EAC) is working with the Government of Guam to 
review socioeconomic needs both directly and indirectly related to the 
military realignment. The fiscal year 2012 budget includes a request 
for $33 million in Defense-wide operations and maintenance funds to 
address projects assessed by the EAC. In addition, other Federal 
agencies' fiscal year 2012 budget requests include approximately $30 
million in funding for Guam to assist with the implementation of the 
projects requested by DOD or support other Guam infrastructure and 
financial management requirements identified by the EAC. The Department 
will continue to work with other Federal agencies to identify 
additional opportunities for Federal Government support to address 
Guam's socioeconomic needs.
    In the coming weeks and months, construction will begin, contracts 
for additional projects will be awarded, and progress will be made with 
the Government of Guam toward addressing its concerns related to land 
acquisition. Concurrently, the Department will continue to evaluate the 
total cost of the realignment based upon the refining of requirements 
and evolution of planning efforts conducted to date.
            base realignment and closure 2005 implementation
    The Department has made significant progress during the past year, 
and to date has completed 328 of 485 realignment and closure actions as 
specified in our established business plans. The Department is on track 
to implement BRAC 2005 realignments and closures by the statutory 
deadline of September 15, 2011. Going forward, our fiscal year 2012 
budget request of $26 million enables ongoing environmental 
restoration, caretaker, and property disposal efforts at BRAC 2005 
installations.
Accomplishments
    In total, the Department has awarded all 118 planned BRAC 
construction projects with a combined value of $2.1 billion. The final 
five projects awarded within the last 6 months total approximately $81 
million and are on schedule for completion prior to the statutory 
deadline. Some noteworthy achievements include:
  --During the past year, DON closed Naval Station Ingleside, Texas, 5 
        months earlier than planned and reverted the property to the 
        Port of Corpus Christi. We also closed the Navy Supply Corps 
        School in Athens, Georgia and relocated the personnel and 
        assets to Naval Station Newport, Rhode Island. By September 15, 
        two more installations, Naval Air Station Willow Grove, 
        Pennsylvania and Naval Air Station Brunswick, Maine will be 
        closed.
  --Construction was completed in December 2010 on the Consolidated 
        Investigative Agencies facility at Marine Corps Base Quantico, 
        Virginia. This $350 million project has set the standard for 
        interagency BRAC coordination and it will bring together the 
        service investigative agencies, the Defense Security Service 
        and the Defense Intelligence Agency to create a premier law 
        enforcement, security and intelligence center that will 
        increase collaboration across DOD and leverage the efficiencies 
        and synergies created by collocating the agencies and services.
  --The Department has invested more than $400 million on construction 
        and outfitting of 11 facilities to establish a state-of-the-art 
        Research, Development, Acquisition, Test and Evaluation Center 
        for Integrated Weapon System and Armaments and Fixed Wing Air 
        Platforms at Naval Air Warfare Center China Lake, California. 
        Nine of the 11 construction projects at China Lake are complete 
        with the remaining two projects scheduled to complete this 
        summer.
Community Reuse Planning Efforts
    Seventeen impacted communities established a local redevelopment 
authority to guide local planning and redevelopment efforts, and have 
been receiving financial support through grants and technical 
assistance from the DOD Office of Economic Adjustment. Two communities 
are still preparing their plans with submissions planned for later this 
year and the Department of Housing and Urban Development is reviewing 
submissions at six installations. At the installations where the reuse 
plans have been completed, the Department has initiated the National 
Environmental Policy Act (NEPA) documentation for disposal of those 
properties. We have completed the NEPA process at eight of those 
installations.
Land Conveyances and Lease Terminations
    By the end of fiscal year 2010, the Department disposed of 45 
percent of the property that was slated for closure in BRAC 2005. These 
disposal actions were completed via a combination of lease transfers 
and terminations, reversions, public benefit conveyances (PBCs), and 
Federal and DOD agency transfers. Of interest for fiscal year 2010 is 
the reversion of the 577-acre main base at Naval Station Ingleside to 
the Port of Corpus Christi. Last year we also transferred a lease 
interest of 34 acres at the Marine Corps Support Activity in Kansas 
City, Missouri for use by the Department of the Army.
    The most significant action we have planned for 2011 is the 
disposal of Naval Support Activity, Athens, Georgia this spring when 
the base will operationally close. This property will be conveyed to 
the University of Georgia via an education PBC. The 2011 plan also 
includes transfer of remaining real property at Marine Corps Support 
Activity Kansas City, Missouri and Naval Support Activity New Orleans, 
Louisiana. Other significant disposals include about 1,200 acres at 
Naval Air Station Brunswick, Maine to support aviation and education 
uses.


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Naval Support Activity New Orleans, Louisiana
    Construction for the new building that will house headquarters, 
Marine Forces Reserve and Marine Corps mobilization command is almost 
complete in the future Federal City. The four floors and approximately 
411,000 square-feet of administrative space are currently having 
furniture and computer equipment installed. When finished, the building 
will be home to about 2,000 marines. A ribbon cutting ceremony is 
planned for the end of June 2011.
    To support the closure of Naval Support Activity New Orleans and 
the relocation of base-operating support and tenant activities to Naval 
Air Station Joint Reserve Base New Orleans, 13 construction projects 
have been completed and the final project is targeted for completion by 
the end of March 2011.
Naval Air Station Brunswick, Maine
    The Department's largest BRAC 2005 operational action will close 
Naval Air Station Brunswick and consolidate the east coast maritime 
patrol operations in Jacksonville, Florida. Runway operations in 
Brunswick ceased in February 2010. The closure ceremony will occur in 
May 2011. The runways and adjacent aviation land and facilities 
totaling more than 900 acres were approved in February 2011 for a no-
cost Federal Aviation Administration PBC to the local redevelopment 
authority. These facilities will become an executive airport.
Naval Air Station Joint Reserve Base Willow Grove, Pennsylvania
    In 2007, legislation was enacted directing the Department to 
transfer Naval Air Station Joint Reserve Base Willow Grove to the Air 
Force, who would then convey property to the Commonwealth of 
Pennsylvania for the operation of a Joint Interagency Installation. In 
November 2009, Governor Rendell of the Commonwealth of Pennsylvania 
informed the Secretary of Defense that the Commonwealth would no longer 
pursue the Joint Interagency Installation because of fiscal 
constraints. The closure of Naval Air Station Joint Reserve Base Willow 
Grove will again follow the BRAC disposal processes. Federal Screening 
among other DOD and Federal agencies has been completed and the local 
redevelopment authority initiated its reuse planning efforts in 
February 2011.
Navy Leased Locations, National Capital Region
    Navy awarded the remaining construction projects for the relocation 
of more than 2,200 DON personnel from leased locations into DOD-owned 
facilities in the National Capital Region. These remaining projects 
while on track to complete in time to meet the statutory deadline 
continue to present significant challenges due to the short 
construction duration, and complex move actions that require close 
coordination with other services and agencies.
Joint Basing
    All 12 joint bases established by BRAC law have achieved full 
operational capability as of October 1, 2010. The Department is the 
supporting component for the following four bases:
  --Joint Expeditionary Base Little Creek-Fort Story;
  --Joint Region Marianas;
  --Joint Base Pearl Harbor-Hickam; and
  --Joint Base Anacostia-Bolling.
Environmental Cost To Complete and Financial Execution
    Over the last year, we spent $16 million in cleanup at BRAC 2005 
locations. The majority of this funded environmental activities at 
Naval Air Station Brunswick, Maine, Naval Weapons Station Seal Beach 
Detachment Concord, California, and Naval Air Station Joint Reserve 
Base Willow Grove, Pennsylvania. Our remaining environmental cost to 
complete for fiscal year 2011 and beyond is $117 million.
Challenges
    Completion of large construction and renovation projects and 
relocations are planned for the last 3 to 6 months of BRAC 2005 
implementation. Projects associated with the movement of DON 
organizations from leased space in the National Capital Region to DOD-
owned space are scheduled to finish September 2011. Additionally, lack 
of full funding at the beginning of fiscal year 2011 resulted in 
rearrangement of implementation plans, leaving little margin for error 
in meeting the statutory deadline across multiple recommendations.
    prior base realignment and closure cleanup and property disposal
    The BRAC rounds of 1988, 1991, 1993, and 1995 were a major tool in 
reducing our domestic installation footprint and generating savings. 
All that remains is to complete the environmental cleanup and property 
disposal on portions of 15 of the original 91 bases and to complete 
environmental cleanup, including long-term monitoring at 23 
installations that have been disposed.


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Property Disposal
    We disposed of 289 acres of real property in fiscal year 2010, for 
a total of 93 percent of real property disposed in the first four 
rounds of BRAC. In fiscal year 2010, we completed the disposal of the 
Defense Fuel Depot Point Molate to the city of Richmond, California, 
using the authority to transfer property prior to completion of 
environmental remediation activities. This conveyance will enable city 
redevelopment of the property years sooner by incorporating the 
environmental remediation effort with the construction. We continue to 
use the 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 
property conveyed has been at no consideration to the Federal 
Government. Our fiscal year 2012 budget request of $129 million will 
enable us to continue disposal actions and meet the legal requirements 
for environmental cleanup.
    With 74 percent of our remaining property requiring supplemental 
NEPA analysis and completion of environmental remediation activities, 
disposal actions will continue after fiscal year 2011. Due to changing 
redevelopment plans, we are currently undertaking supplemental NEPA 
analyses at Naval Shipyard Hunters Point, California and Naval Station 
Roosevelt Roads, Puerto Rico. Although supplemental NEPA analysis is 
not needed at Naval Station Treasure Island, California, the city of 
San Francisco is currently completing a State-required environmental 
review of its revised reuse plan. In addition, we may need to undertake 
supplemental NEPA analysis at Naval Air Station Alameda, California 
depending on future reuse planning decisions by the city of Alameda.
    In fiscal year 2011, we plan to convey 627 acres at Naval Air 
Station South Weymouth, Massachusetts under an EDC. Other significant 
actions include issuing deeds for 530 acres at Marine Corps Air 
Stations El Toro and Tustin in California that are currently under 
leases in furtherance of conveyance and the initiation of a public sale 
at Naval Station Roosevelt Roads, Puerto Rico, for about 2,033 acres. 
With the completion of these actions, we will have disposed of 95 
percent of our Prior BRAC real properties.
Prior Base Realignment and Closure Environmental Cleanup
    The Department has now spent about $4.5 billion on environmental 
cleanup, environmental compliance, and program management costs at 
Prior BRAC locations through fiscal year 2010. Our remaining 
environmental cost to complete for fiscal year 2011 and beyond is 
approximately $1.3 billion. This includes about $180 million cost 
growth which is due in part to additional munitions cleanup at Naval 
Air Facility Adak, Alaska and Naval Shipyard Mare Island, California, 
cleanup at Naval Air Station Moffett Field, California, and additional 
long-term monitoring program-wide. The increase is also associated with 
additional radiological contamination at Naval Station Treasure Island, 
California, and Naval Air Station Alameda, California.
Naval Station Roosevelt Roads, Puerto Rico
    The Commonwealth submitted an EDC application in December 2010 
requesting approximately 1,000 acres of the remaining property. We are 
currently reviewing the application and will soon begin formal 
negotiations. The remaining property will be sold through public 
auction.
Naval Shipyard Hunters Point, California
    DOD listed the shipyard for closure as part of BRAC 1991. The 
Department has spent more than $650 million to investigate and clean up 
contamination at Hunters Point, including 78 installation restoration 
sites and 93 radiological sites. The Congress has added a total of $160 
million to the entire Prior BRAC Program over the past 3 years, and we 
have used more than $100 million to accelerate the cleanup program at 
Hunters Point.
    The additional funding has increased contaminated soil disposal to 
more than 520,000 cubic yards, nearly 31,000 truckloads, through 
removal and remedial actions. For radiological contamination, we have 
received free-release for 17 impacted buildings and removed more than 
12 miles of radiological contaminated sewer and storm lines. We 
continue to utilize emerging technologies to expedite cleanup of 
groundwater plumes and have streamlined the groundwater monitoring 
program.
    The Department continues to work closely with the city of San 
Francisco for the potential early transfer of key development parcels 
within the next year. This transfer of parcel B (59 acres) and parcel G 
(40 acres), followed by additional transfers totaling 60 acres in 2014, 
make up close to 40 percent of the remaining land for development. With 
final RODs signed for parcel C (74 acres) and the anticipated utility 
corridors, we have made significant strides in readying parcels to 
support city redevelopment efforts.
Naval Station Treasure Island, California
    With adoption of new EDC language in the fiscal year 2010 National 
Defense Authorization Act, DON was able to complete negotiation of a 
profit participation model for the transfer of Treasure Island. In 
August of 2010, then-Speaker Pelosi, Secretary Mabus and then-Mayor 
Newsom signed the term sheet and intent to complete an EDC memorandum 
of understanding (MOU). The formal EDC MOU is expected to be approved 
and signed by June of this year. The agreement guarantees $55 million 
to the Navy paid over 10 years with interest and an additional $50 
million paid once the project meets a return of 18 percent. Then after 
an additional 4.5 percent return to investors (22.5 percent total), the 
Navy would receive 35 percent of all proceeds.
    The environmental cleanup of Treasure Island is nearing completion. 
The city has finalized its California Environmental Quality Act (CEQA) 
documentation and will submit the CEQA Environmental Impact Report and 
EDC MOU for approval by the Board of Supervisors in the summer of this 
year. At that point, we will be in position for the transfer of more 
than 80 percent of the base. The remaining cleanup includes the 
continued treatment of two small groundwater plumes and removal of low 
level radiological contamination. These projects and the remaining 
transfer are expected to be complete well before the land is needed for 
subsequent phases of the redevelopment project.
Naval Air Station South Weymouth, Massachusetts
    Naval Air Station South Weymouth was closed by a 1995 BRAC action. 
In 2008, Navy and the local redevelopment authority executed an EDC 
term sheet, but the local redevelopment authority was unable to obtain 
the necessary bonds to complete the transaction. The Navy has 
subsequently revalued the property and the parties are negotiating a 
new payment structure that emphasizes Navy participation in revenue 
sharing for an EDC of 627 acres.
Naval Air Station Moffett Field, California
    Naval Air Station Moffett Field was transferred to NASA in 1994 
with Navy retaining environmental cleanup responsibilities for past 
Navy releases. Hangar 1, which was built in the 1930s to house the USS 
Akron and its sister ship, USS Macon, is a Navy Installation 
Restoration Program site as a result of contamination in its siding and 
interior paint leaching to the environment. Due to it being a 
contributing element to the Naval Air Station Sunnyvale Historic 
District and individual eligibility for the National Register of 
Historic Places, the Navy's environmental response, which will leave 
the hangar without siding, has generated tremendous public and 
congressional interest.
    The Navy has completed all Hangar 1 interior work and removal of 
siding is scheduled to begin in April 2011 for completion at this 
calendar year's end.
    NASA, as the Federal facility owner and operator, has committed to 
reusing and re-siding Hangar 1. They are seeking additional financial 
support for this effort.
                  base realignment and closure summary
    The Department is on schedule to meet the statutory requirement to 
complete the BRAC 2005 closure and realignment actions by September 15, 
2011. While the relocation of Navy organizations from leased locations 
in the National Capital Region to DOD-owned space continues to present 
significant challenges, we feel we have a reasonable plan in place to 
meet this requirement.
    Although the remaining prior round BRAC installations present 
cleanup and disposal challenges, we continue to work with regulators 
and communities to tackle complex environmental issues, such as low-
level radiological contamination, and provide creative solutions to 
support redevelopment priorities, such as innovative EDCs.
                               conclusion
    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. We must continue to transform and recapitalize our 
shore infrastructure to provide a strong foundation from which to re-
supply, re-equip, train, and shelter our forces. With your support of 
the Department's fiscal year 2012 budget request, we will be able to 
build and maintain facilities that enable our Navy and Marine Corps to 
meet the diverse challenges of tomorrow.
    Thank you for the opportunity to testify before you today. I look 
forward to working with you to sustain the war fighting readiness and 
quality of life for the most formidable expeditionary fighting force in 
the world.

    Senator Johnson. Secretary Pfannenstiel, the fiscal year 
2012 budget request includes $100 million for MILCON in 
Bahrain, on top of the $213 million in the fiscal year 2011 
request. Given the current unrest in Bahrain and throughout the 
Middle East, what are the Navy's plans for executing both the 
fiscal year 2011 and fiscal year 2012 requests? Do you think it 
is prudent to go ahead and execute these projects in light of 
the current turmoil in Bahrain?
    Ms. Pfannenstiel. Mr. Chairman, I understand the concern 
with what is happening in Bahrain. I'd point, of course, that 
the fiscal year 2011 projects are, of course, held by the lack 
of appropriations of fiscal year 2011.
    But the, right now, the consideration in Bahrain is that it 
is the home of the Fifth Fleet and, as long as the Fifth Fleet 
remains--and we expect that it will--we need to provide the 
necessary facilities and security for the sailors who are 
there. So, yes, we do think it prudent to continue to support 
those activities.
    Senator Johnson. What is the status of dependents in 
Bahrain? Have they been evacuated?
    Ms. Pfannenstiel. I believe they were, there was a 
voluntary ability for them to leave. Perhaps Admiral Boone can 
address whether they have done so.
    Admiral Boone. Good afternoon. I would first like to thank 
the members of this subcommittee for their continuing support 
to our military.
    To answer the question specifically, as Secretary 
Pfannenstiel stated, like some other locations, there has been 
a voluntary evacuation. I don't know the numbers. We'd have to 
take that for the record.
    [The information follows:]
           Bahrain Authorized Departure of Dependants Update
    Department of Defense (DOD) dependents have not been evacuated from 
Bahrain. On March 15, DOD authorized voluntary departure from Bahrain 
of DOD dependents and non-emergency civilian personnel at Government 
expense. Additionally, a ``stop movement'' order was given. This order 
prohibits dependents of military personnel executing permanent change 
of station orders from traveling to Bahrain. The authorized departure 
(AD) of dependents and stop movement order was extended to May 13 in 
accordance with Department of State actions. At the conclusion of that 
period, the overall situation in Bahrain will be reassessed to 
determine if the policy should be extended, modified, or removed. As of 
May 1, of Bahrain's 710 command-sponsored dependents, 82 have departed 
under AD. Naval Support Activity Bahrain's Joint Reception Center 
continues to receive questions and process applications for alternative 
safe havens in the United States.

    Senator Johnson. Secretary Pfannenstiel, the fiscal year 
2012 budget request includes $181 million for Navy projects in 
Guam. An additional $106 million has been authorized in fiscal 
year 2011 funds, and $300 million was appropriated in fiscal 
year 2010. Of the fiscal year 2010 funding, how much has been 
obligated to date? Now that the major environmental and 
historic preservation hurdles have been cleared, do you expect 
to be able to obligate all the remaining fiscal year 2010 
funds, plus the fiscal year 2011 funds, this fiscal year?
    Ms. Pfannenstiel. The, there are two projects--fiscal year 
2010 projects----
    Senator Johnson. Yes.
    Ms. Pfannenstiel [continuing]. That were, in fact, awarded. 
A couple other fiscal year 2010 projects are in the process of 
being awarded even as we speak. So, these are going out for 
awards. At the moment there is no actual construction going on. 
These are in process of planning and design, and they are 
moving forward. The fiscal year 2011 projects, of course, 
cannot be started because we do not have the appropriation.
    Senator Johnson. Yes. What is the status of the various 
environmental lawsuits that have been filed? Do they present 
any impediment to beginning construction or awarding future 
contracts?
    Ms. Pfannenstiel. No, sir. There is a lawsuit that is in 
the process of being heard as we speak, and it specifically is 
about the training ranges. It concerns whether the training 
ranges were sufficient--whether the environmental review of the 
possible places for the training ranges was sufficient. The 
contracts that have been approved and are considered, are in 
line to be awarded now, don't involve the area of the training 
ranges, so those could go ahead without the lawsuit having been 
resolved.

                     GUAM RANGE ID AND ACQUISITION

    Senator Johnson. General Ruark, what is the status of 
identifying and acquiring training ranges on Guam? Do the 
current plans provide sufficient training resources for the 
marines?
    General Ruark. Thank you, Senator. And we certainly 
appreciate the great support of the Congress for the Marine 
Corps.
    The site at Route 15 was identified for the final 
environmental impact statement (EIS) as the preferred 
alternative location for the live-fire training range complex 
to support the relocating marines. The site was deemed a 
preferred alternative because it was considered to be the best 
balanced to meet the needs of the Marine Corps training.
    The individual skills live-fire training, as identified in 
the Guam EIS, is the absolute minimum necessary on Guam for the 
marines.
    Additionally, the USPACOM commander will conduct a Pacific 
training plan EIS, which starts this fiscal year, which will 
examine other potential training range opportunities throughout 
the Western Pacific, to include the Commonwealth of the 
Northern Marianas, and, to supplement the training on Guam, 
sir.
    Senator Johnson. Senator Kirk.
    Senator Kirk. Thank you, Mr. Chairman.
    I wanted to just follow up on Guam. You can sort of, 
because we're a little confused as to what the construction 
schedule is, the cost.
    At Pagat Village we've, I guess, worked out the historical 
caves agreement, luckily, before this hearing. And so, I want 
to ask about this former FAA property, and, are you being held 
up by the Guamese Government for a price that's too high? Or, 
where are we with that?
    Ms. Pfannenstiel. We haven't started negotiating on that at 
any point. Where we really are is, taking a broad look. And 
that's been, sort of, the, why we haven't come back to this 
subcommittee with an updated schedule yet. We have the 
preferred alternatives what were laid out in the EIS.
    Senator Kirk. Right.
    Ms. Pfannenstiel. And we're going forward with them. And, 
but, we have also, in working with the Government of Guam, 
recognized that there are concerns about how we're planning to 
use the land, as identified in the EIS. So, we agreed with the 
Government of Guam that we will try to reduce our overall 
footprint on Guam. That's caused us to have to take looks at 
different ways of doing things. For example, the FAA land was 
going to be used for housing, and the question is, can we put 
more housing elsewhere?
    We are continuing to look at that now, even, you know, 
within the parameters of the EIS that was approved. And if 
there are changes, we will certainly bring them to the 
subcommittee.
    Senator Kirk. Right. I'm just worried that maybe, you know, 
I am pretty pro-Guam--talked to Madeleine Bordallo about this, 
Chairman Culberson--but if we need them too much, they may 
hijack us for too high a price. So, subcommittee is going to 
get a proposal possibly for a hell of a lot of spending in 
Korea, with full tour norm. We could change that to combat 
capability. We--maybe the principals will put Okinawa back in 
play. It would surprise me. But if they did, is there a way to 
keep Okinawa and Korea more in play, so if the Guamese hijack 
us for money, the combat capability for Pacific is elsewhere?
    Ms. Pfannenstiel. Well, I can assure you that the Pacific 
Command is always continually looking at what is the most 
effective force posture----
    Senator Kirk. Right.
    Ms. Pfannenstiel [continuing]. In the Pacific. And that's 
an ongoing, continual process.
    Senator Kirk. It's a long way away, and future support is, 
it's a tremendous capability. But obviously, when the United 
States faced this in the past, Admiral Boone, I'm wondering, 
has there ever been a long-range United States Navy study about 
what logistics might be made, and, obviously, the good 
relations with northern Australia--put that in play, as opposed 
to what are very difficult and very tiny islands in the 
Pacific, so that we have something that's west of Hawaii, with 
a stable government that really likes us and doesn't charge us 
too much to be there?
    Admiral Boone. Yes, sir, Senator. Of course, through the 
Quadrennial Defense Review process we look at those kinds of 
force posture issues strategically on a regular periodicity. 
And in between, Pacific Command and other components analyze 
force posture issues throughout the region as events evolve. 
And so, all of that is continually being looked at on various 
levels.
    Senator Kirk. What about my question--Australia?
    Admiral Boone. There are studies that are looking at the 
region throughout the Western Pacific to address the 
capabilities that you bring up.
    Senator Kirk. Thank you.
    How are we adjusting now to this estimate--$1.3 billion 
estimate for water, power, and sewage needs on Guam, which is 
far in excess of the fiscal year 2009 plan that I showed to 
Comptroller Hale?
    Ms. Pfannenstiel. Well, actually, there, of the, that $1.3 
billion, the Japanese have committed to $740 million for 
financing of utilities, water----
    Senator Kirk. Right.
    Ms. Pfannenstiel [continuing]. Power and wastewater. And 
that will be a major chunk of that commitment.
    Senator Kirk. But, the original estimate given to this 
subcommittee was about $300 million, so this has gone way up.
    Ms. Pfannenstiel. I don't know where that estimate came 
from. That was----
    Senator Kirk. It's the original DOD estimate, so if you 
look--I mean, this will be a famous chart, because we want you 
guys to update it. But it says: Immediate upgrades to power, 
$130 million; total estimate, about $200 million, and then 
another $300 million for the full is the estimate that you gave 
us. So, $1.3 billion is a lot more than that.
    Ms. Pfannenstiel. $1.3 billion is certainly a lot more. And 
I do know that during the environmental impact process we were 
very involved with the Environmental Protection Agency----
    Senator Kirk. Right.
    Ms. Pfannenstiel [continuing]. And they spent time looking 
deeply at it, so, their conclusion was $1.3 billion.
    Senator Kirk. I'm concerned also about delaying costs as 
the DOD budget goes down. Is there a way to lay out a maximum 
footprint for what we plan for Guam and do one maxi-EIS, so we 
get all of this bureaucracy done at one go? Rather than death 
by 1,000 EISs?
    Ms. Pfannenstiel. We are intending that this, as we look at 
all the changes that are coming--and as you know, there are a 
couple pieces of it that haven't been resolved at this point--
as that work is all done, that we will have a final master 
plan, and that master plan will have an EIS associated with it.
    We are looking internally about whether it's more efficient 
to have the one big master plan, or to have some supplementals 
for some pieces that might change. And it may end up being more 
efficient to do the latter.
    Senator Kirk. Mr. Chairman, the last question. Just, it's a 
substantial U.S. investment which I think we should make for 
U.S. security in the Western Pacific. But, in the end, all of 
this combat capability for the Navy and Marine Corps is only 
worthwhile if it can be around when we need it. I'm surprised 
that we're rolling no substantial robust missile defense 
architecture in, in the current plan. When you've got the 
biggest bullseye in the closest range to the potential 
adversary that would have the most number of bullets to expend 
on this one target, how come, in all of this vast expense, 
we're rolling this in, and the site actually really couldn't 
defend itself very well in its current configuration?

                     ANTI-BALLISTIC MISSILE TREATY

    Ms. Pfannenstiel. The original EIS, and the record of 
decision that was signed in September, does include the 
possibility of an Army anti-ballistic missile system.
    Senator Kirk. Yes.
    Ms. Pfannenstiel. That decision hasn't yet been made by the 
Army.
    Senator Kirk. Don't you think that's kind of putting the 
cart--don't you defend the site before you invest in it?
    Ms. Pfannenstiel. My, the intention is to consider whether 
it makes sense from the Army standpoint to put that system 
there or, likely, somewhere else----
    Senator Kirk. My worry is that because of----
    Ms. Pfannenstiel [continuing]. For them.
    Senator Kirk [continuing]. International pressure or 
something we might worry about putting something there, which 
would be, would render this entire investment useless. And this 
is supposed to be the unsinkable aircraft carrier of the United 
States. But, if we wimp out on a missile defense site, then 
almost all of the money that we've sunk into this is--when we 
actually need it, in a military contingency--not worthwhile.
    Ms. Pfannenstiel. I understand.
    Senator Kirk. Thank you, Mr. Chairman.
    Senator Johnson. I would like to thank all of our witnesses 
for appearing before the subcommittee today. Thanks for all of 
your service to our Nation. We look forward to working with you 
this year.

                     ADDITIONAL COMMITTEE QUESTIONS

    For the information of the members, questions for the 
record should be submitted by the close of business on April 
15.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted to Hon. Robert F. Hale
               Questions Submitted by Senator Ben Nelson
    Question. For the past several years, the need for a new U.S. 
Strategic Command (STRATCOM) headquarters building has been apparent 
and identified as a requirement. The Department of Defense's (DOD's) 
budget seeks to fulfill that requirement by requesting authorization of 
$564 million for a new headquarters. As I understand the request, the 
full authorization is being requested this year and the appropriation 
will be incremental with the first phase being $150 million for fiscal 
year 2012. We all know that we are in a constrained budget and that 
hard choices are being made within DOD. This I know is a hard choice 
but one that is essential in protecting our national strategic missions 
for cyber, missile defense, and nuclear command and control now and in 
the future as these threats will not likely dissipate.
    Question. As I understand the funding process for this project, the 
funding is scheduled to be spread over a 3-year period. What are the 
benefits to spreading this funding over 3 years? And does this optimize 
the construction schedule? How?
    Answer. The benefits to spreading this funding over 3 years is that 
it is optimized and synchronized to the construction schedule. With 
this strategy, we obligate the construction funding at a pace 
consistent with the planned construction schedule. Programming the 
funding quicker than the three increments currently planned would be 
too early and would result in tying up valuable MILCON dollars 
unnecessarily. To the contrary, to shift the increments much beyond 3 
years would delay overall construction completion, as the construction 
schedule would out-pace the funding stream.
    Question. Is the full $150 million needed in fiscal year 2012? What 
would be the impact if the full $150 million were not realized? What 
would be the impact of any reductions in this funding in any year? Why 
is it not practical to just refurbish the current facility?
    Answer. Funding the first increment at less than the $150 million 
requested would likely result in the delay of the overall construction 
timeline. Any reduction in funding that would extend the funding 
increments much beyond 3 years would result in an extension to the 
construction schedule, thus delaying STRATCOM's move to its new 
facility and jeopardizing the viability of this mission so critical so 
America's national defense.
    We considered a number of alternatives for recapitalizing the 
STRATCOM complex at Offutt Air Force Base, Nebraska. Those options 
included building an entirely new facility, renovating a portion of the 
existing complex and constructing an addition to replace the portions 
of the existing complex not suited for renovation, and building an 
entirely new campus-like complex, with multiple facilities, over a 
number of years. In the end, the option to build an entirely new 
facility was the cheapest (when measured by both initial construction 
cost and by annual and periodic maintenance costs over the facility 
lifecycle), the quickest (in terms of overall construction duration), 
and least risky alternative (when measured by suitability for long-term 
STRATCOM mission and mission viability during the construction 
process).
                                 ______
                                 
               Question Submitted by Senator Tim Johnson
                       electronic medical records
    The Air Force recently completed a site survey at Malmstrom Air 
Force Base, as part of the ongoing process to determine suitable basing 
for this repository. The communities of Malmstrom and Great Falls 
continue to be strongly supportive of situating it there. In fact, 
Montana State University in Great Falls has phenomenal online health 
information technology, medical billing and coding, and medical 
transcription courses. If selected, these courses would help to quickly 
train and support military and civilian personnel in these processes--
what a perfect fit for the base, the community, and DOD.
    Question. Realizing that the final decision on basing assignments 
resides with the Secretary of Defense, and in light of the recent 
announcement, Mr. Hale, could you please expound on the nature of the 
facilities that are being looked at to house these electronic medical 
records repositories, and discuss the current timetable for 
implementation?
    Answer. The infrastructure capabilities of facilities within the 
United States, including Defense Information Systems Agency data 
centers, are being considered with regard to electronic medical records 
repositories. A chief consideration in the decisionmaking process will 
be the investment needed to accommodate capability requirements for the 
DOD/VA integrated electronic health record (iEHR). The Departments of 
Defense and Veterans Affairs will continue to collaborate on this 
decision. We anticipate the initial data center consolidation locations 
will be determined in fiscal year 2011. A timetable to support 
migration to these data centers will be established at that time.
                                 ______
                                 
                Questions Submitted to Dr. Dorothy Robyn
                Questions Submitted by Senator Jack Reed
    Question. I support this effort because it promotes the efficient 
administration and completion of Federal construction projects. It 
would also make sure workers are being treated fairly in terms of wages 
and benefits during these difficult economic times.
    What steps has the Department taken to implement this Executive 
order?
    Answer. DOD joined with other agencies and the Federal Acquisition 
Regulatory Council to develop Government-wide implementing regulations 
for Executive Order 13502. The Federal Acquisition Regulation (FAR) 
rulemaking process included going out for public comments, making 
changes based on the comments, and additional deliberations prior to 
publication of a final rule. The final rule amending the FAR was 
effective on April 13, 2010. The rule adds subpart 22.5--Use of Project 
Labor Agreements (PLAs) for Federal Construction Projects to the FAR 
which provides definitions, explains the policy and general 
requirements for project labor agreements. It also identifies a number 
of specific factors that agencies may consider in making a decision to 
require a PLA. The FAR rule provides standard solicitation provisions 
and contract clauses to facilitate implementation.
    Question. What guidance are you providing to the services to 
encourage them to use PLAs on MILCON projects?
    Answer. Executive Order 13502 was issued in February 2009 
encouraging agencies to consider requiring the use of PLAs with large-
scale construction projects. In July 2009, the Office of Management and 
Budget issued a memorandum that required reporting of those contracts 
exceeding the $25 million threshold. The services report to the Office 
of the Under Secretary of Defense (Acquisition, Technology and 
Logistics), Director, Defense Procurement and Acquisition Policy on 
their large-scale construction projects on a quarterly basis.
    A new FAR implementing Executive Order 13502 was announced in April 
2010. The FAR rule provides guidance through standard solicitation 
provisions and contract clauses to facilitate implementation. The DOD 
organization with the majority of large construction contracts that 
exceed the $25 million threshold are the U.S. Army Corps of Engineers 
(USACE) and Naval facilities (NAVFAC). DOD organizations were 
encouraged to develop internal implementing policies for their 
organizations. The USACE procurement instruction letter was signed and 
became effective in October 2010; similar guidance was developed by 
NAVFAC in February 2011.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This hearing is concluded.
    [Whereupon, at 3:27 p.m., Thursday, April 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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