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



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2013

                              ----------                              


                       WEDNESDAY, MARCH 28, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:02 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Nelson, Pryor, Tester, 
Murkowski, and Coats.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

STATEMENT OF HON. JACKALYNE PFANNENSTIEL, ASSISTANT 
            SECRETARY FOR ENERGY, INSTALLATIONS AND 
            ENVIRONMENT
ACCOMPANIED BY:
        MAJOR GENERAL JAMES KESSLER, COMMANDER, MARINE CORPS 
            INSTALLATIONS COMMAND/ASSISTANT DEPUTY COMMANDANT FOR 
            INSTALLATIONS AND LOGISTICS (FACILITIES)
        REAR ADMIRAL DAVID BOONE, DIRECTOR, SHORE READINESS DIVISION, 
            DEPUTY CHIEF OF NAVAL OPERATIONS (FLEET READINESS AND 
            LOGISTICS)

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Good morning. This hearing will come to 
order.
    We meet today to discuss the President's fiscal year 2013 
budget request for military construction (MILCON) and family 
housing for the Departments of the Navy and the Air Force.
    I would note, for the benefit of our witnesses that 
although my Ranking Member Senator Mark Kirk temporarily is 
absent, I am told that he is making good progress toward 
recovery, and I look forward to his return to the subcommittee. 
In the interim, I will make sure that his interests are 
represented in all matters that come before this subcommittee.
    I am pleased to welcome our first panel of witnesses from 
the Navy, Secretary Jackalyne Pfannenstiel, Assistant Secretary 
of the Navy; Major General James Kessler, Assistant Deputy 
Commandant for Installations and Logistics; and Rear Admiral 
David Boone, Director, Navy Shore Readiness Division.
    This year's military construction and family housing budget 
for the Navy and Marine Corps is $1.8 billion. This represents 
a 19-percent reduction in funding for Active Forces military 
construction from the fiscal year 2012 enacted level, but an 
88-percent increase in Navy Reserve funding. Although the Navy 
Reserve funding went from small to middling, $26 million to 
$49.5 million, in these difficult economic times, I am pleased 
to see any increase in funding for the Reserve forces.
    The Navy's MILCON budget request encompasses several 
important and evolving mission requirements, including the 
relocation of marines from Okinawa to Guam and the continued 
buildup of facilities in Djibouti. I look forward to discussing 
these initiatives with our witnesses today.
    Again, thank you all for coming. We look forward to your 
testimony. Madam Secretary, I understand that you will be 
offering the only opening statement. Your full statement will 
be entered into the record, so I encourage you to summarize it 
to leave more time for questions. Please proceed.

            SUMMARY STATEMENT OF HON. JACKALYNE PFANNENSTIEL

    Ms. Pfannenstiel. Chairman Johnson, Senator Tester, I am 
pleased to appear before you today to provide an overview of 
the Department of Navy's investment in shore infrastructure.
    I regret the absence of Senator Kirk. We wish him well and 
hope he is back with us soon.
    The Department's fiscal year 2013 budget request includes 
$13 billion for investment in military construction, facilities 
sustainment, restoration and modernization, previous rounds of 
base realignment and closure (BRAC), family housing, 
environmental restoration, and base-operating support.
    The military construction request of $1.8 billion supports 
our Combatant Commanders, new war-fighting platforms and 
missions, facility recapitalization, and servicemember quality-
of-life initiatives for the Navy and Marine Corps.
    Military construction projects in Bahrain and Djibouti 
support high-priority missions in the region, enhance our 
forward presence and provide stability for United States 
interests. Two projects in Spain support the forward-deployed 
naval forces, and a project in Romania supports the European-
phased base adaptive approach infrastructure.
    Equally important are military construction programs that 
invest in support facilities with joint strike fighter and MV-
22B, infrastructure improvements, training and education 
facilities, and the safety and security of nuclear weapons in 
the United States.
    I would specifically like to emphasize that we remain 
committed to establishing an operational Marine Corps presence 
on Guam. We know Congress has concerns regarding the execution 
of the Guam military alignment and we are taking the necessary 
steps to address them and move the program forward.
    The United States Government is currently meeting with the 
Government of Japan to discuss adjustments to the 2006 
realignment roadmap agreement. As Secretary Panetta has 
testified, Guam is an important part of the United States 
effort to reposture our forces in the Pacific. We believe the 
adjustments being discussed will address execution concerns, 
increase our flexibility and strengthen our presence in the 
region.
    This is an important year for the Guam realignment. We will 
continue to work with you and our partners on Guam and in Japan 
as more information becomes available.
    As for the 2005 round of BRAC, the Department met our legal 
obligations by the statutory deadline of September 15, 2001, 
and successfully implemented all required realignment and 
closure actions.
    For BRAC 2005 installations our fiscal year 2013 budget 
request of $18 million enables our ongoing environmental 
restoration, caretaker and property disposal efforts.
    For the prior BRAC rounds, our fiscal year 2013 budget 
request of $147 million will enable us to continue disposal 
actions for the remaining 7 percent of real property and meet 
the legal requirements for environmental cleanup.
    The Department fully supports the Secretary's proposal for 
additional rounds of BRAC to assess and improve the alignment 
of our shore infrastructure with our force structure.
    Finally, we intend to meet the energy goals set forth by 
Congress and the Secretary of the Navy. We recognize that 
energy is a critical resource for maritime, aviation, 
expeditionary, and shore missions. We must strengthen our 
energy security and reduce our vulnerability to price 
escalations and volatility.
    With this in mind, the Navy and Marine Corps continue to 
reform how we produce, procure and use energy. Our budget 
request includes $1 billion in fiscal year 2013 and $4 billion 
across the fit-up that is to be invested in initiatives that 
provide energy independence and security as well as valuable 
tactical benefits and efficient facility restoration.
    To help meet Congress' renewable-energy goals and our own 
goal of producing 50 percent of our shore energy from 
alternative sources, we're developing a strategy for large-
scale, renewable power projects on naval installations where 
we'll use existing third-party financing mechanisms, such as 
power-purchase agreements, joint ventures and enhanced-use 
leases, to avoid adding cost to rate payers.
    Currently, our bases support about 300 megawatts of 
renewable energy, 270 of which is produced by a geothermal 
plant at China Lake. We have awarded contracts for three 
similar projects in the southwest and are finalizing a solar 
contract for Hawaii.
    The three existing purchase-power agreements at China Lake, 
29 Palms and Barstow will save the Department $20 million over 
20 years. In each instance, we'll be paying less per kilowatt 
hour from day 1 than we would for conventional power.

                           PREPARED STATEMENT

    In closing, your support of the Department's fiscal year 
2013 budget request ensures that we can 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 answering any questions you may have.
    [The statement follows:]

Prepared Statement of Hon. Jackalyne Pfannenstiel; Major General James 
                 Kessler; and Rear Admiral David Boone

    Chairman Johnson, Representative Kirk, and members of the 
subcommittee, I am pleased to appear before you today to provide an 
overview of the Department of Navy's (DON) investment in its shore 
infrastructure.

                  THE NAVY'S INVESTMENT IN FACILITIES

    Our Nation's 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 2013 budget request includes a $13.0 billion investment in 
our installations, a decrease of $0.3 billion from last year.
    The fiscal year 2013 military construction (Active and Reserve) 
request is $1.8 billion. Although significantly less than the fiscal 
year 2012 request of $2.5 billion, it represents continued investment 
enhancing Combatant Commander's capabilities, improving servicemember's 
quality of life, supporting mission requirements, continued emphasis on 
energy security, and recapitalizing aging infrastructure.
    The fiscal year 2013 family housing request of $480 million 
represents a 2-percent increase from the fiscal year 2012 request. The 
Navy and Marine Corps continue to invest in housing, including both the 
recapitalization of our overseas housing, and additional privatization 
to recapitalize inadequate housing in the United States. Having 
privatized virtually 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 BRAC program consists of environmental cleanup and caretaker 
costs, as well as property disposal costs for prior round BRAC and BRAC 
2005 locations. We do not foresee 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 2013 in the amount of $147 million. The fiscal year 2013 
BRAC 2005 budget request of $18 million supports ongoing environmental 
restoration, caretaker costs, and property disposal efforts. The 
Department has completed implementation of the BRAC 2005 
recommendations. The DON fully supports the Secretary's proposal for 
two additional rounds of BRAC to improve alignment of our shore 
footprint with our force structure.
    Our fiscal year 2013 request for base operating support (BOS) is in 
excess of $7.0 billion. The BOS program finances the operation of our 
DON shore infrastructure worldwide including programs that support 
ship, aviation, and combat operations, public safety, security, 
installation management, housing and quality of life for both Active 
and Reserve components. To maximize the impact of our BOS funding, we 
continue to pursue and realize more cost effective ways of providing 
base support functions.
    Finally, the Department's budget request invests $1.0 billion in 
fiscal year 2013, and $4.0 billion across the Future Years Defense Plan 
(FYDP), to support the DON's aggressive energy goals to increase energy 
security and reduce dependency on fossil fuels.

                         MILITARY CONSTRUCTION

    The DON's fiscal year 2012 military construction program requests 
appropriations of $1.8 billion, including $105 million for planning and 
design and $17 million for Unspecified Minor Construction.
    The active Navy program totals $918 million and includes:
  --$176 million to fund eight Combatant Commander projects:
    --At Camp Lemonnier, Djibouti: A Joint operations center, a cold 
            storage warehouse, containerized living/work units, and a 
            fitness center;
    --In Souda Bay: An aircraft parking apron and an intermodal access 
            road; and
    --In Bahrain: A bachelor quarters and dining facility.
  --$146 million to fund Quality of Life initiatives including:
    --A bachelor quarters at Naval Base Coronado, California, in 
            support of the Chief of Naval Operations' Homeport Ashore 
            initiative;
    --A training barracks at Naval Air Station Oceana, Virginia;
    --A bachelor quarters in Okinawa, Japan;
    --A dining facility at Naval Air Station Meridian, Mississippi; and
    --A fitness center at Naval Support Activity South Potomac, 
            Virginia.
  --$280 million to fund: The second increment of a second explosives 
        handling wharf at Naval Base Kitsap, Washington.
  --$284 million to fund 12 projects to achieve initial or final 
        operational capability requirements for new systems and new 
        missions:
    --A general purpose warehouse and high explosive magazine at Naval 
            Station Rota, Spain;
    --An Aegis Ashore missile defense complex at Naval Support Facility 
            Romania;
    --A Broad Area Maritime Surveillance (BAMS) mission control 
            facility at Naval Air Station Jacksonville, Florida;
    --A BAMS maintenance training facility at Beale Air Force Base, 
            California;
    --An H-60S simulator training facility at Naval Base Coronado, 
            California;
    --An EA-18G flight simulator facility at Naval Air Station Whidbey 
            Island, Washington;
    --A Littoral Combat Ship training facility at Naval Base San Diego, 
            California;
    --Drydock electrical distribution upgrades for CVN78 at Norfolk 
            Navy Shipyard, Virginia;
    --A cruiser/destroyer training facility at Naval Support Activity, 
            South Potomac in Virginia;
    --A combat system engineering building at Naval Weapons Station 
            Earle, New Jersey; and
    --A BAMS operational facility at an overseas location.
  --$32 million to fund additional critical Navy priorities:
    --A strategic systems evaluation lab consolidation at Naval Weapons 
            Station Seal Beach, California, and
    --Communications infrastructure at Naval Support Facility, Diego 
            Garcia.
    The active Marine Corps program totals $664 million and includes:
  --$18 million for the construction of unaccompanied housing at Naval 
        Weapons Station Yorktown, Virginia, for the consolidation of 
        the Marine Corps Security Force Regiment;
  --$13 million to provide quality of life facilities such as a mess 
        hall at Quantico;
  --$31 million to construct student billeting for the Basic School in 
        Quantico, Virginia;
  --$83 million to build infrastructure to support ingress/egress 
        access at Marine Corps installations. These projects include 
        road improvements, main gate improvements, anti-terrorism force 
        protection posture improvements, and correct safety issues. 
        These projects will have a direct effect on the quality of life 
        of our marines along with alleviating both on-base and off-base 
        community concerns;
  --$394 million to fund projects enhancing operational capability such 
        as those needed for the MV-22 aircraft at Camp Pendleton, 
        Hawaii, Miramar, and Yuma; Joint Strike Fighter at Beaufort and 
        Iwakuni; and operational units in New River, Cherry Point, and 
        Yorktown;
  --$53 million to provide training facilities at Camp Pendleton, Camp 
        Lejeune, Beaufort, and Iwakuni;
  --$47 million for land expansion for MAGTF large-scale training 
        exercises at 29 Palms;
  --$26 million for the second increment of the North Ramp Parking 
        project at Anderson Air Force Base to support the relocation of 
        marines to Guam.
    The Navy and Marine Corps Reserve Military Construction 
appropriation request totals $47 million and includes a Transient 
Quarters at Naval Air Station Joint Reserve Base New Orleans, 
Louisiana, a Commercial Vehicle Inspection Site at Naval Air Station 
Joint Reserve Base Fort Worth, Texas, a Joint Navy and Marine Corps 
Reserve Center at Des Moines, Iowa, a Marine Corps Reserve Training 
Center at Yuma, Arizona, and a Vehicle Maintenance Facility at 
Brooklyn, New York.

                         FACILITIES MANAGEMENT

Facilities Sustainment, Restoration and Modernization (SRM)
    The Department of Defense (DOD) uses a Facilities Sustainment Model 
to calculate lifecycle facility maintenance and repair costs. The model 
uses industry-wide standard costs for various types of buildings and 
geographic areas and is 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 2013 budget request funds sustainment at 80 percent 
and 90 percent of the model's recommended levels for the Navy and 
Marine Corps, respectively. To maximize support for warfighting 
readiness and capabilities, the Navy has requested overall facilities 
sustainment at 80 percent of the DOD model level. To enhance the 
quality of education at our premier institutes of higher learning, we 
will continue to fund the Naval Academy, Naval War College, and Naval 
Postgraduate School at 100 percent of this model. Additionally, the 
Navy has targeted the allocation of sustainment funds to increase the 
sustainment and maintenance of unaccompanied housing. 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. The Marine Corps will maintain sustainment funding at 
90 percent of the model. Even this strong commitment will result in 
some facilities degradation. The Marine Corps will continue to 
prioritize and target facilities that directly affect mission 
operations for full sustainment.
    Restoration and modernization provides major upgrades of our 
facilities. In fiscal year 2013, the Department of the Navy is 
investing $0.6 billion of Military Construction, and $1 billion of 
Operation and Maintenance funding into restoration and modernization of 
existing facilities.

                              NAVAL SAFETY

    Protecting the Department's sailors, marines, and civilian 
employees and their dependents remains one of our highest priorities. I 
consider continual, marked improvement in our safety performance to be 
essential to maintaining the highest state of operational readiness for 
our Navy and Marine Corps team. During fiscal year 2011, DON once again 
achieved record-setting mishap rate reductions in numerous key mishap 
categories.
    The Department continues to be a world-class safety organization, 
where, in step with civilian industry leaders, no avoidable mishap or 
injury is considered acceptable. In benchmarking against the Nation's 
largest, safest, and most productive commercial industries, we have 
recognized that our top initiative must be the development and 
deployment of a state-of-the-art Risk Management Information System or 
RMIS. RMIS will dramatically expand the quality and quantity of data 
available, improve DON safety information management and analysis, 
simplify reporting, enhance unit-level access to safety information, 
and automate unit-level safety program management. RMIS is a high 
priority for funding in our fiscal year 2014 budget.
    Using fiscal year 2002 as a baseline, the Secretary of Defense 
established a goal for each Military Service and DOD Agency to achieve 
a 75-percent reduction in key mishap rates by the end of fiscal year 
2012. By the end of fiscal year 2011, both the Navy and the Marine 
Corps achieved mishap rate reductions which exceeded the DOD-wide 
average reduction in each of the three primary mishap categories being 
tracked by the Office of the Secretary of Defense. The three mishap 
categories and associated reductions from the fiscal year 2002 mishap 
rate baseline are depicted below:


----------------------------------------------------------------------------------------------------------------
                                                              USN reduction    USMC reduction   Average DOD-wide
                      Mishap category                              (%)               (%)          reduction (%)
----------------------------------------------------------------------------------------------------------------
Private Motor Vehicle Fatality Rate \1\...................                60                47                39
Aviation Class A Flight Mishap Rate \2\...................                49                42                39
Civilian Total Lost Day Rate \3\..........................                43                47                39
----------------------------------------------------------------------------------------------------------------
\1\ Rate is number of deaths per 100,000 military members.
\2\ Rate is number of mishaps per 100,000 flight hours. A Class A Aviation Flight Mishap occurs when there was
  intent for flight and greater than $2 million damage, total loss of an aircraft, a fatality, or an injury
  resulting in total permanent disability.
\3\ Rate is days lost per 100 persons per year (more of a FECA case management than safety metric).

    I am committed to sustained, continuous improvement and our hard 
work is paying dividends. At the end of fiscal year 2011, the 
Department achieved the lowest on- and off-duty fatality rates ever 
recorded in our history. Similarly, for the first time we achieved the 
lowest ever fatality rates for on-duty, private motor vehicle and off-
duty/recreational mishaps in the same year. On the civilian side, over 
the past 10 years, the Department has witnessed declines in civilian 
total and lost time case rates of 39 percent and 36 percent, 
respectively. These reductions are in line with annual Presidential 
injury and illness rate reduction requirements.
    I am pleased to report that the Department of the Navy is the proud 
owner of nearly half of all Department of Defense OSHA VPP (Voluntary 
Protection Program) Star sites, and we recently recognized three OCONUS 
installations in Japan as VPP Star equivalent sites. Implementation of 
safety management systems, such as VPP, will be an important tool for 
our continued improvement in Department-wide safety results.

                                 ENERGY

    The Department of the Navy is committed to implementing an energy 
program that enhances our national security by reducing our dependence 
on imported fossil fuels. Its platform is that energy security is 
national security. The energy program is comprehensive--it involves 
both Services and contains initiatives to reduce energy demand and 
provide alternative forms of energy supplies on shore, afloat, in the 
air, and in theater.
    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 a quarter of all of the 
Presidential awards and nearly a 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.

Goals and Initiatives
    The program for which fiscal year 2013 funding is sought will 
exceed 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.
    The Secretary of the Navy has set five aggressive department-wide 
goals to reduce DON's overall consumption of energy, decrease its 
reliance on petroleum, and 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.
    The 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 and 50 percent of 
        Department installations will be net-zero;
  --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.
    A myriad of investments and activities will be directed to meeting 
the Secretary's goals. Principally, they will be geared toward 
behaviors and technologies that will reduce the Navy and Marine Corps' 
overall requirements for energy and technologies that can provide 
adequate substitutes for fossil-based energy. Two significant 
initiatives will be:
  --The development of a biofuel alternative to the liquid fuels used 
        in ships, tanks, and tactical vehicles. To meet the goal of 50 
        percent of total DON energy from alternative energy, the DON 
        has partnered with the DOE and USDA to collectively pool $510 
        million to spark development of the commercial advanced 
        alternative fuels industry. The DON is using authorities 
        provided by the Defense Production Act (DPA) title III for its 
        contribution. This effort will help to obtain the 8 million 
        barrels of biofuel needed by 2020. The alternative fuel must be 
        available at prices competitive with the conventional petroleum 
        fuels being replaced; it must not have negative consequences 
        for the food chain; and it must be a ``drop-in'', that is, not 
        requiring infrastructure or operational changes.
  --Development of a gigawatt of renewable energy generation on DON 
        installations. Pursuant to meeting the 50 percent shore energy 
        goal, the Secretary has directed the establishment of a task 
        force to facilitate the production of large-scale renewable 
        power where possible on the bases. This development will use 
        existing third-party financing mechanisms such as power 
        purchase agreements, joint ventures and enhanced use leases. 
        The projects will cost no more over their life than 
        conventional energy sources.

        
        
Funding
    The Department has budgeted $1.0 billion in fiscal year 2013 and 
approximately $4.0 billion across the FDYP for operational and shore 
energy initiatives. The strategy for executing these initiatives 
focuses on reducing our dependence on petroleum, lowering our energy 
cost, and complying with Federal legislation and energy mandates.
    The funding sources are:
    O&M Navy.--Projects would include propeller coatings, in-port ship 
energy conservation, Advanced Metering Infrastructure, combustion 
system improvements, Aviation & Maritime training in support of best 
practices for energy conservation (ENCON) and facility energy audits 
and facility energy efficiency upgrades.
    O&M Marine Corps.--Projects would include completion of energy 
audits, shelter liners, advanced power systems, renovated HVAC system 
to increase efficiency, and completed SMART metering projects.
    National Defense Sealift Fund (NDSF)/Other Procurement Navy.--
Projects would include Shipboard Lighting Upgrades, shore power 
management/monitoring systems, ship engine automation upgrades.
    Research, Development, Test, and Evaluation.--Projects would 
include undersea power systems, energy storage and power management, 
the shipboard energy dashboard, water purification technologies, man-
portable electric power units, and energy storage and distribution.

Achievements
    The Department is on track to meet its goals, and throughout 2011, 
we demonstrated progress through an assortment of energy programs, 
partnerships, and initiatives. This past summer, the Blue Angels flew 
all six planes on biofuels during their 2-day air-show at NAS Patuxent 
River.
    Since flying the F/A18, dubbed ``The Green Hornet'', at MACH 1.7 in 
2010 as part of the test and certification process using a 50-50 blend 
of Camelina based JP-5, the Department has also successfully conducted 
test and certification on the MH-60 Seahawk helicopter, AV-8B Harrier, 
E-A6B Prowler, MQ-8B Fire Scout, T-45C Goshawk, MV-22 Osprey, ran a 
Riverine Command Boat, Landing Craft Air Cushion (LCAC), Landing Craft 
Utility (LCU), 7m Rigid Hull Inflatable Boat (RHIB), the ex-USS Paul F. 
Foster, and an Allison 501K turbine generator. The DON also partnered 
with Maersk to run a large merchant ship on renewable biofuel. These 
tests represent milestones necessary to meet the 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 is currently deployed to the 
Pacific region on its maiden operational deployment. The Navy is 
continuing to move forward with installation of a similar system on new 
construction guided missile destroyers and to look at the feasibility 
of retrofitting the fleet with these systems in the course of routine 
shipyard availabilities.
    Additional energy initiatives, such as propeller and hull coatings, 
were undertaken to make the existing inventory of ships more energy 
efficient. Stern flaps will also assist in reducing energy consumption, 
as will some combustor modifications and systems to monitor ship-wide 
energy use. Energy conservation programs were also put in place for 
both ships and aircraft to educate and incentivize the Fleets to reduce 
energy consumption and identify inefficient activities for improvement. 
The future Navy will use advanced materials on propellers, energy 
storage and power management systems, and advanced propulsion 
technology to make warships more efficient while allowing them to meet 
their combat capability.
    Last year, the Marines tested equipment that could be deployed on 
battlefields at their Experimental Forward Operating Bases (ExFOB) at 
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. This year's ExFOB will concentrate on wearable electric 
power systems and lightweight man-portable water purification systems. 
By deploying these technologies, the Marines have proven that energy 
efficiency means combat effectiveness and increased safety for our 
deployed servicemembers as fewer convoys are needed to resupply fuel.
    In addition to these tactical and platform applications, the DON 
has 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. We have awarded 
three projects under our Solar Multiple Award Contracts (MAC) in the 
Southwest (SW) and are finalizing a similar solar MAC for Hawaii. One 
of the SW solar MAC awards will provide 13.8 MW of solar power at NAWS 
China Lake. This project will save the Department $13 million over 20 
years while also providing security from electric grid outages. The 
Hawaii solar MAC will install 28 MW of solar PV on DON installations 
including covering the runway on Ford Island with PV thus recreating 
the look of the runway as seen from the air. We are also looking at 
developing our wind resources, exploring Waste to Energy projects and 
developing ocean power technology at all DON installations.




    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, over 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 built to LEED Silver 
standards per the 2012 NDAA.
    DON continues to explore 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. The Naval Postgraduate School has 
added an energy program to its curricula and we are partnering with the 
National Defense University to pilot two culture change demonstrations. 
The pilots, at MCB Camp Lejeune and NAVSTA Mayport, will focus on 
raising the energy awareness of civilian and military personnel.
    The Department 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 Interior, the Department of Agriculture, and the Small 
Business Administration, 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.

                     RELOCATING THE MARINES TO GUAM

    On February 8, 2012, the U.S. Government and Government of Japan 
acknowledged that they were meeting to discuss potential adjustments to 
the 2006 Realignment Roadmap. Both Governments remain committed to the 
establishment of an operational Marine Corps presence on Guam. We 
believe that the adjustments to the Guam force laydown that are being 
considered will be responsive to congressional concerns, while also 
maintaining and enhancing peace and security in the Asia Pacific 
region, one of two regions emphasized in the January 2012 Defense 
Strategic Guidance. Bilateral discussions have only just begun and I 
expect that more information will be available in the next couple of 
months. The Department will keep Congress informed of these discussions 
and, upon a final decision on the Guam laydown, will provide you with 
updates on our planning, programming, and execution strategies for 
implementing any adjustments.
    The fiscal year 2013 budget request includes $26 million to 
construct facilities in support of the relocation of marines from 
Okinawa to Guam. The project funds the second increment of a facility 
necessary to support the relocating aviation element and, upon 
completion of both increments, will provide aircraft parking apron, 
taxiways, lighting, wash racks and supporting utilities at Andersen Air 
Force Base. This project supports the relocating aviation element and 
is required regardless of the final force laydown on Guam. In its 
Japanese fiscal year (JFY) 2012 budget (which runs April 1, 2012, 
through March 31, 2013), the Government of Japan has requested $8 
million in design funds for its direct cash contribution. The JFY-2012 
budget request also includes $83 million in funding for utilities 
financing, pursuant to the Realignment Roadmap, for water and power 
projects.
    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. In December 2011, the Government of Japan delivered an 
Environmental Impact Statement to the Governor of Okinawa, a necessary 
precursor to the signing of the landfill permit. Further progress on 
the Futenma Replacement Facility and future Japanese financial 
contributions to the Guam realignment will be discussed in detail 
during ongoing bilateral negotiations.
    A Record of Decision (ROD) for the Guam military realignment was 
signed in September 2010. The first military construction contracts 
were awarded following the ROD. Construction activity funded by both 
the United States and Government of Japan at Apra Harbor and Andersen 
Air Force base is now ongoing.
    In response to public concerns regarding access to cultural sites 
near the preferred alternative site for the live-fire training range 
complex, a decision on the location for the live-fire training range 
complex was deferred in the September 2010 ROD. In January 2011, the 
DON committed that training activities would be conducted in a manner 
such that access to these sites would remain available 24 hours per 
day, 7 days per week as is currently available today. The DON has 
evaluated options to satisfy this commitment while fully meeting the 
training requirements of the relocating marines. It was determined that 
a Supplemental Environmental Impact Statement (SEIS) would be necessary 
prior to making a final decision on the location of the live-fire 
training range complex. Litigation regarding the live-fire training 
range complex was dismissed in December 2011 following the Navy's 
commitment to prepare the SEIS.
    A Notice of Intent was published on February 9, 2012, which 
formally began the SEIS process. The SEIS is expected to take 
approximately 2 years to complete. Upon completion of the SEIS and the 
selection of a location for the training range complex, the DON will 
work with the Government of Guam and any affected private land owners 
in order to secure property necessary to meet training requirements.
    Guam remains an essential part of the United States' larger Asia-
Pacific strategy, which includes developing the island as a strategic 
hub and establishing an operational Marine Corps presence. The 
Department of Defense recognizes Congress' concerns regarding execution 
of the Guam military realignment as outlined in the fiscal year 2012 
National Defense Authorization Act (NDAA) and is taking steps necessary 
to resolve critical issues that will allow the construction program to 
move forward. The United States and Japan are continuously looking for 
more efficient and effective ways to achieve the goals of the 
Realignment Roadmap. Both countries remain committed to maintaining and 
enhancing a robust security alliance, and the United States remains 
committed to enhancing the United States-Japan Alliance and 
strengthening operational capabilities while significantly reducing the 
impact of U.S. bases on the Okinawan people.

                                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 (PPVs).--With the strong support from this 
        committee and others, we have successfully used PPV authorities 
        enacted in 1996 to partner with the private sector to help meet 
        our housing needs through the use of private sector capital. 
        These authorities allow us to leverage our own resources and 
        provide better housing faster to our families. Maintaining the 
        purchasing power of BAH is critical to the success of both 
        privatized and private sector housing.
  --Military Construction.--Military construction (MILCON) will 
        continue to be used where PPV authorities do not apply (such as 
        overseas), or where a business case analysis shows that a PPV 
        project is not feasible.
    Our fiscal year 2013 budget includes $102 million in funding for 
family housing improvements (including planning and design). This 
request provides for the revitalization of approximately 200 Navy and 
Marine Corps housing units in Japan and Guam and the second phase of 
privatization in the Pacific Northwest, involving almost 900 homes. The 
budget request also includes $378 million for the operation, 
maintenance, and leasing of remaining Government-owned or controlled 
inventory.
    The Navy and Marine Corps privatized family housing inventory 
consists of over 63,000 homes. With over 90 percent of the housing 
stock privatized, our focus, and my priority, continues to be the 
oversight of the Department's privatized housing portfolio to ensure 
that the public/private ventures are financially viable and self-
sustaining, that our private partners meet their obligations under the 
governing business agreements and that residents are satisfied with 
both their housing and the services they receive.
    Surveys continue to reflect steady, significant improvement in 
reported resident satisfaction. Where issues have been identified, the 
Department has worked with the partners to resolve them as quickly as 
possible. We have taken, or are taking, a number of actions to further 
strengthen our oversight. These include:
  --Identifying and flagging key indicators (e.g., number and type of 
        service calls, response times);
  --Identifying common issues and trends identified in comments 
        provided along with resident surveys;
  --Increasing and reinforcing resident awareness of the Services' role 
        in privatized housing and advocacy for members and their 
        families; and
  --In conjunction with the partners, developing a risk communications 
        plan to respond to resident concerns.

Unaccompanied Housing
    Our budget request includes over $133 million in funding for the 
construction of unaccompanied housing and student quarters to support 
over 1,000 single sailors and marines. This includes a $76 million 
unaccompanied housing project at Naval Base Coronado, California, 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 towards achieving this goal through military 
        construction, privatization, and intensified use of existing 
        barracks capacity. The Navy remains on track to provide housing 
        ashore for all junior single sailors, assigned to sea duty, by 
        2016.
  --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 recently completed Commandant's BEQ initiative, 
        almost 90 percent of the Marine Corps' unaccompanied housing is 
        now considered adequate.

                              ENVIRONMENT

    In fiscal year 2013, the Department of the Navy (DON) is investing 
over $1 billion in its environmental programs across all 
appropriations. This level of investment has remained relatively 
consistent over the past few years.
    The relative distribution of environmental funding across the 
environmental program areas, as displayed within the chart [below], 
remains stable.




    While fulfilling its national security mission, DON continues to be 
a Federal leader in environmental management by focusing our resources 
on achieving specific environmental protection goals and proactively 
managing emerging environmental issues. The Department continues its 
commitment to environmental compliance, stewardship, and responsible 
fiscal management that support mission readiness and sustainability. In 
this regard, DON is continuing efforts to integrate sound environmental 
policies and long-term cost considerations into the early stages of the 
acquisition process to achieve cleaner, safer, more energy-efficient 
and affordable weapons, materials, processes, and technologies across 
the naval enterprise.

Compliance--Sustainability
    The Department's environmental budget will ensure continued 
compliance with existing regulations, while also smartly investing in a 
more agile and sustainable Navy and Marine Corps. Sustainability is 
seen by DON as a means of supporting our mission while also reducing 
lifecycle costs. DON has instituted many policies and practices 
implementing sustainability tenets including retrofitting/constructing 
buildings to optimize energy and water use, adopting goals for 
renewable energy use and stormwater management on facilities, and 
conducting integrated solid waste management.
    As an example, to reduce afloat solid waste, Naval Supply Systems 
Command (NAVSUP) has several packaging initiatives underway. These 
include two programs (Plastics Removal In Marine Environment (PRIME) 
and Waste Reduction Afloat Protects the Sea (WRAPS)) that reduce the 
amount of solid waste generated at sea and encourage use of 
environmentally friendly products. Under these programs, NAVSUP is 
working with the General Services Administration (GSA) to identify 
items that can be shipped with reduced packaging that is free of 
plastics and is implementing a reusable water bottle pilot project. 
NAVSUP is also working with GSA on industry packaging strategies that 
shift the mindset from point of sale packaging to e-commerce packaging 
that features recyclable boxes that are easy to open and free of excess 
materials such as hard plastic clamshell cases, plastic bindings, and 
wire ties.

National Ocean Council
    The National Ocean Council (NOC) is a Cabinet-level body 
established by Executive Order in July 2010 which includes a mandate 
for the use of spatial planning as a tool to maximize compatible use. 
Including the Department of the Navy (DON), there are 27 Federal 
agencies and offices tasked to develop a comprehensive national ocean 
policy which uses ecosystem based management and coastal and marine 
spatial planning as foundational building blocks. The DON is 
extensively engaged in supporting the President's NOC goals while 
working to ensure our current operating areas remain accessible within 
the comprehensive national ocean policy: For the first time 
comprehensive spatial planning is being conducted in the Exclusive 
Economic Zones (EEZs) including the western Pacific, Alaska and the 
Arctic, the Gulf of Mexico, and the Caribbean. 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, serving as the Federal co-lead for the South 
Atlantic Regional Planning Body, and participating in developing 
Coastal and Marine Spatial Plans for each of the nine identified 
regions.
    The Department participates in numerous interagency ocean-policy 
working groups formed under the NOC. The Department of the Navy also 
participated in developing the NOC Implementation Plan, which was 
released to the public in January 2012. To foster more effective 
Federal engagement with tribal governments regarding coastal and marine 
spatial planning, DON is coordinating delivery during 2012 of the DOD 
Tribal Communications and Coastal and Marine Spatial Planning courses 
to participants from all four military services plus the President's 
Council on Environmental Quality, the U.S. Coast Guard, National 
Oceanic and Atmospheric Administration, and Bureau of Ocean Energy 
Management.

Chesapeake Bay
    After issuing the Chesapeake Bay Strategy in May 2010, the 
Department 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 continues 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.

Natural Resources Conservation
    Department of the Navy natural resources program managers continue 
to provide Installation Commanders with special subject matter 
expertise, products and services necessary to ensure they can access, 
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 integrate natural 
resources management with the installation's operational and training 
requirements as well as address the needs of our Federal and State 
partners and other stakeholders to ensure our INRMPs remain current and 
effective. A primary objective of our INRMPs is to implement 
conservation measures which protect threatened and endangered species 
and their habitat as required by the Endangered Species Act, which can 
help to reduce or eliminate the need to designate critical habitat on 
DON property. 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.
    A recent noteworthy accomplishment involved the installation of a 
living shoreline at Naval Support Activity Panama City, Florida. The 
Navy partnered with the Florida Department of Environmental Protection 
to restore approximately 2,800 feet of shoreline. This shoreline was 
restored by establishing 175 separate reefs created from recycled 
oyster shells obtained from local restaurants and plantings of 
approximately 22,000 donated marsh grasses. This living shoreline is a 
natural substitute for the typical hardened sea wall or rip rap that 
would otherwise be necessary to address years of erosion from natural 
and manmade causes. This enduring project was supported by 2,840 
volunteer hours, both military and civilian, who worked together to 
provide this living shoreline which will support interactive 
educational opportunities provided by the Navy.

Cultural Resources Conservation
    Cultural resources under the Department of Navy'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 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 
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 
(ICRMP), 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.
    To increase awareness of many of the Nation's cultural resources 
under the stewardship of DON, this past year, the Marine Corps began 
the development of a poster series, titled ``Defending Our Cultural 
Heritage,'' that celebrates and educates the public on Marine Corps 
stewardship of cultural resources. The initial four posters in this 
series highlight the National Historic Landmarks under Marine Corps 
stewardship, as well as the partnership initiative with the Advisory 
Council on Historic Preservation, the National Park Service, and the 
State Historic Preservation Offices in the four States represented by 
these posters.

Installation Restoration Program (IRP)
    The DON continues to make significant progress remediating past 
contaminants. At the end of fiscal year 2011, the Department had 
completed cleanup or has remedies in place at 86 percent of the 3,909 
contaminated sites on active installations. We are projecting that all 
but 46 of these sites will be cleaned up or have remedies in place by 
2014. These remaining sites will be subject to newly established DOD 
metrics to drive successful completion in the coming years.

Munitions Response Program (MRP)
    The DON is proceeding with investigations and cleanup of Munitions 
and Explosives of Concern and Munitions Constituents at all Navy and 
Marine Corps munitions response sites. Our major focus through fiscal 
year 2011 was initiating remedial investigations and completing site 
inspections for newly identified sites. Of the 361 sites in the 
program, site inspections have been completed at 99 percent of these 
sites, with only one remaining. This site had a removal action underway 
that was necessary prior to the start of the investigation. Additional 
funding was also obligated to address high-priority sites at Vieques, 
Puerto Rico. DON is using the results of the completed site inspections 
to prioritize the next phases of work. DON plans to achieve cleanup or 
remedies in place at 99 percent of MRP sites by fiscal year 2020, with 
the remaining five sites reaching remedy in place by fiscal year 2024.

Marine Mammals
    The Department of the Navy is continuing its focused research and 
monitoring programs addressing marine mammals and anthropogenic sound. 
The Navy is investing over $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.
    Using our improved scientific knowledge developed from our 
research, the Navy has started a second round of environmental 
documentation focused on marine mammal and sound issues. Phase II 
Environmental Impact Statements will include all of the spatial areas 
covered by Phase I, plus increased coverage to include parts of the 
global commons.

                          COMPATIBLE LAND USE

    The Department of the Navy has an aggressive program to promote 
compatible use of land adjacent to our installations and ranges, with 
particular focus on limiting incompatible activities and protecting 
important natural habitats. A key element of the program is 
Encroachment Partnering (EP), which involves cost-sharing partnerships 
with States, local governments, and conservation organizations to 
acquire interests in real property adjacent and proximate to our 
installations and ranges. 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. The 
program has proven to be successful in leveraging Department of Defense 
and Department of Navy resources.
    The Department of Defense provides funds through the Readiness and 
Environmental Protection Initiative (REPI) that are used in conjunction 
with Navy and Marine Corps O&M funds to leverage acquisitions in 
partnership with States, local governments, and nongovernmental 
organizations. For fiscal year 2011, the Marine Corps acquired 
restrictive easements over 3,349 acres. REPI and Marine Corps funds 
totaled $3.4 million while the encroachment partners provided $3.6 
million. The Navy acquired 1,908 acres 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 33,862 
acres of land with $50.8 million of REPI and Marine Corps funding. 
Encroachment partners have contributed $55.7 million. The Navy has 
acquired 9,851 acres to date with $28.4 million of REPI and Navy 
funding, and $35.5 million contribution from encroachment partners.
    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 off-shore 
energy exploration and wind development play a crucial role in our 
Nation's security and are not necessarily mutually exclusive activities 
with military training. Therefore, we are engaging with the other 
Services, the Office of the Secretary of Defense, and the Department of 
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 degrade 
the ability of naval forces to achieve the highest value from training 
and testing.

                          BRAC IMPLEMENTATION

BRAC 2005 Implementation
    The Department met its legal obligations by the statutory deadline 
of September 15, 2011, and successfully implemented all required 
realignment and closure actions as specified in our established 
business plans. Going forward, our fiscal year 2013 budget request of 
$18 million enables ongoing environmental restoration, caretaker, and 
property disposal efforts at BRAC 2005 installations.




    BRAC 2005 provided an important opportunity to improve operational 
efficiencies, reduce excess infrastructure, add Joint Bases, and 
produce savings. In total, the Department led 33 recommendations which 
involved 484 realignment and closure actions and 118 BRAC construction 
projects. We invested our dollars to build state-of-the-art facilities 
which vary in function from administrative to industrial to research 
and development that are necessary to support our warfighters.
    During the past year, DON closed Naval Air Station Brunswick, 
Maine, Naval Air Station Joint Reserve Base Willow Grove, Pennsylvania, 
and the Naval Support Activity New Orleans, Louisiana, along with a 
number of Navy Marine Corps Reserve Centers. The Department established 
the Marine Corps Support Facility in the first-of-its-kind Federal City 
New Orleans. We led the effort and completed the relocation of five DOD 
Investigative, Counterintelligence and Security agencies to Marine 
Corps Base Quantico. The Department invested over $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.
    By the end of fiscal year 2011, the Department disposed of 52 
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, Federal and 
DOD agency transfers, and an Economic Development Conveyance (EDC). Of 
interest for fiscal year 2011 is the conveyance of 1,133 acres at Naval 
Air Station Brunswick to several recipients using various real estate 
authorities supporting economic redevelopment of the community and 
public uses, such as education and parks.
    For 2012, the Department will continue its disposal efforts at 
Brunswick with another 1,593 acres planned for conveyance. The 2012 
Plan also includes transfer of remaining real property at Naval Station 
Ingleside, Texas, Marine Corps Support Activity Kansas City, Missouri, 
and Naval Support Activity New Orleans, Louisiana. Other significant 
disposals include completing all disposal actions at five smaller 
facilities.
    Naval Support Activity New Orleans, Louisiana.--Construction for 
the new building that houses Headquarters, Marine Forces Reserve and 
Marine Corps Mobilization Command was completed in June 2011.
    Naval Air Station Brunswick, Maine.--The Department's largest BRAC 
2005 operational action closed Naval Air Station Brunswick and 
consolidated the East Coast maritime patrol operations in Jacksonville, 
Florida. Runway operations in Brunswick ceased in February 2010. The 
closure ceremony occurred in May 2011. The disposal of NAS Brunswick 
has been a stunning success story to support the reuse and economic 
redevelopment of the base and mid-coast Maine. Almost 1,200 of the 
base's 3,400 acres have already been disposed. This includes 750 acres 
of runway and aviation facilities to start a private airport before the 
base even closed, and almost 300 acres through an EDC. This EDC was 
transferred at fair market value with Navy receiving a portion of the 
mixed use redevelopment proceeds for the next 20 years. Smaller 
conveyances have also been made to the local community college for 
classroom facilities and to the Town of Brunswick for parks and 
recreation reuse.
    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 2012 and beyond is $189 million.

Prior BRAC
    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 14 of the original 91 bases and to complete 
environmental cleanup, including long-term monitoring at 26 
installations that have been disposed.
    We disposed of 839 acres of real property in fiscal year 2011, for 
a total of 93 percent of real property disposed in the first four 
rounds of BRAC. In fiscal year 2011, we completed the disposal of 
nearly 400 acres at the former Naval Air Station Barbers Point, Hawaii, 
to the City and County of Honolulu via a National Parks Service-
sponsored public benefit conveyance. This will allow the City and 
County of Honolulu to develop much needed parks, ball fields, and 
preserve open space in the rapidly developing Kalaeloa area of Oahu. We 
continue to use the variety of the conveyance mechanisms available for 
Federal property disposal, including the Economic Development 
Conveyance 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 2013 budget request of $147 million will 
enable us to continue disposal actions and meet the legal requirements 
for environmental cleanup.




    With 64 percent of our remaining property requiring supplemental 
National Environmental Policy Act (NEPA) analysis and completion of 
environmental remediation activities, disposal actions will continue 
after fiscal year 2012. Due to changing redevelopment plans, we are 
finalizing Supplemental NEPA analyses at Naval Shipyard Hunters Point, 
California, and recently completed efforts at Naval Station Roosevelt 
Roads, Puerto Rico.
    In fiscal year 2012, we have already conveyed nearly 600 acres at 
Naval Air Station South Weymouth, Massachusetts, and over 1,000 acres 
at Naval Station Roosevelt Roads via EDCs. Other significant actions 
include the initiation of a public sale at Naval Station Roosevelt 
Roads, Puerto Rico, for about 2,033 acres and the initial impending 
conveyance of property at Naval Station Treasure Island via an EDC. 
With the completion of these actions, we will have disposed of 96 
percent of our Prior BRAC real properties.
    The Department has now spent about $4.6 billion on environmental 
cleanup, environmental compliance, and program management costs at 
prior BRAC locations through fiscal year 2011. Our remaining 
environmental cost to complete for fiscal year 2012 and beyond is 
approximately $1.36 billion. This includes about $150 million cost 
growth which is due in part to additional radiological contamination at 
Naval Air Station Alameda, California, Naval Station Puget Sound, 
Washington, and Naval Station Treasure Island, California. The increase 
is also associated with ground water cleanup at sites at Naval Air 
Station Moffett Field, California, and additional investigation and 
remediation at Naval Shipyard Mare Island, California.

BRAC Summary
    The Department met its legal obligation 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 require some effort, we 
expect to be fully complete this spring.
    For the Prior BRAC installations, we transferred 1,041 acres at 
Naval Station Roosevelt Roads, Puerto Rico, and 557 acres at Naval Air 
Station South Weymouth, Massachusetts, to the respective Local 
Redevelopment Authorities. Additionally, we are working with the Naval 
Station Treasure Island Local Redevelopment Authority to complete the 
first transfer of property required for the construction of the Oakland 
Bay Bridge. 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 Economic Development 
Conveyances with revenue sharing.

                               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 2013 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. Thank you for your opening statement.
    For the information of Senators, we will begin with a 7-
minute round of questions.

                            OVERSEAS MILCON

    Secretary Pfannenstiel, the Navy's Future Years Defense 
Plan (FYDP) includes a $300-million wedge from fiscal years 
2015 to 2017 for unspecified Pacific engagement military 
construction. The administration has indicated that its pivot 
to the Pacific region includes rotating United States forces to 
Australia, Singapore, and the Philippines. Will that require 
the construction of new bases overseas? What is the purpose of 
the $300-million wedge for Pacific engagement?
    Ms. Pfannenstiel. Senator, I will take the specifics on the 
wedge, the $300 million, for the record. Perhaps General 
Kessler will answer some of what will be happening during that 
timeframe as we rotate to the Pacific.
    General Kessler. Thank you, Mr. Chairman. While some of the 
specifics are not yet available, the intent for that money is 
to invest in infrastructure necessary to support the presence, 
both in the Western Pacific and in the Indian Ocean, focused on 
regional cooperation, stability, and humanitarian assistance in 
disaster-relief requirements.
    And it is important, I think, to note that these funds are 
separate from our requirements for Guam.
    Ms. Pfannenstiel. Admiral Boone, did you want to add to 
that?
    Admiral Boone. Yes, ma'am. Mr. Chairman, the Navy has 
multiple projects planned in the coming years to support the 
Department's emphasis on the Asia Pacific region, like the 
forward stationing the littoral combat ships in Singapore. So 
for programming considerations, we included this wedge to give 
a current rough estimate of what these projects may cost in the 
out-years.
    Of course, we will refine these estimates in future budget 
submissions as we determine our strategic lay-down 
infrastructure requirements and availability of host-nation 
support in the Pacific.

                            MILCON PLANNING

    Senator Johnson. Secretary Pfannenstiel, when do you expect 
firm decisions to be made on the number and mix of marines that 
will be relocated to Guam, a revised timetable for the move and 
a revised MILCON cost estimate? Do you expect that master plan 
for Guam reflecting these decisions to be available by the time 
the fiscal year 2014 budget is submitted? If not, when will it 
be available?
    Ms. Pfannenstiel. Mr. Chairman, even as we speak, 
discussions are ongoing between the United States Government 
and the Government of Japan to resolve many of those issues 
that you have raised, the structure of the Marine contingent on 
Guam, the timing, and the cost.
    Once the agreement is reached with the Government of Japan, 
we will need, most likely, to redo our environmental analysis 
for Guam. That's a couple-of-years process. And until you have 
completed that, it's hard to know with specifically what the 
construction requirements will be.
    However, having said that, we are hopeful we can reach 
preliminary agreement with the Government of Japan within the 
next couple of months, make an announcement thereof and begin 
the environmental work that is needed.
    Senator Johnson. Secretary Pfannenstiel, the Navy's fiscal 
years 2013 through 2017 FYDP reflects a 25-percent decrease in 
MILCON funding below the FYDP submitted with the fiscal year 
2012 budget. Given the new requirements imposed on the Navy by 
the Pacific realignment, does this mean that the Navy plans to 
defer or eliminate previously programmed projects? If so, will 
this impact projects that had been planned for bases in the 
United States?
    Ms. Pfannenstiel. Fundamentally, the reduction in the 
MILCON request is because of the completion of the Grow the 
Force for the Marine Corps. Past FYDP estimates were designed 
to increase the capacity for a 202,000-member Marine Corps. 
That now, of course, has been completed, and we're ramping the 
other way, having completed the construction that's necessary. 
That's really the driver of the reduction going forward.

                      MARINE CORPS PACIFIC LAYDOWN

    Senator Johnson. General Kessler, the United States and the 
Government of Japan have begun official talks to address the 
2006 Realignment Roadmap for Okinawa and Guam. Notably, this 
includes delinking the construction of the Futenma replacement 
facility from the Guam relocation. In anticipation of the Guam 
and Okinawa realignments, funding for restoring or replacing 
aging facilities at the current Marine Corps Air Station in 
Futenma has been very limited.
    If there are further delays constructing the Futenma 
replacement facility, what are the requirements and what is the 
timeline for facility investments in Marine Air Station Futenma 
to maintain mission readiness?
    General Kessler. Thank you, Mr. Chairman. Yes, sir, you're 
absolutely correct that the delinking of the Futenma 
replacement facility has taken place. And as a result of that, 
we've been able to, I think, continue to make very necessary 
progress on some of the other strategic elements of the Defense 
Policy Review Initiative.
    As a result of that, what that has allowed us to do is to, 
as we revisit the facility needs at Marine Corps Air Station 
Futenma, is to recognize that there is still a requirement for 
Marine aviation elements of III Marine Expeditionary Force to 
be able to operate out of Marine Corps Air Station Futenma.

                            OVERSEAS MILCON

    So we are looking right now, sir, at what those 
requirements are, not as much in terms of MILCON, but more in 
terms of sustaining the existing facilities that are there to 
ensure that those facilities are not only safe, but 
operationally capable to support the air wing in Okinawa.
    Senator Johnson. Admiral Boone, the Navy is requesting 
$89.4 million in fiscal year 2013 for military construction at 
Camp Lemonnier in Djibouti. With the recent increase in the 
base's special operations missions, facilities at Camp 
Lemonnier are currently overcrowded.
    Given the funding request, the increase in mission and the 
limited space, when do you anticipate having a master plan to 
chart and organize a well-developed way forward? Does the 
current footprint at Camp Lemonnier have the potential to meet 
our long-term operational needs or will additional land be 
required?
    Admiral Boone. Thank you, Mr. Chairman. Major General 
Faulkenberry, who is the J4 for the United States Africa 
Command, testified about a month ago on their requirements as a 
Combatant Command (COCOM) imposed on Djibouti, and there have 
been some significant changes.
    Together with the other COCOMs that utilize that 
footprint--the U.S. Transportation Command, U.S. Special 
Operations Command, and U.S. Central Command--we are 
integrating those requirements and anticipate by this summer, 
August, we will have a master plan to present to you.
    Senator Johnson. Senator Tester.
    Senator Tester. Yes, thank you, Mr. Chairman, and I want to 
thank all of you for being here today, and the people that you 
represent. Thank you for your service to this country.
    First of all, even though Montana doesn't have a huge naval 
presence, I will say that the work that you folks are doing in 
energy we can be a part of with biofuels and other things.
    And I want to thank you for the work that you're doing and 
the goals that you have to help this country become more energy 
independent. We all understand that the more energy independent 
we are the more secure we are. So thank you in that work.

                         DOMESTIC MILCON ASSETS

    I have a question that revolves around the $13 billion, and 
maybe this is a question for you, Jackalyne, or anybody. Your 
assets and how they're spread out domestically and around the 
world, can you give me an idea on what percentage are domestic 
assets in the United States versus foreign assets?
    Ms. Pfannenstiel. What percent of our bases are domestic?
    Senator Tester. Yes.
    Ms. Pfannenstiel. I can tell you that between the Navy and 
Marine Corps we have about 100 bases. General Kessler, do you 
know how many of the Marine Corps bases are overseas?
    General Kessler. I----
    Senator Tester. You can get back----
    Ms. Pfannenstiel. Yes, let me get back to you----

    [The information can be found at http://www.acq.osd.mil/ie/
download/bsr/bsr2011baseline.pdf]

    Senator Tester. I'm actually----
    Ms. Pfannenstiel. That's an easy enough number----

                     FOREIGN-DOMESTIC MILCON SPLIT

    Senator Tester. The next question is the question that I 
really want to find the answer to and is you set aside $13 
billion for your installations. Is that evenly split between 
foreign and domestic bases, No. 1? And if it's not, tell me 
why.
    Ms. Pfannenstiel. Let me offer the fact that of the $1.8 
billion MILCON dollars----
    Senator Tester. Yes.
    Ms. Pfannenstiel. About 30 percent of the MILCON dollars 
are, in fact, for overseas investments. And those are very 
specifically COCOM investments, as Admiral Boone was talking 
about, specific needs in Djibouti, in Rota, in Romania. So 
they're both COCOM and new, new platform investments. So a 
large part of that.
    In terms of the base-operating support dollars----
    Senator Tester. Right.
    Ms. Pfannenstiel. Those are spread depending on any 
agreement we might have with host nations.
    Senator Tester. I've got you. But from a MILCON standpoint, 
if what I heard you say is correct, 30 percent is going to 
foreign bases, 70 percent stays domestic. Yes, I see some heads 
nodding.
    And that split actually will depend upon the answer to the 
first question. And I don't really have a problem; however, 
it's split. I just want a justification. If more of it's going 
to domestic, what are we doing differently? And if more of it's 
going foreign, why do we need that investment?
    Thank you, guys. And we'll get that. If you can get that to 
me, that'd be great. Thank you for being here today. Appreciate 
it, and keep up the good work.
    Ms. Pfannenstiel. Thank you, Senator.
    Senator Johnson. Senator Coats.
    Senator Coats. Mr. Chairman, thank you.
    Madam Secretary, thank you for your testimony, and general, 
and admiral. Appreciate hearing from you.
    I've got three quick questions. Try to get it in my 7-
minute time limit here.
    First, with recent announcement about looking more toward 
the Western Pacific in terms of locating some facilities, we 
already know that there's going to be a rotating Marine 
contingent up North West Australia.
    Recently, the White House announced that--and the military 
announced that there would be some shifting, more naval 
presence in that part of the world, particularly, again, in 
Australia.
    Have you had an opportunity to factor in what kind of cost 
that might incur in terms of MILCON facilities that might be 
needed to accommodate this new direction? I know it's very 
early in the process, but where are you on that?

                      OVERSEAS MILCON REQUIREMENTS

    Ms. Pfannenstiel. I think you made exactly the right point. 
It's early in the process. On some of these, we do have some 
requirements built in. For example, for Guam, we anticipate 
some expenses, as well as some of what Admiral Boone mentioned.
    In Singapore, for example, where we know there is a 
movement, a lot of the specifics will depend on further 
development of the Pacific posture.
    Senator Coats. General, anything you want to add to that?
    General Kessler. Yes, sir. Thank you. And I agree with 
everything Ms. Pfannenstiel just said. It is a bit early to 
know the details that are specific to the Defense Policy Review 
Initiative adjustments. We know, in general terms, that we'll 
have roughly 5,000 marines on Guam, so we know, in general 
terms, what some of those things are. The specifics are yet to 
be worked out.
    But in addition to that, we also have other movements that 
aren't necessarily directly related to that. For example, we 
have two MV-22 squadrons and one Marine light attack helicopter 
(HMLA) squadron going to Hawaii. So we have some MILCON 
projects that are planned to accommodate the arrival of those 
squadrons.
    So there is, in some of the areas of our adjustment of our 
footprint in the Western Pacific some pretty good detail, and 
those exhibits, obviously, accompany the requests for MILCON. 
Those that are still being worked out with the negotiations, 
the bilateral negotiations, now we just don't have those 
details.
    Senator Coats. Specific to the rotational effort we're 
going to have--I think it's a conjunction with the 
Australians--are we just taking advantage of their facilities 
as part of that effort or do we have to construct new----
    General Kessler. You are correct, sir. We will be looking 
to colocate on an existing Australian facility. That is one of 
those areas where we don't know, at this time, the specific 
details of any potential MILCON. We've got to take a look to 
see if that's going to be necessary. It is not our plan at this 
time, though, to establish a wholly separate Marine Corps 
installation in North West Australia.
    Senator Coats. And admiral, I think there's some discussion 
now about a greater naval presence in that particular region of 
the world. Does that conjure up any kind of significant MILCON 
for the Navy?
    Admiral Boone. Thank you, Senator. As the general stated, 
the first piece is establishing what the force-structure 
requirements are and whether it's a permanent station or 
rotational forces. And that question drives, to a great extent, 
the impact on an installation and what the requirement is, and 
we're certainly working through that.
    The other piece that's critically important is once we 
determine where we would desire to be stationed out of, the 
host-nation agreements that we work through to establish what 
the relationship is critically important. So all that's being 
worked now, and so we'll definitize it as we sort through that.

                 BUDGET CONTROL ACT IMPACTS AND PLAN B

    Senator Coats. Madam Secretary, given the Budget Control 
Act that was passed by the Congress last August and the 
automatic sequester that takes place if we don't make 
adjustments before the end of the year, have you factored in--
do you have a plan B in terms of how does that affect MILCON 
going forward, because it's across-the-board cuts, so, if it 
goes into effect.
    Ms. Pfannenstiel. Yes, Senator. We do not yet have a plan 
B. We understand, as you do, that it would be an across the 
board, although again, even that is relatively uncertain at the 
time.
    We know perhaps, as others have told you that it could have 
catastrophic effects, depending on how it's applied. And so no, 
we have not yet developed our plan B.
    Senator Coats. I'd urge you to do so. I think there's 
bipartisan interest in trying to adjust that, but we don't 
always succeed in reaching our goals here. So it might be good 
to have something on the shelf, at least know what your impact 
on your particular----
    Ms. Pfannenstiel. Yes, absolutely. Thank you.
    Senator Coats. Last question, and this is a parochial one. 
We have a joint Navy-Army base in the middle of Indiana. It is 
on a lake, but it's not on an ocean, and so it's kind of 
foreign--I think it's a little familiar to the Army, but it's a 
little foreign to the Navy.
    But the Naval Surface Warfare Center there does some 
extraordinary work, but there's also a whole host of 
contractors that are working there doing special ops, 
electronic warfare, some really amazing things. I just wanted 
to bring it to your attention. Love to have you come and visit 
it.
    You will see water if you go, but you'll also see a 6,400-
acre base that employs a lot of engineers and highly skilled 
people, along with military doing some really special and 
interesting things, particularly important to the kind of 
future warfare that we're potentially looking at, all the 
electronics going on there.
    And so offer to any of the three of you an invitation to 
visit that facility. We just don't want it to be overlooked 
because it's landlocked. And with BRAC coming up and so forth, 
I think the value of that ought to be understood by all those 
in the business of making decisions.
    Ms. Pfannenstiel. Thank you, Senator. I will see if I can 
get out there. I'd love to.
    Senator Coats. Good. We'll give you a good visit. I think 
you'll enjoy it. That's open to the two of you also.
    Mr. Chairman, thank you.

                        GUAM MILCON REQUIREMENTS

    Senator Johnson. Secretary Pfannenstiel, the fiscal year 
2012 National Defense Authorization Act (NDAA) prohibits the 
Navy from obligating funds in Guam provided by the Government 
of Japan until certain roadmap conditions are met.
    Accordingly, I was recently informed that the Navy is 
canceling $455 million in Japanese-funded contract 
solicitations for four projects in Guam. Are there any 
additional projects that have been placed on hold or canceled 
in accordance with this language?
    Once the realignment roadmap agreement is reached, do you 
anticipate that these Japanese contributions will still be 
available for obligation?
    Ms. Pfannenstiel. First, Mr. Chairman, on the cancellation 
of the contracts, what that was was some bids that had been 
received under the Japanese-funded contracts. And the bids were 
expiring and we could either extend them, continue to extend 
them and, in some cases, they had already been extended--or 
close the bids, cancel those bids and then go back out.
    In terms of other contracts that will be canceled, I don't 
know of any that have been awarded or bids that have been 
solicited that would need to be canceled.
    The deeper question of when will we meet the conditions of 
the NDAA and therefore be able to move forward, we're working 
to meet those conditions now. We would hope to do so in the 
near future such that the condition will be lifted and we can 
move ahead.
    As for whether the Japanese dollars will be available to 
us, that's part of the negotiation that is ongoing with the 
Government of Japan.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. Thank you for your participation in this 
panel, and you may be excused.
    Ms. Pfannenstiel. Thank you, Mr. Chairman.
    [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. Jackalyne Pfannenstiel
               Questions Submitted by Senator Tim Johnson

                   U.S. NAVAL ROTATIONS TO AUSTRALIA

    Question. Secretary Pfannenstiel, in the subcommittee's hearing 
with the Department of Defense (DOD), the Department indicated that the 
Australians are interested in a U.S. Naval rotational presence. How 
would such a rotational presence be structured, and what MILCON needs 
would be required?
    Answer. The Department of the Navy (DON) is still developing how we 
will specifically support the Department of Defense's emphasis on the 
Asia-Pacific region in the future. As we determine our strategic 
laydown, infrastructure requirements and availability of host nation 
support, DON's infrastructure investments, including military 
construction, will be defined and included in future budget 
submissions. The Department of Navy will continue to inform your staff 
on the structure of the Naval rotational presence and the development 
of the MILCON requirements.

                             CAMP LEMONNIER

    Question. Secretary Pfannenstiel, the mission requirements of Camp 
Lemonnier have shifted over the past several years, and this has 
impacted the types of military construction we have undertaken at the 
base. Do you expect the mission to continue to shift? If so, are the 
requested and planned projects adaptable to our changing needs? What is 
the status of acquiring additional land to expand the footprint of Camp 
Lemonnier?
    Answer. Although it is always challenging to meet evolving 
requirements, Navy continues to work closely with applicable Combatant 
Commanders to perform necessary master planning efforts and ensure 
facilities can meet current and future infrastructure requirements. All 
four projects in Navy's fiscal year 2013 budget request support a wide 
range of operations at Camp Lemonnier and serve functions that are 
required independent of mission changes.
    We continue to investigate and evaluate the need for additional 
land and will include this information in the updated Camp Lemonnier 
Master Plan, which will be submitted to the Congressional Defense 
Committees by August 31, 2012.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk

                 AFRICOM INVOLVEMENT IN CAMP LEMONNIER

    Question. Ms. Pfannenstiel, our staffs have been working 
unsuccessfully for over 2 years with your staff trying to lockdown a 
construction master plan for Camp Lemonnier. I know the Navy is the 
executive agent for the camp and is responsible for the construction 
plans, and I also know the operational requirements from the Combatant 
Commands, most especially AFRICOM, change at a rapid rate, making this 
task seemingly impossible.
    Department of Defense doctrine dictates that the executive agent 
must provide support for the Combatant Commands, but I would like to 
ask about the unique nature of this particular location. Camp Lemonnier 
is vital to our national security and is used by four different 
commands, and as such may deserve special consideration.
    Ms. Pfannenstiel, in light of the special circumstances and 
uniqueness of Camp Lemonnier, would it be helpful to all concerned if 
the Secretary of Defense directly tasked the AFRICOM Commander to 
assume more responsibility for the camp since it is in its Area of 
Responsibility (AOR)? For example, the AFRICOM Commander, in 
consultation with the Department of the Navy, shall direct and sign a 
Construction Master Plan for Camp Lemonnier? Your thoughts on this 
would be most appreciated.
    Answer. No. The roles and responsibilities of Combatant Commanders 
and Services are clearly defined by law and Department of Defense 
policy. At this time we do not believe an exception for Camp Lemonnier 
is necessary.
    Although it is always challenging to capture evolving requirements 
in a concise Master Plan, Navy continues to work closely with 
applicable Combatant Commanders to perform necessary master planning 
efforts.
    We have nearly completed the extensive facilities planning effort 
to support current and emerging Combatant Commander requirements at 
Camp Lemonnier. We intend to submit an updated Camp Lemonnier Master 
Plan, to the Congressional Defense Committees by August 31, 2012.

                                BAHRAIN

    Question. Ms. Pfannenstiel, the Secretary of Defense has announced 
that as part of the new force posture realignment in the Middle East 
new or additional combat ships will be stationed in Bahrain, a very 
important location for U.S. forces. Would you please tell us what the 
MILCON requirements will be for these additional combat ships and any 
other missions you might be putting at our facilities in Bahrain?
    Answer. [A response was not provided.]

                     General/Flag Officer Quarters

    Question. Ms. Pfannenstiel, the Navy reports only nine flag office 
quarters will exceed the $35,000 annual cost cap, but the most 
noteworthy flag officer quarters exceeding this amount is in Naples, 
Italy. Villa Nike is an 11,322 square foot house and the operating 
budget request for this house in 2013 is $433,500 ($84,800 for 
management services, $116,200 for utilities, and $232,500 for 
maintenance and repair).
    Ms. Pfannenstiel, would you please provide the justification for 
the Villa Nike property at Naples, Italy; any alternatives that would 
be more economical to the taxpayer; and a detailed list of expenses, 
particularly the $84,000 cost for ``management services'', $88,000 for 
china and furniture, and any other projects that justify the $433,500 
annual cost?
    Answer. [A response was not provided.]
                                 ______
                                 
              Questions Submitted by Senator Daniel Coats

                        MILCON DECISION PROCESS

    Question. In recent years the Navy has changed how it makes 
decisions on funding for military construction projects as well as the 
process for deciding what gets input to the Future Years Defense Plan 
(FYDP). How has this impacted the major commands like the Naval Sea 
Systems Command, Space and Naval Warfare Systems Command, and Naval Air 
Systems Command and their requests for new facilities? Who is making 
the decision and does the activity/installation command have any say or 
``vote'' in the process?
    Answer. Prior to our fiscal year 2010 budget, the MILCON process 
used a bottom-up, advocacy-based shore investment strategy.
    Today, the Navy uses a deliberate, capabilities-based process that 
holistically integrates warfare enterprises' and providers' 
requirements. This new process prioritizes required capabilities and 
ensures they are provided at the proper time. It converts the Chief of 
Naval Operations' (CNO's) guidance into an analytical and objective 
model that accounts for Strategic Alignment and Guiding Principles; 
Mission Dependency; and Facility Conditions. As a result, our MILCON 
program ensures support of fielding new systems/platforms, critical war 
fighting requirements, Quality of Life/Quality of Service initiatives, 
and infrastructure recapitalization.
    The Systems Commands, like all other Navy commands, absolutely have 
a voice in the MILCON process. The CNO ultimately makes decisions by 
balancing risk across the Navy to provide the most capability within 
fiscal constraints.

                        CAPABILITY CONSOLIDATION

    Question. Has the Navy considered consolidation of capabilities of 
mission areas, such as electronic warfare, to move more work to 
facilities that have the capability and capacity to receive increased 
workload and personnel?
    Answer. The Navy continually seeks out and evaluates opportunities 
to improve delivery to the warfighter through efficiency and cost 
improvements, while ensuring that national security needs and statutory 
requirements are met.

                    ENVIRONMENTAL PERMITTING PROCESS

    Question. The Navy stood up Commander, Naval Installations Command 
(CNIC) in 2004 and regionalized the facility maintenance and base 
ownership functions. This has resulted in a command that does not have 
a direct tie to the mission of Working Capital Funded (WCF) commands 
like NSWC Crane and does not appear to appreciate the full impact 
regionalization has had, or can have, on the mission of supporting the 
warfighter with the tools needed to perform their role. An effort is 
underway to force Working Capital Funded commands to relinquish control 
of environmental permits for hazardous operations and processes to the 
CNIC/NSA host command. There is growing concern about the financial 
impact as well as the mission impact of this methodology. How does a 
Working Capital Funded activity ensure the proper permits are 
maintained, and processes monitored, to allow them to perform their 
required functions? How do you justify the additional cost to Working 
Capital Funded customers of having someone else control and monitor the 
permits?
    Answer. CNIC and NAVFAC resource and manage complex environmental 
programs at over 70 installations world-wide with a track record of 
maintaining high-quality environmental compliance programs, despite 
current fiscal challenges. Commander, Navy Installations Command (CNIC) 
was established and authorized to improve shore installations 
management to mission tenants across the Navy. NAVFAC, CNIC, and 
Installation Commanders fully understand the importance of maintaining 
environmental compliance. This responsibility includes legal compliance 
at the installation and successfully performing environmental 
compliance functions to support all tenants, including many Working 
Capital Funded commands.
    In most situations, the Commanding Officer of the host command is 
responsible for obtaining and maintaining required permits and as the 
permit owner is responsible for ensuring compliance with all permit 
conditions. The host command coordinates permit conditions with all 
affected tenant commands and ensures that responsibilities related to 
environmental and natural resources program permits are addressed in 
host/tenant agreements. The Installation Commanding Officer has a 
number of forums and opportunities to communicate, to coordinate and to 
interface with tenant organizations' leadership so all understand 
requirements and expectations.
    The planned realignment of permits at Crane is based on a careful 
and detailed study of responsibilities that was mutually performed by 
the installation, NAVFAC, and NSWC Crane. The financial impacts of 
realigning environmental support at Crane have been carefully analyzed 
jointly by the installation, NAVFAC, and NSWC Crane and will not add 
costs to NSWC Crane customers.

                        DAVIS-BACON REQUIREMENTS

    Question. If Davis-Bacon was waived, how much money would it save 
the Department of the Navy's MILCON program?
    Answer.\1\ The Department of the Navy does not expect any savings, 
principally because our installations reside primarily where the 
prevailing wages paid by contractors are at or above the D-B rates. The 
likely effects on bids on DON construction in other locations are 
unknown but are estimated to be minimal because bid savings are driven 
more by broader economic conditions within the industry, such as 
availability of resources, material prices, prices for capital, design 
considerations, acquisition methods, and competition.
---------------------------------------------------------------------------
    \1\ The response was approved by Mr. Roger Natsuhara.
---------------------------------------------------------------------------
                                 ______
                                 
           Questions Submitted to Major General James Kessler
               Questions Submitted by Senator Tim Johnson

                    USMC FORCE STRUCTURE REALIGNMENT

    Question. Major General Kessler, it is my understanding that under 
the revised plans for relocating 8,700 marines from Okinawa, a 
contingent will be based in Hawaii. How many marines will be moving to 
Hawaii? Are there currently adequate facilities in Hawaii for these 
additional marines and/or their families?
    Answer. According to the United States (U.S.)-Government of Japan 
(GOJ) Joint Statement of the Security Consultative Committee dated 
April 27, 2012, the United States plans to locate Marine Air-Ground 
Task Forces (MAGTF) in Hawaii, along with Okinawa and Guam. The Joint 
Statement also acknowledged that the United States informed GOJ that 
U.S. Marines will move to Hawaii to enhance operational capability 
there. However, detailed force structure moves and numbers have not 
been decided. A final decision on the number of marines potentially 
moving to Hawaii will be informed by a full planning analysis that 
would evaluate, among other topics, environmental, cultural resources, 
socioeconomic, off-base infrastructure, and facility impact. Detailed 
relocation numbers will be announced after completion of planning 
analysis.

                            USMC RELOCATION

    Question. Major General Kessler, can you add specifics regarding 
where the rest of the marines will be going and whether they will be 
accompanied or unaccompanied tours?
    Answer. A final decision on lay down of Marine forces in the 
Pacific has not been determined.
                      Department of the Air Force

STATEMENT OF HON. TERRY A. YONKERS, ASSISTANT SECRETARY 
            FOR INSTALLATIONS, ENVIRONMENT, AND 
            LOGISTICS
ACCOMPANIED BY:
        KATHLEEN I. FERGUSON, DEPUTY ASSISTANT SECRETARY OF THE AIR 
            FORCE FOR INSTALLATIONS
        MAJOR GENERAL WILLIAM H. ETTER, DEPUTY DIRECTOR, AIR NATIONAL 
            GUARD
        MAJOR GENERAL JAMES JACKSON, DEPUTY CHIEF, AIR FORCE RESERVE

    Senator Johnson. I'm pleased to welcome our second panel of 
witnesses, Secretary Terry Yonkers, Assistant Secretary of the 
Air Force for Installations, Environment and Logistics; Ms. 
Kathleen Ferguson, Deputy Assistant Secretary of the Air Force 
for Installations; Major General William Etter, Deputy 
Director, Air National Guard; and Major General James Jackson, 
Deputy Chief, Air Force Reserve.
    This year's military construction and family housing budget 
request by the Air Force is frankly astonishing, a full 67 
percent below fiscal year 2012. The request for Active 
component MILCON is only $388 million as compared to $1.3 
billion last year. I'm confident that the requirements haven't 
dropped that much.
    I understand that the Air Force has taken what it considers 
to be a deliberate pause in military construction in light of 
the current budget constraints. But I'm concerned that MILCON 
funding, especially investments in current mission 
requirements, is being used to offset investments in other 
areas, such as weapons systems.
    MILCON is a very small part of the overall defense budget, 
but to our military members and their families, it is a very 
important investment. We recognize that MILCON investment in 
new mission requirements is critical, but it should not come at 
the expense of displacing urgent current mission requirements 
to be placed in inadequate or failing facilities.
    I'm especially concerned with the fiscal year 2013 MILCON 
request for the Air Force Reserve. The request of $10.9 million 
funds only one project. Considering the importance of 
supporting a total integrated force, it is disturbing to me 
that the MILCON request for the Air Force Reserve is barely 2 
percent of the total Air Force military construction request.
    I understand that times are tough, but I believe that 
adequate funding for military construction for Active as well 
as Reserve components is vital to the well-being of our troops 
and their families.
    I thank our witnesses for coming today and will look 
forward to your testimony. Your full statements will be entered 
into the record, so I encourage you to summarize them to leave 
more time for questions.
    Secretary Yonkers, please proceed.

                   STATEMENT OF HON. TERRY A. YONKERS

    Mr. Yonkers. Thank you, Mr. Chairman and Senator Tester. 
Good morning and thanks for having us here today to be able to 
talk to you about our Air Force installation military 
construction programs and to say thank you again to this 
subcommittee for your unwavering support of our airmen and 
their families.
    Our fiscal year 2013 budget request responds to two main 
drivers, the Budget Control Act that the Congress put into 
place last year, and of course, the new strategic defense 
policy the President and Secretary Panetta announced in 
January.
    As we prepared the fiscal year 2013 budget, we looked 
across the entire Air Force portfolio and made some very 
difficult decisions to achieve the Air Force's share of that 
$487 billion in the Budget Control Act.
    In our installations and military construction portfolios, 
we're focusing on investments in the critical infrastructure 
needed to sustain our installations and the quality-of-life 
improvements for our airmen and their families.
    We're requesting funding to meet the Combatant Commanders 
most critical facility requirements and most urgent facility 
modifications to bed down and sustain new weapons systems, such 
as the joint strike fighter, MQ-9 remotely piloted aircraft 
(RPA) and the standup of an additional B-52 squadron at Minot 
Air Force Base in North Dakota.
    We are ever cognizant of the smart investments that will 
drive down our cost of doing business. And we're requesting 
over $300 million this budget year to reduce our energy 
footprint by demolishing old, inefficient buildings and 
upgrading heating, ventilation, and cooling (HVAC) and other 
high-energy-use systems, investments that will have tangible 
payback across the Future Years Defense Program.
    Across our energy program, we're requesting $530 million in 
fiscal year 2013, the $215 million I already mentioned and $315 
million more in science and technology to develop more energy-
efficient jet engines and to complete our certification of the 
aircraft to fly on alternative fuels.
    Our fiscal year 2013 budget contains $3.9 billion for 
military construction, family housing and facilities 
sustainment, restoration and modernization. For military 
construction we are, in fact, requesting $442 million, which is 
$900 million less than fiscal year 2012.
    We're channeling our limited resources to fund our most 
urgent Combatant Commander needs, our most pressing new mission 
work in continuing our efforts to take care of our airmen. This 
deliberate pause in our program is prudent in light of force 
structure decisions stemming from the new defense strategic 
guidance.
    For this year, we have made a deliberate effort to build 
only where existing capacity is not available or where the 
cost-benefit analysis validates demolishing aging facilities 
and construction of more efficient and functional replacements.
    In our fiscal year 2013 budget request, we are also 
continuing to emphasize first-class housing and strive to 
improve the overall quality of life for our airmen. Our new 
2012 to 2016 dormitory master plan will guide our future 
investments for sustaining existing facilities and 
recapitalizing those which are inadequate.
    As we progress through 2012, we are nearing completion of 
our efforts to privatize family housing in the continental 
United States and to renovate family housing overseas, 
especially in Japan.
    Our fiscal year 2013 budget request for military family 
housing is $580 million. The funding is going to be used to 
improve more than 400 homes and infrastructure, such as 
utilities and water and sewer systems at a couple of Japanese 
bases.
    On September 15, 2011, the Air Force successfully completed 
its BRAC 2005 realignment and closure program on time and 
within the original $3.8 billion budgeted that was approved by 
Congress. The upfront BRAC investment is now resulting in $1.4 
billion in annual savings to the Department.
    With that being said, I must say that the BRAC 2005 fell 
short in terms of reducing the Air Force's excess installation 
capacity. The 2004 Secretary of Defense report provided to 
Congress showed that the Air Force was 24 percent over capacity 
and would expect similar findings if we conducted that analysis 
today.

                           PREPARED STATEMENT

    So that is my opening remarks. I want to thank, again, the 
subcommittee for your support of our airmen and their families. 
And I look forward to any questions that you may have.
    [The statement follows:]

              Prepared Statement of Hon. Terry A. Yonkers

                              INTRODUCTION

    The United States is in the midst of a deliberate evolution in the 
role of the military in achieving our national interests. This 
evolution is shaped by a dynamic geo-strategic environment, uncertain 
economic circumstances, and the diffusion of regional centers of 
influence. In order to effectively deal with this new paradigm, the 
Department of Defense issued new Strategic Guidance which focuses our 
limited resources on deterring and defeating aggression across all 
domains, maintaining a safe and effective nuclear deterrent, and 
protecting the homeland, while reducing the quantity of our forces to 
ensure the quality of our force.
    The United States Air Force plays an integral role in this refined 
guidance, and we have taken care to protect the distinctive 
capabilities we provide every day to our Joint, Interagency, and 
Coalition partners. These enduring capabilities include control of air, 
space, and cyberspace; providing global intelligence, surveillance, and 
reconnaissance; rapidly moving people and materiel around the planet; 
and holding targets at risk--anytime and anywhere.
    Difficult decisions were made to achieve the Air Force's share of 
the $487 billion in defense savings mandated by the Budget Control Act 
of 2011. These decisions fell into five broad categories: Force 
Structure, Readiness, Modernization, More Disciplined Use of Defense 
Dollars, and Taking Care of Our People. These five focus areas were 
integral to the allocation of the resources entrusted to us by the 
taxpayer.
    Within the portfolio of Installations, Environment, & Energy we 
focused investments in critical installation facilities and 
infrastructure and quality of life improvements for our airmen and 
families; reducing our energy footprint by demolishing old, energy 
inefficient buildings and upgrading HVAC and other high energy use 
systems and continuing to build on our excellence in environment, 
safety, and occupational health across our Air Force.
    The Air Force is striving to identify opportunities and initiatives 
in each of the above areas that will enable us to maximize the impact 
of every dollar we are given with an eye of every investment have a 
return on those dollars. We are reevaluating how we can improve the way 
we manage our military construction, housing, real estate, 
environmental, and energy portfolios by centralizing these functions 
and services into a single Field Operating Agency. By doing so, we are 
substantially reducing manpower and overhead costs, streamlining 
processes and decisionmaking and centralizing program management and 
accountability under one agency.
    As funding for military construction becomes more austere we have 
made a deliberate effort to build only where existing capacity is not 
available or where the cost-benefit analysis validates demolishing 
aging facilities in lieu of more efficient and functional replacements. 
Since 2008, we have demolished 23 million square feet of building space 
with an estimated savings of $184 million. Furthermore, we are re-
evaluating our policies and contracting mechanisms in the areas of 
military construction and environmental cleanup with the objective of 
reducing construction and environmental costs.
    As we work our way through the current fiscal challenges the Air 
Force is committed to charting a path that fulfills the promises made 
to the American people today and in the future while staying true to 
our airmen and their families.

                             INSTALLATIONS

Military Construction
    Our fiscal year 2013 President's budget request contains $3.9 
billion for military construction, military family housing, and 
facility sustainment, restoration, and modernization. For military 
construction we request $442 million, $900 million less than fiscal 
year 2012. This deliberate pause in our program is prudent in light of 
force structure decisions stemming from the new Defense Strategic 
Guidance.
    Our most critical projects are captured in this request and align 
with our priorities of continuing to strengthen the nuclear enterprise, 
partnering with the Joint and Coalition team to win today's fight, 
developing and caring for our airmen and their families, modernizing 
our air, space, and cyber inventories, organizations, and training, and 
recapturing acquisition excellence. Removal of the C-27 program is one 
example of how force structure decisions have affected our fiscal year 
2013 military construction program and the corollary elimination of 
facilities that would otherwise be needed to support the C-27 aircraft 
here in the continental United States.
    We are accepting minor risk by electing to wait a year to fund 
current mission requirements, channeling the limited funds we have 
requested to fund Combatant Commander and new mission needs--especially 
facilities needed to bed-down the Joint Strike Fighter. And while we 
strove to fund our Active, Guard, and Reserve components in accordance 
with their equity in built infrastructure, the combination of austere 
funding and how the components derived their priorities led to a small 
shortfall in the Air Force Reserve.
    We continue to stay focused on the needs of our airmen and their 
families and are requesting nearly $500 million to sustain and 
modernize our overseas housing, while supporting housing privatization 
here in the United States. Unaccompanied airmen, likewise remain a top 
priority and we are requesting $118 million to build new dormitories or 
upgrade existing dorms to the Air Force standard--keeping us on track 
to meet our goal of eliminating inadequate housing for unaccompanied 
airmen by 2017.
    Finally, we request restoration and modernization funding at 90 
percent of historical levels, and sustainment funding at slightly over 
80 percent of the OSD model. For the first time in the Air Force, 
restoration and modernization funds will be centrally managed giving us 
the ability to prioritize new requirements across the enterprise while 
improving our ability to forecast where sustainment dollars should be 
invested to minimize risk in infrastructure maintenance and emergency 
repairs. This ``Asset Management'' approach to facility and 
infrastructure management is adopted from industry best practices--
where industry has realized double digit savings. We expect to achieve 
similar results and are confident that by centralizing our management 
we can sustain our air bases on the dollars we have requested in this 
budget.

Continue To Strengthen the Nuclear Enterprise
    The Air Force boasts a legacy of stewardship for two-thirds of the 
Nation's Nuclear Triad, providing security and maintenance for the 
weapons that enable a safe and effective deterrent. Accordingly, our 
number one priority remains the strengthening of the nuclear 
enterprise, with a continued focus on reliability, accountability, and 
compliance from the men and women who fly the bombers and man the 
missile silos in a state of constant vigilance. The fiscal year 2013 
budget request supports the stand-up of an additional B-52 squadron at 
Minot Air Force Base, North Dakota, with a $4.6 million munitions 
equipment maintenance facility addition.

Partner With the Joint and Coalition Team To Win Today's Fight
    The Air Force continues to be an indispensable member of the Joint 
team as our airmen make significant contributions in controlling the 
domains of air and space, providing unprecedented advantages in 
intelligence, surveillance, and reconnaissance, moving people and cargo 
around the world, and providing the ability to hold at risk any target 
on Earth. We currently have more than 35,000 airmen deployed, including 
nearly 2,300 Air Force civil engineers. In particular, our Air Force 
Rapid Engineer Deployable Heavy Operational and Repair Squadron 
Engineers (RED HORSE) and our Prime Base Engineer Emergency Force 
(Prime BEEF) personnel are the recognized experts in providing 
installation engineering and airfield capabilities to the warfighter. 
Red Horse assets are in high demand by Combatant Commands in deployed 
locations.
    Our fiscal year 2013 budget request invests $193.3 million in 
projects that support our Joint partners around the world. Examples 
include:
  --Projects Supporting Our Combatant Commanders That Will Greatly 
        Enhance Ongoing Operations.--This includes the recapitalization 
        of Headquarters, United States Strategic Command at Offutt Air 
        Force Base, Nebraska.
  --New Facilities for Operations and Mission Support.--An expanded air 
        support operations facility at Fort Stewart, Georgia, will 
        allow us to consolidate personnel on the same installation as 
        their Joint partners, enabling the synergistic effects of 
        training, working, and living together.
  --Intelligence, Surveillance, and Reconnaissance Facilities.--The new 
        MQ-9 maintenance hangar at Holloman Air Force Base, New Mexico, 
        will provide adequate cover to work on this sensitive aircraft 
        under any weather condition or any hour of the day--ensuring 
        the training needs of aircrews are met.

Develop and Care for Airmen and Their Families
    The all-volunteer force is the foundation of the capabilities we 
contribute to the defense of the Nation. In our fiscal year 2013 budget 
request we continue to emphasize providing first-class housing and 
striving to improve the overall quality of life for our airmen and 
their families. Our new 2012-2016 Dormitory Master Plan will guide our 
future investments for sustaining existing facilities and 
recapitalizing those which are inadequate.

Billeting
    As part of our basing efficiencies initiative, we propose 
construction of a $17.6 million transient contingency dormitory to 
house personnel supporting rotational aircraft transiting through 
Europe. This project, when coupled with the elimination of the host 
nation maintenance contract and real property consolidation, has a 
payback period of only 2 years.

Dormitories
    The Air Force continues to place a high priority on quality housing 
for our unaccompanied airmen. Our fiscal year 2013 budget request 
includes two dormitory projects totaling $42.5 million. One of these 
projects is located at Joint Base San Antonio, Texas, replacing an 
inadequate facility with severe infrastructure problems and 
historically high sustainment costs. The other, at Thule Air Base, 
Greenland, replaces an inadequate 58-year-old building and is also the 
lynchpin of consolidation efforts at Thule that will provide a payback 
in 3 years. This initiative will reduce energy use by 35 percent and is 
estimated to save $20 million annually.

Military Family Housing
    As we progress through 2012, we are nearing completion of our 
efforts to privatize family housing in the continental United States. 
This allows us to deliver high-quality homes to our members faster than 
ever before, and at significant savings to the taxpayer. Our fiscal 
year 2013 budget request for military family housing is $580 million. 
Included in this request is $84 million to improve 400 homes and 
upgrade infrastructure in Japan, as well as nearly $500 million to fund 
operations, maintenance, utilities, and leases, and to manage 
privatized units for the family housing program.

Modernize Our Air, Space, and Cyberspace Inventories, Organizations, 
        and Training
    Even in the face of declining budgets, we must continue to 
modernize our force to meet the Nation's requirements. Although the 
pace and scope of this modernization will slow, we must protect 
programs that are critical to future warfighter needs. Our fiscal year 
2013 request continues to invest in the beddown of new weapons systems. 
We request $93.5 million for a variety of military construction 
projects, including:
  --Three Projects To Continue the Bed Down of Our Newest Fighter, the 
        F-35.--These projects provide facilities at Hill Air Force 
        Base, Utah, for the first operational F-35 unit, which is 
        scheduled to begin receiving aircraft in 2015.
  --Three Projects Supporting Our HC/C-130J Fleet.--These projects 
        include a fuel systems maintenance hangar at Little Rock Air 
        Force Base, Arkansas, and flight simulators at Little Rock Air 
        Force Base and Moody Air Force Base, Georgia.
  --Other Projects.--These will support diverse mission areas, 
        including F-22 support at Tyndall Air Force Base, Florida, F-16 
        training at Aviano Air Base, Italy, and the overseas basing 
        efficiencies discussed previously, which are projected to save 
        up to $120 million across the FYDP.

Base Realignment and Closure
    On September 15, 2011, the Air Force completed its 2005 Base 
Realignment and Closure (BRAC) program on time and within its original 
$3.8 billion budget. This up-front Air Force BRAC investment has 
resulted in $900 million in annual savings to the Department of Defense 
that are being reinvested in emerging missions starting in fiscal year 
2013. During the 6-year implementation period of BRAC 2005, the Air 
Force implemented 64 base closure commission recommendations affecting 
122 installations, closing 7 installations and realigning 63 others.
    Even so, BRAC 2005 fell short of the Air Force goal to reduce 
overhead and operational costs by reducing excess installation 
capacity. Today, 7 years later with almost 500 fewer aircraft in the 
inventory, the Air Force continues to maintain large amounts of excess 
infrastructure that is costing hundreds of millions of dollars each 
year--dollars that we need to invest in other areas. The Air Force has 
over 24 percent excess installation capacity (DOD's 2004 Report to 
Congress). This excess capacity can only be effectively eliminated by 
closing installations. As such, we fully support the Secretary of 
Defense's request for two more rounds of base closures in 2013 and 2015 
to right-size our infrastructure and reduce our overhead and operating 
costs. We need Congress' help and support--we can't do BRAC if you're 
not in our corner on this. Without the ability to consolidate and close 
bases, the Air Force will be forced to make harder choices in the 
future that will degrade our ability to invest in those assets that 
directly affect our ability to defend this Nation.

Joint Basing
    As the Air Force emerges from its first full year of joint basing, 
we remain committed to providing superior and standardized installation 
support to our sister Services. Efficiencies were always expected from 
consolidation of the Joint Bases--this year we will realize a small 
return of that investment--about 500 personnel across those Joint Bases 
for which the Air Force has operational responsibility. We continue to 
assess our processes and information systems, services support, and 
other key areas to garner greater savings from our Joint Bases. In 
fiscal year 2011, we met 88 percent of the Office of the Secretary of 
Defense (OSD) Tri-Service standards, and will continue to increase the 
effectiveness in which we provide installation support while lowering 
costs in fiscal year 2013.

Encroachment Management
    The Air Force has taken a leadership role in developing 
encroachment management and compatible land use policies--and 
coordinating these efforts with communities around our installations. 
As a follow-on to the Nevada Forum, in January 2011, the Air Force on 
behalf of OSD, hosted a key interagency meeting aimed at finding ways 
to ``clear'' renewable energy projects that had no or little impact to 
military operations. Those efforts culminated in a cross-functional 
team and the DOD's Siting Clearinghouse policy and subsequent Air Force 
policy. In the last year we reviewed and ``cleared'' 486 Energy 
Projects.

Privatized Housing
    We remain committed to providing quality housing to our airmen and 
their families. Under the housing privatization initiative, $485 
million in Government funding has garnered $7.85 billion in private 
sector funding thus far, providing quality homes to our airmen and 
their families much more quickly than our standard military 
construction process. Approximately 41,500 units at 48 bases have been 
privatized to date, which is 76 percent of our housing inventory in the 
continental United States (CONUS), Alaska, and Hawaii. In addition, 
more than 37,000 inadequate units have been eliminated. Our goal is to 
privatize all CONUS housing by closing the remaining four privatization 
projects in 2012, which will result in 53,800 privatized homes across 
the Air Force portfolio.

Enhanced Use Leasing
    The Air Force continually seeks to improve our stewardship of real 
estate assets and to leverage appropriated dollars with investments 
from the private sector. With the authorities provided to execute 
enhanced use leases (EUL), we're pursuing innovative ways to leverage 
our unused real estate to return value from our installations. The Air 
Force has set a goal of unlocking $5 billion in net present value from 
EULs through fiscal year 2020. In pursuit of this goal, we've executed 
nine leases with a net present value of $233 million and are close to 
completing a comprehensive survey of all Air Force installations to 
identify non-excess real estate assets that could be put to use to 
generate revenue to meet installation requirements.
    As we pursue EULs our intent is to extract the greatest value 
possible for the asset, and in the current environment renewable energy 
projects provide significant opportunities. Today, the Air Force is 
actively pursuing 11 projects valued at about $700 million, 7 of which 
are related to renewable energy. We've identified another 21 
opportunities and have developed a set of initiatives to determine 
where market demand aligns with our available assets to create 
additional EUL opportunities.

                                 ENERGY

    Energy and energy security is the corner stone of the Air Force's 
ability to maintain global vigilance, reach, and power at home and 
abroad. The Air Force defines energy security as ``having assured 
access to reliable supplies of energy and the ability to protect and 
deliver sufficient energy to meet operational needs.'' To enhance its 
energy security, the Air Force has developed a three-part strategy:
  --Reduce energy demand through conservation and efficiency;
  --Increase renewable and alternative energy sources; and
  --Ensure the culture of the Air Force recognizes the necessity and 
        criticality of energy to its operations.
    We have set a number of aggressive goals across our entire 
portfolio--goals that, if met, will help us avoid over $1 billion a 
year (based on today's energy prices) and improve energy security for 
our critical assets.

Budget Impact
    The Air Force is the largest single consumer of energy in the 
Federal Government and as energy costs increase and budgets decrease, 
this means that energy is consuming a greater proportion of the Air 
Force budget. In fiscal year 2010, the Air Force spent $8.2 billion for 
fuel and electricity, an amount that increased to $9.7 billion in 
fiscal year 2011 due primarily to the increased cost of crude oil. 
Ironically, our demand for both fuel and electricity was down over the 
same period.
    At our installations, the Air Force spent more than $1 billion for 
facility energy in both fiscal year 2010 and fiscal year 2011. However, 
as a result of the initiatives put in place over the last 8 years, the 
Air Force avoided over $250 million in additional facility energy costs 
in fiscal year 2011 alone.
    In the fiscal year 2013 President's budget, the Air Force is 
requesting more than $530 million for aviation, infrastructure, and 
RDT&E energy initiatives to reduce energy demand, improve energy 
efficiency, diversify supply, and improve mission effectiveness. 
Included in this request is $215 million for energy conservation 
projects on Air Force installations, a continuation of the nearly $800 
million we have invested in such projects over the last 4 years.

Energy Conservation
    Overall, our focus is to reduce our energy footprint across all 
operations. While we have reduced our overall facility energy 
consumption since fiscal year 2003 by nearly 20 percent, and reduced 
energy intensity by more than 16 percent, installation energy costs 
have increased by 32 percent over that same period. The Air Force is on 
track to reduce its energy intensity by 37.5 percent by 2020 and 
increase its renewable energy use to reach 25 percent by 2025.
    As a result of our energy conservation efforts, we have 
cumulatively avoided over $1.1 billion in facility energy costs since 
2003 that can be redirected to better enable warfighters to complete 
their missions. Investments we are making in fiscal year 2012 to 
improve our facility energy efficiency and reduce our energy 
requirement are expected to start generating savings in fiscal year 
2014, and the majority are expected to payback before or just shortly 
after the FYDP.
    The Energy Conservation Investment Program (ECIP) is a critical 
element of the Air Force's strategy to improve the energy performance 
of its permanent installations. In fiscal year 2011, we completed 15 
ECIP projects at a cost of under $20 million. The Air Force estimates 
these projects will save more than 253,000 million British thermal 
units (MBTUs) annually and nearly $54 million over the life of the 
projects. We have submitted six projects to OSD for inclusion in the 
fiscal year 2012 ECIP program. If funded, these projects will save over 
213 billion BTUs.
    The Air Force is also looking to reduce demand by building in 
smarter ways, including maximizing energy efficiency and using 
environmentally friendly materials, and identifying and demolishing 20 
percent of our old, unnecessary, and high-energy use facilities by 
2020.

Renewable Energy
    The Air Force is looking to improve its energy security and 
diversify its energy supply through increased use of renewable energy. 
In fiscal year 2011, more than 6 percent of the electrical energy used 
by the Air Force was produced from renewable sources. Moving forward, 
our goal is to develop more than 1,000 megawatts (MW) of renewable 
power, including more than 600MW from solar, on our installations by 
2016. By making the most of private sector knowledge, technology, and 
financing, we plan to improve our energy security by capitalizing on 
underutilized land on our installations to develop those projects. 
Currently, the Air Force has 131 operational renewable energy projects 
and another 50 under construction across a wide variety of renewable 
energy sources, including 8.7MW from wind energy, 26.2MW from solar, 
and 2.4MW from waste-to-energy projects.
    In fiscal year 2011, the Air Force had 46 projects funded through 
the MILCON appropriation with at least one renewable energy component, 
such as solar photovoltaic systems or cool roof attributes.
    The Air Force is not just limiting its efforts to renewable energy 
projects, but is also incorporating alternative fueled ground vehicles 
into our fleet. With the support of other private and public 
stakeholders, the Air Force is currently working to develop an all 
plug-in electric vehicle fleet at Los Angeles Air Force Base, 
California. When the initiative is completed later this year, Los 
Angeles Air Force Base will be the first Federal facility to replace 
100 percent of its general-purpose vehicle fleet with plug-in electric 
vehicles. By working with OSD and our Sister Services, we have 
identified 15 other potential locations where such vehicles will 
support the mission and improve our energy security. We will use the 
lessons learned at Los Angeles Air Force Base to continue to refine the 
business case and operational analyses to determine where best to 
employ electric vehicles.

Third-Party Financing
    While the Air Force has made considerable progress to reduce our 
energy demands and increase our energy diversity, there is still more 
to do. The Air Force is aggressively pursuing a third-party financing 
approach for both renewable and energy conservation projects.
    Direct Air Force renewable energy project funding through Air Force 
capital sources is rarely cost-effective when compared to commercial 
utility rates. To address this, the Air Force is using existing 
authorities, such as EULs and Power Purchase Agreements, to attract 
private industry to develop renewable energy projects on underutilized 
land on Air Force installations. The Air Force is anticipating third-
party investments could reach more than $1 billion over the next 5 
years to construct on-base renewable projects, while we plan to invest 
only $5-$8 million for renewable projects over the same period. The Air 
Force has set a goal to identify $5 billion worth of EULs and over half 
of this value will be energy EULs.
    The Air Force is reinvigorating third-party financing to fund 
energy conservation projects through energy savings performance 
contracts (ESPC) and utility energy service contracts (UESC). The Air 
Force is targeting over $260 million in potential ESPCs and UESCs over 
the next 2 years. While the Air Force did not award any third-party 
financed projects in fiscal year 2011, we anticipate awarding six such 
projects in fiscal year 2012 that would save approximately 1.1 million 
MBTUs, and are evaluating three projects for fiscal year 2013.

                             ENVIRONMENTAL

    Our environmental programs are designed to provide the mission-
ready people, infrastructure, and natural resources necessary to meet 
today's and tomorrow's mission requirements. The Air Force is committed 
to conducting our operations in an environmentally responsible way; 
meeting all environmental standards and legal obligations applicable to 
these operations; planning future activities to consider environmental 
and community impacts, and minimize them where practicable; eliminating 
pollution from activities wherever and whenever we can; cleaning up 
environmental damage resulting from past activities; and responsibly 
managing our irreplaceable natural and cultural resources in a 
sustainable manner. To address these commitments, the Air Force's 
fiscal year 2013 President's budget request seeks just over $1.1 
billion for our environmental programs.
    In meeting our environmental commitments, the Air Force is re-
emphasizing improved efficiency and effectiveness as necessary outcomes 
for program management and for a host of process improvement efforts we 
have underway. Following are only a few examples of the initiatives we 
are championing.

Environmental Restoration
    Our fiscal year 2013 President's budget request seeks $529 million 
for cleanup of active installations, and $115 million for cleanup of 
BRAC installations. We established our cleanup program in 1984 to 
cleanup former hazardous waste disposal sites on active and BRAC 
installations. Our past focus was on completing investigations and 
getting remedial actions in place--many of which were designed to 
operate for decades. In early 2011, we put into place a new policy and 
new metrics--one that shifts the goal from remedy-in-place to closing 
sites; from one that tolerated decades to complete the cleanup to one 
that rewards innovative technologies that get the job done in 8-10 
years; from one that was cost-plus to one that is fixed price and 
performance based and incentivizes contractors to develop innovative 
ways to get to site closure; and to one that considers the total 
lifecycle cost informed by a solid business case analysis.
    Our new goals are to achieve accelerated completion of 90 percent 
of Air Force BRAC cleanup sites and 75 percent of non-BRAC sites by 
2015, in order to place the emphasis on bringing the program to 
closure. Through the use of improved performance-based contracting, 
coupled with this new policy, we are cleaning up sites three times 
faster, with lifecycle cost-savings as much as 19 percent, and it is 
our expectation this will go even higher as we mature this contracting 
approach. By using this approach, we're not only closing sites faster, 
we're eliminating land use restrictions, while still being fully 
protective of human health and environment.
    We continue to work with State and Federal regulators on 
socializing this new approach. We have received positive feedback from 
many of the regulators on the overarching goal to finish cleanup, but 
there are historical concerns with the execution of performance-based 
contracts that we are addressing.

Environmental Quality
    Our fiscal year 2013 President's budget request seeks $469 million 
in Environmental Quality funding for compliance, environmental 
conservation, pollution prevention, and environmental technology 
investment. As in our cleanup program, we are refocusing our efforts to 
streamline and more effectively manage our Environmental Quality 
program activities. One example is how we've changed our approach in 
our National Environmental Policy Act (or NEPA) program. Every decision 
we make is backed by environmental analyses--with major efforts and 
cost going into the development of Environmental Impact Statements 
(EISs) and Environmental Assessments (EAs). As we looked at how to 
become more efficient in all our functional areas, we found that over 
time our NEPA process had become stagnant and bureaucratic. We had 
migrated away from the Council on Environmental Quality Guidance that 
emphasizes clear, concise, and analytical analyses rather than 
encyclopedic documents. On average, EISs were taking 3\1/2\ years to 
complete and EAs half that time. Our decisionmaking process was being 
crippled by such tasks as elaborate internal reviews and steps that 
added very little value to the quality of the analysis.
    In September 2010, we issued a policy to refocus our NEPA process. 
The policy emphasizes use of performance-based contracts to incentivize 
contractors to provide quality environmental analyses that are fully 
compliant with the spirit and intent of NEPA, that are aimed at better 
decisionmaking. Likewise, to refocus our internal reviews the policy 
sets goals for completion of EISs in 12 months and EAs in 6 months. To 
execute the new policy the Air Force established a NEPA center of 
excellence to standardize the Air Force approach to NEPA management and 
contracting and to provide reach back to major commands and 
installation NEPA professionals. Results to date are very promising; 
our first contract actions are hitting the 12-month and 6-month 
schedules and we're doing this without sacrificing quality.
    We also have some initiatives underway that will change how the Air 
Force manages waste. Pollution prevention and waste minimization 
provide great potential to realize efficiencies while at the same time 
sustaining the Air Force mission, maintaining a safe and healthy 
workplace for our people, and improving the environment in which we 
live. This year, we are establishing pollution prevention and waste 
minimization goals; we will use our environmental management system to 
achieve these goals; and we fully expect to see our operations become 
more efficient, more protective of the workforce, while realizing cost-
savings. We are also striving to change how our culture considers waste 
and the environment. The Air Force believes that ``green'' is a smart 
way to do business. Simply put: Green is money; green is innovation; 
green is safety; and green is good stewardship.
    Our pollution prevention initiative provides a great segue to 
something the Air Force is very excited about. We are embarking on an 
aggressive initiative to transform how the Air Force manages energy, 
water, green house gas production, and solid waste. This year, we are 
rolling out a net zero policy for the Air Force. This initiative will 
strengthen the Air Force's commitment to supporting the Air Force's 
operational mission by leading in energy and environmental management. 
We will do this by complying with legal requirements, reducing 
unacceptable risk to operations from energy-related considerations and 
environmental impacts, by continuously improving energy and 
environmental management practices to be more effective and efficient, 
and to ensure sustainable management of the resources we need to 
adequately fly, fight, and win into the future. There is no question 
that responsible and prudent stewardship of the natural and other 
resources with which we are entrusted is of great importance to 
national and economic security.
    Working together with regulatory agencies, other Federal partners, 
and industry experts, the Air Force is continuously innovating and 
adopting best practices to lessen the environmental impact of its 
operations while helping the Air Force maintain its mission-ready 
posture and capabilities.

                               CONCLUSION

    Our fiscal year 2013 budget request satisfies our most pressing 
needs while supporting the greater good of the Nation's fiscal 
security. It stays true to the fundamental priorities of our Air Force:
  --Continue to strengthen the nuclear enterprise;
  --Partner with the Joint and Coalition team to win today's fight;
  --Develop and care for our airmen and their families;
  --Modernize our air, space, and cyber inventories, organizations, and 
        training; and
  --Recapture acquisition excellence.
    We continue to mature our use of centralized asset management 
principles to mitigate accepted risk in facilities funding. Our total 
force airmen and their families can rest assured that they are cared 
for as we strive to eliminate inadequate family housing by 2018 and 
privatize housing in the United States by 2013.
    Finally, we continue to think about the taxpayer with every dollar 
we spend. Our commitment to continued efficiencies, a properly sized 
force structure, and right-sized installations, combined with steadfast 
stewardship of our energy resources and environment, will enable us to 
provide our trademark support to the Joint fight without imposing 
fiscal hardship on the Nation.

    Senator Johnson. Thank you, Mr. Secretary.
    General Etter, please proceed.
    General Etter. Yes, sir. Chairman Johnson, Senator Tester, 
thanks for having us here today. I'm honored to be here before 
you today representing over the 106,000 dedicated men and women 
of our Nation's Air National Guard.
    The Air National Guard's military construction priorities 
for fiscal year 2013 include bedding down new missions and 
facilitating mission changes to provide the best possible 
environment to support both the training and deployment of our 
guard airmen.
    Our four major projects in the fiscal year 2013 President's 
budget request allow for the conversion of two weapons systems, 
conversion of a facility at Kirtland Air Force Base, New 
Mexico, for incoming intelligence mission and construction of 
the building of the first simulator in Cheyenne, Wyoming.
    These projects are mission essential and would help ensure 
the men and women of your Air National Guard will continue to 
protect both the Nation and their local communities.
    In addition, there are four MILCON projects previously 
funded by Congress that we request to be rescoped and 
reauthorized and executed in the same locations. The first of 
these four projects is at Fort Wayne, Indiana. Four-million 
dollars were appropriated in fiscal year 2012 for Air National 
Guard MILCON to convert the facilities of F-16s for the A-10. 
The 122nd Fighter Wing is now programmed to convert to MC-12s.
    We request your support in keeping these funds available to 
bed down the 122nd's new mission and provide appropriate 
operations and maintenance facilities for this MC-12.
    The second project is at Nashville, Tennessee. The 118th 
Airlift Wing had been programmed to bed down the intelligence 
squadron and a C-130 flying training unit. Subsequently, the 
wing was designated to convert to an intelligence group, a 
cyberwarfare group and a remotely piloted aircraft remote split 
operations unit.
    Congress appropriated $5.5 million in fiscal year 2011 to 
Air National Guard MILCON for the intelligence-squadron 
conversion and for the C-130 training units. We request your 
support to keep these funds available to provide operations 
facilities for the new missions just assigned.
    The third project is at Otis Air National Guard Base in 
Massachusetts. At Otis Air National Guard Base in Massachusetts 
the 102nd Intelligence Wing had expected to bed down a 
component numbered Air Force (CNAF) augmentation unit.
    Congress appropriated $7.8 million in fiscal year 2012 to 
Air National Guard MILCON to provide facilities for this unit. 
However, the Air Force has determined that the CNAF unit is no 
longer needed. It will not be assigned to Otis.
    We request your support in keeping these funds available to 
construct the facilities to consolidate remaining functions at 
Otis in the most efficient campus environment possible.
    The fourth project is at Martin State in Maryland. At 
Martin State Airport near Baltimore, Maryland, the 175th Wing 
had been programmed to convert to C-27 aircraft. Congress 
appropriated $4.9 million in fiscal year 2012 to Air National 
Guard MILCON to provide a squadron operations facility for the 
inbound C-27s.
    The Air Force has determined that the unit will instead 
convert to an intelligence, surveillance, and reconnaissance 
group and a network warfare squadron while continuing to host 
A-10 attack aircraft.
    We request your support to keep the funds available to 
provide operations facilities for the new cyber and 
intelligence missions just assigned.
    Thank you for inviting me here today. Thank you for your 
service to the Nation and your support of the Air Force and its 
Reserve components. I look forward to your questions, Mr. 
Chairman.
    Senator Johnson. Thank you. General Jackson.
    General Jackson. Mr. Chairman, Senator Nelson, and Senator 
Tester, thank you very much for your invitation today. Just a 
few brief opening remarks and then we'll be happy to entertain 
your questions.
    I appreciate the opportunity to appear before you today, 
obviously, and to discuss the state of the Air Force Reserve, 
and particularly our military construction program.
    First, I'd like to take a moment to thank this subcommittee 
for the tremendous support we've received in past military 
construction appropriations. Your generous support allows us to 
continue to meet the needs of the combatant commander and the 
Nation with a viable operational and strategic Air Force 
Reserve. Thank you.
    During budget formulation this year, the Air Force total 
force, the Air National Guard and the Air Force Reserve, again 
applied asset-management principles to ensure maximum 
efficiency, building only where infrastructure was required.
    As a part of the broader Air Force strategy, we are also 
taking a deliberate pause in funding for current mission 
projects. The total force MILCON request ensures construction 
is closely aligned with weapons system deliveries and strategic 
base initiatives.
    The Air Force Reserve MILCON budget request for fiscal year 
2013 is a $10.9 million request. This request funds only one 
mission project, as you know, the construction of a regional C-
130 flight simulation facility at Niagara Falls Air Reserve 
Station in New York, home of the 911th Airlift Wing.
    It provides planning and design funds needed to prepare for 
the fiscal years 2014 and 2015 programs, along with some minor 
construction funding. They'll be used to accomplish urgent and 
compelling projects which cost less than $2 million.
    Mr. Chairman and members of this subcommittee, I take great 
pride in the fact that when our Nation calls on the Air Force 
Reserve, we are trained and ready to go to the fight. Your 
support enabled us to contribute and be proud members of the 
total Air Force team. We are a strategic reserve leveraged 
every day for an operational use, and we thank you very much 
for your support.
    Senator Johnson. Thank you, General Jackson.
    Secretary Yonkers, Ellsworth Air Force Base is scheduled to 
activate a new MQ-9 Reaper operation mission this spring. 
Drones are an increasingly important component of American 
military power, and it seems reasonable to expect the Air 
Force's drone fleet to increase over the next decade. As the 
Air Force reviews its force structure, is it examining whether 
to increase Ellsworth Air Force Base's role in drone 
operations?
    Mr. Yonkers. Thank you, Senator. As you know, we're going 
in our unmanned aerial vehicle RPA program to 65 combat air 
patrols. It is a growth industry for us. I think it's 
recognized across the Department of Defense as a very important 
role, an asset for intelligence, surveillance, and 
reconnaissance, and where it eventually goes is yet to be 
determined.
    In terms of specifics for Ellsworth Air Force Base, it is 
going to support five combat air patrols in the future. And I'd 
like to see if either one of the other panel members would have 
comments with regards to your specific roles at South Dakota.
    General Etter. Yes, sir. From the Air National Guard 
there's no specific change to Ellsworth Air Force Base at this 
time.
    Senator Johnson. Ms. Ferguson, last November, the Air Force 
selected a company to carry out its final housing organization 
plan, the Northern Group Housing Initiative, which includes 
Ellsworth Air Force Base.
    Could you give me an update on where we are with Northern 
Group Housing as well as what type of oversight the Air Force 
will provide to ensure that our servicemen and women receive 
quality housing under this program?
    Ms. Ferguson. Mr. Chairman, thank you for that question. I 
appreciate the patience of you and your staff as we've worked 
our way through the Northern Group. As you know, it's taken us 
quite a long time to get there.
    We are happy to announce we are in final negotiations with 
our selected privatized contractor, Balfour Beatty, and we are 
anticipated to close that project by the end of this fiscal 
year, by the end of September.
    Senator Johnson. General Etter and General Jackson, the Air 
National Guard and the Air Force Reserve offer this country 
tremendous value for a relatively small investment. Guard and 
Reserve units have served admirably in Iraq and Afghanistan, 
and after a decade of war, it is important that we continue to 
make MILCON investments that will preserve the unit 
cohesiveness and ability to fight future missions.
    The fiscal years 2013 through 2017 FYDP shows Guard and 
Reserve MILCON decreasing by a combined 17 percent below the 
estimates in the fiscal year 2012 FYDP. Given current funding 
constraints and the uncertain budget outlook for the future, 
what are the key military construction challenges and 
priorities that the Guard and Reserve face over the next 5 
years? General Etter.
    General Etter. Mr. Chairman, thank you for that 
categorization. We are proud of the service of our Guard and 
Reserve component.
    We have difficult times. We need to make very informed and 
intelligent choices here as we move forward. New mission is 
currently our priority and it will probably remain so for the 
next couple of years, and then, at some point in time, we'll, 
of course, have to go back to our existing missions to catch 
up.
    But at this point in time, the new missions and the changes 
that have occurred with the fiscal year 2013 are probably going 
to drive our decisions for the next couple of years.
    Senator Johnson. General Jackson, as I indicated in my 
opening statement, I'm very disappointed with the meager budget 
request for the Air Force Reserve. This is not the first time 
that the Air Force Reserve has been, in my opinion, short 
changed in the budget process.
    I hope this year is an exception, but even in the best of 
times, the Air Force Reserve MILCON budget is not robust. What 
is the current quality rating, on average, for Air Force 
Reserve facilities and what is the current rehabilitation rate?
    General Jackson. Mr. Chairman, thank you very much for the 
question. As you mentioned, and General Etter did also, the Air 
Force takes a total force look at all the requirements for 
military construction. We bring our projects to the table, and 
some of those, to be honest, do not score out very well because 
they're a current mission or because there are training 
requirements.
    So we support the process that's in place, and we believe 
that going into next year, as you mentioned, Mr. Chairman, we 
should have a better look and a capability to go ahead and 
increase our MILCON percentage there.
    As for the recapitalization rate, sir, it's approximately 
$1.25 billion to go ahead and recapitalize the Air Force 
Reserve Command infrastructure, and we're monitoring that very 
closely.
    Our A-7 has gone out to every location, done a focus study 
on every single one of our locations to make sure we know where 
the priorities are, and we're taking those scarce resources and 
applying those, as required, to those priorities, sir.
    Senator Johnson. Secretary Yonkers, the Air National Guard 
provides 35 percent of the Air Force's capability with 6 
percent of the budget. The Air Force Reserve provides 20 
percent of the Air Force capability with only 4 percent of the 
total Air Force budget.
    The Guard and Reserve are truly the work horses of the Air 
Force. Are you comfortable with the share of the fiscal year 
2013 Air Force MILCON budget request directed to the Guard and 
Reserve?
    Mr. Yonkers. Sir, as we talked about in our opening 
remarks, we did make some hard choices in fiscal year 2013 to 
try to balance the requirements across the Air Force in our 
enterprise.
    Next year and the following years in the FYDP we are going 
to be returning to a more robust military construction program, 
$1.5 billion in 2014, the same in 2015, going to almost $2 
billion in 2016.
    So, at this point in time, given the constraints that we 
have and looking at the distribution of $442 million to meet 
primary mission requirements, I am comfortable with where we 
are.
    Senator Johnson. Secretary Yonkers, the Air Force FYDP 
includes a $215-million wedge between fiscal years 2014 and 
2016 for specific resiliency initiative. Can you explain what 
this program is, where the funding would be used and what types 
of projects it would fund?
    Mr. Yonkers. Similar to the response that the Navy gave, 
this is an operations plan that is yet evolving. The wedge is 
to look at the possibilities, but until such time as that game 
plan comes together, sir, we haven't got any specifics for you.
    Senator Johnson. Is this program linked to the Air Force 
expansion plans at Anderson Air Force Base in Guam?
    Mr. Yonkers. Sir, for the most part, the Guam strike 
projects that we funded in the past and the one in the fiscal 
year 2012 budget for the fuel maintenance hangar are apart from 
the resiliency part of the Pacific laydown.
    Senator Johnson. Senator Tester.
    Senator Tester. I'll defer to the good Senator from Alaska 
and then go after her.
    Senator Murkowski. Mr. Chairman, thank you, and thank you 
to my colleague. I appreciate it. I know we're all trying to be 
in two different places at once, so, gentlemen, Ms. Ferguson, 
thank you for being here.
    I want to ask questions about the status as it relates to 
the proposal at Eielson moving the F-16 squadron. I would ask, 
Secretary Yonkers, for a clear statement in terms of what the 
Air Force plan is for Eielson Air Force Base, how many 
positions will be eliminated when that plan is fully 
implemented?
    Mr. Yonkers. Ma'am, right now, there's actually two things 
that are going on with regards to personnel across the Air 
Force. One is the 9,900 military reduction, but the other part 
of it is the Resource Management Decision (RMD) 703, which got 
at the civilian force. For the civilians at Eielson Air Force 
Base, there's about 41 of those positions that are going to be 
reduced as a matter of the RMD 703. For the move of the F-16s 
from Eielson Air Force Base to Joint Base Elmendorf-Richardson, 
that composition, in terms of military, is about 630 or 640 
personnel.
    Senator Murkowski. Six-hundred and thirty. What is the 
business justification for moving the Aggressor squadron from 
Eielson Air Force Base to Joint Base Elmendorf-Richardson, and 
ultimately, putting Eielson Air Force Base in a warm-basing 
status?
    Mr. Yonkers. There's still, ma'am, a viable KC-135 mission 
that will be remaining at Eielson Air Force Base, and the force 
protection, civil engineering, maintenance, control tower, and 
other functions that are associated with a robust mission will 
stay resident at Eielson Air Force Base.
    The justification or the rationale for moving the 
Aggressors from Eielson Air Force Base to Joint Base Elmendorf-
Richardson was a cost-savings justification.
    Senator Murkowski. Talk to me a little bit about the cost-
savings. Have we identified how much will actually be saved, 
where that comes from, whether it's in personnel reductions or 
from infrastructure cost reductions?
    Mr. Yonkers. It'll be a little bit of both, but it's 
primarily going to come from personnel, and we're looking at 
about $165 million across the FYDP in savings by consolidating 
one jet fighter squadron now at Eielson Air Force Base down to 
Joint Base Elmendorf-Richardson.
    Senator Murkowski. We've been trying to get some 
understanding in terms of how this tabletop exercise was 
conducted, and what specifically was used in terms of data, how 
reliable that data was and whether or not it was any different 
than that which was used back in 2005 when Eielson Air Force 
Base, again, was considered under that BRAC round. Can you give 
me some more details on that tabletop exercise?
    Mr. Yonkers. I can give you some, and I'll ask Ms. Ferguson 
to embellish here. The analytics that went behind it, ma'am, 
were looked at--a number of different things, certainly, in 
terms of the consolidation of the one fighter wing into Joint 
Base Elmendorf-Richardson.
    We looked at personnel. We looked at base-operating 
support. We looked at some of these other service functions 
that I've talked about. And when you do the analytics, it comes 
out that it is actually more efficient to move the Aggressors 
from Eielson Air Force Base to Joint Base Elmendorf-Richardson, 
and as I mentioned, about $165 million savings across the FYDP 
as a result of doing----
    Senator Murkowski. But, again, was there any data that was 
different this go-around in this tabletop exercise than what we 
saw back in 2005?
    Mr. Yonkers. I would like to defer to Ms. Ferguson. She was 
in the building when that study was done.
    Ms. Ferguson. Okay. We'd like to take that for the record. 
I don't think either one of us was actually in the analytical 
phase of this, but we'll take that back and----
    [The information follows:]

                        2005 Table Top Exercise

    Senator, thank you for your question. The Air Force's 2005 BRAC 
recommendation called for the realignment of the F-16 Aggressors to 
Nellis Air Force Base whereas the move in the Air Force's recent force 
structure announcement relocates the F-16 Aggressors to Joint Base 
Elmendorf-Richardson (JBER), where they will be located with the 3rd 
Wing. The F-16 Aggressors will support air-to-air training for the F-22 
Raptors assigned to Joint Base Elmendorf-Richardson and will continue 
to support RED FLAG-Alaska exercises. The movement of the F-16 
Aggressors will garner efficiencies by reducing maintenance supervision 
overhead and support base functions.

    Senator Murkowski. I'd be curious to know because it was--
again, we're looking at this and saying this is exact same 
exercise that we saw back in 2005. It was rejected. Now, it's 
before us. So I am trying to drill down and discern whether 
there is something new that we have learned. So if we can get 
that information, I would appreciate that.
    The site survey team is going to be coming up to the State 
in April, going to the interior to validate the information 
that apparently was generated during this tabletop exercise. 
But there seems to be some ambiguity in terms of what the site 
survey team's mission actually is. Some think that it's an 
effort to validate both the short-term and the long-term plans 
for Eielson Air Force Base.
    Others say it's simply to figure out how to implement the 
short-term plan for Eielson Air Force Base, which is moving the 
Aggressors there to Joint Base Elmendorf-Richardson. Can you 
tell me what exactly the mission of the site survey team is?
    Mr. Yonkers. Ma'am, as I understand it, the site survey 
team was going to look at the more focused move of the F-16s to 
Joint Base Elmendorf-Richardson. But based on your comments and 
observations, it seems prudent to me that we take a broader 
look, and I'm going to have that conversation with the folks 
out at the Pacific Air Forces.
    Senator Murkowski. I would appreciate that a great deal. 
I've had an opportunity to sit and visit with many of the 
leaders within the interior community there. Of course, they're 
very engaged in this, and we have asked for a level of 
discussion when the members of the site survey team come.
    The mayor of the Fairbanks North Star Borough has requested 
a meeting with the survey team to basically share some relevant 
information on local issues. Can you think of any reason why 
you should not be able to accommodate that meeting?
    Mr. Yonkers. I think we can accommodate it, but we'd like 
to accommodate it with the wing commander who has had that 
long-term relationship with those community leaders as sort of 
being a focal point for those discussions.
    Senator Murkowski. So the wing commander with the local 
mayor?
    Mr. Yonkers. They have a close relationship. And that's 
part of the function and role and responsibility of the wing 
commander is that outreach and having that discussion with 
local civic leaders on all issues affecting that airbase.
    Senator Murkowski. And I do understand that he is that 
liaison, but I also recognize that our wing commanders are 
there for very brief periods and then they move on. We 
appreciate all the good work that they do, but if there is any 
way to include a meeting with the mayor of the Fairbanks North 
Star Borough so that he can share, again, some of these very 
local issues that I think are relevant I would certainly 
encourage that.
    And we will wait for further information from you and Ms. 
Ferguson.
    And again, I thank my colleague my colleague from Montana. 
Thank you, Mr. Chairman.
    Senator Johnson. Senator Tester.
    Senator Tester. Yes, thank you, Mr. Chairman. And thank you 
all for being here, and thank you for the people that you 
represent. Thank you for your service.
    I will echo what I told the Navy folks. Thank you for your 
work on energy. I think it's critically important work. I think 
it's good work. I think Montana can help in that work.
    We've got a facility--we've got a university 100 miles away 
from the facilities in Great Falls. Montana State University-
Northern is doing some great work in biofuels. I encourage you 
to utilize them when you need them.
    I also want to thank particularly you, Mr. Yonkers and 
General Etter, for meeting with the Central Montana Defense 
Alliance, taking time out of your busy day. Those are great 
supporters of our installations in Great Falls, and they're 
great supporters of the military. So I thank you for taking 
time out for that.
    I am appreciative of the fact that myself and members of 
the Great Falls community were able to welcome the Air Force 
announcement of a C-130 mission for the State of Montana. While 
I oppose the loss of the F-15 fighter mission, I'm thankful the 
Air Force worked with myself and Senator Baucus to identify a 
new mission that's particularly well suited for Montana, 
particularly, we have airmen with a world-class reputation.
    This fleet of C-130s, as you well know, placed in Great 
Falls would ensure that we have those Montana airmen play a 
critical role. They are a great asset to our Nation's defense. 
It would also help the State, the region and the country better 
address critical and urgent disaster response.
    And I look forward to work with you to make sure the 
mission conversion happens in an efficient, a timely manner, 
and that the Montana Air National Guard is able to maintain its 
status as one of the best in the country.
    Secretary Yonkers, in carrying out the Air Force's proposal 
of restructuring, I believe it's critical we start now. Before 
we can get those planes on the ground, we need to compete 
necessary design work and we need to get funds flowing to 
address any construction needs that are needed up there. Could 
you give me an idea when the C-130s will arrive in Great Falls, 
Montana?
    Mr. Yonkers. General Etter can give you a lot more of the 
specifics, but we have accommodated, in the fiscal year 2013 
budget request, I think it's about $27 million to look at doing 
modifications, as necessary, to accommodate the eight C-130Hs 
that are planned to be there.
    Senator Tester. Major General.
    General Etter. Yes, Senator, we're looking at fiscal year 
2014. Of course, we'd like to do that as early as possible, but 
we're still in the planning stages, so I'm unable to commit to 
an exact order. But we do know that we need to do that to 
dovetail in, as one mission draws down that another mission 
comes up. Of course, we need time to send folks to school.
    Additionally, we've stood up an operations execution 
working group, which is a number of people from all around the 
country to make sure that we address not only the MILCON 
issues, but also those of training, conversion, new facilities, 
and sequencing.
    Senator Tester. Okay. When will you have a time for the C-
130s' arrival? When will that be set into stone? The point you 
make is absolutely correct. If there's a huge mission gap 
between the F-15s leaving, the C-130s leaving, we are in 
trouble. You've said when the F-15s are leaving. When will you 
know the C-130s are coming?
    General Etter. Sir, I think we can do that within 90 days 
and get back to you. And of course, we know when the last 
mission changed there was going to be a little bit wider point 
of time between the two aircraft, and I don't believe that'll 
be a factor this time. But we'll get back to you within 90 
days, hopefully earlier than that, sir.

    [The information was not available at press time.]

    Senator Tester. Thank you very much.
    The timetable--you talked about $27 million available for 
construction. When do you anticipate that to start? The 
conversion construction, because it's--there are different--I 
don't have to tell you guys that, you know.
    Mr. Yonkers. I think, going back to General Etter's point, 
when the specifics are laid down with regards to the arrival of 
the aircraft, we'll define the requirement better than we have 
right now, and then look at how we sequence that construction 
project, so that when those airplanes show up, there's no hang-
up with regards to where we're going to put them or how we're 
going to take care of them.
    Senator Tester. Okay. We're talking March 2012 right now, 
potentially 2 years from now. Right now, those planes could be 
on the ground, potentially. Do you plan on starting the 
military construction conversion upon their announcement within 
the 90 days? When do you plan on starting it?
    Mr. Yonkers. Do you want to address that?
    General Etter. Yes, sir. There is definitely a possibility 
that this is moving so fast that the hangar will not be done 
before the first aircraft arrives. That said, they do have 
hangars where they can nose in the aircraft and stuff like 
that, sir.
    So we know that we need to move forward with this quickly, 
but it's not a fiscal year 2013 MILCON project at this time. 
Therefore, we would be in fiscal year 2014 to try to do that 
design and construction.
    Senator Tester. The $27 million is adequate for fiscal year 
2013 to get the job done for this year--for that year?
    General Etter. Sir, I believe that's a fiscal year 2014 
number, not a fiscal year 2013 number.
    Senator Tester. Okay. Okay. What is in the fiscal year 2013 
budget?
    General Etter. This particular construction project is not 
in the fiscal year 2013 budget, sir.
    Senator Tester. Okay. So we don't anticipate any conversion 
going in the next fiscal year.
    General Etter. We have started conversions in the past 
without the MILCON being completely finished, and I believe 
that we would track down that. So if it's okay, I could get you 
a detailed plan on how we get from A to B.
    Senator Tester. I would really like that a lot.
    General Etter. Yes, sir.
    Senator Tester. Thank you. I want to talk about 
intercontinental ballistic missiles (ICBMs) for a second. There 
are challenges facing the Air Force and the Defense Department 
and a number of ways we could achieve savings when it comes to 
a nuclear arsenal. I think ICBMs--it's the wrong direction to 
go. I think the most cost efficient, we get some great airmen 
on the ground. Are there any changes to the ICBM portion of 
this budget that require military construction dollars?
    Mr. Yonkers. Sir, the plan for the ICBM portion of the 
triad is fully funded in the FYDP for construction and the 
other modifications that need to be made.
    Senator Tester. Okay. So this budget does not apply to 
those changes to the ICBM portion. We're talking about 
potentially idling 30 ICBM over three bases. That's not in this 
budget?
    Mr. Yonkers. As I understand it, and you're way out of my 
swim lane here, those discussions and how those weapon warheads 
are going to be allocated are yet in discussion. So, at this 
point in time, I couldn't give you a definitive answer.
    Senator Tester. We need to catch the swimmer that's in that 
lane, and so if you could give us that name that'd be great.
    One last question, and then I'll boogey on here. The Air 
Force continues to consider alternative missions you guys 
talked about, RPAs, but the fact is there are alternatives--
leave the RPAs out of it. There are alternatives particular to 
a proposal by the Council of Governors in regard to C-130s, 
which has been an interesting debate over the last 2 weeks. As 
far as the Council of Governors' proposal, can you update me 
where we're at in that process? Go ahead.
    Mr. Yonkers. I can give you a little bit, and then, General 
Etter, if you want to embellish. This is something that 
Secretary Panetta said that he would take under consideration. 
So as far as I know, he is still taking that under 
consideration.
    Senator Tester. Okay. Go ahead, Major General.
    General Etter. Yes, sir. I could probably expand just a 
small amount on that. There's been three meetings subsequent to 
that between representatives of the Council of Governors, 
adjutant generals, and the top four leaders of the United 
States Air Force. These discussions are still ongoing. I don't 
know when there will be a conclusion to that, but they're still 
active and ongoing at this time, sir.
    Senator Tester. Okay. One last question. Given the cost of 
permanently stationing C-130s overseas, would it not make more 
sense to bring those C-130s back to--you can say yes.
    Mr. Yonkers. I'd like to take it for the record, but I'll 
tell you--in the specifics--but the European assets that we 
have over there serve definite missions with regards to 
airlift.
    So, as you all know, we're looking at a BRAC-like European 
reduction in the overall facility footprint over there, and 
those discussions and that work is still continuing as well.
    [The information follows:]

                            C-130 Stationing

    Senator, thank you for your question. While cost-savings are part 
of the decisionmaking process, the most important factor is the Air 
Force's ability to provide the capabilities required by the new Defense 
Strategic Guidance.
    There is only one squadron of C-130s remaining in Europe and they 
provide support to two combatant commanders: U.S. European Command and 
U.S. Africa Command. These aircraft are critical to our overseas 
engagement strategy and provide valuable intra-theater support training 
to NATO and our Eastern Europe and African partners. The Air Force does 
maintain special operations C-130s in Europe, but these aircraft are of 
a specialized nature and are used in Africa, Europe, and the Middle 
East.

    Senator Tester. I want to thank you very much for your 
service, once again.
    Thank you for the flexibility, Mr. Chairman.
    Senator Johnson. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman. And welcome to our 
panelists today. Thank you for your service and for the men and 
women in uniform all across our world.
    Secretary Yonkers, I think we've had this conversation 
before, but not before this subcommittee. As you know, 
currently, progress is being made toward constructing a new 
command-and-control complex for United States Strategic Command 
(USSTRATCOM) with military construction funds requested by the 
President and authorized and appropriated by this Congress for 
the fiscal year 2012.
    The mission of USSTRATCOM is at the forefront of our 
national security, and as the command and control of our 
nuclear enterprise, USSTRATCOM plays an important role. As 
America complies with a new START Treaty, it's imperative that 
our nuclear command-and-control node have all the support and 
resources that it needs to carry out its mission.
    And as you know as well, the entire project has been 
authorized, but because of the nature of this project, size 
just alone, the Defense Department will have to request phased 
or incremental funding for construction funds until the project 
is complete.
    Secretary Panetta has visited the current headquarters, and 
knows that the facility's shortcomings put at risk the mission 
and personnel, and that a continued acceleration of the 
construction of the new headquarters is in the best interest of 
our national security.
    In this time of constrained budgets, hard choices have to 
be made within the Department of Defense. And I know this is 
one of those hard choices, but one that I believe we all agree 
protects our strategic missions for cyber, missile defense, 
nuclear command-and-control now and the future, where these 
threats will not likely dissipate, certainly not any time soon.
    Originally, the project was scheduled to receive 
incremental funding over a 3-year period. Last year, however, 
the $150 million requested for the project was cut to $120 
million requiring that the funding be spread out over 4 years 
as opposed to 3 years. Is the full $161-million request for 
fiscal year 2013 actionable on the project for the year?
    Mr. Yonkers. Sir, as you noted, the project was 
reconfigured last year and now is in 4 years as opposed to 3.
    And as far as the $161.0 million that's in the fiscal year 
2013 budget, it is executable. But as we talked about before, 
we're still waiting to fine-tune this.
    With the Army Corps of Engineers about ready to make that 
award in the next several weeks, what we're looking for from 
the award winner will be their sequencing of how they think 
they're going to proceed with the construction of that project.
    And so we'll have a much better feel, in a few weeks, as to 
how that will actually get executed. But right now, we think 
we've got the game plan pretty well marked out.
    Senator Nelson. Okay. I hope we can continue to work toward 
funding at that level. I do understand awarding the contract, 
but if it's executable within that budget sequencing will be 
important, but we want to make sure that as much of the $161-
million allocation will be used during this timeframe. Is that 
fair?
    Mr. Yonkers. It's fair, sir.
    Senator Nelson. Turning to BRAC, one of everyone's favorite 
subjects in Washington, the budget is asking for two more 
rounds. Obviously, the economy is slow. A lot of the progress 
made is fragile, and I am very concerned about it being 
reversible as well.
    The last round of BRAC took place in 2005, and the changes 
it implemented were only completed this past fall. Your request 
seeks authorization for the first BRAC in 2013 to be followed 
by another in 2015. And reportedly, the two new rounds of 
closures could reap savings in 5 to 8 years, but would have a 
great cost up front to move personnel, equip it, and the 
overall costs of shutting down and associated environmental 
impacts.
    In Europe, we're eliminating two heavy brigades, and some 
of those missions and personnel will need to be relocated if 
bases are closed. Relocation of those missions and personnel 
back in the United States might make sense.
    So wouldn't it make most sense to look at our bases 
globally first, not just here at home, to see what the needs 
are going to ultimately be here at home with any closure or 
realignment of overseas bases?
    Mr. Yonkers. Sir, it does make sense, and we are looking at 
it globally. And the Department of Defense, led by Dr. Dorothy 
Robyn's team, has already made two trips to Europe to start 
that view of what is or what can be done over in the European 
Theater.
    As you know, the Air Force has taken one squadron of A-10s 
out of Spangdahlem Air Base, Germany. There is more that can be 
done over there, and we're going to take a look at that.
    We hoped that if the Congress were to approve a 2013 BRAC 
round we would do this in parallel. The driver here obviously 
is we're spending a lot of money on infrastructure that we 
don't need, and so does it make sense to continue those 
expenditures when we've got a lot of other things that we could 
spend that money on?
    Senator Nelson. One of the things we always want to pursue 
is reassessment of our needs as circumstances change.
    Now, in the fiscal year 2012 NDAA, there was a provision 
that would require an independent study on these overseas 
basing decisions in the presence of overseas forces. The study 
is designed to look at the location.
    Ms. Ferguson, is there any indication for that independent 
study as to what should be accomplished in terms of needs on 
our overseas bases?
    Ms. Ferguson. Senator Nelson, my understanding is those 
will be looked at as part of a study. The Office of the 
Secretary of Defense (OSD) is leading that effort in accordance 
with the NDAA. And our anticipation is they will look at those 
things, as Mr. Yonkers pointed out, in concert as well with the 
ongoing visits that OSD, Acquisition, Technology, and 
Logistics, and the services are accomplishing overseas.
    Senator Nelson. If we don't have the study completed at the 
moment, so that we don't know what the recommendations are 
going to be, but we're moving forward with a budget request; is 
the cart before the horse here? Can it be done parallel?
    Do we know what time the study will be accomplished or will 
we be appropriating within the budget for something that we 
don't have the study accomplished for to tell us where the 
money would be spent?
    Ms. Ferguson. We believe that it will all be tied together, 
that the OSD study will be done in time and would help inform 
the force structure requirements and what would be required in 
the continental United States (CONUS).
    Senator Nelson. Is there a date when we can expect and have 
a pretty sufficient guarantee that the study will be done? A 
date? Timeline? Secretary Yonkers?
    Mr. Yonkers. Sir, I haven't seen a timeline. I know that it 
was required in the NDAA this year to perform that study, and I 
know that we are moving ahead on it.
    Senator Nelson. But I always worry about a study that's not 
done, in anticipation we're going to authorize and/or 
appropriate money on the assumption of what the study's going 
to say before we have the actual conclusions of the study, if 
you follow my linear approach to it.
    Mr. Yonkers. I see your observation, sir.
    Senator Nelson. Okay. All right. I hope you'll keep that in 
consideration as we move forward. Thank you.
    And thank you, Mr. Chairman.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman, and thank you for 
hosting this hearing today.
    And Secretary Yonkers, I would like to start with you. But 
first, I want to thank General Jackson and General Etter for 
coming into the office in recent weeks to talk about one of the 
things I want to talk to you about today. That is my concern 
that during the process of creating this budget the National 
Guard and Reserve components were perhaps at the table, but 
perhaps not listened to when it came to some of the priorities 
for funding.
    And one of those in particular that touches my State is the 
funding for A-10s and moving the A-10s, or some of the A-10s, 
out of the National Guard system.
    We have the 188th in Fort Smith, Arkansas, and they have 
this winning combination there. Of course, they have very well-
trained personnel, and they're phenomenal in all the things 
that they've done, but they also have great facilities. They 
have great air space, which I know is a premium, but in the 
area where they are located, they're over some national forests 
and they have this great training space over very mountainous 
terrain.
    Additionally, something that you just cannot find anywhere 
else is they have the National Guard Training Center there just 
off the end of the runway at Fort Chaffee. And so not only do 
National Guard units from all over the country train in Fort 
Chaffee, Arkansas, but the Navy Seals and many others train 
there as well.
    So it's just an unbeatable combination, and I'm very 
concerned that all of this was not taken into consideration 
when it came time to make decisions on the budget.
    So let me start with questions about that. The numbers I've 
seen indicate that it is cheaper to fly and train and house the 
A-10s in the National Guard as opposed to the Active Duty. I've 
asked repeatedly for a cost analysis used by the Air Force, and 
there's been reluctance on behalf of the Air Force to share the 
cost analysis with me. I'm not sure I understand why, and I'd 
ask you if you've seen the cost analysis? I'd like for you to 
share it with the subcommittee and with my office.
    Mr. Yonkers. Sir, I haven't seen any of the cost analysis. 
Again, it's something that I would typically not look at. I 
mean, I'd look at the military construction and that part of 
those decisions.
    I think when you look at the A-10s, and again, we're taking 
about one-third of them out of the inventory. And the idea 
here, as we went through the budget considerations, was to pull 
out those aircraft, whether they were heavy-lifters, fighters, 
et cetera, that were the oldest and the most expensive for us 
to operate and maintain.
    Senator Pryor. And that's what's hard for us to know, if we 
don't know the cost analysis, if we don't know the real 
numbers.
    Also, this is something else I'd be very interested in 
getting from someone at the Department of Defense and the Air 
Force, I'd like the amount of construction money that will have 
to follow these moves. And it sounds like, based on what you're 
saying and the way I read the numbers, it sounds like the 
airplanes would move in fiscal year 2013, but I'm not sure 
there's sufficient construction money to have the planes go 
somewhere and be housed properly somewhere in 2013. Do you know 
the answer to that?
    Mr. Yonkers. It's part of the deliberate pause. I mean, we 
went through the force structure considerations and weren't 
quite sure how that was going to work out with regards to the 
military construction. So that's part of the reason that we 
only looked at new mission in the military construction program 
this year.
    We should catch up next year when we start looking at where 
the implications of those particularly Guard and Reserve were 
in the force structure announcements that were made just a few 
weeks ago.
    Senator Pryor. And I understand that we are in a shrinking-
budget environment. I completely get that and appreciate that.
    At the same time, one of the reasons why I'm so interested 
in the cost analysis is because I'm curious about how there can 
be real savings here. If you can house and train and maintain 
the aircraft in a National Guard facility cheaper than you can 
in Active Duty, and you have to pay some construction cost in 
the out-years, it's hard for me to understand where the savings 
are coming from.
    So if you could help provide any sort of cost analysis or 
put in a good word with whoever might have that information, I 
think it's important that this subcommittee see that.
    Mr. Yonkers. Sir, we'll look at that and see what we can 
get you. I think you need a full explanation, though, of 
everything that went into the logic here.
    I mean, part of it, and I'll defer to, again, to General 
Etter, but a lot of this had to do with trying to balance the 
total force and looking at things such as dwell times.
    I think the chief had talked in terms of the objective for 
Guard and Reserve to be a dwell of about 1 point--a 1-to-4 or a 
1-to-5. They have their day jobs. So, being on station 6 months 
and home for 2 or 2\1/2\ years was something that would ease 
that burden on the employers that they work for, and also for 
the Active Duty. But I'll see if General Etter has something he 
wants to add to this.
    General Etter. Sir, I think Secretary Yonkers described 
this correctly that it was a balance between cost and the dwell 
to deploy time. So I think you categorized that correct, sir.
    Senator Pryor. Like I said, I'd still like to see the 
numbers to satisfy my curiosity about how much we'd actually be 
saving there.
    Let me ask about BRAC. I know you've had several questions 
about BRAC. I haven't done an exhaustive survey of our 
colleagues in the Senate, but my impression is that there's not 
a lot of enthusiasm for a BRAC round. And if there is, it would 
be probably structured more along the lines of doing an 
overseas BRAC first and then a domestic BRAC second.
    We can talk about that and have that discussion, and I'm 
sure that you all will need to be talking to lots of Senators 
about that because there's not a lot of support for that right 
now, for the BRAC as you propose it right now.
    But back on the A-10s, I don't understand the sequence 
there if you're making decisions about A-10, C-130s, all these 
other things that we're making decisions on in this budget, and 
then if you're also, at the same time, asking for a BRAC. It 
seems inconsistent or incompatible because it's almost like 
you're making BRAC-type decisions before there is a BRAC.
    And what if BRAC comes back and tells you something totally 
different and says, no, you need to restructure it this other 
way. And now we've lost 1 year and have all the wasted spending 
and wasted time. So why is the idea to do all these changes now 
and then have a BRAC?
    Mr. Yonkers. Let me see if I can respond to you. First of 
all, the Budget Control Act was a player here, and certainly 
the new defense strategy, as we looked across what has changed 
in the last year or so and looking at how we would go to war 
with one major effort and trying to halt any aggressors in 
another location.
    That balanced out what we thought we needed with regards to 
the fighter force, with regards to the airlift and with regards 
to the other assets. So our fiscal year 2013 budget was based 
primarily on that new defense strategy and those changing 
requirements independent of BRAC.
    When we looked at where we ended up after BRAC 2005--and 
you will recall that we actually had put on a couple of 
installations to foreclose that the commission changed and so 
we didn't go down that path, but when you look at that and look 
at the analysis that was done at the end of--or that 2005 
timeframe, we had 24-percent excess capacity in the continental 
United States.
    And so now, after 7 years, we've taken almost 500 airplanes 
out of the inventory, from the combat air forces reduction that 
went into place 3 or 4 years ago, as well as what is in the 
fiscal year 2013 proposal, and we're going to have fewer 
aircraft, which begs the question how do you sustain or how do 
you continue to sustain the same facility footprint that you 
have with fewer aircraft?
    Senator Pryor. Let me also make this point, and I know 
Senator Tester asked good questions a few moments ago and had 
to leave, but I do share a concern that he sort of raised, but 
I want to be clear on it.
    For example, the C-130 is going to Montana and they may not 
have the proper facilities up there, which apparently they 
don't. The BRAC process moves forward and they look at Montana 
and they say, we need to get rid of these airplanes here, 
because they don't have the proper facilities, and it's going 
to be a lot more expensive to put them here than it is 
elsewhere, so let's move those planes somewhere else.
    So it seems to me that could be a huge wasted effort, and 
not to mention that you're getting expectations up in Montana. 
It could be a huge wasted effort. And so that's why I question 
the sequencing of how you're doing this. I understand the 
Budget Control Act and I get all that, but I am not sure that 
it all makes sense. That's one of the reasons why I think 
there's quite a bit of reluctance in the Senate on a BRAC round 
this time.
    And plus, in addition to that, you take a community like 
Montana or Fort Smith, Arkansas, and some of these things may 
change later. In a BRAC round you actually get some financial 
support through the whole BRAC process to help that community 
adjust after the fact.
    Whereas, if you just do what you're doing now, you don't 
get that, and whether it goes through a BRAC or whether it's 
just a decision at the Pentagon, it still hurts that community 
and there's a void in that community that they just don't have 
much of a chance to fill.
    Mr. Yonkers. Sir, if I could respond, I spent 6 years 
standing up the base realignment and closure office in the Air 
Force back in 1990, and I've looked at the first 88, 91, 93, 
and 95 rounds of BRAC. They were painful for definitely the 
communities, painful for Members of Congress and painful for 
the Air Force and the other services that had to go through 
those----
    Senator Pryor. We lost an airbase in one of those----
    Mr. Yonkers. But I think when you look at the financial 
situation that we're in, we're having to make some really 
difficult choices here. And the longer we delay on implementing 
or approving a BRAC, the more those expenses pile up. And so 
that was part of the reason for trying to execute something in 
2013 or get a 2013 BRAC round started. The idea was with 2015 
to make the adjustments, if there were any needed to be done, 
as a follow-on to it.
    So, I mean, this is part of the logic. It's not something 
that any of us, I think, look forward to, but under the 
financial considerations today, it's one of the options I think 
we have to consider.
    Senator Pryor. Mr. Chairman, I way exceeded my time, but 
just one last point. I think that is one reason why you're 
seeing some reluctance. Obviously, there are political reasons 
too, but some reluctance in the Senate, in the committee, and 
in the subcommittee specifically, because we don't have the 
data and analysis to look inside those numbers to understand 
the savings and all the things we're talking about. We all 
agree that we're going to have to find savings. It's hard for 
us to agree if we only are working with a little part of the 
information, not the whole picture. So thank you, again. Thank 
you, Mr. Chairman.
    Senator Johnson. I would like to thank all of our witnesses 
for appearing before this subcommittee today. We'll look 
forward to working with you this year.

                     ADDITIONAL COMMITTEE QUESTIONS

    For the information of members, questions for the record 
should be submitted by the close of business on April 18.
    [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. Terry A. Yonkers
               Question Submitted by Senator Tim Johnson

    Question. Secretary Yonkers, the Air Force Future Years Defense 
Plan (FYDP) includes a $215 million wedge between fiscal year 2014 and 
2016 for a ``Pacific Resiliency'' initiative. Can you explain what this 
program is, where the funding would be used, and what types of projects 
it would fund? Is this program linked to the Air Force expansion plans 
at Anderson Air Force Base on Guam?
    Answer. Pacific Resiliency refers to the ability to mitigate risk 
to operational plans and contingency responses by providing resiliency 
through various measures to include hardening, distributed basing, 
passive/active defense capabilities, and pre-positioned equipment 
throughout the Pacific area of responsibility. Early phases of this 
initiative provided money to harden two hangars on Guam. Future 
projects around the Pacific theater include hardening POL systems, 
increasing bulk fuel storage locations, aircraft parking aprons, and 
fuel hydrants. The remaining phases are not necessarily tied to Guam, 
nor are they linked to other programs such as Guam Strike or the Marine 
relocation to Guam.
                                 ______
                                 
                Question Submitted by Senator Mark Kirk

                 ENERGY CONSERVATION INVESTMENT PROGRAM

    Question. Secretary Yonkers, I am concerned that the Air Force 
participation in the Energy Conservation Investment Program is 
disproportionately lower than that of the other services.
    Can you offer your opinion as to why the Air Force did not compete 
well in the OSD selection process for ECIP funds?
    Answer. The Air Force consistently receives approximately $30 
million in Energy Conservation Investment Program (ECIP) from the 
Office of the Secretary of Defense (OSD) per year, and is postured to 
execute ECIP much more aggressively through design-build, if OSD can 
increase the Air Force share of ECIP funding. Given the traditional 
conservation focus of ECIP, an increase of $10 million to $20 million 
per year would significantly help the Air Force meet Federal energy 
intensity and water intensity reduction goals. Additionally, under the 
new OSD grading criteria ECIP funding can also help the Air Force meet 
Federal renewable energy goals.
                                 ______
                                 
               Question Submitted by Senator Daniel Coats

    Question. If Davis-Bacon was waived, how much money would it save 
the Department of the Air Force's MILCON program?
    Answer. The Air Force does not collect cost differentials, 
attributable to Davis-Bacon Act (DBA) wages, between the Government and 
the private sector. The cost differential will be different based on 
location (i.e., area wages, cost of living, and union status) and the 
economy (i.e., when the economy is strong and overall prices high, the 
DBA impact is less. When the economy is weak and overall prices low, 
the relative DBA construction cost impact increases). While we cannot 
conclusively determine the monetary savings if Davis-Bacon were waived, 
we investigated the cost associated with the ``Labor Statute Clauses'' 
(to include Davis-Bacon Act, Project Labor Agreements, and Payroll 
Reporting Burden). We estimate the cost increase for Labor Statute 
Clauses when compared to commercial facility equivalent costs are an 
average of approximately 6 percent across the Air Force's military 
construction portfolio.

                         CONCLUSION OF HEARINGS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 11:34 a.m., Wednesday, March 28, the 
hearings were concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]
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